Construction Dispute

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Polydyne, Inc. v. City of Philadelphia
No. 2454 C.D. 2001 (Pa. Commw. Ct. April 4, 2002)
The City of Philadelphia solicited bids for the provision of polymers for use by the City Water Department. Cytec Industries, Inc. (“Cytec”) was the successful bidder. Polydyne, Inc. (“Polydyne”), a disappointed bidder, filed a claim against the City of Philadelphia, seeking to enjoin the award to Cytec. After review of the merits, the trial court rejected the request for equitable relief.

Wausau Business Insurance Company v. Turner Construction Company
No. 99 Civ. 0682 (RWS), 2001 U.S. Dist. LEXIS 5821(SDNY May 9, 2001)
Turner Construction Company (“Construction Manager”) entered into a written agreement with Central Synagogue (the “Owner”) to provide construction management services in connection with renovations of the Central Synagogue Sanctuary (the “Agreement”). The Agreement provided that the Owner would “defend, indemnify and hold the Construction Manager harmless from claims arising out of the acts or omissions on the part of the architects, engineers, attorneys or contractors.” However, the Agreement qualified this obligation by stating that “it is understood and agreed that the Construction Manager shall be liable to the Owner . . . and shall indemnify Owner against Loss, liability, damages, costs and expenses . . . for any negligence or willful misconduct of Construction Manager . . . which results in any loss, claim or injury to the Owner, its successors or assigns.” The Agreement also provided that “Owner shall name the Construction Manager an additional insured party or cause its Contractors to so name the Construction Manager an additional insured party on the Contractors’ insurances.” The Owner opted for the latter, and the Construction Manager was named an additional insured on the contractors’ policies.

Randa/Madison Joint Venture III v. Dahlberg,
239 F.3d 1264, 2000 U.S. App. LEXIS 1736 (U.S. Fed. Cir., Feb. 7, 2001)
Randa/Madison Joint Venture III (“Contractor”) entered into a construction contract with the United States Army Corp of Engineers (“Government”) to perform de-watering of an excavation for a pump house foundation that was to extend forty (40) feet below the existing ground surface. The contract included the standard differing site conditions clause set forth in Federal Acquisition Regulation (“FAR”) § 52.236-2 (2000). In addition, the contract included two separate clauses which addressed the Contractor’s obligations to inspect the site and materials produced by the Government that were made available for inspection. The first clause required that the Contractor acknowledge that it has satisfied itself as to the character, quality, and quantity of surface and subsurface material or obstacles to be encountered insofar as this information is reasonably ascertainable from any inspection of the site, including all exploratory work done by the Government. The second clause addressed physical data and stated that whenever subsurface exploration logs are presented in the Contract Documents, soil test results and soil and rock samples are available for inspection. These test results and samples were not included in the contract documents.

Eastern Steel Constructors, Inc. v. City of Salem,
No. 28202, 2001 W. Va. LEXIS 3 (W. Va. Feb. 9, 2001)
The City of Salem, West Virginia, entered into a contract with Kanakanui Associates pursuant to which Kanakanui was to provide engineering and architectural services for improvements to Salem’s existing sewer system. Kanakanui produced plans and specifications to be used to solicit bids for the improvements. Eastern Steel Constructors, Inc. bid on a portion of the project relying on the plans provided by Kanakanui and was awarded the contract.

Worth Constr. Co. v. I.T.R.I. Masonry Corp.,
2001 U.S. Dist. LEXIS 2144 (S.D.N.Y. Feb. 21, 2001)
Worth Construction entered into a masonry subcontract with ITRI Masonry for a correctional facility in New York. Due to cash flow concerns, ITRI requested and Worth acquiesced to an arrangement where Worth would pay ITRI’s actual payroll costs, but not payroll taxes or benefits, on a weekly basis. These costs would then be deducted from ITRI’s monthly progress payment. Nevertheless, ITRI began to fall behind in its payments to vendors and its workforce. Subsequently Worth began paying ITRI’s payroll and suppliers by joint check. Eventually Worth terminated ITRI for nonperformance on March 13, 1998 and hired all of ITRI’s tradesmen and supervisors to complete the masonry work.

Harbor Court Assoc. v. Leo A. Daly Co.,
179 F.3d 147 (4th Cir. 1999)
The plaintiffs, Harbor Court Associates and Murdock Development Company (“HCA/Murdock”) were the developers of Harbor Court Complex, located in the Inner Harbor area of Baltimore, Maryland. On April 28, 1983, HCA/Murdock hired Leo Daly (“Daly”), an architect with a principal place of business is in Nebraska, to design and construct the project. The parties used an A.I.A. document, which stated that, for disputes arising out of the contract: “any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than the relevant Date of Substantial Completion of the Work, and [as to any failures occurring after substantial completion] not later than the date of issuance of the Final Certificate of Payment.”

Interwest Construction v. A.H. Palmer & Sons,
292 Utah Adv. Rep. 27, 1996 Utah LEXIS 44 (Utah June 14, 1996)
The Supreme Court of Utah held that the intermediate court of appeals erred in holding that a tort action for negligence and strict liability arising out of a breach of contractually defined obligations was precluded. However, the Supreme Court of Utah also held that the tort claims should be dismissed because the claimant failed to prove causation between the alleged defect and the resultant injury.

Allgood Electric Co. v. Martin K. Eby Constr. Co.,
85 F.3d 1547, 1996 U.S. App. LEXIS 15252 (11th Cir. June 25, 1996)
Under Georgia law, subcontractor’s release of all claims against property on which project was located did not operate to release claims against contractor, nor was contractor entitled to benefit of release in which contractor was not mentioned by name.
Plaintiff Allgood Electric Company (“Allgood”) was the electrical subcontractor on a prison project for the Georgia Building Authority (“GBA”). Defendant Martin K. Eby Construction Company, Inc. (“Eby”) was the general contractor. Allgood sought to recover increased costs allegedly caused by Eby’s failure to coordinate various aspects of the project. Allgood also claimed entitlement to retainage.

Hancock Electronics Corp. v. Washington Metropolitan Area Transit Authority, 81 F.3d 451 (4th Cir. 1996).
In the spring of 1994, the Washington Metropolitan Area Transit Authority (“WMATA”) awarded Hancock Electronics Corporation (“Hancock”) a contract to provide replacement braking systems for approximately 300 rail cars. The contract required Hancock to design, manufacture and install the braking systems. The contract further required Hancock to demonstrate its contract performance to WMATA and provide certain technical data about the braking systems.
Because it apparently did not possess the ability to monitor the testing of the brake systems’ software, WMATA subcontracted the testing function to a third party. In addition, as part of the testing process, WMATA requested Hancock to provide certain technical documentation, including the brake systems’ software. WMATA sought Hancock’s permission to provide the technical data to the third party responsible for testing, who had agreed to enter into a lifetime nondisclosure agreement. Hancock refused.

Valley View Enterprises, Inc. v. United States,
35 Fed. Cl. 378 (1996).
On September 22,1992, the Department of the Army awarded plaintiff Valley View Enterprises, Inc. (“Valley View”) a contract to replace seventeen steam lines located at the United States Military Academy in West Point, New York in connection with…