Arco Ingenierosm, S.A. v. CDM Int’l Inc., Civil Action No. 18-12348-PBS, 2019 BL 100779 (D. Mass. Mar. 22, 2019)

In November 2009, Tropical Storm Ida hit El Salvador, causing flooding, landslides, and the destruction of homes, roads, bridges, schools, health clinics, and other infrastructure.  The United States Agency for International Development (“USAID”) provided $25 million in funding to rebuild damaged infrastructure.  USAID retained Defendant CDM International Inc. (“CDM”) to conduct studies and assessment for the construction of eight schools and one health clinic (the “Projects”) and to create preliminary designs and technical specifications for these Projects.  These preliminary designs were intended to constitute at least thirty percent of final designs for the Projects.  Relying on the preliminary designs created by CDM, Plaintiff Arco Ingenieros, S.A. de C.V. (“ARCO”) submitted bids to act as the design-build contractor for the Projects.  USAID awarded the Projects to ARCO.

Continue Reading Contractor’s Third Party Beneficiary Claim Dismissed Against Designer Where Designer’s Contract with Owner Lacked Clear Intent to Benefit the Contractor

Allstate Insurance Company v. Structures Design/Build, LLC, 2016 U.S. Dist. LEXIS 34349 (WD VA March 17, 2016)

This construction dispute case arises from a failed pipe connector that caused water damage to a facility and insured personal property, which Hillel at Virginia Tech, Inc. (“Hillel”) owned in Blacksburg, Virginia. Hillel contracted Structures Design/Build, LLC (“Structures”) to design and construct the facility. Structures, in turn, subcontracted PJ Little Plumbing, Inc. (“PJ”) for plumbing and mechanical installation. PJ purchased the failed pipe connector from CMC Supply, Inc. (“CMC”). Allstate Insurance Company (“Allstate”) insured Hillel for the damage to the facility and the personal property.

As Hillel’s subrogee, Allstate filed a complaint against Structures and PJ. Allstate sued Structures for various state law claims. It sued PJ for negligence and breach of express and implied warranties. PJ filed a third-party complaint to join CMC on a breach of implied warranty theory. PJ and CMC moved to dismiss the claims against them.


Continue Reading Western District of Virginia Confronts Several Legal Issues That Frequently Impact Multi-Party Construction Disputes – Economic Loss, Damage to Other Property, Third Party Beneficiary Status, Warranties, Subrogation, and Third-Party Joinder

Argonaut Great Cent. Ins. Co. v. DiTocco Konstruction, Inc.
2007 U.S. Dist. LEXIS 93846 (D.N.J. Dec. 21, 2007)
After a fire destroyed a T.G.I. Friday’s restaurant and all of its equipment, the meaning of the subrogation continuation clause contained in the contract between the owner and the contractor who had performed renovations and remodeling of the restaurant five years earlier became the focal point of ensuing dispute.

Continue Reading US District Court in New Jersey Holds Waiver of Subrogation in AIA General Conditions Applies to Post-Construction Policies and Losses

Sokaogon Gaming Enterprise Corp. v. Tushie-Montgomery Assocs, Inc.,
86 F.3d 656, 1996 U.S. App.LEXIS 13399 (7th Cir. June 5, 1996)
District Court erred in granting summary judgment in favor of Indian tribe on grounds of tribe’s sovereign immunity; by signing contract with explicit arbitration clause, tribe agreed that it could be sued.

Continue Reading Seventh Circuit Holds that Indian Tribe Agreed to Waive Sovereign Immunity

Neal & Co., Inc. v. City of Dillingham and CH2M Hill Northwest, Inc.,
923 P.2d 89 (Alaska 1996)
In February of 1987, the City of Dillingham (“City”) solicited bids for the construction of a sewerage facility, which would include two lagoon ponds. CH2M Hill (“Hill”), the City’s engineer and on-site representative, had completed a geotechnical survey and data summary, which was provided to interested bidders. Neal & Company, Inc. (“NCI”) was declared the low bidder at $2,059,991 and began excavation on June 6, 1987.

Continue Reading The Supreme Court of Alaska Held That a Contractor's Failure to Comply with the Contractual Notice Provisions Barred Its Claim as a Matter of Law

Hazleton Area School District v. Bosak,
671 A.2d 277 (Pa. Cmwlth. 1996).
In this case, neither of the arbitration provisions provided in the 1988 and 1989 agreements specifically stated that an action in tort for negligence should be arbitrated. The Commonwealth Court affirmed the decision of the trial court and held that the complaint alleged

Danis Clarkco Landfill Co. v. Clark County Solid Waste Mgmt. Dist.,
653 N.E.2d 646, 73 Ohio St.3d 590, 1995 Ohio LEXIS 1869 (Ohio, September 6, 1995).
County solid waste management district was not subject to provisions of public bidding law in making “designation” of exclusive provider of solid waste management services, but was required only to adhere to bidding procedures it set for itself in its RFP. 
Danis Clarkco Landfill Company (“Danis”), a landfill operator, filed an action seeking declaratory and injunctive relief to prevent a county solid waste management district (the “District”) from designating a rival bidder as the sole provider of waste management services for the District. The District had prepared a Request for Proposal (“RFP”) seeking “proposals from qualified bidders to design, construct and operate solid waste management facilities” for the District.
Continue Reading Supreme Court of Ohio Rules That Award of Lucrative Right to be Sole Provider of Solid Waste Management Services Not Subject to Competitive Bidding Law

Metric Constructors, Inc. v. Hawker Siddeley Power Engineering, Inc. and Panda Rosemary Corp.,
468 S.E. 2d 435 (N.C. Ct. App. 1996).
Defendant Hawker Siddeley Power Engineering, Inc. (HSPE) was the Design/Build contractor on a co-generation power plant in Roanoke Rapids, North Carolina. As the general contractor, HSPE subcontracted with plaintiff Metric Constructors, Inc. (Metric) for construction of the power plant. In turn, Metric subcontracted with a wholly-owned subsidiary, Electrical and Special Systems, Inc. (ESSI) for specialized work. Because all of the designs for the plant prior to the commencement of construction were not complete, the project was deemed “Fast Track.”
Pursuant to its contract with Metric, HSPE was responsible for engineering design drawings and procurement of major equipment items. The contract had an inflexible completion date of October 30, 1990 and, in contract negotiations and in the contract, HSPE promised to issue drawings at a pace that would allow Metric to finish its work on time. The contract further provided that Metric would receive a bonus of $9,000 per day for early completion.
Continue Reading The North Carolina Court of Appeals Upholds Multi-million Dollar Verdict Allowing Subcontractor to Recover Sub-subcontractor's Losses

Cleveland Jet Center, Inc. v. Structural Sales Corp.,
1995 Ohio App. LEXIS 4113 (Ohio Ct. App., Sept. 22, 1995).
Utilization of AIA Document A111, Standard Form of Agreement Between Owner & Contractor, 1978 Edition, without express incorporation of AIA Document A201, General Conditions of the Contract for Construction, left owner free to refuse arbitration. 
Cleveland Jet Center, Inc. (“Jet Center”), a corporation in the business of repairing, refurbishing and modifying jet aircraft, entered into a contract with Structural Sales Corp. (“Structural”), in which Structural agreed to design and build a hangar and office area at the Lost Nation Airport in Willoughby, Ohio. Structural selected the American Institute of Architects (“AIA”) Document A111, Standard Form of Agreement Between Owner & Contractor, 1978 Edition” as the contract form and drafted the blank terms.
Continue Reading Ohio Appeals Court Upholds Owner's Refusal to Arbitrate