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VIRGINIA COURT RESPONSE TO COVID -19

Like all businesses and industries, the judicial system is struggling to maintain normal operations as it attempts to limit gathering of large numbers of people to avoid the spread of COVID-19.  In response to directions of the CDC, Virginia Department of Health, and the Governor of Virginia, the courts have all issued orders suspending most matters on the upcoming docket, and they have gone even further with civil jury trials where members of the general public are required to meet.  The following orders and changes have been made to the various court dockets in Virginia. STATE COURTS:  The Supreme Court of Virginia has issued an Order Declaring a Judicial Emergency such that from Monday, March 16th through April 6, 2020, all non-essential and non-emergency court proceedings in Circuit Courts and District Courts are suspended, and all civil, traffic, and criminal matters, including jury trials are continued (with the exception of emergency matters).  It was further ordered that all deadlines are tolled for 21 days.  If an emergency matter must be heard, courtroom attendance is limited to attorneys, parties, necessary witnesses, and press in matters that cannot be continued.  The following persons may be denied entry to the courthouse: A person may be denied entry to the courthouse if: ·       They have within 14 days visited China, Iran, South Korea, Europe, or other high-risk country designated by the CDC; ·       Been asked to quarantine or isolate his or herself by a doctor, hospital or health agency; ·       Been diagnosed with or had contact with anyone diagnosed with COVID-19; ·       Has a fever, cough or shortness of breath or resides with...

The Major Pitfalls of Compensable Consequence

The compensable consequence doctrine applies "when the injury does not arise
on the day of the accident, but instead develops as a direct consequence of an initial
injury." Under the doctrine of compensable consequences, an employer's liability for an
industrial injury extends to "all the medical consequences and sequelae that flow from
the primary injury." The employer is responsible for a natural consequence that flows
from the original injury, if it is a direct and natural result of the primary injury.

“What’s not covered!?”: Defining an “occurrence” in a Subcontractor Claim

Attorneys and claims examiners handling construction litigation know that every construction case starts with coverage issues. In claims against subcontractors, perhaps the most commonly encountered issue is the interplay between an “occurrence” and the “your work” exclusion. Subcontractors facing a claim are often surprised to learn what may and may not be covered when this exclusion comes into play. A recent opinion from the United States District Court for the Western District of Virginia provides a solid blueprint for analyzing this issue. Western World Insurance Company v. Air Tech, Inc. U.S.D.C., West. Dist. Va., Case No. 7:17-CV-518 (Roanoke) involved an insurance dispute between Western World and its insured, Air Tech. The dispute arose after Air Tech was sued for breach of contract and negligence arising from a subcontract agreement that Air Tech entered into with Hall’s Construction Corp. Under the subcontract, Air Tech agreed to supply a Solvent Recovery Chiller for a project Hall’s had undertaken. Air Tech supplied the chiller and was alleged to have been involved in the installation as well. When the chiller failed and required a replacement, Hall’s sued Air Tech for breach of the subcontract and negligence based on: the failure to properly provide the materials and equipment necessary to install the chiller; failure of the manuals provided to accurately describe the equipment and components and required electrical connections; failure of the manuals to accurately describe the work to be performed; and failure to correctly install the chiller. The Western World policy provided coverage for property damage only if caused by an “occurrence.” The policy defined “occurrence” as “’an accident, including continuous or repeated...

Passing the Buck: How to Successfully Transfer Risk to Third Parties

By Brian Cafritz, Esq. When claims are made against your company, one of the quickest ways to clear that loss from your company’s books is to transfer the risk to a third party. A good Risk Transfer Plan can not only remove the risk of indemnity, but it can also prevent expensive litigation costs and attorney’s fees. Indeed, a well-planned and firmly executed Risk Transfer Program can change the internal perceptions of the risk management and claims management departments. By taking a few simple steps, your risk management strategies will create reduce the number of pending claims and create a flow of incoming money, rather than being seen solely as a source of outgoing payments. Key Principles of the Risk Transfer Program In order to compile a useful Risk Transfer Program, one must understand a few key principles regarding the available theories behind Risk Transfer:  Contribution: The right of one tortfeasor to get reimbursement or payment from another tortfeasor to equally or proportionally share the amount owed to a Plaintiff.  Contractual Indemnity: A promise in a contract to pay full amounts owed by another. The scope and breadth of the obligation are determined by the language of the contract, but it can often be limited by state laws depending on a state’s public policies. It is common to see a duty of defense attached to the duty to indemnify, but it must be expressly stated in the contract for it to exist.  Common Law/Equitable Indemnity: If no indemnity contract is available, Equitable Indemnity exists to shift liability from one who is only passively liable to the...

Does the Collateral Source Rule Apply in Contract Cases?

In Dominion Res., Inc. v Alstom Power, Inc., 825 S.E. 2d 757, 297 Va. 262 (2019), the court held
that the collateral source rule does apply to breach of contract actions, where a plaintiff has
been reimbursed by an insurer for the full amount it seeks in damages from the defendant. The
court noted, however, that whether the collateral source rule applies should be determined on
a case by case basis.

Bad Faith for a Bad Investigation

The US District Court in Alexandria recently found a carrier acted in bad faith in the case of South Boston Energy, LLC v. Hartford Steam Boiler Specialty Insurance. In this case, the insured, a power plant, suffered a loss to a large turbine. A piece of metal got inside the turbine and forced the insured to disassemble the turbine. The insured reported the loss to its insurer.

Assaulted Without a Motive

When an employee is assaulted at work, there are several factors to consider in assessing whether the assault “arises out of” the employment. Assault cases are tricky to defend due to the subjective nature of why a person is attacked. Further, the issue is compounded when the assailant is not available to testify regarding the motive. Recently, KPM’s own Bob McAdam successfully argued to the Full Commission that “why” an assailant attacks a claimant is the most important factor to consider regardless of whether motive is known.