Rad and D’Aprile, Inc. v. Arnell Construction Corp, No. 502464/14, 2019 BL 131606 (NY. Sup. Ct. April 3, 2019)

In June of 2001, Arnell Construction Corp. (“Arnell”) entered into a prime contract to build two sanitation garages in Brooklyn for the New York City Department of Sanitation (the “City”).  Arnell subcontracted the project’s masonry work to Rad and D’Aprile, Inc. (“Rad”).  After execution of the subcontract, Rad was informed that the start of work would be delayed because the City had not yet obtained ownership or access to all portions of the site.  When its work did commence, only limited portions of the site were available.  This caused inefficiencies in Rad’s work and caused it to incur increased costs.

Continue Reading New York Court Holds Contractor’s Failure to Timely Pass Through Subcontractor Delay Claim to the Owner Constitutes Breach of the Covenant of Good Faith and Fair Dealing

A.E. Rosen Elec. Co. v. Plank, LLC, No. 07862-7, 2019 BL 113951 (Sup. Ct. Mar. 01, 2019)

On March 1, 2019, the Supreme Court of New York, Albany County, granted a subcontractor’s motion for summary judgment on a payment dispute involving a “pay-when-paid” contract provision.

Defendant Plank, LLC (“Contractor”) entered into a construction contract with Dutch Village, LLC (“Owner”) to act as the general contractor for the construction of four apartment buildings (“Project”).  Thereafter, Contractor entered into a subcontract with Plaintiff A.E. Rosen Electrical, Inc. (“Subcontractor”) for electrical work on the Project.  After nine months of work on the Project, a payment dispute arose between the Owner and Contractor.  At that time, Contractor directed the Subcontractor to cease work on the Project.

Continue Reading New York Supreme Court Granted Summary Judgment for Subcontractor Where Contractor Attempted to Utilize Contractual “Pay-When-Paid” Provision to Unreasonably Withhold Payment from Subcontractor

Whiting-Turner Contracting Co. v Guar. Co. of N. Am. USA, 2019 BL 97923 (Colo. App. Mar. 21, 2019).

This construction dispute involved rights and obligations under a performance bond supplied for an office building construction project in Denver, Colorado.  Whiting-Turner Contracting Company was the general contractor, and it subcontracted Klempco Construction to construct an anchor system for the project’s underground parking garage.  Klempco provided performance and payment bonds for the project from Guarantee Company of North America USA (“GCNA”).  When Klempco fell behind schedule, it stopped paying its sub-subcontractors and directed Whiting-Turner to assume responsibility for its work and sub-subcontractors.

Continue Reading Colorado Court of Appeals Finds Contractor Satisfied Conditions Precedent Under Performance Bond

Dur v. Western Branch Diesel, Inc.
2007 U.S. App. LEXIS 16237 (4th Cir. July 9, 2007)
Following the precedent of the Supreme Court of Virginia in Sensenbreunner v. Rust. Orling & Neale, Architects, Inc., 374 S.E.2d 55 (Va. 1988), the Fourth Circuit Court of Appeals upheld the district court’s grant of a motion for summary judgment. The Court held that damage to an owner’s boat caused by an electrical fire fell within the scope of the contract between the owner’s general contractor and the subcontractor and amounted to nothing more than economic loss, which barred the owner from maintaining a cause of action for negligence against the subcontractor.
Continue Reading Fourth Circuit Court of Appeals Holds Owner’s Negligence Cause of Action Against Subcontractor Barred by the Economic Loss Rule

U.S. ex. rel. Straightline Corp. v. American Casualty Corp.
2007 U.S. Dist. LEXIS 50688 (N.D. W.Va 2007)
The United States District Court for the Northern District of West Virginia held that a “pay-if-paid” clause was not a valid defense to a Miller Act claim. Straightline, involved a contract dispute between a general contractor’s surety (“surety”)

Trinity Church v. Atkin
925 A.2d 720, 2007 N.J.Super.LEXIS195 (N,J, Super, App. Div., June 27, 2007)
Contractual clauses providing for the date of accrual on construction projects are valid in New Jersey. The Superior Court of New Jersey, Appellate Division, affirmed summary judgment in favor of defendants who allegedly performed defective renovation and construction work on a historical building because the plaintiff failed to file a timely action within the period of the statute of limitations.
Continue Reading New Jersey Court Holds Contract Clause Providing for Accrual of Statute of Limitations on Substantial Completion Cannot Be Circumvented By Application of Discovery Rule

Integrated Project Services v. HMS Interiors, Inc.
2007 Pa.Super 246, 2007 Pa.Super.LEXIS 2606 (Pa.Super Ct., April 16, 2007)
This is an appeal from a decision in the lower court wherein a general contractor, “Integrated Project Services, (“General Contractor”) sued a subcontractor, HMS Interiors, Inc. (“Subcontractor”) for a declaratory judgment that the Subcontractor was obligated to indemnify the General Contractor for the General Contractor’s negligence. The Subcontractor filed a motion for judgment on the pleadings which was granted by the lower court and the General Contractor appealed that decision.
Continue Reading PA Court Holds Incorporation of Prime Contract Indemnity Provision Into Subcontract Insufficient to Require Subcontractor To Indemnify General Contractor For Its Own Negligence

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.
Continue Reading Contractor’s Insistence That Subcontractor Execute Release Not Required By Subcontract As Condition To Final Payment Permits Imposition Of Penalty Interest Under Pennsylvania Contractors And Subcontractors Payment Act

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.
Continue Reading Pennsylvania Court Holds Waiver Of Subrogation Provision Contained In AIA General Conditions Bars Insurer's Claim Even Though It Did Not Consent To Or Have Notice Of The Waiver

Dynalectric Co. v. Whittenberg Constr. Co.
2007 U.S. Dist. LEXIS 27025 (W.D. Ky. Apr. 10, 2007)
Defendant project-owner Luther F. Carson Four Rivers Center, Inc. contracted with Whittenberg Construction Company to serve as general contractor in the construction of a fine arts facility and with defendant Ray Black & Son, Inc. to serve as construction manager. Whittenberg contracted the electrical contracting work to Plaintiff Dynalectric. Dynalectric brought suit against Four Rivers and Black, alleging that they had caused its work to take longer and cost more than anticipated and as a result Dynalectric had not been fully compensated for its work on the project.
Continue Reading Contractor’s Negligent Supervision Claims Against Construction Manager Require Privity, But Negligent Representation Claims Do Not