Ellett Constr. Co., Inc. v. United States,
93 F.3d 1537, U.S. App. LEXIS, August 26, 1996
A settlement proposal in response to a termination for the convenience of the Government is a non-routine claim subject to the jurisdiction of the courts pursuant to the Contracts Disputes Act, provided that the settlement proposal ripens into a claim after negotiations have reached an impasse.
Seventh Circuit Holds that Indian Tribe Agreed to Waive Sovereign Immunity
Sokaogon Gaming Enterprise Corp. v. Tushie-Montgomery Assocs, Inc.,
86 F.3d 656, 1996 U.S. App. LEXIS 13399 (7th Cir. June 5, 1996)
District Court erred in granting summary judgment in favor of Indian tribe on grounds of tribe’s sovereign immunity; by signing contract with explicit arbitration clause, tribe agreed that it could be sued.
Seventh Circuit Rules That Forum Selection Clause in Construction Contract Is Enforceable Under Illinois Law
Roberts & Schaefer Co. v. Merit Contracting, Inc.,
99 F.3d 248, 1996 U.S. App. LEXIS 28280 (U.S. Ct. of Appeals, 7th Cir.)
Contract between the parties contained an enforceable forum selection clause, even though the actual written agreement was signed by only one of the parties; therefore, suit brought in Illinois state court pursuant to the forum selection clause, was not removable to Federal Court.
The Supreme Court of Alaska Held That a Contractor’s Failure to Comply with the Contractual Notice Provisions Barred Its Claim as a Matter of Law
Neal & Co., Inc. v. City of Dillingham and CH2M Hill Northwest, Inc.,
923 P.2d 89 (Alaska 1996)
In February of 1987, the City of Dillingham (“City”) solicited bids for the construction of a sewerage facility, which would include two lagoon ponds. CH2M Hill (“Hill”), the City’s engineer and on-site representative, had completed a geotechnical survey and data summary, which was provided to interested bidders. Neal & Company, Inc. (“NCI”) was declared the low bidder at $2,059,991 and began excavation on June 6, 1987.
Federal Circuit Court of Appeals Denies Contractor Recovery Because Alleged "Differing Site Condition" Did Not Exist at Time of Contract Award.
Olympus Corp. v. United States,
98 F.3d 1314, 1996 U.S. App. LEXIS 27509 (U.S. Fed. Cir., Oct. 23, 1996)
Standard “Differing Site Conditions” clause in Government contract requires, as a condition to recovery under that clause, that the alleged differing condition which serves as the basis of the claim must have existed at the time the contract was executed.
The Florida Court of Appeal for the Fifth District Reversed the Trial Court’s Imposition of Delay Damages When the Plaintiff’s Expert "Assumed" Certain Expenses and Therefore Lacked Sufficient Factual Basis to Express His Opinions
Central Florida Plastering and Development, et al. v. Sovran Constr. Co., Inc.,
679 So.2d 1226 (1996)
Sovran Construction Company, Inc. (“Sovran”) contracted with the Orange County School Board (“School Board”) to construct the Cypress Creek High School. Sovran, in turn, subcontracted with Central Florida Plastering and Development Company, Inc. (“CFP”) requiring CFP to install lath and stucco panels on the exterior walls and to install ceiling framing in the auditorium. The contract between Sovran and the School Board obligated Sovran to pay to the School Board liquidated damages of $1,000 per day, and Sovran’s subcontracts with CFP called for CFP to indemnify Sovran “on account of any such damages and additional costs as a result of delays of CFP.”
Utah Supreme Court considers non-contractual liability of contractors for damages resulting from defective work
Interwest Construction v. A.H. Palmer & Sons,
292 Utah Adv. Rep. 27, 1996 Utah LEXIS 44 (Utah June 14, 1996)
The Supreme Court of Utah held that the intermediate court of appeals erred in holding that a tort action for negligence and strict liability arising out of a breach of contractually defined obligations was precluded. However, the Supreme Court of Utah also held that the tort claims should be dismissed because the claimant failed to prove causation between the alleged defect and the resultant injury.
Eleventh Circuit reverses grant of summary judgment in favor of contractor on basis of releases executed by subcontractor.
Allgood Electric Co. v. Martin K. Eby Constr. Co.,
85 F.3d 1547, 1996 U.S. App. LEXIS 15252 (11th Cir. June 25, 1996)
Under Georgia law, subcontractor’s release of all claims against property on which project was located did not operate to release claims against contractor, nor was contractor entitled to benefit of release in which contractor was not mentioned by name.
Plaintiff Allgood Electric Company (“Allgood”) was the electrical subcontractor on a prison project for the Georgia Building Authority (“GBA”). Defendant Martin K. Eby Construction Company, Inc. (“Eby”) was the general contractor. Allgood sought to recover increased costs allegedly caused by Eby’s failure to coordinate various aspects of the project. Allgood also claimed entitlement to retainage.
District Court for District of Columbia Declares Liquidated Damages Clause Unenforceable
Kingston Constructors, Inc. v. Washington Metropolitan Area Transit Authority,
1996 U.S. Dist. LEXIS 8427 (D.D.C. June 6, 1996)
Corps of Engineers Board of Contract Appeals erred in reducing amount of contractual liquidated damages from $1000 to $500 per day; Board should have declared provision unenforceable and awarded actual damages.
The defendant Washington Metropolitan Area Transit Authority (“WMATA”) contracted with plaintiff Kingston Contractors, Inc. (“Kingston”) to remove and destroy existing electrical transformers in WMATA’s rapid transit rail system, and procure and install replacement transformers. The contract contained a liquidated damages provision which provided for $1000 for each calendar day of delay beyond a specified completion date.
New York District Court confirms arbitration award; reference to American Arbitration Assoc. Rules renders award binding notwithstanding redaction of subcontract provision for binding award.
St. Lawrence Explosives v. Worthy Bros. Pipeline,
916 F.Supp. 187 (N.D.N.Y. 1996)
The Petitioner, St Lawrence, requested confirmation and judgment to be entered upon an arbitration award in favor of St Lawrence and against the Respondent, Worthy Brothers.
St Lawrence Explosives and Worthy Brothers Pipeline entered into a subcontract for construction of a gas pipeline within New York which would connect into an international pipeline. The subcontract was a Standard Form of Agreement Between Contractor and Subcontractor: AIA Document A401. Article 6.1 of the subcontract provided that if the Prime Contract did not provide for arbitration, then disputes would be resolved in accordance with the Construction Industry Arbitration Rules (“AAA Rules”). Article 6.4 provided that the award shall be final and judgment may be entered upon it. But, Article 6.4 in the above subcontract agreement was crossed out.