Construction Dispute

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Earlier this year[1] the Eleventh Circuit Court of Appeals joined the Second, Third, Fifth, Sixth, Seventh, Ninth, Tenth, and D.C. circuits in the much-anticipated en banc decision of Corporacion AIC, SA v. Hidroelectrica Santa Rita S.A., where it held that the grounds for vacatur under Chapter 1 of the Federal Arbitration Act (FAA) may also apply to nondomestic arbitration awards (e.g., arbitration awards rendered in the U.S. but involving a non-U.S. party).[2] The court’s decision overruled two of its prior cases, holding that Article V of the New York Convention and Chapter 2 of the FAA provided the exclusive grounds for challenging the enforcement of a nondomestic arbitration award.[3] The decision is of significance because it brings the Eleventh Circuit — which encompasses the increasingly popular arbitration seats of Atlanta and Miami — in line with other circuit courts that have considered this issue.[4]

Reposted from The Dispute Resolver with permission.

You are conducting the final hearing of a high-dollar construction arbitration. Opposing counsel hands you the next document that counsel plans to use in questioning the witness on the stand. You notice that the document is bates stamped but has no exhibit number. So, you quickly consult opposing counsel’s exhibit list and – gasp – you find that the document is not on the list. What do you do? Do you object?

SDSP, LLC v. Attias, 2023 Pa. Super. Unpub. LEXIS 1518

The Superior Court of Pennsylvania vacated a multimillion-dollar award to subcontractors arising from a payment dispute, and remanded the matter to the trial court for an attorney’s fees award to the developer who prevailed on appeal. This is a strong reminder to all tiers of the construction chain that Pennsylvania’s Contractor and Subcontractor Payment Act (CASPA) allows substantially prevailing parties — whether owners, contractors, or subcontractors — to recover fees incurred in proceedings involving payment claims.

In All Seasons Landscaping, Inc. v. Travelers Cas. & Sur. Co. of Am., a Connecticut court considered for the first time whether the performance of warranty work tolls the statute of limitations on payment bond claims. The court ruled that it does not. It dismissed subcontractor All Seasons Landscaping, Inc.’s (ALS’s) bond claim because ALS admitted that it last performed non-warranty work on the project more than one year before filing suit, meaning the statute of limitations barred its claim.

Industrial Steel Construction, Inc. v. Lunda Construction Company, 33 F.4th 1038, 1041 (8th Cir. 2022)

This federal case relates to the construction of a bridge over the Mississippi River between Iowa and Illinois. The state of Iowa hired Lunda Construction Company (Lunda) as the general contractor for the project, which contracted Industrial Steel Construction, Inc. (ISC) to fabricate the structural steel for the bridge. A breach of contract dispute arose between Lunda and ISC that resulted in an arbitration pursuant to the contractual dispute resolution provisions. The arbitrator ruled entirely in favor of Lunda, including awarding Lunda its attorneys’ fees and expert costs, and requiring ISC to reimburse Lunda for its half of the cost of the arbitration.

Hanuman Chalisa, LLC v. BoMar Contr., Inc., 2022-Ohio-1111, 187 N.E.3d 1108 (Ct. App.)

Hanuman Chalisa LLC (owner) contracted BoMar Contracting, Inc. (BoMar) to construct a hotel in Columbus, OH. The contract consisted of the AIA A101-2007 and AIA A201-2007. The owner later terminated BoMar, alleging deficiencies in BoMar’s work. The parties disputed whether the owner terminated the contract “for cause” or “for convenience.”

Accreditation: An extract from Thomas Reuters Practical Law. The full document is available at https://content.next.westlaw.com/practical-law/document/I3e46a7343fed11ed9f24ec7b211d8087/Standard-Arbitration-Clause-for-Construction-Contract.

Troutman Pepper Partners Albert Bates and Zach Torres-Fowler published a Thomas Reuters Practical Law guide for drawing construction arbitration clauses.

RKI Expl. & Prod., LLC v. Ameriflow Energy Servs., LLC, No. 02-20-00384-CV, 2022 Tex. App. LEXIS 4331 (Tex. App. June 23, 2022)

A recent decision by the Court of Appeals of Texas highlights the perils of failing to properly assert a demand for contractual indemnity.

In 2014, a piece of equipment, known as a sand separator, exploded at an oil well in Loving County, TX, killing two individuals and injuring three others. RKI Exploration & Production LLC operated the oil well. RKI contracted with Ameriflow Energy Services LLC and Crescent Services LLC through two master service agreements (MSAs) and a series of work orders.

New York State Thruway Auth. v. CHA Consulting, Inc., 165 N.Y.S.3d 832 (Albany Co., Sup. Ct. 2022).

This case involved a dispute over a wind turbine project. The root cause of the dispute was a bust between the “wind turbulence” at the site, and the wind turbulence that the turbines installed could withstand. Once the project was completed and commissioned, the overworked turbines prematurely failed.

United States ex rel. Spirtas Worldwide, LLC v. SGLC Consulting LLC, No. 3:21-CV-00182-MAB, 2022 U.S. Dist. LEXIS 105589; 2022 WL 2116451 (S.D. Ill. June 13, 2022)

The U.S. District Court for the Southern District of Illinois recently enforced a partially executed agreement to arbitrate where the party that failed to countersign demonstrated assent through its acts and conduct.