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On February 28, the New York Senate passed Bill S8430A to amend New York’s Real Property Actions and Proceedings Law Section 881. The current version of Section 881, enacted in 1968, offers a developer judicial recourse when an owner or lessee of a neighboring building refuses access that a developer needs to improve or repair its own building. This judicial recourse comes in the form of a temporary license for access. Section 881 provides limited guidance on how or when courts will issue these temporary licenses, stating only that a “license shall be granted by the court in an appropriate case upon such terms as justice requires.” Over the years, New York courts have filled in the contours of Section 881, providing additional rules for what temporary licenses may cover and when they may be granted. These cases address topics, ranging from required liability insurance to compensation for a landowner’s loss of quiet enjoyment of their property.…

Continue Reading Proposed Changes to NY RPAPL Section 881: A Big Win for Developers and Owners

2700 Bohn Motor, LLC v. F.H. Myers Construction Corp., 338 So.3d 500 (La. Ct. App. 2022).

This case involved the restoration of an old building in New Orleans. Fire broke out, resulting in a loss that was paid by the owner’s builder’s risk insurance. The builder’s risk carriers — subrogated to the rights of the owner — then sued the prime contractor, its subcontractor, and sub-subcontractor for negligence.…

Continue Reading Louisiana Court Enforces AIA Wavier of Subrogation to Preclude Carrier’s Recovery

Hanuman Chalisa, LLC v. BoMar Contr., Inc., 2022-Ohio-1111, 187 N.E.3d 1108 (Ct. App.)

Hanuman Chalisa LLC (owner) contracted BoMar Contracting, Inc. (BoMar) to construct a hotel in Columbus, OH. The contract consisted of the AIA A101-2007 and AIA A201-2007. The owner later terminated BoMar, alleging deficiencies in BoMar’s work. The parties disputed whether the owner terminated the contract “for cause” or “for convenience.”…

Continue Reading Ohio Court Reforms Construction Contract to Correct “Manifest Absurdity” in Termination for Convenience Term

Tocci Bldg. Corp. v. IRIV Partners, LLC, 101 Mass. App. Ct. 133 (2022)

For the first time, the Appeals Court of Massachusetts has construed the Massachusetts Prompt Payment Act (the statute), requiring strict compliance on the part of owners and contractors who wish to withhold payments from contractors or subcontractors.…

Continue Reading Appeals Court Construes Massachusetts Prompt Payment Act for First Time, Requiring Strict Compliance

COVID-19 has created a severe disruption to the construction industry. Certain jurisdictions, including Boston, San Francisco and Pennsylvania, have placed restrictions on construction projects deemed “nonessential” and require waivers for certain projects to continue. Owners, contractors, suppliers and others may currently have more questions than answers. This article addresses some important concerns, and provides links to additional resources that more specifically address these concerns.
Continue Reading COVID-19 and the Construction Industry: Important Considerations

EnerQuest Oil & Gas, L.L.C. v. Antero Resources Corporation, No. 02-18-000178CV, 2019 BL 130860 (Tex. App. – Fort Worth Apr. 11, 2019)

A Texas appellate court recently found that an out-of-state Oklahoma-based limited liability company was not subject to personal jurisdiction in Texas for alleged misappropriation of trade secrets claims.
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Continue Reading Texas Court Finds Out-of-State Defendant With Majority Ownership in Texas-Based Entity Not Subject to Personal Jurisdiction in Texas

Clipper Pipe & Service, Inc. v. The Ohio Cas. Ins. Co., 2015 Pa. LEXIS 1275 (PA  June 15, 2015)

The Supreme Court of Pennsylvania held that CASPA, 73 P.S. §§501-516, “does not apply to a construction project where the owner is a governmental entity.”  The decision once and for all resolved the issue of whether the Contractor and Subcontractor Payment Act (“CASPA”) applies to payment disputes between prime contractors and subcontractors on public works projects,  either instead of, or in addition to, the prompt payment provisions of the Commonwealth Procurement Code, 62 Pa.C.S. §§ 3931-3939 (commonly referred to as “the Prompt Payment Act”).…

Continue Reading Supreme Court of Pennsylvania Holds Contractor and Subcontractor Payment Act (“CASPA”) Inapplicable to Public Works Projects

An amended version of this post was published in the March 16, 2015 AGC Construction Law in Brief, the weekly newsletter for the Associated General Contractors of America.

Since 1994, Pennsylvania law has provided enhanced remedies for prevailing in a payment dispute arising out of a construction project.  The prevailing party in a recent jury trial discovered uncertainty in the precise contours of those available remedies.  There was no clear precedent governing recovery of fees of a testifying expert, necessary to overcome the complex accounting and delay claims asserted by the defendant in response to the invoice dispute, and the method of calculating pre-judgment and post-judgment interest and penalty interest under the statute.  Because of the large sums at issue, the difference in calculation methods was significant.  Entitlement to these matters was unclear in spite of 20 years of precedent under the Pennsylvania Contractor and Subcontractor Payment Act.…

Continue Reading Analysis: Prevailing Party In Jury Trial Finds Uncertainty In Remedies Available Under Pennsylvania Contractor And Subcontractor Payment Act

Scungio Borst & Assocs. v. 410 Shurs Lane Developers, LLC et al., 2014 Pa. Super. LEXIS 4527 (Pa. Super. Ct. 2014)

On reconsideration of an earlier panel decision of the Pennsylvania Superior Court, the Court en banc rejected a contractor’s contention that Pennsylvania’s Contractor and Subcontractor Payment Act (“CASPA”) extends liability for non-payment beyond the actual contracting parties.

This action arose out of the construction of a condominium project in Philadelphia’s Manayunk neighborhood (the “Project”).  The owner, 410 Shurs Lane Developers, LLC (the “Owner”), entered into a written contract with Scungio Borst & Associates (the “Contractor”) for the construction of the Project.  The Contractor performed the contracted-for construction services, as well as $2.6 million in additional work at the direction of the Owner and the Owner’s President and fifty percent shareholder, Robert DeBolt.  When the Contractor was not paid approximately $1.5 million incurred due to the additional work, it filed suit against the Owner and Mr. DeBolt individually, alleging, inter alia, breach of contract and violation of CASPA.…

Continue Reading En Banc Pennsylvania Superior Court Rejects Extending CASPA Liability Beyond Contracting Parties

KNL Construction, Inc. v. Killian Construction Co., Inc., 2014 U.S. Dist. LEXIS 58269 (M.D. Pa. Apr. 28, 2014)

This action arose out of the construction of the Mohegan Sun Hotel in Luzerene County, Pennsylvania.  General contractor Killian Construction Co., Inc. (“Killian”) retained KNL Construction, Inc. (“KNL”) as a subcontractor to perform certain work on the project.  The parties executed a subcontract which contained a forum selection clause mandating that disputes thereunder be litigated in Greene County Missouri, or if federal jurisdiction is applicable, in the District Court for the Western District of Missouri.
A dispute arose over KNL’s performance under the subcontract, eventually leading to its termination.  In response, KNL brought suit in Pennsylvania state court for breach of contract and related claims premised on payments allegedly owed by Killian, including a claim under Pennsylvania’s Contractor and Subcontractor Payment Act (“CASPA”).  Killian removed the case to the Middle District of Pennsylvania on diversity grounds and filed a motion to dismiss for improper venue, or, in the alternative, transfer for forum non conveniens.  In support of its motion, Killian argued that the clear language of the forum selection clause designates Missouri as the exclusive venue for litigation.…

Continue Reading District Court in Pennsylvania Concludes that CASPA Prompt Payment Act Does Not Override Unambiguous Forum Selection Clause