Subrogation & Recovery Law Blog : Insurance Subrogation Lawyer & Attorney : Cozen O'Connor Law Firm : Property Damage & Insurance Commentary

While plastics have forever changed the way we live, the story isn't always as rosy as the American Chemistry Council infers in the quoted slogan.

Introduced in 1956, acetal (also known as polyacetal, polyformadehyde or polyoxymethlene) was developed for high stiffness, low friction and stability. This material was successfully used in the manufacture of automotive parts such as cams, bearings, gears, etc. But in the 1970's acetal was introduced into plumbing systems, with disastrous results. Over the last 30 years, acetal plumbing parts have shown a high failure rate, resulting in billions of dollars in property losses.

Publicized failures of acetal plumbing parts were seen in the 1980s. Acetal was used to fabricate fittings incorporated into residential water supply piping made of Polybutylene ("PB"). Homes across the country were suffering PB water system failures, causing water losses. Class action litigation ensued, with one of the largest in US history (Cox v. Shell Oil Co., et. al) settling for $950 million. A cause of the PB piping failures was degradation of the acetal fittings, which led to fracture and water release.

Acetal plumbing fittings resurfaced in the 1990s. This time, acetal was formed in fittings incorporated into flexible water supply lines manufactured by various companies, including Robert Manufacturing, Watts Industries and Fluid Master). Failures began to surface in late 1990 and 2000. The failures had a similar appearance, with the plastic coupling fittings suffering cracking or full fracture.

More recently acetal failures have arose in toilet valve assemblies, including those manufactured by Coast Foundry and Fluid Master. Acetal was used in certain models to fabricate the toilet valve shaft, float arm and trigger.

There are two primary causes of these failures. Acetal has been recognized within the plastics industry since as early as the 1950's to be sensitive to acid hydrolysis (a chemical reaction during which one or more water molecules are split into hydrogen and hydroxide ions) and oxidation (the addition of oxygen to a compound with a loss of electrons) by agents such a chlorine. And since chlorine is a required additive for virtually all domestic water systems, degradation of acetal plumbing products is an all to frequent occurrence. Low levels of chlorine in potable water supplies can be sufficient enough to cause stress corrosion cracking (sudden failure of normally ductile metals or tough thermoplastics ) to develop, a problem which has been experienced in both the USA and Europe. Acetal is also notch sensitive, meaning the materials susceptibility to fracture. Acetals have the highest crystallinity (degree of structural order in a solid) of any thermoplastics making it strong and fatigue resistant. This toughness (or lack of ductility) makes it susceptible to fracture where there is a notch, a sudden change in the surface section, a crack, or scratch. Because acetals are notch sensitive, sharp corners must be avoided in part design. This has been an issue in various acetal product designs, including the thread geometry of the water supply coupling nuts and toilet valve triggers, resulting in premature failures.

Many of the plastic components dealt with in subrogation have a tale to tale. Uncovering the material's "story" may be the key to recovery.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In Georgia, it is well known that actions for injury to real and personal property caused by any person furnishing the design or construction of an improvement to the property must be filed within eight (8) years after the substantial completion of the improvement. O.C.G.A. §9-3-51(a).  Further, an improvement to real property has been defined as a fixed alteration to the real property. Mullis v. Southern Co. Services, Inc., 250 Ga. App. 90, 296 S.E.2d 579 (1982). The Courts have held that if a component is an essential and integral part of the improvement to which it belongs, then it is itself an improvement to real property.  Therefore, in the event a claimant files an action against a contractor, architect, or subcontractor to recover damages to its real property, for example, one would surmise that he or she has eight (8) years from the date the work was substantially completed to file the claim. That is not the case insomuch as in 1994, the Georgia Court of Appeals, in effect, shortened the time period to file a claim against a contractor to recover damages to real property to four (4) years.

In Hanna, et al. v. McWilliams, et al., 213 Ga. App. 648, 446 S.E.2d 741 (1994), a homeowner brought an action against a general contractor and subcontractor to recover damages to real and personal property caused by the negligent installation of a fireplace. The Hanna Court held that the fireplace constituted an integral part of the home and an improvement. As a result, the statute of repose applied. The Hanna Court also examined whether the homeowner had eight (8) years after the substantial completion of the fireplace to bring an action against the contractors, as outlined in the statute of repose, or whether the four (4) year statute of limitations barred the claim.  The Court held, as it pertains to damages to real property, that the Plaintiff’s claims were subject to the four (4) year statute of limitations set forth in O.C.G.A. §9-3-30 and the action accrued at the time of the substantial completion of the project.  

The holdings in Hannah provide that in cases involving damages to real property, the statute of repose and statute of limitations will run concurrently after the date of substantial completion. When the four (4) year limitation for tort actions has been reached, the claimant is barred from pursuing a claim to recover damages to its real property as a result of the defect in an improvement to its land. Keep in mind that the application of Hannah is different for damages to personal property as the discovery exception to the statute of limitations applies. 

Claimant beware! Make sure you examine the dates when the repair and/or improvement was made to determine if you have a viable claim.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As was previously reported, New York Governor Paterson has signed a bill which purports to eliminate the alleged windfall of double recoveries to plaintiffs which were alleged to have resulted from the common-law Collateral Source Rule, which enabled collateral source payors, including subrogating insurers, to recover their losses as part of the damages claimed by injured insureds.  This bill does not impact property damage subrogation claims, which was made clear beyond peradventure by a memorandum prepared by one of the previous sponsoring committees.  The language of the prior sponsor's memo is as follows:

Collateral Source and Subrogation Changes: The various collateral source provisions of the CPLR were enacted to eliminate the common law collateral source rule, which prohibited tortfeasors from reducing their obligations to a plaintiff by the amount of benefits the plaintiff receives from other sources, such as insurance. The statute's purpose is to eliminate the windfall of double recoveries to plaintiffs which often resulted from the common law collateral source rule, while still ensuring that uncompensated losses are fully compensated. Notwithstanding the trend to eliminate the windfalls that result from the common law rule, and to safeguard public monies, presently all defendants except public employers may offset against awards for future costs or expenses any amounts that would with reasonable certainty be replaced or indemnified. This bill would ensure that public employers are treated the same as private employers in tort actions. New York City estimates that it would save $14.5 million annually from this reform.

At present, there is no statutory authority that addresses or limits the extent to which a benefit provider may claim contractual reimbursement or subrogation with respect to medical expenses it has paid pursuant to an insurance contract or other agreement. Likewise, there is no statutory authority that specifies whether or under what circumstances such a benefit provider may intervene as a party in a personal injury or wrongful death action. For example, in a medical malpractice action, a health insurer which has provided coverage to the plaintiff may demand reimbursement for its expenses, often unnecessarily prolonging cases, thwarting settlement talks and making cases more expensive to litigate. Thus, it has become important that a statutory framework be established to facilitate settlement of cases and reduce expenses for litigants. This bill would preclude a benefit provider to seek reimbursement or subrogation against a settling defendant for those benefits paid to or on behalf of plaintiff, unless specifically set forth by statute.  In doing so, this bill would make the savings to defendants more tangible, and allow cases to settle more quickly and without unnecessary expense. This provision of the bill would be applicable to actions for personal injury, medical, dental, or podiatric malpractice, or wrongful death and would be inapplicable to the subrogation of property damage claims. (Emphasis added).

• Email This
• Print
• Comments
• Trackbacks
• Share Link