Calculating Actual Cash Value, Part 4: Louisiana

Shane Smith | Property Insurance Coverage Law Blog | January 25, 2015

After attending the 16th Annual Windstorm Insurance Conference in New Orleans this past week along with many of my colleagues, I thought it appropriate to review the calculation of actual cash value in Louisiana.

Louisiana courts calculate actual cash value as replacement cost less depreciation.

In Nguyen v. St. Paul Travelers Insurance Company,1 the plaintiffs owned property that was damaged as a result of Hurricanes Katrina and/or Rita. They commenced a breach of contract claim against their insurer. The plaintiffs’ claim was that they were entitled, under the loss provision of the policy, to receive the actual cash value of their damaged property and that when the insurer settled with them on an actual cash value basis, it did not pay them the full amount due because the insurer underpaid overhead and profit. The Eastern District of Louisiana court agreed with Plaintiffs that actual cash value is equal to replacement cost value less deprecation, and replacement cost value must account for the impact of Hurricanes Katrina and Rita on the costs of supplies and labor, including overhead and profit costs.2

Because the Nguyen court was considering a motion to dismiss, the court noted:3

“At the very least, plaintiffs needed to allege that it was reasonably likely they would need the services of a general contractor, or allege some basis in the facts or the contract language demonstrating an entitlement to overhead and profit as part of their insurance payment.”

Stay tuned for next week when I discuss the method of calculating ACV in Texas.

1 Nguyen v. St. Paul Travelers Ins. Co., No. CIV.A. 06-4130, 2007 WL 3275133 (E.D. La. Nov. 5, 2007).

2 Id. at 2-3.

3 Id. at 7.

via Calculating Actual Cash Value, Part 4: Louisiana : Property Insurance Coverage Law Blog.

World’s first 3-D-printed Apartment Building Debuts in China

Justin Scuiletti | PBS | January 20, 2015

A Chinese company has set another world first in 3-D printing living space.

WinSun, the company that used 3-D printed materials to aid in constructing 10 houses in a period of 24 hours in March 2014, has constructed the world’s first 3-D printed apartment building. The five-story building made its debut in Suzhou Industrial Park in Suzhou, China, alongside a separate, 3-D printed 11,840 square foot villa.

Printing large parts for buildings also calls for a large 3-D printer to accomplish the feat. WinSun used, according to CNET, a proprietary 3-D printer measuring 132 feet long, 33 feet wide, and 20 feet tall to print each part of the mansion. The 3-D printer uses a material created from ground construction and recycled industrial waste to construct the parts. Once the pieces were printed, the assembly of the building occurred at the site, with the addition of steel reinforcements and insulation to meet China’s building codes.

The company, however, does not want to stop there. WinSun, CNET reports, aims to use its 3-D printing technology to tackle even larger projects, including bridges and skyscrapers.

via World’s first 3-D-printed apartment building debuts in China.

What Do You Do If The Judge Does Not Like Your Case

R. James Kravitz | Fox Rothschild LLP | January 14, 2015

I recently tried a commercial dispute where the judge expressed a negative view of my client’s case at the outset.

She seemed predisposed in favor of my adversary. This was frustrating because I felt confident my clients had been wronged and had meritorious claims.

How should you react in these circumstances? There are three things you should do and three things that you not should do:

What You Should Do

1. Present yourself in a respectful manner to the judge and your adversary.

2. Concede points where appropriate.

3. Be on time to court and be prepared. Do not create any new sources of friction.

What You Should Not Do

1. You should not communicate any frustration or dissatisfaction with the Judge. Be careful about the tone of your voice and your body language.

2. You should not interrupt the judge, particularly to contend that the Judge has erred.

3. Do not make overreaching or aggressive arguments. If the judge has a negative view of your case, weak arguments will reinforce her perception.

In the case I described above, I retained a respectful and deferential tone. The case was tried before the same judge who was initially skeptical of our claims, and we won. The judge did not allow a negative first impression to infect his decision-making. He decided the case based upon the witnesses and exhibits that he considered.

Judges deal with a lot more cases than lawyers do. Sometimes they come to a first impression that is not their last impression. It is important that you do not aggravate the situation. By maintaining a respectful tone and appearance before the court you will better serve your client.

via What Do You Do If The Judge Does Not Like Your Case – Litigation, Mediation & Arbitration – United States.

Suing for Bad Faith gets a Little Easier in Florida

Robert D. Helfand | Carlton Fields Jorden Burt | December 22, 2014

In a ruling that claims merely to clarify a 14-year-old case from the Florida Supreme Court, an appellate court recently held that an insurer may be liable to a statutory claim for bad faith failure to settle, based only on an unfavorable resolution of a property policy’s appraisal process. The decision will likely make bad faith claims more common and negotiations with Florida insureds more contentious.

The plaintiffs in Cammarata v. State Farm Florida Ins. Co. waited two years to file a claim after their home suffered damage from Hurricane Wilma in 2005. Their insurer estimated the amount of the damage to be below their deductible, but it agreed to submit to the policy’s appraisal process. At the end of that process, a neutral umpire reached an estimate that fell between those of the two parties, but which was higher than the policy deductible. The insurer promptly paid the claim. Although there was no allegation that State Farm had obstructed the appraisal, the insureds filed a new action for statutory bad faith.

The circuit court awarded summary judgment to the insurer, holding that the claim was not ripe, because there had not yet been any finding that State Farm was liable for breach of contract. Reversing that decision, the Fourth District Court of Appeal held that a bad faith suit may rest on determinations of nothing more than (i) the amount of damages and (ii) the fact that the insurer is liable to provide coverage. As one of the judges acknowledged in a concurrence, those conditions are satisfied “any time the insurer dares to dispute a claim, but then pays the insured just a penny more than the insurer’s initial offer to settle.” Thus, State Farm could be required to defend a bad faith suit on the merits, although “the record here provides no basis indicating that the insurer breached the contract, much less failed to act in good faith.”

The decision rests primarily on the Florida Supreme Court’s somewhat paradoxical 2000 opinion in Vest v. Travelers Ins. Co. In Vest, the insured brought a bad faith claim, and the insurer responded by paying policy limits. The Supreme Court stated that the bad faith suit had been premature when filed, but that it “ripened” upon the insurer’s “settlement.” That is, the insurer’s voluntary payment was enough of a “determination” of its liability to pay the claim to support an action for bad faith.

What Vest did not consider, however, was the practical effect of a rule under which any insurer that submits to an appraisal and ends up paying more than it first offered must then defend a bad faith action on the merits. The concurrence in Cammarata did address that problem, urging the Legislature to amend the relevant statute by imposing further requirements on bad faith claims.

via Suing for bad faith gets a little easier in Florida – Lexology.

Florida’s Construction Defect Statute Overhaul in 2015?

Jeffrey S. Wertman | Berger Singerman LLP | January 13, 2015

In 2003, the Florida Legislature adopted Chapter 558 of the Florida Statutes to provide an alternative dispute resolution process for construction defects in real property. This statute, commonly referred to as Florida’s “opportunity-to-cure” statute, has undergone a litany of legislative changes since its enactment.  The amendments over the years have attempted to clarify and correct inherent infirmities in the statute.

On December 9, 2014, the Florida House of Representatives introduced House Bill 87 which would significantly revamp the statute. The proposed legislation requires claimants to identify the specific location of each alleged construction defect and the specific provisions of the building code, project plans, project drawings, project specifications, or other documentation that serve as the basis for the claim for each alleged defect. The failure to include this information in the notice of claim is prima facie evidence of a defective notice.

In addition, the bill changes the requirements for a response to the notice of claim.  The responding party will be required to state whether he or she disputes the claim, and whether he or she is willing to attempt to settle all or a portion of the claim through a monetary settlement offer, including the amount of the offer and a timetable for payment.

The bill imposes severe penalties on a claimant who proceeds with an action on any claim that was previously resolved by the payment of money or the making of repairs, or a combination of the two.  That claim will be deemed frivolous and dismissed from the lawsuit.  In addition, monetary sanctions could be awarded against the claimant for the costs incurred in defending the meritless claim, including the costs of inspection, investigation, testing, related costs, and attorney’s fees.

The bill also revises existing provisions relating to the production of records by limiting the exchange of expert reports that describe any defect upon which the claim is made to those that are “nonprivileged,” and requiring the claimant to produce maintenance records and other documents related to the discovery, investigation, causation of the alleged defect and any resulting damages.

Finally, the bill authorizes the courts to impose monetary sanctions against a claimant who complains of a construction defect that was solely the fault of the claimant or his or her agents, including the costs of inspection, investigation, testing, and attorney’s fees, if the court finds that the claimant or the claimant’s attorney knew or should have known that the material facts or the existing law did not support the claim when it was initially presented.

The bill was referred to subcommittees in the Florida Legislature, which will analyze and discuss it before it proceeds further in the legislature.

via Florida’s construction defect statute overhaul in 2015? – Lexology.