Stratton & Co., Inc. v. Argonaut Ins. Co.,
1996 Ga. App. LEXIS 303 (Ga. Ct. App., March 14, 1996).
Provision in the standard form of comprehensive general liability insurance policy which excludes coverage for “property damage to the named insured’s products arising out of such products or any part of such products,” did not apply because the damage the “building” constructed was not the named insured’s “product.”
Stratton & Co., Inc. (“Contractor”) completed the construction of an office building and parking deck for Goldome Credit Realty Corporation (“Owner”). After complaining about the quality of the Contractor’s work, the Owner filed a lawsuit against the Contractor. The Contractor tendered the defense of that lawsuit to its insurance company, Argonaut Ins. Co. (“Insurer”), but the Insurer denied coverage and refused to defend the Contractor. Contractor ultimately settled the lawsuit with the Owner and paid $468,464.
The North Carolina Court of Appeals Upholds Multi-million Dollar Verdict Allowing Subcontractor to Recover Sub-subcontractor’s Losses
Metric Constructors, Inc. v. Hawker Siddeley Power Engineering, Inc. and Panda Rosemary Corp.,
468 S.E. 2d 435 (N.C. Ct. App. 1996).
Defendant Hawker Siddeley Power Engineering, Inc. (HSPE) was the Design/Build contractor on a co-generation power plant in Roanoke Rapids, North Carolina. As the general contractor, HSPE subcontracted with plaintiff Metric Constructors, Inc. (Metric) for construction of the power plant. In turn, Metric subcontracted with a wholly-owned subsidiary, Electrical and Special Systems, Inc. (ESSI) for specialized work. Because all of the designs for the plant prior to the commencement of construction were not complete, the project was deemed “Fast Track.”
Pursuant to its contract with Metric, HSPE was responsible for engineering design drawings and procurement of major equipment items. The contract had an inflexible completion date of October 30, 1990 and, in contract negotiations and in the contract, HSPE promised to issue drawings at a pace that would allow Metric to finish its work on time. The contract further provided that Metric would receive a bonus of $9,000 per day for early completion.
Minnesota Court of Appeals Affirms Summary Judgment rulings that the assertion of a right to liquidated damages was a "claim" under a contract and therefore governed under the time limits for asserting claims; and, an owner waived its right to enforce completion date by requesting changes in the construction after the scheduled completion date had passed
A. Hedenberg & Co., Inc., v. St. Luke’s Hospital of Deluth,
1996 Minn. App. LEXIS p. 379 (Minn. Ct. App. April 2, 1996)
In July 1992, St. Luke’s Hospital of Deluth (“Hospital”) contracted with A. Hedenberg & Co., Inc. (“Contractor”) to build a hospital addition. The contract provided for a 240-day construction period and allowed $500 per day as liquidated damages for work not completed within that time period. The contract also included a provision entitled “Claims and Disputes,” and defined claim as:
a demand or assertion by one of the parties seeking, as a matter of right, adjustment or interpretation of contract terms, payment of money, expenses and time or other relief with respect to the terms of the contract. The term “claim” also includes other disputes and matters in question between the Owner and Contractor arising out of or relating to the Contract. Claims must be made by written notice.
Georgia Appeals Court Holds Contractor’s Delay Claim Barred by Exculpatory Clause and Failure to Provide Timely Notice
Holloway Constr. Co. v. Department of Transportation
218 Ga. App. 243, 461 S.E. 2d 257, 1995 Ga. App. LEXIS 693 (July 13, 1995).
One of several multiple prime contractors was not entitled to sue owner for delays attributable to other prime contractor — on theory of breach of implied or express obligation — in light of clear contractual provision stating that owner would not be liable for delays attributable to contractors. Contractor barred from pursuing claim for extended overhead and equipment costs allegedly attributable to owner-directed changes in the work and owner’s failure to make prompt decisions because contractor did not provide timely request for an extension of time in accordance with contract.
New York District Court Upholds Termination of Subcontractor for Davis-Bacon Act Violations; Subcontractor's Claim for Quantum Meruit Reimbursement Rejected
United States ex rel. Tower Masonry, Inc. v. J. Kokolakis Contracting, Inc.,
1995 U.S. Dist. LEXIS 13024, 90 Cont. Cas. Fed. [CCH] [[paragraph]] 76,843 (S.D.N.Y., Sept. 8, 1995).
Prime contractor properly terminated subcontractor for non-compliance with Davis-Bacon Act requirements. Because cost to complete exceeded subcontract balance, terminated contractor not entitled to reimbursement of value of work completed.
Defendant J. Kokolakis Contracting, Inc., (“Kokolakis”), a general contractor, entered into a subcontract with plaintiff Tower Masonry, Inc. (“Tower”), for masonry work on a United States Department of Labor project involving the construction of two new dormitory buildings for the Delaware Valley Job Corps Center in Callicoon, New York. The job was subject to the minimum wage levels and record-keeping requirements of the Davis-Bacon Act, 40 U.S.C. [[section]]276(a) et seq., and these requirements were incorporated into the subcontract.
Connecticut Court Holds Prime Contractor not Required to Utilize Subcontractor Listed in Its Bid, Where It was Unaware of Bid Exclusions Later Presented by Subcontractor
Harvey Robbin Co. v. Cristwood Contracting, Inc.,
1995 Conn. Super. LEXIS 2633 (Conn. Super. Ct., Sept. 13, 1995).
Statute requiring bidder for public contract to list subcontractors did not require bidder to utilize subcontractor where subcontractors bid exclusions were not communicated until after submission of prime bid.
Plaintiff Harvey Robbin Company, a subcontractor for HVAC (“Subcontractor”) sued Defendant Cristwood Contracting, a general contractor (“Contractor”), in connection with the construction of a physical plant at the University of Connecticut. The Subcontractor alleged, inter alia, breach of contract and detrimental reliance. In turn, the Contractor denied the Subcontractor’s principal allegations, and alleged misrepresentation on the part of the Subcontractor, and that no contract was entered into by the parties.
Washington Appeals Court Holds Contract to Furnish and Install Dehumidification System for Pool Subject to the Uniform Commercial Code
Tacoma Athletic Club, Inc. v. Indoor Comfort Systems, Inc.,
79 Wash. App. 250, 902 P.2d 175, 1995 Wash. App. LEXIS 406 (Sept. 14, 1995).
In breach of warranty action brought by owner against contractor, contract to furnish and install a “dehumidification system” was considered to be a “sale of goods” governed by Article 2 of the U.C.C. pursuant to “predominant factor test.” Evidence was insufficient to establish that owner was entitled to be reimbursed entire amount of original contract plus cost to insulate walls as a result of contractor’s breach of warranty related to dehumidification system.
The Tacoma Athletic Club (“Owner”) hired Indoor Comfort Systems (“Contractor”) to furnish and install a dehumidification system for an indoor pool. The humidity in the pool area was so high that water dripped from the ceilings and down the walls causing damage to the walls. The system provided by the Contractor failed to reduce the humidity in the pool area. After the Contractor attempted unsuccessfully to solve the moisture problem, the Owner eventually hired a new contractor to attempt to fix the problem. The Owner then sued the Contractor for breach of warranty under Article 2 of the Uniform Commercial Code and obtained a favorable judgment.
Ohio Appeals Court Upholds Owner's Refusal to Arbitrate
Cleveland Jet Center, Inc. v. Structural Sales Corp.,
1995 Ohio App. LEXIS 4113 (Ohio Ct. App., Sept. 22, 1995).
Utilization of AIA Document A111, Standard Form of Agreement Between Owner & Contractor, 1978 Edition, without express incorporation of AIA Document A201, General Conditions of the Contract for Construction, left owner free to refuse arbitration.
Cleveland Jet Center, Inc. (“Jet Center”), a corporation in the business of repairing, refurbishing and modifying jet aircraft, entered into a contract with Structural Sales Corp. (“Structural”), in which Structural agreed to design and build a hangar and office area at the Lost Nation Airport in Willoughby, Ohio. Structural selected the American Institute of Architects (“AIA”) Document A111, Standard Form of Agreement Between Owner & Contractor, 1978 Edition” as the contract form and drafted the blank terms.
Second Circuit Court of Appeals Reverses Multi-million Dollar Verdict for Delay Damages on Basis of Erroneous Submission of Question of Contract Interpretation to Jury
Morse/Diesel, Inc. v. Trinity Industries, Inc.; Mosher Steel Co., and Aetna Insurance Co.,
67 F.3d 435, 1995 U.S. App. LEXIS 27614 (2d Cir. Sept. 26, 1995).
Contract provision authorizing compensation for delay, “notwithstanding any other provision . . .” held to override “no-damage-for-delay” provisions in other portions of contract as a matter of law. Trial court erred in submitting question of interpretation to jury.
Morse/Diesel, Inc. (“Morse/Diesel”) was the general contractor for the construction of the Marriott Marquis Hotel in Manhattan’s Times Square. In August, 1982, Morse/Diesel entered into a subcontract with Mosher Steel Company, a division of Trinity Industries, Inc. (“Trinity”) to fabricate and erect the steel members necessary for hotel construction within 13 months, excluding inclement weather. In fact, the job took 20 months, from January, 1983 until September, 1984. Morse/Diesel sued Trinity and Trinity’s bonding company, Aetna Insurance Company, for damages in the amount of $37 million arising from the cost of an acceleration program designed to recapture the delay, as well as losses suffered by the hotel’s owner, the architect and other subcontractors. Trinity counterclaimed for its own damages arising from additional work and delay in completing the subcontract.
District Court in South Carolina Holds Subcontractor for Underground Utility Work Not Entitled to Statutory Lien Applicable to Erection, Alteration or Repairs of Buildings; IRS Takes Priority
Bell South Communications, Inc. dba Southern Bell Telephone and Telegraph Co. v. Dekalb Concrete Pro
1995 U.S. Dist. LEXIS 11443 (D.S.C. July 27, 1995)
BellSouth Telecommunications, Inc. (“Southern Bell”) initiated interpleader proceedings to determine which one of three Defendants held priority in the debt owed by Southern Bell to the fourth Defendant, Kelly Green, Inc. (“Kelly Green”). Each of the three Defendants were creditors to Kelly Green. In June of 1993, Southern Bell contracted Kelly Green to perform miscellaneous work connected with burying underground telephone cable. Kelly Green, in turn, subcontracted a portion of the work to Defendant Dekalb Concrete Products, Inc. (“Dekalb”). Shortly thereafter, Kelly Green failed to pay Dekalb, Defendant, Internal Revenue Service (“IRS”) for employment related taxes and Defendant King & Vernon, P.A. (“King & Vernon) for legal services rendered.