Author Archives: Lian Skaf

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Virginia Molds Tort Versus Contract Law in New Home Construction Case


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Often times, both contract and tort claims co-exist in a subrogation matter and the line between the two can be blurred. This is especially true in the context of damages resulting from new home construction defect claims. However, states are increasingly attempting to define the scope of when the “gist of the action” is based in contract only. In Tingler v. Graystone, 834 S.E.2d 244 (Va. 2019), the Supreme Court of Virginia defined that scope in terms of new home construction. The court defined the “source of duty rule” by holding that claims of nonfeasance sounding only in contract do not give rise to an independent tort claim. The court also reiterated its application of the economic loss doctrine, stating that, when negligent actions result in damage to property other than the product itself, there can be a viable tort claim. Continue reading →

This entry was posted in Construction Defects, Contracts, Economic Loss Rule, Virginia and tagged , , .
Time

Tennessee Looks to Define Improvements to Real Property


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For subrogation practitioners dealing with an installation-based statute of repose, knowing what is an improvement to real property is the first battle in what can, but does not have to be, a long fight. Like many other states, Tennessee’s statute of repose bars claims based on improvements to real property. Tennessee’s statute of repose runs four years after substantial completion of the improvement. See Tennessee Code Ann. § 28-3-202. In the case of Maddox v. Olshan Found. Repair & Waterproofing Co. of Nashville, L.P., E A, 2019 Tenn.App. LEXIS 464, 2019 WL 4464816, the Court of Appeals of Tennessee examined whether or not the work done by the defendant, Olshan Foundation Repair & Waterproofing Co. of Nashville, L.P., E.A. (Olshan) — which addressed bowing walls, cracks in the foundation and walls and water intrusion — qualified as improvements to real property for the purposes of the statute of repose. The court held that the work by Olshan essentially amounted to repairs, and did not qualify as improvements to real property. Continue reading →

This entry was posted in Construction Defects, Statute of Limitations-Repose, Tennessee and tagged , , .
Gavel

Amazon Loses – It Is a Seller Under Wisconsin’s Products Liability Law


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As most subrogation professionals know, Amazon has been fighting products liability claims across the country for some time now. While it has been largely successful in doing so in the past, in a recent decision, Wisconsin sided with the plaintiff. In the case of State Farm Fire & Cas. Co. v. Amazon.com, Inc., 2019 U.S. Dist. LEXIS 122316, 2019 WL 3304887, the United States District Court for the Western District of Wisconsin denied the motion for summary judgment filed by defendant Amazon.com, Inc. (Amazon). The court held that Amazon was so deeply involved with the transaction at issue that it was an entity that could be held strictly liable under Wisconsin law. It also held that 47 U.S.C. § 230 of the Communications Decency Act (CDA) did not immunize Amazon because its liability was not based on posting content from a third party. Continue reading →

This entry was posted in Products Liability, Subrogation, Wisconsin and tagged , , .
Construction Defect

In Connecticut, Contractors and Subcontractors are Presumptively in Privity for Res Judicata Purposes


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While pursuing contractors and subcontractors separately can oftentimes be a strategic move in subrogation cases involving construction defects, attorneys must be aware that proceeding in a piecemeal fashion may result in claim preclusion in the later cases. In the case of Girolametti v. Michael Horton Assocs., 2019 Conn. LEXIS 172, 2019 WL 2559548, the Supreme Court of Connecticut considered whether the issuance of an arbitration decision involving the general contractor precluded subsequent claims against subcontractors who worked on the same project. The court held that, because the subcontractors were presumptively in privity with the general contractor for purposes of res judicata and there were no facts requiring the court to depart from that presumption, the doctrine of res judicata applied and precluded the plaintiff’s claims against the subcontractors. Continue reading →

This entry was posted in Arbitration, Connecticut, Construction Defects, Res Judicata and tagged , , .
Large Property Loss

Texas Walks the Line on When the Duty to Preserve Evidence at a Fire Scene Arises


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The extent to which a loss scene can be altered before adversaries can legitimately cry spoliation has long been a mysterious battleground in the world of subrogation. In the case of In re Xterra Constr., LLC, No. 10-16-00420-CV, 2019 Tex. App. LEXIS 3927 (Tex. App. – Waco, May 15, 2019), the Court of Appeals of Texas, Tenth District, addressed the question of when a party has a duty to preserve evidence. The court found that the trial court abused its discretion in imposing sanctions on the defendants for the spoliation of evidence as the evidence at issue was already gone by the time the defendants knew or reasonably should have known there was a substantial chance a claim would be filed against them. Continue reading →

This entry was posted in Evidence, Spoliation, Subrogation, Texas and tagged , , .
Time

Washington Court Tunnels Deeper Into the Discovery Rule


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Often times, properly analyzing when a statute of limitations begins to run – not just how long it runs – is crucial to timely pleading. In Dep’t of Transp. v. Seattle Tunnel Partners, 2019 Wash.App. LEXIS 281 (Was. Ct. App. Feb. 5, 2019), Division Two of the Court of Appeals of Washington addressed when the discovery rule starts the statute of limitations clock on a negligence cause of action. The court held that the statute of limitations begins to run when the plaintiff knows that the factual elements of the claim against the defendant exist. The clock starts to run even if the plaintiff wants to investigate the possibility of other contributing factors or the defendant identifies opposing viewpoints on the theory of the claim. Continue reading →

This entry was posted in Statute of Limitations-Repose, Uncategorized, Washington and tagged , .
Pointing out a Problem

Minnesota “Fryes” the Difference Between Novel Scientific Theory and Novel Science


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In re 3M Bair Hugger Litig., 2019 Minn. App. LEXIS 11, the Minnesota Court of Appeals analyzed the applicable standard for determining whether or not expert opinion testimony based on a novel scientific theory is admissible. Using the Frye-Mack standard, the court reinforced that if an expert opinion involves a novel scientific theory, the underlying evidence used to formulate that theory must be generally accepted in the relevant scientific community. The court further articulated the standard by confirming that, pursuant to Minn. R. Evid. 702, the Frye-Mack applies to novel scientific theory, not novel science. Once the standard is deemed applicable, the court must find the novel scientific theory to be generally accepted in the scientific community to admit the expert’s testimony. Although 3M does not discuss subrogation matters, its analysis should apply with equal force to opinions offered by experts in subrogation cases. Continue reading →

This entry was posted in Evidence, Experts – Daubert, Minnesota and tagged , .
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California Court of Appeals Holds Subrogating Carrier Cannot Assert Claims of Its Suspended Insured


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In Travelers Prop. Cas. Co. of Am. v. Engel Insulation, Inc., 29 Cal. App. 5th 830 (2018), the Third District Court of Appeals of California addressed whether a subrogating carrier can assert the rights of its corporate insured while the insured is suspended and thus barred from doing so itself. The court rejected the argument that Cal. Rev & Tax Code § 19719(b) (1998), which exempts subrogating carriers from the penalties for asserting the rights of a suspended corporation set forth in its own subsection (a), eliminated the prohibition against carriers bringing an action based on the subrogation rights of its suspended insured. Because Travelers’ claims were based solely on its derivative rights of subrogation and its corporate insured was suspended, the Court of Appeals affirmed the trial court’s ruling that Travelers had no right to bring its suit. The court’s holding reaffirms California case law that denies subrogating carriers any rights greater than those of their insureds. See Truck Ins. Exch. v. Superior Court, 60 Cal. App. 4th 342 (1997). Continue reading →

This entry was posted in California, Parties, Subrogation and tagged .
Gavel

Florida Court of Appeals Holds Underlying Tort Case Must Resolve Before Third-Party Spoliation Action Can Be Litigated


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In Amerisure Ins. Co. v. Rodriguez, 43 Fla. L. Weekly 2225 (Fla. Dist. Ct. App., Sept. 26, 2018), the Third District Court of Appeals of Florida addressed whether a third-party spoliation claim should be litigated and tried at the same time as the plaintiff’s underlying tort case. The court held that since the third-party spoliation claim did not accrue until the underlying claim was resolved, the spoliation cause of action could not proceed until the plaintiff resolved his underlying claim. Continue reading →

This entry was posted in Evidence, Florida, Spoliation and tagged , .
Water Loss

Rhode Island District Court Dismisses Plaintiff’s Case for Spoliation Due to Potential Unfair Prejudice to Defendant


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In Amica Mutual Ins. Co. v. BrassCraft Mfg., Co., 2018 U.S. Dist. LEXIS 88986 (D.R.I. May 29, 2018), the United States District Court for the District of Rhode Island addressed the question of whether the defendant was so unfairly prejudiced by the subrogating insurer’s spoliation of evidence that dismissal of the plaintiff’s case was the appropriate Rule 37(b)(2)(a)(i)-(vi) sanction. The court, focusing on the potential for undue prejudice to the defendant, granted the defendant’s motion to dismiss. Continue reading →

This entry was posted in Rhode Island, Spoliation and tagged , .