Subcontractor Fails To Supply Additional Insured Coverage

In today's world, subcontractors often times name their general contractor's as additional insureds (AI). In many other trades, parties can name others as AI's. However, if you have been promised to be named as an AI or have promised to name someone else as an AI, you must make sure that the AI endorsement is provided. A mere promise of insurance is not enough. The AI endorsement should be issued by the insurance agent or broker as well. Without the AI endorsement, the AI carrier is likely to deny the claim on behalf of the AI. If this happens, the person that was promised AI coverage is likely to sue you for breach of contract, negligence, or even fraud (depending on the circumstances). Likewise, if someone has failed to properly name you as an AI and the carrier denies your AI claim, you may have a case for breach of contract, negligence, and fraud.

If you are not sure that you have properly complied with your AI obligations, contact your insurance broker or attorney. Better safe than sorry.

I am attorney Robert A. Von Esch IV. I practice business litigation, construction defect, and real estate law. If you have any questions, please do not hesitate to contact me via http://www.voneschlaw.com/.

Evidence Preservation

It is all to common for evidence to disappear when litigation becomes apparent. Emails disappear, surveillance tapes are recorded over, and physical items are misplaced. I recommend sending opposing counsel or party a letter requesting them to preserve any important items early on in the case. This sets up a spoliation motion in the event this important evidence is lost or destroyed.

A court can sanction your opponent if evidence I'd destroyed or lost after being advised to retain it. Sanctions may include a presumption of fault, exclusion of your opponent's witnesses or evidence, or an entry of default in your favor. If evidence goes missing, I like to take the deposition of the persons that had custody or control over the missing evidence. This may lead to information that proves that your opponent intentionally or negligently destroyed evidence, which may warrant sanctions. Preservation of evidence is critical. For techniques on evidence preservation and sanctions, please contact me via www.voneschlaw.com.

Business and Bankruptcy

It seems as if litigation is booming on collection matters. I have several collection matters pending and each of them has one thing in common: one party doesn't have money. This probably doesn't come as a surprise in this economic climate. The question I am constantly faced with is whether bankruptcy is the best way out. There is no simple answer. Ultimately it depends on whether you are willing to lose control over your assets, as the bankruptcy court will assert control over them. Also, it depends on whether you plan on continuing to operate your business, which is important for people that have developed a business brand name.

I try to discuss the bankruptcy option with my client as early as possible in the case, once I am advised by the client that the amount sought is substantial considering their financial position. I have relationships with bankruptcy attorneys and involve them in the case once it becomes clear that it may be a better alternative for my client than litigation. Each case differs. Bankruptcy is not for everyone.

If you are being sued, discuss the bankruptcy option with your attorney. If you have any questions, please do not hesitate to contact me via www.voneschlaw.com. I practice business
and real estate law.

Accidents May No Longer Be Covered Losses

A recent case has just held that intentional conduct, with unintentional results is not covered as an "accidental loss" under an insurance policy. Fire Insurance Exchange v. Superior Court 181 Cal App 4th 388 (2010). This is a big deal, here is why. If you are a contractor or homeowner that built a home on a lot but, inadvertently built a small portion on the neighbor's side of the property line, you have no coverage for the lawsuit when the neighbor sues you for encroachment, nuisance, negligence, or trespass. The reason: you intended to build the house. It does not matter if you unknowingly or accidentally made a mistake on the placement of the home and inadvertently placed a portion of the structure on the neighbor's lot.

Another example of how this will impact regular people. Two kids are playing by the pool, when one kid decides it would be funny to throw his friend in the pool. Unfortunately, he does not throw is friend far enough and his friend hits his head on the side of the pool and suffers a fractured skull. He is sued by his injured friend for negligence to cover the medical costs and he tenders the lawsuit to his homeowner's insurance carrier. The carrier can deny coverage because the boy intended to throw the other boy. It does not matter that he did not intend to hurt his friend.

I am attorney Robert A. von Esch IV. I handle construction defect, real estate, business, and personal injury matters. If you have any questions about this article or any other matter, please do not hesitate to contact me via www.voneschlaw.com.

Mixed Motives Employment Case To Be Decided By Supreme Court

An important case is now pending before the CA Supreme Court: Harris v. City of Santa Monica. Essentially, Harris (a pregnant bus driver) said she was fired because of her pregnancy. The City said she was fired because of her bad performance record, nevertheless, it requested the Court to allow it to put on a mixed motives defense. Essentially, this defense was designed to allow the City to show that it would have fired Harris regardless of her pregnancy, even though her pregnancy may have been considered as one of the reasons to fire. Traditionally, all that a plaintiff is required to prove is that the protected trait (race, sex, religion, etc) was a motivating factor behind the decision to terminate; even if other reasons were considered (poor performance), plaintiff would prevail.

The Court refused to allow the mixed movtives defense. The Court of Appeal reversed and allowed the mixed motives defense. The final decision will now be made by the CA Supreme Court. This is one to watch as it will have an impact on employment litigation.

I am attorney Robert A. von Esch IV. I practice business litigation. If you would like to contact me or have additional questions about this article, I can be reached via http://www.voneschlaw.com/.

Mello Roos Projects Subject To Prevailing Wage?

A case is now pending before the Second District Court of Appeals involving the Azusa Land Partners against the Industrial Relations Agency (IRA). The dispute arose after the IRA found that the Azusa residential construction project was a public works contract to the extent it relied upon Mello Roos to install certain portions of the project, such as pipe lines, sewers, schools, etc. As a result, these portions of the job were subject to prevailing wages (20-30% higher than private construction wages). Azusa sued the IRA to overturn its decision, the Los Angeles Superior Court agreed with the IRA and held that the job was a public works project.

This is an important case for contractors and consumbers alike. If the Court of Appeals upholds the decision, residential housing costs are going to get more expensive as the cost to build the projects will increase. This is one to watch.

I am attorney Robert A. Von Esch IV and I handle construction disputes, construction defect, and real estate matters. If you have any questions, please contact me via www.voneschlaw.com.

Court Layoffs Will Result In Civil Court Delays

The headlines over the past two weeks have made it clear: LA Superior Court is laying off nearly 300 support staff workers. This will result in the closure of Court departments. As a result, civil matters will get sent to the back burner because criminal and family matters have priority. The days of civil lawsuits taking 3-5 years to complete are back again. So much for fast track legislation that required a civil matter to be resolved within one year, unless, it was deemed a complex matter. Construction defect, real estate, business, and personal injury lawsuits will take a lot longer for plaintiffs to resolve, as these are all civil matters.

I am attorney Robert A. Von Esch IV. If you have any questions about any of the above, please refer to my website at www.voneschlaw.com or give me a call.