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Fed. Eng’rs & Constructors Inc. v. Relyant Global LLC, No. 3:19-CV-73-KAC-JEM, 2022 U.S. Dist. LEXIS 95617 (E.D. Tenn., May 27, 2022)

This case arises out of the renovation of a U.S. Air Force dormitory in Missouri. The U.S. Army Corps of Engineers hired Relyant Global LLC to act as the prime contractor. Relyant subcontracted with Federal Engineers and Constructors, Inc. (FE&C). Relyant later terminated its subcontract with FE&C. FE&C filed suit against Relyant, and Relyant moved for judgment on the pleadings.…

Continue Reading Choose With Care: Tennessee Federal Court’s Prompt Payment Conclusions Turn on Choice of Law Clause

Entech Engineering, P.C. v. Dewberry Engineers, Inc., 204 A.D.3d 467, 167 N.Y.S.3d 55 (1st Dep’t 2022)

The New York Supreme Court Appellate Division recently affirmed a ruling enforcing a pay-if-paid provision.

Defendant Dewberry Engineers, Inc. (Dewberry) contracted with the New York City Economic Development Corporations’ Build-It- Back Hurricane Sandy Program to inspect homes for structural, asbestos, and lead paint issues. Dewberry retained Entech Engineering PC (Entech) to perform pre-construction lead paint inspections of homes. The subcontract contained a pay-if-paid clause that made the city’s payment to Dewberry a condition precedent to Dewberry’s obligation to pay Entech.…

Continue Reading NY Appellate Court Enforces Pay-If-Paid Provision Against Party With No Lien Rights

On February 28, the New York Senate passed Bill S8430A to amend New York’s Real Property Actions and Proceedings Law Section 881. The current version of Section 881, enacted in 1968, offers a developer judicial recourse when an owner or lessee of a neighboring building refuses access that a developer needs to improve or repair its own building. This judicial recourse comes in the form of a temporary license for access. Section 881 provides limited guidance on how or when courts will issue these temporary licenses, stating only that a “license shall be granted by the court in an appropriate case upon such terms as justice requires.” Over the years, New York courts have filled in the contours of Section 881, providing additional rules for what temporary licenses may cover and when they may be granted. These cases address topics, ranging from required liability insurance to compensation for a landowner’s loss of quiet enjoyment of their property.…

Continue Reading Proposed Changes to NY RPAPL Section 881: A Big Win for Developers and Owners

Virginia has joined the ranks of states that ban “pay-if-paid” clauses. Contingent payment clauses, like “pay-if-paid” and “pay-when-paid” clauses, protect contractors: A contractor need not pay its subcontractors or suppliers until the owner pays the contractor.…

Continue Reading Virginia Bans Pay-If-Paid Clauses to Protect Construction Subcontractors

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.…

Continue Reading No Free Warranty: Connecticut Court Adopts Correction or Repair Test

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.…

Continue Reading Federal Court Confirms Liberal Federal Policy Favoring Arbitration Awards

2700 Bohn Motor, LLC v. F.H. Myers Construction Corp., 338 So.3d 500 (La. Ct. App. 2022).

This case involved the restoration of an old building in New Orleans. Fire broke out, resulting in a loss that was paid by the owner’s builder’s risk insurance. The builder’s risk carriers — subrogated to the rights of the owner — then sued the prime contractor, its subcontractor, and sub-subcontractor for negligence.…

Continue Reading Louisiana Court Enforces AIA Wavier of Subrogation to Preclude Carrier’s Recovery

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.”…

Continue Reading Ohio Court Reforms Construction Contract to Correct “Manifest Absurdity” in Termination for Convenience Term

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.…

Continue Reading Not Everything Is Bigger in Texas: Court of Appeals Reverses Trial Court’s Expansive Interpretation of Indemnity Clause

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.…

Continue Reading Illinois Federal District Court Enforces Partially Executed Agreement to Arbitrate