Author Archives: Gus Sara

Figures

Ohio Court Measures the Damage to a Computer Network by Its Value to the Owner, Not Its Fair Market Value


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In Westfield Insurance Group v. Silco Fire & Security, 2019 Ohio App. LEXIS 2810, the Court of Appeals of Ohio, Fifth Appellate District addressed whether the trial court properly instructed the jury that the applicable measure of damages for damage done to a computer network was the network’s replacement cost value rather than its fair market value. Based on the unique circumstances of the case, the Court of Appeals held that the trial court did not abuse its discretion when it instructed the jury on the replacement cost measure of damages rather than fair market value. Continue reading →

This entry was posted in Contracts, Damages - Real Property, Ohio, Subrogation and tagged , , .
Broken Bricks

Wisconsin Supreme Court Holds that Subrogation Waiver Does Not Violate Statute Prohibiting Limitation on Tort Liability in Construction Contracts


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In Rural Mut. Ins. Co. v. Lester Bldgs., LLC 2019 WI 70, 2019 Wisc. LEXIS 272, the Supreme Court of Wisconsin considered whether a subrogation waiver clause in a construction contract between the defendant and the plaintiff’s insured violated Wisconsin statute § 895.447, which prohibits limitations of tort liability in construction contracts. The Supreme Court affirmed the lower court’s decision that the waiver clause did not violate the statute because it merely shifted the responsibility for the payment of damages to the defendant’s insurance company. The waiver clause did not limit or eliminate the defendant’s tort liability. This case establishes that while
§ 895.447 prohibits construction contracts from limiting tort liability, a subrogation waiver clause that merely shifts responsibility for the payment of damages from a tortfeasor to an insurer does not violate the statute and, thus, is enforceable. Continue reading →

This entry was posted in Construction Defects, Subrogation, Waiver of Subrogation, Wisconsin and tagged , , , , .
Gavel

California Court Invokes Equity to Stretch Anti-Subrogation Rule Principles


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By: Gus Sara and William L. Doerler

In Western Heritage Ins. Co. v. Frances Todd, Inc. 2019 Cal. App. Lexis 299, the Court of Appeals of California, First Appellate District, addressed whether a commercial condominium association’s carrier could subrogate against the tenants (aka lessees) of one of its member unit owners. After examining the condominium association’s declarations, as well as the lease terms between the owner and the lessees, the court held that the association’s carrier could not subrogate against the lessees because they were implied co-insureds on the policy. To reach its decision, the court explained that an insurer steps into the shoes of its insured, not the party with whom it is in privity. Although the first-party property portion of the association’s insurance policy did not, as required by the association’s declarations, have the owner listed as an additional named insured, the court held that it would be inequitable to treat the association as the sole insured for purposes of determining Western Heritage’s right to bring a subrogation action. Continue reading →

This entry was posted in Anti-Subrogation Rule, California, Landlord-Tenant, Subrogation, Sutton Doctrine and tagged , , .
Time

Arbitration: For Whom the Statute of Limitations Does Not Toll in Pennsylvania


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In Morse v. Fisher Asset Management, LLC, 2019 Pa. Super. 78, the Superior Court of Pennsylvania considered whether the plaintiff’s action was stayed when the trial court dismissed the plaintiff’s complaint after sustaining the defendants’ preliminary objections seeking enforcement of an arbitration clause in the contract at issue. The Superior Court—distinguishing between a defendant who files a motion to compel arbitration and a defendant who files preliminary objections based on an arbitration clause—held that, in the latter scenario, if the defendant’s preliminary objections are sustained, the statute of limitations is not tolled. This case establishes that, in Pennsylvania, plaintiffs seeking to defeat a challenge to a lawsuit based on a purported agreement to arbitrate need to pay close attention to the type of motion the defendant files to defeat the plaintiff’s lawsuit. Continue reading →

This entry was posted in Arbitration, Pennsylvania, Statute of Limitations-Repose and tagged , , .
Signing Agreement

District Court of Missouri Limits Whining About the Scope of Waiver of Subrogation Clauses in Wine Storage Agreements


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In Netherlands Ins. Co. v. Cellar Advisors, LLC, 2019 U.S. Dist. Lexis 10655 (E.D. Mo.), the United States District Court for the Eastern District of Missouri considered the scope of a waiver of subrogation clause in two wine storage agreements. The court held that the subrogation waivers were limited in scope and, potentially, did not apply to the damages alleged in the pleadings. This case establishes that, in Missouri, waivers of subrogation are narrowly construed and cannot be enforced beyond the scope of the specific context in which they appear. Continue reading →

This entry was posted in Contracts, Missouri, Subrogation, Waiver of Subrogation and tagged , , .
Time

New Hampshire’s Statute of Repose for Improvements to Real Property Does Not Apply to Product Manufacturers


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In United Services Automobile Association v. Broan-Nutone, LLC, No. 218-2017-CV-01113,[1] the Superior Court of Rockingham County, New Hampshire recently considered whether the eight-year statute of repose for improvements to real property applied to the manufacturer of a ceiling ventilation fan that was installed in the property during its original construction. The court held that New Hampshire’s statute of repose did not apply to the manufacturer because it was not involved in incorporating its product into the property. Continue reading →

This entry was posted in Construction Defects, New Hampshire, Statute of Limitations-Repose and tagged , .
Large Property Loss

Indiana Court of Appeals Holds That Lease Terms Bar Landlord’s Carrier From Subrogating Against Commercial Tenant


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In Youell v. Cincinnati Ins. Co., 2018 Ind. App. LEXIS 497 (2018), the Court of Appeals of Indiana considered whether a landlord’s carrier could bring a subrogation claim against a commercial tenant for fire-related damages when the lease, which did not reference subrogation, explicitly required the landlord to maintain fire insurance coverage for the leased premises. The court held that subrogation was barred because the provision requiring the landlord to maintain fire insurance established an agreement to provide both parties with the benefits of insurance. The Youell case establishes that, in Indiana, if the lease explicitly states that the landlord will maintain fire casualty insurance for the building, the lease evidences an agreement by the parties to shift the risk of loss to the insurer. This agreement bars a landlord’s insurance carrier from subrogating against a commercial tenant in the event of a casualty. Continue reading →

This entry was posted in Contracts, Indiana, Landlord-Tenant, Subrogation and tagged , .
Construction Defect

California Court of Appeal Holds That the Right to Repair Act Prohibits Class Actions Against Manufacturers of Products Completely Manufactured Offsite


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In Kohler Co. v. Superior Court, 29 Cal. App. 5th 55 (2018), the Second District of the Court of Appeal of California considered whether the lower court properly allowed homeowners to bring class action claims under the Right to Repair Act (the Act) against a manufacturer of a plumbing fixture for alleged defects in the product. After an extensive analysis of the language of the Act, the court found that class action claims under the Act are not allowed if the product was completely manufactured offsite. Since the subject fixture was completely manufactured offsite, the Court of Appeal reversed the lower court’s decision. The court’s holding establishes that rights and remedies set forth in the Right to Repair Act are not available for class action claims alleging defects in products completely manufactured offsite. Continue reading →

This entry was posted in California, Class Actions, Products Liability, Right to Repair Act and tagged , , .
Gavel

Wisconsin Court of Appeals Holds Economic Loss Doctrine Applies to Damage to Other Property If It Was a Foreseeable Result of Disappointed Contractual Expectations


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In Kmart Corp. v. Herzog Roofing, Inc., 2018 Wisc. App. Lexis 842, the Court of Appeals of Wisconsin considered whether the economic loss doctrine barred the plaintiff’s negligence claims against the defendant roofer for damages resulting from the collapse of a roof. The Court of Appeals held that, while some of the plaintiff’s property damages were unrelated to the scope of the contract, the economic loss doctrine still applied to those damages because they were a foreseeable result of the defendant’s breach of the contract. This case establishes that in Wisconsin, the economic loss doctrine bars tort claims for damage to property unrelated to the contract if those damages were a reasonably foreseeable risk of disappointed expectations of the contract. Continue reading →

This entry was posted in Damages, Economic Loss Rule, Wisconsin and tagged , , .
Pointing out a Problem

California Supreme Court Holds That Evidence of Industry Custom and Practice May Be Admissible in a Design Defect, Strict Product Liability Case


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In Kim v. Toyota Motor Corp., 6 Cal.5th 21 (Cal. 2018), the Supreme Court of California considered whether the trial court properly allowed the defendant to introduce evidence of industry custom and practice in defense of a strict product liability design defect case. The Supreme Court held that the evidence was relevant and admissible because it was introduced to address the feasibility and cost of alternative product designs, and not to show that the defendant acted reasonably. The court’s holding establishes that, while evidence of industry custom and practice is not admissible to prove or disprove fault in strict liability cases, it is admissible for other purposes, such as analyzing whether a product was defectively designed under the risk-benefit test. Continue reading →

This entry was posted in California, Evidence, Products Liability and tagged , , .