URS Group, Inc. v. Tetra Tech FW, Inc. and Foster Wheeler Environmental Corporation
2008 Colo. App. LEXIS 159 (February 7, 2008)
The Court of Appeal of Colorado held that the plaintiff subcontractor did not assume the risk of differing site conditions and thus its claims for differing site conditions and mutual mistake were viable. Moreover, the Court held that the economic loss rule did not bar plaintiff’s negligent misrepresentation claim, because the alleged misrepresentation occurred during negotiations before the contract was formed.

John A. Russell Corp. v. Fine Line Drywall, Inc. and Acstar Insurance Co.
2008 U.S. Dist. LEXIS 13098 (D. Vt., February 21, 2008)
The United States District Court for the District of Vermont held that only a material breach of contract constitutes a default triggering the year-long period provided by 8 V.S.A. § 3663 for commencing an action.
In John Russell Corp., Subcontractor began work on the metal framing and gypsum drywall systems of a project in November 2003 and ceased work on November 10, 2004. Prior to beginning work, Subcontractor secured a performance and payment bond (the “Bond”) with Contractor as obligee. During the Fall of 2004, Subcontractor’s presence at the job site was sporadic. Daily work logs indicated that Subcontractor was absent from the job site on six occasions during September and October 2004, the periods of absence ranging from one to five days. After November 10, 2004, Subcontractor never returned to the work site. Contractor made repeated attempts to contact Subcontractor to determine whether it planned to complete performance of its obligations under the Subcontract. Subcontractor did not respond to any of those attempts and had no further communication with Contractor. By early December 2004, Contractor “suspected [that Subcontractor had] abandoned the project.”

Hall Street Associates, LLC v. Mattel, Inc.
2008 U.S. LEXIS 2911 (U.S. Mar. 25, 2008)
In a 6-3 decision, the Supreme Court held that in an arbitration case subject to the Federal Arbitration Act (“FAA”), the scope of judicial review of an award could not be expanded by agreement of the parties beyond the grounds for vacating or modifying an award specified in the FAA.
The case originally stemmed from a lease dispute between the toy maker Mattel and its landlord, Hall Street Associates. Mattel terminated its lease when the property’s water tested for high levels of contaminants, which was the result of the previous tenant’s use of the property as a manufacturing site. Hall Street filed suit claiming that a provision in the lease obligated Mattel to indemnify Hall Street for the costs of cleaning up the site.

Dugan Construction Company, Inc. v. New Jersey Turnpike Authority
941 A.2d 622 (N.J. Super. Ct. App. Div. 2008)
The Superior Court of New Jersey, Appellate Division, recently had to decide whether a contractor was entitled to the contractual per unit price for the removal of substantial quantities of groundwater where the estimated quantity in the bid documents was grossly understated and contractor failed to bring the error to the public entities’ attention. Analyzing the case utilizing principles of patent ambiguity and reformation, the Court held that the mistake in the bid documents warranted reformation of the contract and the contractor was only permitted to recoup the actual value of the work performed.

Perdue Farms, Inc. v. Design Build Contracting Corp.
2008 U.S. App. LEXIS 2861 (4th Cir. Feb. 8, 2008)
The Fourth Circuit held that where a condition precedent to arbitration, in this case voluntary mediation, was not fulfilled, a party to a contract had no right to force arbitration of the…

Crown Castle USA, Inc., et al. v. Fred A. Nudd Corporation
2008 U.S. Dist. LEXIS 3416 (W.D. N.Y. Jan. 16, 2008)
The United States District Court for the Western District of New York held that the “economic loss doctrine” did not bar a professional negligence claim against defendant where plaintiff’s claims sought tort liability for defendant’s failure to exercise reasonable care in the design of a prefabricated product.
Fred A. Nudd Corporation (“Nudd”) fabricates steel products, including cellular phone towers (“monopoles”). On January 12, 2001, Crown and Nudd executed a construction services agreement (the “CSA”) where Nudd was to design, fabricate and/or construct twelve monopoles for Crown. In November 2003, a monopole designed by Nudd for another company collapsed. When Crown became aware of the collapse, it became concerned about the monopoles that Nudd designed and manufactured under the CSA. Crown alleges that it began an investigation which revealed that the monopole shafts, base plates, anchor rods and foundations for each of the monopoles were defective, overstressed and did not have the capacity to support the loads for which they were designed. Crown filed a complaint alleging that the monopoles which Nudd designed, fabricated and constructed contained design and construction defects. In its complaint, Crown’s only claim for damages is the costs to repair the allegedly defective monopoles.

Liberty Mutual Insurance Company v. N. Picco & Sons Contracting Co., Inc.
2008 U.S. Dist. LEXIS 4915 (S.D.N.Y. Jan. 16, 2008)
The United States District Court for the Southern District of New York (“SDNY”) recently had to decide whether a surety was entitled to assert subrogation rights against other project participants when the surety completed the construction work abandoned by the general contractor and performed remediation work. The SDNY determined that the surety did not voluntarily undertake the remediation work and, therefore, was entitled to assert subrogation rights.

Potomac Constructors, LLC v. EFCO Corp.
2008 U.S. Dist. LEXIS 1602 (D. Md, Jan. 9, 2008)
Plaintiff general contractor and Defendant manufacturer entered into a purchase order agreement under which Defendant would engineer and supply steel formwork used to cast concrete segments to be incorporated in the support structure for a bridge. The agreement contained a clause, which specifically limited the Defendant’s liability to the repair or replacement of any defective work, explicitly disallowing incidental, direct or consequential damages.

City of Lonsdale v. NewMech Companies, Inc.
2008 Minn. App. Unpub. LEXIS 31 (Minn. App. 2008)
The City of Lonsdale solicited sealed bids for construction of a wastewater-treatment plant. According to the terms of the bid form, each bidder submitting a bid form:
“Propose[d] and agree[d], if [the] Bid is accepted, to enter into an Agreement with City in the form included in the Bidding Documents to perform all Work as specified or indicated in the Bidding Documents for the prices and within the times indicated in the Bid and in accordance with the other terms and conditions of the Bidding Documents.”

WM Hotel Group, LLC v. Pride Construction, Inc.
2008 R.I.Super.LEXIS 9 (2008)
WM Hotel, owner of the Hampton Inn & Suites, located in Middletown, R.I. initiated a lawsuit against Pride Construction, the general contractor for the construction of its hotel, Antcil Plumbing & Mechanical Contractors, Inc., the plumbing subcontractor that installed the hotel bathtubs and Travelers, Antcil’s insurer under a CGL policy.
Antcil installed the tubs, tested them for leaks, placed “tub protectors” in each and transferred control of them to Pride. The tubs began evidencing cracking, rust, and sagging. WM Hotel asserted that 93 of the 95 tubs were defective as manufactured and/or installed and that it was Antcil’s faulty installation that resulted in the damage to the tubs. Forensic testing and analysis indicated that a styrofoam sound deadening pad was missing from beneath the tubs, and that the omission could have contributed to deflection of the bathing surface. Travelers filed a motion for summary judgment asserting that the CGL policy issued on behalf of Antcil did not provide coverage for the damage incurred. Travelers asserted that the damages were not the result of an “occurrence” as defined in the policy and that exclusionary language in the policy precluded coverage.