Archive: 2013

1
Pennsylvania Appeals Court Confirms Insurance Coverage for Product Liabilities and Distinguishes “Faulty Workmanship”
2
Welcome to the 24th Edition of K&L Gates’ Arbitration World
3
Attributes of a Good Construction Contract
4
Welcome to the 23rd Edition of K&L Gates’ Arbitration World
5
Legal and Insurance Lessons Learned From Major Catastrophic Events and Construction Claims (Live Event)
6
The Projects and Construction Review, Chapter 22 “Italy”
7
New York Court holds that Indian Sovereign Immunity does not Extend to For-Profit Corporation
8
West Virginia’s High Court Holds Defective Workmanship Causing Bodily Injury or Property Damage Does Constitute an “Occurrence” Under Standard CGL Policy
9
Connecticut Supreme Court Determines Damage Caused by Unintended Faulty Work Constitutes Property Damage Resulting from an “Occurrence” Under Standard Commercial General Liability Policy
10
Maritime Law Does Not Preempt State Safety Laws When The State Laws Do Not Unduly Interfere With Maritime Law

Pennsylvania Appeals Court Confirms Insurance Coverage for Product Liabilities and Distinguishes “Faulty Workmanship”

By: Joseph C. Safar & Kimberly L. Karr, K&L Gates, Pittsburgh

Whether a construction defect constitutes a covered “occurrence” under a commercial general liability (“CGL”) policy has been the subject of a national debate among state courts in recent years.  Armed with a small minority of seemingly pro-insurer decisions finding no coverage for a contractor’s “faulty workmanship,” some insurers have sought to broaden the coverage-divesting implications of such cases by arguing that the defective design or manufacturing of products should also be deemed “faulty workmanship,” and thus, not covered.  This expansive view of what constitutes “faulty workmanship” disregards important distinctions made in earlier cases and significantly degrades, if not completely undermines, the broad products liability coverage commonly recognized to exist under CGL policies.  For example, if taken to its logical conclusion, this would mean that product manufacturers whose off-the-shelf products unexpectedly cause property damage or bodily injury to others would not be able to obtain coverage—thereby defeating the very purpose of securing CGL coverage.

To read the full alert, click here.

Welcome to the 24th Edition of K&L Gates’ Arbitration World

Welcome to the 24th edition of Arbitration World, a publication from K&L Gates’ International Arbitration Group that highlights significant developments and issues in international and domestic arbitration for executives and in-house counsel with responsibility for dispute resolution.

To view Arbitration World in our online magazine format, click here.

To download a printable PDF of the publication, open the link above and click  on the far right icon in the magazine toolbar at the top of the page.

This edition focusses on Africa, a continent that offers significant opportunities across a number of business sectors, and which is seeing remarkable GDP growth rates in many of its nation states.  We include a commentary on the means of mitigating risks arising from disputes when concluding business transactions in Africa.  We review the recent changes in the arbitration landscape in Africa and their potential impact.  We also include a comparative review of Maghreb’s arbitration laws, with particular focus on Morocco, Algeria and Tunisia.

We provide our usual update on developments from around the globe in international arbitration and investment treaty arbitration.  We look at recent U.S. court decisions on the evolving issue of class arbitration, continue our series of articles on means of protecting foreign investments with a review of the fair and equitable treatment protection standard, and consider the approach to multi-tiered dispute resolution provisions in different jurisdictions.  We hope you find this edition of Arbitration World of interest, and we welcome any feedback (email Ian.Meredith@klgates.com or
Peter.Morton@klgates.com).

Attributes of a Good Construction Contract

By Richard Paciaroni, K&L Gates, Pittsburgh

In April, I participated as a panelist for a program titled Failure is an Option, which addressed best practices for developing a construction project.  Being the only lawyer on the panel among seasoned construction professionals, I was prepared to tackle the topic from a lawyer’s perspective.  I was told to expect the following questions: 1) Is there such a thing as a “good” construction contract?; 2) Can a “good” contract increase the likelihood of success?; and 3) What are the attributes of a “good” construction contract?

After nearly 30 years of handling construction claims and disputes, I felt that I was qualified to address these points.  Specifically, my answers to the first two questions were “yes.”  A good analogy that I can offer is that a “good” construction contract is like a well-constructed ship—it will get you safely through rough water.  Conversely, a “bad” construction contract is analogous to a poorly constructed ship—in rough water, it is likely to capsize, resulting in disaster.

To read the full article, click here.

This article was originally published in the Summer, 2013 edition of The Voice—The Official Magazine of the Construction Users Roundtable.

Welcome to the 23rd Edition of K&L Gates’ Arbitration World

Welcome to the 23rd edition of Arbitration World, a publication from K&L Gates’ International Arbitration Group that highlights significant developments and issues in international and domestic arbitration for executives and in-house counsel with responsibility for dispute resolution.

To view Arbitration World, click here.

To download a printable PDF of the publication, open the link above and click on the far right icon in the magazine toolbar at the top of the page.

We are delighted to be able to include in this edition a guest contribution from Wieger Wielinga of Omni Bridgeway, funder and manager of cross border claim recoveries.  In his article, Wieger offers his insights and practical tips for the enforcement of arbitral awards against sovereign states and entities under their control, advising that parties overlook at their peril the potential risks and pitfalls of enforcement of awards.

We also include in this edition our usual update on developments from around the globe in international arbitration and investment treaty arbitration, along with specific articles covering some of those developments, along with other topics of interest in more detail, authored by members of K&L Gates’ International Arbitration Group.

We hope you find this edition of Arbitration World of interest, and we welcome any feedback (email ian.meredith@klgates.com or peter.morton@klgates.com).

Legal and Insurance Lessons Learned From Major Catastrophic Events and Construction Claims (Live Event)

Sponsors: Marsh and K&L Gates

September 10, 2013

TKP Conference Center
109 West 39th Street
(Between 6th and Broadway)
New York, NY

Join Marsh and K&L Gates for a complimentary one-day seminar at the TKP New York Conference Center on Tuesday, September 10, 2013, at 8 a.m.

During this seminar, our experts will discuss important topics from both a legal and risk management perspective to better prepare you for managing the risks associated with catastrophic events.

We will cover:

  • Lessons learned from Superstorm Sandy and the World Trade Center Disaster.
  • Contractor default insurance and claim management techniques.
  • Optimizing post-disaster claim recovery.
  • Project risk management techniques to reduce the likelihood and impact of cost overruns and schedule delays.

Registration and Continental Breakfast begin at 8:00 a.m.
Sessions 8:30 a.m. – 4:30 p.m.
Cocktail Reception 4:30 p.m. – 6:30 p.m.

We look forward to seeing you on September 10th!

*Important Note — Due to construction taking place next to the TKP New York Conference Center, the entrance to 109 West 39th Street is not easily visible.  An alternate entrance is 104 West 40th Street (between 6th & Broadway).  Once inside the main lobby, take the elevators to the 2nd floor.  Registration check-in will be to your right.

To RSVP, please register or contact Ale Muzika.

The Projects and Construction Review, Chapter 22 “Italy”

Third Edition, Law Business Research Ltd.

Chapter 22 by: Francesco Sanna, Anna Amprimo and Carolina Teresa Arroyo, K&L Gates, Milan

I INTRODUCTION

The current state of Italian project finance is the result of a trend initiated more than 20 years ago, when public resources started to become scarce and the construction or infrastructure needed private funds to be carried out.

First came the realisation of energy plants – especially the renewables sector with the CIP6 regulation, which started in 1992 – where project finance started to be used in Italy on the basis of the UK experience.  Such project finance schemes were initially purely private and fostered by public subsidies in the sale of green energy to the state. In the light of the success of such structures, the Italian state in the late 1990s passed a specific regulation to use project finance schemes to finance, build and operate public infrastructures in the context of European framework legislation on public works.  The procedure, in brief, provided that private sponsors could submit autonomously to the authorities’ projects to finance, build and operate public infrastructure.

In the case of ‘cold’ infrastructure, public grants are available to subsidise business plans; public subsidies, however, need to comply with Eurostat rules and need only cover a minority part of the investment.  This procedure has passed through many legislative changes in the past decade and is now regulated under Article 153 et seq. of the Italian Act for Public Works, which provides a specific procedure for selecting sponsors in public PFI schemes.  Such schemes are extensively utilised in a wide range of infrastructures in Italy, with particular focus on hospitals and roads.  Purely private PFI schemes are still used in the energy sector, with a specific focus on renewable and photovoltaic projects.

These schemes are financed by major Italian banks, and their development has been helped by the setting up of regional public agencies that direct and manage all the major public PFI schemes dealing with infrastructure, but also urban regeneration programmes that involve the disposal of public assets.

(Footnotes omitted.)

To read the full chapter, click here.

Reproduced with permission from Law Business Research Ltd.
This article was first published in The Projects and Construction Review, 3rd edition (published in July 2013 – editor Júlio César Bueno).
For further information please email
Adam.Sargent@lbresearch.com 

New York Court holds that Indian Sovereign Immunity does not Extend to For-Profit Corporation

Sue/perior Concrete & Paving, Inc. v. Lewiston Golf Course Corp., — N.Y.S.2d—, 2013 WL 2674470 (N.Y. App. Div. June 14, 2013)

In Sue/perior Concrete, the Appellate Division, Fourth Department, clarifies how closely a corporation must be tied to an Indian tribe to be entitled to tribal sovereign immunity.

Defendant, Lewiston Golf Course Corporation, was an Indian tribe-affiliated entity formed under the laws of the Seneca Nation of Indians.  Lewiston hired the plaintiffs, Sue/perior Concrete & Paving, Inc. to construct a golf course that would increase revenue for an adjoining casino.  The casino was owned by Lewiston’s parent company, Seneca Niagara Falls Gaming Corporation.  Seneca Niagara Falls Gaming Corporation was in turn owned by another corporation, which itself was in turn owned by the Seneca Nation.  Thus, the Seneca Nation was Lewiston’s ultimate owner, but the Nation was three steps removed from construction of the golf course.  The construction project took over a year longer than estimated, and upon completion Sue/perior sued Lewiston for $4.1 million for extra work performed as well as delay-related damages.  Lewiston moved to dismiss on the grounds that they were entitled to the Seneca Nation’s sovereign immunity.

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West Virginia’s High Court Holds Defective Workmanship Causing Bodily Injury or Property Damage Does Constitute an “Occurrence” Under Standard CGL Policy

By: Robert F. PawlowskiMatthew S. Sachs, K&L Gates, Newark

West Virginia has joined the majority of states recognizing coverage for bodily injury and property damage claims arising out of defective workmanship.  Influenced by the growing number of states allowing for such coverage, the Supreme Court of Appeals of West Virginia rejected prior rulings and recently held that defective workmanship causing bodily injury or property damage constitutes an “occurrence” under a policy of commercial general liability (“CGL”) insurance.  Cherrington v. Erie Insurance Prop. & Cas. Co., Case No. 12-0036, 2013 WL 3156003 (W.Va. June 18, 2013) (“Cherrington”).  In so holding, the Cherrington Court expressly overruled three of its prior decisions, decided between 1999 and 2005, holding that CGL policies do not cover defective workmanship claims.

To read more, click here.

Connecticut Supreme Court Determines Damage Caused by Unintended Faulty Work Constitutes Property Damage Resulting from an “Occurrence” Under Standard Commercial General Liability Policy

By: Frederic J. Giordano & Ashley L. Turner, K&L Gates, Newark

Jurisdictions are split over whether defective construction can give rise to an occurrence under commercial general liability insurance policies.  Some jurisdictions have held that faulty workmanship cannot constitute the basis for an occurrence because it is not the type of risk intended to be insured by commercial general liability policies or lacks the fortuity necessary to be considered an accident.  In contrast, other jurisdictions have held that faulty workmanship may constitute the basis for an occurrence because it is unintended.  The Connecticut Supreme Court joined those courts holding that faulty workmanship may give rise to an occurrence in the recent decision Capstone Building Corp. v. American Motorists Ins. Co., SC 18886, 2013 WL 2396276 (Conn. June 11, 2013) (“Capstone”).

To continue reading, click here.

Maritime Law Does Not Preempt State Safety Laws When The State Laws Do Not Unduly Interfere With Maritime Law

Durando v. City of New York, 963 N.Y.S.2d 670 (N.Y. App. Div. 2013)

In this case, the New York Appellate Division, Second Department, addressed the interaction of New York state construction law and federal maritime law in the context of a construction worker’s personal injury suit, and held that local regulations will not be preempted when they do not unduly interfere with a fundamental characteristic of maritime law or the free flow of maritime commerce.

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