King County, Washington, hired Frank Coluccio Construction Co. (FCCC) to act as general contractor for a public
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(a) King County’s property damage policy specifically excluded, at the county’s request, coverage of tunnels. The county drafted its contract with FCCC to require the all-risk builder’s risk policy and authorize itself to “sponsor” claims. When FCCC and DBM filed their claims, the county secretly colluded with its property damage insurer to deny payment. What do these facts indicate about the county’s ethics and legal liability in this situation?
(b) Could DBM, as a third party to the contract between King County and FCCC, maintain an action on the contract against King County? Discuss.
(c) All-risk insurance is a promise to pay on the “fortuitous” happening of a loss or damage from any cause except those that are specifically excluded. Payment usually is not made on a loss that, at the time the insurance was obtained, the claimant subjectively knew would occur. If a loss results from faulty workmanship on the part of a contractor, should the obligation to pay under an all-risk policy be discharged? Explain.
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Business Law Text and Cases
ISBN: 978-0324655223
11th Edition
Authors: Kenneth W. Clarkson, Roger LeRoy Miller, Gaylord A. Jentz, F
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