Aquatherm, LLC v. CentiMark Corp, 2019 BL 13240 (D. Utah Apr. 12, 2019)

Stag II Lindon LLC and Stag Industrial Inc. (collectively “Stag”) owned a building in Lindon, Utah.  Stag contracted with CentiMark Corp. (“CentiMark”) to perform work on the building’s roof.  CentiMark’s work required it to manipulate, move, and reinstall existing heating cables on the roof.  Shortly after completion of the work, in March of 2014, a fire occurred on the roof which was traced to the location of heat tape, which CentiMark had removed and replaced.

Continue Reading District Court in Utah Grants Summary Judgment for Contractor Against Insurance Subrogation Claim Based on Contractual Waiver Provision and Statute of Limitations

Pinnacle Crushing & Constr. LLC v. Hartford Fire Ins. Co., 2018 U.S. Dist. LEXIS 67965 (W.D. Wa. Apr. 23, 2018)

The Army Corps of Engineers (the “Corps”), as owner, and Cherokee General Corporation (“CGC”), as prime contractor, entered into a contract (the “Contract”) in connection with work at the Yakima Training Center (the “Project”).  CGC subcontracted with SCI Infrastructure (“SCI”) for certain work related to the Project (the “SCI Subcontract”), and SCI subcontracted with Pinnacle Crushing & Construction, LLC (“Pinnacle”) (the “Pinnacle Subcontract”).  CGC obtained a Miller Act payment bond (the “Bond”) from Hartford Insurance Co. (the “Surety”) to provide coverage for labor and materials supplied in carrying out the work.

After the Corps terminated the Contract with CGC, CGC submitted a claim under the Contracts Disputes Act.  As required by the SCI Subcontract, CGC asserted SCI’s pass through claims against the Corps, which included amounts allegedly owed to both SCI and Pinnacle.

Separately, SCI and Pinnacle sued CGC and the Surety to recover under the Bond for the work they performed under the subcontracts, but for which CGC had not paid them.


Continue Reading Subcontract Provision Requiring Subcontractor to Pass Through its Claims Does Not Prevent the Subcontractor From Suing to Recover Against Miller Act Bond

Adams v. Barr, 2018 VT 12, 2018 Vt. LEXIS 10 (VT 2018)

On February 24, 2016, Barr Law Group (“Barr”) filed a demand for arbitration with the American Arbitration Association to recover $40,000 in unpaid legal fees from its client, Adams Construction VT, LLC (“Adams”).  Adams responded by filing an answer and counterclaim, seeking to recover $97,000 in damages from Barr.  Thereafter, Adams and Barr each actively participated in the arbitration, including arbitrator selection, preliminary conferences, extensive discovery and motion practice over a period of more than five months.  At the request of Adams, the matter was set for a three day hearing.

In October of 2016, just one week before the three day hearing was set to begin, Adams filed an objection and motion to dismiss the arbitration, arguing that the arbitration clause in its fee agreement with Barr was unenforceable.  Specifically, Adams argued that Barr, as Adams’ counsel, owed a fiduciary duty and ethical obligations that required it to disclose to Adams the rights it would forego by signing the agreement.  According to Adams, Barr had failed to explain the legal implication of the arbitration clause and failed to advise Adams to obtain independent counsel before signing the agreement.  However, Adams’ objection and motion to dismiss was the first time it had raised any objection to the arbitration proceedings.


Continue Reading Supreme Court of Vermont Holds That Contractor Waived its Right to Challenge the Validity of Arbitration Agreement by Actively Participating in the Arbitration for Six Months Before Raising an Objection

Universal Acad. v. Berkshire Dev., 2017 Mich. App. LEXIS 975 (Ct. App. June 20, 2017)

The dispute arose out of an agreement between Universal Academy (“Universal”) and Berkshire Development (“Berkshire”), under which Berkshire agreed to provide demolition services to Universal and Hamadeh Education Services (“HES”).  The agreement also contained an arbitration provision which provided in part:

In the event of a dispute between Contractor and the Owner that cannot be resolved, the parties agree to binding arbitration with the American Arbitration Association in accordance with the Construction Industry’s Rules of the American Arbitration Association in effect as of the date of this Agreement.

The agreement was terminated by Universal, alleging material breaches by Berkshire.  Following termination, subcontractors for the project filed a complaint against Berkshire, Universal, and HES, requesting foreclosure of construction liens and payment for services.  In response, Berkshire filed a cross-complaint against Universal and HES, requesting foreclosure of its lien and asserting claims of promissory estoppel and fraudulent inducement.  Five months after it filed the cross-complaint, Berkshire filed a motion to enforce the arbitration agreement between it and Universal.


Continue Reading Michigan Appellate Court Rules That, Absent Proof of Prejudice, Defendant’s Filing of a Cross-Complaint Does Not Constitute a Waiver of Arbitration

G.T. Leach Builders, LLC v. Sapphire V.P., 2015 Tex. LEXIS 273 (Tex. Mar. 20, 2015)

This action arose after 2008’s Hurricane Dolly caused extensive damage to a luxury condominium project that Sapphire V.P., L.P. (“Developer”) was in the process of developing on South Padre Island (the “Project”).  In 2009, the Developer sued insurance brokers for negligence and breach of contract, alleging that they let the builder’s risk insurance policy expire eight days before the storm struck and be replaced by a permanent policy even though construction of the Project was not yet complete.  The Developer sought to recover millions of dollars for water damage and other increased building costs it alleged that the builder’s risk policy covered or should have covered but the permanent policy did not.


Continue Reading Texas Supreme Court Holds Builder’s Limited Defensive Participation in Litigation Did Not Waive Right to Compel Developer to Arbitrate

East Coast Paving & Sealcoating, Inc. v. N. Allegheny Sch. Dist., 111 A.3d 220 (Pa. Commw. Mar. 6, 2015).

North Allegheny School District (“Owner”) hired East Coast Paving & Sealcoating, Inc. (“Contractor”) to pave several large areas.  Shortly after Contractor began its paving work, Owner’s architect found “soft spots” in the areas to be paved.  Contractor’s scope of work under the contract did not include soft spot repair work, in which soft ground is replaced with compacted stone before paving, but Contractor and Owner’s Director of Facilities, who had the authority to authorize additional work, agreed that Contractor would do the repair work.  Owner’s architect’s finding of soft spots and Owner’s Director of Facilities’ agreement with Contractor were documented in a report to Owner.  A second report to Owner documented Contractor’s commencement of the repair work.


Continue Reading Pennsylvania Appeals Court Finds Public Owner Waived Written Change Order Requirement By Conduct

Laquila Grp., Inc. v. Hunt Constr. Grp., Inc., 2014 N.Y. Misc. LEXIS 2824 (N.Y. Sup. Ct. June 25, 2014)

This action arose out of a payment dispute following construction of the Barclays Center in Brooklyn, New York.  General contractor Hunt Construction Group, Inc. (“Hunt”) retained Laquila Group, Inc. (“Laquila) as a subcontractor to perform excavation and foundation work for the project.  The parties executed a subcontract whereby Laquila would perform the work for $27.5 million with the understanding that the work had to be completed in a timely manner due to events at Barclays already scheduled around the completion date.  The subcontract further specified that Hunt was not liable to Laquila for any additional costs or changes in the work absent a written change order.

The project experienced various complications, which resulted in the parties entering into numerous change orders.  Hunt paid Laquila the money due under the original $27.5 million subcontract, plus payments covering the change orders.  Each change order executed by Laquila contained the clause, “[a]cceptance of this Change Order constitutes a waiver of any claim, additional compensation and time whatsoever in relationship to the items covered under this Change Order.”  Moreover, with each progress payment, Laquila submitted releases and a “Partial Waiver of Claims” including a waiver of liens that confirmed that it had been properly paid for its work.


Continue Reading New York Court Rules that Excavator’s Suit Against GC May Proceed Despite Releases It Provided with Progress Billings