Hartford Fire Insurance Co. v. City of Mont Belvieu
2010 U.S. App. Lexis 14277 (5th Cir. July 13, 2010)

The Court of Appeals for the Fifth Circuit recently held that a Texas City’s bond claim was time barred under the statute of limitations and equitable remedies based on estoppel were unavailable to revive claims on the bond.

Hartford Fire Insurance Company issued a performance bond for a contractor constructing a public recreational facility for the City of Mont Belvieu, Texas. The bond was a requirement under Texas public work contracts. By statute, the bond was subject to a one-year limitations period commencing from project final completion. The project progressed with numerous delays and changes. However, the City issued a certificate of occupancy in mid-2001, taking possession and operating the facility by July 2002.

At that time, numerous punch list items remained and several subcontractors owed payment by contractor filed claims on a payment bond. Hartford advised the City to be cautious when releasing further payment to contractor. Thereafter, in July 2002, City paid contractor almost $675,000 as an equitable adjustment via a change order. Critically, the change order stated that the project’s completion date was July 19, 2001.

Indianapolis – Marion County Public Library v. Charlier Clark & Linard, P.C
2010 Ind. LEXIS 397 (Indiana, June 29, 2010)

The Indianapolis-Marion County Public Library entered into contracts with Woollen Molzan and Partners, Inc. (“Architect”) for the design for the renovation and expansion of the Library’s facility including its parking garage. The Architect entered into subcontracts with Thornton Tomasetti Engineers (“TTE”) and Charlier Clark and Linard, P.C. (“CCL”) to perform architectural and engineering services. TTE performed structural engineering services and CCL administered various services for the Project, including reviewing and inspecting the construction plans and construction progress to determine if construction was in general compliance with the construction documents. The Library never consulted directly with TTE or CCL.

Circle Y Construction, Inc. v. WRH Realty Services, Inc.
2010 U.S. Dist. LEXIS 67812 (N.D. Ga. July 8, 2010)

Circle Y Construction, Inc. contracted with WRH Hidden Colony to perform certain renovation work at nine unoccupied apartment units. The contract designated Brown, vice president of construction services for WRH Realty Services, as the person responsible for administering the contract on behalf of WRH Hidden Colony and stated that Brown was the only person authorized to approve changes to the scope of work. The contract further provided that “all extra or changed work shall be authorized by a written change order.”

Kuhn Construction Company v. Ocean and Coastal Consultants, Inc.
2010 U.S. Dist. LEXIS 71057 (D. Del. July 15, 2010)

Diamond State Port Corporation (“DSPC”) engaged Ocean and Costal Consultants, Inc. (“OCC”) to prepare engineered drawings, plans, and specifications for a project at the Port of Wilmington in Delaware. In soliciting bids, DSPC utilized the bid documents designed and prepared by OCC. Kuhn Construction Company (“Kuhn”) relied upon those documents to prepare its bid for work on the project. As the lowest bidder, Kuhn entered into a contract with DSPC.

Raito, Inc. v. Cardi Corp.
2010 R.I. Super. LEXIS 108 (RI Super. Ct. July 14, 2010)

The Superior Court of Rhode Island was recently asked to reconsider its earlier ruling in which it found that a condition precedent to recovery under a performance bond was not satisfied and, therefore, summary judgment in favor of the surety was warranted. The Court found no reason to disturb its prior ruling and denied the motion for reconsideration.

John L. Mattingly Constr. Co. v. Hartford Underwriters Ins. Co.
2010 Md. LEXIS 327 (Md. July 27, 2010)

The Maryland Court of Appeals determined that the waivers of subrogation clause in AIA A107-1997 is ambiguous as to whether it encompasses losses sustained after completion of construction and final payment. As a result, the case was remanded to the Court of Special Appeals so that it could resolve the ambiguity by considering extrinsic evidence.

In 2002, K.B.K., Inc. and John L. Mattingly Construction Company, Inc. entered into AIA form contract number A107-1997 to build an Arby’s Restaurant. Section 16.4 of the Contract required K.B.K. to “purchase and maintain property insurance until final payment has been made” or until no person … other than K.B.K. had an insurable interest.” Section 16.5 of the Contract stated that K.B.K. and Mattingly “waived all rights against … each other and any of their subcontractors for damages covered by property insurance … applicable to the Work.”

Mastec North America, Inc. v. El Paso Field Services, L.P.
2010 Tex. App. LEXIS 3436 (Tex. App. May 6, 2010)

The Court of Appeals of Texas recently held that when a contract places the risk of differing site conditions on the contractor, the contractor is not required to bear the risk “that the bid documents misrepresent the nature and amount of the work to be performed.”

The matter involved replacement of a pipeline that extended from Houston to Corpus Christi. Defendant El Paso contracted with Plaintiff MasTec, for the replacement work.

Weigand Construction Co., Inc. v. Stephens Fabrication, Inc.
2010 Ind. App. LEXIS 1109 (Ind. Ct. App. June 25, 2010)

Ball State University (BSU) contracted with Weigand Construction Co. (“Weigand) to act as the general contractor for its Music Instruction Building project. Weigand subcontracted the structural steel work to Stephens Fabrication, Inc. (“Stephens”). Stephens was to manufacture the steel, perform certain engineering and prepare shop drawings. Stephens contracted with sub-subcontractors, Argo and Wilson, to perform the engineering and prepare the shop drawings.

Turnberry Pavillon Partners, L.P. v. M.J. Dean Construction, Inc.
2010 U.S. App. Lexis 9832 (9th Cir. May 13, 2010)

Developer built a luxury condominium tower and hired contractor to serve as both the construction manager and concrete subcontractor. A separate interior drywall and site wall subcontractor was also hired for the Project. A series of lawsuits arose. In the first lawsuit, construction manager was found liable for causing “lost production” and “uncompensated overtime” to site wall subcontractor due to its negligent concrete work as well as negligent construction management. While cross-appeals were pending on the matter Developer paid $2.1 to settle the site wall subcontractor’s claim. In a second case, condominium association sued Developer for construction defects. In turn, Developer filed a third-party complaint against construction manager as well as other subcontractors alleging that their negligence caused defects in the Project. Ultimately, the parties to the second suit reached a settlement whereby Developer and construction manager paid the condominium association $2 million and $600,000 respectively.

Village of Sturtevant v. STS Consultants, Ltd.
2010 Wisc. App. LEXIS 433 (Wis. Ct. App. June 9, 2010)

The Court of Appeals of Wisconsin recently considered whether a design professional could maintain a claim for contribution against a subcontractor on the basis that the subcontractor had a duty to advise that the design was not suited for the intended application. The Court of Appeals upheld the lower court’s dismissal of such claims on the basis that the subcontractor had no design or construction responsibility and therefore could not be a joint tortfeasor.