Is There Direct Physical Loss Under A Property Policy When COVID-19 is Present?
April 06, 2020 —
Tred R. Eyerly - Insurance Law HawaiiMost property policies provide coverage for property damage only when there is "direct physical loss" to covered property. Early indications are that COVID-19 remains on surfaces. The duration can last from a few hours to three weeks, depending on the type of surface material. If an employee is infected and the store or restaurant must closed because the virus may rest on surfaces within the building, is there direct physical loss, even though the building structure itself is unharmed?
To answer this question, cases from jurisdictions outside Hawaii may provide guidance. In a case from Louisiana, the homeowner had to move out of her home when excessive levels of organic lead were discovered in the kitchen, living room, master bedroom, and attic. Widder v. La. Citizens Prop. Ins. Corp., 82 So. 3d 294 (La. Ct. App. 2011). The insurer denied coverage because there was no direct physical loss. The trial court agreed; since the home was still intact, no direct physical loss had occurred, so there was no coverage under the policy. The appellate court reversed. It compared the presence of inorganic lead in the home to cases that found a direct physical loss from the existence of Chinese drywall, from which gaseous fumes were released, rendering the home unusable or uninhabitable. Physical damage was not necessary.
What if smoke from a nearby wildfire fills an outdoor theater, forcing cancellation of performances and loss of business income? This was the situation in Oregon Shakespeare Festival Ass'n v. Great Am. Inc. Co., 2016 U.S. DIst. LEXIS 74450 (D. Ore. Jun 7, 2016). Wildfires in the area caused smoke, soot, and ash to accumulate on the surface of seats and concrete ground of the open-air theater. The air quality was poor, but no federal, state or local agency ordered cancellation of the performances. Further, the theater did not suffer any permanent or structural damage to its property. The insurer denied coverage, contending that the loss or damage must be structural to the building itself. After all, the smoke in the air at the theater did not require any repairs to the structure of the property. The court disagreed. The theater sustained "physical loss or damage to property" when the wildfire smoke infiltrated the theater and rendered it unusable for its intended purpose. The decision in Oregon Shakespeare Festival was eventually vacated by a joint stipulation of the parties. Oregon Shakespeare Festival Ass'n v. Great Am. Ins.Co., 2017 U.S. Dist. LEXIS 33208 (D. Ore. March 6, 2017), but the reasoning is still sound.
Read the court decisionRead the full story...Reprinted courtesy of
Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Standard For Evaluating Delay – Directly from An Armed Services Board Of Contract Appeal’s Opinion
October 04, 2021 —
David Adelstein - Florida Construction Legal UpdatesSometimes, it is much better to hear it from the horse’s mouth. That is the case here. The Armed Services Board of Contract Appeal’s (ASBCA) opinion in Appeals of -GSC Construction, Inc., ASBCA No. 59402, 2020 WL 8148687 (ASBCA November 4, 2020) includes an informative discussion of a contractor’s burden when it encounters excusable delay and, of importance, the standard for evaluating delay. It’s a long discussion but one that parties in construction need to know, appreciate, and understand. EVERY WORD IN THIS DISCUSSION MATTERS.
Construction projects get delayed and with a delay comes money because time is money. Many claims are predicated on delay. These can be an owner assessing liquidated damages due to a delayed job or a contractor seeking its costs for delay. Either way, the standard for evaluating delay and the burdens imposed on a party cannot be understated and, certainly, cannot be overlooked. For this reason, here is the discussion on evaluating delay directly from the horse’s mouth in the Appeal of-GSC Construction, Inc.:
The critical path is the longest path in the schedule on which any delay or disruption would cause a day-for-day delay to the project itself; those activities must be performed as they are scheduled and timely in order for the project to finish on time. Wilner v. United States, 23 Cl. Ct. 241, 245 (1991). In Yates-Desbuild Joint Venture, CBCA No. 3350 et al., 17-1 BCA ¶ 36,870, our sister board compiled an excellent and very helpful synopsis of the standards for evaluating delay claims, which I adopt nearly verbatim among the discussion that follows.
Read the court decisionRead the full story...Reprinted courtesy of
David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Sellers of South Florida Mansion Failed to Disclose Construction Defects
October 08, 2014 —
Beverley BevenFlorez-CDJ STAFFA couple who reportedly sold their custom, beach-front home on Golden Beach for more money than any other home in that town previously, may have failed to disclose construction defects, according to Daily Business Review.
The original owners, reported Daily Business Review, claimed (according to court documents) that “they were ‘unable to spend even one night because an overwhelming smell of mold in the home triggered a severe reaction in Mrs. Hochberg.’" They also alleged the new home had “cracked walls, drafty doors, leaky windows, poorly cut marble and peeling stucco.” The owners sued the subcontractors, but lost due to not filing within the four-year statute of limitations.
While water leaks were disclosed during the sale with a notation that all leaks had been repaired, “the extent of the home's repair history was not discussed during nearly eight months of haggling over the property, the buyer's broker said.”
Read the court decisionRead the full story...Reprinted courtesy of
Fifth Circuit Concludes Government’s CAA Legal Claims are Time-Barred But Injunctive-Relief Claims are Not
November 28, 2018 —
Anthony B. Cavender - Gravel2GavelIn another recent U.S. Court of Appeals for the Fifth Circuit decision, on October 1, 2018, the Fifth Circuit affirmed, in part, the District Court’s ruling that the general federal statute of limitations, 28 U.S.C. § 2462, required the dismissal of the government’s civil enforcement action in the case of U.S., et al., v. Luminant Generation Co., LLC, et al.
The Fifth Circuit agreed that the statute barred the imposition of any civil fine for the alleged unlawful construction operations regarding the modification of major emitting facilities contrary to Section 7475(a) of the Clean Air Act (CAA). But, the Fifth Circuit remanded the injunctive-relief claims to the District Court for further consideration.
Read the court decisionRead the full story...Reprinted courtesy of
Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
California Appellate Court Confirms: Additional Insureds Are First-Class Citizens
May 04, 2020 —
Scott S. Thomas - Payne & FearsMany businesses shift risk by requiring others with whom they do business – e.g., vendors, subcontractors, suppliers, and others – to procure insurance on their behalf by making the business an “additional insured” under the other person’s liability insurance policy. Unfortunately, insurance companies sometimes treat these additional insureds as second-class citizens, refusing to acknowledge that the additional insured has the same rights as the policyholder, who paid the premium. In Philadelphia Indemnity Insurance Company v. SMG Holdings, a California appellate court removes any doubt whether these additional insureds are third-party beneficiaries entitled to the same rights – and bound by the same duties – as the entity that bought the policy.
While the dispute at issue in SMG Holdings was a narrow one – i.e., whether the additional insured was bound by the policy’s arbitration clause – the implications of its holding are far ranging in ways that, in some instances, may benefit the additional insured. For example, because the additional insured is an intended beneficiary under the policy, neither the insurer nor the policyholder may do anything to impair the additional insured’s rights under the policy; if they do, they may be liable for tortiously interfering with the additional insured’s contract rights. This means that (again, by way of example) if the insurer attempts to rescind, or cancel, or amend the policy in a way that impairs the additional insured’s rights, the additional insured may have recourse. It also means that if the policyholder does something untoward that jeopardizes the additional insured’s rights under the policy, the policyholder may be liable to the additional insured for any resulting harm.
Read the court decisionRead the full story...Reprinted courtesy of
Scott S. Thomas, Payne & FearsMr. Thomas may be contacted at
sst@paynefears.com
Quick Note: Notice of Contest of Claim Against Payment Bond
January 31, 2018 —
David Adelstein - Florida Construction Legal UpdatesOn private jobs where the general contractor has an unconditional payment bond, subcontractors, sub-subcontractors and suppliers need to serve a
notice of nonpayment to preserve payment bond rights.
Read the court decisionRead the full story...Reprinted courtesy of
David Adelstein, Florida Construction Legal UpdatesMr. Adelstein may be contacted at
dadelstein@gmail.com
Research Project Underway to Prepare Water Utilities for Wildfire Events
January 23, 2023 —
Brown and CaldwellPORTLAND, Ore., January 17, 2023 — A multi-disciplinary team of utilities, academia, and consultants have convened to develop a study and publish guidance to improve water treatment resilience against the impacts of forest fires.
Critical to water security, forested watersheds provide 75 percent of the world’s accessible freshwater (Food and Agriculture Organization of United Nations 2021) and supply drinking water for more than two-thirds of North American consumers (EPA 2019). The frequency and severity of forest fires have been increasing globally with warming temperatures and shifting precipitation patterns due to climate change. Wildfires can cause costly, long-term water treatment issues that push water treatment processes beyond their design and operational response capabilities.
Such issues include filtration effectiveness, disinfection efficacy, the elevation of disinfection by-product formation, and increased bioavailable phosphorus leading to problematic cyanobacterial/algal blooms.
Led by a principal research team of Lynn Stephens (Brown and Caldwell), Dr. Mac Gifford and Yone Akagi (Portland Water Bureau), and Dr. Monica Emelko (University of Waterloo), Water Research Foundation (WRF) project #5168 is funded by the foundation’s Emerging Opportunities Program and the Portland Water Bureau (PWB).
About The Water Research Foundation
The Water Research Foundation (WRF) is the leading research organization advancing the science of all water to meet the evolving needs of its subscribers and the water sector. WRF is a nonprofit, educational organization that funds, manages, and publishes research on the technology, operation, and management of drinking water, wastewater, reuse, and stormwater systems—all in pursuit of ensuring water quality and improving water services to the public. For more information, visit www.waterrf.org
About Brown and Caldwell
Headquartered in Walnut Creek, Calif., Brown and Caldwell is a full-service environmental engineering and construction services firm with 52 offices and more than 1,700 professionals across North America and the Pacific. For over 75 years, our creative solutions have helped municipalities, private industry, and government agencies successfully overcome their most challenging water and environmental obstacles. As an employee-owned company, Brown and Caldwell is passionate about exceeding our clients’ expectations and making a difference for our employees, our communities, and our environment. For more information, visit www.brownandcaldwell.com
Read the court decisionRead the full story...Reprinted courtesy of
April Rise in Construction Spending Not That Much
June 28, 2013 —
CDJ STAFFApril saw an increase in construction spending that didn’t even break a half of a percent with just a 0.4% increase, although that’s better than March’s slight decrease of 0.8%, Both government and residential construction spending dropped, although government spending dropped only 1.2% and residential a miniscule 0.1%. This was slightly more than offset by the modest 2.2% increase in residential spending.
Although the April gains were modest, they come after the first year to increase after five years of decline.
Read the court decisionRead the full story...Reprinted courtesy of
