breach of contract

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S.M. Wilson & Company v. Urban Concrete Contractors
2007 Tex. App. LEXIS 3747, No. 04-06-00227-CV (Tex. Ct. App., May 16, 2007)
A Texas Court of Appeals held that an oral change order agreement to pay for work which was, in fact, within the scope of the original contract was unenforceable for lack of consideration.
S.M. Wilson & Company (“Wilson”) entered into a contract with the Target Corporation to construct a Target Store in Austin, Texas (the “Project”). Wilson then solicited bids from subcontractors for various aspects of the Project. Urban Concrete Contractors, Ltd. (“Urban”) submitted a bid to Wilson to perform concrete work on the Project. During the pre-bid process, Wilson sent a proposed contract including Work Package 03300, which identified the scope of concrete work that Urban would be responsible for. Work Package 03300 referred to two sets of plans describing the concrete work to be performed which were not included in the package but were available to Urban for review at no charge prior to bidding.

Charles T. Driscoll Masonry Reconstruction Co., Inc. v. County of Ulster
2007 N.Y. App. Div. LEXIS 6068 (N.Y. App. Div., May 17, 2007)
The Appellate Division of the Supreme Court of New York held that a construction contract must be enforced according to its terms and, therefore, oral modifications of an agreement which specifically calls for modifications to be in writing will be unenforceable. Although recognizing that written modification clauses may be waived based upon the conduct of the parties, the court found that the conduct of the parties in this case did not support a waiver.

Menorah Home and Hosp. for the Aged and Infirm v. Fireman’s Fund Ins. Co.
2007 U.S. Dist. LEXIS 27684 (E.D.N.Y., April 13, 2007)
The District Court for the Eastern District of New York held that a liquidating agreement between an Owner and a Surety was valid and enforceable, even though it permitted the Owner to retain any recovery it obtained from the third-party, rather than having money pass-through to the surety.
The case arose out of a project to build and renovate facilities for Menorah Home and Hospital for the Aged and Infirm (“Owner”). The Owner entered into a contract with J.A. Jones Construction Group, LLC (“Jones”) for the Project. When Jones defaulted, Fireman’s Fund Insurance Company (“FFIC”), Jones’ surety, took over and completed the Project. The Owner subsequently sued FFIC alleging that FFIC had breached its performance bond obligations by failing to complete the Project in a timely manner and correct deficiencies in the work performed by Jones.

Quality Trust Inc. v. Cajun Contractors, Inc.
2007 U.S. Dist. Lexis 25431 (D. Kan. 2007)
The District Court granted the prime contractor summary judgment on its right to terminate a subcontractor for failure to provide submittals and sufficient work force, while at the same time holding that the contractor was not entitled to summary judgment on the subcontractor’s claims for delay damages and contract balances.
Prime contractor, Cajun Contractors, Inc. (“Cajun”), entered into a general contract with the United States Army Corps of Engineers (“COE”) for the construction of a wastewater facility at Fort Riley, Kansas. The project entailed the partial demolition of an existing facility and the construction of a new facility. Cajun subcontracted with Quality Trust, Inc. (“QTI”) to erect eight metal buildings as part of the new facility. Under the subcontract, Cajun was to construct the concrete building pads, to procure the buildings through a third party supplier, and to provide the buildings for QTI to erect and finish.

Scandale Associated Builders & Engineers, Ltd. v. Bell Justice Facilities Corp.
No. 4:03-CV-1773, 2007 U.S. Dist. LEXIS 25112 (M.D. Pa. April 4, 2007)
In January 2001, Scandale Associated Builders & Engineers, Ltd. (“Scandale”) entered into a subcontract (“Subcontract”) with Bell Justice Facilities Corporation (“Bell”) for work on the construction of the U.S. Penitentiary/Federal Prison Camp at Canaan, Pennsylvania (“Prison”). The Subcontract required Scandale to perform cast-in-place concrete work on the Prison. Bell was the general contractor and the United States through the Federal Bureau of Prisons was the Owner.

Universal Underwriters Insurance Co. v. A. Richard Kacin, Inc.
916 A.2d 686 (Pa. Super. Ct. 2007)
The Superior Court of Pennsylvania held that the American Institute of Architects’ (“AIA”) form waiver of subrogation clause barred a subrogation claim even where the loss was created by the contractor’s own negligence. Relying on Penn Avenue Place Assoc., L.P. v. Century Steel Erectors, Inc., 798 A.2d 256 (Pa. Super. Ct. 2002), the court held that a warranty provision did not invalidate the waiver of subrogation and opined that the warranty provision provided a remedy only to the extent that losses were not covered by insurance. The court further held that an insurer does not need to be party to the contract containing the waiver of subrogation clause nor does the insurer need to consent to or have notice of the waiver of subrogation clause in order for it to be enforceable.

Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc.
2007 U.S. App. LEXIS 7808 (3d Cir., Apr. 5, 2007 )
The United States Court of Appeals for the Third Circuit held that, despite the commercial practice to the contrary, a subcontractor was not bound by the qualified bid it submitted to a general contractor. The subcontractor’s bid plainly stated that the price was for information purposes only and should not be relied on by the recipient.
General Contractor Fletcher-Harlee solicited subcontract bids for concrete work. As is an industry custom, Fletcher-Harlee stated in its solicitation letter that bids must be held open for a minimum of 60 days and also that the subcontractor must agree to be accountable for the prices and proposals submitted. Pote Concrete Contractors submitted a written bid. However, Pote included a disclaimer in its submission. In the bid, Pote stated that the price quote was for informational purposes only, was not a firm offer, should not be relied on and that Pote did not agree to be held liable for any of the terms that it submitted.

Lexicon, Inc. v. Safeco Insurance Co. of America
No. 04-6086, 2006 U.S. App. LEXIS 3113 (6th Cir. Feb. 9, 2006)
Icon, Inc. served as a subcontractor on a steel plant expansion project in Kentucky. Pursuant to its subcontract, Icon secured a payment bond, with Safeco Insurance Company of America as surety. Lexicon, Inc. performed work on the project as a subcontractor to Icon. Lexicon incurred additional costs on the project as a result of delays for which it was not at fault. Lexicon brought a claim for these “delay and impact” costs against Safeco, as surety for Icon.

Harborview Office Ctr., LLC v. Camosy Inc.
2006 Wisc. App. LEXIS 149 (Wis. Ct. App. Feb. 15, 2006)
Project owner Harborview entered into a contract for the construction of a three-story office building. After discovering significant water infiltration problems, Harborview filed suit against the parties who had provided services in its construction: the general contractor, the architectural firm, the installer of aluminum windows, and the installer of the Exterior Insulation and Finishing System (EIFS). Harborview alleged negligence and breach of contract against each and claimed that in order to resolve the water infiltration problem it would be necessary to remove and replace all of the building’s windows. Harborview hired an expert, who was an architect and engineer, to identify the causes of the problem, evaluate a correction process, and ultimately oversee the remediation process.

Carolina Casualty Insurance Company, et al. v. R.L. Brown & Associates, Inc., et al.
No. 1:04-CV-3537-GET, 2006 U.S. Dist. LEXIS 5261 (N.D. Ga. January 25, 2006)
In Carolina Casualty Insurance Company, et al. v. R.L. Brown & Associates, Inc., et al., No. 1:04-CV-3537-GET, 2006 U.S. Dist. LEXIS 5261 (N.D. Ga. January 25, 2006), a dispute arose between a surety that had provided a performance bond on a public works project and the project’s program manager. After the owner declared the general contractor in default for defective work, the surety finished the underlying contract under the terms of the performance bond. The owner sought additional damages from the surety. In an agreement settling those claims for additional damages, the owner assigned to the surety all of its own claims against third parties arising out of the defective construction and supervision of the project.