By Kerianne E. Kane
Saxe Doernberger & Vita, P.C.

What do you do when your house falls out from underneath you? Over the last few years, homeowners in northeastern Connecticut have been suing their insurers for denying coverage for claims based on deteriorating foundations in their homes. The lawsuits, which have come to be known as the “crumbling concrete cases,” stem from the use of faulty concrete to pour foundations of approximately 35,000 homes built during the 1980s and 1990s. In order to save their homes, thousands of homeowners have been left with no other choice but to lift their homes off the crumbling foundations, tear out the defective concrete and replace it. The process typically costs between $150,000 to $350,000 per home, and homeowner’s insurers are refusing to cover the costs. As a result, dozens of lawsuits have been filed by Connecticut homeowners in both state and federal court.

Of those cases, three related lawsuits against Allstate Insurance Company were the first to make it to the federal appellate level.[1] The Second Circuit Court of Appeals was tasked with deciding one common issue: whether the “collapse” provision in the Allstate homeowner’s policy affords coverage for gradually deteriorating basement walls that remain standing.

The Allstate policies at issue were “all-risk” policies, meaning they covered “sudden and accidental direct physical losses” to residential properties. While “collapse” losses were generally excluded, the policies did provide coverage for a limited class of “sudden and accidental” collapses, including those caused by “hidden decay,” and/or “defective methods or materials used in construction, repair or renovations.” Covered collapses did not include instances of “settling, cracking, shrinking, bulging or expansion.”

Under Connecticut law, if an insurance policy’s terms are “clear and unambiguous,” then courts will give the terms their ordinary meaning. If the terms are ambiguous, however, courts will construe the language in favor of the insured. The homeowners argued that under Connecticut Supreme Court precedent, the term “collapse” is ambiguous, because it includes not only sudden catastrophe, but also the type of gradual deterioration occurring in the foundations of their homes.

The homeowners principally relied on the Connecticut Supreme Court’s decision in Beach v. Middlesex Mutual Assurance Co.[2] In Beach, the plaintiffs sought coverage from their homeowner’s insurer for a crack in the foundation of their home, caused by a “collapse” within the terms of the policy. The insurer denied that a collapse had occurred and argued that the crack was caused by “settlement of earth movement,” a type of loss excluded under the policy. The homeowners argued that because “collapse” was not defined in the policy, it was ambiguous because it could include both a catastrophic breakdown, as well as a gradual breakdown based on loss of structural strength. The Connecticut Supreme Court agreed, finding that the term “collapse,” left undefined, encompasses “substantial impairment of the structural integrity of a building.” As a result, the court construed the term in favor of the homeowners, noting that if the insurer intended for the definition of “collapse” to be limited to a sudden and complete catastrophe, it had the opportunity to expressly include such a limited definition in the policy.

The Second Circuit Court of Appeals was not persuaded, however, that Beach was controlling, and found that the policy at issue in Beach was easily distinguishable from the Allstate policies, which included qualifying terms to define covered collapses as “entire,” “sudden” and “accidental.” The Court of Appeals explained that by including these terms, it was expressly clear that Allstate intended for covered collapses to be limited to abrupt, unexpected collapses. As a result, the Court concluded that the damages sustained by the homeowners were not covered under the policies, because not only was the gradual erosion and cracking of the foundations not “sudden” or “accidental,” but “cracking” was expressly excluded from the definition of collapse.

These decisions are a perfect example of the significance of policy terms and definitions, which can vary greatly from one insurance carrier to the next, and the impact that they can have on potential claims. The likelihood of success for the countless crumbling concrete cases still pending in Connecticut courts will largely depend on the specific terms of each policy, and the manner in which terms like “collapse” are defined or otherwise qualified.

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1 The three cases are Valls v. Allstate Insurance Co., 919 F.3d 739 (2d Cir. 2019); Carlson v. Allstate Insurance Co., Case No. 17-3501, 2019 WL 1466935 (2d Cir. April 2, 2019); and Lees v. Allstate Insurance Co., Case No. 18-007, 2019 WL 1466939 (2nd Cir. April 2, 2019).
2 Beach v. Middlesex Mutual Assurance Co., 205 Conn. 246, 532 A.2d 1297 (1987).
3 Valls, supra, at 744 (quoting Beach v. Middlesex, 205 Conn. at 253).

A web post by Glen A. Murphy for Spilman Thomas & Battle addresses potential issues and concerns that may arise between general contractors, subcontractors and their insurers when claims by outside parties (also known as third-parties) may arise.

Murphy explains:

When a General engages a Sub to perform work on projects, the parties should always reduce their expectations and agreements to a written document in which both sides agree and acknowledge the terms. These documents may go by many names, but they are contracts that bind the parties to the terms. It is a common component of these agreements for the businesses or organizations to take on the liability of another entity, which they might normally not otherwise have. This form of agreement, where one party takes on or assumes the liability of another party by contract, is commonly called a “hold harmless” or an “indemnity” agreement.

Read the article.

Zapproved has published a new Electronic Discovery Management Model that addresses the overarching importance of information governance, advances in legal technology, and the 2015 amendments to the Federal Rules of Civil Procedure.

The updated version can be downloaded from the company’s website at no charge.

The original Electronic Discovery Reference Model successfully described the nascent ediscovery process and gave ediscovery practitioners a common language and framework for evolving their own approaches, but a lot has changed since then, Zapproved says on its website.

The company says it grappled with the overarching importance of information governance, advances in legal technology, and the expansion of data identification. It also considered recent changes in legal department operations and the 2015 amendments to the Federal Rules of Civil Procedure, which sought to stem the tide of out-of-control ediscovery by re-emphasizing proportionality.

Download the new version.

JPMorgan Chase said on Thursday that it agreed to pay $5 million to settle a class-action lawsuit filed on behalf of male employees who contend they were denied access to the same paid parental leave as mothers between 2011 and 2017.

The Washington Post‘s Samantha Schmidt reports the American Civil Liberties Union, which represented named plaintiff Derek Rotondo, said “this marks the first settlement of its kind stemming from a class-action lawsuit on behalf of male employees claiming they were denied the same equal paid parental leave as women. The settlement comes amid growing pressure on employers to adopt gender-neutral paid-leave policies that encourage more equitable caregiving roles in the home.”

While not admitting liability, the company pledged to train those administering the policy and pay $5 million to male employees who claim they were denied additional paid parental leave as primary caregivers.

Read the Post article.

The Aldous\Walker law firm has earned a place on The National Law Journal’s 2018 list of Top 100 Verdicts for securing a $25 million verdict against a former Dallas Cowboys player and the nightclub that over-served him, leading to a fatal DWI crash.

The firm represented Stacey Jackson, mother of former Cowboys practice squad player Jerry Brown, who died in the 2012 crash. Brown was a passenger in the car driven by former star defensive lineman Josh Brent. Both had visited Privae Lounge in Dallas the night of the accident, and tests showed Brent’s blood-alcohol content was twice the legal limit at the time of the crash, according to a release from the law firm.

The Aldous\Walker team successfully argued that the club shared responsibility for continuing to serve alcohol to Brent after he was intoxicated. The jury found Privae Lounge’s owners and Brent were equally liable for Brown’s death.

The verdict is among the largest in Texas for this kind of case. The full list of the NLJ Top 100 Verdicts for 2018 appears in the publication’s June issue.

“This is a very tragic case. But I was pleased we were able to bring Ms. Jackson the justice she deserved,” said Aldous\Walker co-founder Charla Aldous, who along with Brent Walker, represented Ms. Jackson at trial. “The owners of that club did everything they could – including filing for bankruptcy – to avoid their responsibility. But we stuck with it because we knew we were right.”

The win was the first of three courtroom verdicts the firm earned on behalf of its clients in less than three months, including:

• Sarah Milburn, who was left quadriplegic in a collision involving a Honda Odyssey van. In February 2019, Aldous and Walker won a $37.6 million verdict on her behalf after a jury found Honda’s design of a third-row seat belt defective.
• Isabella Fletcher, who was sexually assaulted by former Hebron High School football players when she was 14. A Denton County jury awarded her $32 million, just weeks after the Milburn victory.

The firm’s release said the courtroom wins represent just the latest high-profile legal successes for Aldous and Walker, both of whom also represented nurse Nina Pham, who contracted Ebola in 2014 while working at Texas Health Presbyterian Hospital Dallas. And in 2011, they won a $9.3 million verdict on behalf of a female student who was sexually assaulted by a teacher at the Episcopal School of Dallas.

The U.S. Supreme Court has turned away an appeal of a ruling against the widow of a Reed Smith partner who blamed the labeling of the antidepressant Paxil for her husband’s suicide.

The court denied the appeal petition from plaintiff Wendy Dolin in her lawsuit against pharmaceutical company GlaxoSmithKline, reports the Cook County Record.

“Dolin had sued GSK over the death of her husband, Stewart Dolin, who had committed suicide in a downtown Chicago transit station in 2010,” writes the Record‘s Jonathan Bilyk. “Dolin alleged her husband’s suicidal behavior was caused by the drug paroxetine, the generic version of GSK’s Paxil. The warning label for paroxetine is identical to the label for Paxil.”

Read the Cook County Record report.

The Miami Herald reports that a federal judge ordered top Carnival Corporation executives, including chairman Micky Arison and president Arnold Donald, to appear in court on June 3 because the company is charged with violating its probation.

“Federal prosecutors announced last week that they had reached a deal with Carnival Corp. on the charges, which include dumping plastic into Bahamian waters and falsifying records. At the June 3 hearing, Judge Patricia Seitz will review the deal, and she wants Carnival Corp.’s C-suite to be there,” explains the Herald‘s Taylor Dolven.

The world’s largest cruise company was put on probation for its 2016 conviction for environmental crimes on its Princess Cruises ships. Carnival paid $40 million as part of its guilty plea and began its five-year probation in April 2017. It was Carnival Corp.’s third conviction for the same crime of dumping oily waste into the ocean since 1998.

Read the Miami Herald report.

The U.S. Supreme Court has held in Mission Product Holdings, Inc. v. Tempnology, LLC that a trademark licensee may retain certain rights under a trademark licensing agreement even if the licensor enters bankruptcy and rejects the licensing agreement at issue, reports Paul Weiss.

“Relying on the language of section 365(g) of the Bankruptcy Code, the Supreme Court emphasized that a debtor’s rejection of an executory contract has the ‘same effect as a breach of that contract outside bankruptcy’ and that rejection ‘cannot rescind rights that the contract previously granted,’” according to the firm.

“The Supreme Court’s decision has far-ranging implications, as the opinion’s reasoning can be expanded to apply to the vast majority of contracts that may be rejected in bankruptcy,” the article concludes.

Read the article.

Harvey Weinstein

Image by David Shankbone

Disgraced movie mogul Harvey Weinstein may owe his former lawyers nearly $500,000 for work they did in four cases brought against him by insurance companies, reports the New York Post‘s Page Six.

Court documents show that Abelson Herron Halpern LLP is seeking $420,495 in the suits brought against Weinstein by insurance companies who say they shouldn’t have to pay for the costs of his civil and criminal defenses in the sexual misconduct and assault cases brought against him.

Page Six’s Priscilla DeGregory writes that the firm is staking a claim to the money they say they are owed by putting a lien on the ongoing litigation with the insurance companies in the event that Weinstein recoups money from any of them.

Read the Page Six article.

A Thompson & Knight trial team earned a unanimous verdict for BP America Production Company in a retrial of a 12-year-old lease termination dispute brought by Laddex, Ltd., an Amarillo-based oil company. Absent further appeals, this verdict could be the final chapter in over a decade of contentious lease termination litigation, according to a release from the law firm.

The release tells the history of the litigation:

In 2013, BP took two lease termination disputes to trial within one month of each other: Laddex v. BP America and Red Deer Resources v. BP America. In each case, the plaintiffs sought termination of large BP leases in the Texas Panhandle. Both cases involved the hot Texas litigation topic of “production in paying quantities,” a doctrine that allows a typical oil and gas lease to continue after its primary term only if the well or wells on that lease produce enough oil and gas to turn a profit.

Laddex was originally tried in June 2013. In that trial, the jury found that the lease failed to turn a profit from August 2005 to October 2006 and further found that a reasonable operator would not continue to operate the Mahler D-2 well for the purpose of making a profit. The effect of these answers was the termination of BP’s lease.

Red Deer went to trial one month later. In that case, the jury found that the well had produced in paying quantities at all relevant times, but that it was not capable of producing in paying quantities at the time it was shut-in on June 12, 2012.

Both cases eventually found their way to the Texas Supreme Court. In Red Deer, the court determined in its 2017 opinion that the only material question asked of the jury was whether the lease produced in paying quantities—and BP prevailed on that question. The result was a reversal and judgment rendered in favor of BP. In Laddex, also in 2017, the Texas Supreme Court ruled that the jury charge in the 2013 trial erroneously instructed the jury to limit its analysis only to a specific 15-month period and held that the length of the time period to be considered for determining profitability was for the jury to decide. The court therefore remanded the case for a new trial.

The focus of Laddex is whether the Mahler D-2 well produced enough oil and gas to maintain BP’s almost 50-year-old lease. In order for the 1971 lease to remain valid, it needed to produce oil and gas in profitable quantities. Laddex’s suit claimed that the Mahler D-2 failed to turn a profit for over a year starting in the summer of 2005, and therefore the lease terminated on its own terms. It was undisputed that the well experienced a significant slowdown for about 15 months, but BP maintained that the lease was still profitable during that time. The well recovered to more normal levels of production in November 2006 and continues to produce near those levels to this day.

BP hired Thompson & Knight for the retrial, which began on April 15, 2019, and concluded mid-day on April 23. The jury ruled unanimously for BP.

The Thompson & Knight retrial team in Laddex v. BP was led by Rob Vartabedian, with support from Alix Allison, Rich Phillips, Conrad Hester, and Connor Bourland. Thompson & Knight’s Rob Vartabedian and Conrad Hester assisted with all aspects of Red Deer, from trial to the Texas Supreme Court. M. Coy Connelly, BP America managing counsel, supervised the successful litigation efforts in both the Laddex and Red Deer suits.

A Houston-area utility worker has filed a lawsuit against CenterPoint Energy Houston Electric, LLC, after he was severely injured in a fall from a company utility pole.

On March 15, 2019, near Tomball, Texas, Garrett Wilder, an employee of electrical contractor L.E. Myers Co., went with his co-worker to the utility pole owned by CenterPoint Energy Houston to do maintenance work, according to a post on the website of Androvett Legal Media & Marketing.

The lawsuit says a CenterPoint employee on the site told him to climb the 100-foot pole to install hand and foot bolts with fall protection eyelets. The contractor had climbed approximately halfway up the pole using fall protection gear when one of the handholds that was supposed to be permanently attached to the pole became separated, causing him to fall 40 feet to the ground. Upon impact, Wilder stopped breathing and his heart stopped beating. He was revived by his co-worker before being taken to the hospital. After multiple surgeries to his lower extremities and back, Wilder has been transitioned to a long and arduous physical therapy regime, according to the lawsuit.

Provost Umphrey attorney Matthew Matheny is representing Wilder. “Our client has suffered severe, permanent injuries which would have cost him his life if it had not been for the swift action of his fellow employee,” he said.

Wilder is seeking in excess of $1 million in damages for physical pain and suffering, mental anguish, lost wages, disfigurement, physical impairment and future medical bills. He is also asking for punitive damages. The lawsuit is Garrett Wilder vs. CenterPoint Energy Houston Electric, LLC in the 269th District Court, Harris County, Texas.

CenterPoint Energy Houston Electric, LLC, is owned by Utility Holding, LLC, a wholly owned subsidiary of Houston-based CenterPoint Energy, Inc.

Jones Day is objecting to the use of pseudonyms for four of the six plaintiffs who have sued the Biglaw firm for allegedly discriminating against female partners and associates in compensation.

Above the Law reports that the firm told the judge hearing some of the cases that “the court’s approval of the pseudonyms itself impugns Jones Day’s reputation by implying, without basis in evidence, that Jones Day would improperly retaliate against the Jane Does if their identities were made public.”

The firm’s motion said that “pseudonyms prevent the public—including clients, potential clients, lateral recruits, and law students—from fully evaluating the Does’ allegations and credibility.”

Read the Above the Law article.

Image by Mike Mozart

Reuters is reporting that Bayer AG plans to argue that a $2 billion jury award and thousands of U.S. lawsuits claiming its glyphosate-based weed killer Roundup causes cancer should be tossed because a U.S. regulatory “agency said the herbicide is not a public health risk.

“Some legal experts believe Bayer will have a tough time convincing appellate courts to throw out verdicts and lawsuits on those grounds,” writes Reuters’ Tina Bellon. “Bayer has a better shot if a business-friendly U.S. Supreme Court takes up the case, experts said. But that could take years.”

Bayer acquired Monsanto, the manufacturer of Roundup, last year, and the litigation involving 13,400 plaintiffs went along with the deal. The plaintiffs allege the product causes cancer. So far, three consecutive U.S. juries have found the product to be carcinogenic, resulting in verdicts amounting to billions of dollars.

Read the Reuters article.

Exterro has made available a new Gartner report titled “Defining Your E-Discovery Process Will Lower Costs and Reduce Risks.”

The report, which discusses six recommendations Gartner has for defining e-discovery process, can be downloaded from Exterro’s website at no charge.

“The goal of e-discovery is to find important files and communication that is usually spread out across an organization’s data footprint,” according to the Gartner report. “Infrastructure and operations leaders can use these procedures to better control their information and equip themselves for legal discovery requirements while improving overall maturity.”

Download the report.

Judge Amit P. Mehta

A federal judge expressed astonishment Tuesday at arguments raised by President Trump’s lawyers seeking to block his accounting firm from turning over years of financial records to the House Oversight and Reform Committee and seemed to signal a swift ruling in favor of lawmakers, reports The Washington Post.

“U.S. District Judge Amit P. Mehta fired pointed questions at the president’s lawyers, who argued in an April 22 lawsuit that the committee’s sweeping subpoena to Mazars USA for the financial records of Trump and various associated entities since 2011 was not ‘a valid exercise of legislative power,’” writes the Post‘s Spencer S. Hsu.

A lawyer representing Trump accused Democrats of “assuming the powers of the Department of Justice” on a partisan crusade.

Read the Post article.

Attorneys argued for more than three hours Tuesday over whether a judge should approve the $2.2 billion settlement of a class-action lawsuit over SCE&G’s failed nuclear plant construction project and the nine electric rate hikes that paid for it, reports the Durham Herald Sun.

The main point of contention was whether the 13 law firms that fought SCE&G for months before negotiating the settlement should earn $64 million in fees — money that could otherwise add to the cash refunds and rate credits going to the Cayce-based utility’s customers, writes the herald Sun‘s Avery G. Wilks.

A lawyer for the 13 law firms told the judge they took a tremendous risk in suing SCE&G. Facing long odds and high-powered defense lawyers, they spent 15 months, 26,000 hours and $865,000 building their case with star witnesses and crucial documents, he said.

Read the Herald Sun article.

A recent Texas ruling illustrates the problems that can arise when parties to a joint operating agreement elect to have a non-owner serve as the operator, points out Austin Brister in the McGinnis Lochridge Oil and Gas Law Digest.

The court was called on to determine whether an elected unit operator is permitted to delegate operatorship duties to a contract operator, and whether that contract operator can be liable to nonoperators for breach of any duties imposed on the operator under that unit operating agreement.

PBJV was designated as unit operator, but then PBJV entered into a contract with Apache to perform a number of duties.

The court concluded that Apache was merely delegated duties, based on its observations that PBJV never actually named or designated Apache as the “Unit Operator,” but instead entered into a “Contract Services Agreement” and power of attorney with Apache under which PBJV contractually delegated certain operator duties to Apache.

Read the article.

Reuters is reporting that a group of U.S. state attorneys general are investigating Expedia Group and hotel chains like Hyatt Hotels Corp and Marriott International Inc for alleged violations of antitrust law in online travel booking, according to a court filing.

“The filing in a state court in Utah relates to a dispute originally filed in Texas in which Travelpass accused the hotel chains last year of agreeing with each other, and with online travel groups like Expedia, to not advertise to consumers who searched for another company’s hotel,” according to the report.

Court documents name the hotel chains Hyatt, Marriott, Caesars Entertainment Corp and Choice Hotels International Inc.

Read the Reuters article.

Bloomberg Law reports that two women among a group of female associates accusing Morrison & Foerster LLP of pregnancy discrimination must replead some or all of their claims, a federal judge ruled.

One of the plaintiffs was too late with her claims under federal and District of Columbia law, the U.S. District Court for the Northern District of California said. And another plaintiff’s allegations were insufficient to support her argument that a release she signed was unduly influenced by the dire economic situation caused by her termination, the court said.

The women are part of a proposed nationwide class action filed in April 2018.

Read the Bloomberg Law article.

A federal judge on Tuesday ordered Pacific Gas and Electric Co.’s board to tour the Butte County community where the company’s equipment is suspected of starting a historically devastating California wildfire last year.

The San Francisco Chronicle reports that “U.S. District Judge William Alsup made the decision at a sentencing hearing he held for the utility regarding a violation of its probation arising from the 2010 San Bruno pipeline explosion. Alsup previously found the utility did not properly report a settlement it reached over a small 2017 fire.”

Alsup said he wanted the energy company executives to “see the gravity of what happened up there” and indicated he likely will join the tour.

Read the SF Chronicle article.