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Kiski Area Sch. Dist. v. Mid-State Surety Corp.
2008 Pa. LEXIS 2260 (Dec. 17, 1988)

Kiski Area School District (“the District”) entered into an agreement with contractor, Lanmark, for the construction and renovation of an elementary school. Mid-State Surety Corporation (“Midstate”) provided a performance bond for the project naming Lanmark as principal and the District as obligee.

The District became dissatisfied with the quality and timeliness of Lanmark’s work, declared it in default, withheld final payment and demanded that Mid-State assume responsibility for the remaining work. The District did not remit the remaining contract balance to Mid-State. Lanmark filed suit against the District seeking payment of the contract balance (the “Lanmark Matter”). The District counterclaimed and joined Mid-State. The District also filed a separate action against Lanmark and Mid-State (“the District Matter”), which was stayed pending resolution of the Lanmark Matter.

Hunt Construction Group, Inc. v. Brennan Beer Gorman / Architects, P.C.
2008 U.S. Dist. LEXIS 93754 (D. Vt. 2008)

In declining to apply an exception to the economic loss rule, the Court dismissed a contractor’s negligence claims against the project architect (and other design professionals).

In 2005, Spruce Peak Realty, LLC (“Owner”), retained Plaintiff, Hunt Construction Group (“Contractor”), to construct a resort hotel in Stowe, Vermont. Owner and Contractor executed a contract setting forth their respective rights and responsibilities on the Project. Owner then contracted with an architect, mechanical, electrical and plumbing engineers, a structural engineer, and an interior designer (collectively, the “Design Professional Defendants”). Contractor was to build the Project according to the plans and specifications the Design Professional Defendants provided under contracts with Owner.

Atlantic City Associates LLC v. Carter & Burgess Consultants, Inc.
2008 U.S. Dist. LEXIS 93684 (D.N.J. Nov. 13, 2008)

The United States District Court for the District of New Jersey was asked to resolve the effect of liability limiting provisions on an architect’s indemnity obligations to an owner under a professional services agreement. Determining that the consequential damages provision and the indemnification provision contained in the agreement could be harmonized, the Court held that the architect would only be liable for indemnification of direct, and not consequential, damages. The Court held, however, that a damages cap contained in the architect’s proposal, which was made a part of the contract by incorporation, could not be harmonized with the indemnity clause, so that under the contract, the indemnity provision took precedence over the damages cap.

Steadfast Insurance Co v. Brodie Contractors, Inc.
2008 U.S. Dist. LEXIS 88448 (October 31, 2008 W.D. Va.)
Steadfast Insurance Co., as subrogee of Skanska USA Building Co., the general contractor, alleged claims for breach of contract and breach of warranty against Brodie Contractors, Inc., a masonry subcontractor, concerning replacement of brick veneer on the Danville Regional Medical Center. Brodie moved for summary judgment alleging that the lawsuit was barred by Virginia’s statute of limitations.

City of Gillette v. Hladky Construction, Inc.
2008 Wyo. LEXIS 139 (November 14, 2008)
The Supreme Court of Wyoming upheld an award to a Contractor of more than one million dollars against an Owner for a breach of an implied covenant of good faith and fair dealing even though the Owner did not breach the contract’s express terms.
The City of Gillette (“City”) hired Hladky Construction, Inc. (“HCI”) for the remodel and expansion of City Hall. The project specifications called for the installation of precast concrete exterior panels that matched those on the existing structure. Further, there was a requirement that the plant at which the precast panels were to be manufactured be certified under the Precast/Prestressed Concrete Institute Plant Certificate Program prior to the start of their production. HCI submitted a bid that unknown to it named an precast manufacturer which had not yet received the required certification. Both the City hired architect and structural engineer were aware prior to bid acceptance that HCI’s precast manufacturer was in the process of obtaining certification, but was not yet certified. Despite knowing that HCI’s manufacturer was not certified and a contract provision requiring the architect to notify bidders of any bid objections, no City representative objected or informed HCI about its uncertified precast manufacturer.

Somerset Village Townhomes Condominium Owners’ Association v. Allied Construction, Inc.
2008 Wash App. LEXIS 2178 (September 2, 2008)
Developer, Far Northwest Development Co, LLC (“Far Northwest”) contracted with Steinvall Construction (“Steinvall”) for the construction of the Somerset Village Townhomes. The contract between Far Northwest and Steinvall stated that “[t]he Contract Documents shall not be construed to create a contractual relationship of any kind . . . between the Owner and a Subcontractor . . .” Steinvall subcontracted portions of its work. The subcontracts incorporated the general conditions of the Far Northwest –Steinvall contract and also imposed certain obligations on the subcontractors concerning Far Northwest, including, inter alia, obtaining insurance to protect its interests and indemnifying Far Northwest for certain claims.

Lanier at McEver, L.P. v. Planners and Engineers Collaborative, Inc.
2008 Ga. LEXIS 553 (Ga. June 30, 2008)
In this case, the Supreme Court of Georgia reversed a Court of Appeals’ decision, previously reported here, holding that a provision limiting an owner/developer’s damages against the project engineer to the fees paid for the engineer’s services was void and unenforceable as against public policy.
Lanier was the owner/developer of an apartment complex. Lanier hired the defendant engineering firm, PEC, to design various aspects of the apartment complex, including the storm sewer and sanitary drainage system. The engineering agreement contained a provision stating that the total aggregate liability of PEC and its subconsultants to Lanier “for any and all claims … shall not exceed PEC’s total fee for services rendered on this Project.” The clause applied not only to liability to Lanier, but also to “all construction contractors and subcontractors on the project or any third parties.” Following construction of the Project according to the plans and specifications prepared by PEC, problems arose with the storm water system that required modification and repair by the owner. As a result, Lanier sued PEC for negligent design, breach of express contractual warranty and litigation expenses.

Bryan’s Quality Plus, LLC v. Shaffer Builders, Inc.
2008 U.S. Dist. LEXIS 61713 (E.D. Pa. Aug. 12, 2008)
The District Court for the Eastern District of Pennsylvania was faced with a motion to dismiss a defendant’s counterclaims for fraud and negligent misrepresentation. The case arose out of a subcontract between the defendant contractor and the plaintiff subcontractor in which the subcontractor agreed to complete piling work for a commercial project undertaken by defendant (the “Project”). The contractor alleged in its counterclaim that the subcontractor represented that it would complete the work in seven days, that it could install in excess of fifty piles a day, that its performance and equipment would surpass conventional methods, that it would furnish and install pile tension brackets and fasteners, and that it had sufficient credit to purchase the materials necessary to complete the work. The parties executed a written contract, although some of the work was completed prior to execution of the subcontract.

Waynesborough Country Club of Chester County v. Diedrich Niles Bolton Architects, Inc.
2008 U.S. Dist. LEXIS 45980 (E.D. Pa. July 21, 2008)
The case arose out of the design and construction of a new clubhouse for Waynesborough. Diedrich Niles Bolton Architects (“DNB”) provided professional architectural services to Waynesborough for the project and Ehret Construction served as the project’s general contractor and construction manager. Structural problems arose after the clubhouse was complete, and Waynesborough sued DNB alleging, as a result of DNB’s professional negligence and breach of contract, significant water leaks developed at various places throughout the interior of the clubhouse. DNB joined Ehret as a third party defendant. Ehret, in turn, filed a counterclaim against DNB for negligent misrepresentation, claiming that DNB’s architectural work was deficient and that Ehret’s work was delayed, disrupted and inefficient as a result of having relied upon inaccurate drawings and other architectural documents supplied by DNB during construction.

Chrysler Realty Company, LLC v. Design Forum Architects, Inc.
2008 U.S. Dist. LEXIS 42721, No. 06-CV-11785 (E.D. Mich. May 30, 2008)
The United States District Court for the Eastern District of Michigan was asked to consider whether a plaintiff’s claim for professional liability against a design professional should be dismissed where plaintiffs allowed evidence to be destroyed. Finding that the plaintiff’s intentional removal and destruction of the allegedly defective HVAC system without notice to the defendant deprived the defendant of an opportunity to develop defenses to the claims, the Court dismissed the plaintiff’s claims.