Oil & Gas

March 10, 2017

Plaintiffs in $4.7 million construction defect case mum after ruling

Source: http://norcalrecord.com, February 28, 2017
By: Charmaine Little

Plaintiffs in a major construction lawsuit that ended with a San Diego law firm recovering nearly $5 million have decided to stay silent after the ruling was in their favor.

The law firm, which represented Laurel Bay Community Association, won $4.7 million in the case that was filed Aug. 21, 2013, against the developer and converter, Hammer Development LLC and Hammer Laurel Condominiums LLC. The suit was also a complaint against the original contractors, Simpson Laurel Bay LP, SHLP Laurel Bay LLC and GWC Contractors LP. The development was slated to be a new apartment complex in 2004 before it was turned into a set of residential condominiums in 2005.

Commercials Metal Company is listed as one of the primary plaintiffs in the high-profile case. It refused to speak on the $4.7 million ruling.

“We do not comment on litigation matters,” Susan Gerber, manager of public relations for Commercial Metals Company, told the Northern California Record.

March 10, 2017

Completed-Operations Coverage: What Is Included and Excluded from Your Commercial General Liability Policy?

Source: http://www.natlawreview.com, February 1, 2017
By: Barbara J. Jordan, P.E., S.I. and Donald B. Leach, Jr.

In 2008, Ohio Northern University (ONU) entered into a contract with Charles Construction Services, Inc. (CCS) for the construction of The Inn, a new luxury hotel and conference center on ONU’s Campus, consisting of 57,000 square feet of space, including guest rooms, meeting rooms, kitchen, laundry, spa, front desk lobby, office area and support areas. After construction was complete, ONU discovered damage to the Inn caused by water intrusion and moisture in The Inn’s wall coverings, dry wall, insulation and exterior walls.1 Remediation of this damage led to the discovery of additional structural defects.2 ONU subsequently brought a claim against CCS in 2012 seeking damages relating to the deficient construction services. CCS then brought third-party claims against many of its subcontractors that performed the work, which resulted in the alleged property damage.

CCS’s insurer, Cincinnati Insurance Company (CIC), intervened in the lawsuit and filed a motion for summary judgment, asking the Hancock County Court of Common Pleas3 to dismiss it from its obligation to defend CCS, relying upon the Ohio Supreme Court’s precedent from Westfield Ins. Co. v. Custom Agri Systems, Inc.4 In Westfield Ins., the Supreme Court of Ohio held “that claims of defective construction or workmanship brought by a property owner are not claims for ‘property damage’ caused by an ‘occurrence’ under a commercial general liability policy.”5

February 9, 2017

California Court Holds Continuous Progressive Injury Exclusion Applicable to Construction Defect Claim

Source: http://www.jdsupra.com, February 7, 2017
By: Brian Margolies, Traub Lieberman Strauss & Shrewsberry LLP

In its recent decision in Saarman Construction, Ltd. v. Ironshore Specialty Ins. Co., 2017 U.S. Dist. LEXIS 13633 (N.D. Cal. Jan 31, 2017), the United States District Court for the Northern District of California had occasion to consider the application of a continuous and progressive injury exclusion in the context of a construction defect claim.

The underlying suit arose out of Saarman’s work as a general contractor at a condominium complex performed in 2006 and 2007 to address pre-existing water intrusion problems.  In 2011, a lessee of one of the units sued the unit owner, claiming that her unit suffered from several defects, including mold, plumbing leaks and water intrusion.  The unit owner, in turn, sued several parties, including Saarman based on the theory that it failed to remedy the defects, which contributed to the mold growth.

Ironshore insured Saarman under a general liability policy issued for the period June 30, 2010 to June 30, 2011.  The policy contained an exclusion applicable to any claim alleging bodily injury or property damage “arising out of, in whole or in part, the actual, alleged or threatened discharge … of any mold, mildew, bacteria or fungus.”  The policy also contained an exclusion applicable to any bodily injury or property damage:…

January 23, 2017

Construction mishap reveals asbestos at SCC

Source: http://www.thesnaponline.com, January 19, 2017
By: Ritchie Starnes

The discovery of asbestos inside SCC’s signature building has led to its closure until May.

A construction mishap during the summer led to the discovery of asbestos in a glue compound used beneath the tile floor in the Patterson building on the campus of Stanly Community College. Further inspection also found asbestos in a compound inside the joints of the structure’s walls.

Consequently, offices and services located in Patterson were relocated to other parts of the campus in the interest of safety. Predominately an administrative building, most of the relocation pertained to faculty and staff. Patterson, constructed in the ‘70s, is also home to the college’s business office.

No classes, however, have been canceled as a result. Instead, classes were moved to other parts of campus.

“Students come first, then faculty and staff,” SCC President John Enamait said. “It was not a convenient time for faculty and staff to move out of that building at the end of the semester. It was a burden.”

Enamait applauded his faculty and staff since they were forced to absorb the brunt of relocation, much that did not occur until late into the semester after more asbestos was found.

Other than a few nooks in the campus’ oldest building, the second semester of the school year at SCC has been without the use of the Patterson building, or the main focal point of the campus that offers occupants a scenic view from atop a hill on the campus. It’s also the most visible structure, which is the first building that greets visitors as they ascend College Drive.…

August 4, 2016

Federal Environmental Requirements for Construction

Source: http://www.cem.va.gov

What Do You Need to Consider?

Do you perform clearing, grading, or excavation activities? Do you build roads, golf courses, playing fields, homes, or buildings? Are you involved in demolition activities? Will you discharge dredged or fill material to a waterway or wetland? Are you involved in tunnel or pipeline projects?

If so, you may be responsible for ensuring that requirements in federal environmental regulations are met. Depending on the regulation, a violation can result in a civil penalty up to $27,500 per day and a criminal penalty of up to $250,000 and 15 years in prison.

This guide provides information on federal environmental requirements for construction projects. It is written primarily for owners of construction projects and for general contractors who supervise  construction projects. Subcontractors also may find the information useful.

EPA delegates authority to implement certain regulatory programs to some states. A state may have requirements that are more stringent than the federal requirements. Therefore, be sure to check with your state and local agencies before starting a construction project.…

November 21, 2014

Professional services exclusion bedevils another court

Source: http://www.lexology.com, November 15, 2014
By: Carl A. Salisbury, Kilpatrick Townsend & Stockton LLP

A well drilling company has an insurance policy that covers property damage to any well, hole, or formation, or to any drilling or well servicing machinery or equipment, arising out of operations performed by the drilling company.  The policy contains an exclusion for damage due to the performance of professional services.  If a well that the insured is drilling blows and damages well drilling equipment,  can the professional services exclusion swallow up all the coverage for damage to the well and the equipment?  According to a Texas federal court, it can and it does.

It happens more often than it should.  A construction contractor gets sued by the project owner for some alleged defect or damage.  The contractor purchased liability insurance thinking that such claims would be covered, only to have the carrier deny the claim because of a “professional services” exclusion in the policy.  Every contractor, after all, brings specialize construction, engineering, and other knowledge and experience to a project.  If it weren’t for such expertise, we could all simply do the work ourselves.  The professional services exclusion, if not limited to its proper scope, can swallow up all of the coverage otherwise provided by a contractor’s liability policy.  Unfortunately, such coverage-killing interpretations are too often applied by courts.  It happened again recently in Nicklos Drilling Co. v. Ace American Ins. Co., Civ. Action No. V-14-021 (S.D.Tex. Nov. 5, 2014).  (Get a copy here.)…

July 7, 2014

Claims Case Study: Parr vs. Aruba Petroleum

Source: Ironshore Environmental, Environmental Energy Newsletter, July 2014

“Lessons Learned” Parr vs. Aruba Petroleum

A Dallas jury recently awarded $2.9 million dollars to a family that claimed serious health injuries related to Aruba Petroleum’s nearby oil and gas operations. Although the wells had been hydraulically fractured, the case concerned exposure to air pollutants associated with oil and gas activities not hydraulic fracturing fluids. Nonetheless, the verdict left many wondering whether this was an anomaly or a blueprint for future litigation.

Bob and Lisa Parr live on 40 acres outside of Decatur, Texas which is located in Wise County. In 2007 – 2009, Wise County saw significant oil and gas exploration related to the Barnett Shale. According to court documents, during this time period, approximately 70 wells were drilled within 2 miles of the Parr’s property. Aruba Petroleum operated 22 of those wells, the closest being only 791 feet away.  In 2011, the Parrs filed suit in Dallas County Court of Law No. 5 against Aruba Petroleum (along with eight other companies) claiming they suffered toxic exposure to hazardous gas emissions from oil and gas operations that led to continual sickness, annoyance, and discomfort. The Parrs provided medical evidence of elevated natural gas compounds in their blood, which appeared soon after operations began. The Parrs also kept a daily journal that documented their family’s health problems and they filed numerous complaints with the Texas Commission of Environmental Quality (TCEQ).…

December 10, 2013

Saltwater Spill Cleaned Up By TX Company

Read here about a saltwater spill on the Montana-North Dakota border that has been cleaned up by a Texas company.…

April 17, 2013

Failure to Report a Spill Ends Costly for Oil Hauler

Source: Zurich, April 11, 2013

A crude oil carrier has been slapped with two penalties by the US DOT after its tank truck overturned in an accident in January, spilling about 420 gallons of oil onto the roadside soil. One penalty was for failure to notify the National Response Center within the required 24 hours after a reportable environmental spill and the second was for failure to submit the written (U.S. DOT 5800.1) report within 30 days of the incident.

In the incident, nearby residences were evacuated and an elementary school was closed for the day as a precautionary measure due to the nature of the product and potential risks. A contractor was dispatched to perform the cleanup, and absorbent material was applied to absorb free product from the soil, which was excavated, and the site returned to pre-existing condition. About 52 tons of contaminated soils were generated during the cleanup efforts, which were transported for disposal in accordance with local, state and federal regulations. No injuries were reported. And no reports were filed.…

March 12, 2013

PA Residents Claim Bad Water Result of Drilling

Read here about a community in Pennsylvania that is worried about bad water and claim it’s the result of drilling for natural gas.…