Transocean Offshore Gulf of Guinea VII Ltd. v. Erin Energy Corp., 2018 U.S. Dist. LEXIS 39494 (S.D. Tex. Mar. 12, 2018)

On March 12, 2018, in Transocean Offshore Gulf of Guinea VII Ltd. v. Erin Energy Corp., the U.S. District Court for the Southern District of Texas became the second U.S. court to recently determine that the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), as codified in the Federal Arbitration Act (“FAA”), applies to consent awards.  Although seemingly inconsequential at first glance, the question of whether consent awards—i.e., settlement agreements recorded by arbitral tribunals as awards—are subject to the New York Convention, has remained the subject of much debate within the field of international arbitration for many years.

In Transocean, the petitioners, Transocean Offshore Gulf of Guinea VII Limited and Indigo Drilling Limited, entered into an agreement to provide drilling equipment, personnel, and services in the waters off the coast of Nigeria to the respondent, Erin Energy Corporation.  Prior to the completion of the contract, a dispute arose and, pursuant to an arbitration clause, the petitioners initiated an arbitration under the rules of the London Court of International Arbitration (“LCIA”).  Before the tribunal made a decision on the merits, the parties reached a settlement and, at the parties’ request, the tribunal issued a consent award setting forth the terms of the parties’ settlement.

Hope v. Dep’t of Veterans Affairs, 2018 U.S. Dist. LEXIS 28479 (E.D. Ark. Feb. 22, 2018)

This matter involved a motion for temporary restraining order and preliminary injunction (the “Motion”) filed by Richard Alan Hope (“Hope”) and his HVAC company, Powers of Arkansas (“Powers”), asking the District Court to prohibit the Department of Veterans Affairs (“VA”) from continuing debarment proceedings against them.  In 2012, Federal agents began investigating Hope for fraudulently presenting DAV Construction Company, Inc. as a legitimate service-disabled, veteran-owned small business in order to obtain government construction contracts.  Hope was indicted in 2016 for conspiracy to defraud, among other things.  The VA thereafter suspended Hope and Powers from government contracting based on the indictment.  The indictment was ultimately dismissed after the Court declared a mistrial.  In January of 2018, the VA lifted the suspensions, but issued notices of proposed debarment to Hope and Powers.  While debarment proceedings are pending, a contractor may not be awarded government contracts.
The Court first analyzed jurisdiction.  Absent waiver, sovereign immunity shields the VA from suit.

However, the Administrative Procedure Act (“APA”) waives sovereign immunity to allow judicial review of final agency actions.  The Court held that it lacked jurisdiction here because there was no final agency decision as to the proposed debarment.  Indeed, the VA has established procedures for debarment decisions and the proposal for debarment is only the first step.  The Court found that because the VA’s decision-making process had only just begun, and there had been no final agency action, the APA did not authorize the Court to review the merits of the proposed debarment at this time.

St. George Fire Prot. Dist. No. 2 v. J. Reed Constructors, Inc. 2018, La. App. LEXIS 262 (February 20, 2018)

J. Reed Constructors, Inc. (“J. Reed”) and St. George Fire Protection District No. 2 (“St. George”) entered into two construction contracts under which disputes were subject to binding arbitration. A dispute arose in which J. Reed contested St. George’s assessment of liquidated damages and claims for breach of warranty. The matter was submitted to arbitration and the arbitrator awarded St. George $58,865.00.
St. George petitioned the trial court to confirm the arbitration award, pointing out that the three month deadline for the parties to request that the award be vacated, modified, or corrected had lapsed.  J. Reed answered the petition by objecting to the confirmation of $41,660.00 for architect and attorney fees.  J. Reed acknowledged that it did not file a motion to modify within three months of the award, as required by the Louisiana Binding Arbitration Law (the “Act”), but argued that it was not prohibited from raising its objection as an affirmative defense in its answer to the petition.

The trial court rejected J. Reed’s argument and confirmed the award.  The Court of Appeals affirmed, holding that J. Reed’s right to challenge the award had been waived and could not be revived by characterizing the challenge as an affirmative defense to the petition to confirm.

Dormitory Auth. of the State of NY v. Samson Constr. Co., 2018 N.Y. Lexis 218 (February 15, 2018)

The Dormitory Authority of the State of New York (“DASNY”) undertook, as project manager, to construct a facility for the Office of the Chief Medical Examiner of the City of New York (the “City”) as a forensic biology laboratory (the “Project”).  DASNY retained Perkins Eastman Architects, P.C. (“Perkins”) as architect for the Project, and Samson Construction Co. (“Samson”) as the foundation contractor.

Complications during the construction of the foundation resulted in 18 months of delays due to the adjacent building settling eight inches, damages to the adjacent sidewalks, utilities and emergency repairs.  DASNY and the City filed suit against Samson, and later joined Perkins, asserting claims against Perkins for breach of contract and negligence.

Perkins moved for summary judgment to dismiss the City’s claims, and to dismiss DASNY’s negligence claim as duplicative of its breach of contract claim.  The trial court dismissed the City’s breach of contract claim; holding that the City was not an intended third-party beneficiary of the contract between DASNY and Perkins (the “Contract”), and allowed both DASNY’s breach of contract and negligence claims to proceed, holding that the claims were not duplicative of each another.

Smith Jamison Constr. v. Apac-Atlantic, Inc., 2018 N.C. App. LEXIS 132 (N.C. Ct. App. Feb. 6, 2018)

General contractor APAC-Atlantic (“APAC”) hired Smith Jamison Construction (“Jamison”) as a subcontractor to perform concrete work on a highway project.  The APAC-Jamison subcontract included an agreement that the parties would arbitrate all claims arising out of or relating to their subcontract.  Jamison alleged that APAC later sought to have Jamison further subcontract the concrete work to Yates Construction Company (“Yates”).  According to Jamison, APAC terminated the subcontract when Jamison refused to subcontract with Yates.

Jamison sued APAC and Yates in state court, alleging that APAC had breached its subcontract with Jamison and that Yates had committed fraudulent misrepresentation, tortious interference, civil conspiracy, and violations of the North Carolina unfair and deceptive trade practices statute.  Both APAC and Yates sought to compel arbitration of the claims Jamison asserted against them.  The court ordered arbitration of Jamison’s claims against APAC based on the arbitration agreement in their subcontract.  The court denied Yates’s attempt to compel arbitration.  Like APAC, Yates also based its argument on the arbitration agreement in the subcontract between Jamison and APAC – a contract to which Yates was not a party.  Yates appealed.

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.

Harakas Constr., Inc. v. Metro Gov’t of Nashville, 2018 Tenn. App. LEXIS 45 (Tenn. App. January 29, 2018)

 BK Partners LLC (“BK”) sought to build a condominium complex in Davidson County.  This required an upgrade to the existing public sewer system.  Therefore BK and the Metropolitan Government of Nashville and Davidson County (“Metro”) entered into an agreement whereby Metro agreed to contribute $200,000 to the cost of the sewer upgrade with BK responsible for the actual construction.  BK hired Harakas Construction, Inc. (“Harakas”) to upgrade the system (the “Project”).  Metro was not a party to that contract (the “Contract”).

Harakas encountered unforeseen soil conditions, which resulted in two change orders that increased the Contract amount.  Under the Contract, Metro was not required to authorize change orders; nevertheless, Metro was involved in the discussions.  Harakas performed the extra work and achieved substantial completion.  However, after a defect was discovered in the upgraded system, Metro refused to fund the Project.  When BK failed to pay Harakas, Harakas sued both Metro and BK.  Against Metro, Harakas claimed promissory estoppel and unjust enrichment.  The trial court granted Metro summary judgment based on sovereign immunity.

Cont’l Res. v. P&P Indus., LLC, 2018 N.D. Lexis 20 (January 22, 2018)

In 2013, Continental Resources Inc. (“Continental”), an oil producer doing business in North Dakota, entered into a master servicing agreement, governed by Oklahoma law, with United Oilfield Services (“United”).  According to the contract, United agreed to provide transportation, water hauling, and related support services to Continental in support of Continental’s ongoing operations in North Dakota.  The contract also contained the following termination provision: “[I]t being understood and agreed that either party hereto may cancel this Contract by giving the other party thirty (30) days written notice of such cancellation.”

Approximately a year after the parties signed the contract, Continental alleged that United (i) violated state and federal limits and regulations regarding the number of hours a truck driver may drive, (ii) violated Continental’s policy limiting the number of hours an employee could work in a day, and (iii) engaged in improper and fraudulent billing.  Following its discovery of United’s alleged misconduct, Continental terminated its contract and filed suit against United and other related entities.

Strickland v. Arch Ins. Co., No. 17-10610, 2018 U.S. App. LEXIS 504 (11th Cir. Jan. 9, 2018)

Strickland provided sand to a paving company (“Douglas”) for a Georgia Department of Transportation (“GDOT”) road improvement project (the “Project”).  Arch Insurance Company (“Arch”) issued payment and performance bonds on Douglas’s behalf.  In 2007, GDOT declared Douglas in default and removed it from the Project.  In accordance with the performance bond, Arch arranged for a third-party contractor to complete Douglas’s work on the Project. Strickland did not supply sand after Douglas’s removal.
In August 2010, GDOT determined that the Project was substantially complete, and in September 2010, performed final inspection and generated a punch list.  Arch’s contractor completed the punch list by September 2011.  In March 2012, GDOT accepted Project maintenance responsibilities because the Project had been satisfactorily completed as of September 2011.  GDOT made semi-final payment to Arch in July 2012.

In September 2012, Strickland sent a demand for payment on Arch’s payment bond.  Arch acknowledged the claim and asked for additional documentation.  Strickland did not respond.  In 2014, Strickland learned that GDOT was preparing to close out the Project and filed a lawsuit against Arch.

McMillin Albany LLC v. Superior Court, No. S229762, 2018 Cal. LEXIS 211 (Jan. 18, 2018)

Several homeowners (“Plaintiffs”) brought suit against developer/general contractor McMillin Albany LLC (“McMillin”) for alleged defective construction of new homes.  Plaintiffs alleged the defects caused property damage and economic loss in the form of repair costs and reduced property values, and asserted common law claims for negligence, strict product liability, breach of contract, and breach of warranty, and a statutory claim for violation of the construction standards outlined in the Right to Repair Act (Civ. Code §§ 895–945.5, the “Act”).  The Act defines standards for the construction of individual dwellings; governs various builder obligations, including provision of warranties; creates a prelitigation dispute resolution process; and describes mandatory procedures for lawsuits under the Act.  McMillin sought a stay of proceedings so that the parties could proceed through the Act’s prelitigation dispute process, which includes notice to the builder of defects and an opportunity to cure.  Plaintiffs refused to stipulate to the stay and instead, dismissed their statutory claim.  McMillin then sought a court-ordered stay which Plaintiffs contested, arguing that their suit now omitted any claim under the Act, and therefore, was not subject to its procedures.