Trevdan Building Supply v. Toll Brothers, Inc.
2010 PA Super. 100, 996 A.2d 520 (May 28, 2010)

On May 28, 2010 the Pennsylvania Superior Court filed a ruling that is significant to project owners as well as subcontractors and suppliers. In Trevdan Building Supply v. Toll Brothers, Inc., the Court held that an unpaid supplier had an “equitable lien” on contract funds that the owner had interpleaded into Court; and that the contractor, its bankruptcy estate and its secured bank creditor did not have a cognizable interest in the contract funds because, under the terms of the construction contract, the contractor did not earn the funds until it had both performed the work and paid its suppliers. The Court considered the unpaid supplier’s rights to be so clear that the Court denied the owner’s statutory claim to be reimbursed its attorneys’ fees for filing the interpleader action, stating that the owner was guilty of “delay” and acted “unreasonably” by “ignoring” the supplier’s equitable claim and refusing “to exercise its undisputed contractual right to pay” the supplier (this despite two judges in the same case – the trial judge and a dissenting Superior Court judge – having decided the case differently).Continue Reading Pennsylvania Superior Court Holds Unpaid Supplier’s Right to Contract Funds is Superior to Rights of Failed Contractor’s Secured Bank Creditor and Bankruptcy Estate – Owner’s Recovery of Attorneys’ Fees in Interpleader Disallowed

Indianapolis – Marion County Public Library v. Charlier Clark & Linard, P.C
2010 Ind. LEXIS 397 (Indiana, June 29, 2010)

The Indianapolis-Marion County Public Library entered into contracts with Woollen Molzan and Partners, Inc. (“Architect”) for the design for the renovation and expansion of the Library’s facility including its parking garage. The Architect entered into subcontracts with Thornton Tomasetti Engineers (“TTE”) and Charlier Clark and Linard, P.C. (“CCL”) to perform architectural and engineering services. TTE performed structural engineering services and CCL administered various services for the Project, including reviewing and inspecting the construction plans and construction progress to determine if construction was in general compliance with the construction documents. The Library never consulted directly with TTE or CCL.Continue Reading Indiana Supreme Court Holds Economic Loss Doctrine Bars Owner’s Claims for Design Deficiencies Against Engineering Firms Not in Privity

Circle Y Construction, Inc. v. WRH Realty Services, Inc.
2010 U.S. Dist. LEXIS 67812 (N.D. Ga. July 8, 2010)

Circle Y Construction, Inc. contracted with WRH Hidden Colony to perform certain renovation work at nine unoccupied apartment units. The contract designated Brown, vice president of construction services for WRH Realty Services, as the person responsible for administering the contract on behalf of WRH Hidden Colony and stated that Brown was the only person authorized to approve changes to the scope of work. The contract further provided that “all extra or changed work shall be authorized by a written change order.”Continue Reading U.S. District Court in Georgia Holds Written Change Order Requirement Waived By Course of Conduct

Mastec North America, Inc. v. El Paso Field Services, L.P.
2010 Tex. App. LEXIS 3436 (Tex. App. May 6, 2010)

The Court of Appeals of Texas recently held that when a contract places the risk of differing site conditions on the contractor, the contractor is not required to bear the risk “that the bid documents misrepresent the nature and amount of the work to be performed.”

The matter involved replacement of a pipeline that extended from Houston to Corpus Christi. Defendant El Paso contracted with Plaintiff MasTec, for the replacement work.Continue Reading Texas Court Holds Contract Allocation of Risk of Underground Conditions Overridden by Owner’s Affirmative Assurances in Specifications

Village of Sturtevant v. STS Consultants, Ltd.
2010 Wisc. App. LEXIS 433 (Wis. Ct. App. June 9, 2010)

The Court of Appeals of Wisconsin recently considered whether a design professional could maintain a claim for contribution against a subcontractor on the basis that the subcontractor had a duty to advise that the design was not suited for the intended application. The Court of Appeals upheld the lower court’s dismissal of such claims on the basis that the subcontractor had no design or construction responsibility and therefore could not be a joint tortfeasor.Continue Reading Wisconsin Court Holds Subcontractor Had No Responsibility to Critique Design in Contract Documents

Cleveland Construction, Inc. v. Kent State University
2010 Ohio 2906, 2010 Ohio App. LEXIS 2407 (Ohio Ct. App. June 24, 2010)

The Ohio Court of Appeals held that a contractor’s failure to submit claims in accordance with the contract’s dispute process and its failure to exhaust administrative remedies prescribed by statute would bar its claims regardless of assertions as to the futility or unfairness of such procedures.Continue Reading Ohio Court Holds Contractor Claims Barred Because of Failure to Comply With Contract’s Claim Submission and Dispute Resolution Provisions

Blesi-Evans Co. v. Western Mechanical Service, Inc.
2010 U.S. Dist. LEXIS 36302 (S.D. April 13, 2010)

Defendant Western Mechanical Services, Inc. entered into a contract with the state of South Dakota to replace boilers on the South Dakota School of Mines and Technology campus Western, in turn, solicited bids for the boilers. Western accepted Plaintiff Blesi-Evans Co.’s proposal to supply one of the boilers. A dispute arose out of the delay in the production and delivery of that boiler.Continue Reading U.S. District Court in South Dakota Denies Summary Judgment on Contractor’s Set-off Defense Based on Delay in Delivery to Supplier’s Claim for Payment On Grounds That Material Issues of Fact Existed Regarding Time for Delivery and UCC Notice to Supplier

Lillibridge Health Care Services, Inc. v. Hunton Brady Architects, P.A.
2010 U.S. Dist. LEXIS 34210 (M.D. Fla. April 7, 2010)

Lillibridge Healthcare Services, Inc. sued Hunton Brady Architects, P.A. and Heery International, Inc. for breach of contract, negligent design, and negligent misrepresentation.

Hunton had entered into an agreement with Mediplex Medical Building Corporation (“MMBC”) to prepare documents and to provide other services for the construction of a four story, steel frame medical office building located in Celebration, Florida. MMBC assigned its rights under that contract to Lillibridge. Heery had assumed obligations under a subcontract with Hunton to perform the engineering work for the Project.Continue Reading U.S. District Court in Florida Rules Expert Witness Not Required to Establish Architectural or Engineering Standards of Care, Where Claims Based on Rejection of Designs for Noncompliance With Codes

Acme Contracting, Ltd. v. Toltest, Inc.
2010 U.S. App. LEXIS 6144 (6th Cir. Mar. 24, 2010)

The Court of Appeals for the Sixth Circuit affirmed a District Court decision that a “no damage for delay” clause was void and unenforceable pursuant to Section 4113.62 of the Ohio Revised Code. The clause contained provisions requiring that any “delay must be reported in writing and an extension of time shall be the sole and exclusive remedy of Contractor for any such delays or suspensions, but only to the extent that a time extension is obtained from the Owner,” and that “no claims will be accepted for costs incurred due to delays caused by others except to the extent that such delays exceed four (4) months.”Continue Reading U.S. Court of Appeals for Sixth Circuit Holds Ohio Statute Precludes Application of “No Damage for Delay” Clause

Razorback Contractors Inc. v. Board of County Commissioners
227 P.3d 29 2010 Kan. App. LEXIS 35 (Kan. Ct. App. April 2, 2010)

The Court of Appeals of Kansas recently upheld a trial court’s decision to strictly enforce a written notification of differing site conditions provision in a construction contract.

The matter before the Court of Appeals involved construction of a sanitary sewer line in Southern Johnson County, Kansas. Defendant the Johnson County Board of County Commissioners contracted Plaintiff Razorback Contractors of Kansas, Inc., the successful bidder on the Project, to provide construction services in connection with the Project.Continue Reading Kansas Court Strictly Construes Written Notification of Differing Site Conditions Clause