Seattle Washington Building Expert Directory

Insurer Could Not Rely on Extrinsic Evidence to Circumvent Its Duty to Defend

February 14, 2023 — Lorelie S. Masters & Yaniel Abreu - Hunton Insurance Recovery Blog
In First Mercury Insurance Co. v. First Florida Building Corp., et al., a federal district court ordered that an insurer had a duty to defend its insured against an underlying personal injury lawsuit. 2023 WL 23116, at *1 (M.D. Fla. Jan. 3, 2023). First Mercury is a cautionary tale about how insurers may try to circumvent their obligations by improperly considering extrinsic evidence when determining whether they have a duty to defend their insureds. First Mercury is a coverage dispute over an underlying personal injury lawsuit that was filed against the insured, a construction company, for injuries the claimant allegedly sustained at a construction site. Id. The claimant alleged that he was at the construction site as an invitee who was “working with” the insured. Id. The insurer agreed to defend the insured against the personal injury lawsuit under a reservation of rights. Id. However, the insurer filed a coverage action seeking a declaration that coverage for the personal injury lawsuit was excluded under the policy. Id. Specifically, the insurer, on summary judgment, argued that the claimant was an employee of the insured who was injured in the course of his employment, thus falling within the employer’s liability and workers’ compensation exclusions in the policy. Id. Although the insurer acknowledged that the personal injury complaint against the insured triggered its duty to defend under the policy, the insurer argued that those exclusions relieved its duty to defend or indemnify the insured. Id. Reprinted courtesy of Lorelie S. Masters, Hunton Andrews Kurth and Yaniel Abreu, Hunton Andrews Kurth Ms. Masters may be contacted at lmasters@HuntonAK.com Mr. Abreu may be contacted at yabreu@HuntonAK.com Read the court decision
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Second Month of US Construction Spending Down

November 05, 2014 — Beverley BevenFlorez-CDJ STAFF
ABC News reported that US Construction spending was down again in September, though housing had a slight rebound. "Construction spending dropped 0.4 percent in September compared to August when spending fell 0.5 percent, the Commerce Department reported Monday," as quoted by ABC News. However, "expectation is that further gains in construction will help support growth this quarter and into next year. Many economists are looking for the economy to grow at a 3 percent rate in the final three months of this year and average 3 percent in 2015 as well," according to ABC News. Read the court decision
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Blindly Relying on Public Adjuster or Loss Consultant’s False Estimate Can Play Out Badly

May 03, 2021 — David Adelstein - Florida Construction Legal Updates
Insurance policies, particularly property insurance policies, have a concealment or fraud provision that, in essence, gives the insurer an out if the insured submits a fraudulent claim, a false claim, or conceals material facts. Unlike a traditional fraud claim where a party needs to prove intent, the provision is broad enough that it does not require any intent behind making a false statement. See Mezadieu v. Safepoint Ins. Co., 46 Fla.L.Weekly D691c (Fla. 4th DCA 2021). For this reason, and as exemplified below, do NOT blindly rely on a public adjuster or loss consultant’s estimate that contains false statements because those false statements, particularly if you know they are false, can play out badly for you! Review the estimate and ask questions about it to make sure you understand what is being included in the loss or damages estimate. In Mezadieu, a homeowner submitted a claim to her property insurance carrier due to a second-floor water leak emanating from her bathroom. She submitted an estimate from her public adjuster that included damages for her kitchen cabinets directly below the second-floor bathroom, as well as other items on her first-floor. Her carrier denied coverage based on the exclusion that the policy excludes damage caused by “[c]onstant or repeated seepage of water or steam…which occurs over a period of time.” Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

Court Rules that Damage From Squatter’s Fire is Not Excluded as Vandalism or Malicious Mischief

April 15, 2015 — Valerie A. Moore, Christopher Kendrick, and Colin T. Murphy – Haight Brown & Bonesteel LLP
In Ong v. Fire Insurance Exchange (No. B252773, filed 4/3/15), a California appeals court ruled that a vacancy exclusion limited to damage caused by “vandalism or malicious mischief” did not bar coverage for damage to a vacant property caused by a warming fire purposely started by a transient that got out of control and spread to other parts of the property. In Ong, the insured’s rental premises had been vacated by tenants and the utilities turned off. Nearly two years later, the insured submitted a claim for fire damage that had just occurred. An investigator reported finding signs that a squatter had been living in the building, stating that: “[I]t appears the fire may have been initiated as the result of an uncontrolled warming fire started by an unauthorized inhabitant.” The investigator found firewood and a mattress, and concluded that holes burned in the floor were the result of the squatter attempting to throw burning wood out the door when the fire got out of control. The policy excluded vandalism as follows: “We do not cover direct or indirect loss from: . . . 4. Vandalism or Malicious Mischief, breakage of glass and safety glazing materials if the dwelling has been vacant for more than 30 consecutive days . . . just before the loss. A dwelling under construction is not considered vacant.” The term “Vandalism” was not defined in the policy. The insurer denied coverage based on the exclusion, stating: “Our investigation indicates that this loss was the result of vandalism. A trespasser entered the vacant dwelling and intentionally set a fire on the kitchen floor.” Reprinted courtesy of Haight Brown & Bonesteel LLP attorneys Valerie A. Moore, Christopher Kendrick and Colin T. Murphy Ms. Moore may be contacted at vmoore@hbblaw.com. Mr. Kendrick may be contacted at ckendrick@hbblaw.com Mr. Murphy may be contacted at cmurphy@hbblaw.com Read the court decision
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First Suit Filed for Losses Caused by COVID-19

March 30, 2020 — Tred R. Eyerly - Insurance Law Hawaii
Last week, the first lawsuit was filed seeking insurance coverage for business-interruption due to losses caused by COVID-19. The case, Cajun Conti, LLC, et al. v. Certain Underwriters at Lloyd's of London, ,et al., was filed in Louisiana. A New Orleans restaurant, Oceana Grill," seeks a declaratory judgment that its "all risks" policy issued by Lloyd's covers losses resulting from the closure of its restaurant due to the Governor's order restricting public gatherings and the Mayor of New Orleans' order closing restaurants. The lawsuit contends that "contamination of the insured premises by the coronavirus would be a direct physical loss needing remediation to clean the surfaces of the establishment." The lawsuit further alleges the policy contains no exclusions for a "viral pandemic." The suit seeks a declaration that "the policy provides coverage to plaintiffs for any future civil authority shutdowns of restaurants in the New Orleans area due to physical loss from coronavirus contamination and that the policy provides business income coverage in the event that the coronavirus has contaminated the insured premises." The obvious dispute will be whether the coronavirus constitutes a "direct physical loss or damage" as required by the policy. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

Mechanics Lien Release Bond – What Happens Now? What exactly is a Mechanics Lien and Why Might it Need to be Released?

January 04, 2021 — William L. Porter - Porter Law Group
Mechanics Lien Release Bond – What Happens Now? What exactly is a Mechanics Lien and Why Might it Need to be Released? California law entitles unpaid contractors, subcontractors, and material suppliers to record a mechanics lien on property where they performed work or supplied materials. The mechanics lien attaches to the real property as a legal interest and secures the right to payment for the work performed and materials supplied. If payment is not forthcoming the mechanics lien allows the property where the work was performed and materials supplied to be sold under court order to satisfy the debt. It is a powerful remedy against owners and their agents who do not pay for work performed and materials supplied to improve the owner’s property. A Mechanics Lien Release Bond Frees Property from a Mechanics Lien Owners typically do not wish to have their property sold out from under them. Fortunately for owners, there is a method by which a mechanics lien can be substituted for another interest and sale of the property thereby avoided. This method is through the use of a mechanics lien release bond. California Civil Code §8424 allows a property owner or contractor effected by a mechanics lien to record a mechanics lien release bond equal to 125 percent of the lien amount with the County Recorder where the mechanics lien has been recorded. The effect of this is to substitute the mechanics lien release bond for the mechanics lien itself, thereby relieving the property from the possibility of that property being sold to satisfy the debt. Instead, any payment made will come from the release bond. Read the court decision
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Reprinted courtesy of William L. Porter, Porter Law Group
Mr. Porter may be contacted at bporter@porterlaw.com

Thank Your Founding Fathers for Mechanic’s Liens

August 04, 2015 — Craig Martin – Construction Contract Advisor
Yep, our founding fathers, Thomas Jefferson and James Madison specifically, Craig Martin, Construction Attorney Lamson Dugan & Murray LLPwere responsible for proposing the first mechanic’s lien laws in the United States. Mechanic’s liens were not a new concept when the first law was passed in the United States; France, Spain and other countries already had them. But, in England, where landownership was limited to the upper classes, the concept of giving a tradesman an interest in the land for his labors was a truly foreign concept. The Early Years—Pre Mechanic Lien In the 1700s, there was no right to a mechanic’s lien. The possession of land was never deemed to be changed by its improvement and the laborer or material supplier was held to have acquired no right of lien in the property. The only remedy the laborer or material supplier had was to bring an action against the land owner. If the laborer or material supplier obtained a judgment, he would acquire the lien of a judgment creditor. A Treatise on the law of Mechanics’ Liens on Real and Person Property, 1893. Read the court decision
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Reprinted courtesy of Craig Martin, Lamson, Dugan and Murray, LLP
Mr. Martin may be contacted at cmartin@ldmlaw.com

California Fire Lawyers File Suit Against PG&E on Behalf of More Than 50 Wildfire Victims

November 15, 2017 — David Suggs – Bert L. Howe & Associates, Inc.
Digital Journal reports that the California fire lawyers are comprised of four law firms, Baron & Budd, Singleton Law Firm, Dixon Diab & Chambers LLP, and Thornes Bartolotta McGuire. These firms filed suit against PG&E (Pacific Gas and Electric Company) on October 27th alleging that the brutal wildfires that swept through Northern California started when electrical infrastructure encountered vegetation. According to Digital Journal, more than 50 plaintiffs are being represented in this case who endured damages including “wrongful death, personal injuries, damage to or destruction of property, loss of cherished possessions, medical bills, evacuation expenses and lost wages.” John Fiske, an attorney at Baron & Budd stated, “through our team’s investigation to date, we believe that PG&E may have played a role in causing these fires.” Holding PG&E accountable for the 40 people killed, 8,400 structures destroyed, and 210,000 acres burned is their goal. Read the court decision
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