Up in Smoke: Insurer’s Circumstantial Evidence Did Not Establish Negligence


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In Union Mut. Fire Ins. Co. v. Ace Caribbean Mkt., No. 21-2653,2023 U.S. App. LEXIS 8203 (2d Cir. Apr. 6, 2023), the United States Court of Appeals for the Second Circuit (Second Circuit) considered whether evidence that a fire may have originated in extension cords was sufficient to establish that: a) the owners/proprietors were negligent in their use of the extension cords; and b) their negligence was the cause of the fire. The Second Circuit held that the circumstantial evidence was not sufficient and affirmed summary judgment in favor of the defendant.

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Help Me Help You – How Working With Claimant’s Counsel Can Maximize Your Lien Recovery – “Part 3 – The War Story: Successes and Failures”


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Listen to the newest episode of the Subro Sessions podcast, available now! Join Brett Tishler and Michael Abed for the third installment of their three-part series, “Help Me Help You – How Working With Claimant’s Counsel Can Maximize Your Lien Recovery.”

Part 3 of the series is entitled:  The War Story: Successes and Failures.  In Part 3, Brett and Mike discuss some war stories to help show how working with claimant’s counsel can maximize an insurer’s lien recovery.

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Florida Continues Enacting Tort Reforms, This Time Shortening the Statute of Repose


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On April 13, 2023, Florida’s governor, Ron DeSantis, signed into law SB 360 which, among other things, shortens the statute of repose period for improvements to real property. The law also revises the date on which the statute of limitations period runs for these types of damage claims. Florida’s revision of this law provides further evidence of the state’s tort reform efforts.

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

New Mexico Adopts Right to Repair Act


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On April 7, 2023, New Mexico’s governor, Michelle Lujan Grisham, signed into law New Mexico’s Right to Repair Act (Act), 2023 N.M. SB 50. The Act’s effective date is July 1, 2023. The Act applies to construction defects in dwellings, i.e., newly constructed single family housing units designed for residential use. The Act applies to not only newly constructed housing units but also to systems and other components and improvements that are part of the housing unit at the time of construction.

Pursuant to the Act, except for construction defect claims that involve an immediate threat to the life or safety of persons occupying the dwelling, that render the dwelling uninhabitable or in which the seller, after notice, refused to make a repair pursuant to any applicable express warranty, a purchaser must comply with the provisions of the Act before filing a complaint or pursing an alternative dispute mechanism related to a construction defect in the dwelling. A seller who receives a notice complying with the provisions of the Act must give notice to all construction professionals who may be responsible for the defect.

The Act gives the seller an opportunity to inspect the dwelling and take reasonable measures to determine the nature and cause of each alleged construction defect, and the nature and extent of any repairs needed. Further, the Act requires sellers to respond within 60 days. The response may include: a) an offer to repair or replace each alleged construction defect, b) an offer to provide monetary compensation to the purchaser, or c) invoke any remedies provided in the construction contract. If the seller’s response includes a notice of intent to repair or replace the construction defect(s) – and such offer has not been rejected by the purchaser – the purchaser shall allow the seller and the seller’s construction professional a reasonable opportunity to do so.

A purchaser who reasonably rejects the seller’s offer has complied with the requirements and may initiate suit. Similarly, if a seller does not comply with the Act and the seller’s failure is not due to any fault by the purchaser, the purchaser shall follow any remedy provided for in the construction contract, file a complaint in court or pursue any alternative dispute resolution mechanism set forth in the construction contract.

To the extent that the repair and replacement process takes place pursuant to the Act, the statute of repose set forth in NMSA § 37-1-27 and any applicable statutes of limitations is tolled.

Although the Act does not specifically mention that it applies to subrogation claims, because a subrogating insurer steps into the shoes of its insured, subrogation professionals should be aware of this change in the law and, as appropriate, provide the notice set forth in the Act.

This entry was posted in Construction Defects, New Mexico, Right to Repair Act, Statute of Limitations-Repose, Uncategorized and tagged , , , , , .

BISSELL Expands Recall of Cordless Multi-Surface Wet Dry Vacuums


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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 6, 2023, the CPSC announced the following recall related to a product that presents a fire hazard:

BISSELL Expands Recall of Cordless Multi-Surface Wet Dry Vacuums Due to Fire Hazard.

According to the CPSC’s website, “[t]he circuit board inside the vacuum’s battery pack can overheat and smoke, posing a fire hazard.”

Product images from the CPSC website are set forth below:

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Jetson Electric Bikes Recalls 42-Volt Rogue Self-Balancing Scooters/Hoverboards


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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 March 30, 2023, the CPSC announced the following recall related to a product that presents a fire hazard:

Jetson Electric Bikes Recalls 42-Volt Rogue Self-Balancing Scooters/Hoverboards Due to Fire Hazard; Two Deaths Reported.

According to the CPSC’s website, “[t]he lithium-ion battery packs in the self-balancing scooters/hoverboards can overheat, posing a fire hazard.”

Product images from the CPSC website are set forth below:

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Consumer Product Safety Commission Recalls


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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 March 30, 2023, the CPSC announced the following recalls related to products that present fire hazards:

  1. Higdon Outdoors Recalls Battery Packs on XS Series Motion Waterfowl Decoys and Replacement Battery Packs Due to Fire and/or Burn Hazards. According to the CPSC’s website, “[t]he recalled waterfowl decoys’ lithium-ion battery packs or replacement battery packs can overheat while charging or soon after charging, posing a fire and/or burn hazard.”
  2. Polaris Recalls RZR Recreational Off-Road Vehicles Due to Fire Hazard (Recall Alert). According to the CPSC’s website, “[t]he alternator can fail during operation, posing a fire hazard.”
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Someone Who Hires an Independent Contractor May Still Be Liable, But Not in This Case


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In Allstate Veh. & Prop. Ins. Co. v. Glitz Constr. Corp., 2023 N.Y. App. Div. LEXIS 1180, 2023 NY Slip Op 01171, the Supreme Court of New York, Appellate Division, Second Department (Appellate Court), considered whether a contractor could be found liable for its subcontractor’s alleged negligence in causing injury to a homeowner’s property. The homeowner’s insurer, as subrogee of the homeowner, sought to recover damages from the contractor despite an allegation that the subcontractor – an independent contractor – caused the injury to the homeowner’s property. Finding that there was no evidence that any of the exceptions to the non-liability rule related to hiring independent contractors applied, the Appellate Court affirmed the lower court’s decision granting judgment in favor of the contractor.

In this case, the homeowner hired the contractor (defendant) to convert her garage area into a bedroom and an office. The defendant later hired a subcontractor to perform the electrical rough-in work. At trial, the homeowner’s insurer (plaintiff) presented evidence that the subcontractor, who damaged an existing wire with a drill bit, caused an electrical failure that resulted in a fire. The defendant argued that it could not be held liable for the subcontractor’s alleged negligence because the subcontractor was an independent contractor and, on appeal, the Appellate Court agreed.

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This entry was posted in Negligence, New York, Uncategorized and tagged , .
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 , , , , , .

Consumer Product Safety Commission Recalls


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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.  Recently, the CPSC announced the following recalls related to products that present fire hazards:

  1. STIHL Incorporated Recalls Docking Stations Sold with STIHL iMOW Robotic Lawn Mowers Due to Fire Hazard. According to the CPSC’s website, “[t]he docking station’s printed circuit board can short circuit when exposed to moisture, posing a fire hazard.”
  2. Polaris Recalls Sportsman All-Terrain Vehicles Due to Fire and Crash Hazards (Recall Alert). According to the CPSC’s website, “[a]n improperly assembled wiring harness can contact the brake line and/or vehicle frame during use which can result in a loss of the use of the front brakes and/or fire, posing fire and crash hazards.”
  3. Sunbeam Heated Blankets Recalled Due to Burn and Fire Hazards; Distributed by Star Elite. According to the CPSC’s website, “[t]he recalled heated blankets can overheat, posing fire and burn hazards.”
  4. Kawasaki Motors USA Recalls Engines Sold on Ferris and SCAG Riding Lawn Mowers Due to Burn and Fire Hazards. According to the CPSC’s website, “[t]he high-pressure fuel line can get damaged by contact with the fuel pump cover, causing a fuel leak that poses burn and fire hazards.”

 

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