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Jane Fox Lehman

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Strickland v. Arch Ins. Co., No. 17-10610, 2018 U.S. App. LEXIS 504 (11th Cir. Jan. 9, 2018)

Strickland provided sand to a paving company (“Douglas”) for a Georgia Department of Transportation (“GDOT”) road improvement project (the “Project”).  Arch Insurance Company (“Arch”) issued payment and performance bonds on Douglas’s behalf.  In 2007, GDOT declared Douglas in default and removed it from the Project.  In accordance with the performance bond, Arch arranged for a third-party contractor to complete Douglas’s work on the Project. Strickland did not supply sand after Douglas’s removal.
In August 2010, GDOT determined that the Project was substantially complete, and in September 2010, performed final inspection and generated a punch list.  Arch’s contractor completed the punch list by September 2011.  In March 2012, GDOT accepted Project maintenance responsibilities because the Project had been satisfactorily completed as of September 2011.  GDOT made semi-final payment to Arch in July 2012.

In September 2012, Strickland sent a demand for payment on Arch’s payment bond.  Arch acknowledged the claim and asked for additional documentation.  Strickland did not respond.  In 2014, Strickland learned that GDOT was preparing to close out the Project and filed a lawsuit against Arch.

Team Contrs., L.L.C. v. Waypoint NOLA, L.L.C., No. 16-1131, 2017 U.S. Dist. LEXIS 162172 (E.D. La. Oct. 2, 2017).

Waypoint NOLA (“Waypoint”) was the owner of a hotel construction project in New Orleans (the “Project”).  Waypoint contracted with Team Contractors (“Team”) to serve as the Project general contractor and HC Architecture (“HCA”) to serve as the Project architect.  HCA, in turn, subcontracted with KLG to prepare the mechanical, electrical, and plumbing (“MEP”) plans.

HCA delivered a complete set of specifications, including KLG’s MEP plans, to Team, and Team began work.  It was later discovered that the MEP plans did not comply with code requirements.  Team was forced to remove and reconstruct the MEP work before proceeding with its work as scheduled.
Team filed suit for breach of contract against Waypoint and for negligence against Waypoint, HCA, and KLG.  Team alleged it experienced delay and incurred damages when it was forced to remove and reconstruct the MEP work.  Its damages included extended home office overhead related to the delay.  Team’s expert used the Eichleay formula to calculate these damages.

King Cnty. v. Vinci Constr. Grands Projets/Parsons RCI/ Frontier-Kemper, JV, No. 92744-8, 2017 Wash. LEXIS 743 (July 6, 2017)

King County contracted with three construction firms (collectively, “VPFK”) to construct a tunnel.  The contract required substantial completion by November 14, 2010 (the “contract time”).  It also required VPFK to secure a performance bond from five surety companies, under which the sureties were to remedy any default in VPFK’s performance.

VPFK experienced difficulties with its tunnel-boring equipment and was unable to dig nearly as fast as estimated.  When it became clear that VPFK would not achieve substantial completion by the contract time, King County declared VPFK in default.  The sureties refused King County’s request for a cure, arguing that because the contract time had not passed, no default had yet occurred.

King County filed a breach of contract action against VPFK and the sureties, who denied coverage and adopted all of VPFK’s defenses.  A jury found in favor of King County and awarded nearly $130 million in damages.

Wood Elec., Inc. v. Ohio Facilities Constr. Comm’n, 10th Dist. Franklin No. 16AP-643, 2017-Ohio-2743, 2017 Ohio App. Lexis 1745 (May 9, 2017)

The Ohio Facilities Construction Commission (“OFCC”), together with a school district, an architect, and a construction manager, issued an invitation for bids to build a school. Three prime contractors were chosen: a general contractor, a mechanical contractor, and an electrical contractor, Wood Electric (“Wood”).

The general contractor failed to meet the contractual milestones for either temporary enclosure or full building enclosure, significantly delaying Wood’s work. Wood notified the OFCC of the likely impact on its work soon after the general contractor failed to meet the first milestone, and requested an extension of its own deadlines. The OFCC denied Wood’s request. Wood then requested an extension of time in which to prepare, substantiate, and certify a formal claim, which the OFCC also denied.  Wood hastened to submit a timely claim, projecting an impact of $207,467.57, and reserving its right to supplement the claim when the full impact on its work became known.

When OFCC denied Wood’s claim, Wood sued OFCC in the Court of Claims.  At trial, OFCC acknowledged that Wood had a proper claim, but disputed the $254,027 amount, which included $35,006 for home office overhead.  Wood’s expert testified that he had calculated the home office overhead using the “HOOP” formula adopted by the Ohio Department of Transportation.  The trial court ultimately entered judgment in favor of Wood for the full amount of its claim.

Central Ceilings, Inc. v. Suffolk Constr. Co., Inc., 2017 Mass App. Lexis 36 (March 29, 2017)

 The Massachusetts State College Building Authority contracted with Suffolk Construction Company (“Suffolk”) to serve as the general contractor for the construction of dormitories at Westfield State University (“the Project”). Suffolk subcontracted with Central Ceilings, Inc. (“Central”) to install interior and exterior framing, drywall, and door frames for the Project.

Central’s work was impeded by Suffolk’s failure to: coordinate the work of other trades; establish proper elevation, column, and control lines; timely and properly coordinate delivery of the door frames; and ensure that the buildings were weather-tight and properly heated. Its workers were forced to repeatedly demobilize from one area and remobilize in another, and to work in the same space and at the same time as other subcontractors, i.e. stacking of trades.  Central’s project manager and other supervisors were forced to coordinate and administrate the remobilizations.  Both the remobilizations and the stacking of trades significantly increased Central’s labor costs.

Nappa Constr. Mgmt., LLC v. Flynn, 2017 R.I. LEXIS 13 (R.I. Jan. 23, 2017)

Caroline and Vincent Flynn (the “Flynns”) contracted with Nappa Construction Management, LLC (“Nappa”) to construct an automobile repair facility. The parties executed the American Institute of Architects’ A101-2007 Standard Form of Agreement Between Owner and Contractor.  The contract provided that the owner could terminate the contract for cause; could order the contractor to suspend the work without cause “for such period of time as the Owner may determine”; and could terminate the contract for convenience.

Six months after Nappa commenced work, the Flynns directed Nappa to “immediately cease any further work on the project,” contending that Nappa was not constructing the flooring according to the project plans or industry standards. Thereafter, Nappa submitted a payment application that included expenses for the disputed flooring, which the Flynns declined to pay.  Nappa notified the Flynns that they were in breach of the contract and filed for mediation.  Nappa ultimately terminated the contract for nonpayment.

Blackman & Co., Inc., v. GE Bus. Fin. Servs., Inc., 2016 U.S. Dist. LEXIS 87904 (D.N.J. July 7, 2016)

Grove Street Realty Urban Renewal, LLC (“Grove Street”) contracted with Blackman & Co., Inc. (“Blackman”) to manage a project (the “Project”) to construct a four-story apartment building in West Deptford, New Jersey between 2007 and 2009 (the “Contract”).  The Contract incorporated AIA Document A201-1997 – General Conditions of the Contract for Construction.

GEBFS acquired the Project from Grove Street pursuant to foreclosure proceedings in 2012.  Three years after it acquired the Project (and six years after construction was complete), GEBFS filed a $4,000,000 Demand for Arbitration with the American Arbitration Association (“AAA”) against Blackman for alleged post-construction defects, asserting claims for breach of contract and breach of implied warranty.  Blackman filed an action in response to GEBFS’ Demand for Arbitration, seeking a judgment that the dispute was not governed by any agreements to arbitrate.

Summit Contracting Grp., Inc. v. Ashland Heights, LP,  2016 U.S. Dist. LEXIS 60662 (M.D. Tenn. May 6, 2016)

Ashland Heights, LP (“Owner”) contracted with Summit Contracting Group, Inc. (“Contractor”) to construct an assisted living facility in Tennessee.  After completing the project, Contractor alleged that Owner had failed to pay Contractor in full for the work it performed; to make timely payments; to provide Contractor a time extension for inclement weather; and to deposit retainage into an interest-bearing escrow account as required by Tennessee’s Retainage Law.

Contractor filed a breach of contract and Retainage Law action in federal district court, seeking damages and litigation costs in excess of $1.5 million (the “Contract Action”).  Contractor concurrently filed a mechanic’s lien action in state court seeking enforcement of the lien in the amount of $1,074,688.74 (the “Lien Action”).

Zacherl, Inc. v. Flaherty Mechanical Contractors, LLC, 131 A.3d 1030, 2016 Pa. Commw. LEXIS 22 (Jan. 6, 2016)

The West Allegheny School Board (the “School Board”) voted to approve the School District’s (the “District’s”) plan to renovate its high school building (the “Project”).  The District contracted with Flaherty Mechanical Contractors, LLC (“Flaherty”) to act as the prime contractor.  Flaherty submitted the names of its subcontractors for the School Board’s review.  When the School Board raised no objections to Flaherty’s submission, Flaherty subcontracted with F. Zacherl, Inc. (“Zacherl”) to perform sheet metal work at the Project.

During the Project, the District made timely payments to Flaherty, but Flaherty failed to make timely payments to its subcontractors, including Zacherl.  The District terminated Flaherty’s contract in part as a result of Flaherty’s payment issues.  Flaherty, in turn, terminated Zacherl’s contract.

City of Whiting, Indiana v. Whitney, Bailey, Cox, & Magnani, LLC, 2015 U.S. Dist. LEXIS 150229 (N.D. Ind. Nov. 5, 2015)

The City of Whiting, Indiana (the “City”) contracted with American Structurepoint, Inc. (“Engineer”) to design a lakefront park that would protect its shoreline from erosion (the “Project”).  Engineer subcontracted with Whitney, Bailey, Cox, & Magnani, LLC (“Subconsultant”) to serve as the marine engineer for the Project (the “Subcontract”).  Pursuant to the Subcontract, Subconsultant designed a revetment to protect the Project shoreline.  The revetment failed, damaging the City’s property and necessitating remediation.