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Winger Contr. Co. v. Cargill, Inc., No. 17-1169, 2019 BL 132092 (Iowa Apr. 12, 2019).

On April 12, 2019, the Iowa Supreme Court affirmed a lower court ruling which held that, inter alia, the Iowa mechanic’s lien statute would not permit the attachment of mechanic’s liens to the property of a lessor in connection with a contract to supply materials and labor to a lessee.Continue Reading The Lessor of Two Evils: Iowa Supreme Court Holds That Mechanic’s Liens Will Not Attach to the Property of a Lessor for Work Authorized by a Lessee

Westfield Ins. Co. v. Weaver Cooke Constr., LLC, 2019 BL 129431 (E.D.N.C. Apr. 11, 2019)

This case arises out of the alleged defective construction of a condominium complex in North Carolina.  In 2009, the developer on the project filed suit for the alleged construction defects.  This related coverage lawsuit then ensued between the parties’ insurers regarding a duty to defend the general contractor.Continue Reading Federal Court in North Carolina Enforces Insurers’ Duty to Defend a General Contractor as an Additional Named Insured Under the Subcontractor’s Commercial General Liability Policy

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

R&O Constr. Co. v. MBA Gen. Contracting, LLC, No. 1:18-cv-00042, 2019 BL 98680 (D. Utah Mar. 21, 2019)

On March 21, 2019, a Utah federal court granted Defendants MBA General Contracting, LLC and Cory Martin’s motion to dismiss R&O Construction Company’s claim for attorney fees.
R&O, as general contractor of a construction project, entered into two subcontracts with MBA to perform concrete work.  The first subcontract, entitled Master Subcontract Agreement, outlined general obligations between the parties.  The second, entitled Work Authorization Document, outlined more specific obligations.  R&O asserted various causes of action against MBA arising from MBA’s alleged breach of the subcontracts, including a claim for attorney fees.  MBA moved to dismiss the attorney fees claim, arguing that neither subcontract provides for such an award.Continue Reading Utah Federal Court Dismisses Claim for Attorney Fees Finding That Neither the Indemnification Provision nor the Failure-To-Perform Provision Applies to a Lawsuit Between Contractor and Subcontractor

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

Parkcrest Builders, LLC v. Hous. Auth. of New Orleans, 2017 U.S. Dist. LEXIS 125012 (E.D. La. August 8, 2017)

The Housing Authority of New Orleans (“the Authority”) contracted with Parkcrest Builders, LLC (“Parkcrest”) to construct a public housing project.  The Project was delayed and the Authority terminated Parkcrest prior to completion, and entered into a Takeover Agreement with Parkcrest’s Surety.  The Surety retained Parkcrest to complete the work, and later notified the Authority that it had achieved substantial completion.  The Authority asserted deficient and incomplete items remained on the project, which the Surety refused to complete.  The Authority then solicited bids for the remaining work, and awarded the work to a replacement contractor.

Parkcrest sued the Authority for breach of contract and also asserted that any delays on the Project were excusable and, therefore, not subject to liquidated damages.  The Authority counterclaimed against Parkcrest for added costs to complete the project.  The Surety intervened, also seeking a ruling that all delays were excusable.  The Authority then counterclaimed against the Surety for completion costs.Continue Reading Federal Court Holds That Under Louisiana Law, Actual Notice of Cause of Delay Satisfies Contractual Notice Requirement Despite Failure to Strictly Comply With the Notice Provision

Iliescu v. Steppan, No. 68346, 2017 Nev. LEXIS 38, (Nevada Supreme Court, May 25, 2017)

Appellants Iliescu entered into a Land Purchase Agreement to sell four unimproved parcels in downtown Reno, Nevada to Consolidated Pacific Development (“CPD”) for development of a high-rise, mixed-use project to be known as Wingfield Towers, which agreement was subsequently assigned to BSC Investments, LLC (“BSC”).  BSC subsequently hired Mark Steppan (“Steppan”), to provide design services for the Wingfield Towers.  Financing was never obtained for the project and the escrow never closed on the sale of appellants’ property.  In addition, since BSC did not pay Steppan for his services, Steppan recorded a mechanic’s lien against appellants’ property.  However, Steppan did not provide appellants with a pre-lien notice.

In this case, the Nevada Supreme Court was asked to determine whether the actual notice exception for pre-lien notices should be extended to offsite work and services performed by an architect for a prospective buyer of the property.  NRS 108.245(1) requires a mechanic’s lien claimant, other than one who performs only labor, to deliver a written notice to the owner of the property of the right to lien after they first perform work on or provide material to a project.  However, substantial compliance with this requirements is met if the property owner: (1) has actual notice of the construction on the property and (2) knows the lien claimant’s identity.Continue Reading Actual Notice Exception to Pre-Lien Notice Requirement of Nevada Lien Statute Does Not Apply to Architect’s Offsite Work When No Onsite Work Has Been Performed Even Though Owner Knew That Architect Was Performing Work for the Project

Int’l Fidelity Ins. Co. v. Americaribe-Moriarty JV, 2017 U.S. App. LEXIS 3628 (11th Cir. Feb. 28, 2017)

Americaribe-Moriarty Joint Venture (“Americaribe”) entered into a subcontract with Certified Pool Mechanics I, Inc. (“CPM”) for construction of a pool in a mixed-use development that Americaribe was building in Miami, Florida. CPM provided a performance bond, issued by International Fidelity Insurance Company and Allegheny Casualty Company (collectively, “Fidelity”) as security for performance of the pool subcontract.  According to Americaribe, CPM failed to perform its obligations under the pool subcontract.  As a result, Americaribe terminated CPM, made a claim on the performance bond, and contemporaneously hired a replacement contractor (“Dillon”) to complete CPM’s scope of work.

In the event of default by CPM, the subcontract required three days’ written notice before undertaking completion of CPM’s work. The bond incorporated the subcontract by reference and also required a further, but undefined, period of time after CPM’s termination during which Fidelity could evaluate options for responding to CPM’s alleged default.  In the event that Fidelity did not conduct such an evaluation with reasonable promptness, Americaribe could declare a default by Fidelity upon seven days’ written notice.  Although Americaribe provided the written notices of default, it proceeded to complete CPM’s work with Dillon before the notice periods expired.Continue Reading Eleventh Circuit Affirms Decision Under Florida Law Barring Contractor’s Performance Bond Claim for Failure to Comply With Notice Provisions in the Bond and in the Subcontract

Port of Houston Auth. of Harris Cnty. v. Zachry Constr. Corp., 2016 Tex. App. LEXIS 13306 (Tex. App. Houston 14th Dist. Dec. 15, 2016)

This contract dispute dates back to 2004, when the Port of Houston Authority contracted with Zachry Construction to build a shipping wharf in Harris County, Texas. Zachry’s bid proposed, as part of its means and methods, building the wharf “in the dry” by using a frozen earthen wall to seal out water from the construction area. Several months into the project the Port Authority decided to extend the wharf. Zachry again proposed freeze-wall technology for the extension, and the parties entered into a change order.
The Port Authority then refused to approve Zachry’s frozen wall design, and directed Zachry to either present an alternative design or alternate means of mitigating risk. Unable to identify a viable alternative design, Zachry switched from the frozen wall design and completed the construction “in the wet.”Continue Reading Texas Court of Appeals Holds That Owner’s Change to Contractor’s Means and Methods Resulted in a “Breach,” Instead of a “Change” Subject to the Changes Clause