Berkshire Blanket & Home Company Recalls Heated Throws and Blankets


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

Berkshire Blanket & Home Company Recalls Heated Throws and Blankets Due to Fire and Thermal Burn Hazards.

According to the CPSC’s website, “[t]he electric throws and blankets may overheat, posing fire and burn hazards.”

Product images from the CPSC website are set forth below:

 

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Product Recall

Lenovo Recalls USB-C Laptop Power Banks


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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 November 22, 2023, the CPSC announced the following recall related to a product that presents a fire hazard:

Lenovo Recalls USB-C Laptop Power Banks Due to Fire Hazard.

According to the CPSC’s website, “[t]he power bank’s internal screws can come loose, causing a short circuit and overheating of the lithium-ion battery, posing a fire hazard. Do not put lithium-ion batteries in the trash or battery recycling boxes found at various retail and home improvement stores. They can cause fires and explosions if they are damaged or crushed and are a hazard when thrown in the trash.”

Product images from the CPSC website are set forth below:

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Workers’ Compensation Subrogation Tales by the Water Cooler: Part I – How to Handle a Case—AKA—What Are We Getting Ourselves Into?


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Brett Tishler, Partner, and Michael Abed, Associate, are back to host the newest episode of Subro Sessions. This is the first of a two-part podcast series, entitled “Workers’ Compensation Subrogation Tales by the Water Cooler: Part I – How to Handle a Case—AKA—What Are We Getting Ourselves Into?” Brett and Michael are joined by a special guest, Rob Caplan, Partner, to trade stories and discuss the many moving parts in workers’ compensation #subrogation—and the many moving parts to consider when dealing with a new claim in order to obtain a recovery.

Mark your calendar for Part 2, entitled: “Tales by the Water Cooler:  We Got a New Claim, Now What?” launching on Tuesday, December 19th.

Check the all of our Subro Sessions podcast episodes.

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Recall Alert

Consumer Product Safety Commission Warning – Stop Using Toos Elite Electric Scooters 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 Consumer Product Safety Commission (CPSC) issued a warning about the product at issue may help to establish that the product was defective when it left the manufacturer’s possession and control. On October 23, 2023, the CPSC issued a warning urging consumers “about the risk of fire from Toos Elite 600-volt electric scooters.” According the CPSC, two people died in an apartment fire that local officials determined was caused by the lithium-ion battery in a Toos Elite 60-volt scooter. Apparently, “Toos Urban Ride has refused to conduct an acceptable recall with [the] CPSC.”

You can find out more information about the warning here.

Product images from the CPSC website are set forth below:

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Don’t Spoil Me: Oklahoma District Court Rules Against Spoliation Sanctions


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In Okla. Farm Bureau Mut. Ins. Co. v. Omega Flex, Inc., No. CIV-22-18-D, 2023 U.S. Dist. LEXIS 197755, the United States District Court for the Western District of Oklahoma (the District Court) determined spoliation sanctions were not warranted after a home was demolished for repair following a joint scene examination.

The insurer, Oklahoma Farm Bureau Mutual Insurance Company (Insurer) provided a policy of insurance to Michael and Sondra Diel (the Diels). On July 11, 2020, the Diels’ home was struck by lightning and their attic caught fire. Following the loss, Insurer retained both counsel and fire origin and cause experts to inspect the Diels’ property. Insurer’s counsel informed in-house counsel for Omega Flex, Inc. (Omega Flex) via a letter dated July 14, 2020, that a preliminary investigation indicated the fire may have been caused by an Omega Flex product—specifically, TracPipe Corrugated Stainless Steel Tubing (CSST). Insurer’s counsel invited Omega Flex to inspect the property, noting: “It is anticipated that the loss will exceed $300,000” and stating that any inspection “must be completed during the next two weeks. At that time, the homeowner will proceed with demolition to rebuild.” (Emphasis added).

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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 November 9, 2023, the CPSC announced the following recalls related to products that present fire hazards:

  1. Twin-Star International Recalls Infrared Quartz Electric Fireplaces Due to Fire Hazard; Sold Exclusively at Lowe’s. According to the CPSC’s website, “[t]he electric fireplaces can overheat, posing a fire hazard.”
  2. Magnolia Market Recalls 3-Wick Glass Candles Due to Fire and Laceration Hazards (Recall Alert). According to the CPSC’s website, “[t]he recalled Magnolia 3-wick candles were manufactured with the incorrect wax, which can cause excessive flames on the wicks and cause the glass candle containers to break, posing fire and laceration hazards.”
  3. Polaris Recalls RANGER Off-Road Vehicles Due to Fire and Crash Hazards (Recall Alert). According to the CPSC’s website, “[a]n improperly installed center brake line can cause the rear brake circuit to remain pressurized during operation, resulting in overheated brakes and reduced braking performance, posing fire and crash hazards.”
  4. DR Power Equipment Recalls Tow-Behind Field & Brush Mowers Due to Fire and Burn Hazards. According to the CPSC’s website, “[t]he exhaust pipe can break and cause damage to the unit due to excessive heat, especially in the presence of dry cuttings or spilled fuel, posing fire and burn hazards.”
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Beware: A Security Company’s Contract May Eliminate Your Causes of Action


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In Jewels by Iroff, Inc. v. Securitas Tech. Corp., No. 1:23-CV-556-TWT, 2023 U.S. Dist. LEXIS 172391, a Georgia federal court addressed a suit against a security/alarm company arising from a break-in at a jewelry store where the thieves stole over $1 million in jewelry. The court addressed numerous provisions in the alarm company’s contract – such as a waiver of subrogation, exculpatory and limitation of liability provision – and concluded that the provisions were enforceable. Thus, the court dismissed the plaintiff’s complaint (although it gave the plaintiff the opportunity to try and amend its complaint to state a cause of action).

In February 2022, a break-in occurred in Alpharetta, Georgia at Jewels by Iroff, Inc. (Iroff). Iroff’s insurer, Jewelry Mutual Insurance Company (Insurer), reimbursed Iroff for more than $1.2 million in losses following the incident. Insurer then filed a subrogation action against Iroff’s alarm security contractor, Securitas Tech. Corp. (Securitas), alleging gross negligence, breach of contract and fraudulent misrepresentation.

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This entry was posted in Contracts, Georgia, Limitation of Liability, Subrogation, Waiver of Subrogation and tagged , , , , , , .
Signing Agreement

Risky Business: Contractual Versus Equitable Rights of Subrogation


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In Zurich Am. Ins. Co. v. Infrastructure Eng’g. Inc., 2023 Ill. App. LEXIS 383, the insurer, Zurich American Insurance Company (Insurer) proceeded as subrogee of Community College District No. 508 d/b/a City Colleges of Chicago and CMO, a Joint Venture. The Appellate Court of Illinois, First District (Appellate Court) addressed whether Insurer – who issued a builder’s risk policy to insure a building during construction – could subrogate on behalf of the building owner, City Colleges of Chicago (City Colleges), who was part of the joint venture and an additional named insured, but who had not been directly paid for the underlying loss. The Appellate Court determined that the policy language established that the carrier was contractually permitted to subrogate on behalf of all additional named insureds on the policy, including the building owner.

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This entry was posted in Builder's Risk, Contractual Subrogation, Equitable Subrogation, Illinois, Insurable Interest and tagged , , , , .

Drawing the Line: In Tennessee, the Economic Loss Doctrine Does Not Apply to Contracts for Services


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In Commercial Painting Co. v. Weitz Co. LLC, No. W2019-02089-SC-R11-CV, 2023 Tenn. LEXIS 39 (Weitz), the Supreme Court of Tennessee (Supreme Court) considered whether the economic loss doctrine barred the plaintiff’s claims for fraud, negligent misrepresentation and punitive damages arising out of a contract with the defendant for construction services. The court held that the economic loss doctrine only applies to product liability cases and does not apply to claims arising from contracts for services. This case establishes that, in Tennessee, the economic loss doctrine does not bar tort claims in disputes arising from service contracts.

In Weitz, defendant, Weitz Co. LLC (Weitz), was the general contractor for a construction project and hired plaintiff Commercial Painting Co. (Commercial) as a drywall subcontractor.  Weitz refused to pay Commercial for several of its payment applications, claiming that the applications were submitted untimely and contained improper change order requests.  Commercial filed a lawsuit against Weitz seeking over $1.9 million in damages, alleging breach of contract, unjust enrichment, enforcement of a mechanic’s lien, and interest and attorney’s fees under the Prompt Pay Act of 1991. Weitz filed a counterclaim for $500,000 for costs allegedly incurred due to Commercial’s delay and defective workmanship. In response, Commercial amended its complaint to add claims for fraud, intentional and negligent misrepresentation, rescission of the contract and $10 million in punitive damages. Commercial alleged that Weitz received an extension of the construction schedule but fraudulently withheld this information from Commercial and continued to impose unrealistic deadlines.

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This entry was posted in Contracts, Economic Loss Rule, Tennessee and tagged , , .
Product Recall

Kawasaki Motors USA Recalls Engines Used in Lawn and Garden Equipment


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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 October 26, 2023, the CPSC announced the following recall related to a product that presents a fire hazard:

Kawasaki Motors USA Recalls Engines Used in Lawn and Garden Equipment Due to Fire and Burn Hazards (Recall Alert)

According to the CPSC’s website, “[t]he fuel tube could have been damaged due to improper workmanship while removing the fuel tube for repair, which could cause a fuel leak, posing fire and burn hazards.”

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