Fed. Ins. Co. v. Fredericks, Inc., 2015-Ohio-694, 29 N.E.3d 313, 2015 Ohio App. LEXIS 684 (Ohio Ct. App. Feb. 27, 2015)

This case arises from a construction project in Vandalia, Ohio that was damaged during a windstorm before construction was completed.  The project was for the construction of a “cross-dock facility” warehouse (the “Project”) on certain real property owned by Pasco Enterprises (“Pasco”), a company in the business of owning and leasing real estate holdings.  Pasco’s 100% parent, J.P. Holding Co., Inc. (“JP Holding”) also owned Carter Express, Inc. (“Express”) and Carter Logistics, LLC (“Logistics”).  Logistics was in the business of providing freight transportation services to its customers; it also contracted with freight carriers, including Express, to transport its customers’ freight.  Approximately 85% of Logistics’ freight shipments were transported by Express.

NYU Hosps. Ctr. v. HRH Constr. LLC, 2015 U.S. Dist. LEXIS 31967 (S.D.N.Y. Mar. 12, 2015)

NYU Hospitals Center (“NYU”) hired HRH Construction LLC (“HRH”) to renovate NYU’s radiology center. HRH entered into subcontracts with various trades to complete the work. The renovation project was to proceed in several phases, and the contract between NYU and HRH called for HRH to submit monthly payment requisitions for costs and expenses incurred during the preceding month.

Clipper Pipe & Service, Inc. v. The Ohio Cas. Ins. Co., 2015 Pa. LEXIS 1275 (PA  June 15, 2015)

The Supreme Court of Pennsylvania held that CASPA, 73 P.S. §§501-516, “does not apply to a construction project where the owner is a governmental entity.”  The decision once and for all resolved the issue of whether the Contractor and Subcontractor Payment Act (“CASPA”) applies to payment disputes between prime contractors and subcontractors on public works projects,  either instead of, or in addition to, the prompt payment provisions of the Commonwealth Procurement Code, 62 Pa.C.S. §§ 3931-3939 (commonly referred to as “the Prompt Payment Act”).

East Coast Paving & Sealcoating, Inc. v. N. Allegheny Sch. Dist., 111 A.3d 220 (Pa. Commw. Mar. 6, 2015).

North Allegheny School District (“Owner”) hired East Coast Paving & Sealcoating, Inc. (“Contractor”) to pave several large areas.  Shortly after Contractor began its paving work, Owner’s architect found “soft spots” in the areas to be paved.  Contractor’s scope of work under the contract did not include soft spot repair work, in which soft ground is replaced with compacted stone before paving, but Contractor and Owner’s Director of Facilities, who had the authority to authorize additional work, agreed that Contractor would do the repair work.  Owner’s architect’s finding of soft spots and Owner’s Director of Facilities’ agreement with Contractor were documented in a report to Owner.  A second report to Owner documented Contractor’s commencement of the repair work.

State v. Perini Corp., 2015 N.J. LEXIS 388 (N.J. April 30, 2015)

The Supreme Court of New Jersey held that for an improvement supplying critical utilities to multiple buildings constructed as part of a multi-phase construction project, the ten year statute of repose (N.J.S.A. 2A:14-1.1(a)) begins to run from that time when the final buildings comprising the project are substantially complete and the improvement is hooked up to all of the buildings it is designed to serve.

Curtiss-Manes-Schulte, Inc. v. Safeco Insurance Company, 2015 U.S. Dist. LEXIS 57836 (W.D. Mo. May 4, 2015) 

In this opinion, the United States District Court for the Western District of Missouri (i) vacated its earlier order denying the surety’s motion for summary judgment (see earlier post) and (ii) held that the contractor’s failure to formally declare the sub-contractor in default precluded the contractor from recovering from the subcontractor’s performance bond surety.  The dispute involved the contractor, Curtiss-Manes-Shulte, Inc. (“CMS”) and Safeco Insurance Company of America (“Safeco”), who provided a performance bond to Balkenbush, CMS’s mechanical subcontractor.

Marenalley Constr., LLC v. Zurich American Ins. Co. and Nason Constr. Inc., 2015 U.S. Dist. LEXIS 30968 (E.D. Pa. March 13, 2015)

This payment dispute case arises out of a Veterans Affairs (“VA”) construction project located in Philadelphia. Nason was the general contractor, Zurich was Nason’s surety, and Marenalley was Nason’s subcontractor. Marenalley’s subcontract required it to pursue any claim related to the project through the administrative disputes resolution process provided by Nason’s prime contract with the VA before bringing suit against the project’s bond.  The prime contract’s administrative dispute resolution process clause incorporated the terms of the Contract Disputes Act (the “CDA”).

KBW Assocs. v. Jaynes Corp., 2015 U.S. Dist. LEXIS 18220 (D. Nev. Feb. 13, 2015)

This action arose out of the construction of additions to existing buildings at Creech Air Force Base in Indian Springs, Nevada (the “Project”).  The United States Army Corps of Engineers (the “COE”) contracted with Defendant Jaynes Corporation, Inc. (“Jaynes”) to perform the work.  Jaynes then subcontracted with Plaintiff, KBW Associates, Inc. (“KBW”), to construct the metal framing and outer shell of the buildings.

Following construction delays, Jaynes found itself involved in two separate actions.  In the first action (the “Prime Contract Litigation”), Jaynes was defending against liquidated damages assessed by the COE under the prime contract.  In the instant action (the “Subcontract Litigation”), Jaynes was defending a Miller Act suit for contract balances brought by KBW.  KBW alleged Jaynes was responsible for the construction delay, through a “pattern of mismanagement”, involving failure to timely approve work, unilateral imposition of work beyond the scope of the subcontract and improper scheduling.  Jaynes asserted several affirmative defenses and filed counterclaims against KBW, on grounds that KBW failed to perform in accordance with the subcontract and failed to meet construction schedules.

Curtiss-Manes-Schulte, Inc. v. Safeco Insurance Company, 2015 U.S. Dist. LEXIS 10032 (W.D. Mo. 2015)

NOTE:  THIS DECISION WAS VACATED ON REHEARING AND THE DECISION ON REHEARING WILL BE THE SUBJECT OF A POST TO BE PRESENTED SHORTLY IN CONSTRUCTLAW.

This dispute between a general contractor and its subcontractor’s performance bond surety arose out of a renovation project at Fort Leonard Wood in Missouri.  On October 19, 2010, the general contractor, Curtiss-Manes-Schulte, Inc. (“CMS”), entered into a subcontract with Balkenbush Mechanical, Inc. to replace the air conditioning system on the project.  A week later, Balkenbush obtained the required performance bond from Safeco Insurance Company of American.

By October 2011, CMS knew that Balkenbush was behind schedule.  In July 2012, CMS responded to a Contract Bond Status Inquiry and informed Safeco that the contract was not complete, that Balkenbush’s work was not progressing satisfactorily, that the project was nine months late, and that liquidated damages would be assessed.  Around the same time, Safeco hired consultants and a law firm to investigate, defend and resolve claims made against four performance bonds Safeco issued to Balkenbush on other projects.  In December 2012, Safeco filed a lawsuit against Balkenbush to recover its losses resulting from the claims on the four other performance bonds.  One month later, in January 2013, Balkenbush filed a bankruptcy petition and Safeco’s counsel entered their appearance in that proceeding.

DCK TTEC, LLC v. Postel Industries, Inc., 2015 U.S. App. LEXIS 2775 (3d Cir. Feb. 25, 2015)

This action arose out of the construction of two maintenance hangars at the Marine Corps Air Station in Yuma, Arizona (the “Project”).  The Navy hired DCK TTEC, LLC (“DCK”) as the general contractor for the construction of the Project.  In November 2010, Postel Industries, Inc. (“Postel”) submitted a bid to DCK to supply and erect fabricated steel for the Project, and in May 2011, Postel and DCK met and signed a letter of intent.