Installation of Solar Panels Ain’t “Roofing Work” Under OSHA Says 9th Circuit

Garret Murai | California Construction Law Blog | July 22, 2019

In a straightforward case, but one with widespread applicability today, the 9th Circuit Court of Appeals held that rooftop installation of solar panels isn’t (ain’t) “roofing work” under OSHA.

In Bergelectric Corp. v. Secretary of Labor, Case No. 17-72852 (June 6, 2019), contractor Bergelectric Corporation sought review of a final order of the Occupational Safety and Health Review Commission, in which OSHA held that Bergelectric was required to comply with the stricter safety standards governing work on “unprotected sides and edges” as opposed to the more lenient safety standards governing “roofing work.”

In 2016, Bergelectric was hired to install solar panels on the roof of a hangar at the Marine Corps Air Station Miramar in San Diego, California. While Bergelectric was performing work OSHA conducted an inspection.  Bergelectric informed OSHA that they were using “warning lines” and a “safety monitor” in compliance with OSHA’s safety standard for roofing work and, further, that its employees would use personal fall arrest systems (PFAS) should they do work outside the warning lines.

OSHA issued a citation alleging that Bergoelectric had violated 29 C.F.R. § 1926.501(b)(1), which requires employees working near unprotected sides and edges to be protected by guardrail systems, safety net systems, or PFAS.

At the hearing on the violation, Bergelectric argued that the alternative standard under 29 C.F.R. § 1926.501(b)(10), which allows workers performing roofing work on low-sloped roofs to use warning lines and a safety monitor, applied.  The hearing officer disagreed, and Bergelectric appealed but OSHA declined review.

On appeal to the 9th Circuit Court of Appeals, the 9th Circuit noted that for OSHA to prove a prima facie violation of a particular safety standard:

[T]he Secretary [of Labor] must show by a preponderance of the evidence that (1) the cited standard applies; (2) the employer failed to comply with the terms of the cited standard; (3) employees had access to the violative condition; and (4) the cited employer either knew or could have known with the exercise of reasonable diligence of the violative condition.

And here, explained the Court,  29 C.F.R. § 1926.501(b)(1), which OSHA relied on, provides:

Unprotected sides and edges. Each employee on a walking/working surface (horizontal and vertical surface) with an unprotected side or edge which is 6 feet (1.8 m) or more above a lower level shall be protected from falling by the use of guardrail systems, safety net systems, or personal fall arrest systems.

Whereas, 29 C.F.R. § 1926.501(b)(10), which Bergelectric argued should apply, provides:

Roofing work on Low-slope roofs. Except as otherwise provided in paragraph (b) of this section, each employee engaged in roofing activities on low-slope roofs, with unprotected sides and edges 6 feet (1.8 m) or more above lower levels shall be protected from falling by guardrail systems, safety net systems, personal fall arrest systems, or a combination of warning line system and guardrail system, warning line system and safety net system, or warning line system and personal fall arrest system, or warning line system and safety monitoring system.

The Court held that the more stringent “unprotected sides and edges” standards applied, relying on 29 C.F.R. § 1926.500(b), which defines “roofing work” as the “hoisting, storage, application, and removal of roofing materials and equipment, including related insulation, sheet metal, and vapor barrier work, but not including the construction of the roof deck.”

Solar panels, explained the Court, are not among the materials involved in “roofing work.” Simply put, held the Court, solar panels are neither “roofing materials [or] equipment” used in the construction of a roof, such as “insulation, sheet metal [or] vapor barriers.”

So there you have it, if you’re installing rooftop solar panels on a roof with unprotected sides or edges more than 6 feet above a lower level you must either: (1) use guardrail system; (2) safety net system; or (3) each employee must use personal fall arrest systems.

Be careful out there.


Florida’s Citizens Property Insurance May Be Immune From Bad Faith, But Is Not Immune From Consequential Damages

Michael S. Levine, Andrea DeField and Daniel Hentschel | Hunton Andrews Kurth | June 7, 2019

A coverage dispute arising as a result of property damage from Hurricane Frances, which occurred in 2004, will continue following a Florida appellate court decision in an action brought against Citizens Property Insurance Corp.

The insureds, Manor House, LLC, Ocean View, LLC, and Merrit, LLC, presented a claim to Citizens for damage sustained at nine apartment buildings as a result of Hurricane Florence. After payments for a portion of the property damage were sustained, Citizens continued to dispute the full amount due. Meanwhile, the insureds suffered lost rental income because of the delay. Ultimately, the insureds filed suit against Citizens alleging, among other things, breach of contract and fraud, and sought to recover extra-contractual damages for loss of rental income due to the delay in adjusting and repairing the damaged property.

The trial court granted Citizens’ motion for partial summary judgment on several issues, including Citizens’ motion for partial summary judgment regarding appraiser and umpire fees; motion for partial summary judgment to prevent the insureds from pursuing a claim for extra-contractual, consequential damages; and motion for judgment on the pleadings on the insured’s claim for fraud.

Despite finding that the trial court had accurately interpreted the insurance policy at issue – to not provide coverage for lost rental income – Florida’s Fifth District Court of Appeals reversed the lower court’s decision, finding that the trial court ignored the “more general proposition” that the injured party in a breach of contract action was entitled to recover monetary damages that would put it in the same position it would have been in had the other party not breached the contract. As a result, the court held that, when an insurer breached a contract of insurance, the insureds were “entitled to recover more than the pecuniary loss involved in the balance of the payments due under the policy” as consequential damages, provided that the damages “were in contemplation of the parties at the inception of the contract.”

The appellate court determined that the insureds were denied the opportunity to prove whether the parties contemplated that the property at issue would suffer consequential damages in the form of lost rental income if Citizens breached its contractual obligations. The opinion further made clear that, even though Citizens was immune from bad-faith claims, it was not statutorily immune from this aspect of the insureds’ claim because the consequential damages claimed by the insureds were “based squarely on breach of contract claims requiring no allegation or proof that Citizens acted in bad faith.”

The decision is a significant win for policyholders as it reiterates their ability to seek all damages flowing from an insurer’s breach of contract, even if such damages are in addition to policy benefits. And, more importantly, this applies even where the insurer is a an entity that is immune from bad faith liability under Florida law.

The Hunton Insurance Coverage team congratulates our friend, Molly Chafe Brockmeyer, of Boyle & Leonard, P.A., and her colleagues, Mark Boyle and Alexander Brockmeyer, on this victory for Florida insureds. Molly has presented with members of our team at the ABA Insurance Coverage and Litigation Committee Annual Conference and Mark and Molly have co-counseled with members of our team on prior cases.

Washington Court Tunnels Deeper Into the Discovery Rule

Lian Skaf | The Subrogation Strategist | May 10, 2019

Often times, properly analyzing when a statute of limitations begins to run – not just how long it runs – is crucial to timely pleading. In Dep’t of Transp. v. Seattle Tunnel Partners, 2019 Wash.App. LEXIS 281 (Was. Ct. App. Feb. 5, 2019), Division Two of the Court of Appeals of Washington addressed when the discovery rule starts the statute of limitations clock on a negligence cause of action. The court held that the statute of limitations begins to run when the plaintiff knows that the factual elements of the claim against the defendant exist. The clock starts to run even if the plaintiff wants to investigate the possibility of other contributing factors or the defendant identifies opposing viewpoints on the theory of the claim.

In this matter, the Washington State Department of Transportation (WSDOT) contracted with an engineering firm, WSP USA, Inc. (WSP), for an evaluation of the Alaskan Way Viaduct in 2001. As part of this project, WSP retained the services of Shannon and Wilson (S&W), another engineering firm, to conduct geological profile logs, groundwater-pumping tests, and prepare technical memoranda. In 2002, WSP and S&W installed a pumping well with an eight-inch steel casing (TW-2). In 2009, apparently based on the work done by WSP and S&W, WSDOT determined that a bored underground tunnel was the best option for replacing the viaduct.

In January of 2011, WSDOT and Seattle Tunnel Partners (STP) entered into a contract to construct an underground bored tunnel. STP launched its tunnel-boring machine (TBM) on July 30, 2013. A hollow steel casing emerged from the project surface site on December 4, 2013 and STP stopped its boring work two days later to investigate the slow rate of tunneling and rise in temperature of the TBM that ensued after seeing the casing. From December 6, 2013 to January 28, 2014, STP conducted an investigation into the cause of the boring issue. The relevant dates and events are as follows:

December 9, 2013:STP’s project manager sent an email stating that STP hit a WSDOT well
December 10, 2013:WSP’s engineer sent an email casting doubt on the issue
December 12, 2013:STP sent a letter to WSDOT stating they were investigating
December 17, 2013:WSDOT identified the damaged casing as being from TW-2
January 11, 2014:STP laid out a plan to resume tunneling
January 15, 2014:STP responded to questioning from WSDOT, identifying the well casing as the cause of damage
January 28, 2014:STP resumed tunneling
February 2, 2014:STP stopped tunneling indefinitely due to damage to the TBM

WSDOT filed suit against STP for breach of contract on October 9, 2015. STP subsequently answered and counterclaimed, alleging that WSDOT failed to disclose the presence of TW-2. In addition, on January 26, 2017, STP filed a complaint against S&W, adding WSP to the action the following day. Thereafter, S&W and WSP filed a joint motion for summary judgment, claiming that STP’s action was barred by the three-year statute of limitations for negligence. S&W and WSP claimed that even with application of the discovery rule, which delays the running of the statute until the plaintiff knows or in the exercise of due diligence should have discovered the factual bases of its cause of action, STP had sufficient knowledge of the facts at issue prior to January 26, 2014, and thus STP’s complaint was untimely. After the lower court found in favor of the STP, S&W and WSP appealed.

In support of its position on appeal, STP argued that there was an insufficient basis to start the running of the statute of limitations by January 26, 2014. STP highlighted internal correspondence between S&W, WSP and WSDOT, questioning the role of TW-2 in the incident. STP also argued that the statute of limitations should not begin to run until it determined that TW-2 was the “true cause” of the incident.

The court found both of STP’s arguments unpersuasive. The court reasoned that it was not when STP knew the bases of the cause of action that triggered the statute, but when STP discovered them. It also held that neither the possibility of other contributing factors existing nor the fact that an investigation is ongoing alters the point in time when the plaintiff has sufficient notice of an accrued claim to trigger the statute of limitations. Based on these principles, the court determined that January 15, 2014, was the latest day it could be argued that STP had sufficient notice, actual or inquiry, for the statute of limitations to begin. Thus, because STP filed its complaint after the three-year statute of limitations had expired, the court reversed the ruling of the lower court.

While the discovery rule has an equitable purpose and can often be helpful in prosecuting claims thought to be untimely, it is not a magic wand. The case described herein is a good example of the rule’s limits. Since the determination of when a plaintiff has sufficient notice under the discovery rule for a statute to begin to run is a factual one that is subject to interpretation, counsel should be aware of the potential for differing interpretations. Thus, whenever possible, practitioners should err on the side of caution when deciding when to file a complaint if a statute of limitation is about to run.

“If It Walks Like A Duck . . .” – Expert Testimony Not Always Required In Realtor Malpractice Cases Where Alleged Breach Of Duty Can Be Easily Understood By Lay Persons

David W. Evans and Renata L. Hoddinott | Haight Brown & Bonesteel | March 7, 2019

In Ryan v. Real Estate of the Pacific, Inc., et al. (No. D072724, filed 2/26/19), the Fourth Appellate District reversed a trial court’s granting of summary judgment and finding that expert testimony is not required in a professional negligence action where the claimed acts or omissions are within the understanding of a lay person.

Daniel and Patricia Ryan hired Defendants David Schroedl, David Schroedl & Associates, and Real Estate of the Pacific, Inc., doing business as Pacific Sotheby’s International Realty to list, market, and sell their property. During an open house, the Ryans’ neighbor informed Defendant David Schroedl that he planned significant construction on his own property which would impact the Ryans’ property including, but not limited to, building a large addition that would obstruct the property’s westerly ocean view. Schroedl never disclosed this information to the Ryans or to the subsequent purchasers of the Ryans’ property. The day after escrow closed, the new owners’ interior decorator spoke with that neighbor who again explained his extensive remodeling plans.

Upon learning the new information, the new owners of the property immediately sought to rescind the transaction. The Ryans, based in part on Defendants’ advice, refused to rescind the transaction. The dispute then proceeded to arbitration with the new owners contending the Ryans knew and failed to disclose the construction plans for their neighbor’s property. After extensive litigation, investigation, discovery, and an arbitration hearing, the arbitrator ruled in favor of the subsequent purchasers of the property and ordered that the real estate purchase contract be rescinded. The Ryans were ordered to return the $3.86 million purchase price and title and possession for the property transferred back to the Ryans. The arbitrator further ordered the Ryans to pay damages, prejudgment interest, costs, and attorneys’ fees in excess of $1 million.

After the arbitration, the Ryans filed suit against Defendants seeking to recover the money paid as a result of the arbitrator’s award and damages caused by Defendants’ negligence. The complaint alleged six causes of action: (1) negligence, (2) breach of fiduciary duty, (3) breach of implied covenant of good faith and fair dealing, (4) equitable indemnity and apportionment, (5) common count – mistaken receipt, and (6) common count – money had and received. The Ryans’ lawsuit was based on Defendants’ knowledge of the neighbor’s construction plans and failure to inform either the Ryans or the subsequent purchasers about the plans.

Defendants moved for summary judgment arguing that the Ryans could not establish any cause of action against Defendants as they failed to designate an expert witness. Defendants contended that a party could not establish a claim for professional negligence without expert testimony to prove or disprove that Defendants’ performed in accordance with the prevailing standard of care. The Ryans opposed the motion maintaining that expert testimony was not required because of the findings of fact and conclusions of law regarding the standard of care in the prior arbitration. The trial court granted Defendants’ motion and the Ryans appealed.

On appeal, the Court held that California law does not require an expert witness to prove professional malpractice in all circumstances and that expert testimony is not required to prove or disprove a party acted in accordance with the prevailing standard of care where the negligence is obvious to laymen. The Court determined that Defendants possessed material information impacting the value of the Ryans’ property and chose to keep that information from the Ryans and from the subsequent purchasers so as to collect a commission from the sales price which would undoubtedly have been lower had the information been disclosed. The Court pointed out that any seller who hired a real estate broker to sell their home would expect that broker to share pertinent information that would adversely impact the value of the home. Because Defendants’ conduct was within the common knowledge of a layman, expert testimony was not warranted.

The purpose of expert testimony is to assist the trier of fact in understanding a technical or scientific issue that requires specialized knowledge, education or training. While it is generally good practice in any professional liability matter to retain an expert on the standard of care in that industry, the Ryan opinion is a reminder that not all professional liability actions involve a nuanced issue pertaining only to that profession and requiring expert analysis. Sometimes an act or omission is such that anyone can see it using simple common sense.

This document is intended to provide you with information about professional liability law related developments. The contents of this document are not intended to provide specific legal advice. This communication may be considered advertising in some jurisdictions.

11th Circuit Finds Duty to Indemnify Is Not Ripe until Underlying Action Is Resolved

Eric Gold | Policyholder Pulse Blog | March 28, 2019

It’s a familiar story to anyone involved in insurance claims. A policyholder is sued and tenders the claim to its insurer. The insurer agrees to defend subject to a reservation of rights, but it also asserts that policy exclusions may ultimately preclude coverage. While the underlying litigation is ongoing, the insurer files suit against the policyholder seeking a declaration that it does not have a duty to indemnify if liability is established against the policyholder in that litigation.

This common scenario often places the policyholder in the untenable position of having to defend against liability in an underlying suit, while simultaneously taking legal positions and answering discovery in the coverage action that may be at odds with its defense strategy. The insurer’s coverage action also drives up the insured’s costs and creates stress over whether the insured will be left on the hook for any judgment that is ultimately entered against it. Where liability has yet to be established against the policyholder in the first place, insureds are often left wondering why the insurer’s suit against indemnification should be allowed to move forward while they are still defending themselves in the underlying action.

In a recent decision, the U.S. Court of Appeals for the Eleventh Circuit gave a clear answer to this question, finding under Florida law that the duty to indemnify is not ripe for decision until the underlying lawsuit is resolved or the insured’s liability is established. While the decision does not alter an insurer’s obligation to defend, it makes clear that coverage questions regarding indemnity must wait until liability is resolved.

In Mid-Continent Casualty Co. v. Delacruz Drywall Plastering & Stucco, Inc., Mid-Continent agreed to defend Delacruz in an underlying state court action brought by a general contractor, who asserted that Delacruz performed defective work in connection with the construction of a community of single-family homes in Fort Myers, Fla. While that underlying lawsuit was pending, Mid-Continent filed a coverage action in federal court seeking a declaration that it had no duty to indemnify Delacruz and no duty to defend or indemnify the general contractor. The federal court denied summary judgment and dismissed Mid-Continent’s complaint without prejudice, finding that Mid-Continent’s duty to indemnify was not ripe for a decision.

On appeal, the Eleventh Circuit affirmed, quoting a decision of the former Fifth Circuit, which held that the claim was not ripe “because the issue ‘might never arise’” where “the damage suits had never been tried, no one had yet paid or become legally liable to pay,” and no party could state whether anything would be paid in the future. While the court acknowledged an exception to this rule when “the court can determine that the allegations in the complaint could under no circumstances lead to a result which would trigger the duty to indemnify,” the court held that the exception was not binding and refused to address the issue because Mid-Continent had failed to raise the argument in the lower court.

The court also rejected Mid-Continent’s argument regarding the lower court’s alleged failure to address the duty to defend. Noting that “the duty to defend is broader than the duty to indemnify, and ‘courts must look to the underlying complaint to determine the duty to defend, not the true facts of the cause of action against its insured,’” the court found that Mid-Continent failed to seek affirmative relief on the duty to defend and, while it might be ripe, it was not at issue in the operative complaint. Accordingly, the court dismissed Mid-Continent’s complaint without prejudice.

The Eleventh Circuit’s opinion has positive implications for policyholders. For example, the decision stops insurers from unnecessarily expanding the scope of a coverage action to include the policyholder’s ultimate liability in the underlying suit. This will keep discovery and expert costs down at the outset and focus the parties on the duty to defend, which is both significantly broader than the duty to indemnify and a substantively different analysis, one that only requires the policyholder to show a potential for coverage based on the allegations in the underlying complaint and the terms of the insurance policy. The court’s ruling also protects policyholders from having to take positions in the coverage action regarding indemnification that may be inconsistent with their strategy in the underlying action to deny liability.