Published in Dispute Resolution Journal (June 2020, Vol. 74, No. 3), the flagship publication of the American Arbitration Association. © 2020, American Arbitration Association. It is reprinted here with permission.

EXCERPT:

“There is a deceptive simplicity about the way in which arbitral proceedings are conducted… In fact, the appearance conceals the reality.”

Introduction

Arbitration is simple. Parties select a person or persons — the arbitrator(s) — whose expertise or judgment they trust to resolve their differences in a privatized forum. After each party puts on their case, the arbitrator(s) consider the arguments and evidence and renders a binding decision.
Continue Reading Internationalizing Domestic Arbitration: How International Arbitration Practices Can Improve Domestic Construction Arbitration

D.A. Nolt, Inc. v. The Philadelphia Municipal Authority, 2020 BL 199761 (E.D. Pa. May 28, 2020)

The Philadelphia Municipal Authority (the “Authority”) contracted D.A. Nolt, Inc. (Nolt) to renovate a building that would serve as the City’s new police headquarters. After Nolt had performed a portion of the renovation work, the Authority cancelled the project. Nolt sued the Authority, alleging that the Authority owed it $2.5 million for work performed before the project was cancelled. The Authority denied that payment was due, claiming that Nolt had delayed the project by 255 days and that a $10,000 per day liquidated damages provision in the contract thus offset Nolt’s claim.

Nolt moved for summary judgment on the Authority’s liquidated damages counterclaim. It argued that the provision was unenforceable because the $10,000 per day amount was not a reasonable forecast or approximation of the loss the Authority expected to suffer in the event of delay. Nolt cited testimony from the Project Director for the City’s Department of Public Property, who was responsible for finalizing the Authority’s contract with Nolt. The Director testified that he did not estimate the anticipated harm that might occur in the event of a delay in Nolt’s work. Rather, he determined that $10,000 per day was reasonable because prior City projects of a similar scope and magnitude included $10,000 per day liquidated damages provisions. The Director was not personally involved in the analysis which the City had undertaken on the referenced prior projects, and he did not personally analyze any of the calculations or estimates that the City completed for those prior projects.
Continue Reading Federal Court in PA Finds Liquidated Damages Provision Unenforceable Where the Per Day Liquidated Damage Amount Was Copied from Contracts for Prior Unrelated Projects Rather than a Project-Specific Forecast of Likely Damages

N. Plains Res. Council v. United States Army Corps of Eng’rs, No. 4:19-cv-00044-BMM, 2020 BL 35412 (9th Cir. May 14, 2020)

Oil and gas pipeline construction may no longer proceed under Nationwide Water Permit 12 (NWP 12). The Ninth Circuit, by way of a two-judge panel, denied challenges to a district court decision vacating NWP 12 and enjoining the United States Army Corps (Army Corps) from authorizing oil and gas pipeline construction projects pursuant to NWP 12. The Order, which was issued without an opinion, has national effect and set a briefing schedule for reconsideration of a motion for an administrative stay. N. Plains Res. Council v. United States Army Corps of Eng’rs, No. 4:19-cv-00044-BMM.
Continue Reading Ninth Circuit Orders Enjoinment of Oil and Gas Line Construction Proceeding Under Nationwide Water Permit 12

On April 20, Pennsylvania Gov. Tom Wolf amended his March 19, 2020 Order Regarding the Closure of All Businesses That Are Not Life Sustaining. Under the previous order, construction was permitted to continue only if the business qualified as “life-sustaining” and was performing emergency repairs or if the business obtained a waiver.

The amended order paves the way for construction projects to start again throughout the Commonwealth. On April 23, Gov. Wolf announced that statewide construction can commence on May 1, 2020 and provided additional information related to the amended order in an accompanying document titled “Guidance for Businesses in the Construction Industry Permitted to Operate During the COVID-19 Disaster Emergency.” Gov. Wolf specified that the amended order applies to “all businesses in the construction industry in the Commonwealth, including those in new construction, renovation, and repair[.]” Prior to May 1, all construction industry businesses must continue to follow existing guidelines. A full list of businesses that may maintain in-person operations before May 1 can be found here.
Continue Reading Pennsylvania Governor Paves Way to Reopen Construction on May 1

DAK Americas Mississippi, Inc. v. Jedson Engineering, Inc. et al, No. 1:18cv31-HSO-JCG, 2019 BL 208838 (S.D. Miss. June 6, 2019)

This dispute arose out of the design and construction of a concrete storage slab at DAK’s polymer resin manufacturing facility located in Hancock County, Mississippi.  DAK hired Ohio-based Jedson to design and oversee the construction of a cement slab suitable for commercial operating loaders and other heavy equipment necessary to transport, unload, and stack shipping containers.  DAK allegedly discovered substantial cracking and chipping of the cement, and filed suit in federal court claiming Jedson failed to design a slab suitable for DAK’s intended purposes.  DAK asserted claims for negligent design, negligent construction management, and breach of contract.

Continue Reading Federal Court Finds That Ambiguous Limitation-of-Liability Clause Did Not Clearly Restrict Owner’s Claims

Popple Construction, Inc. v. Reilly Associates, Inc. No. 775-MDA-2017, 2019 BL 213236 (Pa. Sup. Ct., June 10, 2019).

On June 10, 2019, the Superior Court of Pennsylvania affirmed a lower court decision to deny a motion to dismiss in connection with a tort claim for negligent misrepresentation by a contractor against a third-party design/engineer.  The Court’s opinion highlights Pennsylvania’s exception to the economic loss doctrine insofar as it applies to claims raised by contractors against architects/engineers for faulty bidding documents, specifications, or designs.

Continue Reading Pennsylvania’s Exception to the Economic Loss Doctrine Appears Alive and Well: Appellate Court Permits Contractor to Pursue Negligent Misrepresentation Claim Against Design Professional

Gainesville Mech., Inc. v. Air Data, Inc., No. A19A0518., 2019 BL 229069 (Ga. Ct. App. June 19, 2019)

The First Division of the Georgia Court of Appeals affirmed a superior court’s decision to confirm an arbitration award against Appellant Gainesville Mechanical, Inc. (“Gainesville”) because Gainesville failed to show that the arbitrator manifestly disregarded the law governing the “modified total cost” approach to damages.

Continue Reading Georgia Court of Appeals Affirms Superior Court’s Confirmation of Arbitration Award, Finding That Arbitrator Did Not Manifestly Disregard Law Governing the “Modified Total Cost” Approach to Damages

Thomaston Acquisition, LLC v. Piedmont Construction Group, Inc., No. S19Q0249, 2019 BL 202176 (Ga. June 03, 2019)

The acceptance doctrine represents the principle that an independent contractor is not liable for damages occurring after the contractor has completed its work and the work is turned over to and accepted by the owner, provided that the defect was readily observable on reasonable inspection and was not inherently dangerous.
Continue Reading Georgia’s Supreme Court Re-Affirms The Acceptance Doctrine

Construction disputes frequently require companies to engage third-party consultants to analyze and opine on such issues as delays, defects in workmanship or materials, and deficiencies in payment— even before they anticipate litigation.  Construction companies should keep in mind that materials they provide consultants, and materials that consultants generate, can in certain circumstances be discoverable in

Published in The Construction Lawyer, Volume 39, Number 1 Winter 2019. © 2019 American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent