Legal Information

June 4, 2013

Professional services exclusion precludes coverage for design defect claims

Source: http://www.lexology.com, May 23, 2013
By: Wiley Rein LLP

Applying Nevada law, a federal district court held that an insurer has no duty to defend or indemnify claims alleging damage from design defects in houses constructed by the insureds due to the policy’s professional services exclusion. St. Paul Fire & Marine Ins. Co. v. Del Webb Communities, Inc., 2013 WL 1181904 (D. Nev. Mar. 19, 2013).

The insured construction companies were named as defendants in a class action lawsuit alleging damages as a result of structural seismic design defects in houses. The insureds tendered the lawsuit for defense and indemnity coverage under an excess policy issued by the insurer. The excess policy contained a professional services exclusion precluding coverage for damage “that results from the performance of or failure to perform architect, engineer, or surveyor professional services” including “the preparation or approval of any drawing and specification, map, opinion, report, or survey, or any change order, field order, or shop drawing; and any architectural, engineering, inspection, or supervisory activity.” The insurer accepted a defense subject to a reservation of rights, and filed a declaratory judgment action seeking a determination that no defense or indemnity obligation existed under the excess policy pursuant to the exclusion.

The court held that coverage was precluded by the plain terms of the professional services exclusion in the excess policy. According to the court, the only damages sought in the class action lawsuit were “damages relating to curing the design defect” that fell directly within the scope of the exclusion. In so holding, the court rejected the insureds’ contention that additional discovery was warranted to determine if a concurrent cause for the damages existed that would defeat application of the exclusion. The court noted that the insureds “cannot show that there was a concurrent cause which would defeat the Exclusion because the only allegation in the [underlying action] is that homes were built using the allegedly defective [designs] and are hazardous because they do not meet seismic codes.” As such, the court rejected the insureds’ request for further discovery and held that no coverage obligations existed for the class action lawsuit under the excess policy.

The opinion is available here.…

August 31, 2011

Class action denied in Tecumseh Products water pollution case

Source: http://www.lenconnect.com, August 30, 2011
By: Dennis Pelham

More than 60 property owners could file separate lawsuits over groundwater pollution from the Tecumseh Products  Co. plant in Tecumseh after a judge denied class action status on Monday.

“I do not like the idea of inviting 60-some litigants,” said Lenawee County Circuit Judge Margaret M.S. Noe. But potential damage to each property has to be evaluated separately, she said, which does not allow a class action suit.

Tecumseh attorney Charles Gross said options that remain open for property owners include joining separate claims and sharing the cost of an appraisal study to determine damages in the case. He told the court class action status was needed to make an estimated $30,000 to $50,000 appraisal study practical.

Gross represents brothers Thomas and Robert Robarge who filed suit in 2009 after they learned groundwater beneath their homes had been contaminated with chemical solvents dumped on factory property.

Gross argued at Monday’s hearing that Tecumseh Products has admitted liability for the groundwater contamination in a 2010 consent agreement with the federal Environmental Protection Agency. He also said 36 monitoring wells operating in the area of the Tecumseh plant have identified at least 62 properties affected by the underground contamination.

“Every one of these people have a problem,” Gross argued. Owners and potential buyers will have problems borrowing against the property because of the proven groundwater contamination.

He agreed any loss of value has to be proven for each individual property. But class action status would relieve each owner from a legal battle to first prove Tecumseh Products is responsible.

“Each of these plaintiffs shouldn’t have to prove liability and causation,” Gross said.

“These guys are going to deny everything,” Gross said. “This is why we have class actions. It is the only way for individuals in Tecumseh, Mich., to have a chance against this group.”

Tecumseh Products has not admitted any liability, said company attorney Robert Jackson of Detroit.

A Michigan Court of Appeals ruling in the lawsuit allowed only a nuisance claim to proceed against the company, he said, and that requires “a property owner by property owner analysis. They have to prove a substantial interference with their use and enjoyment.” Because the city has a municipal water system, he said, property owners do not have contact with the affected groundwater.

“Plaintiffs simply cannot meet the requirements of class action,” Jackson said.…

July 27, 2011

Dying worker awarded 47M from LILCO, Con Ed

Source: http://www.weitzlux.com

A March 2003 article in the New York Daily News reported on a mesothelioma personal injury verdict/settlement regarding an ex-boilermaker who was awarded $47 million yesterday by a jury that blamed his lung cancer on years of working with asbestos.

Robert Croteau, 53, of Pottstown, Pa., was diagnosed with mesothelioma, a fatal lung cancer, in 2001, according to his attorneys, Michael Roberts, Jerry Kristal and Richard Meadow of Weitz & Luxenberg. Roberts said his client got cancer after being exposed to asbestos at Con Edison and Long Island Lighting Co. power plants while working for various contractors in the 1960s and 1970s.

The Manhattan Supreme Court jury deliberated for slightly more than two days, following a two-month-long trial, finding both companies negligent as well as reckless.

Representatives of the companies said they would appeal. The jury also found about 20 other companies partially responsible for Croteau’s plight.

Weitz & Luxenberg is a leading plaintiffs’ law firm that has represented people affected by mesothelioma for over 20 years. Men and women diagnosed with mesothelioma or lung cancer caused by asbestos exposure may be entitled to compensation from the companies responsible for their disease. If you would like a free consultation or more information about your legal options, please complete the form on this page, and a representative of our law firm will contact you as soon as possible.…

May 26, 2011

$8.1 mil settlement for Attica families

Source:  http://www.wlfi.com, May 24, 2011
By: Tiffanie Dismore

Attorneys are calling a Kraft Global Foods settlement one of the first successful environmental lawsuits of its kind.

Those involved in the class action lawsuit against a multi-billion dollar Kraft are comparing it to a biblical story.

“It was back and forth negotiations like David and Goliath,” said Ben Bowles. He and his wife were one of the 124 families to file a class-action lawsuit against Kraft.

The lawsuit filed against Kraft stated cancer-causing chemicals were released into the groundwater from the RMC factory off Summit Street more than 50 years ago, which then became vapors which entered homes.

“You can’t say, anymore, that you have no legal responsibility to clean up,” said attorney Shawn Collins. “You can’t say that anymore, if you want to settle with us and Kraft said ‘Okay.'”

Collins said Kraft will pay the families $8.1 million, or about $40,000 each, depending on their property value. Kraft will also clean the groundwater and install mitigation systems in the affected homes.…

March 9, 2011

Win for Asbestos Insurers

Source: http://blogs.wsj.com, May 18, 2007
By: Nathan Koppel

A ruling issued today in a New Jersey state court marked a win for insurers who challenged an asbestos “pre-packaged” bankruptcy.

The case, which concerns the 2003 bankruptcy of Congoleum Corporation, has been followed closely by combatants in the asbestos prepackaged arena. Some companies that have faced asbestos liability have tried to control their exposure by filing prepackaged bankruptcies, which are negotiated ahead of time, potentially allowing a company to reorganize in an expedited fashion.

Critics have argued that asbestos prepacks” let plaintiffs lawyers collect damages for dubious asbestos claims at the expense of insurers.

Congoleum was a manufacturer of flooring products, some of which once contained asbestos. From 1981 to 2002, over 70,000 claimants filed asbestos-related injury suits against the company, prompting the company to negotiate a prepackaged bankruptcy plan under which it later agreed to pay more than $465 million to resolve asbestos claims, the ruling said.

Congoleum’s insurers filed suit in New Jersey claiming Congoleum, as part of its prepackaged plan, agreed to pay claims that would not be paid in the tort system.

Judge Nicholas Stroumstos Jr. concluded that the prepackaged plan was the result of collusion between Congoleum’s former bankruptcy lawyers and lawyers representing asbestos claimants. The plan “contains no meaningful provisions to ferret out fraudulent claims,” he wrote.

We’re delighted by the decision, said John Gerstein, who represents one of the insurers. We think it will become a watershed decision, because it should lead to intensified scruitiny of asbestos prepacks in the future. Lawyers who negotiated the plan were not immediately available for comment.…

March 7, 2011

Hearing in RES lawsuit focuses on class-action certification

Source: Joplin Globe (MO), March 2, 2011
Posted on: http://envfpn.advisen.com

Jasper County Circuit Court Judge David Dally is expected to rule in 10 days on whether or not Carthage residents can sue as a class over damages from odors allegedly coming from Renewable Environmental Solutions of Carthage.

Dally heard two hours of arguments today focusing on whether a lawsuit filed by two Carthage women would be certified as a “class action,” meaning the case also could go forward on behalf of a larger group of residents around the now-closed plant.

Rhon Jones, one of the attorneys representing Carthage residents Cynthia Sundy and Tricia Orr, is proposing the class include residential property owners who lived within three kilometers of the plant during its operation from 2003 to 2009.

He said the lawsuit is a “simple nuisance claim” on whether odors from the plant impaired owners’ use of their property.

“Class certification is just an efficient means to bring multiple common claims to trial,” he said.

Mark Anstoetter, on behalf of RES, said plaintiffs’ arguments did not meet requirements for class action status, based in part on varying responses from residents living within the boundary.

“What they have are highly individualized experiences not worthy of a class action,” he said. “They’ve offered no evidence of damages that can be provided on a class wide basis.”…

December 23, 2010

Asbestos Level Underestimated

A claim for an at-risk construction management firm arose during extensive renovation and abatement at a school.  The construction manager hired a firm to estimate the levels of asbestos in school.  The claimant alleged that the level of asbestos was grossly underestimated resulting in an additional $13 million during construction to abate asbestos. 

This is a claim scenario developed from a single claim or several claims and has been developed for illustrative purposes only.

August 16, 2010

Class Action Lawsuit for UST Leak of MTBE into Potable Well

Acknowledgement to XL Environmental

THE CLAIM
An XL insured, a gas station, was contacted by the county health department following an odor/taste complaint by a customer who had purchased a beverage from the store. The insured’s potable well was tested, revealing methyl tertiary butyl ether (MTBE) in concentrations that were twice the state actionable level.

Investigation by the county health department linked the MTBE to a leak from the piping/dispenser system associated with underground storage tanks. A class action lawsuit was filed against the insured by local residents for a mix of claims including property damage, bodily injury and fear of injury.

THE RESPONSE
XL’s environmental claims counsel retained local defense counsel to represent and defend our insured’s interests. An experienced, local remediation consultant was also retained on the insured’s behalf to design a remediation system.

THE SOLUTION
A remediation technology was selected and implemented. A settlement was reached with respect to the class action litigation whereby certain residents’ homes were purchased, others received dollar settlement amounts and others received a settlement including medical monitoring costs.

The insured’s Pollution and Remediation Legal Liability Policy paid $1,200,000 to resolve the class action lawsuit on the insured’s behalf and remediate the insured’s property.…

August 13, 2010

Waste Facility Allegedly Caused Contamination

Acknowledgement to XL Environmental

THE CLAIM
A class action lawsuit from 68 claimants was filed against an XL insured waste facility alleging that the insured contributed to contamination (oil residue, biocides, acids, mercury, lead, diesel fuels, metals, radioactive materials and hydrocarbons) at a waste disposal pit owned by the insured. The class action alleged that contamination from the site emanated onto the claimants’ properties, contaminating their homes, crops, livestock and personal property.

THE RESPONSE
XL’s environmental claims counsel worked with the insured to formulate a defense to the allegations and investigate the claims made. XL retained local defense counsel to defend the insured’s interests with respect to the lawsuit filed.

THE SOLUTION
XL’s claims counsel and defense counsel worked collaboratively with the insured through the discovery phase of the litigation. Approximately a year after filing the class action lawsuit, the claimants and their counsel voluntarily dismissed the action for lack of evidence against the insured. XL paid for the insured’s defense counsel fees and costs in the amount of $75,000 under the insured’s Pollution and Remediation Legal Liability Policy.…

July 12, 2010

Residents Sue Over Chemical Spill

Three residents of a Louisville, Kentucky neighborhood recently sued when a chemical spill caused vapors to travel through sewer pipes. The claimants are seeking class action status, which would cover anyone in a 1.6 mile area near the plant. At the time of the incident, it was estimated that up to 50 homes were affected by the vapors.  (Source: www.insurancejournal.com)

If the chemical company had a PLL Policy in place, it could be afforded coverage for third party bodily injury or property damage claims and associated legal defense resulting from the chemical spill and associated vapors.…