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Neshaminy Constructors, Inc. v. Concrete Building Systems, Inc.
2007 U.S. Dist. LEXIS 69197, Civil Action No. 06-1489 (E.D. Pa. 2007)
The United States District Court for the Eastern District of Pennsylvania conducted a bench trial in which the primary question was whether a contract had been formed between a contractor and subcontractor in connection with a project for which the contractor submitted a bid proposal utilizing, in part, the subcontractor’s bid proposal for calculating the total price for the work. Relying on Pennsylvania common law, the Eastern District held that use of a subcontractor’s bid, by a general contractor in the submission of its own bid to the owner, in and of itself is not sufficient to create a binding contract.

Central Ceilings, Inc. v. Nat’l Amusements, Inc.,
70 Mass. App. Ct. 172, 873 N.E.3d 754 (Sept. 18, 2007)
National Amusements, Inc., entered into a contract with Old Colony Construction Corporation for the construction of National’s cinema theater complex. Old Colony subsequently entered into a subcontract with the plaintiff, Central Ceilings, Inc., for a portion of the construction of the Project. Although delays made meeting the original completion date next to impossible, National stressed to Central its strong desire to have the theatre complex open for the Labor Day weekend. In response, Central made it clear to National that meeting such an aggressive completion date would require it to accelerate the work schedule. In addition, since Old Colony was experiencing cash flow problems and owed Central a substantial sum of money for work already completed, Central demanded assurances from National that it would be paid for its work before it would continue with the accelerated work on the Project. As a result, one of National’s agents orally agreed to pay Old Colony’s obligations to Central. Thereafter, Central completed its work and achieved substantial completion by August 25.

PSEG Power New York, Inc. v. Alberici Constructors, Inc.
2007 U.S. Dist. LEXIS 66767 (N.D. NY. September 7, 2007)
During the course of litigation arising out of a contract for the construction of a combined-cycle power plant between the principal contractor Alberici and PSEG, an e-discovery dispute arose around the production of email. In response to Alberici’s request for documents including email and any email attachments, PSEG produced over 211,000 pages and a disc containing email, but not the email attachments. Later it was discovered that during the process in which PSEG’s vendor downloaded the emails for production, the tie between the email and its corresponding attachments was broken, making it very difficult to determine which attachment belonged to which email. However, the raw data remained intact. Around the same time, and before the close of discovery, PSEG moved for summary judgment. The District Judge struck the motion sua sponte, stating that the motion was to be renewed after discovery had been completed and the parties had consulted with the magistrate judge.

Federated Dep’t Stores, Inc. v. M.J. Clark, Inc.
2007 U.S. Dist. LEXIS 51826 (N.D. Ill. July 17, 2007)
After a flood caused by a leak in the sprinkler system during remodeling at a Bloomingdale’s store in Chicago damaged the first five floors of the store, plaintiffs, Bloomingdale’s and its owner Federated, sued defendant contractor, subcontractor, and building manager for breach of contract, negligence, and indemnification.
The agreement between the contractor and owner provided the contractor agreed to indemnify the owner. It further provided that each party waived all rights against the other for any loss or damage “for which property insurance is carried or required to be carried pursuant to [the parties’] Agreement.” Specifically excepted from the waiver were the contractor’s indemnification responsibilities. During the time of the flood, the owner was covered by an “all risk” insurance policy. Among other things, the policy excluded ordinary wear and tear and errors in design or faulty workmanship.

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.

Mactec, Inc. v. Bechtel Jacobs Co., LLC and Demco, Inc. v. Mactec, Inc
2007 U.S. Dist. LEXIS 60377 (E.D. Tenn. August 16, 2007)
The United States District Court for the Eastern District of Tennessee held that a private contractor had no duty to verify the pricing of a bid received from a subcontractor.
Defendant Bechtel Jacobs, LLC (“Bechtel Jacobs”) entered into a contract with the United States Department of Energy’s Oak Ridge Operations to demolish and dispose of several radioactively contaminated buildings in the main area of the K-25 Gaseous Diffusion Plant. Bechtel Jacobs issued a request for proposal inviting proposals from subcontractors to demolish and dispose of several radioactively contaminated buildings from the main plant. In response, Plaintiff MACTEC submitted a proposal in the amount of $3.99 million, which was later adjusted to a final contract price of $5.36 million. Bechtel Jacobs internal estimate for the cost of the project was $8.20 million. The next lowest proposal was $8.44 million. Bechtel Jacobs did not inform MACTEC that its proposal was significantly lower than Bechtel Jacobs internal estimate and significantly lower than the next lowest bidder. Bechtel Jacobs awarded MACTEC the subcontract.

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.

Charles Boyd Construction Inc. v. Vacation Beach, Inc.
No. 5D06-2168, 2007 Fla. App. LEXIS 9597 (Fla. Dist. Ct. App., June 22, 2007)
Following the precedent of the United States Supreme Court in Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (U.S. 2006), the Fifth District Court of Appeal of Florida reversed its prior decision and held that whether a contract is illegal in its entirety and, thus, an arbitration provision contained therein would be unenforceable, must in the first instance be decided by the arbitrator, and not a court.

Carlson v. SALA Architects, Inc.
2007 Minn. App. LEXIS 74
The of Minnesota Court of Appeals reversed entry of summary judgment in favor of a purchaser of architectural services, holding, among other things, that the relationship between an architect and its client is not per se a fiduciary relationship. Rather, the Court held that whether a fiduciary relationship exists was a question of fact which was unable to be resolved on summary judgment.

Lanier at McEver, L.P. v. Planners and Engineers Collaborative, Inc.
2007 GA App LEXIS 539 (Ga. Ct. App., May 16, 2007)
In this case, the Court of Appeals of Georgia affirmed a decision limiting an owner/developer’s damages against the project engineer to the fees paid for the engineer’s services.
The court held that a damages limitation clause that limits the amount of damages an engineer could possibly pay to an owner/developer is neither a violation of public policy nor an unenforceable penalty. Lanier, was the owner/developer of an apartment complex. Lanier hired the defendant engineering firm PEC, to design various aspect of the apartment complex, including the storm sewer and sanitary sewer drainage and management system. The engineering agreement contained a limitation of liability provision stating that the total aggregate liability of PEC and its subconsultants to Lanier “shall not exceed PEC’s total fee for services rendered on this Project.” Following construction of the Project according to the plans and specifications prepared by PEC, problems arose with the storm water system that required modification and repair by the owner. As a result, Lanier sued PEC for negligent design, breach of express contractual warranty and litigation expenses.