Construction Dispute

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Flagstaff Affordable Housing LP v. Design Alliance, Inc.
223 P.3d 664, 2010 Ariz. LEXIS 11 (Ariz. Feb. 12, 2010)

In 1995, the Owner of a low income housing project, Flagstaff Affordable Housing Limited Partnership contracted with Design Alliance, Inc. (“Architect”) for the design of the Project. The design had to comply with the Federal Fair Housing Act’s (“FFHA”)accessibility guidelines. The Owner also contracted with Butte Construction Company (“Contractor”) for the construction of the apartments. The Project was completed in 1996.

Universal Concrete Products Corp. v. Turner Construction Co.
595 F.3d 527 (4th Cir. Feb. 19, 2010)

Universal Concrete Products Corp. (“Universal”) sued Turner Construction Co. (“Turner”) for breach of contract and several other claims seeking payment for $885,507 worth of precast concrete work Universal had completed at the Granby Tower construction project in Norfolk, Virginia (“Project”).

Universal had entered into a written subcontract with Turner for the installation of precast concrete at the Project. Turner had a prime contract with the project owner’s to provide general construction work on the Project. The Project fell through in March 2008 when the owner could no longer finance it. By that point, however, Universal had already substantially completed all of its work at the Project. Turner, however, had not paid Universal for any of the work performed because Turner had not yet been paid by the owner. When Universal sought payment from Turner for the work performed, Turner refused citing a pay-when-paid provision in the subcontract.

S&B/BIBB Hines PB3 Joint Venture v. Progress Energy Florida, Inc.
2010 U.S. App. LEXIS 2875 (11th Cir. Feb. 11, 2010)

S&B/BIBB Hines PB3 Joint Venture, S&B Engineers and Contractors, LTD (“S&B) agreed to perform engineering, procurement and construction on a fixed-price basis (the “Contract”) for two electric generating plants in Polk County for the project owner and defendant, Project Energy Florida, Inc. (“Project Energy”). During the course of construction, four hurricanes struck Polk County resulting in a shortage of labor and materials and a corresponding increase in the cost of construction for S&B. S&B sought approximately $40 million in additional compensation as a result of this extraordinary event. S&B’s claim for additional compensation was denied by Project Energy and S&B filed suit. The district court dismissed the majority of S&B’s breach of contract and other claims on a Rule 12(b)(6) motion holding that the fixed price Contract precluded additional compensation beyond the Contract price.

American Manufacturers Mutual Insurance Co. v. Payton Lane Nursing Home, Inc.
2010 U.S. Dist. LEXIS 8537 (E.D.N.Y. Feb. 2, 2010)

The United States District Court for the Eastern District of New York (“EDNY”) recently considered whether a surety could maintain a breach of contract claim against a construction project owner’s architect based upon the architect’s alleged wrongful certification of payments occurring prior to the execution of a takeover agreement. In rendering its opinion, the EDNY concluded that expert opinions were not required where the claim sounded in contract, rather than in tort. The EDNY also found that summary judgment was defeated because there remained genuine issues of material fact as to the extent of the architect’s scope of construction phase services and whether the architect failed to satisfy its construction phase service obligations.

Bell BCI Co. v. United States
570 F.3d 1337 (Fed. Cir. Jun. 25, 2009)

Plaintiff, Bell BCI Company (Bell), a general contractor, sued the United States (the “Government”) for damages plus interest under the Contract Disputes Act for the unpaid balance of the contract price, unresolved change order claims, delay damages, labor inefficiency costs and profit thereon. Bell also asserted claims on behalf of five subcontractors.

Addicks Services, Inc., Appellant v. GGP-Bridgeland, LP
2010 U.S. App. LEXIS 2623 (5th Cir. Feb. 8, 2010)

Plaintiff, Addicks Services, Inc. (“Addicks”) sought damages for extra work and delay costs incurred while performing land improvement work for a residential development in Texas. Addicks’ claims were denied by the district court because Addicks executed monthly waivers and releases to receive progress payments which waived their claims for extra work and delay costs.

Goldsmith Assoc., Inc. v. Del Frisco’s of Philadelphia, Inc.
2009 U.S. Dist. LEXIS 92193 (E.D. Pa. Oct. 1, 2009)

Grasso Holding Acquisition, Inc. (“Grasso”) entered into a lease with Del-Frisco’s of Philadelphia (“Del-Frisco’s”) to occupy and renovate the bottom floors of the Packard Building in Philadelphia, PA for use as a restaurant. Building owners, Chest-Pac Associates, Inc. (“Chest-Pac”) and Grasso, reserved the right to review and approve the designs for the renovation. Once the lease expired, the renovation improvements were to become the sole property of Chest-Pac and Grasso. After negotiating the lease, Del-Frisco’s contracted with Lorient, LLC to serve as the general contractor for the renovations. Lorient then subcontracted with Plaintiff, Goldsmith Associates, Inc. (“Goldsmith”) to provide the electrical work. Goldsmith submitted invoices in the amount of $1,835,110.87 but was allegedly only paid $734,879.30. Goldsmith commenced an action against Del Frisco’s, Chest-Pac and Grasso, asserting a claim of unjust enrichment, and seeking to recover $1,100,231.57 in unpaid work. The defendants moved to dismiss the Complaint as legally insufficient.

GTECH Corp. v. Commonwealth, Dept. of Revenue
965 A.2d 1276 (Pa. Commw. 2009)

The Commonwealth Court of Pennsylvania considered whether the Pennsylvania Procurement Code provides the exclusive remedy for aggrieved bidders to challenge the procedure and outcome of bidding contests in the context of a procurement for the Pennsylvania Lottery. The Court found that while the Procurement Code provides an exclusive remedy for substantive challenges (i.e., a general right of protest to an offeror who is aggrieved in connection with the solicitation or award of a contract), it did not provide a remedy for procedural challenges.

Charter Foods Inc. v. Derek Engineering of Ohio, Inc.
2009 U.S. App. LEXIS 115477 (E.D. KY. Dec. 11, 2009)

The District Court for the Eastern District of Kentucky held that a general contractor, who had performed excavation work on a site in accordance with the plans and specifications, could not be held liable for breach of contract as a matter of law, but could potentially be held liable to the owner for negligence if the contractor breached the duty of care it owed the owner.

McKinney & Moore, Inc. v. City of Longview, Texas
2009 Tex. App. LEXIS 9299 (Tex. App., Dec. 8, 2009)

The Court of Appeals of Texas for the Fourteenth District held that a general contractor’s acceptance of final payment barred its claims for compensation for extras. The Court relied on the express release language in the parties’ contract to support its ruling.

The City of Longview, Texas (the “Owner”) retained McKinney & Moore, Inc. (“MMI”) to serve as a general contractor for the construction of the Lake O’ the Pines Raw Water Intake Structure (the “Project”). The parties’ contract contained various provisions related to subsurface conditions and the Owner supplied reports regarding such conditions. Among other things, the contract also provided that the Owner was responsible for design accuracy and sufficiency of the contract documents. The contract further addressed circumstances under which MMI would be entitled to reimbursement for damages and the effect of MMI’s acceptance of final payment.