Contracts

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Hovas Constr., Inc. v. Western Line Consolidated School Dist.
2012 Miss. App. LEXIS 556 (September 14, 2012)

The Board of Trustees of Western Line Consolidated School District entered into a $450,000 contract with Hovas Construction, Inc. for an addition and renovation work at the O’Bannon High School in Washington County, Mississippi. The contract required that the project achieve substantial completion by June 6, 2008 and included a project delay liquidated damages provision providing for damages of $500 per day. The project achieved substantial completion on July 15, 2008, thirty-nine days late, and the School District withheld $19,500 from Hovas as substantial completion liquidated damages. Hovas filed suit in the Circuit Court of Washington County. The Circuit Court concluded the $19,500 withheld was appropriate because the liquidated damage provision was enforceable and that the School District suffered actual damages.

Martin K. Eby Constr. Co., Inc. v. OneBeacon Ins. Co.,  
2012 U.S. Dist. LEXIS 131875 (D. Kan. Sept. 17, 2012)

Eby was the contractor for a project to build a water pipeline in Texas. KBR was the construction manager on the project. In the Indemnity Provision of the water pipeline project contract:

Eby agree[d] to indemnify and hold harmless KBR from and against any damages, claims, demands, suits, and judgment costs including attorney’s fees and expenses for or on account of damage to property directly or indirectly arising from or caused in connection with the work by Eby.”

Celanese, the owner of a methanol pipeline in the area near the project, sued Eby and KBR for negligence after the methanol pipeline leaked during the construction of the water pipeline. A jury determined that KBR was not liable to Celanese and that Eby’s actions caused the damage. But, KBR incurred attorney’s fees defending against the suit and sought to recover those fees from Eby under the Indemnity Provision.

GII Industries, Inc. v. New York Dep’t of Transp.
2011 Bankr. LEXIS 3663 (Bankr. E.D.N.Y. Sept. 30, 2011)

The Bankruptcy Court for the Eastern District of New York considered the appropriate method for calculating a contractor’s inefficiency damages and whether the contractor was entitled to prejudgment interest in connection with a highway reconstruction project. The Court held that the total cost method was the appropriate manner by which to calculate damages and that the contractor was entitled to prejudgment interest running from the date final payment was due.

Josef Gartner USA LP v. Consigli Construction Co., Inc.
2011 U.S. Dist. LEXIS 62492 (D. Mass. June 10, 2011)

Consigli Construction and J. F. White Contracting, as joint venturers and general contractors, contracted with Josef Gartner USA for the design, fabrication, and installation of a curtain wall at the Cambridge Public Library. This subcontract provided for periodic payments to Gartner, contingent upon Gartner’s submission of evidence to Consigli/JFW that all known indebtedness connected with Gartner’s work had been satisfied. The subcontract also provided that Gartner would be entitled to additional compensation due to delays and out-of-sequence work.

Larry Snyder & Co. v. Miller
648 F.3d 1156 (10th Cir. 2011)

The Tenth Circuit held a repair warranty in a subcontract (the “repair clause”) limited the subcontractor’s repair obligations for failed paving work notwithstanding the flow-through of the prime contract’s “full satisfaction” clause.

SNC-Lavalin America, Inc. v. Alliant Techsystems, Inc.
2011 U.S. Dist. LEXIS 118312 (W.D. Va. Oct. 13, 2011)

SNC-Lavalin America, Inc. and Alliant Techsystems, Inc. (“ATK”) entered into a contract under which SNC would provide engineering, procurement, and construction services for the construction of a nitric acid and sulfuric acid concentration plant at the Radford, Virginia arsenal operated by ATK. SNC claimed that ATK’s delay in choosing an appropriate acid-resistant concrete for the ground floor and ATK’s denial of SNC’s request for an extension of time for severe winter weather each damaged SNC.

ATK moved for partial summary judgment, seeking to bar, among others, SNC’s claims (1) resulting from ATK’s delay in choosing a material and (2) resulting from severe winter weather.

First Gen. Constr. Corp., Inc. v. Kasco Constr. Co., Inc.
2011 U.S. Dist. LEXIS 55349 (E.D. Pa. May 24, 2011)

Kasco was the general contractor for a shopping center expansion. Kasco subcontracted the concrete work to First General. The subcontract included a term requiring First General to submit, upon request, releases of liens, with its payment applications. The Contract also required written approval of extra work, timely written notice of claims within ten days of their occurrence, and the submission of written backup information.

Structure Tone, Inc. v. Universal Services Group, Ltd.
929 N.Y.S. 2d 242 (App. Div. 2011)

This action arose out of the construction of a Whole Foods Market in the AOL/Time Warner Center at Columbus Circle in Manhattan. The general contractor, Structure Tone, Inc., (“STI”) retained Universal Service Group (“USG”) to waterproof the market. STI sued USG, claiming that the waterproofing failed on 15 occasions, causing water to leak from the Whole Foods Market into various tenant spaces below. STI undertook to remedy the problem, and as a result, allegedly sustained damages totaling $1.2 million. STI alleged causes of action for negligence and breach of contract, seeking as damages the costs of remediation, loss of profit, recovery of the amounts paid to USG and contract balances not paid by Whole Foods.

Lasalle Group, Inc. v. JST Properties, LLC
2011 U.S. Dist. LEXIS 83548 (S.D. Mich. July 29, 2011)

LaSalle, as general contractor, obtained a contract for construction of a school building in Gulfport, Mississippi. LaSalle subcontracted the concrete work on the project to Gulf Coast. American Contractors Indemnity Company (“ACIC”) provided performance and payment bonds to support LaSalle’s obligations under the subcontract.

Sloan & Co. v. Liberty Mutual Ins. Co.
633 F. 3d 175 (3d Cir. 2011)

IOC developed a waterfront condominium project in Philadelphia. Shoemaker was the prime contractor for the Project. Shoemaker retained multiple contractors, including Sloan, who was to perform drywall and carpentry work. Liberty Mutual was Shoemaker’s payment bond surety. At completion, IOC refused to pay Shoemaker nearly $6.5 million. Of that amount, $5 million was due to subcontractors. IOC claimed, among other things, that some of the subcontractors’ work was untimely and deficient. Because of this, Shoemaker refused to pay Sloan of the remaining balance due under its subcontract, $1,074,260.