NEW YORK CONSTRUCTION CLAIMS RESOURCES
- 1 CONSTRUCTION CLAIMS
- 2 Construction Damages
- 3 Coverage Trigger of Coverage
CONSTRUCTION CLAIMS
Limitations & Repose Periods
Statutes of Limitations
Bodily Injury, Property Damage and Malpractice (other than medical malpractice) actions must be commenced within three (3) years. CPLR §214. The statute of limitations on a claim against an architect or design professional that is essentially stated as a breach of the ordinary professional obligations, has a three year statute of limitations, regardless of whether it is asserted as breach of contract or negligence. This malpractice cause of action commences “from the date of termination of the professional relationship … and the completion of the ‘performance of significant (i.e. non-ministerial) duties under the parties’ contract.’” Board of Managers of 255 Hudson Condominium v. Matorella, 37 Misc.3d 1222 (S.Ct. N.Y. Ct. 2012) citing Sendar Development Co., LLC v. CMA Design Studio, P.C., 890 N.Y.S.2d 534 (1st Dep’t 2009).
Statute of Repose:
CPLR §214-d imposes certain procedural requirements, i.e. filing of a Notice of Claim, upon prospective plaintiffs for personal injury and property damage claims or cross-claims and third party claims against licensed architects, engineers, surveyors and landscape architects which accrue more than ten (10) years after the performance of services that gave rise to the claim. Once the Notice of Claim is filed, a prospective plaintiff is entitled to proceed with discovery. However, the design professional is also entitled to bring a motion to dismiss for failure to state a cause of action prior to the actual filing of suit. CPLR §214-d does not, however, extend any applicable statutes of limitation, nor does it affect the dates of accrual for claims against architects or engineers. Getwicks v. Campbell, 257 A.D.2d 601 (2d Dep’t. 1999). New York has limited right to repair laws. New York Gen Bus. Law § 777-a, a housing merchant implied warranty is implied in the contract or agreement for the sale of a new home and shall survive the passing of titled. A housing merchant implied warranty shall mean, Where two or more parties are subject to liability for damages for the same bodily injury, property damage or wrongful death may claim contribution among them whether or not an action has been brought or a judgment has been rendered against the party from whom contribution is sought. CPLR §1401. In New York, there is no requirement for filing certificate or affidavit of merit for claims against design or construction professionals. In New York, only asbestos handling contractors and crane operators are licensed at state level. Every other type of construction-related general contractor license, including general contractor, is issued by the city of county in which the contractor will be will be working. General requirements for New York Contractors License include submitting an application and appropriate fee, proof of identity (i.e., a driver’s licenses) and proof of liability and workers’ compensation insurance. Some municipalities require a criminal background check. NARight to Repair Laws and/or Pre-Suit Statutory Procedures
Indemnity and Contribution
Indemnity
Contribution
Certificate of Merit – Experts
Economic Loss Doctrine
Contractor Licensing Requirements
Common Law & Statutory Claims
Construction Damages
Cost of Repair
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Diminution in Value
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Punitive Damages
- Punitive damages are not recoverable for an ordinary breach of contract claim as their purpose is not to remedy private wrongs but to vindicate public rights. Garrity v. Lyle Stuart, Inc., 40 N.Y.2d 354 (1976).
- The New York Court of Appeals has held that a private party seeking punitive damages has to show not only that the person they are suing acted wrongfully, “but also that such conduct was part of a pattern of similar conduct directed at the public generally. Rocanova v. Equitable Life Assur. Soc. Of U.S., 83 N.Y.2d 603 (1994).
- Public policy precludes insurance indemnification for punitive damage awards whether based on intentional acts or gross negligence, recklessness, wantonness or conscious disregard of the rights of others. Home Ins. Co. v. American Home Products Corp., 551 N.Y.S.2d 481 (1990).
Attorney’s Fees
Joint and Several Liability (specific to construction)
Cost Incurred to Access Repair Areas
Consequential Damages
Coverage Trigger of Coverage
Definition of an Occurrence
New York follows the general rule that a commercial general liability policy does not afford coverage for breach of contract, breach of fiduciary duty, or breach of warranty, but rather for bodily injury and property damage. National Union Fire Ins. Co. v. Turner Construction Co., 119 A.D.3d 103 (1st Dep’t 2014).
Duty to Defend
- Contractual Indemnity
- Anti-Indemnity Statures
- Additional Insureds
- Coverage for AI’s own negligence vs. vicarious liability for Named Insured
- Determining Primary and Non-Contributory vs. Excess Position
- AI carrier’s rights to reimbursement for defense expenses from other, co-primary carriers
- Insureds Right to Independent Counsel and Consequences of Rejecting a Defense
- Reservation of Rights
- If an insurer defends with knowledge of facts which constitute a defense to coverage, it will be estopped from later asserting that the policy does not cover the claim. O’Dowd v. American Sur. Co. of N.Y., 165 N.Y.S.2d 458 (1957)
- An insurer must timely reserve its rights in writing before defending an action on behalf of an insured. The reservation of rights letter should include every reason of which an insurer is aware or should then be aware as to why the insured might not be entitled to coverage. Federated Department Stores, Inc. v. Twin City Fire Ins. Co., 807 N.Y.S.2d 62 (2006).
- However, an insurer does not have to assert every conceivable defense, and the failure to reserve its rights as to a particular defense is excused where the insurer lacked knowledge of the available defense. Federated Dept Stores, Inc. v. Twin City Fire Ins. Co., 807 N.Y.S.2d 62 (2006).
- When being defended under a reservation of rights, the insured is entitled to retain its own counsel. Prashker v. United States Guar. Co., 154 N.Y.S.2d 910 (1956).
- The New York Court of Appeals has held that an insurer which breaches its duty to defend does not waive coverage defenses applicable to indemnification of an insured’s settlement. K2 Inv. Group, LLC v. American Guar. & Liab. Ins. Co., 2014 N.Y. LEXIS 201 (N.Y. Feb. 18, 2014).
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Coverage Defenses
Late Notice
- For policies issued after January 1, 2009, “a provision that failure to give any notice required to be given by such policy within the time prescribed therein shall not invalidate any claim made by the insured, injured person or any other claimant unless a failure to provide timely notice has prejudiced the insurer. N.Y. Ins. Law §3420(a)(5).
- For policies issued before January 1, 2009, an insured’s failure to satisfy the notice requirement contained in a policy constitutes a failure to comply with a condition precedent to coverage, which as a matter of law vitiates the contract. Great Canal Realty Corp. v. Seneca Insurance Co., 800 N.Y.S.2d 521 (2005). No showing of prejudice is required. Argo Corp. v. Greater N.Y. Mut. Ins. Co., 794 N.Y.S.2d 704 (2005).
- An Additional Insured has an independent duty to provide the insurer with notice of an “occurrence” and “suit”. American Home Assur. Co. v. International Ins. Co., 661 N.Y.S.2d 584 (1997).
Lack of an Occurrence
- Under New York law, defective workmanship alone is not an “occurrence.” Aquatectonics, Inc. d/b/a Loebs & Gordon PoolCraft v. The Hartford Casualty Insurance Company, 2012 U.S. Dist. LEXIS 41185 (E.D.N.Y. 2012).
- The defective workmanship in the work must create a legal liability for bodily injury or property damage to property other than the work itself. George A. Fuller Co. v. United States Fid. & Guar. Co., 613 N.Y.S.2d 152 (1st Dep’t 1994)
- However, where there was in fact “property damage” resulting from an “occurrence” and no policy exclusion for work product, a Commercial General Liability policy may be called upon to cover contractual liability. Hotel des Artistes, Inc. v. Gen. Accident Ins. Co. of Am., 775 N.Y.S.2d 262 (1st Dep’t 2004).
Choice of Law (Forum Selection Clauses)
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Targeted Tenders
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Consent Judgments
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