Posts By: Gregory Cokinos

Western District of Texas Requires Insurer to Defend General Contractor in Sports Complex Construction Defect Suit Despite “Breach of Contract Exclusion” Endorsement

Cokinos | Young recently received a favorable summary judgment ruling from a Texas federal judge for its general contractor client in a coverage action initiated by the client’s liability insurer, Mt. Hawley Insurance Company. The judge ordered Mt. Hawley to provide a defense for the underlying claims related to alleged defects in the construction of a municipal sports complex in a San Antonio suburb.

Mt. Hawley’s policy included a “breach of contract exclusion” endorsement, which precludes coverage for property damage “arising directly or indirectly” out of a breach of contract or express or implied warranty. Mt. Hawley denied coverage for the claim and immediately commenced a declaratory judgment action against its insured, seeking a ruling that it owed no duty to defend or indemnify in the underlying lawsuit. In its briefing, Mt. Hawley argued that so long as there was any allegation that the general contractor breached its construction contract, coverage for the entire lawsuit was excluded.

Chief Judge Orlando Garcia of the Western District of Texas rejected Mt. Hawley’s broad reading of the breach of contract exclusion. Instead, the court held that for the exclusion to apply, a breach of contract by the insured must be a “but for” cause of all alleged property damage. Mt. Hawley argued in its briefs that the exclusion should apply to the entire lawsuit because all of the general contractor’s liability was derived from the construction contract. But the court clarified that this argument “conflated” the concepts of liability with causation of property damage. The court held:

[M]erely because [the general contractor] may ultimately be liable for certain of the City’s economic losses under a breach of contract theory does not mean that all of the alleged property damage was causally attributable to [the general contractor’s] alleged breach of contract with the City.

In other words, a breach of contract by the insured must be a “but for” link in the causal chain that initially caused the alleged property damage. The fact that, later on, the insured may be liable in contract for property damage initially caused by a subcontractor’s defective work does not trigger the exclusion. Because an insurer must defend the entire lawsuit if there are any allegations of covered property damage, the court held that Mt. Hawley owed a duty to defend.

Though the court reached the correct conclusion in this instance, it took a careful, nuanced examination of a broadly worded exclusion to arrive at this result. In fact, the court went out of its way to distinguish previous Fifth Circuit cases where the courts interpreted similar exclusions much more broadly. In many circumstances, this type of exclusion can still be very dangerous for coverage as to construction defect claims involving breach of contract. Cokinos | Young advises its clients to watch out for this and similar exclusions when purchasing insurance.

The entire opinion can be found at Mt. Hawley Ins. Co. v. Slay Engr., Texas Multi-Chem, and Huser Constr. Co., Inc., 5-18-CV-00252-OLG, 2018 WL 3946547, at *1 (W.D. Tex. Aug. 15, 2018).

For more information, please contact Travis Brown directly at TBrown@CokinosLaw.com or 817-635-3619.

Nine Super Lawyers Named at Cokinos | Young

Nine lawyers spanning all four of our offices here at Cokinos | Young have been named 2018 Super Lawyers by Thomson Reuters. This distinction is held by less than five percent of lawyers and selections are made on a state by state basis.  Independent research consisting of an evaluation of 12 varying indicators of professional achievement combined with peer nominations and evaluations are employed to determine this accolade.

The full list of Super Lawyers will be published in:
– Texas Super Lawyers Magazine, in October 2018
– Texas Monthly, in October 2018
– Stephanie O’Rourke will be featured in Texas Monthly, The Top Women Attorneys in Texas special section in January 2019

Our Super Lawyers include:

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Craig Clendenin – Houston
PI General: Defense
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Gregory Cokinos – Houston
Construction Litigation
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James Ewbank, II – Austin
Business Litigation
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John Grayson – Houston
Construction Litigation
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Gabriel Head – San Antonio
Construction Litigation
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Stephanie O’Rourke – San Antonio
Construction Litigation
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Craig Power – Houston
Bankruptcy: Business
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Patrick Wielinski – Dallas
Insurance Coverage
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Marc Young – Austin
Construction Litigation
View Bio[/one_third_last]

Construction Law All Star, Stephanie O’Rourke, Highlighted in Houston Business Journal

Stephanie O’Rourke, a principal in our San Antonio office, was recently called upon to offer her expertise in the construction litigation realm on a case that the Houston Business Journal was covering.

This article centered around unpaid wages for construction companies due to contract disputes. Specifically, a 2009 case between Jacob White Construction and Landry’s where the construction company was owed around $64,000 of unpaid wages related to repairing the Aquarium restaurant in Kemah due to storm damage from Hurricane Ike.

The company filed a lawsuit with the Harris County Clerk against Landry’s. The lawsuit was later decided in favor of Landry’s in 2012 in part because Mickler had signed a lien release after finishing the job, relinquishing further payment.

O’Rourke has this comment as it related to construction litigation:

“Texas contractors and subcontractors should be well informed on the latest construction laws so they’re not tied up in payment disputes that can often lead to costly litigation, construction experts said. For example, a developer or owner cannot require a contractor to sign a lien release for final payment unless they have been paid, according to Stephanie O’Rourke, a principal with Houston-based Cokinos law firm citing Texas Property Code.”

O’Rourke, who specializes in construction litigation and is based in Cokinos Young’s San Antonio office, said contractors should ensure that all change orders are signed prior to starting the work in order to avoid the possibility of litigation.

“One of the biggest areas of litigation is contractors and subcontractors performing the work without a signed change order,” said O’Rourke.

All communication about the changes and additional compensation should be documented and, if sent via email, should be sent with read receipts to confirm communication, O’Rourke said.

For more information, please contact Stephanie directly at SORourke@CokinosLaw.com or 210-293-8714. The full article is available on the HBJ website.

Central Texas Mandatory Paid Sick Leave Update

San Antonio Adopts Mandatory Paid Sick Leave Ordinance
Austin Paid Sick Leave Ordinance Stayed By Court Of Appeals

The status of mandatory paid sick leave in the region had two major developments within two days.  These developments create more uncertainty, and potentially a greater burden on companies with employees in Austin and San Antonio.

On August 16, 2018, the San Antonio City Council adopted a mandatory paid sick leave ordinance for employers that have employees working within the City of San Antonio, regardless of where the company is located.  The San Antonio ordinance is substantially similar to the Austin Paid Sick Leave Ordinance in all material respects and is set to go into effect in August 2019.

The next day, August 17, 2018, the status of the Austin ordinance was significantly changed.  The Texas Third Court of Appeals granted Plaintiffs’ motion to stay the Austin Paid Sick Leave Ordinance during the pendency of the appeal in the lawsuit challenging it, meaning that an October 1, 2018, effective date is no longer certain.

San Antonio Mandatory Paid Sick Leave Ordinance:

San Antonio became the second major Texas city to pass a mandatory paid sick leave ordinance.  The San Antonio ordinance follows the Austin model very closely.  The text of the San Antonio ordinance can be found here.

Under the San Antonio ordinance, covered employees must accrue sick leave at the rate of one hour for every 30 hours worked, up to 64 hours annually, or 48 hours annually for employers with 15 or fewer employees.  Unused sick time is carried over to the following year, subject to the yearly caps of 64 or 48 hours.  An employer that operates or is headquartered outside the San Antonio city limits must still offer sick leave to its employees that perform work in San Antonio.   Employers must provide sick leave to any employee who works at least 80 hours within a calendar year in the San Antonio city limits.  These requirements are the same as those found in the Austin ordinance.

Employees may use paid sick leave for more than just being sick.  Just as with the Austin ordinance, leave may be used for the employee’s or a family member’s illness, injury, health condition or preventive care, or as necessary to deal with domestic abuse, sexual assault, or stalking involving the employee or a family member.  Employers who make paid time off (PTO) available to employees under conditions that meet the requirements of the ordinance are not required to provide additional sick leave to the employee.

Administrative requirements exist under both ordinances.  Employer handbooks must contain a written policy and notice of rights under the ordinance.  Workplace posters must be displayed.  Employers must provide a statement showing available leave on at least a monthly basis.

The same land mines found in the Austin ordinance can also be found in the San Antonio ordinance.  For example, if an employee returns to work for the same employer in a six-month period, the employee may use previously earned sick time.  Further, an employer may delay an employee’s sick time for the first 60 days of employment only if the employer establishes the employee’s term of employment will be at least one year.

Austin Ordinance Lawsuit Update:

On August 17, 2018, the Texas Third Court of Appeals granted Plaintiffs’ motion to stay the ordinance during the pendency of the appeal.  Plaintiffs filed an appeal of the district court’s ruling denying a temporary injunction in the lawsuit claiming the paid sick leave ordinance violates the Texas Constitution and is preempted by state minimum wage law. A further description of the lawsuit can be found here.  In staying the ordinance, the Court of Appeals stated that “enjoining the ordinance is necessary to preserve the parties’ rights until disposition of the appeal.”  The Court therefore granted the motions for emergency relief and ordered the Austin ordinance be enjoined from taking effect while the appeal is pending.

The stay means the appeal will determine when and if the Austin ordinance will go into effect.  Although briefing deadlines in the appeal come before the original implementation date of October 1, 2018, it is unlikely the Court of Appeals will hear and rule upon the issues before that day.  Crazier things have happened however, and employers need to be equipped to implement changes to payroll practices at a moment’s notice to comply with the Austin ordinance.

What Employers Need To Do:

October 1, 2018, is no longer set in stone as the start date, and thus employers should prepare, but not implement changes to comply with the Austin ordinance.  Regardless of the current legal and legislative battles, mandatory sick leave will be here in Texas – someday.  Indeed, mandatory paid sick leave is quickly becoming a reality in many major cities and many states including Arizona, Connecticut, California, Massachusetts, Oregon, Vermont, and Washington have enacted paid sick leave laws.

Employers would be prudent to prepare for current, as well future, obligations.  The employment law team at Cokinos | Young can provide effective, common sense assistance to prepare Texas employers in this ever-changing environment.  Employers should work with legal counsel to find practical solutions for compliance and transition to lessen the impact of changes on operations, employee morale, and budgeting.  Employers should audit handbook policies, PTO and vacation policies, verification procedures, and payroll systems to determine how to prepare for the Austin and San Antonio ordinances going into effect.

As always, current policies should be updated for compliance with the FLSA, FMLA, and related statutes.  Even without the enactment of mandatory sick leave laws, there are many legal compliance issues related to time off and leave, and Central Texas employees are now educated and keyed-in on their rights more than ever.  An employer that is not in compliance with pay and leave requirements is playing a dangerous game in today’s landscape.

Look for more updates on the Austin lawsuit and the status of both ordinances.  Interim rules issued by Austin, San Antonio, or the Courts may change or clarify employer obligations.  Contact Cokinos | Young for the latest.

 

Wilson Stoker is an employment law counselor with Cokinos | Young, who is Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization. Wilson helps businesses navigate employment law issues related to on hiring, promotion, discipline and termination by providing common-sense, proactive solutions.  Wilson has particular experience defending employers in lawsuits and agency investigations involving discrimination, harassment, retaliation, wage and hour and leaves of absence.  View bio.

Patrick J. Wielinski named 2019 Lawyer of the Year by Best Lawyers®

 

Cokinos | Young is honored to announce Best Lawyers® selected Patrick J. Wielinski as “Lawyer of the Year” in the Dallas/Fort Worth area in the field of Construction Litigation in the 2019 Edition of The Best Lawyers in America.


Patrick J. Wielinski
Construction Law, Litigation-Construction
2019 Lawyer of the Year – Construction Litigation
Mr. Wielinski has been named a Best Lawyer for more than 10 years.

 

Best Lawyers® selects only one lawyer in each practice area and designated metropolitan area as the “Lawyer of the Year.” The publication selects lawyers based on voting averages received during the peer review assessments. Receiving this designation reflects the high level of respect a lawyer has earned among other leading lawyers in the same communities and same practice areas for their abilities, professionalism and integrity.

 

About Best Lawyers®

Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. 83,000 industry leading lawyers are eligible to vote (from around the world), and we have received almost 10 million evaluations on the legal abilities of other lawyers based on their specific practice areas around the world. For the 2019 Edition of The Best Lawyers in America©, 7.4 million votes were analyzed, which resulted in more than 58,000 leading lawyers being included in the new edition. Lawyers are not required or allowed to pay a fee to be listed; therefore inclusion in Best Lawyers is considered a singular honor. Corporate Counsel magazine has called Best Lawyers “the most respected referral list of attorneys in practice.”

Best Lawyers© Announces 2019 List & Includes Multiple from Cokinos | Young


First published in 1983, Best Lawyers© is the oldest and most highly respected peer review guide to the legal profession worldwide.  Selection to this prestigious list is based on exhaustive evaluations in which leading attorneys cast votes on the legal abilities of other lawyers in their geographical and legal practice area.

Six attorneys from Cokinos | Young have been selected for inclusion in the 2019 edition of Best Lawyers in America©. Cokinos | Young is proud to recognize the following attorneys for their continued commitment to excellence in their profession and practice areas.

HOUSTON

Gregory M. Cokinos
Construction Law & Litigation-Construction
Mr. Cokinos has appeared on this list for 15 years.

Parker Fauntleroy
Personal Injury Litigation-Defendants
Mr. Fauntleroy has appeared on this list for 5 years.

Charles Getman
Construction Law

John C. Warren
Construction Law & Litigation-Construction

DALLAS/FORT WORTH

Patrick J. Wielinski
Insurance Law & Litigation-Construction
Mr. Wielinski has appeared on this list for 10 years.

SAN ANTONIO

Stephanie L. O’Rourke
Construction Law & Litigation-Construction

Stephanie O’Rourke Elected Secretary of the State Bar of Texas Construction Law Section

Principal Stephanie O’Rourke was elected to be the 2018-2019 Secretary of the State Bar of Texas Construction Law Section by the section membership at the annual State Bar of Texas Convention. As a member of the Executive Committee of the Section, Mrs. O’Rourke will assume the position of Chair of the Section in 2021.

 

Stephanie O’Rourke
Principal – San Antonio
(210) 293-8714
sorourke@cokinoslaw.com
View Attorney Bio

Contracting Issues in Concrete Construction: What Would You Do?

Senior Counsel Stephanie Cook and Woodward L. “Woody” Vogt, P.E., D.GE, [President of Paradigm Consultants, Inc.] led a discussion of “Contracting Issues in Concrete Construction” at the July meeting of the Houston Chapter of the American Concrete Institute.  After presenting each of four examples of deficient contract documents that led to legal disputes, the panel of three concrete practitioners addressed how the contract documents caused or contributed to the undesirable results, what actions could have been taken to avoid the problem(s), and what should be done to avoid similar situations, whether by the concrete supplier, the concrete subcontractor, or the general contractor.  Specifically, the “esthetics” of structural concrete – uniformity of color, finish, and the appearance of joints – are often undefined in the contract documents leaving the owner with unmet expectations.

For more information and to learn more about the presentation, contact Stephanie Cook directly at 512-476-1198 or SCook@CokinosLaw.com. You can view her profile by clicking here: Stephanie Cook.

Austin Paid Sick Leave Ordinance – Lawsuit Update

Several motions in the lawsuit challenging the Austin Paid Sick Leave Ordinance were heard in Travis County District Court, including the motion for a temporary injunction and Defendants’ motions to dismiss the case.  The court’s June 26, 2018, denial of the temporary injunction seeking to block the Ordinance produces an interesting three months before the challenged Ordinance’s effective date.

As background, the Ordinance establishes mandatory paid sick leave for employees who work at least 80 hours within Austin in a calendar year.  The ordinance is set to take effect on October 1, 2018, and will require businesses to provide up to 64 hours of paid sick leave to employees working over 80 hours per year within the City of Austin.  Under the Ordinance, leave may be used for the employee’s or a family member’s illness, injury, health condition or preventive care, or as necessary to deal with domestic abuse, sexual assault or stalking involving the employee or a family member.

In April 2018, a lawsuit was filed by the Texas Public Policy Foundation representing several plaintiffs, including the Texas Association of Business and the National Federation of Independent Business, and the Society of Human Resource Management, arguing that the paid sick leave ordinance violates the Texas Constitution and is preempted by state minimum wage law.  The plaintiffs also asked the court to block the ordinance from going into effect while the case is being heard.

Although the headline is the temporary injunction was denied on June 26, 2018, there is much more to the story.  Perhaps most importantly, the trial court’s denial of a temporary injunction motion to enjoin the Ordinance allows Plaintiffs time to file an appeal on the injunction motion to the Third Court of Appeals in Austin.  Procedural mechanisms will likely be used by Plaintiffs to get the dispute heard by the court of appeals before the October 1, 2018, effective date.  Indeed, on July 5, 2018, Plaintiffs challenging the Ordinance filed their Notice of Appeal.

It is also newsworthy that the trial court denied all of Defendants’ motions to dismiss the action.  This means that the trial court deemed Plaintiffs’ legal challenges to the Ordinance to have legal merit.  In other words, the legal challenges related to preemption, due process and constitutionality are valid and there is a basis to bring the litigation.  In addition, Plaintiffs succeeded in having Intervenor-Defendant Workers Defense Project dismissed from the case.

Expect more news in the coming months now that the temporary injunction motion is ripe for appeal.  In the meantime, Austin employers should continue to get organized by reviewing handbook policies, leave verification procedures, and employee time tracking mechanisms.  Remember, under the Ordinance, even an employer headquartered outside the Austin city limits must offer sick leave to its employees working in Austin.

 

Wilson Stoker is an employment law counselor with Cokinos | Young, who is Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization. Wilson helps businesses navigate employment law issues related to on hiring, promotion, discipline and termination by providing common-sense, proactive solutions.  Wilson has particular experience defending employers in lawsuits and agency investigations involving discrimination, harassment, retaliation, wage and hour and leaves of absence.  View bio.

Gregory M. Cokinos named the Best Lawyers© 2018 Construction Law “Lawyer of the Year”

Best Lawyers in America, the oldest peer-reviewed publication in the legal profession, has named Gregory M. Cokinos as Lawyer of the Year in Construction Law in Houston. Only a single lawyer in each specialty and market is honored as “Lawyer of the Year”.

Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. For 2018, 7.3 million votes were analyzed and the publication has been called “the most respected referral list of attorneys in practice” (Corporate Counsel magazine).

Gregory M. Cokinos
Construction Law, Litigation-Construction
2018 Lawyer of the Year – Construction Law
Mr. Cokinos has been named a Best Lawyer for more than 10 years.

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