negligence

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Quinn Construction, Inc. v. Skanska USA Building Inc.
2008 U.S. Dist. LEXIS 45980 (E.D. Pa. June 10, 2008)
The United States District Court for the Eastern District of Pennsylvania held that no certificate of merit was required in contractor and subcontractor’s negligent misrepresentation claims against architect.
Skanska served as general contractor for two private construction projects owned by the Trustees of the University of Pennsylvania. Skanska entered into two written subcontracts with Quinn for certain concrete work on the projects. Thereafter, Quinn filed a negligent misrepresentation claim against the project Architect, alleging that it relied upon the drawings, specifications, addenda and bulletins prepared by the Architect in preparing its bids, executing its subcontracts with Skanska, planning and scheduling its work and performing its work. Quinn further alleged that the Architect’s continuous design changes, its failure to complete drawings previously represented as 100% complete and its failure to timely review and approve Quinn’s shop and coordination drawings created an unreasonably and unforeseeably lengthy submission process, which prevented Quinn from timely delivering its materials to the Project and caused Quinn to incur overtime labor expenses to adhere to the Project schedule.

Mostellar Mansion, LLC v. Mactec Engineering & Consulting of Georgia, Inc.
2008 N.C. App. LEXIS 1011 (May 20, 2008)
Mostellar Mansion, LLC (Mansion) entered into a contract with Mactec Engineering and Consulting of Georgia, Inc. (Mactec) in connection with Mostellar’s plan to purchase a tract of land for the construction of an apartment complex (the Project Site). Under the contract, Mactec was to assess the subsurface conditions of the Project Site, determine if the Project Site was suitable for the proposed construction and provide recommendations for foundation design and site preparation for the proposed structures. The contract contained the following pertinent provisions:

Sloan Constr. Co. v. Southco Grassing, Inc.
2008 S.C. LEXIS 99 (S.C. Mar. 24, 2008)
The South Carolina Department of Transportation (SCDOT) contracted with general contractor Southco Grassing, Inc. in connection with state highway maintenance project and, in accordance with the applicable statutory bond requirements, Southco provided a payment bond for the benefit of its subcontractors and suppliers in the full contract amount. Subsequently, Southco entered into a subcontract with subcontractor Sloan to perform asphalt paving work. In June 2001, before the paving work was completed, Southco’s payment bond was cancelled when the bond’s issuer became insolvent. Notice of the insolvency and cancellation was provided to SCDOT and SCDOT requested in writing that the Southco provide a replacement bond within seven days. Southco did not reply. In the meantime, Sloan completed its work, but in January 2002 notified SCDOT that it still had not received payment from Southco for its subcontract valued at approximately $52,000 and that the payment bond had never been replaced. In March 2003, despite that it had not made full payment to Sloan, Southco advised SCDOT that it had made all payments on the project, and SCDOT released final retainage to Southco.

URS Group, Inc. v. Tetra Tech FW, Inc. and Foster Wheeler Environmental Corporation
2008 Colo. App. LEXIS 159 (February 7, 2008)
The Court of Appeal of Colorado held that the plaintiff subcontractor did not assume the risk of differing site conditions and thus its claims for differing site conditions and mutual mistake were viable. Moreover, the Court held that the economic loss rule did not bar plaintiff’s negligent misrepresentation claim, because the alleged misrepresentation occurred during negotiations before the contract was formed.

Crown Castle USA, Inc., et al. v. Fred A. Nudd Corporation
2008 U.S. Dist. LEXIS 3416 (W.D. N.Y. Jan. 16, 2008)
The United States District Court for the Western District of New York held that the “economic loss doctrine” did not bar a professional negligence claim against defendant where plaintiff’s claims sought tort liability for defendant’s failure to exercise reasonable care in the design of a prefabricated product.
Fred A. Nudd Corporation (“Nudd”) fabricates steel products, including cellular phone towers (“monopoles”). On January 12, 2001, Crown and Nudd executed a construction services agreement (the “CSA”) where Nudd was to design, fabricate and/or construct twelve monopoles for Crown. In November 2003, a monopole designed by Nudd for another company collapsed. When Crown became aware of the collapse, it became concerned about the monopoles that Nudd designed and manufactured under the CSA. Crown alleges that it began an investigation which revealed that the monopole shafts, base plates, anchor rods and foundations for each of the monopoles were defective, overstressed and did not have the capacity to support the loads for which they were designed. Crown filed a complaint alleging that the monopoles which Nudd designed, fabricated and constructed contained design and construction defects. In its complaint, Crown’s only claim for damages is the costs to repair the allegedly defective monopoles.

Liberty Mutual Insurance Company v. N. Picco & Sons Contracting Co., Inc.
2008 U.S. Dist. LEXIS 4915 (S.D.N.Y. Jan. 16, 2008)
The United States District Court for the Southern District of New York (“SDNY”) recently had to decide whether a surety was entitled to assert subrogation rights against other project participants when the surety completed the construction work abandoned by the general contractor and performed remediation work. The SDNY determined that the surety did not voluntarily undertake the remediation work and, therefore, was entitled to assert subrogation rights.

Potomac Constructors, LLC v. EFCO Corp.
2008 U.S. Dist. LEXIS 1602 (D. Md, Jan. 9, 2008)
Plaintiff general contractor and Defendant manufacturer entered into a purchase order agreement under which Defendant would engineer and supply steel formwork used to cast concrete segments to be incorporated in the support structure for a bridge. The agreement contained a clause, which specifically limited the Defendant’s liability to the repair or replacement of any defective work, explicitly disallowing incidental, direct or consequential damages.

WM Hotel Group, LLC v. Pride Construction, Inc.
2008 R.I.Super.LEXIS 9 (2008)
WM Hotel, owner of the Hampton Inn & Suites, located in Middletown, R.I. initiated a lawsuit against Pride Construction, the general contractor for the construction of its hotel, Antcil Plumbing & Mechanical Contractors, Inc., the plumbing subcontractor that installed the hotel bathtubs and Travelers, Antcil’s insurer under a CGL policy.
Antcil installed the tubs, tested them for leaks, placed “tub protectors” in each and transferred control of them to Pride. The tubs began evidencing cracking, rust, and sagging. WM Hotel asserted that 93 of the 95 tubs were defective as manufactured and/or installed and that it was Antcil’s faulty installation that resulted in the damage to the tubs. Forensic testing and analysis indicated that a styrofoam sound deadening pad was missing from beneath the tubs, and that the omission could have contributed to deflection of the bathing surface. Travelers filed a motion for summary judgment asserting that the CGL policy issued on behalf of Antcil did not provide coverage for the damage incurred. Travelers asserted that the damages were not the result of an “occurrence” as defined in the policy and that exclusionary language in the policy precluded coverage.

1800 Ocotillo, LLC v. WLB Group, Inc.
2008 Ariz. App. LEXIS 9 (Jan. 29, 2008)
The Court of Appeals of Arizona held that a state statute prohibiting design professionals for contracting for indemnity for their sole negligence does not as matter of law prohibit the use of limitation of damages provisions in professional service contracts.
In 1998, a real estate developer, 1800 Ocotillo, undertook the development of a townhouse project in Phoenix that bordered the Arizona Canal. Developer hired an engineering-architectural firm, The WLB Group, to perform surveying, engineering and landscape architecture services on the project. Developer had its design-build contractor sign the contract with the engineering-architectural firm, which included a limitation of damages provision limiting its exposure to the amount of its fees. While the parties never specifically discussed this provision, the entire contract was incorporated into a supplemental contract between the Developer and the engineering architectural firm approximately two years later.

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.