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Kristopher Berr

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C. Szabo Contracting, Inc. v. Lorig Construction Co., 2014 IL App (2d) 131328; 2014 Ill. App. LEXIS 699 (Sept. 29, 2014)

In May of 2006, the Illinois State Toll Highway Authority (“Highway Authority”) retained Defendant Lorig Construction Company (“Lorig”) as general contractor on a construction project for improvements to Interstate 355. The Highway Authority required that Lorig subcontract a portion of its work to a “Disadvantaged Business Enterprise” (“DBE”), and that the project be performed with union labor.

When responding to document requests or a subpoena duces tecum, litigants in New York traditionally have been faced with the onerous privilege log requirements set forth in Section 3122 of the New York Civil Practice Law and Rules.  Section 3122 requires a litigant who withholds any responsive documents to provide to the requesting party a privilege log containing a separate entry for each withheld document.  Each entry must disclose the legal grounds on which the document is withheld, in addition to certain identifying information including the type of document, the general subject matter of the document, and the date of the document.  N.Y. CPLR § 3122(b).  In complex construction disputes, there is often a large volume of privileged documents, and thus preparing a privilege log that meets the requirements of Section 3122 can be time consuming and expensive.

American Towers LLC v. BPI, Inc., 2014 U.S. Dist. LEXIS 106724 (E.D. Ky. Aug. 4, 2014)

American Towers LLC (“American Towers”), which operates wireless and broadcast communications towers, undertook a project to construct a cell tower in Prestonburg, KY, along with a tower compound and access road.  American Towers selected BPI, Inc. (“BPI”) as general contractor for the project, and the parties executed a contract.

The contract contained a number of provisions that allocated the parties’ responsibilities with respect to design and construction.  In particular, the contract provided that American Towers was to provide BPI with drawings, specifications, and instructions.  BPI, for its part, was responsible for “all construction means, methods, techniques, sequences, and procedures[.]”  Moreover, BPI was to complete its work in a “workmanlike manner and with the highest degree of skill and care exercised by reputable contractors performing the same or similar services[.]” In performing its work, if BPI recognized any problems with American Towers’ design, the contract provided that BPI was to stop work and inform American Towers of the problem.  American Towers would then “issue written instructions” to BPI about how BPI should proceed.

In re Kellogg Brown & Root, Inc., 2014 U.S. App. LEXIS 12115 (D.C. Cir. June 27, 2014)

The United States Court of Appeals for the District of Columbia Circuit held that the attorney-client privilege applies to internal investigations performed at the direction of in-house counsel if “one of the significant purposes” of the investigation was to obtain or provide legal advice.

Kellogg Brown & Root, Inc. (“KBR”) was a defense contractor for the United States government. Harry Barko, a former employee of KBR, filed a False Claims Act complaint against KBR, alleging fraud against the government. During the ensuing litigation, Barko requested documents related to KBR’s prior internal investigation into the alleged fraud. The investigation had been conducted by KBR pursuant to Department of Defense regulations that require defense contractors to maintain compliance programs and conduct internal investigations, and was overseen by the company’s in-house legal department. KBR objected to the document request, arguing that the investigation was protected by the attorney-client privilege. In turn, Barko argued that the documents were discoverable business records not covered by the privilege.

Boone Coleman Construction, Inc. v. Village of Piketon, 2014-Ohio-2377, 2014 Ohio App. LEXIS 2317 (Ohio Ct. App. May 22, 2014)

The Court of Appeals of Ohio held that a liquidated damages provision in a public construction contract constituted an unenforceable penalty because the amount of liquidated damages sought – nearly one-third of the total contract price – was “so manifestly unreasonable and disproportionate” to the contract price that it was unenforceable.

The defendant in that case was the Village of Piketon, Ohio, which solicited bids for a public construction project for roadway improvements. Plaintiff, Boone Coleman Construction, Inc., was the low bidder on the project. The parties entered into a contract under which Boone Coleman agreed to construct the project for $683,300. The contract further provided that if Boone Coleman had not substantially completed its work within 120 days, it would pay the Village $700 per day in liquidated damages until the project was substantially completed. Ultimately, Boone Coleman did not complete its work until 397 days after the agreed project completion date. Upon completion, the Village paid Boone Coleman $535,823 for its work.

SRC Constr. Corp of Monroe v. Atl. City Housing Auth.
2013 U.S. Dist. LEXIS 47301 (D.N.J. April 2, 2013)

The U.S. District Court for the District of New Jersey denied a defendant architect’s motion for summary judgment, holding that the economic loss doctrine applies only to bar tort claims between parties to a contract.