July 2012 Archives

Illinois Finds Coverage for Additional Insured Despite Lack of Coverage for Named Insured Engineer Under Professional Services Exclusion; California Finds Fire-Sale Pricing of High End Goods May Trigger Personal Injury Coverage for Trade Disparagement

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Illinois and California appellate courts recently issued two policy-holder favorable decisions. In both cases, the trial court had granted summary judgment in favor of the insurance company and denying coverage, and in both cases the trial court decisions were reversed.

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G2G Friday Favorites - July 27

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  • What ever happened to tough love? Report shows that members of DOJ staff manipulated hiring process to get their kids jobs.
  • Sustainable cities beneath the sea? The "highly imaginary concept" of seascrapers is segmented into garbage collection units at the bottom, recycling plants in the middle, and housing and recreational zones at the top.

Green Construction, Through the Roof

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Throughout the world, the popularity of "green roofs" is on the rise. ENR.com reports that green roofs are being used to mitigate various environmental problems facing urban areas, most notably, storm water management. According to the EPA, green roofs also help combat a problem known as "Heat Island Effect" by removing heat from the air through evapotranspiration. This process reduces temperatures of both the roof surface and the surrounding air, allowing the surface temperature of a green roof to be lower than the surrounding air temperature on a hot day. Other benefits of green roofs include corrosion protection, noise reduction, energy efficiency, and improved air quality. And the uses for green roofs vary widely from practical to pure entertainment. The ENR.com article notes that the largest green roof project currently underway in the United States - the Croton Water Filtration Plant in Bronx County, New York City - will include a 36,512-sq-m golf driving range.

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G2G Friday Favorites - July 20

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Wisconsin Holds That Insurer's Failure to Reserve Rights Does Not Waive Its Ability to Deny Coverage Based on Coverage Clause

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It is the rule in many jurisdictions that an insurer which assumes defense of its insured without issuing a reservation of rights can be estopped from later denying coverage based on rights or defenses in the insurance contract. This general rule was rejected by the Supreme Court of Wisconsin in Maxwell v. Hartford Union High School District, 814 N.W.2d 484 (Wis. 2012). The court in Maxwell held that an insurer which defends without reserving the right to deny coverage has not waived its ability to rely on coverage clauses in the policy allowing for such a denial.

In Maxwell, the policyholder - a school district facing a wrongful termination suit from an ex-employee - tendered a claim to its liability insurer which defended the school district in the ensuing litigation without issuing a reservation of rights letter. It was not until a judgment in excess of $100,000 was awarded against the school district that the insurer denied coverage based on language in the policy excluding liability for damages due under the employment agreement and for lost benefits or lost wages. That the policy indeed excluded coverage for the damages at issue was not in dispute. The issue presented to the court was whether, because the insurer failed to issue a reservation of rights, it had waived or could be estopped from asserting its defense of no coverage. In rendering its decision, the court held that waiver or estopped could not supply coverage to an insured that was not provided in the policy itself. Ruling otherwise, the court stated, would force an insured to pay for a loss for which it had not received a premium.

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California High Speed Rail Moves a Step Forward

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On July 6, the California State Senate narrowly approved the use of $4.5 billion in proceeds from state Proposition 1A bonds for transportation projects. Governor Jerry Brown is expected to sign the bill into law. Full text of the bill can be found here. Senate Bill 1029 is intended to preserve California's rights to about $3.3 billion of federal American Recovery and Reinvestment Act (ARRA) funds for the long-awaited California High Speed Rail.

About $2.6 billion of the state bond proceeds is now dedicated to High Speed Rail, intended to match the $3.3 billion of ARRA funds for a total of about $5.9 billion in funding for the early rail projects. (The remaining $1.9 billion is earmarked for local transit improvements, such as $140 million for new BART cars, $705 million for Caltrain electrification, $61 million for the SF Muni Central Subway, and $500 million for Metrolink and related systems.)

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