91视频

Contractors across the nation may soon be following an Oregon legal dispute.

The relatively complicated FountainCourt case began in 2007. The board of directors of the聽 last week voted to take action on the Washington County lawsuit, saying it could have serious implications for the construction industry.

鈥淭he key issue really for us is who has the burden of proof for determining which damages are covered by the contractor’s liability insurance and which damages are not covered, and the impact of shifting that determination from the insurance carrier,鈥� said Mike Salsgiver, executive director for the Oregon-Columbia chapter. 鈥淭hese smaller contractors and subcontractors don’t have that kind of resources.鈥�

According to an appellant’s brief filed by American Family Mutual Insurance Co., a group called the FountainCourt Homeowners Association sued its developer and general contractor for construction defects that resulted in water damage. The case went to trial in 2009, and the group won approximately $2.15 million. The jury ordered that $485,877 of that amount be paid by Sideco 鈥� a subcontractor.

In 2010, the FountainCourt Homeowners Association issued a writ of garnishment to Sideco’s insurance company, American Family, for the subcontractor’s portion. American Family, however, refused to pay the lump sum garnishment, claiming that Sideco’s policy did not cover all of the damages and that it was the subcontractor’s and/or FountainCourt’s obligation to determine what was covered.

The FountainCourt Homeowners Association then sued American Family, and the court ruled that the burden resided with the insurance company. Furthermore, the court found that if American Family could not determine what its policy covered and what it didn’t, then it was liable for the entire amount.

American Family appealed that decision in November.

Now AGC may ask the Washington County Circuit Court for permission to file an amicus brief protesting American Family’s appeal.

That’s a big process, and Jeremy Vermilyea, an AGC board member and a construction law attorney for , said it will likely cost the organization an amount in the range of six figures.

鈥淭he question in a nutshell is: 鈥榃ho is in the better position to bear the risk of having to obtain a special verdict from a jury and make sure that those damages get allocated?’ 鈥� Vermilyea said.

Vermilyea noted that there may have been a conflict of interest in the FountainCourt lawsuit because American Family represented Sideco in the legal proceedings. He said American Family could have requested to have damages itemized before the original verdict, but chose not to. He added that Sideco 鈥� like most contractors 鈥� likely would not have known to do so.

鈥淭he bottom line is that, from AGC’s point of view, we think that given the balance of dollars and sophistication and the fact that the carrier controls the defense 鈥� the carrier ought to bear the burden of addressing the allocation issue rather than forcing the contractor into that position,鈥� Vermilyea said.

The attorney representing American Family Insurance, Todd Baran, said he was unable to speak about the case because of the company’s policy to not comment on pending litigation.

The 126-page brief Baran filed on behalf of American Family, however, posed some questions that illustrated the insurance company’s objections.

One point questioned the legality of requiring American Family to pay the full amount of a lawsuit even though the policy covered only a portion of the subcontractor’s work, especially because the jury issued a general, nonspecific verdict for less than the amount sought.

Another point questioned whether American Family should be held liable for damages that began before Sideco’s coverage began and continued beyond the policy’s expiration.

Vermilyea said the AGC had not yet hired a lawyer to head the amicus effort but that the deadline to submit the brief was Feb. 29. However, he said an extension of that deadline was likely, given the importance of the issue.

鈥淢y expectation would be that 鈥� regardless of the outcome, there will at least be a request that the (Oregon) Supreme Court take a look at it,鈥� Vermilyea said.