Dep’t of Transp. v. Seattle Tunnel Partners, 2019 BL 36988, 2 (Wash. App. Div. 2 Feb. 05, 2019)

On January 8, 2019, the Court of Appeals for the State of Washington reversed and remanded in part a trial court’s grant of summary judgment in a tunnel-boring construction case.  Specifically, the Court clarified that the three-year statute of limitations for negligence claims begins to run as soon as the aggrieved party becomes aware of the factual elements of the claims.  It does not matter whether the underlying cause of the claims remains disputed.

Continue Reading The Washington Court of Appeals Clarifies When the Statute of Limitations for a Negligence Claim Begins to Run Under the Discovery Rule

Pavik v. George & Lynch, Inc., No. 160, 2017, 2018 Del. LEXIS 133 (Mar. 23, 2018)

This case arises out of a highway reconstruction project and a car accident which occurred on the highway during non-working hours.  The Delaware Department of Transportation (“DelDOT”) hired George & Lynch, Inc. (“G&L”) to repave Omar Road.  The contract obligated G&L to perform its work in a manner that would provide reasonably safe passage to the traveling public and to provide for the protection and safety of the general public.  DelDOT approved G&L’s traffic control plan, which provided for placement of temporary warning signs during working hours and permanent warning signs advising travelers of road work ahead.  As part of its work, G&L performed cold in-place recycling, a process by which asphalt is removed, recycled, and reapplied as a base layer.  As the recycled asphalt cures, the road surface can support traffic, but there is a risk that raveling—a condition in which the base layer breaks apart—can occur.

It was during a curing period that the accident occurred.  On Friday, after asphalt had been installed and began to cure, the road was reopened.  On Saturday, after a thunderstorm, DelDOT received complaints of potholes on the road.  On Sunday, DelDOT patched the potholes and later that night, the driver lost control of her car and ran off the road.  Plaintiffs claimed the accident was caused by raveling and that G&L was negligent because it failed to provide warning signs about the road’s condition during the non-working hours.  G&L argued that it had no duty to erect additional signs and that DelDOT’s repairs broke the chain of causation.


Continue Reading Divided Delaware Supreme Court Holds Highway Contractor Owes a Common Law Duty to Provide for the Safety of the Traveling Public, Above and Beyond Its Approved Traffic Control Plan

City of Whiting v. Whitney, Bailey, Cox & Magnani, LLC, 2018 U.S. Dist. LEXIS 44943 (N.D. Ind. Mar. 20, 2018)

The City of Whiting, Indiana (the “City”) undertook a 26-acre lakefront development project.  It hired an engineering firm to serve as the consultant for the project.  The consultant subcontracted with a subconsultant for marine engineering services, including design of a rock revetment on the lakefront for shoreline protection.  According to the City, the revetment failed on three occasions, resulting in damage to the City’s property at the project site, including a walking path, landscaping and existing trees, a gazebo, and an existing Gun Club structure, which the City had planned to convert to a restaurant.

After accepting assignment of the consultant’s contract with the subconsultant, the City filed a six-count complaint and alleged that the subconsultant’s negligent revetment design caused damage to the City’s property.  The subconsultant moved for summary judgment on the City’s negligence claim, arguing that the economic loss rule precluded liability against it in tort.  The court noted that Indiana’s economic loss rule bars tort liability when there is damage only to the product contracted for itself, but that the rule does not preclude tort liability if there is personal injury or damage to “other property.”


Continue Reading A Project Consisting of Several Component Projects Is a Single Project or “Product Purchased by the Owner” Within the Meaning of the Indiana Economic Loss Rule; Only Damage to Pre-Exiting Property at the Site May Be Subject to Recovery in Negligence

Alkemade v. Quanta Indem. Co., 2017 U.S. App. LEXIS 6896 (9th Cir. Apr. 20, 2017)

 In 1994, Adrianus and Rachelle Alkemade (the “Alkemades”) bought a house from Meltebeke Built Paradise Homes (“Meltebeke”). The home was built on expanding soils, causing significant structural damage.  Meltebeke repaired the existing damage and hired an engineering firm to install a helical pier foundation, which would have prevented any further damage to the home.  However, the helical pier foundation was also installed negligently, afflicting the home with the same type of structural damage as before.

Alkemades sued Meltebeke for negligent supervision of the helical piers installation. Meltebeke entered a settlement agreement with Alkemades in which Meltebeke assigned to Alkemades the right to sue its insurers, Quanta and GFIC, who refused to defend Meltebeke on grounds that its knowledge of the damage caused by the original, defective construction prevented coverage under a known damages provision in Meltebeke’s policies (the “Policies”).  Alkemades subsequently sued the issuers for breach of contract in the U.S. District Court for the District of Oregon for their failure to defend and indemnify Meltebeke.  The insurers moved for summary judgment.

The Policies excluded coverage for damage known by the insured, in whole or in part, that occurred before the policy period began. If such damage was known to the insured, then any “any continuation, change or resumption” of that damage was also deemed known, and excluded.


Continue Reading Ninth Circuit Holds That Despite ‘Known Damage’ Exclusion Insurer Had Duty Under Oregon Law to Indemnify and Defend Contractor When Property Damage Resulted From Contractor’s Negligent Repair of a Prior Negligent Act

Amberwood Dev., Inc. v. Swann’s Grading, Inc., No. 1 CA-CV 15-0786, 2017 Ariz. App. Unpub. LEXIS 207 (Ct. App. Feb. 23, 2017)

This case arose out of a housing development project, with Amberwood Development Inc. (“Amberwood”) acting as the general contractor and Swann’s Grading, Inc. (“SGI”), as a subcontractor. In their subcontract agreement, SGI agreed to defend, indemnify and hold harmless Amberwood from claims and “liability of every kind whatsoever arising out of or in connection with [SGI’s] work.”  This indemnity extended to any claims asserted by any subsequent owner alleging improper or defective workmanship.

After construction concluded, eighteen homeowners sued Amberwood, alleging numerous construction defects. Amberwood then sought indemnification from its subcontractors, including SGI. Ten of the eighteen homeowners arbitrated their claims to award and the remaining eight settled with Amberwood.  Amberwood then settled with all of its subcontractors except SGI.


Continue Reading No Negligence? No Causation? No Problem. Arizona Appellate Court Holds General Contractor Need Not Prove Subcontractor’s Negligence or Causation To Be Indemnified

Engeman Enterprises, LLC, v. Tolin Mechanical Systems Company
2013 Colo. App. LEXIS 345 (Colo. App. Mar. 14, 2013)

Engeman operates a cold storage facility and Tolin designs, installs, maintains, and repairs cooling systems. In 2008, Engeman engaged Tolin for an emergency repair at Engeman’s facility. The parties entered into two agreements, both of which stated that Tolin would perform its work in a “prudent and workmanlike manner,” and which disclaimed Tolin’s liability beyond repairing issues caused by defective workmanship.


Continue Reading Colorado Court of Appeals Upholds Summary Judgment Barring Owner Tort Claims Against Service Contractor Pursuant To Economic Loss Rule

SRC Constr. Corp of Monroe v. Atl. City Housing Auth.
2013 U.S. Dist. LEXIS 47301 (D.N.J. April 2, 2013)

The U.S. District Court for the District of New Jersey denied a defendant architect’s motion for summary judgment, holding that the economic loss doctrine applies only to bar tort claims between parties to a contract.


Continue Reading U.S. District Court in New Jersey Holds Economic Loss Doctrine No Bar to General Contractor’s Delay Claims Against Architect

LeBlanc v. Logan Hilton J.V.
463 Mass. 316 (2012)

The Massachusetts Supreme Court ruled where there is evidence that design professionals had actual knowledge of deficiencies in the installation of electrical switchgear but failed to fulfill their contractual duties to report the deficiencies to the property owner, the evidence of is sufficient to support a finding of professional negligence without an expert opinion.


Continue Reading Massachusetts Supreme Court Holds Expert Testimony Is Not Always Required to Support Professional Negligence Claim

Martin K. Eby Constr. Co., Inc. v. OneBeacon Ins. Co.,  
2012 U.S. Dist. LEXIS 131875 (D. Kan. Sept. 17, 2012)

Eby was the contractor for a project to build a water pipeline in Texas. KBR was the construction manager on the project. In the Indemnity Provision of the water pipeline project contract:

Eby agree[d] to indemnify and hold harmless KBR from and against any damages, claims, demands, suits, and judgment costs including attorney’s fees and expenses for or on account of damage to property directly or indirectly arising from or caused in connection with the work by Eby.”

Celanese, the owner of a methanol pipeline in the area near the project, sued Eby and KBR for negligence after the methanol pipeline leaked during the construction of the water pipeline. A jury determined that KBR was not liable to Celanese and that Eby’s actions caused the damage. But, KBR incurred attorney’s fees defending against the suit and sought to recover those fees from Eby under the Indemnity Provision.


Continue Reading U.S. District Court In Kansas (Applying Texas Law) Holds That Indemnity Clause Which Failed to Call Out Indemnitee’s Negligence Did Not Afford Indemnity for Attorneys’ Fees Even Where Indemnitee Sued for Negligence Was Found Not Negligent

Structure Tone, Inc. v. Universal Services Group, Ltd.
929 N.Y.S. 2d 242 (App. Div. 2011)

This action arose out of the construction of a Whole Foods Market in the AOL/Time Warner Center at Columbus Circle in Manhattan. The general contractor, Structure Tone, Inc., (“STI”) retained Universal Service Group (“USG”) to waterproof the market. STI sued USG, claiming that the waterproofing failed on 15 occasions, causing water to leak from the Whole Foods Market into various tenant spaces below. STI undertook to remedy the problem, and as a result, allegedly sustained damages totaling $1.2 million. STI alleged causes of action for negligence and breach of contract, seeking as damages the costs of remediation, loss of profit, recovery of the amounts paid to USG and contract balances not paid by Whole Foods.


Continue Reading NY Court Holds Subcontractor’s Contribution Claims Against Architect And Supplier Barred By Economic Loss Doctrine And Its Common-Law Indemnification Claims Precluded By Allegations Of Subcontractor’s Active Fault