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.

This article was originally published in the April 2020 issue of ConsensusDocs Construction Law. It is republished here with permission.

State and local governments throughout the country continue to issue orders in response to the novel coronavirus (COVID-19) outbreak. Many states have ordered the shutdown of all businesses, with various exceptions such as businesses that are “essential” and/or “life-sustaining.” Each jurisdiction has provided a list and/or guidance on what kinds of businesses must close and what can remain open. Pepper Hamilton continues to monitor these orders and update its “COVID-19 – State Business Impact Tracker” map, an interactive tool that shows shutdown orders by state.

Whether construction projects can continue is an ever-changing issue. In some jurisdictions, such as Boston, all construction projects were shut down. In other locations, whether construction can continue may depend on the county, or even city, where the project is located and/or the type of project. However, those supplying labor, materials and/or equipment to construction projects should closely monitor how their projects are being impacted, including whether and when to exercise statutory remedies available, e.g., ‘ lien, stop payment notice and/or bond rights. In many states, the statutory deadlines to assert these rights are triggered by “completion” of a project.

This article was originally published on December 3, 2019 on ConsensusDocs. It is reprinted here with permission.

Construction contracts often include a “no damage for delay” clause that denies a contractor the right to recover delay-related costs and limits the contractor’s remedy to an extension of time for noncontractor-caused delays to a project’s completion date. Depending on the nature of the delay and the jurisdiction where the project is located, the contractual prohibition against delay damages may well be enforceable. This article will explore whether an enforceable no-damage-for-delay clause is also a bar to recovery of “acceleration” damages, i.e., the costs incurred by the contractor in its attempt to overcome delays to the project’s completion date.

This article was published in Law360 on December 4, 2019. © Copyright 2019, Portfolio Media, Inc., publisher of Law360. It is republished here with permission.

On Nov. 21, the Queen Mary University of London School of International Arbitration, in partnership with the U.K.-based law firm Pinsent Masons LLP, released its ninth annual international arbitration survey focused on international construction disputes.

As a nod to the significance the construction industry plays in the field of international arbitration, the 2019 Queen Mary University survey marks the largest industry-specific survey its School of International Arbitration has ever conducted and offers insights that will undoubtedly be used for years to come.
While the survey data and accompanying report provide a granular level of analysis concerning a wide variety of topics, below are some of the key takeaways of interest to U.S. practitioners.

Chinese Hosp. Ass’n v. Jacobs Eng’g Grp., Inc., 2019 BL 330340, 2 (N.D. Cal. Sept. 03, 2019)

This case arises out of the alleged breach of contract and defective design for the construction of a new hospital in San Francisco.  During construction, property owner and plaintiff Chinese Hospital Association (“Chinese Hospital”) became aware of alleged defects involving the designs provided by its subcontractor, architect-defendant Jacobs Engineering Group, Inc. (“Jacobs”).  Chinese Hospital terminated its contract with Jacobs for convenience mid-construction.

Decker Constr. Co. v. Wesex Corp., No. 2:18-cv-727, 2019 BL 232653 (S.D. Ohio June 24, 2019)

In Decker Construction Co. v. Wesex Corporation, the United States District Court for the Southern District of Ohio declined to dismiss a cause of action for fraudulent misrepresentation against Third-Party Defendant Mark Schrader (“Schrader”), the former Chief Financial Officer of Wesex Corporation (“Wesex”).  Wesex served as the general contractor on a construction project in New Albany, Ohio (the “Project”).  In its claim against Schrader, Third Party Plaintiff CCL Label, Inc. (“CCL”), the construction manager on the Project, alleged that Schrader signed affidavits included in Wesex’s payment applications that falsely certified Wesex’s subcontractors had been paid for their work on the Project.  Schrader sought dismissal on the basis that the Court lacked personal jurisdiction over him and that CCL failed to state a claim.

Skanska USA Building, Inc. v. J.D. Long Masonry, Inc., No. 1:16-cv-00933, 2019 BL 336852, (D. Md. Sept. 9, 2019)

On September 9, 2019, a Maryland federal court awarded Skanska USA Building, Inc. (“Skanska”) compensatory damages, pre- and post-judgment interest, and litigation expenses including attorney and expert fees in its suit against subcontractor J.D. Long Masonry, Inc. (“Long”) for defective masonry work at a Johns Hopkins University research facility.

  1. Lost profits, not part of unpaid contract balance, may be recoverable as consequential damages in contract claim, but cannot be included in lien. TSP Services Inc. v. National-Standard, LLC, 2019 BL 340267 (Mich. Ct. App. Sept. 10, 2019)

National-Standard, LLC contracted TSP Services, Inc. for asbestos abatement, demolition, restoration,…

Abdul Latif Jameel Trans. Co. v. FedEx Corp., No. 19-5315 (6th Cir. Sept. 19, 2019).

In the world of international arbitration, where document disclosure is already relatively limited compared to practices in federal and state court, 28 U.S.C. § 1782 — titled “Assistance to foreign and international tribunals and to litigants before such tribunals” — has been a commonly overlooked tool for obtaining useful evidence in support of an international arbitration. In broad strokes, the statute permits a federal district court to require a person within the district to provide documents or testimony for use in a proceeding in a “foreign or international tribunal.”

Precision Hydraulic Cylinders, Inc. v. Manufacturing. Technology, Inc., No. 7:18-CV-203-FL, 2019 BL 344743, 2019 U.S. Dist. LEXIS 156670 (E.D.N.C. Sept. 13, 2019)

Precision Hydraulic Cylinders, Inc. (“Precision”) issued a series of purchase orders to Manufacturing Technology, Inc. (“MTI”) to weld steel components together to create hydraulic cylinders. MTI agreed to develop welds for Precision’s small and large cylinders under two separate purchase orders.