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What happens when a construction-related claim is reported untimely or falls outside coverage of a construction management professional liability policy?  From the policyholder’s perspective, nothing good. The Policies The coverage dispute, recently decided by the United States Court of Appeals for the Second Circuit (New York), involves a general contractor and two Texas projects.  Hunt Construction Group, the contractor, bound two construction management professional liability insurance policies from Berkley Assurance Company.  The policies included the same material terms, but were for

What happens when winter weather disrupts a major airline’s operations and strands thousands of passengers for days on end?  Unlike Southwest Airlines’ planes in December 2022, the first lawsuit regarding the meltdown has arrived early. Tens of thousands of flights were delayed or cancelled during the December holiday break in 2022 because of abnormally cold weather across most of the United States. Southwest Airlines was the most impacted airline and the last airline to resume normal operations. The extensive delays and cancellations by Southwest were attributed to staffing issues and fa

To void coverage, is it necessary for an insurer to prove that a policyholder had an intent to deceive when making material representations in an insurance application? The Texas Supreme Court has agreed to hear this issue, with potential widespread implications. In 2017, Sergio Arce applied for a life insurance policy with American National.  In response to a question on the application about whether he had ever been diagnosed with or treated for or given medical advice regarding hepatitis C, Sergio answered, no.  However medical records showed that Sergio was diagnosed with hepatitis C in

Do arbitration agreements in home construction contracts run with the land? The Texas Supreme Court recently answered this question affirmatively, binding a subsequent buyer to arbitration. In Lennar Homes of Texas Land and Construction, Ltd., et al. v. Kara Whitely, Kara Whitley filed suit against Lennar alleging negligent construction, breach of warranties and DTPA claims regarding a house she had purchased from the original buyer.  Lennar built the house in Dickinson, Texas and sold it to the original buyer in 2014. At the time, Lennar conveyed the house and property via special warranty d

A Dallas jury recently awarded over $6 million to a homeowner’s association for repairs to its property.  Whether the verdict stands or falls will depend in part on how the Judge interprets the pre-suit notice and offer provisions of Texas Residential Construction Liability Act (RCLA), a Texas statute governing construction defects in residential construction and the Texas Deceptive Trade Practices—Consumer Protection Act (DTPA). In Avalon Square Homeowners Association v. K. Hovnanian Homes – DFW, LLC, the Avalon Square Homeowners Association (Association) filed a lawsuit against the bu

What lessons can members of the design and construction industry learn from the sudden and cataclysmic failure of FTX, the crypto-currency exchange? There are many, but we will focus on three of the most significant ones. On November 11, 2022, FTX and various related entities filed for Chapter 11 bankruptcy petition in Delaware.  In support of the Petition for Bankruptcy, John J. Ray, III, the newly appointed Chief Executive Officer the FTX debtors filed a declaration with the bankruptcy court. Among the conclusions Ray reached on his first day as CEO was the following. Never in my career hav

Last month, a Texas jury found that FedEx Corp. retaliated against a former employee and awarded the former employee $365 million in punitive damages, $120,000 for past pain and suffering, and $1.04 million for future mental anguish. The jury was apparently more disturbed about retaliation for reporting racial discrimination than the alleged discrimination, itself, finding no discrimination had occurred. Jennifer Harris, an African American woman, started working for FedEx in 2007 as an entry-level sales representative. For nearly a decade, she was a rising star at the company, receiving sever