Contracts

Subscribe to Contracts via RSS

Charles T. Driscoll Masonry Reconstruction Co., Inc. v. County of Ulster
2007 N.Y. App. Div. LEXIS 6068 (N.Y. App. Div., May 17, 2007)
The Appellate Division of the Supreme Court of New York held that a construction contract must be enforced according to its terms and, therefore, oral modifications of an agreement which specifically calls for modifications to be in writing will be unenforceable. Although recognizing that written modification clauses may be waived based upon the conduct of the parties, the court found that the conduct of the parties in this case did not support a waiver.

Hutton Contacting Company, Inc. v. City of Coffeyville
2007 U.S. App. LEXIS 9914, (10th Cir., April 30, 2007)
Contractor contracted to construct power and fiber-optic lines for the City. Upon completion of the project, the City refused to pay the final balance of the contract price, claiming that it was entitled to the funds as liquidated damages because the project was not completed on time. The Contractor sued to obtain the unpaid contract balance. The trial court ordered the City to pay the Contractor the retainage due minus $85,000 in liquidated damages. On appeal, the United States Court of Appeals for the Tenth Circuit, applying Kansas law, considered: 1) whether the contract’s force-majeure clause excused the Contractor for delays caused by late deliveries from its pole supplier; 2) whether the contract’s liquidated-damages provision was enforceable; and 3) whether the contract’s liquidated damages provision allowed the District Court to apportion delays between the Contractor and the City.

Menorah Home and Hosp. for the Aged and Infirm v. Fireman’s Fund Ins. Co.
2007 U.S. Dist. LEXIS 27684 (E.D.N.Y., April 13, 2007)
The District Court for the Eastern District of New York held that a liquidating agreement between an Owner and a Surety was valid and enforceable, even though it permitted the Owner to retain any recovery it obtained from the third-party, rather than having money pass-through to the surety.
The case arose out of a project to build and renovate facilities for Menorah Home and Hospital for the Aged and Infirm (“Owner”). The Owner entered into a contract with J.A. Jones Construction Group, LLC (“Jones”) for the Project. When Jones defaulted, Fireman’s Fund Insurance Company (“FFIC”), Jones’ surety, took over and completed the Project. The Owner subsequently sued FFIC alleging that FFIC had breached its performance bond obligations by failing to complete the Project in a timely manner and correct deficiencies in the work performed by Jones.

Nello Construction Co. v. Commwth of PA, Dept of General Services
(Commonwealth of Pennsylvania, Board of Claims, March 20, 2006)
Nello brought claims against the Department of General Services (“DGS”), arising from a contract entered into by Plaintiff and DGS on June 7, 2001, for the construction of a visitors’ center, museum, parking lot and other attendant facilities to be built in Beaver County, PA on behalf of the Pennsylvania Historical and Museum Commission. The initial value of the Contract was $ 2,433,000.00 and, with a contractually mandated duration of 335 days from the initial job conference within which to complete the work, the contemplated contract completion date was May 29, 2002. Because of various delays, final inspection on the project did not occur until January 30, 2003, 246 days past the contemplated contract completion date. Plaintiff requested damages of $ 462,010.48 for costs and expenses resulting from construction delays caused by Defendant’s actions and inactions.

Turner Constr. Co. v. Am. Mfrs. Mut. Ins. Co.
2007 U.S. Dist. LEXIS 32640 (S.D.N.Y. Apr. 30, 2007)
Plaintiff Turner Construction Company entered into a construction management agreement with Central Synagogue in Manhattan for renovation work which included the installation of central air conditioning. The HVAC contractor on the project was Trident Mechanical Systems, Inc. During the project, a fire broke out, started by an employee of the roofing contractor who had been using a propane torch. The fire, which ordinarily would have caused minimal damage, was accelerated by exhaust fans that had been installed in the roof, and caused several millions of dollars damage to the landmark Synagogue. The Synagogue’s insurer, Wausau, sued Turner and some of the project’s contractors, to recover amounts it paid the Synagogue. The trial was bifurcated, trying liability first, then damages. Liability was determined as: Turner 50%, the roofing contractor 30%, the general contractor 15%, and Trident 0%. A settlement was reached before the damages portion of the trial began.

Quality Trust Inc. v. Cajun Contractors, Inc.
2007 U.S. Dist. Lexis 25431 (D. Kan. 2007)
The District Court granted the prime contractor summary judgment on its right to terminate a subcontractor for failure to provide submittals and sufficient work force, while at the same time holding that the contractor was not entitled to summary judgment on the subcontractor’s claims for delay damages and contract balances.
Prime contractor, Cajun Contractors, Inc. (“Cajun”), entered into a general contract with the United States Army Corps of Engineers (“COE”) for the construction of a wastewater facility at Fort Riley, Kansas. The project entailed the partial demolition of an existing facility and the construction of a new facility. Cajun subcontracted with Quality Trust, Inc. (“QTI”) to erect eight metal buildings as part of the new facility. Under the subcontract, Cajun was to construct the concrete building pads, to procure the buildings through a third party supplier, and to provide the buildings for QTI to erect and finish.

Scandale Associated Builders & Engineers, Ltd. v. Bell Justice Facilities Corp.
No. 4:03-CV-1773, 2007 U.S. Dist. LEXIS 25112 (M.D. Pa. April 4, 2007)
In January 2001, Scandale Associated Builders & Engineers, Ltd. (“Scandale”) entered into a subcontract (“Subcontract”) with Bell Justice Facilities Corporation (“Bell”) for work on the construction of the U.S. Penitentiary/Federal Prison Camp at Canaan, Pennsylvania (“Prison”). The Subcontract required Scandale to perform cast-in-place concrete work on the Prison. Bell was the general contractor and the United States through the Federal Bureau of Prisons was the Owner.

Universal Underwriters Insurance Co. v. A. Richard Kacin, Inc.
916 A.2d 686 (Pa. Super. Ct. 2007)
The Superior Court of Pennsylvania held that the American Institute of Architects’ (“AIA”) form waiver of subrogation clause barred a subrogation claim even where the loss was created by the contractor’s own negligence. Relying on Penn Avenue Place Assoc., L.P. v. Century Steel Erectors, Inc., 798 A.2d 256 (Pa. Super. Ct. 2002), the court held that a warranty provision did not invalidate the waiver of subrogation and opined that the warranty provision provided a remedy only to the extent that losses were not covered by insurance. The court further held that an insurer does not need to be party to the contract containing the waiver of subrogation clause nor does the insurer need to consent to or have notice of the waiver of subrogation clause in order for it to be enforceable.

Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc.
2007 U.S. App. LEXIS 7808 (3d Cir., Apr. 5, 2007 )
The United States Court of Appeals for the Third Circuit held that, despite the commercial practice to the contrary, a subcontractor was not bound by the qualified bid it submitted to a general contractor. The subcontractor’s bid plainly stated that the price was for information purposes only and should not be relied on by the recipient.
General Contractor Fletcher-Harlee solicited subcontract bids for concrete work. As is an industry custom, Fletcher-Harlee stated in its solicitation letter that bids must be held open for a minimum of 60 days and also that the subcontractor must agree to be accountable for the prices and proposals submitted. Pote Concrete Contractors submitted a written bid. However, Pote included a disclaimer in its submission. In the bid, Pote stated that the price quote was for informational purposes only, was not a firm offer, should not be relied on and that Pote did not agree to be held liable for any of the terms that it submitted.

Titan Stone, Tile & Masonry v. Hunt Construction Group, Inc.
Civ. No. 05-3362, 2007 U.S. Dist. LEXIS 19489 (D.N.J. March 19, 2007)
The Court decided several motions for summary judgment filed by a prime contractor to claims of a subcontractor. Among the motions decided, the Court addressed the duty of good faith and fair dealing attendant to an obligation to evaluate payment applications, the breadth of a “pay-if-paid” clause, whether a monthly release executed with a payment application barred claims for extra work performed after the pay period in the attendant payment application and whether the plaintiff adequately plead its claim for violation of the New Jersey Trust Fund Act.