Atlantic City Associates, LLC v. Carter & Burgess Consultants, Inc., et al
2011 U.S. App. LEXIS 9191 (3rd Cir. May 4, 2011)

* Please note that the Third Circuit issued this opinion as a non precedential opinion pursuant to Third Circuit Internal Operating Procedure Rule 5.7.

Atlantic City Associates (“ACA”) hired Carter & Burgess Consultants, Inc. (“C&B”) to oversee construction of a development in Atlantic City, New Jersey. Following numerous delays, ACA sued C&B and obtained a total recovery, including attorneys’ fees, costs and interest, of nearly $13 million. On appeal, C&B argued that the District Court failed to apply several clauses of the parties’ agreement waiving consequential damages, and failed to enforce an additional clause limiting C&B’s total liability to its compensation.

Continue Reading Third Circuit, Applying NJ Law, Revisits Distinction Between Direct and Consequential Damages and Holds Indemnification Obligation Only Applies When Seeking Damages for Third-Party Losses

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.
Continue Reading Construction Manager Sued For Failure To Ensure Quality Of Contractor’s Work Could Not Sue Contractor’s Surety For Indemnity Or Contribution

MidAmerica Construction Management, Inc. v. MasTec North America, Inc., et al.
2006 U.S. App. Lexis 3022 (10th Cir. 2006)
In MidAmerica Construction Management, Inc. v. MasTec North America, Inc., et al., 2006 U.S. App. Lexis 3022 (10th Cir. 2006), the Court held that a subcontract agreement contained a “pay-if-paid” clause, and that the clause in question was enforceable under both Texas and New Mexico law. As a result, general contractors did not need to pay the subcontractor for the work that the subcontractor performed under the contract, because the general contractors had not been paid by the project owner for that work.
Continue Reading Terms Of Subcontract Containing A “Pay-If-Paid” Clause Enforceable Under Both Texas And New Mexico Law

Environmental Energy Partners Inc. v. Siemens Building Technologies,Inc., et al.
Nos. 26521 & 26702, 2005 Mo. App. LEXIS 1568 (Mo. Ct. App., Oct. 25, 2005)
In Environmental Energy Partners Inc. v. Siemens Building Technologies, Inc., et al., Nos. 26521 & 26702, 2005 Mo. App. LEXIS 1568, a payment dispute arose between a contractor and its subcontractor on a hospital renovation project. When the contractor refused to pay the subcontractor the remaining subcontract balance ($201,178.75) on the basis that the subcontractor’s work was not completed, the subcontractor filed a mechanic’s lien against the property. The subcontractor then filed a petition to enforce its lien, naming the contractor and owner as defendants. Because of the subcontractor’s lien, the owner withheld the last installment payment of $148,475 due to the contractor under their agreement. Thereafter, and unbeknownst to the contractor, the subcontractor and the owner entered into a confidential “Settlement Agreement and Release” under which the owner agreed to pay directly to the subcontractor the $148,475 amount that it was withholding from the general contractor in exchange for a release of the lien upon entry of judgment in the litigation.
Continue Reading Missouri Court Holds Subcontractor Tortiously Interfered with Contractor’s Agreement with Owner by Seeking Payment Directly from Owner