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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Sanders, Richard B. </O=ENRON/OU=NA/CN=RECIPIENTS/CN=RSANDER< X-To: Brownfeld, Gail </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Gbrownf< X-cc: X-bcc: X-Folder: \Sanders, Richard B (Non-Privileged)\Sanders, Richard B.\Sent Items X-Origin: Sanders-R X-FileName: Sanders, Richard B (Non-Privileged).pst 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; Tom.Whipple@nepco.com; 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: Tom.Whipple@nepco.com; 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 David.Lund@nepco.com or davidlu@nepco.com
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