Actual Controversy Without Actual Exhaustion: California Supreme Court Allows Declaratory Relief and Bad Faith Claims Against Excess Insurers
August 24, 2026 —
Kyle A. Rudolph - Saxe Doernberger & Vita, P.C.California courts were previously split on the issue of whether an insured may bring declaratory relief claims against excess insurers prior to the exhaustion of underlying insurance. Some California courts held that the actual exhaustion of underlying insurance was necessary, whereas other courts allowed for these types of claims to proceed.[
1]
Recently, the California Supreme Court addressed this split of authority and, in doing so, handed down a significant win for policyholders. In Fox Paine & Company, LLC, et al. v. Twin City Fire Insurance Company et al., the Court held that insureds may proceed with bringing forth viable declaratory relief and bad faith claims against excess insurers prior to the exhaustion of underlying insurance.[
2] A summary of the Court’s opinion is provided below.
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Kyle A. Rudolph, Saxe Doernberger & Vita, P.C.Mr. Rudolph may be contacted at
KRudolph@sdvlaw.com
IEEPA Tariff Refunds: CBP Launches CAPE Process
April 27, 2026 —
David J. Creagan, Guido Antolini, Bruce W. MacLennan & Gary P. Biehn - White and Williams LLPOn April 20, 2026, U.S. Customs and Border Protection (CBP) launched the first phase of the Consolidated Administration and Processing of Entries (CAPE) tool in the Automated Commercial Environment (ACE) portal to administer refunds of duties imposed under the International Emergency Economic Powers Act (IEEPA) through a streamlined electronic filing process.
Background
In February 2026, the U.S. Supreme Court held that certain tariffs imposed under IEEPA were unlawful. Subsequent proceedings before the U.S. Court of International Trade required CBP to develop a scalable refund process applicable not only to litigants but also to non-plaintiffs. According to CBP and court filings, approximately 330,000 importers paid or deposited an estimated $166 billion in IEEPA duties across more than 53 million entries. In response, CBP developed CAPE as an electronic, consolidated refund mechanism within ACE.
Reprinted courtesy of
David J. Creagan, White and Williams LLP,
Guido Antolini, White and Williams LLP,
Bruce W. MacLennan, White and Williams LLP and
Gary P. Biehn, White and Williams LLP
Mr. Creagan may be contacted at creagand@whiteandwilliams.com
Mr. Antolini may be contacted at antolinig@whiteandwilliams.com
Mr. MacLennan may be contacted at maclennanb@whiteandwilliams.com
Mr. Biehn may be contacted at biehng@whiteandwilliams.com
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Ayushi Neogi Published in ADC Defense Comment on Arbitration in Evolving Plaintiff-Friendly Landscape
May 12, 2026 —
Gordon Rees Scully MansukhaniGordon Rees Scully Mansukhani Senior Counsel Ayushi Neogi has authored an article in the Association of Defense Counsel of Northern California and Nevada’s Defense Comment magazine examining the shifting landscape of arbitration following the Ending Forced Arbitration Act.
Titled “Compelling Arbitration in a Post-Ending Forced Arbitration Act, Plaintiff-Friendly Landscape,” the article analyzes how recent legislative changes are reshaping arbitration strategy, particularly as employees gain greater ability to bypass arbitration in certain claims. Neogi provides practical insight into how courts are responding and what this means for defense counsel navigating increasingly complex and plaintiff-friendly environments.
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Gordon Rees Scully Mansukhani
Owner Taking Assignment of General Contractor’s Claims Against a Subcontractor(s)
September 21, 2026 —
David Adelstein - Florida Construction Legal UpdatesHere’s a scenario that occurs in construction defect cases. An owner sues a general contractor and subs for construction defects. The owner settles with a number of parties and takes an assignment of the general contractor’s claims against some or all of the subs and pursues the remaining parties for indemnity based on the assignment of the general contractor’s claims.
This was the scenario in Craftsman Plastering and Lath, Inc. v. Rath Mor, LLC, 2026 WL 2328032 (Fla. 4th DCA 2026). The owner settled with the general contractor and all subs except one. The owner took an assignment of the general contractor’s claim against the sub, and really the indemnity claim. The owner was then substituted as the real party in interest as it relates to the general contractor’s claims against the sub. The owner sought roughly $780,000 in attorney’s fees and costs in connection with the dispute claiming the sub was liable for such fees. The jury didn’t buy the argument and awarded the owner about $55,000. Basically, the jury seemingly prorated the fees by the number of parties, at least, that’s how the math worked out. The owner didn’t like that and moved for an additur to increase the jury’s verdict which the trial court granted. This was reversed on appeal despite the fact that a trial court has broad discretion to grant a motion for additur.
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David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
The GKN Aerospace Chemical Release and the Laws Designed to Address It
July 06, 2026 —
Sean M. Sherlock - Snell & WilmerOn May 21, 2026, a 34,000-gallon storage tank at the GKN Aerospace facility in Garden Grove, California began leaking methyl methacrylate (MMA), a volatile and highly flammable industrial chemical used to manufacture high-strength acrylic plastics. GKN Aerospace makes advanced military and commercial transparencies, such as aircraft canopies, windshields, cabin windows, bullet-resistant glass, and spacecraft windows.
In polymer chemistry lingo, MMA is known as a monomer. Monomers are like individual links to a chain. Under the right conditions they link up (react) with each other to form long-chained polymers, or plastics. MMA is an unstable monomer that requires controlled storage conditions to avoid setting off a polymerization (chain) reaction.
According to early reports, the MMA tank at GKN Aerospace overheated. The cause of the overheating is not yet clear, but the overheating may have created conditions enabling the MMA to initiate polymerization, which in turn generated heat, which in turn generated pressure, activating the tank’s pressure-relief system and releasing MMA vapor into the atmosphere. Concerns about a runaway reaction, massive release, and explosion led the Orange County Fire Authority to order evacuation of approximately 40,000 residents and closure of thirteen schools.
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Sean M. Sherlock, Snell & WilmerMr. Sherlock may be contacted at
ssherlock@swlaw.com
Vacant Building Negates Coverage for Broken Pipe
September 01, 2026 —
Tred R. Eyerly - Insurance Law HawaiiThe Michigan Court of Appeals found the insured was not covered for water damage because the commercial space was left vacant. Cherry Hill Recreation Center, Inc. v. Conifer Ins Co., 2026 Mich, App. LEXIS 5099 (Mich Ct. App. June 18, 2026).
Alan Abbas purchased a bowling alley. Due to the onset of the COVID-19 pandemic and executive orders issued by the governor, Abbas was unable to operate the bowling center for several months. During the winter, Abbas allowed the thermostat to drop significantly, with the building expected to be around 43 degrees Fahrenheit. He later admitted the sprinkler system’s pipes were not protected against freezing.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Every High-Tech Building Has Many Lifespans
August 16, 2026 —
Aarni Heiskanen - AEC BusinessWhen I worked as an architect, our team designed a laboratory for fuel research. The facility included a large research hall where various boilers and other devices were tested and analyzed. The setup required extensive floor channeling under the thick concrete floor. We suggested building a modular system that would allow flexibility in the future, when requirements would certainly change. They did not want that because of budget constraints.
The high-tech construction trend is spreading. Data centers, semiconductor fabs, battery plants, and life science facilities share one property that sets them apart from ordinary buildings. The technology inside turns over faster than the structure around it. Server generations change every three to five years. Rack densities have risen from 10 or 20 kW to 130 kW and beyond in just a few years.
A high-tech facility is really several buildings with different lifespans inside one envelope, and we keep designing them as if they were one. The failure is not that things become obsolete. It is that we never say when each layer is expected to.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
Presumption of Prejudice Applies to All Affirmative Defenses Regarding Insured’s Failure to Comply with Post-Loss Policy Conditions
June 23, 2026 —
David Adelstein - Florida Construction Legal Updatesn a recent property insurance coverage dispute, an issue on appeal pertained to the “prejudice” jury instruction associated with the insured’s failure to comply with post-loss policy conditions. The trial court found that the prejudice only pertained to prompt notice and not other post-loss policy conditions. This was reversed on appeal as prejudice applied to ALL the post loss policy conditions that the insured failed to comply with, not just the prompt notice requirement. The prejudice presumption applies to all affirmative defenses regarding an insured’s failure to comply with post-loss policy conditions.
Consider this discussion when dealing with an insurer raising prejudice as an affirmative defense to do an insured’s failure to comply with post-loss policy conditions, and the associated burdens of proof:
On appeal, [the insurer] contends the trial court erred by instructing the jury that the presumption of prejudice was inapplicable to all of its post-loss obligation defenses except prompt notice. We agree.
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David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com