Rad and D’Aprile, Inc. v. Arnell Construction Corp, No. 502464/14, 2019 BL 131606 (NY. Sup. Ct. April 3, 2019)

In June of 2001, Arnell Construction Corp. (“Arnell”) entered into a prime contract to build two sanitation garages in Brooklyn for the New York City Department of Sanitation (the “City”).  Arnell subcontracted the project’s masonry work to Rad and D’Aprile, Inc. (“Rad”).  After execution of the subcontract, Rad was informed that the start of work would be delayed because the City had not yet obtained ownership or access to all portions of the site.  When its work did commence, only limited portions of the site were available.  This caused inefficiencies in Rad’s work and caused it to incur increased costs.

Continue Reading New York Court Holds Contractor’s Failure to Timely Pass Through Subcontractor Delay Claim to the Owner Constitutes Breach of the Covenant of Good Faith and Fair Dealing

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

Team Contractors, LLC v. Waypoint Nola, LLC, No. 16-1131, 2019 BL 96133 (E.D. La. Mar. 20, 2019)

The Eastern District of Louisiana recently denied the motion of a prime contractor (the “Contractor”) for summary judgment on its breach of contract claim against the owner (the “Owner”) of a construction project in New Orleans (the “Project”) where the primary issue involved whether a suspensive condition was enforceable.

Continue Reading Federal Court in Louisiana Upholds Suspensive Condition Not Subject Solely to Owner’s Whim

Hartford Fire Insurance Co. v. City of Mont Belvieu
2010 U.S. App. Lexis 14277 (5th Cir. July 13, 2010)

The Court of Appeals for the Fifth Circuit recently held that a Texas City’s bond claim was time barred under the statute of limitations and equitable remedies based on estoppel were unavailable to revive claims on the bond.

Hartford Fire Insurance Company issued a performance bond for a contractor constructing a public recreational facility for the City of Mont Belvieu, Texas. The bond was a requirement under Texas public work contracts. By statute, the bond was subject to a one-year limitations period commencing from project final completion. The project progressed with numerous delays and changes. However, the City issued a certificate of occupancy in mid-2001, taking possession and operating the facility by July 2002.

At that time, numerous punch list items remained and several subcontractors owed payment by contractor filed claims on a payment bond. Hartford advised the City to be cautious when releasing further payment to contractor. Thereafter, in July 2002, City paid contractor almost $675,000 as an equitable adjustment via a change order. Critically, the change order stated that the project’s completion date was July 19, 2001.


Continue Reading U.S. Court of Appeals for the Fifth Circuit Holds Performance Bond Claim Time Barred – Estoppel Excuse Not Available to City

John L. Mattingly Constr. Co. v. Hartford Underwriters Ins. Co.
2010 Md. LEXIS 327 (Md. July 27, 2010)

The Maryland Court of Appeals determined that the waivers of subrogation clause in AIA A107-1997 is ambiguous as to whether it encompasses losses sustained after completion of construction and final payment. As a result, the case was remanded to the Court of Special Appeals so that it could resolve the ambiguity by considering extrinsic evidence.

In 2002, K.B.K., Inc. and John L. Mattingly Construction Company, Inc. entered into AIA form contract number A107-1997 to build an Arby’s Restaurant. Section 16.4 of the Contract required K.B.K. to “purchase and maintain property insurance until final payment has been made” or until no person … other than K.B.K had an insurable interest.” Section 16.5 of the Contract stated that K.B.K. and Mattingly “waived all rights against … each other and any of their subcontractors for damages covered by property insurance … applicable to the Work.”


Continue Reading Court of Appeals of Maryland Holds AIA A107-1997 Waivers of Subrogation Clause Ambiguous – Therefore Extrinsic Evidence Should Be Considered to Determine Whether the Parties Intended the Waiver to Apply to Claims Arising After Construction