For many years, Pillsbury & Coleman, LLP, has represented general contractors, building supply manufacturers, property developers and others in cases involving coverage for construction defects claims in California. Today, our firm is applying a legal concept we have used with great success in maritime mesothelioma litigation to construction defects law.
Applying The "All Sum" Concept To Construction Defect Law In California
In both types of litigation, the damage occurs gradually over an extended period of time. During that time, a company may have policies from many insurance companies. Yet according to California all sums law, any one of these numerous insurance companies can be held responsible for paying all sums — the total amount of the claim.
One of our clients is a building supplies manufacturer who often is one of the numerous parties that gets sued when a construction project begins to show signs of defects. Often 10 to 20 years have passed from completion of the project to the date the construction defect complaint is filed. Our client is involved in roughly 100 lawsuits with damages totally about $60 million.
$60 Million Or Nothing
Our attorneys have argued that any one of the insurance policies that were in place during that time period can be called upon to pay all sums — the entire $60 million construction defect claim against our client. Further, we contend that only one $2 million out of pocket payment for self-insured retention — a form of deductible — must be paid. Application of the all sums concept allows our client to select the year when it had the most insurance coverage available.
The insurance companies' lawyers argue that the $60 million in losses must be spread over 20 years and in each of those years, our client must pay $2 million out of pocket. In any single year, however, total losses may be only $2 to $3 million. In essence, this approach would leave our client without any coverage, while our application of the law would provide more than $60 million in coverage.
Contact Our Insurance Law Attorneys
If your construction defect liability insurance claim was denied or if you would like to discuss new approaches to resolving construction defect claims, please call our office at 415-655-1549 or contact us via email. In addition to working on the insurance issues, we frequently advise and work with the attorneys on the underlying case.
From offices in San Francisco's Transamerica Pyramid, we represent clients with complex insurance issues throughout California.