Publications Archive

In a significant shift, The California Supreme Court in Quach v. California Commerce Club, Inc., has aligned state law with a recent development in federal precedent, eliminating the arbitration-specific prejudice requirement when determining waiver of the right to enforce arbitration agreements. Historically, both California and federal courts required a showing of prejudice to establish waiver in the context of arbitration, a standard rooted in a policy favoring arbitration over litigation. However, following the U.S. Supreme Court's ruling in Morgan v. Sundance, Inc. (2022) 596 U.S. 411, which clarified that arbitration agreements should be treated like any other contract, the California Supreme Court has now repealed its prejudice requirement. This decision underscores the principle that arbitration agreements are placed on equal footing with other contracts, ensuring that waiver determinations are based solely on general contract law principles.

As the construction industry continues to thrive, it also grapples with numerous challenges that have the potential to impact project timelines, budgets, and overall success. The key issues of project delays, labor shortages, supply chains, increased costs, and expanding timelines create challenging claims, and coverage dilemmas that plague the claims process. This article looks at some of the bigger issues affecting the construction industry, and what we can expect going forward into 2025.

In the ongoing matter of North River Insurance Company v. James River Insurance Company, the Ninth Circuit recently turned to the Nevada Supreme Court to resolve an important legal question that could determine the outcome of a recurring dispute between insurers. The case arises from a wrongful death lawsuit following a murder at a Las Vegas apartment complex. The settlement exceeded the primary insurer’s policy limits, but it remained within the combined limits of both the primary and excess insurers. The excess insurer, after covering the remainder of the settlement, filed suit against the primary insurer in California federal court, claiming a breach of its duty to settle as well as the implied covenant of good faith and fair dealing. The primary insurer moved to dismiss the claims on the grounds that Nevada does not recognize equitable subrogation as between a primary insurer and excess insurer, and the district court (Central District of California) granted the motion. The excess insurer appealed to the Ninth Circuit Court of Appeals, who in turn, sought clarity on whether Nevada law permits equitable subrogation between insurers in such cases. Specifically, the Ninth Circuit certified the following question to the Nevada Supreme Court pursuant to Nev. R. App. P. 5(a), stating that the answer to the certified question is essential to the outcome of the case:

Under Nevada law, can an excess insurer state a claim for equitable subrogation against a primary insurer where the underlying lawsuit settled within the combined policy limits of the insurers?

In Limprasert v. PAM Specialty Hospital of Las Vegas LLC (2024), the Nevada Supreme Court addressed two critical issues concerning claims for professional negligence in Nevada. First, it clarified the standard for distinguishing professional negligence claims (which requires a supporting affidavit from a medical expert under NRS 41A.071) from ordinary negligence claims. This clarification effectively overruled the common knowledge exception previously established in Estate of Curtis v. South Las Vegas Medical Investors, LLC, 136 Nev. 350, 466 P.3d 1263 (2020). Second, the court confirmed that pursuant to Baxter v. Dignity Health, 131 Nev. 759, 357 P.3d 927 (2015), NRS 41A.071, the affidavit requirement was satisfied if it was incorporated by reference in the complaint and executed before the complaint was filed.

The Court of Appeal just issued a groundbreaking case in Audish v. Macias (2024) 102 Cal.App.5th 740 (review denied August 21, 2024), which provides welcome relief to the defense community with respect to its ability to establish the reasonable market value of past and future medical treatment claimed by personal injury plaintiffs. The case is important for at least two reasons: (1) it bolsters the import of Cuevas v. Contra Costa County (2017) 11 Cal.App.5th 163, which held, in a medical malpractice case, that future Medi-Cal and other insurance benefits are admissible for determining the reasonable value of medical services; and (2) it provides a rebuttal case to language in Pebley v. Santa Clara Organics, LLC (2018) 22 Cal.App.5th 1266, which rejected the notion that future Medicare/insurance benefits are admissible to establish the reasonable value of medical services.

In an important ruling for commercial property owners, the New Jersey Supreme Court in Alejandra Padilla v. Young II An, (A-43-22) addressed the owners' obligations regarding the maintenance of public sidewalks and answered the question: Do owners of vacant commercial lots have a duty to maintain adjacent public sidewalks in reasonably good condition?

In a ruling that has significant implications for the construction industry, the Massachusetts Appeals Court in Lessard v. R.C. Havens & Sons, Inc., recently clarified the scope of coverage under commercial general liability (CGL) insurance policies concerning construction defects. For the first time, the court determined that construction defects, standing alone, do not qualify as "property damage" under these policies. This decision that could reshape the landscape of liability for contractors and homeowners alike, potentially altering how parties approach risk management, contract negotiations, and insurance underwriting. As the industry grapples with the ramifications of this ruling, stakeholders may need to reconsider their legal strategies and the allocation of responsibility in construction projects. This landmark decision not only shifts the understanding of what constitutes insurable damage, but also sets a precedent that could influence future legal interpretations and coverage disputes across the nation.

In a new arbitration-related ruling, a California court in the case of Cook v. University of Southern California, found that an arbitration agreement requiring an employee to arbitrate all claims, even those not arising from the employment relationship, for an infinite amount of time, was unconscionable and entirely unenforceable. The decision arose from a lawsuit in which the plaintiff alleged discrimination and harassment by her employer and two co-workers. Despite the defendants' collective motion to compel arbitration based on an agreement signed by the plaintiff as a condition of employment, the court denied the motion, citing the purportedly pervasive unconscionability of the agreement. The defendants appealed the decision.

In a recent legal battle before the Connecticut Supreme Court, a plaintiff challenged her employer's handling of a hostile work environment claim after facing racially discriminatory statements from a coordinator in her department. O'Reggio v. Commission on Human Rights and Opportunities et al., highlights the complexities of defining supervisory roles and the implications for vicarious liability in discrimination cases.

In a significant ruling, Texas Department of Insurance et al. v. Stonewater Roofing, Ltd., Co., 2024 WL 2869414 (June 7, 2024), the Texas Supreme Court upheld state regulations mandate licensing for public insurance adjusters and prohibit dual roles as both a contractor and adjuster. This decision came after Stonewater Roofing, a roofing contractor, challenged the constitutionality of these regulations, arguing they violated First and Fourteenth Amendment rights. The court's decision has critical implications for insurers and contractors, reinforcing the legal boundaries within which they must operate.

On June 18, 2024, Governor Gavin Newsom and several labor and business groups came to an agreement regarding the future of the highly contentious California Private Attorney General Act known as PAGA. The agreement proposes to pass bipartisan legislation amending the statute. Should the legislation pass, the agreement would successfully halt a November ballot initiative for the voters which proposed eliminating PAGA altogether. To date, the agreement has been welcomed by businesses who have long criticized widespread, abusive, and costly PAGA litigation. Although the proposed amendments add to a business's quiver of possible defenses, it remains to be seen how effective these will be, and we do not expect the amendments to halt the avalanche of PAGA litigation statewide.

In a unanimous decision, the United States Supreme Court recently delivered a significant opinion in maritime law. The holding in Great Lakes Insurance SE v. Raiders Retreat Realty Co, LLC, No. 22-500 stands for the proposition that choice-of-law clauses in maritime contracts are presumptively enforceable under federal maritime law, subject only to very narrow limited exceptions

The recent Illinois appellate case of King v. El Paraiso Del Pacifico, Inc., 2024 IL App. (2d) 230026, has raised important considerations regarding the duty of care businesses owe to their patrons, particularly in relation to accidents caused by out-of-control drivers. In this case the court held that a car crashing through the front entrance of a restaurant was reasonably foreseeable and not an “intervening or superseding” cause of a patron’s injuries. The court determined that the accident fell within the scope of the business's duty of care. This decision is of high importance because previously the Illinois Supreme Court found there was reluctant to impose a duty to protect invitees against out-of-control drivers. This article will delve into the facts of the case, highlight the significance of this decision, and discuss its implications for businesses and insurance carriers in the state of Illinois.

The New Jersey Supreme Court recently ruled unanimously that standard commercial property insurance policies do not cover business interruption losses caused by the COVID-19 pandemic, aligning with many other courts around the country. The case, AC Ocean Walk, LLC v. Am. Guarantee Liab. Ins. Co. _ N.J._ (Jan. 24, 2024), centered around a casino operator in Atlantic City who claimed losses due to the presence of COVID-19 particles on its premises and the resulting governmental shutdown of its operations.

How do you define the term "contractor?" In the case of California Specialty Insulation Inc. v. Allied World Surplus Lines Insurance Company, No. B324805 (2024), the court ultimately honored the reasonable expectations of the insured and ordered that the insurer defend and indemnify in an underlying suit stemming from the policy. This case involves a commercial general liability insurance policy issued by Allied World Surplus Lines Insurance Company (Allied) to California Specialty Insulation, Inc. (CSI). The central issue is whether Allied World is obligated to defend and indemnify CSI against a negligence claim stemming from a construction site accident. The dispute hinges on the interpretation of a policy exclusion for bodily injury to employees of any "contractor," a term not defined in the policy.

The Communications Decency Act, codified at 47 U.S.C. Section 230, has long been a foundational tenet of law governing the internet, providing crucial protections for online platforms. However, it is under intense scrutiny once again as the law faces significant re-examination and potential reform. The new legislation proposes to sunset Section 230 during the final week of 2025, effectively setting a timer on Congressional action and giving lawmakers only eighteen months to establish a new standard for liability. This legislative move seeks to address mounting concerns about the role of online platforms in hosting and moderating user-generated content. At the crux of the issue is whether online platforms can be held responsible for the content that users post.

In the case of Pine Management v. Colony Insurance Company, 23-624-cv (2dCir. Mar. 26, 2024), the United States District Court of the Southern District of New York provided essential guidance regarding when a pre-suit demand constitutes a claim triggering the obligation to notify your liability insurer under New York law.

The recent ruling from the New York Court of Appeals has broadened the protective umbrella of Labor Law 241(6), deeming a plastic covering a foreign substance as defined in Industrial Code section 23-1.7(d). Additionally, the court determined that the presence of the plastic covering did not qualify as an integral part of the work, highlighting the defendant's responsibility in creating an "avoidable danger." This opinion presents a significant challenge for defendants as it raises the risk of liability for owners, contractors, and their representatives in construction site accident cases. The case of Bazdaric v. Almah Partners LLC, 2024 NY Slip Op 00847 (decided on February 20, 2024), centers on a workplace injury that occurred while an employee was completing a painting project. The plaintiffs sought damages for injuries that resulted from a slip and fall on a plastic covering placed over the top of a stopped escalator.

In the complex world of property ownership and community governance, conflicts often emerge concerning the responsibilities of condominium associations versus individual unit owners. In Canner v. Governors Ridge Ass'n, 348 Conn. 726(Conn. Apr. 2, 2024), the Connecticut Supreme Court offered important insight regarding the intricate web of obligations outlined in Connecticut’s Common Interest Ownership Act (CIOA), as well as the relevant statute of limitations analysis governing such claims. The plaintiffs raised concerns over the allegedly defective foundations of their units within a common interest community. Central to the plaintiffs' argument were assertions of negligence in design and construction, coupled with the association's purported failure to uphold its duties under CIOA. Conversely, the defendant condominium association invoked a statute of limitations defense, contending that the plaintiffs' claims were time barred. This case not only underscores the often complex interplay between contractual and tortious obligations, but also highlights the role of statutory interpretation in resolving disputes within common interest communities and clarifies the statute of limitations applicable to such claims.

Colorado's housing market is currently a battleground for legislative proposals aimed at addressing affordability challenges while balancing construction industry concerns. Amid the state's affordable housing shortfall and prospective buyers contending with stubbornly high interest rates and escalating borrowing expenses, the state is exploring diverse avenues to combat the state's housing challenges. As part of this push for reform on both sides, two competing bills are currently pending in the General Assembly, SB 24-106 and HB 24-130. Each have the potential to significantly alter the landscape of construction industry operations in Colorado.

On December 29, 2023, New York Governor Kathy Hochul vetoed the revised S74A "Grieving Families Act" for the second time since its inception over a year ago. The law was aimed at substantially expanding compensable damages in wrongful death actions.

Binding private arbitration is intended to be a speedy and efficient means for resolving disputes that would otherwise be litigated through the court system. There are numerous benefits to pursue this form of alternative dispute resolution, but also some drawbacks. This article addresses these pros and cons, as well as strategies and other considerations for compelling cases to arbitration.

Lyme and other tick-borne diseases are complex medical conditions that lack a unified consensus on diagnostic testing and treatment. Because there is a lack of medical consensus on how to treat these conditions, Lyme-literate providers, who practice on the cutting edge of medicine, can find themselves vulnerable to medical board and other regulatory agency investigations. A recent survey of 155 Lyme-literate medical providers found that 39% were reported to either a medical board, insurer, or subjected to a hospital-based quality improvement inquiry. This survey has drawn attention to the challenges faced by medical providers in treating these complex and often misunderstood conditions. Exploring the reasons behind the complexity of treating tick-borne diseases sheds light on the ever increasing prevalence of Lyme disease and the growing demand for more comprehensive treatment approaches.

While AI has penetrated awareness in the larger culture, construction companies have been delving into it themselves in recent years including using it to optimize work schedules, to improve workplace safety, and to keep a close eye on construction sites.

On June 16, 2023, Nevada signed into law a bill that would amend the cap on damages in medical malpractice cases. This bill has significant implications for patients and medical professionals alike.

Florida is quickly establishing itself as one of the most business-friendly states in the nation. After undertaking massive tort reform, state legislators are now tackling construction defect issues. While much work remains to be done, moving the statute of repose from 10 to 7 years is big news. Three extra years is significant in the wear and tear of property as well as in maintenance-related issues that drive homeowner's associations to seek counsel instead of making necessary repairs that are expected during the lifeblood of a building. This move is likely to make this venue more friendly for insurance carriers and the resulting development of the growing Florida market.

Construction site safety is of utmost importance, yet construction site injuries and fatalities remain a significant concern in New York State. The Occupational Safety and Health Administration (OSHA) has identified the leading causes of construction site injuries and fatalities, including falls, struck-by incidents, electrocutions, and caught-in/between incidents. Construction workers are at a higher risk for these types of accidents due to the nature of their work, which often involves working from heights, working near heavy machinery, and working in confined spaces.

After jamming the courthouse system with thousands of lawsuits, plaintiff attorneys are out of time to get their claims filed before Florida's new tort reform legislation is signed into law by Governor De Santis. After its signing, HB 837 will make it more difficult for Floridians to file lawsuits. In anticipation of this changing climate, it is estimated that Florida plaintiff firms have filed hundreds of lawsuits in anticipation of the bill's signage last week. The bill calls for wide-ranging tort reform and the new revisions in the area of civil litigation arena are significant. Many plaintiff firms are unhappy with the changes and some have even publicly stated that they plan to make the litigation process as difficult as possible for defense attorneys moving forward.

Many experts agree that the economy is on the precipice of a recession. The Federal Reserve increased interest rates seven times in 2022. Congress is once again tasked with raising the debt ceiling to push the national debt north of $31.4 trillion. According to Bloomberg, in 2022, consumer price inflation in the U.S. soared to a 40 year high of 9.1%. Historically speaking, real estate and construction litigation increases when the economy heads down. As homeowners lose their jobs and watch the adjustable rates on their mortgages climb—causing payments to skyrocket—they historically file more lawsuits against real estate, construction and design professionals. People who are upside down on their payments are desperate for a solution and often take aim at the defects in their homes when times were better. The economic repercussions of the COVID-19 pandemic and the increased stress on the supply chain, in part caused by the war in Ukraine, have contributed to an economy plagued by inflation. Real estate professionals, the construction industry, and design professionals face particularly trying times sharing in the impact of financial uncertainty and responding an to increased litigation risk. Armed with historical data, the real estate and construction industries can take positive steps to prepare for a recession and minimize its impact on business growth. 

On January 30, 2023, at the eleventh hour, Governor Hochul vetoed legislation known as the Grieving Families Act. The defense bar has waited with some degree of anxiety to see if Bill S74A would pass her desk, and when it did not, a collective sigh of relief was heard among many. Despite heavy pressure from the plaintiff bar and others, Governor Hochul expressed concern about the potential negative impact of the bill on the economy as well as healthcare costs.

Florida House Bill 85 would decrease the time in which an action could be brought by a homeowner for construction defects. Proponents of the bill say that reducing potential liability for insurance companies, builders and other construction professionals will ultimately drive down costs and provide more affordable housing options in the state. Opponents argue that if passed into law this legislation would significantly undercut homeowners rights and impair their ability to seek a remedy for latent defects that only appear years after building is complete. Similar bills proposed during the 2022 legislative session inspired much debate, but did not pass.

Contractors in the State of Washington have been watching closely a case involving prelien notice by subcontractors. On December 6, 2022, the Washington Court of Appeals, Division Two addressed the issue in the decision of Velazquez Framing LLC v. Cascadia Homes, Inc., (2022) Case No. 56513-7-II. In this matter, a second-tier subcontractor’s failure to provide prelien notice to the general contractor prevented enforcement of its lien. The court held that allowing an unknown subcontractor to file a lien against a general contractor's property when the general contractor was not aware of the second-tier subcontractor’s hiring or participation in the project is against legislative policy to protect both laborers and owners.

Beginning on January 1, 2023, California will go one step further in combating the pervasive problem of sex trafficking in hotels and motels by imposing liability on owners for failing to identify and report sex trafficking activity when supervisors knew or should have known it was occurring on their property. As a result, hotel owners and operators should work to ensure staff receive proper training and set clear policies and procedures for employees to report activity.

Insurance industry professionals should take notice of a recent bill passed by the California legislature that will impact time-limited insurance settlements moving forward. On September 28, 2022, SB 1155 was signed into law by Governor Newsom. This bill adds Chapter 3.2 entitled "Time-Limited Demands" to the California Code of Civil Procedure (sections 999-999.5).

Any legal practitioner in California and beyond can attest to the court reporter shortage. Even before the onset of the pandemic, the court reporting industry was experiencing an increasing shortfall of court reporters available compared to the number of courtrooms and depositions needing the services of one.

In a highly anticipated decision, the Court of Appeal clarified an issue on agency which is important to hospitals in California that host doctors working as independent contractors. In the Franklin v. Santa Barbara Cottage Hosp., 2d Civil B311482 (Cal. Ct. App. Aug. 8, 2022) decision, the court clarified that a hospital cannot be held liable for the acts of an independent contractor working at the hospital. Key documentation was pivotal in this decision, as the patient had executed paperwork formally recognizing the independent relationship. In addition, the hospital did not retain any ability to control how the physician chose to treat his patients, or the manner in which he performed operations or other procedures. He was also not an ostensible agent as the patient, not the hospital, had selected the doctor in question for his surgery.

In a decision causing quite a stir among medical professionals, the Pennsylvania Supreme Court decided to change a twenty-year-old rule regarding venue for medical malpractice actions. On August 25, 2022, the Court adopted amendments to Pennsylvania Rules of Civil Procedure 1006, 2130, 2156, and 2179, which govern venue in medical malpractice actions. Prior to this decision, medical malpractice cases could only be brought in the county where the medical care or treatment occurred.

In Ryck v. Superior Court of San Francisco County (2022) 81 Cal.App.5th 824, the California Court of Appeal held that the San Francisco Superior Court abused its discretion when it denied a motion to transfer venue from San Francisco to San Diego, where the motor vehicle accident at issue in the case occurred. Although most witnesses were located in California, the trial court relied on the fact the Legislature statutorily provided for remote testimony through July 1, 2023 as the primary basis for maintaining the case in San Francisco. In a published decision, the Court of Appeal reversed, ruling that the remote testimony rules may not be used as a basis to maintain a venue that does not further the interests of justice, which is the key consideration in change of venue motions.

After decades of debate, the reform of medical malpractice claims in California is finally coming to fruition. Legislators and interested parties on both sides of the MICRA debate have reached a compromise and agreed to a deal that will avert a planned ballot measure in the upcoming election. On May 23, 2022, Governor Gavin Newsom signed the measure into law. Practitioners are wise to be reminded that this law goes into effect for cases filed next year. This is notable because plaintiff lawyers will be holding off filing their cases if possible so as not to blow the statute of repose. Brace yourself for a slew of new filings in 2023.

A “Friends” reunion; a “Sopranos” prequel movie; Britney Spears—pop culture from the early 2000s has made a comeback. Unfortunately something far less enjoyable from that era may also be finding its way back into our lives: mold litigation. We see multiple signs of a mold sequel and offer advice on how to avoid becoming a star of this show

WSHB Partner Constance Endelicato was quoted in the June 8, 2020 Skilled Nursing News article, "Nursing Homes Face Fines, Lawsuits Unless They Test for Covid-19 — But Access Often Out of Their Hands"

In this article, Ms. Endelicato wrote: 

“Testing capability is riddled with a number of factors that often are out of the hands of the nursing facility,” Constance Endelicato, a partner at the law firm Wood, Smith Henning & Berman who represents health care providers that include SNFs, wrote to Skilled Nursing News in an e-mail on June 3. “The facilities face the daunting task of attempting to abide by the governing recommendations, keeping in mind that with the exception of New York, recommendations will not necessarily define the standard of care under the pandemic crisis. We need to remember that the entire medical community was not prepared for this unknown and eerily unpredictable virus.”