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.

Woodrow Wilson Constr. LLC v. Orleans Par. Sch. Bd.,  2018 La. App. LEXIS 762 (April 18, 2018)

The Orleans Parish School Board (“OPSB”) awarded a prime contract to Woodrow Wilson Construction (“WWC”) for the construction of a new elementary school (the “Project”).  On May 23, 2016, WWC submitted its request for payment of final retainage to OPSB.  OPSB withheld payment from WWC, claiming that WWC owed liquidated damages for the delays in completion of the Project, which allegedly exceeded the amount due to WWC.  WWC filed a petition for writ of mandamus pursuant to La. R.S. 38:2191(D) (the “Act”), which provides that “[a]ny public entity failing to make any … any final payment when due as provided in this Section, shall be subject to mandamus to compel the payment of the sums due under the contract …”  The trial court denied the petition and WWC appealed.  The question on appeal was whether OPSB may withhold final payment due under the Act because of alleged delays in the Project, despite the fact that liability for the delays had not yet been adjudicated.

Section A of the Act provides that “[a]ll public entities shall promptly pay all obligations arising under public contracts when the obligations become due and payable under the contract.  All … final payments shall be paid when they respectively become due and payable under the contract.”  Under the prime contract, retainage was due upon the occurrence of six enumerated requirements.  The Court determined that these requirements were all satisfied as of May 23, 2016 and therefore final retainage was due to WWC as of that date.  The Court further found that upon satisfaction of these requirements, the public entity owed a ministerial duty to issue final payment.  By providing the right to mandamus relief in the Act, the legislature intended to eliminate the public entity’s discretion to withhold payment from a contractor.

Aquatic Renovations Sys. v. Vill. of Walbridge, 2018 Ohio App. Lexis 1581 (April 13, 2018)

This post was published on July 7, 2018 in The Pennsylvania Record.

On May 2, 2012, Aquatic Renovations Systems, Inc. (“Aquatic”) entered into a contract with the Village of Walbridge (“the Village”) for the installation of a new pool liner (“Contract 1”).  Prior thereto, the Village council adopted an ordinance which authorized the mayor to enter into Contract 1 (“Ordinance”).  On April 12, 2013, the mayor signed a new contract for the balance of the work (“Contract 2”).  A few days after Aquatic completed its work, the pool liner began to lift.  The Village then refused to pay Aquatic for the completed and approved work.

Aquatic sued the Village for non-payment, alleging the Village breached Contract 2.  Aquatic also alleged that the Village was liable under a theory of quantum meruit and unjust enrichment.  The trial court granted the Village’s motion for summary judgment, holding that Contract 2 was not valid because it did not comply with the Ohio Revised Statute which required the mayor, the clerk, and the Village administrator to authorize all Village Contracts.  Thus, because Contract 2 was unenforceable, Aquatic could not recover under a breach of contract, quantum meruit or unjust enrichment theory.

United States Home Corp. v. Ballesteros Trust, 2018 Nev. LEXIS 28 (Nev. Apr. 12, 2018)

United States Home Corporation (“U.S.H.”) built homes in a Nevada common-interest community, subject to a Covenant, Conditions, and Restrictions agreement (“CC&R”), which provided that any dispute would be resolved by arbitration.

Between August 2013 and February 2015, twelve home purchasers filed pre-litigation notices against U.S.H. for alleged construction defects.  Three of the purchasers had direct purchase and sales agreements with U.S.H. that contained arbitration clauses; the remaining homeowners did not sign such agreements, but took title subject to the CC&R.  U.S.H. demanded arbitration, but the homeowners brought claims in a Nevada district court seeking damages for breach of contract and other claims.  U.S.H. moved to compel arbitration.  The court held that the transaction did not involve interstate commerce, so the Federal Arbitration Act (“FAA”) did not apply, and invalidated the arbitration agreements as unconscionable.

Fraser Eng’g Co. v. IPS-Integrated Project Servs., LLC, 2018 US Dist. LEXIS 51392 (D.N.H. March 27, 2018)

IPS-Integrated Project Services, LLC (“IPS”) was the general contractor on a project to design and construct a manufacturing facility in Portsmouth, New Hampshire. IPS subcontracted with Fraser Engineering Company (“Fraser”) for the project’s mechanical and plumbing scope of work. Shortly after award, IPS notified Fraser that it may be directed to accelerate its work. In response, Fraser put IPS on notice that acceleration would result in labor inefficiencies for which it expected to be reimbursed.  Thereafter, IPS directed Fraser to accelerate and Fraser complied by using extra overtime over the next several months. During that time, the parties communicated numerous times about Fraser’s claim for labor inefficiencies.

Under its subcontract with IPS, Fraser was required to submit lien waivers with each of its payment applications. According to the court, the waivers at issue “do not merely release lien rights, but also ‘all claims, demands, or causes of action . . . which [Fraser] has, or might under any present or future law, assert against [IPS] or [the owner] relating to the Partial Payment and/or the labor services, materials or equipment for which the partial payment has been made.’” During its work, Fraser submitted eight such waivers.

Pavik v. George & Lynch, Inc., No. 160, 2017, 2018 Del. LEXIS 133 (Mar. 23, 2018)

This case arises out of a highway reconstruction project and a car accident which occurred on the highway during non-working hours.  The Delaware Department of Transportation (“DelDOT”) hired George & Lynch, Inc. (“G&L”) to repave Omar Road.  The contract obligated G&L to perform its work in a manner that would provide reasonably safe passage to the traveling public and to provide for the protection and safety of the general public.  DelDOT approved G&L’s traffic control plan, which provided for placement of temporary warning signs during working hours and permanent warning signs advising travelers of road work ahead.  As part of its work, G&L performed cold in-place recycling, a process by which asphalt is removed, recycled, and reapplied as a base layer.  As the recycled asphalt cures, the road surface can support traffic, but there is a risk that raveling—a condition in which the base layer breaks apart—can occur.

It was during a curing period that the accident occurred.  On Friday, after asphalt had been installed and began to cure, the road was reopened.  On Saturday, after a thunderstorm, DelDOT received complaints of potholes on the road.  On Sunday, DelDOT patched the potholes and later that night, the driver lost control of her car and ran off the road.  Plaintiffs claimed the accident was caused by raveling and that G&L was negligent because it failed to provide warning signs about the road’s condition during the non-working hours.  G&L argued that it had no duty to erect additional signs and that DelDOT’s repairs broke the chain of causation.

City of Whiting v. Whitney, Bailey, Cox & Magnani, LLC, 2018 U.S. Dist. LEXIS 44943 (N.D. Ind. Mar. 20, 2018)

The City of Whiting, Indiana (the “City”) undertook a 26-acre lakefront development project.  It hired an engineering firm to serve as the consultant for the project.  The consultant subcontracted with a subconsultant for marine engineering services, including design of a rock revetment on the lakefront for shoreline protection.  According to the City, the revetment failed on three occasions, resulting in damage to the City’s property at the project site, including a walking path, landscaping and existing trees, a gazebo, and an existing Gun Club structure, which the City had planned to convert to a restaurant.

After accepting assignment of the consultant’s contract with the subconsultant, the City filed a six-count complaint and alleged that the subconsultant’s negligent revetment design caused damage to the City’s property.  The subconsultant moved for summary judgment on the City’s negligence claim, arguing that the economic loss rule precluded liability against it in tort.  The court noted that Indiana’s economic loss rule bars tort liability when there is damage only to the product contracted for itself, but that the rule does not preclude tort liability if there is personal injury or damage to “other property.”

G&G Mech. Constructors, Inc. v. Jeff City Indus., Inc., No. WD80840, 2018 Mo. App. LEXIS 271 (Mar. 20, 2018)

This case arose out of a project in Columbia, Missouri on which Jeff City Industry, Inc. (“JCI”) was the general contractor and G&G Mechanical Constructors, Inc. (“G&G”) was a subcontractor.

The draft subcontract contained an interest provision which provided that overdue payments “shall bear interest at the annual rate of 18% or the highest rate allowed by law, if lower. Retainage shall not be held out of payment.”  JCI struck through this provision, wrote “5% Retiange [sic]” in the margin, initialed it, and sent it to G&G.  G&G also initialed the revision.

When JCI failed to pay G&G for its work, G&G sued JCI for breach of contract, unjust enrichment, and violation of Missouri’s Prompt Pay Act.  A jury returned a verdict against JCI, and the trial court entered a judgment against it which included prejudgment interest at the rate of 9% pursuant to Missouri Revised Statute § 408.020.

Meridian Eng’g Co. v. United States, 2018 U.S. App. LEXIS 7024 (Fed. Cir., Mar. 20, 2018)

Meridian Engineering Company (“Meridian”) was hired by the United States (“Government”) to construct flood control structures on the Chula Vista Project.  Meridian encountered what it considered to be differing site conditions on the project.  The Government issued two contract modifications in response to Meridian’s claims.  Later, structural failures occurred and the Government ultimately terminated Meridian.  Meridian filed suit in the Court of Federal Claims.

The court held that Meridian failed to establish a compensable differing site condition because the bid documents sufficiently notified contractors of potential water conditions at the site that could result in the conditions claimed.  Also, the court held that Meridian was charged with knowledge of the conditions that a pre-bid site visit would have revealed, which included the conditions in question.  The Court of Appeals affirmed the trial court on that issue.

Suffolk Constr. Co. v. Rodriguez & Quiroga Architects Chtd., 2018 U.S. Dist. LEXIS 42652 (S.D. Fla. Mar. 15, 2018)

This case arises out of the design and construction of a science museum in Miami, Florida (the “Project”).  Museum of Science, Inc. (“MSI”), the Project owner, executed several agreements relating to the Project, including: (i) an agreement with Defendant Rodriguez and Quiroga Architects Chartered (“R&Q”) to serve as executive architect; (ii) an agreement with Defendant Grimshaw Architects P.C. (“Grimshaw”) to serve as the design architect; (iii) a construction services contract with Plaintiff Suffolk Construction Co. (“Suffolk”); and (iv) a direct contract with Suffolk’s subcontractor, Plaintiff Baker Concrete Construction, Inc. (“Baker”) for construction services after MSI terminated Suffolk for convenience.  After execution of these agreements, R&Q executed contracts with Defendant Fraga Engineers, LLC (“Fraga”) for mechanical, electrical, and plumbing design services, and with Defendant DDA Engineers, P.A. (“DDA”) for structural design and engineering services.

Suffolk and Baker (collectively, “Plaintiffs”) filed suit for negligence against R&Q, Grimshaw, Fraga, and DDA (collectively, “Defendants”), claiming that by issuing deficient design documents, Defendants breached their duties owed to Plaintiffs causing Plaintiffs to incur economic losses.  All Defendants but R&Q moved to dismiss the claims, arguing that they had no supervisory role or control over Plaintiffs, as demonstrated by the fact that their contracts with MSI did not designate them as “supervisory architects,” and thus, owed no duty to Plaintiffs.