Monthly Archives: June 2022

Shop Drawings and Submittals, Part 5 – Deviations from Contract Requirements, by Kevin O’Beirne, PE

Few contractor-furnished submittals cause more agita and heartburn than those with deviations from the construction contract’s requirements. Does a design professional’s approval of such a submittal also approve the contractual deviation? If not, can the contract be enforced after the item is purchased, fabricated, or installed into the work? Is an approved submittal with deviations a contract modification? This article explores these questions and related matters.

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Shop Drawings and Submittals, Part 4 – Submittal Review Stamps, by Kevin O’Beirne, PE

This is the fourth in a six-part series of articles on shop drawings and submittals.  Previous articles have addressed: definition, purpose, and necessity of submittals; the various types of submittals; and liability associated with submittal reviews.  Forthcoming articles in the series will address submittals with deviations from contract requirements and delegated design submittals.

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Status of arbitration award if arbitrator was noticeably drowsy or asleep during the arbitration hearing. Loren Imhoff Homebuilder, Inc. v. Taylor and Cuevas. Supreme Court of Wisconsin (2022), by Hugh Anderson

Eight months into a residential construction project the homeowners and the contractor were at odds regarding the quality of the work and alleged “discrepancies” in the contractor’s invoices. After an unsuccessful mediation, the dispute was arbitrated. Following a five-day evidentiary hearing, the homeowners objected to the proceedings, complaining that the arbitrator had shown bias toward the contractor, and had repeatedly fallen asleep, including during the presentation of evidence by the homeowners. The arbitrator denied the homeowners’ motion that he recuse himself from the proceedings, and issued an arbitration award of $320,000 in favor of the contractor.

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Denial of coverage based on contractor’s failure to comply with a subcontractor warranty endorsement in the Commercial General Liability insurance policy. Baudoin v. American Glass & Mirror Works, Inc. Court of Appeal of Louisiana (2022), by Hugh Anderson

A subcontractor warranty endorsement (also known by various other names, such as “Subcontractor Endorsement” or “Contractor’s Special Conditions”) is a supplement to a general contractor’s commercial general liability (CGL) policy that lists risk-transfer requirements that the insured contractor must meet in its subcontracts. The endorsements sometimes impose harsh consequences, such as nullification of insurance coverage, on general contractors that fail to comply with the endorsement requirements.

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Binding effect on insurance company of representations made in a certificate of insurance. Security National Insurance Co. v. Construction Associates of Spokane, Inc. United States District Court (Eastern District of Washington) (2022), by Hugh Anderson

Construction Associates of Spokane is a general contractor. An employee of a subcontractor, Merit Electric, was injured on a Construction Associates project and later sued the general contractor seeking damages for the injuries. Construction Associates tendered the lawsuit to Merit Electric’s insurance broker, asserting additional insured status under Merit’s commercial general liability insurance policy. In support of the tender, Construction Associates presented a certificate of insurance, issued by the broker, showing Construction Associates’ additional insured status.

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Differing site conditions, delay, breach of implied warranty, withholding superior knowledge, and wrongful termination of U.S. Army Corp of Engineers dredging contract. Marine Industrial Construction, LLC, v. the United States. United States Court of Federal Claims (2022), by Hugh Anderson

The 2014 Corps of Engineers contract called for dredging of the Quillayute Waterway (including an adjacent marina known as the boat basin) in La Push, Washington. The waterway is dredged every 2-3 years. The solicitation for the contract urged bidders to conduct a site visit to inspect the “character, quality, and quantity of surface and subsurface materials or obstacles,” but the site visit was not mandatory. Marine Industrial did not inspect the site.

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Validity and meaning of a limitation of liability clause in a professional services agreement between an architectural firm and an engineering firm. Johnson Nathan Strohe, P.C. v. MEP Engineering, Inc. Court of Appeals of Colorado (2021), by Hugh Anderson

The architectural firm (Architect), Johnson Nathan Strohe, designed an apartment building in Denver. The Architect retained MEP Engineering (Engineer) for the design of the building’s mechanical, electrical, and plumbing systems. The professional services agreement between Architect and Engineer was drafted by the Engineer and contained a limitation of the Engineer’s liability.

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