Disciplined in Sophisticated Defense and Insurance Litigation

February 23, 2017 | Publication| Is It Hot in Here? Significant Recovery Opportunities with Boiler Failures

Dean S. Rauchwerger, Geoffrey M. Waguespack

This article originally appeared in the Litigation Management Magazine, a publication of the Claims & Litigation Management Alliance (CLM). Legal opinions may vary when based on subtle factual differences. All rights reserved.

Water boiler failures provide significant recovery opportunities. By understanding how these relatively simple systems work, one can realize that recovery potential and identify the probable failures modes, skillfully directing the recovery investigation, and asserting the proper legal theories that afford recovery. Steam and energy-generating boilers date back to the late 1700s and early 1800s with the development of kettle-type boilers. As mechanical capabilities and technology advanced, steam/ energy generation sky-rocketed. Recovery opportunities for boiler failures are numerous given the sheer quantity of boilers operating in the field. As of 2005, there were up to 162,000 boilers in manufacturing, lodging, and industrial applications. Commercial properties in the U.S. host over 581,000 boilers. Major steam-generating industries, such as food, paper, chemicals, refining, and energy are home to 71 percent of the boiler units and 82 percent of the boiler capacity. There are relatively few kinds of power-producing boilers. Water tube boilers and fire tube boilers are the predominant types. Each has numerous subset variations. Water tube boilers, the primary focus here, are the most common boilers.

How They Work

Water tube boilers are relatively simple. Most consist of a pair of drums, tubing, and a heat source. One upper drum for steam collection, and one lower drum for water heating. The drums are connected with tubes, primarily downcomer and riser tubes. A system of burners heats the water in the lower drum, which produces steam that naturally flows to the upper drum. The upper drum facilitates steam and water separation with the water stored below the steam. The water that collects in the upper drum is then fed back into the lower drum at hotter temperatures, continuing the cycle of convectional water flow in the system. Heat can also be applied to the tubing and there are several other variations, but recovery avenues following failure events are applicable throughout a majority of water-tube boilers. Commercial and industrial water-tube boilers have different applications that power a wide variety of business. Commercial water-tube boilers generally generate steam for hot water utility or comfort applications. A significant portion of hotels and office buildings use water-tube boilers for heating and water boiling. Hospitals and medical facilities tend to use water-boilers for sterilization, humidification, and dietary cleanliness. Industrial water-tube boilers generate energy and facilitate industrial applications. Some commercial applications will require higher pressures and larger quantities of steam generation, as well as higher energy/heat inputs from external heating sources. For example, companies that generate ethanol or natural energy and by-products rely on water-tube boilers for their production processes.

Recovery Opportunities

Water-tube boilers are large steel and alloy machines that manipulate heavy pressures and temperatures that can exceed 1,800 degrees Fahrenheit. Because strength of steel drops exponentially at temperatures over 800 degrees, numerous issues can affect a boiler’s operation, resulting in catastrophic failure.

Low water conditions — Most boilers do not use pumps to push water through the system. Instead, they allow and rely on natural circulation of water through the tubes. Constantly flowing water, at proper levels, removes heat from the tubes. As the water temperature rises in the upper boiler steam drum, sufficient heat is eventually generated and steam forms. Cold water is then fed into boiler, replaces the water that rose, creating the natural circulation. Low water conditions usually occur when diminished amounts of cold water enter the system to replace the water lost to generated steam. Without sufficient amounts of cold water, the low water condition can melt or otherwise severely damage the steel tubing. Several common causes of low water conditions include trip switch failure, control valve failure, feedwater pump failure, and sudden changes in the steam load. Trip switches are an inexpensive preventative measure to avoid boiler damage due to low water conditions. These easy-toinstall switches will shut off a boiler when low water conditions occur. Newer boilers tend to contain these switches and industry standards typically promote their installation in older boiler systems.

Poor water/chemical treatment — The water running through a boiler system is supposed to be treated. Proper treatment protects the boiler tubing from two basic issues — minimizing solid deposits and preventing corrosion. When the water is vaporized to steam, there are solids that are left behind. Most boilers operate at adequately low pressures to allow for the use of simple treatment procedures. Solids can also be removed through the use of blow-down procedures and the assistance of trained chemical treatment providers. Although the amount of solids in the water and their density vary, untreated water accelerates a reduction in efficiency. Given the need for efficient water circulation to maintain the temperature of a boiler’s steel tubing, deposit buildup reduces the ability to keep temperatures at optimal levels by reducing the efficiency of water circulation. Eventually, if the water is left untreated and deposits accumulate, the result is overheating and eventual blowout. Proper chemical treatment of the water reduces the solid deposits to acceptable levels. Generally, the greater the operating pressure and running temperatures, the more closely water treatment must be monitored and properly maintained.

Improper warm-up — When external corporate stresses and production requirements are high, extreme over emphasis on expediting boiler operations may result in an initial failure at warm-up. Poor or rushed warm-up is one of the most severe hardships that a boiler can undergo. The boiler’s startup cycle, operation, and turn-off put serious strain on numerous joints. Parts of the boiler, operate at different pressures at different times. All of these materials change temperatures while warming up and cooling down at different times in the warm-up process. Speeding through start-up procedures subjects the boiler components to fatigue and high localized pressures, resulting in acute failures.

Steam blanketing — Steam blanketing affects and damages boiler tubing during normal operation. When the water circulation occurs naturally, as it does in most water-tube boilers, gravity generates proper velocity through the tubes. Improper angling of the tubing, usually due to a design and/or manufacturing defect, decrease water velocity and in turn, may cause stratification.

Stratification — Stratification is the result of decreased water velocity that is insufficient to separate steam from water. Stratification creates the steam blanket, which is the two-phase (water/steam) shift within the tubing that increased localized heating. The ultra-high heat wears out the steel in the tubing, eventually causing a rupture. Steam blanketing can be identified under metallurgical examination. The affected tubes will show noticeable thinning around the steam blanketed area.

Corrosion — Dissolved oxygen in boiler water can cause serious corrosive damage throughout the system when it attaches to the walls of metal piping, causing rust. Steel is always susceptible to water’s corrosive properties. Water-tube boilers are equipped with deaerating systems, which remove oxygen and other dissolved gases from feed-water as it is entering a water-tube boiler. Corrosion is the reversion of steel to its ore form and can affect a boiler in various ways. From localized destruction of tubing, to large-scale impact of the steel drum, corrosion can come from several sources. Generally, corrosion originates from improper water deaeration. Corrosion control processes include proper deaeration, pH level maintenance, deposit control, and reduction of stresses through recommended operational practices.

Recovery Investigation

The initial phase of a boiler failure investigation often requires retention of forensic experts, such as mechanical engineers, metallurgists, water treatment experts, and boiler specialists. Then, heavy photographic documentation of the boiler, the surrounding areas, and the relevant documentation should be gathered. Afterwards, a forensic, expert-driven onsite investigation is usually necessary. Onsite investigations can provide experts with information that is critical to the overall recovery investigation. During the initial phase of the boiler failure investigation, it is important to gather accurate information that will assist the forensic experts in their investigation. There are several pieces of information that will be critical to the investigation into the origin and cause of the failure, as well as the eventual legal strategy regarding potential recovery. Initially, it is important to gather as much accurate information regarding the incident as possible. This information includes:

• Witness information.

• Surveillance camera footage.

• Pre-programmed controls and operational protocols and data.

• Plant processes and operations (including equipment changes or modifications).

• Water treatment records.

• A large number of high-quality digital photographs of the incident scene.

• Identification of the persons most knowledgeable on the boiler design/ installation/commissioning/operation.

• Identification of any entities that or individuals who might have potentially caused or contributed to the failure.

• Electronic data (protocol or process data) on the subject boiler system during the period of interest.

• Contracts, agreements, and documentation for purchase, installation, commissioning, maintenance, and/or modifications of the subject boiler systems and water treatment services.

During the investigation, the experts should aim to understand how the failure occurred and the contributing dynamics.

Recovery Theories

Boiler Manufacturer/Designer — Design defects should be considered when a boiler component is involved in a failure. Small deviations, such as tube angling, porosity of the steel, and thickness of components, can have detrimental impacts on a boiler’s operation. Generally, two types of design defects exist in boilers – ones that directly cause harm and ones that make harm from other sources more likely. The two most common tests used to determine whether a design defect was present are the consumer expectation test and the risk utility test. Under the consumer expectation test, courts determine whether the product was defective to a degree not ordinarily contemplated by the reasonable consumer. Under the risk utility test, courts determine whether the probability of failure and harm posed by the product outweighs the benefits associated with its use. Manufacturing defects occur when the product is manufactured in a way that departs from its intended design or specifications. No matter how careful the manufacturer was when designing the product, choosing materials, creating the assembly line, and issuing quality assurance, the manufacturer still could be liable for deviations that injure consumers. However, manufacturing defects can be difficult to establish. A plaintiff must show that the claimed defect was outside the product’s design specifications.

Water Chemical Treatment Servicer — Water chemical treatment services should be considered. The water chemistry servicer should follow express manufacturing protocols and have a plan to avoid unnecessary fluctuations in circulation and composition of the water. Failures resulting from sludge, waste, or corrosion can be placed on the shoulders of water chemical treatment servicers.

Installer & Maintenance Provider — A retained maintenance provider is also a potential recovery avenue. National Fire Protection Association (NFPA) 85 establishes safe installation, operation, maintenance and training procedures for installers and servicers. NFPA 85 contributes to operating safety and prevents failures in boiler fire systems. Forensic experts should be well-versed in NFPA 85.

Inspecting Entity — When boilers suffer from minor failures, inspecting entities are sometimes retained to determine the cause of the breakdown. These entities must provide clear inspection scopes in written reports that define their respective examination and recommendations. If there is a future failure and a forensic examination reveals that the previous inspecting entity failed to identify existing problems or failed to recommend proper and corrective actions, liability could exist. Statements from the inspecting entity could establish a basis for recovery. Claims generally available include negligence, negligent misrepresentation, breach of contract, and breach of implied and express warranties.

Implied and Express Warranties — The implied warranty of fitness relies on the intentional representations upon which a buyer relies. To establish this claim, the buyer has expressly or impliedly informed the seller of a particular purpose for which the product is required and has relied on the seller’s skill or judgment in selecting or furnishing a product to satisfy that purpose. The implied warranty of merchantability certifies to a buyer that the goods are fit to sell. “Fit to sell” just means that the product is reasonably fit for its foreseeable, ordinary purpose within the customer’s reasonable expectations. An express warranty is any affirmation of fact or promise, relating to the goods, that the seller makes to the buyer and that becomes part of the basis for the bargain. A particularly sensitive arena, for potential liability, is created in statements made in advertisements, brochures, sales pitches, and instruction manuals. Even vague statements could be construed as express warranties, if a reasonable buyer would consider them in purchasing the product. Unlike implied warranties, express warranties cannot be disclaimed.

Successful Recovery

There are hundreds of thousands active commercial water boilers powering a massive variety of industry. From hospitals, hotels, and industrial settings, boiler failures can shutter critical services in the sector. The key to a successful recovery pursuit is having the right team of professionals in place. The investigation and any recovery litigation must be based on good working knowledge of water boilers, credible evidence, and forensic work-up. The investigation should be effective, efficient, and strategic. A focused, thorough forensic investigation affords the potential for maximizing significant boiler recovery opportunities.

Dean S. Rauchwerger

A Partner at Butler Weihmuller Katz Craig LLP in Chicago, IL. Dean practices in our Aviation, Casualty Defense Litigation, Product Liability, and Subrogation & Recovery departments.

Geoffrey M. Waguespack

A Senior Associate at Butler Weihmuller Katz Craig LLP Chicago, IL. Geoffrey practices in our Appellate, Construction, Employment Law, Product Liability, and Subrogation & Recovery departments.

Jonathan M. Levy

An Associate at Butler Weihmuller Katz Craig LLP in Chicago, IL. Jonathan practices in our Product Liability and Subrogation & Recovery departments.

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April 01, 2012 PublicationWhat Nearly Two Decades as a Subrogation Attorney Has Taught Me about Product Safety

The other day when I was asked to write an article about "product safety" I pondered how to best approach this.  As we all know, what is or is not a "safe product" is often in the eye of the beholder (or which side of the "v" you are on!).  Is any product that fails even once an "unsafe product?"  If 1,000,000 items have been manufactured and "only" 73 of them have failed, is that an "unsafe product?"  What about 133 of them?  If a product fails when it was being used improperly, but it was not a stretch for the manufacturer to have anticipated this "alleged misuse", is that an "unsafe product?"  If a product has been tested by agencies and groups with an international reputation for such testing, and the product has passed, can that product be an "unsafe product?" 

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February 14, 2012 Publication"Freedom to Contract" Gives Rise to Big Recovery Opportunities from Policyholders for Self-Insured Retentions, Deductible Reimbursements, Retrospective Premiums and Loss Adjustment Expenses

Insurance policies often include language that allows insurers to recover amounts they have advanced for the insured's benefit. For instance, if the insured's policy has a SIR, the policy may contain a provision similar to the following:

We shall have the right but no obligation, in all cases,  to assume charge of the defens and/or settlement of any claim, and, upon our written request, you shall tender such portion of the SIR as we may deem necessary to complete the settlement of such claim.
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October 29, 2009 PublicationThe Daubert Tango: "Recent Developments In Fire and Explosion Litigation"

In 1923, the Court of Appeals for the District of Columbia, affirming the exclusion of an expert witness at trial, stated:

Just when a scientific principle or discovery crosses the line between the experimental and demonstrable stages is difficult to define. Somewhere in this twilight zone the evidential force of the principle must be recognized, and while courts will go a long way in admitting expert testimony deduced from a well recognized scientific principle or discovery, the thing from which the deduction is made must be sufficiently established to have gained general acceptance in the particular field in which it belongs.

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October 07, 2008 PublicationLanding the Knockout Punch: Contacting Another Party's Current And Former Employees Within the Ropes

Winning litigation requires that you and your counsel land the devastating uppercuts at the key moments in the fight. Big opportunities for critical testimony and evidence exist by pursuing permissible ex parte contacts with another party's current and former employees. The ethical ropes and practical tips for effectively contacting and interviewing such witnesses are discussed below.

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December 03, 2007 PublicationDrowning in Black Water: Water Restoration Contractors' Deviations from Industry Good Practices & Standards of Care Trigger Potential Mold Liabilities

Entry of errant water into a building or other structure can lead to serious mold problems, physical damages and substantial property and business interruption losses. This  article provides a roadmap on developing viable recovery claims against restorative drying contractors who were involved in improper and careless restoration and remediation of water  damaged property. As in any garden-variety tort claim, it is imperative that your counsel appreciate the critical importance of identifying the target contractor's vulnerable liability exposures.

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December 05, 2006 PublicationUnderwriters Laboratories—The Forgotten Island In The Litigation Seas—"Full Of Fruit"—For Bolstering Or Undercutting Product Integrity

Underwriters Laboratories Inc. ("UL") is a nonprofit organization conducting product safety evaluations. UL Marks are on 19 billion products ( www.ul.com ). As of 2005, there are more than 71,000 manufacturers producing UL-certified products and 97 countries where UL customers are located. UL publishes hundreds of safety standards and disseminates safety information globally.

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December 01, 2006 PublicationAttacking the Admission of OSI Evidence

In product liability lawsuits, plaintiffs frequently seek to admit evidence of other incidents involving the same product alleged to be defective in that particular case. Although the stated rationale for the admission of this evidence can vary, the practical reality is that one of the primary reasons plaintiffs seek to admit "other similar incident" ("OSI") evidence is because of the considerable influence it can have on a jury in hearing of other catastrophic injuries that have previously occurred.

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October 01, 2006 PublicationProduct Liability: The Top 30 Hooks!

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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August 01, 2006 PublicationThe Big Daubert Hurdles in Fire & Explosion Litigation

Over a decade has passed since the U.S. Supreme Court's ruling in Daubert v. Merrell Dow Pharmaceuticals, Inc ., 509 U.S. 579 (1993), and it is time to evaluate where we've been, where we are, and where we are headed on the admissibility of expert opinion testimony in fire and explosion cases.

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June 05, 2006 PublicationA Product Supplier's Liability Exposure for Noncompliance With its Obligation Under the Consumer Product Safety Act and Related alternative Statutory Authorities

Manufacturers, importers, distributors and retailers have the obligation to place only those products that are safe for use into the stream of commerce. In addition to those obvious duties, these entities also face significant duties under the Consumer Product Safety Act (CPSA) ' and other legislation and regulations enforced by the Consumer Product Safety Commission (CPSC).

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May 09, 2006 Publication"Top-Dog" Depositions The Hurdles to Overcome

High-level executives are frequently sought to be deposed because of their unique corporate roles for, inter alia, policy making, corporate governance and implementing policy compliance and corrective actions. On a tactical basis, the executive deposition is pursued so that your adversary's "figurehead" directly feels the "hot buttons" of your case, real-time, without layers of filtering and spin. "Top-dog" depositions, commonly called "apex depositions," cover a wide range of executives, including CEOs, presidents and other senior management positions.

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May 09, 2006 PublicationTaking A Closer Look For Deep Pockets

A CORPORATION is a legal entity created by filing certain documents with the state. It offers many benefits that are found in other entities, such as limited liability, centralized management, transferability of ownership, continuity, and taxation. On the other hand, some of these benefits pose problems for securing legal liability when the corporation is used as a shield to avoid liability or to perpetuate a fraud. In these cases, a victim may be left without any avenue of relief. Fortunately, all hope is not lost!

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May 01, 2006 PublicationAlternative Ways To Use Evidence Of "Other Conduct" That Would Otherwise Not Be Admitted

In developing your case, as plaintiff or defendant, it is important to appreciate the various alternative ways for opening the door to "other conduct" evidence to prove relevant facts at issue. Below is a synopsis of strategic methods and insights for proffering evidence of character for a non-propensity purpose, habit, subsequent remedial measures and prior occurrences/failures.

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April 01, 2006 PublicationAre Products Advertisements That Give Rise to Advertising Injury Coverage?

International Risk Management Institute (©Copyright April 2006) (with Rebecca C. Appelbaum)  

Please contact the attorney for a copy of the article.

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January 03, 2006 PublicationGetting the Winning Edge: Appreciating the Permissible Boundaries, in Qui Tam and Other Litigation Contexts, for Contactiong Your Adversary's Current & Former Employees

To say the least, litigation is frequently competitive, hard-fought and fraught with many hurdles. Developing a winning case requires that you seek the edge at every step in the journey. Big opportunities for marshalling critical testimony and evidence exist by pursuing permissible ex parte contacts with your adversary's current and former employees. Below is a general discussion of the ethical boundaries and practical tips for effectively contacting and interviewing such witnesses

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October 05, 2005 PublicationCourageous Whistleblowers are not "Left Out In The Cold": Legitimate Justifications Exist for Collecting Evidence of False Claims Act Violations

It is the courage of whistleblowers, standing up in the face of great adversity and overwhelming pressure to "look the other way;' that enables the False Claims Act ("FCA") to fulfill its primary purpose of combating fraud on the U.S. Treasury. By marshalling evidence and collecting company documents, the whistleblower provides the necessary proof to shed light on fraudulent and illegal FCA activities.

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May 03, 2005 PublicationHow "What We Learned in Little League" Paves the Way for Winning Litigation!"

As in baseball, whether being the batter, pitcher, or outfielder, successful litigation requires a strong belief and conviction that one has the power to shape reality. Certainly, without the batter's confidence that he or she will hit the ball, irrespective of its speed, twists or turns, few home runs would be made, let alone "singles or doubles"

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May 01, 2005 PublicationBuilding Your Product Liability Claim: A Product Supplier's Obligations Under The Consumer Product Safety Act

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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May 01, 2005 PublicationPractical Considerations in the Defense of Rollover Accident and ROPS Defect Claims

Despite the prevalence of rollover protective structures ("ROPS") on agricultural and construction equipment manufactured over the last two decades, claims against manufacturers and dealers arising out of rollover accidents continue to be filed. These cases often involve older machinery that was manufactured without ROPS as standard equipment, or machinery that has a design or purpose that make ROPS inappropriate.

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April 01, 2005 PublicationLive . . . From The House Of Subrogation!

 The Hilton Hotel in Austin, Texas will truly be "The House of Subrogation" from November 13 through 16, when over 1,200 subrogation professionals from around the globe assemble for the NASP Annual Conference. And this year's conference is expected to be even bigger, better and more alive than ever before!

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January 06, 2004 PublicationGoing Toe-to-Toe With Your Opposing Expert

Experts oftentimes make or break cases.  As knowledge and science have grown, so has the range of experts that parties call upon to advocate their cause.  Not only must a party always look to bolster one's own expert case, a party must simultaneously be mindful of the need to undercut your adversary's expert.  As the client, you want to ensure that your assigned counsel appreciates the following practical ways for tackling the opposing expert during the discovery process

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PublicationUnraveling The Complexities Of Contractual Disputes

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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PublicationDeveloping A Claim Of Successor Liability—A Practical Guide To Recovery When Your Primary Target Defendant Has No Seizable Assets

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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PublicationProtective Orders- Not Everything Can Be Swept Under The Rug!

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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PublicationSix Critical Steps For Achieving A Successful Mediation

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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PublicationAll Is Not Lost Simply Because A Target Defendant Has No Assets—Pull Out The Magnifier And Investigate The Corporate Connections Of Your Target For Alternative Deep Pockets!

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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PublicationContracting Outside The Four Corners Of The United States—A Closer Look At The United Nations Convention On Contracts For The International Sales Of Goods

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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PublicationThe Top 100 Ways To Build A Winning Recovery Case: Effective Claims Management Of Subrogation Cases

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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PublicationMCS90 Endorsements Provide Significant Subrogation Recovery Opportunities

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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PublicationSubrogating The Spill: What Are An Insurer's Options For Recovering Claims Paid As A Result Of The Gulf Oil Spill?

If you would like to discuss this topic further, please contact Dean Rauchwerger at drauchwerger@butler.legal  or directly (312) 462-9147

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PublicationSignificant Recovery Opportunities Where An Insured Breaches Its Reimbursement Policy Obligations For Advanced Deductible, Self-Insured

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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PublicationBig Daubert Hurdles In Fire & Explosion Litigation—Revisiting The Importance Of Testing An Expert's Theories

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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PublicationMass Confusion in Transactional Business: Boilerplate Forms and Competing Contractual Terms Often Lead to a "Battle of the Forms"—Practical Considerations for Minimizing Litigation

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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PublicationUnited States' Liability For Negligent Disaster Response Under The Federal Tort Claims Act

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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PublicationUndue Delay In Pursuing Subrogation May Result In Missing The Recovery Boat

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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PublicationFederal Tort Claims Act: Pursuing Uncle Sam's Deep Pockets By Unlocking The Right Doors

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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PublicationRailroad Subrogation And Third Party Recoveries—"Getting Back On Track"

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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PublicationWhen Businesses Compete Fiercely, Crossing Certain Boundaries May Give Rise To Tortious Interference Claims

If you would like to discuss this topic further, please contact Dean Rauchwerger or directly (312) 462-9147.

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