Subcontract

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Goldsmith Assoc., Inc. v. Del Frisco’s of Philadelphia, Inc.
2009 U.S. Dist. LEXIS 92193 (E.D. Pa. Oct. 1, 2009)

Grasso Holding Acquisition, Inc. (“Grasso”) entered into a lease with Del-Frisco’s of Philadelphia (“Del-Frisco’s”) to occupy and renovate the bottom floors of the Packard Building in Philadelphia, PA for use as a restaurant. Building owners, Chest-Pac Associates, Inc. (“Chest-Pac”) and Grasso, reserved the right to review and approve the designs for the renovation. Once the lease expired, the renovation improvements were to become the sole property of Chest-Pac and Grasso. After negotiating the lease, Del-Frisco’s contracted with Lorient, LLC to serve as the general contractor for the renovations. Lorient then subcontracted with Plaintiff, Goldsmith Associates, Inc. (“Goldsmith”) to provide the electrical work. Goldsmith submitted invoices in the amount of $1,835,110.87 but was allegedly only paid $734,879.30. Goldsmith commenced an action against Del Frisco’s, Chest-Pac and Grasso, asserting a claim of unjust enrichment, and seeking to recover $1,100,231.57 in unpaid work. The defendants moved to dismiss the Complaint as legally insufficient.

A.A. Bellucci Constr. Co. v. United States Surety Co.
2010 U.S. Dist. LEXIS 8369 (M.D. Pa., Feb. 2, 2010)

CSI Engineering, DC, P.C. (“CSI”) entered into a contract with a division of the U.S. Department of Labor to act as the general contractor for one of its construction projects. In turn, CSI subcontracted a portion of the work to A.A. Bellucci (“Bellucci”). The contract between CSI and Bellucci required mediation and arbitration to resolve disputes between them. To secure payment to all of its subcontractors, including Bellucci, CSI furnished Miller Act payment bonds from United States Surety Company (“Surety”) and U.S. Specialty Insurance Company (“Speciality”).

Hunt Construction Group, Inc. v. National Wrecking Corporation
587 F.3d 1119; 2009 U.S. App. LEXIS 25909 (2009)

Plaintiff, Hunt Construction Group (“Hunt”), commenced an action against one of its subcontractors, National Wrecking Corporation (“National”) and against two sureties (the “Sureties”) on National’s performance bond. The Sureties argued that Hunt failed to give timely notice of default depriving the Sureties of a realistic opportunity to exercise their rights under the bond to cure National’s defective performance.

U.S. for Use and Benefit of Greenmoor, Inc. v. Travelers Casualty and Surety Co.
2009 U.S. Dist. LEXIS 113153 (W.D. PA 12/04/2009)

The Court held that a properly terminated subcontractor was nevertheless entitled to payment for contract work and extras performed prior to termination, less certain offsets for contractor’s damages. Subcontractor was also entitled to interest at 1% per month under a prompt payment statute, but because it was properly terminated was not entitled to lost profit on the terminated portion of the subcontract.

Steadfast Insurance Co v. Brodie Contractors, Inc.
2008 U.S. Dist. LEXIS 88448 (October 31, 2008 W.D. Va.)
Steadfast Insurance Co., as subrogee of Skanska USA Building Co., the general contractor, alleged claims for breach of contract and breach of warranty against Brodie Contractors, Inc., a masonry subcontractor, concerning replacement of brick veneer on the Danville Regional Medical Center. Brodie moved for summary judgment alleging that the lawsuit was barred by Virginia’s statute of limitations.

Somerset Village Townhomes Condominium Owners’ Association v. Allied Construction, Inc.
2008 Wash App. LEXIS 2178 (September 2, 2008)
Developer, Far Northwest Development Co, LLC (“Far Northwest”) contracted with Steinvall Construction (“Steinvall”) for the construction of the Somerset Village Townhomes. The contract between Far Northwest and Steinvall stated that “[t]he Contract Documents shall not be construed to create a contractual relationship of any kind . . . between the Owner and a Subcontractor . . .” Steinvall subcontracted portions of its work. The subcontracts incorporated the general conditions of the Far Northwest –Steinvall contract and also imposed certain obligations on the subcontractors concerning Far Northwest, including, inter alia, obtaining insurance to protect its interests and indemnifying Far Northwest for certain claims.

Lanier at McEver, L.P. v. Planners and Engineers Collaborative, Inc.
2008 Ga. LEXIS 553 (Ga. June 30, 2008)
In this case, the Supreme Court of Georgia reversed a Court of Appeals’ decision, previously reported here, holding that a provision limiting an owner/developer’s damages against the project engineer to the fees paid for the engineer’s services was void and unenforceable as against public policy.
Lanier was the owner/developer of an apartment complex. Lanier hired the defendant engineering firm, PEC, to design various aspects of the apartment complex, including the storm sewer and sanitary drainage system. The engineering agreement contained a provision stating that the total aggregate liability of PEC and its subconsultants to Lanier “for any and all claims … shall not exceed PEC’s total fee for services rendered on this Project.” The clause applied not only to liability to Lanier, but also to “all construction contractors and subcontractors on the project or any third parties.” 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.

Bryan’s Quality Plus, LLC v. Shaffer Builders, Inc.
2008 U.S. Dist. LEXIS 61713 (E.D. Pa. Aug. 12, 2008)
The District Court for the Eastern District of Pennsylvania was faced with a motion to dismiss a defendant’s counterclaims for fraud and negligent misrepresentation. The case arose out of a subcontract between the defendant contractor and the plaintiff subcontractor in which the subcontractor agreed to complete piling work for a commercial project undertaken by defendant (the “Project”). The contractor alleged in its counterclaim that the subcontractor represented that it would complete the work in seven days, that it could install in excess of fifty piles a day, that its performance and equipment would surpass conventional methods, that it would furnish and install pile tension brackets and fasteners, and that it had sufficient credit to purchase the materials necessary to complete the work. The parties executed a written contract, although some of the work was completed prior to execution of the subcontract.

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.

RLI Insurance Company v. Indian River School District
2008 U.S. Dist. LEXIS 43303 (D. Del. June 3, 2008)
In this case, the United States District Court for the District of Delaware held that a surety’s claim against an architect and construction manager for improper approval of payments to the principal was barred by the economic loss doctrine. Additionally, the court held that the surety was not released of its liability to the owner where the owner wrongfully paid the contractor, as the owner had made those payments in reliance on certifications from the architect and the construction manager.