United States ex rel E & H Steel Corp. v. C. Pyramid Enterprises, Inc
Civil Action No. 06-4209, 2007 U.S. App. LEXIS 27347 (3d Cir. Nov. 27, 2007)
The Court of Appeals for the Third Circuit reviewed a decision of the United States District Court for the District of New Jersey in which the primary question was whether a particular project participant, responsible for supplying structural steel, was a “subcontractor” for purposes of the Miller Act, 40 U.S.C. § 3131, et seq. Reviewing the Supreme Court interpretations and the intent of the Miller Act, the Third Circuit reversed the District Court’s decision and held that the project participant at issue was a “subcontractor” under the Miller Act, because it had a substantial and important relationship with the prime contractor. Accordingly, a fabricator which had contracted to furnish steel to it could sue on the bond.

Copper Mountain, Inc. v. Industrial Systems, Inc.
2007 Colo. App. LEXIS 2298 (Colo. App. Ct. Nov. 29, 2007)
Copper Mountain, Inc. hired Amako Resort Construction, Inc. as the general contractor to renovate and expand a mountain resort lodge. Amako subcontracted with Industrial to build the steel framework for the project. The parties signed a standard American Institute of Architects (AIA A201) contracts, which required Copper to obtain property insurance to cover damages for the work. To comply with this requirement, Copper relied on its all-purpose insurance policy that provided coverage for all of Copper Mountain, including the work and adjacent properties, instead of purchasing separate insurance policy, which would cover only the expansion and renovation work.

Excavation Technologies, Inc. v. Columbia Gas Co.
2007 PA Super 327; 2007 Pa. Super LEXIS 3845 ( Super. Ct., Nov. 7, 2007)
The Pennsylvania Superior Court held that a public utility asked under the Pennsylvania “One-Call” Act to mark the location of its underground gas lines in the vicinity of a work site could not be sued for economic losses suffered by an excavation contractor which struck gas lines which it had erroneously failed to mark or mismarked.

Imperial Excavating & Paving, LLC v. Rizzetto Construction Management, Inc.
2007 PA Super 318, 2007 Pa. Super LEXIS 3540 (Pa. Super. Ct.. Oct. 23, 2007)
General contractor Rizzetto entered into a contract to perform extensive work for the Southern Lehigh School District, including work on the two high school soccer fields. Rizzetto contracted with subcontractor Imperial to perform earthwork on the fields including the removal of topsoil, grading and compacting of the subsoil. After Imperial’s earthwork on the fields had been completed, Rizzetto had been paid by the school less retainage and Rizzetto had paid Imperial, Rizzetto hired a landscaper to perform additional work on the fields including correction of irregularities in soil structuring, tilling and seeding, and the addition of six inches of topsoil.

Dooley & Mack Constructors, Inc., v. Developers Surety & Indemnity Company
2007 Fla. App. LEXIS 17769 (Fla. Ct. App. Nov. 7, 2007)
Dooley & Mack Constructors, Inc. (“Contractor”), the general contractor on a Miami-Dade Community College project, was the obligee on a performance bond issued by Developers Surety and Indemnity Company (“Surety”), on behalf of Buildtec Construction Group, Inc., the masonry subcontractor (“Subcontractor”). After Subcontractor defaulted by abandoning the job, Contractor completed the masonry work itself and sued the Surety for the resulting damages.

James Corp. v. North Allegheny School District
No. 1268 C.D., 2007 Pa. Commw. LEXIS 636 (Pa. Commw. Ct. Nov. 30, 2007)
The Pennsylvania Commonwealth Court held that the “measured mile” method of proving damages for an acceleration claim was legally sufficient to establish the extent of the contractor’s damages. The Court also held the contractor’s failure to provide notice in accordance with the contract was not fatal to the claim, and that attorney fees and expenses under the Prompt Payment Act must be apportioned to those fees and expenses associated with recovering payment’s due under the contract.

Northeast Fence & Iron Works, Inc. v. Murphy Quigley Co.
933 A.2d 664, 2007 Pa. Super. LEXIS 3092 (Pa. Super. Ct. Sept. 18, 2007)
The Pennsylvania Superior Court held that a subcontractor could recover on a theory of unjust enrichment against a contractor where the subcontractor proved that it performed work for which it was not paid and that this work satisfied the contractor’s obligations to a third party. The Subcontractor was not required to prove payment to the Contractor by the Owner.

Caddell Construction Co., Inc. v. United States
2007 U.S. Claims LEXIS 285, No. 04-461C, (September 7, 2007)
The United States District Court of Federal Claims held that the design deficiencies alleged by the plaintiff contractor did not rise to the level of a breach of the implied warranty set forth under the Spearin Doctrine.
Plaintiff Caddell Construction Co. (“Plaintiff”) entered into a contract with the Department of Veteran Affairs (the “Government”) to modernize and strengthen the VA Medical center in Memphis, Tennessee. Plaintiff claimed on behalf of its steel fabrication subcontractor, Steel Service Corporation (“SSC”), that the Government provided structural steel drawings that contained conflicts, errors, omissions, and/or inadequate details which resulted in delay and additional costs to SSC.

National American Insurance Company v. United States
No. 2007-5016, 2007 U.S. App. LEXIS 20058 (Fed. Cir. August 23, 2007)
The US Court of Appeals for the Federal Circuit upheld the lower court’s grant of a motion for summary judgment. The Court held that a payment bond surety is equitably subrogated to the rights of the contractor whose debt it discharges, and thus can pursue a claim directly against the government.
The case arose out of a contract between Innovative PBX Services, Inc. (“Contractor”) and the United States Small Business Administration (the “government”) for the replacement of a telephone system at the Department of Veterans Affairs Medical Center. The Contractor subcontracted part of the work to Nortel Communications Systems, Inc. (“Subcontractor”). As required by the Miller Act, the Contractor executed payment and performance bonds in favor of the government with National American Insurance Company (“Surety”) as the surety. After completion of the contract work, the Subcontractor notified the Surety that it was owed approximately $675,000 for labor and materials that the Contractor had failed to pay for. The Subcontractor then instituted a Miller Act claim under the payment bond against the Surety, which the Surety settled. The Surety also notified the government that no addition payments should be made to the Contractor in light of the Miller Act claim and requested that all remaining contract funds be held for the Surety’s benefit. The government, however, did not follow the Surety’s request and made its final contract payment to the Contractor. As a result, the Surety filed a complaint against he government seeking damages of $280,000.

Neshaminy Constructors, Inc. v. Concrete Building Systems, Inc.
2007 U.S. Dist. LEXIS 69197, Civil Action No. 06-1489 (E.D. Pa. 2007)
The United States District Court for the Eastern District of Pennsylvania conducted a bench trial in which the primary question was whether a contract had been formed between a contractor and subcontractor in connection with a project for which the contractor submitted a bid proposal utilizing, in part, the subcontractor’s bid proposal for calculating the total price for the work. Relying on Pennsylvania common law, the Eastern District held that use of a subcontractor’s bid, by a general contractor in the submission of its own bid to the owner, in and of itself is not sufficient to create a binding contract.