Monthly Archives: August 2018

Insurance Company Must Defend Contractor Regardless of CGL Policy’s Breach-of-Contract Exclusion.

29 Wednesday Aug 2018

Posted by in Construction General Liability, Contract Law, Duty to Defend, Insurance Law

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Normally, an insurance company has no duty to defend a contractor under a construction general liability (“CGL”) policy against breach-of-contract and negligence allegations. Not this time. This time, in the Western District of Texas, the insureds won against the insurance company. The court held the breach of contract exclusion did not apply because the contractor’s subcontractor, not the contractor, could be responsible for a construction defect.

A municipality hired the general contractor to construct a sports complex that included a swimming pool, baseball and softball fields, and parking lots. The contractor hired two subcontractors – one to design and build the swimming pool, and another to do all the dirt work, grading, and storm drainage for the entire complex.

At the beginning of 2017, a contractor employee saw cracks beginning the pool and parking lot after completion of the pool and most of the sports complex. The contractor put the pool subcontractor on notice to fix the cracks. About three months later, a contractor employee noticed the cracks were worse. The contractor and the pool subcontractor were unable to agree on how to fix the pool. By the end of the year, more cracks and other defects had appeared. The city, contractor, and subcontractors could not agree on how to solve these problems.

The city sued the contractor for breach of contract and negligence. The contractor notified its insurance company and, relying on its CGL policy, asked its insurance company to defend it against the city’s lawsuit. The insurance company refused. It sued the contractor requesting a judgment declaring that it had no duty to defend the contractor in the lawsuit filed by the city based on the CGL exclusion clause.

The insurance company relied on language in its policy that specifically denied coverage to the contractor for property damage caused by the contractor. In it its lawsuit against the contractor, the city had specifically alleged that work performed by the contractor and its subcontractors was defective. The insurance policy’s exclusion did not apply to work performed by a subcontractor. The court held that, because the city’s allegations included the possibility that subcontractor alone had created the defects at issue in the city’s lawsuit, the insurance company had a duty to defend the contractor.

Mt. Hawley Insurance Company v. Slay Engineering, Texas Multi-Chem and Huser Construction, LLC, No. 5:2018cv00252 – Document 19 (W.D. Tex. 2018). You can read the entire Memorandum and Order at Justia US Law here: https://bit.ly/2wul7ka. -CCE

 

A $10 Million Punctuation Mistake.

25 Saturday Aug 2018

Posted by in Legal Writing, Punctuation

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Take That, AP Style! Court of Law Rules The Oxford Comma Necessary, by Kelly Gurnett, The Write Life (republished here with permission)

https://thewritelife.com/is-the-oxford-comma-necessary/

Which of these two sentences look right to you?

I need a pen, my notes, and a legal pad.

I need a pen, my notes and a legal pad.

The first sentence includes the Oxford comma, sometimes called the “serial comma.” If you do not already use it, you may ask why bother? It is about clarity versus ambiguity. In this case, the Oxford comma made all the difference.

“In this class action lawsuit, drivers for Oakhurst Dairy sued the company over its failure to grant them overtime pay. According to Maine law, workers are entitled to 1.5 times their normal pay for any hours worked over 40 per week. However, there are exemptions to this rule. Specifically, companies don’t need to pay overtime for the following activities:

The canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of:

Agricultural produce;

Meat and fish product; and

Perishable foods

Note the end of the opening line, where there is no comma before the ’or.’”

The employer argued the employees did not qualify for overtime because “packing for shipment” and “distribution” were two different things. The employees argued that, without the comma before the “or,” they should be paid for both. The court agreed with the employees. The language determining overtime pay was ambiguous because of the missing comma.

“Without that comma, as the judge maintained, this distinction was not clearcut:

Specifically, if that exemption used a serial comma to mark off the last of the activities that it lists, then the exemption would clearly encompass an activity that the drivers perform. And, in that event, the drivers would plainly fall within the exemption and thus outside the overtime law’s protection. But, as it happens, there is no serial comma to be found in the exemption’s list of activities, thus leading to this dispute over whether the drivers fall within the exemption from the overtime law or not.”

How much did this missing comma cost the employer? Approximately $10 million. Proper punctuation matters, especially in legal writing.

Feeling the need for a punctuation refresher? Try this website: http://www.thepunctuationguide.com/comma.html

-CCE

What’s the Clue to Whom Did What, Where, and Why?

03 Friday Aug 2018

Posted by in Bad Legal Writing, Grammar, Legal Writing, Persuasive Writing, Plain Language

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Give A Clue (A Linguist Whodunit), by Mark Cooney, 97 Mich. B. J. 60-62 (June 2017) 

“This piece first appeared in Professor Cooney’s book, Sketches on Legal Style, published by Carolina Academic Press.”

https://www.michbar.org/file/barjournal/article/documents/pdf4article3146.pdf

In this tongue-in-cheek parody of Hasbro’s classic board game, Clue©, Professor Cooney delightfully explains the importance of using the active voice rather than the passive.

The basic tenet of good legal writing is to put the subject and verb together, place modifiers next to what they modify, and use the active voice. The passive voice causes confusion rather than clarity because it fails to communicate the writer’s intention. There is only one valid use of the passive voice – when the actor is unknown or unimportant.

Enjoy! -CCE