News

Insurance Practice

Peter E. Kanaris, David E. Heiss and Nicole M. Oyer were recently successful in obtaining a dismissal of all claims pending against an architectural firm. Our client provided design services for the construction of an eight-story residential condominium building in the Chicago area. Plaintiffs, the condominium board, sought to bring an implied warranty of habitability claim against our client based upon an expansion of a narrow exception permitting the assertion of such a claim against subcontractors in the event of an insolvent general contractor. Our attorneys convinced the Court that Illinois law did not contemplate the assertion of implied warranty of habitability claims against an architect regardless of whether the general contractor was in fact insolvent. As a result, the Court dismissed all claims against our client with prejudice.

Fisher Kanaris, P.C. attorneys Peter E. Kanaris, Eric D. Stubenvoll and David E. Heiss helped effectuate a commercial resolution of a $225 million insurance claim in which the parties entered settlement negotiations with quantum differences exceeding $120 million. The Policyholder, a Fortune 500 company, filed suit against all insurers on its insurance program for alleged losses stemming from a flood in Central Indiana. Our attorneys, who represented the entire insurance market in this dispute, were able to broker a resolution of all pending claims despite the existence of complex coverage and quantum issues which presented numerous questions of first impression under Indiana law.

Fisher Kanaris Shareholder David E. Heiss spoke to members of the Loss Executives Association at its annual meeting in June 2011 in Newport, Rhode Island. Mr. Heiss spoke and participated in a panel that addressed prevalent bad faith concerns in complex first-party property commercial losses.

Terry Cosgrove has been accepted into the membership of the Federation of Defense & Corporate Counsel (FDCC). The FDCC is an elite group of civil defense lawyers throughout the country and around the world. Its members are recognized leaders in the legal community who have achieved professional distinction. The FDCC is dedicated to promoting the knowledge, justice, and professionalism of its members as they pursue the course of a balanced judicial system and represent those in need of defense in civil lawsuits. Members are accepted only after undergoing a rigorous selection and review process through which only a small percentage of nominees are approved for membership.

Peter E. Kanaris, Cheryl L. Mondi and Megan E. Ritenour obtained summary judgment in favor of Lexington Insurance Company in the Eastern District of California in Energy 2001 v. Lexington Insurance Company, et al, 10 CV 00415. Although Energy 2001 was not named as an insured or additional insured under the Lexington policy, Energy 2001 sought coverage for damage arising out of a transformer failure on August 8, 2008. Judge Mendez agreed with Fisher Kanaris, P.C.'s coverage position that Energy 2001 lacked standing to assert breach of contract and breach of implied covenant of good faith and fair dealing claims under the Lexington policy because it was not an insured. While Energy 2001 relied upon an agreement between Energy 2001 and a third-party, The Shaw Group, which required The Shaw Group to procure certain insurance coverage, the Court agreed with Lexington and held that Lexington was not bound to any agreements made by Energy 2001 and a third-party. The Court also agreed with Lexington and held that Energy 2001's reliance upon an Evidence of Commercial Property Coverage Form to confer status as an additional insured under the Lexington Policy failed because a certificate of insurance is not a contract between the insurer and the certificate holder and does not operate to alter the terms of an insurance policy.

The 8th Circuit Court of Appeals affirmed an order granting summary judgment in favor of Fisher Kanaris, P.C.'s client Valley Forge Insurance Company in Riggs v. Valley Forge Ins. Co. 09 C 3768, Plaintiffs, a western apparel retailer located in Arkansas, sought damages in excess of $1,500,000 under contractual and extra-contractual theories of relief related to a fire at its business location. The Western District of Arkansas granted the motion for summary judgment filed by Firm attorneys Peter E. Kanaris, David E. Heiss and T. Nicholas Goanos. On appeal, the 8th Circuit ruled that Valley Forge had presented sufficient evidence to establish Plaintiffs made material misrepresentations concerning the scope and quantum of its claim under the policy at issue thereby voiding the policy and barring all contractual and bad faith claims.

Peter E. Kanaris and Jefferson D. Patten recently obtained partial summary judgment in the United States District Court for the Eastern District of Louisiana on behalf of Continental Casualty Company. Plaintiff, a governmental entity, submitted a claim under a first party property policy of insurance for damages to 61 government locations incurred as a result of Hurricane Katrina. Plaintiff's suit alleged damages in excess of $14 million above the Policy's per location limit of liability. The Court agreed with the insurers' coverage position and entered judgment as a matter of law in favor of Continental Casualty Company. The ruling decreased Plaintiff's claim by $14 million.

Fisher Kanaris, P.C. trial lawyers Peter E. Kanaris and David E. Heiss obtained a defense verdict in Johnathan Pepper Co., Inc. et. al. v. Hartford Casualty Ins., 05 C 1404, United States District Court for the Northern District of Illinois. Plaintiffs alleged that a fire damaged its business personal property and at trial sought damage recovery under its first-party property insurance policy and for Hartford's alleged bad faith. Hartford denied the claim and contended that Plaintiffs' intentionally set the fire. After a bench trial, the Court found that Plaintiffs did set the fire in question and entered judgment in favor of Hartford on all coverage claims. The Court further awarded Hartford damages totaling $596,651.94 under the Illinois insurance fraud statute, i.e., 720 ILCS 5/46-5, exclusive of its reasonable attorneys fees.

Peter E. Kanaris recently obtained summary judgment in PMG Collins, LLC v. Allianz Global Risks et. al., United States District Court for the Southern District of Miami on behalf of Allianz Global Risks US Insurance Company and Great Lakes Reinsurance. Plaintiff, the owner/developer of a multi-million dollar high-rise condominium building under construction in Miami, submited a claim for water damage to the property which occurred near the completion of the project. Plaintiff filed suit over the insurers' contention that a 5% of total project values deductible applied to water damage. The Court agreed with the insurers' coverage position and entered judgment as a matter of law in favor of the insurers. Since Plaintiff's loss failed to exceed the deductible, its claim was dismissed in its entirety.

Construction Practice

In September 2008, the Construction Law Practice succeeded in winning the dismissal of all counts pled against its construction manager client in an alleged $100,000,000 construction defect case arising from a complex project at a major metropolitan airport. The Owner alleged it incurred large change orders when the construction manager and others failed to properly oversee the design team, manage construction and monitor quality control/quality assurance. The Owner pled breach of contract, breach of contractual indemnity and breach of fiduciary duty against the client (a limited liability company) and each of the LLC members. In granting the motion, the court agreed with Fisher Kanaris, P.C. that the LLC members should be dismissed with prejudice based on Illinois statutes regarding limited liability companies and third-party proceedings. The court also dismissed with prejudice the fiduciary duty claim, ruling that no fiduciary duty arises between an owner and construction manager when they contract at arm's length. The court also granted the construction manager's joint motion to compel the Owner to join the contractor responsible for the defects, an entity the Owner intentionally omitted from the proceedings.

The Construction Law Practice recently succeeded in obtaining voluntary dismissal of its architect-client from a personal injury action pending in the Cook County Circuit Court of Cook County. In that matter, Plaintiff was injured when the first floor in a three-story condominium building collapsed. Plaintiff alleged the masonry supplier overloaded the floor structure with tons of excess weight from multiple CMU pallets. The material supplier filed a third-party contribution action against the architect despite evidence the architect only prepared construction documents and provided no construction phase services. Fisher Kanaris, P.C. filed a dispositive Motion to Dismiss supported by the corroborating deposition testimony of the architect and general contractor. Upon receipt of this Motion, the material supplier agreed to voluntarily dismiss the case before the balance of discovery was conducted and before full briefing of the Motion. The outcome was an expeditious ending to an action which should never have been filed.

The Construction Law Practice often obtains early disposition for its design professionals before the expenditure of time and money to complete discovery. For example, Fisher Kanaris filed a dispositive Motion to Dismiss claims against its architect-client arising from Plaintiff's fall down a restaurant staircase. The claim was dismissed with prejudice when Plaintiff elected not to contest the Motion which was supported by deposition testimony from the restaurant manager. In another action, an injured worker who tripped while walking across a foundation's wire mesh sued the design architect. The worker alleged the architect owed him a duty to secure the wire mesh and/or warn of the "dangerous condition" it purportedly created. Not surprisingly, the architect's contract did not include such duties and expressly disclaimed responsibility for construction means/methods and site safety. Fisher Kanaris, P.C. filed a dispositive motion containing corroborating deposition testimony from the structural engineer and general contractor. Plaintiff elected to not contest the Motion to Dismiss and released the architect from the case. These are just some of many examples where Fisher Kanaris' efficiently harnessed the facts and expeditiously terminated further involvement of the design professionals in the litigation process.

Most construction-related claims in Illinois are governed by a relatively long, four-year construction statute of limitations. That limitations period is extended by the "discovery rule," which holds that the limitations period is triggered by the claimant's 'discovery' of their cause of action - often years after construction is complete and the design professional's involvement ends. However, the Construction Law Practice is intimately familiar with the interaction of several shorter statutes of limitation that may be used to obtain dismissal of claims against its design professional clients. For example, in one recent case, Plaintiffs sued the general contractor for numerous construction errors in their luxury home. The general contractor filed third-party claims against the structural engineer and several subcontractors. On April 16,2008, the trial court granted Fisher Kanaris P.C.'s motion to dismiss the structural engineer based on a shorter two-year statute of limitations applicable to implied indemnity claims. In another case, Fisher Kanaris, P.C. obtained dismissal of a homeowner's first-party claim against its structural engineer client by successfully arguing that the five-year statute of limitations for breach of oral contracts applied in lieu of the four-year construction statute of limitations. While seemingly counterintuitive, this approach succeeded because the "discovery rule" would have extended the four-year limitation period longer than the fixed five-year period applicable to oral contracts. While a statute of limitations defense is not always available, it is an avenue that Fisher Kanaris, P.C. always considers when strategizing defense options.