Assignment of Benefits Provision in Homeowner’s Policy is Enforceable

September 18, 2018
David Adelstein - Florida Construction Legal Updates

When it comes to property insurance claims, particularly those under a homeowner’s insurance policy, an insured will oftentimes assign its benefits under the policy to a restoration contractor. The request for the assignment may likely be prompted by the contractor that does not want to perform the work without the assignment of benefits. The assignment of benefits (also known by the acronym “AOB”) allows the third-party contractor (as the assignee of the insured) to sue the insurer directly for benefits under the policy associated with the restoration work.

Mr. Adelstein may be contacted at dma@kirwinnorris.com


SBA Cuts Surety Guarantee Fees, for One Year

September 10, 2018
Tom Ichniowski – Engineering News-Record

The U.S. Small Business Administration will be trimming the fees it charges for its surety bond guarantees for one year, the first reduction in the charges in 12 years.

Mr. Ichniowski may be contacted at ichniowskit@enr.com


Over One Hundred Charged in Fraudulent Sandy Relief Fund Applications

September 5, 2018
David Suggs – Bert L. Howe & Associates, Inc.

Recently, the number of false claims in New Jersey Sandy Relief Fund Applications has grown to 120, according to Property Casualty 360. Furthermore, “[t]he 120 people charged by the Attorney General’s Office allegedly were responsible for diverting more than $8 million in relief funds.”

Attorney General Gurbir S. Grewal explained what has been done to reclaim the alleged diverted funds: “We have recovered over $2.2 million through these prosecutions and we also have sent a strong message that should deter this type of fraud during future disaster relief efforts.”


Insurer's Motion to Dismiss Case for Collpase Coverage Denied

August 29, 2018
Tred R. Eyerly - Insurance Law Hawaii

In yet another collapse case from Connecticut, the federal district court denied the insurer's motion to dismiss. Maki v. Allstate Ins. Co., 2018 U.S. Dist. LEXIS 102708 (D. Conn. June 20, 2018).

In February 2016, the insureds noticed a series of cracks throughout the basement walls of their home. The insureds believed the problem was due to tainted concrete, likely obtained from the J.J. Mottes Concrete Company, which had caused similar problems in homes throughout Connecticut. A chemical compound in the Mottes concrete would eventually cause the home to cave in on itself, and there was no known method to prevent the continuing deterioration.

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Insurer's Denial of Claim for Faulty Workmanship Does Not Survive Summary Judgment

August 21, 2018
Tred R. Eyerly - Insurance Law Hawaii

The court granted the insured's motion for summary judgment despite the insurer's denial based upon faulty workmanship. Engineered Structures, Inc. v. Travelers Prop Cas. Co. of Am., 2018 U.S. Dist. LEXIS 102822 (D Idaho June 18, 2018).

Engineered Structures, Inc. (ESI) contracted with Fred Meyer Stores, Inc. to build a fuel center. The contract called for the installation of two underground storage tanks (USTs) for storage and sale of fuel. ESI contracted with 3 Kings Environmental, Inc. (3 Kings) to install the Liquid Fuel Distribution and Electrical systems.

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Arizona Upholds Assignment of Post-Loss Benefits

August 15, 2018
Tred R. Eyerly - Insurance Law Hawaii

The Arizona Court of Appeals upheld the insured's assignment of benefits despite the policy's anti-assignment provision. Farmers Ins. Exchange v. Honorable David Udall, 2018 Ariz. Ct. App. LEXIS 94 (Ariz. June 12, 2018).

Farmers issued homeowners' policies to four homeowners who later required water damage mitigation and restoration services. Each of the policies included an anti-assignment provision stating that the insured's "interest in this policy may not be transferred o another person without [Farmers'] written consent." Each insured, however, signed a "Work Order Agreement & Assignment of Benefits" authorizing the remediation company, EcoDry Restoration of Arizona, LLC, to perform emergency water mitigation services and then assign insurance rights under the policies to EcoDry. The assignment authorized and instructed the insurance company to pay directly to EcoDry the amount shown in the final billing for work done by EcoDry.

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Is the New York Scaffolding Law Driving Up Insurance Costs?

August 8, 2018
Beverley BevenFlorez-CDJ STAFF

Construction Drive reported that critics are blaming New York’s Scaffold Safety Law for insurance increases for “New York City's $11.2 billion East Side Access tunnel has risen 557% from original cost estimates to $584 million.” However, others are claiming “much of the increase is due to a decade's worth of project delays, and insurance costs have risen along with the extended coverage period. In addition, as part of its last insurance policy renewal, the authority has to pay a $15 million penalty to its insurer because personal injury claims exceeded the policy's $40 million cap.” Construction Dive suggested “[i]f personal injury claims for falls is what is driving up a construction company's insurance costs, then that contractor should probably evaluate its safety program, and implement policies that will reduce the rate of accidents.”


Current Trends in Construction Insurance Industry

July 31, 2018
Beverley BevenFlorez-CDJ STAFF

Insurance Journal interviewed construction insurance professionals to see what’s new in the market. First, there seems to be confidence in the construction market as a whole: “It’s a healthy construction market outlook,” Danette Beck, national construction practice leader at USI, an insurance brokerage and consulting firm, told Insurance Journal. “There aren’t any projections right now that there is going to be a slowdown.” Other topics discussed include Meaningful Risk Management, Construction Utilizing Technology, and Coverage Trends.


Questions Home Buyers Should Ask Regarding Coastal Flooding

July 21, 2018
Beverley BevenFlorez-CDJ STAFF

According to Property Casualty 360, coastal flooding issues are on the rise: “A national research analysis from the Union of Concerned Scientists (UCS) predicts that 311,000 coastal homes are at risk of flooding, which is 26 times or more per year within the next 30 years, a phenomenon called a “chronic inundation.” By 2100, that number will exceed 2.4 million homes in the U.S.” The article recommends home buyers to “ask smart questions about coastal and tidal flooding.”


Can Workers With Sun-Related Skin Issues File Workers' Compensation Claims?

July 18, 2018
Scott Van Voorhis, Scott Blair, & Jonathan Barnes – Engineering News-Record

Shade tents and frequent water breaks are part of the strategies Kris Comon uses for dealing with 100°-plus temperatures and a punishing sun at a two-story building being constructed in Phoenix. Comon is project manager for UEB Builders, prime contractor for the Helios Education Foundation, and to beat the heat, work starts at 6 a.m. and ends in the early afternoon, he says.

Reprinted courtesy of ENR attorneys Scott Van Voorhis, Scott Blair and Jonathan Barnes
Mr. Blair may be contacted at blairs@enr.com


Hurricane-Proof Homes Are Real. Why Isn’t Anyone Buying Them?

July 11, 2018
Christopher Flavelle - Bloomberg

In a private waterfront resort on the northern tip of Key Largo, nestled between tropical forest and the Caribbean, Eric Soulavy is marketing luxury for the age of climate change: Coastal homes that are all but hurricane proof.

The Florida-based developer is finishing a three-story condominium project with overlapping defenses, a hydrological Fort Knox where prices start at $5 million for a four-bedroom apartment.


Hurricane Prevention Reduces Business Loss Exposures

July 2, 2018
Beverley BevenFlorez-CDJ STAFF

For every dollar spent on Hurricane protection, businesses saved $105, according to research completed by FM Global, as reported by Property Casualty 360. The statistic was derived from “over 10,000 wind- and flood-related investments and their associated reduction in property loss and business disruption exposure for 1,800 clients around the world from 2008 to 2017.” FM Global is a commercial and industrial property insurer.


Issues of Fact Require Denial of Insurer's Summary Judgment Motion in Collapse Case

June 13, 2018
Tred R. Eyerly - Insurance Law Hawaii

The insurer's motion for summary judgment to establish there was no coverage for the collapse of the front wall in the insured's home was denied. Desvarieux v. Allstate Prop. & Cas. Ins. Co., 2018 US. Dist. LEXIS 71230 (E.D. Pa. April 26, 2018).

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Coverage Found for Water Damage Caused by Collapsed Plumbing System

June 6, 2018
Tred R. Eyerly - Insurance Law Hawaii

The Eleventh Circuit, following Florida law, reversed the district court's granting of summary judgment to the insurer for water damage caused by a collapse in the dwelling's plumbing system. Cameron v. Scottsdale Ins. Co., 2018 U.S. App. LEXIS 9800 (11th Cir. April 16, 2018).

A pipe in the plumbing system of the insureds' dwelling collapsed, causing water damage to the interior and necessitating additional damage to access and repair the plumbing. The cause of the plumbing problem was the age of the plumbing system that carried wastewater out of the building.

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Hawaii Legislature Passes Six Insurance-Related Bills

May 30, 2018
Tred R. Eyerly - Insurance Law Hawaii

The 2018 session of the Hawaii Legislature recently concluded after enacting six insurance-related measures. Each of the bills have been sent to the governor for signature.

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Coverage for Loss Caused by The Big Island's Volcanic Eruptions

May 24, 2018
Tred R. Eyerly - Insurance Law Hawaii

The Puna District of the Big Island of Hawaii continues to experience volcanic eruptions causing extensive loss of property. The recent eruptions have opened 14 separate vents. covering 104 acres of forest land and home sites with lava in the Leilani Estates neighborhood, located approximately ten miles from the source at the Puu Oo Crater. Twenty-seven homes have been destroyed. Most of the neighborhood's 1800 residents have moved from the area. The damage is approaching the $1.9 million threshold for the federal government to declare a major disaster area.

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Insurer Must Defend Claims of Faulty Workmanship That Damage Another's Work

May 16, 2018
Tred R. Eyerly - Insurance Law Hawaii

The Nebraska Court of Appeals ruled that the insurer must defend claims of faulty workmanship causing property damage to something other than the insured's work product. Grinnell Mut. Reinsurance Co. v. Fisher, 2018 Neb. App. LEXIS 47 (Neb. Ct. App. March 13, 2018).

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Coverage Case for Construction Defects Transferred to Hawaii

May 3, 2018
Tred R. Eyerly - Insurance Law Hawaii

The federal district court for the Northern District of California determined the proper forum for a coverage case was Hawaii, not California. Navigators Specialty Inc Co. v. Kapiolani Residential, LLC, 2018 U.S. Dist. LEXIS 47770 (N.D. Cal. March 22, 2018).

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Construction Management Fee Exclusion Bars Coverage

April 11, 2018
Tred R. Eyerly - Insurance Law Hawaii

The general contractor was not entitled to a defense based upon an exclusion for construction management fees. Houston Cas. Co. v. Cavan Corp. of NY, Inc., 2018 N.Y. App. Div. LEXIS 1138 (N.Y. App. Div. Feb. 20, 2018).

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Defense Owed To Additional Insured General Contractor

March 29, 2018
Tred R. Eyerly – Insurance Law Hawaii

The Illinois Court of Appeals reversed summary judgment entered for the insurer and found the general contractor, an additional insured under the policy, was entitled to a defense. Hastings Mut. Ins. Co. v. Blinderman Constr. Co., Inc., 2017 Ill. App. LEXIS 661 (Ill. Ct. App. Oct. 24, 2017).

Blinderman was the general contractor on a construction project for an elementary school. Blinderman hired JM Polcurr, Inc. to do the electrical work on the project. By contract, Polcurr was obligated to purchase a policy naming Blinderman as an additional insured for Polcurr's work on the project. Polcurr purchased the policy.

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Absence of Property Damage Leads to Rejection of Insured's Claim

March 22, 2018
Tred R. Eyerly - Insurance Law Hawaii

Affirming the district court, the Eighth Circuit found that deteriorated bags which unintentionally mixed with landscaping materials did not amount to property damage under the CGL policy. Decker Plastics Corp. v. West Bend Mut. Ins. Co., 2018 U.S. App. LEXIS 2085 (8th Cir. Jan. 29, 2018). The district court's decision was the subject of a prior post [here].

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Limited Fees Awarded to Insured After Partial Victory Over Insurer

March 14, 2018
Tred R. Eyerly. - Insurance Law Hawaii

The Federal District Court, District of Hawaii, overruled the insured's objections to the Magistrate Judge's Findings and Recommendations awarding partial fees. Hanover Ins. Co. v. Anova Food, LLC, 2018 U.S. Dist. LEIXS 11493 (D. Haw. Jan. 24, 2018).

A prior post set forth the background of the case. In a prior opinion, the court denied pre-tender defense fees to the insured, but found there were genuine issues of material fact regarding post-tender fees.

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Claim for Punitive Damages Against Agent Should Go to Jury

February 28, 2018
Tred R. Eyerly – Insurance Law Hawaii

The Hawaii Intermediate Court of Appeals reversed the trial court's granting the insurance agent's Motion for Judgment as a Matter of Law on the insured's claim for punitive damages. Fuche Corporation, Inc. v. Leung, et al., 2018 Haw. App. LEXIS 37 (Haw. App. LEXIS Feb. 8, 2018).

Fuche Corporation sued its insurance agents, Bill Hin Bi Leung and Noguchi & Associates, for malpractice and breach of contract for their failure to procure coverage for water damage arising from flooding incidents which occurred from December 1, 2004 through November 17, 2005 at the insured's restaurant. After the first flooding incident in December 2004, Fuche Corporation notified Leung, who informed Fuche Corporation that the flooding incident was not covered by his policy and that coverage could not be provided until the policy was renewed in September 2005. After a third flooding incident at the restaurant on September 4, 2005, Fuche Corporation reported the flood to Leung and told Leung to add the flood coverage when Leung renewed the policy.

Mr. Eyerly may be contacted at te@hawaiilawyer.com


Duty to Defend Owed From Date of Window Installation Even Absent Allegations As To When Property Damage Occurred

February 22, 2018
Tred R. Eyerly – Insurance Law Hawaii

In a long-standing dispute between a window manufacturer and its insurer, the federal district court found that the insurer was obligated to pay defense costs from the date of installation of the alleged faulty windows even though the underlying complaints did not allege when the damage occurred. Pella Corp. v. Liberty Mut. Ins. Co., No. 4:11-cv-00273 (S.D. Iowa Jan. 16, 2018). The case is here.

Mr. Eyerly may be contacted at te@hawaiilawyer.com



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