City of Gillette v. Hladky Construction, Inc.
2008 Wyo. LEXIS 139 (November 14, 2008)
The Supreme Court of Wyoming upheld an award to a Contractor of more than one million dollars against an Owner for a breach of an implied covenant of good faith and fair dealing even though the Owner did not breach the contract’s express terms.
The City of Gillette (“City”) hired Hladky Construction, Inc. (“HCI”) for the remodel and expansion of City Hall. The project specifications called for the installation of precast concrete exterior panels that matched those on the existing structure. Further, there was a requirement that the plant at which the precast panels were to be manufactured be certified under the Precast/Prestressed Concrete Institute Plant Certificate Program prior to the start of their production. HCI submitted a bid that unknown to it named an precast manufacturer which had not yet received the required certification. Both the City hired architect and structural engineer were aware prior to bid acceptance that HCI’s precast manufacturer was in the process of obtaining certification, but was not yet certified. Despite knowing that HCI’s manufacturer was not certified and a contract provision requiring the architect to notify bidders of any bid objections, no City representative objected or informed HCI about its uncertified precast manufacturer.

Somerset Village Townhomes Condominium Owners’ Association v. Allied Construction, Inc.
2008 Wash App. LEXIS 2178 (September 2, 2008)
Developer, Far Northwest Development Co, LLC (“Far Northwest”) contracted with Steinvall Construction (“Steinvall”) for the construction of the Somerset Village Townhomes. The contract between Far Northwest and Steinvall stated that “[t]he Contract Documents shall not be construed to create a contractual relationship of any kind . . . between the Owner and a Subcontractor . . .” Steinvall subcontracted portions of its work. The subcontracts incorporated the general conditions of the Far Northwest –Steinvall contract and also imposed certain obligations on the subcontractors concerning Far Northwest, including, inter alia, obtaining insurance to protect its interests and indemnifying Far Northwest for certain claims.

Lanier at McEver, L.P. v. Planners and Engineers Collaborative, Inc.
2008 Ga. LEXIS 553 (Ga. June 30, 2008)
In this case, the Supreme Court of Georgia reversed a Court of Appeals’ decision, previously reported here, holding that a provision limiting an owner/developer’s damages against the project engineer to the fees paid for the engineer’s services was void and unenforceable as against public policy.
Lanier was the owner/developer of an apartment complex. Lanier hired the defendant engineering firm, PEC, to design various aspects of the apartment complex, including the storm sewer and sanitary drainage system. The engineering agreement contained a provision stating that the total aggregate liability of PEC and its subconsultants to Lanier “for any and all claims … shall not exceed PEC’s total fee for services rendered on this Project.” The clause applied not only to liability to Lanier, but also to “all construction contractors and subcontractors on the project or any third parties.” Following construction of the Project according to the plans and specifications prepared by PEC, problems arose with the storm water system that required modification and repair by the owner. As a result, Lanier sued PEC for negligent design, breach of express contractual warranty and litigation expenses.

Bryan’s Quality Plus, LLC v. Shaffer Builders, Inc.
2008 U.S. Dist. LEXIS 61713 (E.D. Pa. Aug. 12, 2008)
The District Court for the Eastern District of Pennsylvania was faced with a motion to dismiss a defendant’s counterclaims for fraud and negligent misrepresentation. The case arose out of a subcontract between the defendant contractor and the plaintiff subcontractor in which the subcontractor agreed to complete piling work for a commercial project undertaken by defendant (the “Project”). The contractor alleged in its counterclaim that the subcontractor represented that it would complete the work in seven days, that it could install in excess of fifty piles a day, that its performance and equipment would surpass conventional methods, that it would furnish and install pile tension brackets and fasteners, and that it had sufficient credit to purchase the materials necessary to complete the work. The parties executed a written contract, although some of the work was completed prior to execution of the subcontract.

Waynesborough Country Club of Chester County v. Diedrich Niles Bolton Architects, Inc.
2008 U.S. Dist. LEXIS 45980 (E.D. Pa. July 21, 2008)
The case arose out of the design and construction of a new clubhouse for Waynesborough. Diedrich Niles Bolton Architects (“DNB”) provided professional architectural services to Waynesborough for the project and Ehret Construction served as the project’s general contractor and construction manager. Structural problems arose after the clubhouse was complete, and Waynesborough sued DNB alleging, as a result of DNB’s professional negligence and breach of contract, significant water leaks developed at various places throughout the interior of the clubhouse. DNB joined Ehret as a third party defendant. Ehret, in turn, filed a counterclaim against DNB for negligent misrepresentation, claiming that DNB’s architectural work was deficient and that Ehret’s work was delayed, disrupted and inefficient as a result of having relied upon inaccurate drawings and other architectural documents supplied by DNB during construction.

Chrysler Realty Company, LLC v. Design Forum Architects, Inc.
2008 U.S. Dist. LEXIS 42721, No. 06-CV-11785 (E.D. Mich. May 30, 2008)
The United States District Court for the Eastern District of Michigan was asked to consider whether a plaintiff’s claim for professional liability against a design professional should be dismissed where plaintiffs allowed evidence to be destroyed. Finding that the plaintiff’s intentional removal and destruction of the allegedly defective HVAC system without notice to the defendant deprived the defendant of an opportunity to develop defenses to the claims, the Court dismissed the plaintiff’s claims.

Quinn Construction, Inc. v. Skanska USA Building Inc.
2008 U.S. Dist. LEXIS 45980 (E.D. Pa. June 10, 2008)
The United States District Court for the Eastern District of Pennsylvania held that no certificate of merit was required in contractor and subcontractor’s negligent misrepresentation claims against architect.
Skanska served as general contractor for two private construction projects owned by the Trustees of the University of Pennsylvania. Skanska entered into two written subcontracts with Quinn for certain concrete work on the projects. Thereafter, Quinn filed a negligent misrepresentation claim against the project Architect, alleging that it relied upon the drawings, specifications, addenda and bulletins prepared by the Architect in preparing its bids, executing its subcontracts with Skanska, planning and scheduling its work and performing its work. Quinn further alleged that the Architect’s continuous design changes, its failure to complete drawings previously represented as 100% complete and its failure to timely review and approve Quinn’s shop and coordination drawings created an unreasonably and unforeseeably lengthy submission process, which prevented Quinn from timely delivering its materials to the Project and caused Quinn to incur overtime labor expenses to adhere to the Project schedule.

RLI Insurance Company v. Indian River School District
2008 U.S. Dist. LEXIS 43303 (D. Del. June 3, 2008)
In this case, the United States District Court for the District of Delaware held that a surety’s claim against an architect and construction manager for improper approval of payments to the principal was barred by the economic loss doctrine. Additionally, the court held that the surety was not released of its liability to the owner where the owner wrongfully paid the contractor, as the owner had made those payments in reliance on certifications from the architect and the construction manager.

Acme Contracting, Ltd. v. TolTest, Inc
2008 U.S. Dist. LEXIS 36355 (E.D. Mich. May 5, 2008)
The United States District Court for the Eastern District of Michigan recently had to interpret an Ohio statute (O.R.C. §4113.62) which statute dealt with the enforceability of no damages for delay provisions in construction contracts. Relying on prior cases interpreting the applicable statute, the District Court found that the subcontract which limited delay claims to a time extension only was prohibited under the statute and, therefore, void and unenforceable. Although the District Court permitted the subcontractor to recover delay damages, it also concluded that the subcontractor had not proven that it was entitled to extended home office overhead costs using the Eichleay formula and refused to award such damages.

Helena Assocs., LLC v. EFCO Corp.
U.S. Dist. LEXIS 39977 (S.D.N.Y. May 14, 2008)
Owner, The Helena Associates, LLC contracted with EFCO Corporation for the work, materials and installation of aluminum windows in the construction of The Helena, a high-rise residential building in New York City. Helena brought a breach of contract action against EFCO alleging that EFCO had failed to comply with project schedules, caused delay to the project, and failed to provide sufficient manpower and supervision. Helena claimed damages in excess of $6.7 million. EFCO denied Helena’s claims arguing that the delays were caused by factors outside of its control and within the control of parties for whom Helena was responsible, and asserted a counterclaim for additional work of approximately $875 thousand. EFCO moved for partial summary judgment.