Source: http://www.lexology.com, December 18, 2013
By: Brian Margolies, Traub Lieberman Straus & Shrewsberry LLP
In its recent decision in Perini/Tompkins Joint Venture v. Ace Am. Ins. Co., 2013 U.S. App. LEXIS 24865 (4th Cir. Dec. 16, 2013), the United States Court of Appeals for the Fourth Circuit, considering both Maryland and Tennessee law, had occasion to consider whether an insured’s settlement of an underlying construction defect claim, without its insurer’s consent, precluded its right to indemnification.
Perini/Tompkins Joint Venture (“PTJV”) qualified as a named insured under a primary and excess layer owner controlled insurance program (“OCIP”) issued by ACE American Insurance Company with respect to the construction of a $900 million hotel and convention center in Oxon Hill, Maryland. A collapse of the hotel’s atrium during the construction process resulted in significant property delays. Following completion of the project, PTJV sued the owner on various theories for approximately $80 million in unpaid work, and the owner brought a separate suit against PTJV based on various theories of negligence in connection with its construction management activities. The owner’s sought damages in the amount of $65 million. PTJV did not notify ACE of the countersuit, but later settled the litigation. Pursuant to the settlement, the owner paid PTJV approximately $42 million and PTJV credited $26 million back to the owner.
Some six months after the settlement, PTJV demanded that ACE pay the $26 million shortfall. ACE issued a reservation of rights on several grounds, including breach of the policies’ prohibition on settlements without ACE’s consent. Specifically, the policies contained clauses stating that “No insured will, except at that insured’s own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent.” In the ensuing coverage litigation, the United States District Court for the District of Maryland granted summary judgment in ACE’s favor on the issue of voluntary payment.…
Source: http://www.natlawreview.com, December 18, 2013
By: Jill Berkeley, Neal, Gerber & Eisenberg LLP
In Selective Ins. Co. v. Cherrytree Cos., 2013 IL App (3) 120959, the Illinois Appellate Court for the Third District drove the final nail in the insurer’s “if there is no duty to defend, there is no duty to indemnify” coffin. Holding that an insured had the right to settle a claim for defective construction after the insurer wrongfully denied coverage, the court reaffirmed its previous ruling that Zurich Ins. Co. v. Carus Corp., 293 Ill. App. 3d 906 (1997) misstated and misconstrued the law when it held that “when there is no duty to defend, there will be no duty to indemnify.” The court explicitly ruled that a standard general liability policy does not require the filing of a “suit” before the insured is entitled to seek indemnification for damages it is legally obligated to pay to a third party.
Not only does the majority opinion bring a smile to my lips, but the dissent by Justice Schmidt articulates one of my other favorite rules that “whereas here, the insurer denies coverage, the insured is entitled to do what he or she can to cut his or her losses, and need not wait until suit is filed to once again make demand on the insurer.” Hooray, sanity reigns in the Third District.
Source: http://envfpn.advisen.com, December 15, 2013
Posted on: http://envfpn.advisen.com
The Environmental Protection Agency will spend the next two months collecting air samples from homes in the Avondale community to determine how serious vapor intrusion is for those Riverside citizens.
But in the meantime, residents are worried about their health and property values.
The area of concern is bordered by Guernsey Dell Avenue, Minnesota Drive, Hypathia Avenue, Rohrer Boulevard and Valley Pike. There are about 130 residences in that neighborhood.
Vapor intrusion occurs when underground pollutants give off dangerous gases that can rise up through the soil and seep into buildings through foundation cracks and holes, causing unsafe indoor air pollution, according to the EPA.
The drinking water is not impacted by these site conditions, according to the EPA. The drinking water comes from the city of Dayton’s public water supply.
Steve Renninger, on-scene coordinator for the EPA’s Region 5 in Cincinnati, said it is possible the contamination extends beyond the initial area of concern.
“The data drives the decisions,” Renninger said. “If we start seeing elevated levels past in any direction, we’ll step it out another block until we see it subside.”
Kenneth Emmons, who lives with his parents at 2620 Bushnell Avenue, said since he and his fiancee moved in back in June, he regularly gets headaches and becomes nauseated.…
Source: http://news.yahoo.com, December 13, 2013
By: Nick Brown
Anadarko Petroleum Corp and its Kerr-McGee unit acted with “intent to hinder” when they spun off Tronox, the paint materials company that later went bankrupt, and should pay billions of dollars in environmental cleanup costs, a judge ruled on Thursday.
The decision, which parties had been awaiting for about a year since a trial wrapped up in late 2012, drove Anadarko’s shares down 9.8 percent to $75.50 in after-hours trading.
Judge Allan Gropper said damages could range between about $5 billion and more than $14 billion, in the decision handed down late Thursday afternoon in U.S. Bankruptcy Court in Manhattan.
Anadarko and Kerr-McGee are expected to appeal the ruling.
“Given the significant factual evidence supporting our position, we vehemently disagree with the Judge’s Memorandum of Opinion,” Anadarko CEO Al Walker said in a statement.
“We fully expect to pursue every avenue available to us through the appellate process to protect the interests of our stakeholders, once a final judgment including damages has been rendered.
Tronox sued Anadarko and Kerr-McGee in 2009, arguing that the 2005 spinoff that created Tronox was fraudulent because it loaded Tronox up with environmental liabilities that made it insolvent.
Tronox, which makes titanium dioxide used in paints, filed for Chapter 11 bankruptcy in 2009.…
Source: http://www.lexology.com, December 12, 2013
By: Brian Margolies, Traub Lieberman Straus & Shrewsberry LLP
In its recent decision in Stoddard Equipment Co., Inc. v. American Safety Indemnity Co., 2013 U.S. Dist. LEIS 170701 (W.D. Mo. Dec. 4, 2013), the United States District Court for the Western District of Missouri had occasion to consider whether property damage occurred during the policy period of a pollution liability policy.
American Safety’s insured, Stoddard, was named as a defendant in an underlying suit for its alleged negligent installation of a gas pipeline running from a storage tank to a marina where the gasoline was dispensed. Stoddard completed the work in early October 2009. The underlying plaintiff alleged that during the evening of September 2, 2011, the entire contents of its tank leaked into the surrounding soils and waters. Plaintiff alleged that Stoddard’s negligent installation of the pipe in 2009 is what caused the release in 2011.
Stoddard sought coverage under various policies for the underlying suit, including a contractors’ pollution liability policy issued by American Safety for the period November 3, 2008 to November 3, 2009. The policy’s insuring agreement provided coverage for property damage, but only to the extent the property damage occurred during the policy period. American Safety denied coverage to Stoddard on the basis that the property damage, i.e., the damage caused by the release of the storage tank’s contents, happened in its entirety nearly two years after the expiration of its policy. Stoddard nevertheless maintained that because the pipe was negligently installed during the time the American Safety policy was in effect, the property damage should be considered progressive in nature, spanning several policy periods.
On motion to dismiss, the court rejected Stoddard’s argument, distinguishing the gasoline release from matters involving property damage happening over a lengthy period of time, such as at issue in the Missouri Supreme Court case D.R. Sherry Const., Ltd. v. American Fam. Mut. Ins. Co., 316 S.W.3d 899 (Mo. 2010), which involved structural damage to a home over a period of years as a result of an unstable foundation. The underlying complaint contained no allegation that the pipe installed by Stoddard began leaking prior to November 3, 2009, but instead alleged that the entirety of the leak happened during a one night period in September 2011. The court further reasoned that no inference could be drawn from the complaint that any hole developed in the pipe prior to the expiration of the American Safety policy. In reaching its holding, the court cited to the line of Missouri law “that draws a distinction between the occurrence of negligent act during the policy period and the occurrence of physical damage that results from the commission of a negligent act during the policy period.” While the court agreed that Stoddard’s alleged negligence happened while the American Safety policy was in force, the resulting damage happened in its entirety after the expiration of the policy and thus fell outside of that policy’s scope of coverage.
Read here about improvements made to a meat processing plant in South Dakota that have pleased state officials.