Alexander E. Davis
Associate / Charleston
Alex earned his B.A. in History from Wake Forest University and graduated cum laude from the University of South Carolina School of Law. While in law school, Alex was a member of the South Carolina Law Review and was inducted into the Order of the Wig and Robe and the Order of the Coif. His practice at Carlock Copeland focuses on Construction, Construction Defect Litigation and General Civil Liability. Alex has extensive litigation experience at all levels of South Carolina’s state trial and appellate courts. He has represented clients in a variety of business and commercial tort claims, as well as complex insurance coverage disputes.
Publications and Presentations
Multiple Claims Versus a Single Occurrence: Iowa Judge Rules in Favor of Pella Windows – Insurance Coverage Blog Post by Alex Davis
April 5, 2017
Blog Posting by Alex Davis. A federal judge in Iowa has issued two rulings in the past two weeks interpreting an ongoing coverage dispute regarding underlying construction defect claims against a window manufacturer. The case arises out of a dispute between Pella Corporation and several subsidiaries (“Pella”) and its insurer, Liberty Mutual Insurance Company (“Liberty”). The dispute arose out of a number of lawsuits against Pella by various plaintiffs for alleged water intrusion damages resulting from defectively designed, manufactured, or installed windows. Pella sought reimbursement of defense costs and settlements as a result of each of these claims. On cross-motions for summary judgment, the District Court for the Southern District of Iowa was asked to determine under Iowa law whether to apply a pro rata apportionment of damages for each policy period or a joint and several “all sums” allocation of damages. The court was also asked to determine whether each of many claims against Pella was a separate “occurrence” under the Liberty policies or whether each of the claims should be categorized as three or four total occurrences, based on the type of alleged conduct/omissions on the part of Pella. In its first order, issued March 22, 2017, the court held that Iowa law would apply a pro rata apportionment of damages under the various policies at issue. In reaching this decision, the court rejected Pella’s argument that the non-cumulation provisions of the policy required a finding of an “all sums” allocation. Instead, the court held that the policy language limiting recovery to damages within the policy period unambiguously provided for a pro rata allocation method, and specifically rejected several findings to the contrary by courts in other jurisdictions. The court issued a second order on March 31, 2017. In this order, the court determined that each claim constituted a separate “occurrence” under the policies. In reaching its conclusion, the court noted the majority rule that the determination of the number of occurrences is based on the underlying cause of the alleged property damage. However, Pella and Liberty disagreed over the level of generality for applying this standard. Pella argued that each specific claim had distinguishing facts related to the cause of the damages, while Liberty asserted that the underlying cause should be more generally understood to group together claims for defective installation, a fall through a window, and a couple broad categories of manufacturing or design defect claims. After reviewing the facts of each of the claims and the language in the underlying policies, the court concluded that both parties made reasonable interpretations of the language in the policies in question. However, because the policies were subject to multiple reasonable interpretations regarding this issue, the court was constrained to find that the policies were ambiguous as to the interpretation of what constituted an “occurrence.” Therefore, the court found in favor of Pella, pursuant to Iowa law that an ambiguous policy provision must be construed in favor of the insured. The case is Pella Corporation v. Liberty Mutual Insurance Company, No. 4:11-cv-00273, in the U.S. District Court for the Southern District of Iowa. Please contact us if you would like a copy of the order or would like to discuss the case further.  This case deals with a number of “sample claims” that were representative of the larger total number of claims. For more information on our Insurance Coverage Corner Blog or to subscribe, click here.
Harleysville v. Heritage: What Every Insurer Needs to Know to Effectively Reserve its Rights by Alexander E. Davis
On January 17, 2017, the South Carolina Supreme Court issued an opinion, Harleysville Group Insurance v. Heritage Communities, Inc., Op. No. 27698 (S.C. Sup.Ct. field Jan. 11, 2017), which could radically affect the practice of construction law in South Carolina. The decision was far-reaching, addressing the effects of reservation of rights letter by insurers, the construction of punitive damages exclusions, the proper “time on the risk” analysis for loss of use and punitive damages, and the allocation of covered and non-covered damages where the jury returns a general verdict. The following is a brief summary of the case’s most important aspects, and some of the potential effects on construction practice in South Carolina.
- Reservation of Rights
- Exclusion for Punitive Damages
- Allocation of Time on the Risk
- Takeaways from the Case
Heritage Decision Fallout Begins as Carrier Denied Intervention… by Alex Davis
February 6, 2017
The fallout has already begun from the recent South Carolina Supreme Court decision Harleysville Group Ins.v. Heritage Comms., Inc., Op. No. 27698 (S.C. Sup.Ct. field Jan. 11, 2017), which we wrote about a few weeks ago (see Don’t Write Another Reservation of Rights Letter Before Reading This Opinion! Posted January 18, 2017). We understand that in a hearing on a Motion to Intervene last week, a South Carolina trial court denied the Motion, relying in part on Heritage in reaching its decision. While the Order has yet to be signed, we have been informed that the Court’s denial of the Motion rested heavily on the recent Heritage decision. As we understand it, the court held that the Heritage decision indicated a preference for general verdicts in a construction matter, even where this means that an insurer will be responsible for the all covered and non-covered claims in that verdict. The trial court seemed to consider the potential conflict of interest where the insurer was attempting to both defend its insured and present special questions to the jury in an effort to deny possible indemnification following trial, which we understand it believed unfair to the insured. Finally, the court seems to have noted that the insurer’s intervention would create a high likelihood of confusing the jury. It is our understanding that the court concluded that intervention by the insurer was inappropriate, and denied the Motion, noting that a subsequent declaratory judgment action would be a more proper vehicle for asserting that the insured had no right to indemnification under the policy. This is an interesting decision, as the insurer had asserted the right to intervene based on the ruling in Heritage. As noted, however, the trial court read the decision differently, holding that it does not entitle the insurer to intervene in the underlying litigation to propound special interrogatories to the jury. Whether other trial and appellate courts interpret the recent decision in a consistent manner or provide their own interpretation is something we will be watching closely in the coming months.
Don’t Write Another Reservation of Rights Letter Before Reading This Opinion!
January 18, 2017
Last week, the South Carolina Supreme Court issued an opinion that is likely to heavily influence the fields of construction coverage law and construction litigation in South Carolina. The case, Harleysville Group Ins. V. Heritage Comms., Inc., Op. No. 27698 (S.C. Sup.Ct. field Jan. 11, 2017), arises out of the construction of two condominium complexes in Myrtle Beach, South Carolina. The complexes were constructed by Heritage Communities between 1997 and 2000, during which time various Heritage entities had liability policies through Harleysville. The last Harleysville policy lapsed in 2001, after which Heritage was uninsured and, ultimately, went out of business entirely. When Harleysville received notice of the lawsuits against it, it agreed to assume Heritage’s defense under what it believed to be a full reservation of rights. Following general verdicts in favor of the Plaintiffs in the underlying cases, Harleysville filed a declaratory judgment action seeking a determination that there was no coverage for the losses, or, in the alternative, requesting that the court determine which portions of the general verdicts were covered damages. The case was referred to a Special Referee, who found that Harleysville failed to properly reserve its right to contest coverage as to the underlying damages constituting faulty workmanship because the reservation of rights letters were not sufficiently specific to put the insureds on notice of Harleysville’s specific defenses. On appeal, the Supreme Court agreed with the Special Referee. The Supreme Court held that although the letters identified the particular insured entities, the lawsuits at issue, the allegations against the insureds in the Complaint, the policy numbers, the policy periods, and nine to ten pages of various policy terms relating to, among other issues, the insuring agreement, Harleysville’s duty to defend, and a number of policy exclusions and definitions, the letters lacked sufficient specificity to properly reserve Harleysville’s right to contest coverage, except as to punitive damages. The Supreme Court noted both the “cut-and-paste approach” to the policy provisions in the reservation of rights letter and the fact that, despite the inclusion of these provisions, “the letters failed to specify the particular grounds upon which Harleysville did, or might thereafter, dispute coverage.” The Supreme Court also noted that Harleysville’s letters did not “expressly put its insureds on notice that it intended to litigate the issues of whether any damages resulted from acts meeting the definition of occurrence, whether any damages occurred during the applicable policy period, what damages were attributable to non-covered faulty workmanship, and whether certain damages resulted from intentional acts by the insured and were thus excluded.” The court also rejected Harleysville’s contention that subsequent oral reservations were sufficient to put the insureds on notice, without definitively determining whether oral representations may be sufficient in other circumstances. Thus, the court concluded that the reservation of rights letters were no more than a “general warning” and were “too imprecise to shield” Harleysville. Finally, the court made note of the more than six-month delay between notice of the lawsuit and the issuance of Harleysville’s reservation of rights letters, but also held that the issue was not raised by either party and, therefore, not preserved for review. We are still unpacking the full meaning of this decision, not only for reservation of rights letters, but for construction law in general. In addition to the reservation issue, the Supreme Court also issued rulings affecting recovery for punitive damages under a liability policy, the effects of the use of a general verdict form on subsequent coverage litigation, and the proper time-on-the-risk analysis for damages, including loss of use and punitive damages, among other rulings. Thus, it is likely that this decision will continue to reverberate through the fields of construction coverage and litigation in South Carolina for years to come. Stay tuned for a more detailed analysis of this case in Carlock, Copeland & Stair LLP’s next installment of its quarterly construction newsletter, “The Critical Path.”
Carlock Copeland’s Annual Seminar: Insurance Coverage and Bad Faith for Claims Professionals
September 15, 2016
Carlock Copeland’s Annual Insurance Coverage and Bad Faith Seminar for claims professionals serving Georgia, South Carolina and Tennessee was held at the Atlanta Botanical Garden on September 15. Melissa Bailey, Jeff Crudup, Jack Daniel, Alex Davis, Broderick Harrell, Mark Hood, Charlie McDaniel, Kimberly Reeves, David Root, Fred Valz, Lee Weatherly, Sarah Wetmore and Ryan Wilhelm presented. Topics included: • Litigating Coverage Issues Through Appeal • Construction Defect Coverage Issues • Rescinding Policies • Effective Denials and Reservation of Rights Letters • Interplay of Underwriting and Claims • Coverage Issues Involving Additional Insureds • Litigation Coverage Issues In Trucking Policies • Coverage Issues in a Sharing Economy Please contact Patricia F. O’Toole at firstname.lastname@example.org for more information.
U.S. District Court Rules on “Your Work” Exclusion – Recent Blog Posting by Alex Davis
October 11, 2016
Recent blog posting by Alex Davis. A U.S. District Court in Florida recently found that the “Your Work” exclusion in a CGL policy barred coverage for a contractor and developer of a condominium project where the only property damage alleged as a result of the insured’s defective and deficient work was to other portions of the insured’s work. The insurer, Evanston Insurance Company, sought a declaration that it had no duty to defend or indemnify its insured, DiMucci Development Corp. of Ponce Inlet, Inc. DiMucci constructed a 132 unit condominium complex, the Towers Grande, in Volusia County Florida. DiMucci acted as the owner, builder, developer, and seller of the Towers Grande. In 2012, subsequent to the completion of the project, the Towers Grande Condominium Association filed a construction defect case against DiMucci in state court in Florida, alleging, among other things, defects and deficiencies in the roof, exhaust pipe, HVAC system, and water intrusion and other decking/structural issues at the condominium complex. The underlying complaint also brought claims against DiMucci’s roofing subcontractor, who performed roofing work at the site. The complaint asserted claims for negligence, breach of implied warranties, and violations of Florida Building Code. After determining that Florida law applied to the action before it, the District Court first looked at whether or not the underlying complaint alleged an “occurrence” and “property damage,” which would trigger Evanston’s duty to defend under the policies. The court held that there were sufficient allegations of an “occurrence” under the policy because DiMucci neither expected nor intended structural damage to the property caused by the alleged defects. The court also held that there were sufficient allegations of “property damage” under the complaint, because DiMucci’s allegedly defective work damaged otherwise non-defective portions of the Towers Grande. The District Court went on, however, to analyze whether coverage for the alleged damages was excluded pursuant to the “Your Work” exclusion in the policy. In holding that the “Your Work” exclusion barred coverage, the court noted that DiMucci’s work at the project encompassed the entire project, with the exception of the roof. The court held that because the allegations of the underlying complaint alleged only that DiMucci’s defective work on a portion of the project resulted in damage to other parts of the project also constructed by DiMucci, the “Your Work” exclusion barred coverage and Evanston had no duty to defend the underlying complaint. The court distinguished the situation before it from a situation where an insured’s defective work causes damage to other portions of a project that were not constructed by the insured. The District Court’s interpretation of the “Your Work” exclusion is similar to interpretations by South Carolina’s courts. The case also highlights the importance of understanding the effect that “Your Work” and other “business risk” exclusions may have on coverage in a given case. The case is Evanston Insurance Company v. DiMucci Development Corp. of Ponce Inlet, Inc., case no. 6:15-cv-486-Orl-37DAB, in the U.S. District Court for the Middle District of Florida. Please contact us if you would like a copy of the order or would like to discuss the case further. Please click here for more information on our Insurance Coverage Corner Blog.
Ryan Wilhem and Alex Davis will present Construction Defect Coverage Issues at Carlock Copeland’s Insurance Coverage and Bad Faith Seminar – September 15 – Atlanta Botanical Garden
September 14, 2016
Ryan Wilhem and Alex Davis will present Construction Defect Coverage Issues at Carlock Copeland's Insurance Coverage and Bad Faith Seminar to be held September 15 at the Atlanta Botanical Garden. Topics covered will include, understanding what is covered under the policy, property damage and bodily injury caused by an occurrence within the policy period, in depth discussions regarding what is excluded and exceptions to exclusions, how to make a coverage decision, how to better understand the policy, understanding the claim and allegations, and understanding your jurisdiction’s interpretation of the policy. Please click here for the presentation.