Tri-State Elec., Inc. ex rel. Apex Enters. v. Western Sur. Co., 1:14-CV-00245, 2017 U.S. Dist. LEXIS 4974 (D. Idaho Jan. 11, 2017)

The United States Department of Veterans Affairs (the “VA”) contracted with Sygnos, Inc. (“Sygnos”) for improvements to the electrical system at a VA hospital in Boise, Idaho. Sygnos subcontracted a portion of the work to Apex Enterprises, Inc. (“AEI”), who in turn subcontracted a portion of its work to Tri-State Electric, Inc. (“Tri-State”).  Delays plagued the project from the outset, and the work – originally scheduled for completion in 240 days – ultimately took more than 950 days to perform.  Disputes concerning responsibility for and the amount of delay damages ensued.

Sygnos submitted a request for equitable adjustment to the VA as a result of the delays. Receiving no timely response from the VA, Sygnos converted the request for equitable adjustment to a claim for delay damages under the Contract Disputes Act, which the VA and Sygnos settled for $645,000.  AEI and Tri-State subsequently sued Sygnos for delay damages they incurred on the project.  Sygnos did not dispute that AEI and Tri-State had suffered delays but it disputed some categories of damages claimed and cited the no-damage-for-delay clause in Tri-State’s contract as barring its claims.

D.W. Wilburn, Inc. v. K. Norman Berry Assocs., No. 2015-CA-001254-MR, 2016 Ky. App. Lexis 206 (Ky. Ct. App. Dec. 22, 2016)

This case arose out of a construction project in which the Oldham County Board of Education (the “Board”) was the owner, K. Norman Berry Associates (“KNBA”) was the architect and D.W. Wilburn (“Wilburn”) was the general contractor. The Board’s contract with Wilburn provided that: (i) change orders must be signed by the architect, contractor, and owner; (ii) claims for additional time, money or delay damages must be submitted within twenty-one days of the event giving rise to the claim; (iii) change orders resolved all claims for time and money relating to the scope of the change order, and (iv) the contractor’s acceptance of final payment waived its claims, except those identified in writing as unsettled at the time of final application for payment.  Pursuant to the contract, the parties executed twenty-one change orders and Wilburn submitted a final payment application and closeout form.

Later, Wilburn was sued by one of its subcontractors for delay to the project. Wilburn then sued KNBA in a third party complaint asserting that KNBA was liable for the delay as a result of its defective plans and specifications.  The trial court granted KNBA summary judgment, dismissing Wilburn’s claim for lack of contractual privity.  Wilburn appealed, and the Court of Appeals reversed.

Port of Houston Auth. of Harris Cnty. v. Zachry Constr. Corp., 2016 Tex. App. LEXIS 13306 (Tex. App. Houston 14th Dist. Dec. 15, 2016)

This contract dispute dates back to 2004, when the Port of Houston Authority contracted with Zachry Construction to build a shipping wharf in Harris County, Texas. Zachry’s bid proposed, as part of its means and methods, building the wharf “in the dry” by using a frozen earthen wall to seal out water from the construction area. Several months into the project the Port Authority decided to extend the wharf. Zachry again proposed freeze-wall technology for the extension, and the parties entered into a change order.
The Port Authority then refused to approve Zachry’s frozen wall design, and directed Zachry to either present an alternative design or alternate means of mitigating risk. Unable to identify a viable alternative design, Zachry switched from the frozen wall design and completed the construction “in the wet.”

Hensel Phelps Constr. Co. v. Thompson Masonry Contractor, Inc., et. al., No. 151780, 2016 Va. LEXIS 166 (Va. Nov. 3, 2016)

The dispute arose from the construction of a student health and fitness center at Virginia Tech. The prime contractor, Hensel Phelps, and its subcontractors substantially completed their work in 1998, and Virginia Tech made final payment in 1999. In April 2012, Virginia Tech discovered defects in the work, elected to repair them, and then sought to recover the costs from Hensel Phelps. Despite the significant passage of time between completion of the work and Virginia Tech’s assertion of its claims, Hensel Phelps could not invoke the statute of limitations because under Virginia Code § 8.01-231, statutes of limitation do not apply to claims asserted by Commonwealth agencies such as Virginia Tech.  Ultimately, Hensel Phelps paid $3,000,000 to Virginia Tech to settle the defective work claims.

Hensel Phelps, in turn, sought to recover from the subcontractors that performed the defective work. When the subcontractors refused to pay, Hensel Phelps commenced an action alleging, among other things, breach of contract against the subcontractors and their sureties. All of the defendants argued that Hensel Phelps’ claims were barred by the applicable statute of limitations. The lower courts agreed. On appeal, the Virginia Supreme Court affirmed.

Tilson Home Corp. v. Zepeda, No. 14-16-00075-CV, 2016 Tex. App. LEXIS 12022 (Tex. App. Nov. 8, 2016)

The Court of Appeals of Texas has held that an arbitrator—not a trial court—must determine whether a prerequisite to the obligation to arbitrate has been met. Thus, when faced with the procedural question of whether an arbitration demand was timely filed, Texas trial courts must compel arbitration, leaving the question to the arbitrator. 

In Tilson Home Corp., Jorge and Lisa Zepeda hired Tilson to build a home on their property.  The contract’s arbitration provision stated:

Any dispute or claim which arise[s] from or relates to this Agreement, the Work and/or the Home will be barred unless the claim is filed with the [AAA] by Owner or Contractor within two (2) years and one (1) day from the date the cause of action accrues.

Jay Jala, LLC v. DDG Construction, Inc., No. 15-3948, 2016 US Dist. LEXIS 150969 (E.D. Pa. Nov. 1, 2016)

Jay Jala, LLC was the owner of a motel construction project in Allentown, Pennsylvania. DDG Construction, Inc. was the contractor.  The project was delayed during construction and, four months after the specified completion date, DDG abandoned the project.  Jay Jala terminated DDG for default, completed the project, and initiated this action.

The contract provided that the parties “waive Claims against each other for consequential damages arising out of or relating to this Contract.” During litigation, DDG stipulated that it breached the contract but moved for partial summary judgment, arguing that Jay Jala’s damages were consequential, and thus waived.

U.S. Pipelining LLC v. Johnson Controls, Inc., No. 16-00132 HG-RLP, 2016 U.S. Dist. LEXIS 150767 (D. Haw. Oct. 31, 2016)

This action arose out of the renovation of a condominium complex on Maui (Project). Johnson Controls, Inc. (JCI) was the general contractor and U.S. Pipelining LLC (USP) was a subcontractor. While the parties disputed who was ultimately responsible for obtaining a license for the work, the Subcontract included a provision that required USP to “obtain[] all licenses and permits required for the prosecution of the Work.” Nonetheless, USP performed its work without obtaining a license from the State of Hawaii. During the Project, a dispute arose between the parties. USP filed a complaint alleging various claims against JCI and others, seeking payment for the additional work it allegedly performed.

Chapter 444 of the Hawaii Revised Statutes (the “Statute”) requires contractors to obtain a license before performing any renovation work on real property.

Tribal Casino Gaming Enterprise v. W.G. Yates & Sons Constr. Co., 2016 U.S. Dist. LEXIS 86100 (W.D. NC July 1, 2016)

Tribal Casino Gaming Enterprise (the “Casino”) contracted with joint general contractors, W.G. Yates & Sons Construction Company and Rentenback Constructors Inc. (the “Contractor”) for an expansion of the Casino’s facility in Cherokee, North Carolina.  Following completion, two parking decks constructed during the project partially collapsed.  The Casino contended that the parking deck failures resulted from the Contractor’s faulty work.

The Casino submitted a demand for arbitration with the American Arbitration Association (“AAA”), asserting contractual, tort, and statutory claims against the Contractor.  The Contractor filed a motion with the Western District of North Carolina seeking to stay the AAA arbitration.  Citing the doctrine of contractual impossibility and due process concerns, the Contractor argued that the arbitration clause in the parties’ contract was unenforceable because it required that the arbitral panel issue an award within 30 days, which the Contractor contended was unreasonable under the circumstances of the complex dispute.

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.