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Butch-Kavitz, Inc. v. Mar-Paul Co., Inc., 2015 U.S. Dist. LEXIS 160652 (M.D. Pa. Dec. 1, 2015)

The United States Army Corps of Engineers (the “Owner”) entered into a contract (the “Contract”) with Mar-Paul Company, Inc. (“Mar-Paul”) for $3,381,000.00, under which Mar-Paul would serve as general contractor on a construction project for renovations to a building at the Tobyhanna Army Depot in Tobyhanna, Pennsylvania (the “Project”).  In turn, Mar-Paul entered into a subcontract (the “Subcontract”) with Butch-Kavitz, Inc. (“Butch-Kavitz”) for $452,000.00, under which Butch-Kavitz would perform the electrical and generator work in connection with the Project.

SAK & Assocs. v. Ferguson Constr., Inc., 189 Wn. App. 405 (Wash. Ct. App. 2015)

Ferguson Construction, Inc. (“General Contractor”) entered into a fixed sum contract (the “Subcontract”) with SAK & Associates (“Subcontractor”) to provide concrete materials and paving services (the “Work”).  The Subcontract included a termination for convenience clause providing that General Contractor could terminate Subcontractor for convenience upon written notice.  After Subcontractor completed 24 percent of the Work, General Contractor terminated Subcontractor.  General Contractor paid Subcontractor 24 percent of the fixed contract price for the work Subcontractor actually completed.

King County v. Vinci Construction Grands Projects/Parsons RCI/Frontier-Kemper, JV, 2015 Wash. App. LEXIS 2735 (Nov. 9, 2015)

The Court of Appeals of Washington recently decided King County v. Vinci Construction Grands Projects/Parsons RCI/Frontier-Kemper, JV, a dispute between a joint venture contractor (the Contractor) and King County, Washington (the County). The dispute stemmed from problems that arose and significant delays that occurred during a major expansion of the County’s wastewater treatment system, known as the Brightwater project. The case illustrates the potential pitfalls of a contractor’s claim of differing site conditions.

Elliot-Lewis Corp. v. Skanska USA Building, Inc., 2015 U.S. Dist. LEXIS 98405 (E.D. Pa. July 27, 2015)

This dispute arises out of a major renovation and expansion of the Franklin Institute in Philadelphia (the “Project”).  Plaintiff Elliot-Lewis Corporation (“ELCo”) was a subcontractor hired to install the piping and controls for the Project’s heating, ventilation and air conditioning (“HVAC”) system.  The Project’s schedule required that start up and testing of the HVAC system begin by February 23, 2013 and that the system be operational by April 1, 2013.  But, when the HVAC was started for testing, flooding issues arose due to problems with the condenser pumps specified in the HVAC system’s specifications.  Ultimately, the HVAC system was not operational by April 1 and ELCo was required to perform additional work and install temporary cooling equipment so that the Franklin Institute could open during the summer.  ELCo was never paid by the prime contractor for this additional work.

On August 31, 2015, highway contractors Trinity Industries, Inc. and Trinity Highway Products, LLC (collectively, Trinity) appealed to the U.S. Court of Appeals for the Fifth Circuit a $663,360,750 final judgment entered against them under the federal False Claims Act (FCA). At the conclusion of a six-day trial that commenced on October 13, 2014, the jury rendered a unanimous verdict, finding Trinity “knowingly made, used, or caused to be made or used, a false record of statement material to a false or fraudulent claim” in violation of the FCA. The jury unanimously found that the U.S. government suffered damages in the amount of $175,000,000 as the result of Trinity’s FCA violations.

DVBE Trucking and Construction Co., Inc. v. McCarthy Building Companies, Inc., 2015 U.S. Dist. LEXIS 90052 (N.D. Cal. July 10, 2015)

This payment dispute case arises out of a Veterans Affairs (“VA”) construction project located in Palo Alto, California.  McCarthy Building Companies, Inc. (“McCarthy”) was the prime contractor, Federal Insurance Company and Travelers Casualty and Surety provided the performance and payment bonds on behalf of McCarthy mandated by the Miller Act, and DVBE Trucking and Construction Company, Inc. (“DVBE”) was McCarthy’s subcontractor.  Section 11.1 of DVBE’s subcontract required that, for any dispute involving the VA, it would follow the dispute resolution procedures agreed to by McCarthy in its contract with the VA, and agreed to be bound by the result of any such dispute resolution procedures to the same degree as McCarthy.

Davis Group, Inc. v. Ace Electric, Inc., 2015 U.S. Dist. LEXIS 83368 (M.D. Fla. June 26, 2015)

This action arose out of a construction project to build a new Radar Approach Control Facility at Seymour Johnson Air Force Base in Goldsboro, North Carolina (“Project”). The United States Army Corps of Engineers (“COE”) contracted with general contractor Davis Group, Inc. (“TDG”) to construct the Project. TDG entered into a subcontract with Ace Electric, Inc. (“Ace”) to perform the electrical work on the Project (the “Subcontract”).

The Subcontract included various provisions addressing delays in completion of the work. In particular, the parties agreed that Ace was entitled to a reasonable extension of time and/or additional compensation if its work was delayed, through no fault of Ace, by the COE, TDG or other subcontractors. If on the other hand, Ace was responsible for a delay in completion of the work, then the parties agreed that Ace would “reimburse [TDG] for the entire cost and expense suffered or incurred as a result of” the delay, including any liquidated or other damages the COE might assess against TDG for delays to the Project as a whole. The Subcontract further provided that, if “such damages are caused by [Ace] and another person or entity,” TDG could “reasonably apportion such damages between the parties, and any such apportionment shall be final and binding upon [Ace].”

Vanguard Constr., Inc. v. United States, 2015 U.S. Claims LEXIS 1158 (Fed. Cl. Sep. 8, 2015)

The United States Air Force (the “Government”) entered into a contract with Vanguard Construction, Inc. (“Contractor”) to replace a roof (the “Contract”).  The Contract incorporated by reference portions of the Federal Acquisition Regulation (FAR).

Contractor’s demolition of the existing roof revealed that a significant section of the roof stem wall was missing.  The Contract did not address the contingency of a missing stem wall.  Contractor sent the Government several letters asking for guidance on how to proceed, including a request for information on structural requirements for building a stem wall.  The Government refused to provide the requested information, asserting that the terms of the contract allocated to the Contractor the risk of dealing with latent or unanticipated site conditions and the burden of devising a solution to the problem.

John Spearly Constr., Inc. v. Penns Valley Area Sch. Dist., 2015 Pa. Commw. LEXIS 337 (Pa. Commw. Ct. July 24, 2015)

This action arose out of the construction of a biomass boiler system for the Penns Valley Area School Districts (“District”) to house the District’s boiler plant  (“Project”).  The District contracted with general contractor John Spearly Construction, Inc. (“Contractor”) to construct the Project. The District entered into direct contracts with the Project Architect and other contractors responsible for other components of the work.

Construction began in July 2010 and was to be substantially completed no later than October 18, 2010.  From its inception, however, the Project was plagued with delays.  Project delays were caused by, among other things, delays by the District’s Architect in deciding on and responding to submittals relating to changes, disputes between the District and its HVAC contractor responsible for delivering the boiler, and work performed by a sewer contractor the District brought in toward the end of the Project to repair and replace storm water and sewer pipes. Ultimately, the Project was not substantially completed until August 11, 2011.

Gongloff Contracting, L.L.C. v. L. Robert Kimball & Assocs., Architects and Eng’rs, Inc., 2015 Pa. Super 149 (Pa. Super. Ct. July 8, 2015)

Pennsylvania law generally bars negligence claims when the injured party has suffered only economic losses.  This principle is commonly referred to as the economic loss doctrine.  An exception to this doctrine is found in Section 552(1) of the Restatement (Second) of Torts, which provides that, “one who, in the course of his business, profession or employment … supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.” In Bilt-Rite Contractors, Inc. v. Architectural Studio, 581 Pa. 545 (2005), the Pennsylvania Supreme Court adopted this exception and found it to be applicable in cases where information is negligently supplied by an architect or design professional under circumstances where it is foreseeable that others will rely upon that information.  In Gongloff, the Superior Court of Pennsylvania, interpreting Bilt-Rite, held that the Bilt-Rite exception can be triggered when an architect or design professional negligently includes faulty information in its design documents.  The Gongloff court rejected the argument that, under Bilt-Rite, an injured party is required to identify an “express” misrepresentation in a particular communication or document in order to support a claim of negligent misrepresentation.