Blackman & Co., Inc., v. GE Bus. Fin. Servs., Inc., 2016 U.S. Dist. LEXIS 87904 (D.N.J. July 7, 2016)

Grove Street Realty Urban Renewal, LLC (“Grove Street”) contracted with Blackman & Co., Inc. (“Blackman”) to manage a project (the “Project”) to construct a four-story apartment building in West Deptford, New Jersey between 2007 and 2009 (the “Contract”).  The Contract incorporated AIA Document A201-1997 – General Conditions of the Contract for Construction.

GEBFS acquired the Project from Grove Street pursuant to foreclosure proceedings in 2012.  Three years after it acquired the Project (and six years after construction was complete), GEBFS filed a $4,000,000 Demand for Arbitration with the American Arbitration Association (“AAA”) against Blackman for alleged post-construction defects, asserting claims for breach of contract and breach of implied warranty.  Blackman filed an action in response to GEBFS’ Demand for Arbitration, seeking a judgment that the dispute was not governed by any agreements to arbitrate.

Scott Enters., Inc. v. City of Allentown, 2016 Pa. LEXIS 1503 (Pa. July 19, 2016)

The Supreme Court of Pennsylvania reversed an order of the Commonwealth Court and held that the prompt payment provisions of the Commonwealth Procurement Code, 62 Pa. C.S. §3931-3939 (the “Prompt Payment Act”), do not mandate an award of penalty interest and attorneys’ fees upon a finding that the government withheld payments from the contractor in bad faith.

On June 16, 2016, the U.S. Supreme Court ruled in the matter of Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), changing the legal landscape for False Claims Act qui tam claims concerning the implied false certification theory of liability. This article will discuss the Escobar holding and examine relevant considerations for contractors in light of this ruling.

Elliott-Lewis Corp. v. Skanksa USA Bldg., Inc., 2016 U.S. Dist. LEXIS 59406 (E.D.Pa. May 4, 2016)

The Federal District Court for the Eastern District of Pennsylvania held that the narrow exception to the economic loss doctrine carved out in Bilt-Rite Contractors, Inc. v. The Architectural Studio – where the Pennsylvania Supreme Court held that architects and other design professionals may be held liable to third parties that rely to their detriment on false information provided in design documents by architects and other design professionals – does not apply to a contractor that supplied information to design professionals in connection with remedial work performed by the contractor.

ITT Water & Wastewater USA, Inc. v. L. D’Agostini & Sons, Inc., 2016 Mich. App. LEXIS 579 (March 17, 2016)

This action arises out of a contract dispute between plaintiff, ITT Water & Wastewater USA, Inc. (“ITT”), and defendant, L. D’Agostini & Sons, Inc./Lakeshore Engineering Services, Inc. Joint Venture (“D’Agostini”), related to ITT’s supply of eight water pumps to D’Agostini on a project to construct a sanitary and storm water treatment and pumping station.  D’Agostini filed a counterclaim against ITT, alleging that ITT’s late pump delivery delayed the project by 103 days.  The trial court granted ITT’s motion for partial summary disposition and ruled that D’Agostini could not rely upon the Eichleay formula for determining its alleged home office overhead damages.  The parties then dismissed, without prejudice, the remaining claims and D’Agostini appealed.

Summit Contracting Grp., Inc. v. Ashland Heights, LP,  2016 U.S. Dist. LEXIS 60662 (M.D. Tenn. May 6, 2016)

Ashland Heights, LP (“Owner”) contracted with Summit Contracting Group, Inc. (“Contractor”) to construct an assisted living facility in Tennessee.  After completing the project, Contractor alleged that Owner had failed to pay Contractor in full for the work it performed; to make timely payments; to provide Contractor a time extension for inclement weather; and to deposit retainage into an interest-bearing escrow account as required by Tennessee’s Retainage Law.

Contractor filed a breach of contract and Retainage Law action in federal district court, seeking damages and litigation costs in excess of $1.5 million (the “Contract Action”).  Contractor concurrently filed a mechanic’s lien action in state court seeking enforcement of the lien in the amount of $1,074,688.74 (the “Lien Action”).

Flintco Pacific, Inc. v. TEC Management Consultants, Inc., 2016 Cal. App. LEXIS 594 (Cal. App. 2d Dist. June 21, 2016)

There was an important California decision published on July 19, 2016 (decided June 21, 2016) regarding damages due to reliance on a subcontractor bid of which all General Contractors should be aware.  A general contractor can usually recover damages if a subcontractor does not honor its bid price; which price the general has relied upon in submitting its bid to the owner.  The Court of Appeals has set forth significant limitations on a general contractor’s recovery for damages usually founded under the theory of promissory estoppel.

Nova Group/Tutor-Saliba v. United States, 125 Fed. Cl. 469 (Fed. Cl. Mar 16, 2016)

The United States Naval Facilities Engineering Command (the “Navy”) contracted with the joint venture of Nova Group and Tutor-Saliva (the “JV”) for construction of a pier at the Puget Sound Navy Shipyard in Bremerton, Washington.  The contract assigned selection of pier stability assessment methods to the JV’s discretion.  Exercising that discretion, the JV selected a SAP 2000 model for performance design loads.  Five months after the Navy had approved the JV’s design submittals, the Navy’s construction manager voiced concerns about the design and questioned the JV’s reliance upon the SAP 2000 model.

Allstate Insurance Company v. Structures Design/Build, LLC, 2016 U.S. Dist. LEXIS 34349 (WD VA March 17, 2016)

This construction dispute case arises from a failed pipe connector that caused water damage to a facility and insured personal property, which Hillel at Virginia Tech, Inc. (“Hillel”) owned in Blacksburg, Virginia. Hillel contracted Structures Design/Build, LLC (“Structures”) to design and construct the facility. Structures, in turn, subcontracted PJ Little Plumbing, Inc. (“PJ”) for plumbing and mechanical installation. PJ purchased the failed pipe connector from CMC Supply, Inc. (“CMC”). Allstate Insurance Company (“Allstate”) insured Hillel for the damage to the facility and the personal property.

As Hillel’s subrogee, Allstate filed a complaint against Structures and PJ. Allstate sued Structures for various state law claims. It sued PJ for negligence and breach of express and implied warranties. PJ filed a third-party complaint to join CMC on a breach of implied warranty theory. PJ and CMC moved to dismiss the claims against them.

Securiforce Int’l America, LLC v. United States, 125 Fed. Cl. 749 (March 21, 2016)

Plaintiff Securiforce International America, LLC (“Securiforce”) was awarded a contract by the Defense Logistics Agency Energy (“DLA Energy” or the “agency”) to deliver diesel fuel and gasoline to eight Department of State sites in Iraq.  But, within three months of the award, the agency partially terminated the contract for the convenience of the government.  The remainder of the contract was terminated for cause shortly thereafter.

As a result of its termination, Securiforce submitted claims to DLA Energy’s contracting officer, seeking, among other things, a declaration from the contracting officer that the termination for convenience was invalid and constituted a breach of contract.  The contracting officer denied the claims.