Subject: FW: Fred and Marilyn Promis vs. NEPCO, LSP, LSP-Kendall, NRG and Granite Power Partners
From: [email-masked]
To: [email-masked]
Date: Sun, 26 Aug 2001 05:52:37 -0700 (PDT)

I am assuming that this is just an FYI. If so, dont respond back

-----Original Message-----
From: Truss, Stephanie 
Sent: Friday, August 24, 2001 5:11 PM
To: Lund, David; [email-masked]; Ranz, Michael
Cc: Brownfeld, Gail; Vote, Robert; Sanders, Richard B.
Subject: RE: Fred and Marilyn Promis vs. NEPCO, LSP, LSP-Kendall, NRG
and Granite Power Partners 

Since this is an insurance claim, I am leaving it to Bob to handle (per Jim Derrick's policy manual).  As to the last sentence of your e-mail...have you been talking to my mother? 
-----Original Message-----
From: Lund, David 
Sent: Tuesday, August 21, 2001 6:13 PM
To: [email-masked]; Ranz, Michael
Cc: Brownfeld, Gail; Vote, Robert
Subject: Fred and Marilyn Promis vs. NEPCO, LSP, LSP-Kendall, NRG and
Granite Power Partners 

ATTORNEY-CLIENT COMMUNICATION; PRIVILEGED AND CONFIDENTIAL

Tom and Mike:

As you may know, NEPCO and the project Owners are named in a personal injury
lawsuit that was served on NEPCO earlier this month in Cook County,
Illinois.  I tender the case by letter to Dick Corp for their defense and
indemnity since it involved one their employees who broke his leg on the
jobsite in Kendall, Illinois.  I cited paragraph 4 (b) and (d) of the JVA as
my authority for shifting the risk to Dick, however was silent on Paragraph
11 and 19 which actually says we should have purchased a GL policy for the
JV to protect the JV and its partners.  As a cost saving measure agreed by
the JV partners, no policy was purchase because each Dick and NEPCO would
rely on the GL policy of their own (Dick's and Enron's) to protect
themselves against third party claims. Paragraph 19 is an indemnity which
states the JV partners share risk 50/50 without respect to who is at fault
except for willful actions.  It also states the JV will indemnify the JV
members, which only works if the JV had purchased a GL policy and in the
absence of a GL policy then the intent would be that each party will utilize
the others GL policy and share in the deductible cost.  Dick has responded
in writing and said it will defend and indemnity NEPCO through its GL policy
(Travelers) but says the JV partners must share in their $250,000
deductible, or $125K per partner.  That hurts, but not as bad as if this
were handled by Enron's policy which has a self insured deductible of $2
Million.

In the end, I agree to some extent with Dick's response for pure third party
claims, but I have some trouble with the concept of claims coming from their
own employees of which they would have immunity from suit under the workers
compensation act.  Dick pays up to it's cap on liability under the WC act
and then theoretically has 50% deductible liability under the GL policy for
claims against the other JV partner.  Had this not been a JV relationship,
we would have had Dick paying all of the defense and indemnity as a
subcontractor.  The JVA is silent on this split in liability for claims by
either parties' own employees, however, I look back to the paragraphs I
cited to Roger Peters (Par. 4 (b) and (d)) and they say with respect to
subcontracts, of which Dick and NEPCO were expected to perform their
respective scopes of work under (see 4 (b)), each such subcontract shall
oblige the subcontractor to indemnify the JV and each of the parties from
and against all expense, liability and claims resulting from its
construction/engineering work.  This language would say that Dick should
take 100% of the claim.  

The bottom line, the JVA is vague in respect to claims by its own employees.
If this were the only claim, I would say lets share the loss because the
benefit and exposure flows both ways.  In reality though, most if not all of
the claims will come from construction workers (Dick employees).  So sharing
the loss is not reasonable especially since the Travelers lawyer has said
the common practice of Union hired employees in the Chicago area is to bring
numerous accident injury claims against owners and GCs as the project winds
down.  He said to expect more claims like this because he sees this on other
Dick jobs.

Gail and Bob,  This message is more for informational purposes since the
claim has been accepted by Dick Corp although Travelers did not afford me
much selection of counsel since they went ahead and assigned it to a Chicago
lawyer, Chic Marasa.  His number and address is:  (312) 345-7229, Law
offices of Chic Marasa, One East Wacker Drive, Suite 3450, Chicago, Illinois
60601.  We may want to have one of you monitor the outside lawyer hired by
Travelers and make sure our interests are served.  I sent the complaint and
my tender letter to Richard Sanders on August 10th.  Gail,  I spoke to Chic
and he sounds nice, single and available if you are interested. Juuust
kidding.

David H. Lund, Jr.
Assistant General Counsel
National Energy Production Corporation
11831 North Creek Parkway N.
Bothell, WA 98011
425-415-3138
Fax: 425-415-3032
[email-masked] or [email-masked]