Reasonable Expectations – Pennsylvania’s Case by Case Approach to the Sutton Rule
February 12, 2024 —
Melissa Kenney - The Subrogation StrategistIn Mutual Benefit Ins. Co. a/s/o Michael Sacks v. Koser, No. 1340 MDA 2023, 2023 Pa. Super. LEXIS 574, 2023 PA Super 252 (Mutual Benefit), the Superior Court of Pennsylvania discussed whether a landlord’s property insurer could file a subrogation action against tenants that had negligently damaged the landlord’s property. Despite there being more than one clause in the lease holding the tenants liable for the damages, the court held that because there was a provision requiring the landlord, not the tenants, to insure the leased building, the insurer could not subrogate against the tenants.
In Pennsylvania, a tenant’s liability for damage to a leased premises in a subrogation action brought by a landlord’s insurer is determined by the reasonable expectation of the parties to the lease agreement. Under this approach, to determine if subrogation is permitted, the court considers the circumstances of the case and examines the terms of the lease agreement.
In Mutual Benefit, the tenants leased and resided in a residential home pursuant to a lease agreement. The lease specifically addressed insurance, stating that landlord was responsible for obtaining insurance on the dwelling and the landlord’s personal property, and tenants were encouraged to procure separate insurance for their personal property. The lease also addressed liability for damage to the leased property, stating generally that the tenants were responsible for damage caused by the tenants’ negligence.
Read the full story...Reprinted courtesy of
Melissa Kenney, White and WilliamsMs. Kenney may be contacted at
kenneyme@whiteandwilliams.com
American Arbitration Association Revises Construction Industry Rules and Mediation Procedures
April 08, 2024 —
Dennis Cavanaugh & Larry Grijalva - Construction Law ZoneThe American Arbitration Association (AAA), one of the longest-standing and experienced alternative dispute resolution (ADR) administrators, has unveiled a significant update to its Construction Industry Rules and Mediation procedures. This update, last revised in 2015, became effective March 1, 2024. Changes to the AAA Construction Industry Rules are significant as these rules are incorporated by default in American Institute of Architects standard construction forms, which are widely used in the industry.
Advancements in remote access technology drive a substantial number of new changes. Others are designed to streamline the arbitrator appointment process and certain prehearing procedures and to make arbitration more cost-efficient by enhancing the arbitrator’s case management authority. Some of the more notable changes are:
Fast Track
F-1: The limit for cases eligible for AAA’s Fast Track Procedures has been increased from $100,000 to $150,000 so long as no claim or counterclaim exceeds that amount.
Reprinted courtesy of
Dennis Cavanaugh, Robinson & Cole and
Larry Grijalva, Robinson & Cole
Mr. Cavanaugh may be contacted at dcavanaugh@rc.com
Mr. Grijalva may be contacted at lgrijalva@rc.com
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The New York Lien Law - Top Ten Things You Ought to Know
December 23, 2023 —
Ralph E. Arpajian - White and Williams LLPOver the course of my career, I have had the privilege of working with and representing numerous construction lenders (and borrowers/developers) in the financing of some of the largest commercial projects in the United States.
A number of these projects have been in New York, where one encounters the New York Lien Law (the “Lien Law”). Many of my clients, particularly those lenders, borrowers, and their counsel, located outside of New York, are often perplexed by my advice regarding the Lien Law and the loan structuring requirements which result. In the hope that it would be helpful (especially for non-New York counsel), I have compiled a “top ten” list outlining, in my view, the most critical (and most perplexing) aspects of structuring New York construction loans under the Lien Law.
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Ralph E. Arpajian, White and Williams LLPMr. Arpajian may be contacted at
arpajianr@whiteandwilliams.com
Allegations Versus “True Facts”: Which Govern the Duty to Defend? Bonus! A Georgia Court Clears Up What the Meaning of “Is” Is
December 11, 2023 —
Rachel E. Hudgins & Syed S. Ahmad - Hunton Insurance Recovery BlogCourts scrutinize a complaint’s factual allegations to decide whether the allegations trigger a duty to defend.
[1] If the facts unambiguously exclude coverage, there is no duty to defend.
[2] But what if the factual allegations fall within a policy exclusion, but the allegations are untrue or questionable? What if the true facts would mean the exclusion doesn’t apply? In that case, many courts have found that the insurer should base its decision on the policyholder’s version of the “true facts.”
[3] An insurer can’t rely on the complaint’s allegations to deny coverage when the facts that the insurer knows or can ascertain show that the claim is covered.
[4]
A recent case,
United Minerals & Properties Inc. v. Phoenix Insurance Co., No. 4:23-cv-00050 (N.D. Ga.), illustrates these policy interpretation principles.
Reprinted courtesy of
Rachel E. Hudgins, Hunton Andrews Kurth and
Syed S. Ahmad, Hunton Andrews Kurth
Ms. Hudgins may be contacted at rhudgins@HuntonAK.com
Mr. Ahmad may be contacted at sahmad@HuntonAK.com
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Recent Florida Legislative Changes Shorten Both Statute of Limitation ("SOL") and Statute of Repose ("SOR") for Construction Defect Claims
March 19, 2024 —
Holly A. Rice - Saxe Doernberger & Vita, P.C.The Florida Legislature and Governor DeSantis passed Senate Bill 360, effective April 13, 2023, which imposes significant changes to Florida’s statute of limitation (“SOL”) and statute of repose (“SOR”) periods prescribed in Florida Statute § 95.11. In short, the SOL and SOR periods will commence earlier and run earlier, which in effect shortens the time to bring a construction defect claim on both ends of the timeline.1
These changes will have positive impacts for general contractors who may save on insurance premiums with shorter completed operations tails. In other words, the timeframe within which contractors are at risk of being sued for construction-related errors is significantly reduced under the new version of the statute. Owners and developers, on the other hand, may feel that the increased pressure of uncovered construction defects necessitates the filing of lawsuits sooner than they might have otherwise filed. Collectively, all parties involved will certainly have to consider when and how to place their carriers on notice of claims or potential claims and, coupled with Florida’s sweeping changes to fee shifting statutes, insured parties may see more coverage denials which, in turn, could lead to more coverage actions.2
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Holly A. Rice, Saxe Doernberger & Vita, P.C.Ms. Rice may be contacted at
HRice@sdvlaw.com
Appraisal Goes Forward Even Though Insurer Has Yet to Determine Coverage on Additional Claims
December 11, 2023 —
Tred R. Eyerly - Insurance Law HawaiiThe trial court's order granting the insured's motion to stay litigation and compel an appraisal was affirmed even though the insurer had not determined coverage on the insured's additional claims.Heritage Prop. & Cas. Ins. Co. v. Wellington Place HOA, 2023 Fla. App. LEXIS 6405 (Fla. Ct. App. Sept. 13, 2023).
The insured homeowner's association reported roof damage to its insurer, Heritage, after Hurrican Irma struck. Heritage agreed the damage was covered, but issued no payment because the amount of loss was less than the deductible.
The insured hired its own adjuster. The insured requested an extension of the policy's two year time limit to complete repairs because the claim was still in dispute and the insurer had not yet paid sufficient funds to allow necessary repairs. Heritage sent a revised estimate and asked the insured to send its adjuster's estimate in order to address any disputes. The insured submitted its adjuster's estimate of more than $6 million, including, for the first time, the cost to replace all the windows and sliding glass doors.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Watchdog Opens Cartel Probe Into Eight British Homebuilders
April 02, 2024 —
Damian Shepherd & Katharine Gemmell - BloombergBritain’s top antitrust enforcer has opened an investigation into eight housebuilders to probe potential information sharing, sharpening scrutiny of a sector that’s failing to deliver enough affordable housing to meet demand.
The Competition and Markets Authority has opened a cartel investigation into eight developers including Barratt Developments Plc, the Berkeley Group, Persimmon Plc and Vistry Group Plc. The investigation centers on concerns the companies may have exchanged competitively sensitive information, which could be influencing the build-out of sites and the prices of new homes. An initial review will take place until December.
CMA Chief Executive Officer Sarah Cardell told Bloomberg Television the watchdog had seen potential evidence of companies exchanging information relating to pricing, sales rates, and incentives offered to new homebuyers. The watchdog has the power to fine firms a maximum penalty of as much as 10% of annual revenue and disqualify directors following cartel investigations.
Reprinted courtesy of
Damian Shepherd, Bloomberg and
Katharine Gemmell, Bloomberg Read the full story...
Traub Lieberman Partner Michael K. Kiernan and Associate Brandon Christian Obtain Dismissal with Prejudice in Favor of Defendant
November 27, 2023 —
Michael K. Kiernan & Brandon Christian - Traub LiebermanIn a 14-count breach of contract action brought in the Fifteenth Judicial Circuit in Palm Beach County, Florida, Partner Michael K. Kiernan and Associate Brandon Christian obtained dismissal with prejudice in favor of Defendant St. Joseph’s Episcopal Church of Boynton Beach, Florida (“Church”).
Plaintiffs, St. Joseph’s Episcopal School (“School”) and its benefactor, William Swaney, filed suit to enforce an alleged 99-year oral lease agreement which Swaney asserted had been made to him by a prior rector of the Church in exchange for his contributions to the School. Plaintiffs also sought emergency injunctive relief to allow the School to continue to operate on Church property. The Church maintained in part that the only lease in effect was a written lease, approved by the Church Vestry and the Diocese of Southeast Florida, and which the Church Vestry unanimously voted not to renew in 2022.
Reprinted courtesy of
Michael K. Kiernan, Traub Lieberman and
Brandon Christian, Traub Lieberman
Mr. Kiernan may be contacted at mkiernan@tlsslaw.com
Mr. Christian may be contacted at bchristian@tlsslaw.com
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