Litigation

By: Stephen P. Lagoy

Mediation may be defined most simply as facilitated negotiation.  Unlike litigation and arbitration, mediation does NOT involve a decision maker nor are there formal proofs or arguments.  Its goals include avoiding or breaking impasses, diffusing controversy, and encouraging parties to generate settlement options.  These goals are foreign to the adversarial environment in which many lawyers live their professional lives.  The mediator, who is usually selected by the parties, functions as a catalyst, rather than adjudicator.  The mediator focuses on the parties’ interests rather than the conflict and the positions they have taken.  Often, the mediator’s most critical function is to assist the parties in determining their real values and interests.

Mediation has many advantages over litigation.  Mediation can reduce the time and expense of dispute resolution.  It can also reduce the emotional toll of litigation because the parties have more control over the process.  In contrast to that uncomfortable feeling that comes from placing your fate in the hands of total strangers (typically a judge or jury), the parties in mediation are in control.  They typically choose the mediator, when and where the mediation will take place, and how long the mediation will last.  The parties also have control over the outcome.  There is no settlement unless all parties agree, thereby reducing outcome uncertainty.  Mediation also helps to improve communications between and among the parties.  The process may also mitigate tensions, build understanding and trust, and avoid the bitterness often associated with adjudication.  Mediation provides an opportunity to deal with the underlying interests in a dispute.

Skilled mediators employ numerous strategies to encourage the disputing parties to look behind the issues and their positions.  The mediator addresses the expectations of the parties, both reasonable and unreasonable, and can help to control unreasonable expectations in ways the party’s attorney often cannot.  Once the underlying interests of the parties have been determined, there are usually more settlement options to consider.  As a result, mediation can achieve more creative outcomes than other dispute resolution processes.  For more information, please contact the office.

Update on coverage for claims involving faulty workmanship under commercial general liability policies

On December 30, 2008, the Pennsylvania Supreme Court denied the Petition for Allowance of Appeal from the Order of the Pennsylvania Superior Court in the case of Millers Capital Ins. Co. v. Gambone Bros. Dev. Co., 941 A.2d 706 (Pa. Super. 2007). In Miller, the Pennsylvania Superior Court found no coverage under the insured builder’s commercial general liability (CGL) policy for claims made against it by homeowners who alleged that their homes were built with defective stucco exteriors, windows and other artificial seals, resulting in water damage to the interior of the homes.

The Pennsylvania Superior Court applied the Pennsylvania Supreme Court’s holding in Kvaerner Metals v. Commercial Union Ins. Co., 908 A.2d 888 (Pa. 2006), in which the Court held that a contractor’s alleged faulty workmanship in building a coke oven battery for a steel company was not an “accident” and, therefore, was not an “occurrence” within the meaning of the contractor’s CGL insurance policy. In doing so, the Court explained that faulty workmanship claims lacked the degree of fortuity contemplated by the ordinary definition of accident.

In light of the Court’s decision in Miller, there is no longer any uncertainty with respect to the exclusion of coverage for faulty workmanship claims under CGL policies. Builders and others who previously thought their CGL policies protected them against such claims should be careful in hiring and supervising the work of subcontractors as they may no longer look to their insurance carriers for protection. There is a “subcontractor exception” which may preserve coverage that would otherwise not exist.

More on the subcontractor exception next month…

Welcome to the Litigation Section’s blog. Our firm is located in West Chester, Chester County, Pennsylvania, and Phoenixville, Chester County, Pennsylvania. This blog is intended to provide a litigator’s perspective on a wide range of specific legal issues, along with commentary on emerging legal trends. The content is intended to be useful to individuals and small businesses wanting to learn more about exposure to liability, avoiding liability, the process of civil litigation, and alternative dispute resolution options.

Disputes arise in a variety of settings. Our team of litigators is experienced in contract and business disputes, employment, real estate, banking and creditor’s rights, construction, mortgage foreclosures, commercial leasing, and estate and orphan’s court matters.

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Brian D. Boreman

James C. Dalton

Daniel P. Dwyer

Nancy J. Glidden

John K. Fiorillo

Daniel M. Hanifin

Stephen P. Lagoy

Shannon M. Reilly

Christopher L. Turner

Donald C. Turner