General Contractors

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Carolina Casualty Insurance Company, et al. v. R.L. Brown & Associates, Inc., et al.
No. 1:04-CV-3537-GET, 2006 U.S. Dist. LEXIS 5261 (N.D. Ga. January 25, 2006)
In Carolina Casualty Insurance Company, et al. v. R.L. Brown & Associates, Inc., et al., No. 1:04-CV-3537-GET, 2006 U.S. Dist. LEXIS 5261 (N.D. Ga. January 25, 2006), a dispute arose between a surety that had provided a performance bond on a public works project and the project’s program manager. After the owner declared the general contractor in default for defective work, the surety finished the underlying contract under the terms of the performance bond. The owner sought additional damages from the surety. In an agreement settling those claims for additional damages, the owner assigned to the surety all of its own claims against third parties arising out of the defective construction and supervision of the project.

MidAmerica Construction Management, Inc. v. MasTec North America, Inc., et al.
2006 U.S. App. Lexis 3022 (10th Cir. 2006)
In MidAmerica Construction Management, Inc. v. MasTec North America, Inc., et al., 2006 U.S. App. Lexis 3022 (10th Cir. 2006), the Court held that a subcontract agreement contained a “pay-if-paid” clause, and that the clause in question was enforceable under both Texas and New Mexico law. As a result, general contractors did not need to pay the subcontractor for the work that the subcontractor performed under the contract, because the general contractors had not been paid by the project owner for that work.

Ed Kimber Heating & Cooling, Inc. v. Travelers Casualty & Surety Co.
No. 3:03cv2111 (SRU), 2006 U.S. Dist. LEXIS 3323 (D. Conn. Jan. 26, 2006)
Trataros Construction, Inc. (“Trataros”), the general contractor on a school addition and renovation project, subcontracted with Ed Kimber Heating & Cooling, Inc. (“Kimber”) for the performance of HVAC and plumbing work. Travelers Casualty & Surety Co. (“Travelers”) issued payment and performance bonds as the surety for Trataros.

Beckwith Machinery Company v. Asset Recovery Group, Inc.
2005 Pa. Super. 429, 2005 Pa. Super. LEXIS 4276 (Pa. Super. Ct. 2005)
In Beckwith Machinery Company v. Asset Recovery Group, Inc., et al., 2005 Pa. Super. 429 (Pa. Super. Ct. 2005), the Court held that invoices for major repairs in the nature of capital improvements to heavy construction equipment were not covered by the terms of a payment bond. The Court reasoned that the repairs referenced in the invoices at issue could not be classified as ordinary maintenance performed for consumption over the course of the project, but rather were services which a contractor would retain the benefit of on the completion of work to be used by him in a like manner on subsequent projects.

Webber v. McBride & Sons Contracting Co.
No. ED86076, 2005 Mo. App. LEXIS 1846 (Mo. Ct. App. Dec. 13, 2005)
A painter suffered personal injuries after falling through a stairwell hole in the floor of an unfinished single-family residence. The stairwell hole had been cut by predecessor subcontractors no longer on the site. At the time of the fall, the general contractor, which also owned the residence, had already accepted the work of the subcontractors as completed.

Environmental Energy Partners Inc. v. Siemens Building Technologies,Inc., et al.
Nos. 26521 & 26702, 2005 Mo. App. LEXIS 1568 (Mo. Ct. App., Oct. 25, 2005)
In Environmental Energy Partners Inc. v. Siemens Building Technologies, Inc., et al., Nos. 26521 & 26702, 2005 Mo. App. LEXIS 1568, a payment dispute arose between a contractor and its subcontractor on a hospital renovation project. When the contractor refused to pay the subcontractor the remaining subcontract balance ($201,178.75) on the basis that the subcontractor’s work was not completed, the subcontractor filed a mechanic’s lien against the property. The subcontractor then filed a petition to enforce its lien, naming the contractor and owner as defendants. Because of the subcontractor’s lien, the owner withheld the last installment payment of $148,475 due to the contractor under their agreement. Thereafter, and unbeknownst to the contractor, the subcontractor and the owner entered into a confidential “Settlement Agreement and Release” under which the owner agreed to pay directly to the subcontractor the $148,475 amount that it was withholding from the general contractor in exchange for a release of the lien upon entry of judgment in the litigation.

Nat’l Union Fire Ins. Co. v. David A. Bramble, Inc.
388 Md. 195, 879 A.2d 101 (Md. July 21, 2005)
In connection with construction of a resort hotel project, general contractor Clark Construction provided a payment bond securing its obligation to pay its subcontractors for all labor, material, and equipment required. The bond was a standard American Institute of Architects document A312 form, used without alteration to the form language, issued jointly by three sureties. In the event claim was made against the bond, it provided that the surety would “Send an answer to the Claimant, with a copy to the Owner, within 45 days after receipt of the claim, stating the amounts that are undisputed and the basis for challenging any amounts that are disputed.”

Allgood Electric Co. v. Martin K. Eby Constr. Co.,
85 F.3d 1547, 1996 U.S. App. LEXIS 15252 (11th Cir. June 25, 1996)
Under Georgia law, subcontractor’s release of all claims against property on which project was located did not operate to release claims against contractor, nor was contractor entitled to benefit of release in which contractor was not mentioned by name.
Plaintiff Allgood Electric Company (“Allgood”) was the electrical subcontractor on a prison project for the Georgia Building Authority (“GBA”). Defendant Martin K. Eby Construction Company, Inc. (“Eby”) was the general contractor. Allgood sought to recover increased costs allegedly caused by Eby’s failure to coordinate various aspects of the project. Allgood also claimed entitlement to retainage.

Urban Masonry Corporation, Appellant, N&N Contractors, Inc., Appellee,
676 A.2d 26 (D.C. App. 1996)
In November 1990, Urban Masonry Corporation (Urban) subcontracted with N&N Contractors, Inc., (N&N) to install concrete panels on a major construction project in the District of Columbia. Urban was the subcontractor of the general contractor, Blake Construction Company, and N&N was a subcontractor of Urban. The panels were to be supplied by Blake.
Upon installation of the concrete panels it became obvious that the panels were smaller than anticipated, therefore, additional pieces would be needed to complete the project. Because this was beyond the scope of the original agreement, it was agreed between Urban and N&N, that Urban would pay additional compensation for installing extra panels. In fact, Urban’s Project Manager sent a “speed memo” affirming the compensation, and Urban’s President sent a letter acknowledging the request for compensation and promised to pass on the claim to the general contractor (Blake). Subsequently, Urban made a settlement with Blake which did not include compensation for N&N’s claims in November 1991.

ThermoCor, Inc. v. United States,
1996 U.S. Claims LEXIS 68 (Cl. Ct. 1996).
On October 16, 1989, the United States Army Corps of Engineers (“Corps”) awarded ThermoCor, Inc. (“ThermoCor”) a contract in the amount of $15,500,000 to excavate and treat soils contaminated with polychlorinated biphenyls (“PCB’s”) in Erie County, New York. In part, the contract provided for estimated quantities, from which ThermoCor submitted a unit price bid. The contract also provided a Variance in Estimated Quantity Clause (“VEQ”), which provided, in pertinent part:
If the quantity of a unit-priced item in this contract is an estimated quantity and the actual quantity of the unit-priced item varies more than 15 percent above or below the estimated quantity, an equitable adjustment in the contract price shall be made upon demand of either party. The equitable adjustment shall be based upon any increase or decrease in costs due solely to the variation above 115 percent or below 85 percent of the estimated quantity. 48 C.F.R. [[section]] 52.212-11 (1989) (emphasis supplied).