Author Archives: Gus Sara

Part 1: Subrogor Problems – Handling Claims Involving an Uncooperative or Difficult Insured


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Listen to the newest episode of the Subro Sessions #podcast where we launch a new series: “Subro Trauma Center – Discussions on Common Issues that Arise in Subrogation Claims and How to Address Them,” hosted by Gus Sara, Lian Skaf and Matthew I. Ferrie. The series analyzes common symptoms of subrogation claims, diagnoses potential problems and discusses how to treat the symptoms or problems to secure a recovery. Gus, Lian and Matt share their tips and experiences in “Part 1: Subrogor Problems – Handling Claims Involving an Uncooperative or Difficult Insured” to provide an explanation as to why the #insured is integral to the #subrogation process. They also discuss what the potential outcome is when the insured is not cooperative during the investigation.

Mark your calendars for “Part 2: A Long Way From Home – Pursuing Claims Against Foreign Entities,” available on June 20th!

Check out all our other Subro Sessions podcast episodes.

This entry was posted in Podcast, Subrogation.
Gavel

No Signature, No Problem: Texas Court Holds Contractual Subrogation Waiver Still Enforceable


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In Chubb Lloyds Inc. Co. of Tex. v. Buster & Cogdell Builders, LLC, No. 01-21-00503-CV, 2023 Tex. App. LEXIS 676, the Court of Appeals of Texas, First District (Court of Appeals) considered whether the lower court properly dismissed the plaintiff’s subrogation case by enforcing a subrogation waiver in a construction contract which was not fully executed.  The contract was signed by only one of the two subrogors and was not signed by the defendant general contractor.  The Court of Appeals affirmed the trial court’s decision, holding that despite the lack of signatures, the evidence established mutual assent to the contractual terms by all parties.

The plaintiff’s subrogors, Jeffrey and Mary Meyer (collectively, the Meyers), retained defendant Buster & Codgell Builders (BCB) to expand their residence.  BCB drafted a contract using the American Institute of Architects (AIA) standard form contract for residential construction.  The AIA contract included, by reference, a subrogation waiver that applied to BCB and its subcontractors.  Prior to beginning the work, BCB emailed Jeffrey Meyer a version of the contract that only had one signature block for both Jeffrey and Mary Meyer.  Minutes later, BCB sent a second version of the contract which had a signature line for each of the Meyers.  However, Jeffrey Meyer signed the first version of the contract and emailed it back to BCB.  In the subject line of his email, Mr. Meyers asked that BCB countersign and return the contract.  BCB did not sign and return the contract.

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This entry was posted in AIA Contracts, Contracts, Subrogation, Texas, Waiver of Subrogation and tagged , , , , , .
Handshake

A Tort, By Any Other Name, is Just a Tort: Massachusetts Court Bars Contract Claims That Sound in Negligence


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In University of Massachusetts Building Authority v. Adams Plumbing & Heating, Inc., 2023 Mass. App. Unpub. LEXIS 28, 102 Mass. App. Ct. 1107, the Appeals Court of Massachusetts (Appeals Court) considered whether the lower court properly held that the plaintiff’s breach of contract and indemnification claims were time-barred by the statute of repose because they sounded in tort.  The Appeals Court held that while the six-year statute of repose only applies to tort claims, they can also bar claims for breach of contract and indemnification if they sound in tort.  The Appeals Court affirmed the lower court’s ruling, finding that the plaintiff’s breach of contract and indemnification claims were just negligence claims disguised as non-tort claims.

In 2013 and 2014, the University of Massachusetts (UMass) retained various contractors to renovate the dining hall for one of its campus buildings, which included the installation of new ductwork for the kitchen’s exhaust system.  The dining hall opened for service in September 2014.  In the Spring of 2018, it was discovered that the ductwork for the kitchen had collapsed.  Further investigation revealed other deficiencies with the exhaust system.  On December 1, 2020, UMass filed a lawsuit against various contractors, asserting negligence, breach of contract, and indemnification. The breach of contract claims alleged breach of express warranties.

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This entry was posted in Construction Defects, Contracts, Massachusetts, Negligence, Statute of Limitations-Repose, Subrogation and tagged , , , , , , .

Not So Fast: Washington Court Finds the One-Year Limitations Period in a Residential Construction Contract Is Unenforceable


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In Tadych v. Noble Ridge Constr., Inc., No. 100049-9, 2022 Wash. LEXIS 545, the Supreme Court of Washington (Supreme Court) considered whether the lower court erred in enforcing a one-year accelerated limitations period clause in a construction contract. The Supreme Court considered the extent to which the provision hindered the plaintiffs’ statutory rights – as set forth in Wash. Rev. Code § 4.16.310 – which provides homeowners with a six-year repose period for construction defect claims.  The court found that the contractual provision’s shortening of the time period from six years to one year was a gross deprivation of the plaintiffs’ statutory rights and was unfairly one-sided in favor of the defendant.  As such, the court held that the provision was substantively unconscionable and, thus, unenforceable.

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This entry was posted in Construction Defects, Contracts, Statute of Limitations-Repose, Washington and tagged , , , , , .
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Too Costly to Be Fair: Texas Appellate Court Finds the Arbitration Clause in a Residential Construction Contract Unenforceable


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In Cont’l Homes of Tex., L.P. v. Perez, No. 04-21-00396-CV, 2022 Tex. App. LEXIS 7691, the Court of Appeals of Texas (Appellate Court) considered whether the lower court erred in refusing to enforce an arbitration clause in a construction contract between the parties. The Appellate Court considered the costs of the arbitration forum required by the contract in the context of the plaintiffs’ monthly household income. The court also compared the arbitration cost to the estimated cost of litigating the dispute. The court held that the arbitration clause was substantively unconscionable on the grounds that the arbitration costs were not affordable for the plaintiffs and not an “adequate and accessible substitute to litigation.”  The Appellate Court affirmed the lower court’s decision denying the defendant’s motion to compel arbitration. Continue reading →

This entry was posted in Arbitration, Construction Defects, Contracts, Texas and tagged , , , , , .
House Flood

Part of the Whole: Idaho District Court Holds Economic Loss Rule Bars Tort Claims Related to Water Supply Line that was Part of Home Purchase


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In Safeco Ins. Co. of Ill. v. LSP Prods. Grp., 2022 U.S. Dist. LEXIS 139566, the United States District Court for the District of Idaho (District Court) considered whether the plaintiff’s tort claims against the manufacturer of an allegedly defective toilet water supply line were barred by the economic loss rule. The defendant filed a motion for summary judgment arguing that, since the supply line was a part of the home when the plaintiff’s insureds purchased it, the plaintiff was barred by the economic loss rule from bringing tort claims against the manufacturer. The District Court granted the defendant’s summary judgment motion, ruling that the supply line was a part of the home, which was the subject of the transaction, at the time it was purchased. Thus, the District Court held that the economic loss rule barred the plaintiff’s tort claims. Continue reading →

This entry was posted in Economic Loss Doctrine, Idaho, Products Liability, Subrogation and tagged , , , , .

Who’s on First: How First Party Claims Adjusters Add Value to Subrogation Recovery Efforts, Part 2


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In the most recent episode of the Subro Sessions Podcast, Matt Ferrie, Gus Sara and Lian Skaf of the Subrogation Department are joined by Ihor Redkva, Field Property Claims Leader at Allstate, in part two of a discussion about the value first-party claims adjusters bring to subrogation efforts.

Did you miss Part 1 of this discussion? Click here to listen now. 

This entry was posted in Podcast.
Signing Agreement

Mind Over Matter: Court Finds Expert Opinion Based on NFPA 921 Reliable Despite Absence of Physical Testing


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In Smith v. Spectrum Brands, Inc., 2022 U.S. Dist. LEXIS 142262, the United States District Court for the Eastern District of Pennsylvania (District Court) considered whether the plaintiffs’ liability expert met the requirements of Rule 702 of the Federal Rules of Evidence and could testify that a filter pump for an aquarium tank was defectively designed and caused a fire at the plaintiffs’ home. The defendant filed a motion to exclude the plaintiffs’ liability expert on grounds that the expert’s opinion did not satisfy the reliability element of Rule 702 because the expert never conducted physical testing on the filter pump. The court found that the cognitive testing employed by the expert through various methods, including visual inspections of the evidence, a review of photographs of the scene and literature from the manufacturer, and research on similar products, was sufficiently reliable to admit his opinion. Continue reading →

This entry was posted in Experts, Experts - Reliability, Experts – Daubert, NFPA 921, Pennsylvania and tagged , , .