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CLM National: March 2021

News and verdicts that affect you from across the country

March 30, 2021 Photo

A broad COVID-19 liability immunity bill is signed into law in Indiana, a COVID-19 bill in Washington would broaden insurance policy terms, and, in North Carolina, the Court of Appeals reaffirms the narrow application of the license defense in a case where a general contractor brought negligence claims against design professionals.


New COVID Legislation Would Modify Insurance Policy Terms

On Jan. 26, SB 5351 was introduced during the 67th Legislature’s 2021 regular session. The bill seeks to change the suit-limitations period from one year to two years (RCW 48.18.200), and add the provision that “Every property insurance policy containing a grant of coverage for direct physical loss of or damage to property shall be construed to include the deprivation of such property and the loss of the ability to use such property.” (RCW 48.18.520) The bill would also add two new sections: one applying these changes retroactively to Feb. 29, 2020, when Gov. Jay Inslee issued Proclamation 20-05; and the other explaining that the act would take effect immediately.—From Jillian M. Henderson (Soha & Lang, P.S.)


New Law Outlines Landlord/Tenant Assistance and Protections

On Jan. 29, Gov. Gavin Newsom signed into law SB 91, which took effect immediately and sets the rules for use of the funds allocated to California under the $2.6 billion emergency rental-assistance funding created by the federal Consolidated Appropriations Act, 2021. SB 91 encompasses a new regulatory scheme that not only aims to stave off evictions, but also address accumulating rent debt. SB 91 pledges to reimburse landlords for up to 80 percent of unpaid rent debt, but with a significant catch: Landlords have to both forgive the other 20 percent of rent, and they have to promise not to evict the tenant for rent debt. SB 91 appeals to smaller landlords who are struggling to make ends meet and keep their properties maintained, but there are consequences for landlords who submit to SB 91’s regulatory regime, such as losing 20 percent of their rental property value and waiving access to summary eviction proceedings. This means landlords who receive assistance will shoulder the burden of California’s housing crisis.—From CLM Member Mandana Arjmand (Wood, Smith, Henning & Berman LLP)


Sex Trafficking Complaint Against Hotel Brand Dismissed

On Feb. 24, in the federal sex trafficking matter, J.L. v. Best Western International, Inc., et al., the defense team successfully achieved dismissal of the first amended complaint against a major U.S. hotel brand in a federal civil case arising from alleged sex trafficking on premise in the U.S. District Court for the District of Colorado. Chief Judge Philip A. Brimmer granted the motion to dismiss with prejudice as to all claims after permitting one round of repleading by plaintiff. The first amended complaint alleged one count against each defendant under the William Wilberforce Trafficking Victims Protection Reauthorization Act of 2008. Other brand hotelier defendants also prevailed.—From CLM Members Kevin Foreman, Marisa Trasatti, and Robert E. Scott, Jr. (Wilson Elser Moskowitz Edelman & Dicker LLP)


EPA Issues PFAs Health Advisories

Illinois has joined a growing list of states seeking to regulate per- and polyfluoroalkyl substances (PFAS) and compounds. On Jan. 28, the Illinois Environmental Protection Agency announced four “health advisories” in accordance with the Illinois Part 620 groundwater regulations. The four PFAS compounds—PFBS, PFHxS, PFHxA, and PFOA—were identified during the course of an Illinois’ statewide PFAS groundwater investigation, which began in September 2020. The investigation’s goal was to assess finished drinking water in all 1,749 community water supplies in Illinois for 18 different PFAS compounds. The statewide assessment is expected to be completed in the fall of 2021.The advisories establish guidance levels for the chemicals that are not enforceable groundwater or drinking water standards. However, the health advisory guidance levels and other data will be used by Illinois EPA in the development of maximum contaminant levels for PFAS, which are enforceable drinking water standards.—From CLM Member Larry Mason (Goldberg Segalla)

North Carolina

License Defense Only Applies to Owners

General contractors (GC) may bring negligence claims against design professionals even if the GC is unlicensed at the time it entered into the construction contract. License defense emanates from the common-law doctrine, which primarily provides contractors are barred from bringing claims for payment for work performed, and enforcing the contract against the owner, at the time it contracted for the project, or during a period of time when it becomes unlicensed after execution of the contract. But in Wright Construction Services, Inc v. Hard Art Studio, PLLC, the North Carolina Court of Appeals found that the license defense did not apply to negligence claims of the general contractor against the designer professionals, noting the purpose of the license doctrine is to protect the public from suspect construction work completed by unlicensed contractors, not to protect construction designers. Wright reaffirms the narrow application of the license defense—a party other than the owner will not be able to use this defense to avoid liability for its own negligent conduct.—From CLM Member William Silverman (Wood, Smith, Henning & Berman LLP)


Holcolmb Signs COVID-19 Immunity Bill

Gov. Eric Holcomb signed SB 1 on Feb. 18, which provides civil tort immunity for damages arising from COVID-19. SB 1 is effective retroactive to March 1, 2020 and provides broad immunity to a wide range of individuals and businesses. It protects businesses, schools, the state, health care workers, and others from damages arising from COVID-19 on the protected entity’s property, or “on any premises on which the person or an employee or agent of the person provided property or services o another person.” Immunity does not apply to an act or omission that constitutes gross negligence or willful or wanton misconduct as proven by clear and convincing evidence. Gov. Holcomb said in a statement, “The pandemic has affected Hoosier businesses, schools, and others in ways no one could have foreseen just one year ago. To aid in the state’s recovery, I made providing assurances that they will not have to live and work in fear of frivolous lawsuits a part of my Next Level Agenda.”—From Senior Managing Editor Phil Gusman

About The Authors
Phil Gusman

Phil Gusman is senior managing editor for CLM Magazine and Construction Claims magazine.  phil.gusman@theclm.org

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