Kobalt and Greenworks Brand Cordless Electric Lawn Mowers Recalled Due to Fire Hazard


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In subrogation cases where the insured’s damages were caused by a defective product, the fact that the product at issue is or was subject to a recall announced by the Consumer Product Safety Commission (CPSC) may help to establish that the product was defective when it left the manufacturer’s possession and control. On May 26, 2017, the CPSC announced the following recall related to a product that presents a fire hazard:

Cordless Electric Lawn Mowers Recalled Due to Fire Hazard; Made by Hongkong Sun Rise Trading

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Applying the Statute of Repose for Construction Claims, Colorado’s Supreme Court Finds Third-Party Claims Timely-Filed


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In Goodman v. Heritage Builders, Inc., 390 P.3d 398 (Colo. 2017) (en banc), the Supreme Court of Colorado clarified the parameters for timely-filing third-party claims for indemnification or contribution in construction defects cases. The court held that C.R.S. § 13-80-104(1)(b)(II) – addressing when a party can file third-party indemnification and contribution claims – controls over the two-year statute of limitations period set forth in C.R.S. § 13-80-102 and the six-year statute of repose period in C.R.S. § 13-80-104(1)(a). Thus, in Colorado, so long as third-party claims are brought during the litigation or within ninety days after the date of judgment or settlement, such claims should be timely.

In Goodman, Heritage Builders, Inc. (Heritage) acted as the general contractor for a home sold to Karen and Courtney Lord (collectively, the “Lords”). The county issued a certificate of occupancy for the home in September 2006. In November 2011, the Lords sold the home to Richard Goodman (Goodman), who discovered alleged construction defects in the home between March and June 2012.  In July of 2013, Goodman sent Heritage informal notice of his claims. He sent them a formal notice of claim – as required by Colorado’s Construction Defect Action Reform Act, C.R.S. §§ 13-20-801 to 31-20-808 – in October of 2013. Thereafter, Heritage sent a notice of claim letter to Studio B Architects (Studio B) and Bluegreen, Inc. (Bluegreen), alleging design deficiencies in the home. Subsequently, on December 20, 2013, Goodman filed suit against Heritage and some of its contractors and, in response, Heritage asserted cross-claims and filed a third-party complaint against Studio B and Bluegreen, among others. Arguing that Heritage’s third-party claim against it was barred by the six-year statute of repose contained in C.R.S. § 13-8-104(1)(a), Studio B moved for summary judgment. Bluegreen joined the motion. Finding that Heritage’s claims against Studio B and Bluegreen arose, at the earliest, when Heritage received informal notice of the alleged defects in July of 2013 – more than six years after the home’s date of substantial completion – the trial court held that the statute of repose barred Heritage’s third-party claims against Studio B and Bluegreen. The Supreme Court of Colorado disagreed.

As noted by the court on appeal, in general, construction defect claims are subject to the two-year statute of limitations in C.R.S. § 13-80-102 and the six-year statute of repose in C.R.S. § 13-80-104(1)(a). However, construction defect claims against other parties – “who may be liable to the claimant for all or part of the claimant’s liability to a third person” – are governed by C.R.S. § 13-80-104(1)(b)(II). Pursuant to this subparagraph, notwithstanding the provisions of § 13-80-104(1)(a), contribution and indemnification claims against third-parties may be brought in either: “(1) the construction defect litigation before a settlement or entry of judgment or (2) a separate lawsuit after a settlement or entry of judgment.” Giving the “notwithstanding” language its controlling effect, the court held that, although § 13-80-104(1)(a) incorporates the two-year statute of limitations in § 13-80-102 and contains a six-year statute of limitations for construction defect claims, § 13-80-104(1)(b)(II) is the statute section under which courts determine the timeliness of third-party contribution and indemnification claims. Pursuant to § 13-80-104(1)(b)(II), so long as third-party indemnification and contribution claims are brought during the construction defect litigation or within ninety days following the date of judgment, the claims are timely. Thus, because Heritage brought its third-party claims against Studio B and Bluegreen before any judgment or settlement, the court held that its claims were timely.

The analysis in Goodman serves as a reminder to subrogation professionals that, when deciding whether construction defect-related claims are timely, it is important to review the language of the applicable statute of repose. Where, as in Colorado, there is language in a subsection of the statute of repose indicating that the statute applies “notwithstanding” other statutory sections, subrogation professionals reviewing the statute should accord the subsection containing the “notwithstanding” language appropriate weight.

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Sportex Recalls Salt Rock Lamps


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In subrogation cases where the insured’s damages were caused by a defective product, the fact that the product at issue is or was subject to a recall announced by the Consumer Product Safety Commission (CPSC) may help to establish that the product was defective when it left the manufacturer’s possession and control. On May 23, 2017, the CPSC announced the following recall notice related to a product that presents a fire hazard:

Sportex Recalls Salt Rock Lamps Due to Shock and Fire Hazards

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Honeywell International Recalls Swift® Wireless Gateway Sold With Fire Alarm Systems


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In subrogation cases where the insured’s damages were caused by a defective product, the fact that the product at issue is or was subject to a recall announced by the Consumer Product Safety Commission (CPSC) may help to establish that the product was defective when it left the manufacturer’s possession and control. On May 12, 2017, the CPSC announced the following recall related to a product that presents a fire spread hazard:

Honeywell International Recalls SWIFT® Wireless Gateway Sold with Fire Alarm Systems Due To Failure to Communicate in Fire

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Carrier and Bryant Recall Heat Pumps and AM Conservation Group Recalls Night Lights


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In subrogation cases where the insured’s damages were caused by a defective product, the fact that the product at issue is or was subject to a recall announced by the Consumer Product Safety Commission (CPSC) may help to establish that the product was defective when it left the manufacturer’s possession and control. The CPSC recently announced the following recall notices related to products that present fire hazards:

Carrier and Bryant Recall Heat Pumps Due to Fire Hazard

Night Lights Recalled by AM Conservation Group Due to Fire Hazard

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In Ohio, When a Subrogating Insurer is the Plaintiff, Defendants Should not File Contribution or Indemnification Claims Against the Insured


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For subrogation professionals, it is important to limit the liability exposure of your insured. In cases where the insurer, as subrogee, is proceeding as the plaintiff, this means limiting any direct claims against the insured – whether for contribution or indemnity – to affirmative defenses as opposed to third-party claims. Limiting direct claims against insureds not only keeps captions clean, but avoids strategic maneuvering by the defense that could negatively impact your case. In Ohio, when a defendant tries to pursue direct claims against the insured for contribution or indemnification, practitioners should, consistent with the analysis set forth in Continental Casualty Company v. Equity Indus. Maple Heights, LLC, 2017 U.S. Dist. LEXIS 54440 (N.D. Ohio, April 10, 2017), argue that defendants can no longer attempt this maneuver and that they are limited to raising affirmative defenses against the plaintiff’s subrogor.

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Springs Window Fashions Recalls Lithium Batteries Sold With Motorized Window Coverings


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In subrogation cases where the insured’s damages were caused by a defective product, the fact that the product at issue is or was subject to a recall announced by the Consumer Product Safety Commission (CPSC) may help to establish that the product was defective when it left the manufacturer’s possession and control. On May 5, 2017, the CPSC announced the following recall related to a product that presents a fire hazard:

Springs Window Fashions Recalls Lithium Batteries Sold with Motorized Window Coverings Due to Fire and Burn Hazards

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Food Dehydrators Recalled by Greenfield World Trade


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In subrogation cases where the insured’s damages were caused by a defective product, the fact that the product at issue is or was subject to a recall announced by the Consumer Product Safety Commission (CPSC) may help to establish that the product was defective when it left the manufacturer’s possession and control. On April 20, 2017, the CPSC announced the following recall related to a product that presents a fire hazard:

Food Dehydrators Recalled by Greenfield World Trade Due to Fire and Burn Hazards

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United States Court of Appeals for the Sixth Circuit Holds That Kentucky’s Economic Loss Rule Does Not Apply to Consumer Transactions


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In State Farm Mutual Automobile Insurance Company v. Norcold, Inc., 849 F.3d 328 (6th Cir. 2017), the United States Court of Appeals for the Sixth Circuit considered whether Kentucky’s economic loss rule applies to consumer transactions. The economic loss rule prevents the buyer of a product from suing in tort to recover for economic losses when the product damages only itself. The Sixth Circuit predicted that Kentucky would not extend the economic loss rule to consumer transactions. The Norcold case reminds us that, while the economic loss rule can be a significant impediment to products liability subrogation claims, it is important to consider whether there are exceptions available to overcome this defense.

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Recall of Bosch Solar Services Solar Panels and Polaris Ranger 900 Recreational Off-Highway Vehicles


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In subrogation cases where the insured’s damages were caused by a defective product, the fact that the product at issue is or was subject to a recall announced by the Consumer Product Safety Commission (CPSC) may help to establish that the product was defective when it left the manufacturer’s possession and control. On April 13, 2017, the CPSC announced the following recall notices related to products that present fire hazards:

Bosch Solar Services Recalls Solar Panels Due To Fire Hazard

Polaris Recalls Ranger 900 Recreational Off-Highway Vehicles Due to Fire and Burn Hazards

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