Categorization of construction repair costs as consequential or general damages. Keystone Airpark Authority v. Pipeline Contractors, Inc. Court of Appeal of Florida (2019), by Hugh Anderson

EJCDC publishes documents that contain mutual waiver of consequential damages clauses. These clauses are intended to protect against obscure and distant consequences, from outside the project scope. But as the Keystone case illustrates, the impact may sometimes be more direct. Perhaps it is no surprise that in many cases one party or the other—often a project owner—will remove such a waiver from a contract during the contract formation process.

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Does an indemnification agreement apply only to third-party claims? International Fidelity Insurance Co. v. Americaribe-Moriarty JV. United States Court of Appeals, 11th Circuit (2018), by Hugh Anderson

EJCDC has always viewed its indemnification clauses as applying to third-party claims only. That viewpoint has been reinforced in recent years through the express addition of the words “third party” in key indemnification clauses, such as the general indemnity in the Standard General Conditions of the Construction Contract (C-700—2018, Paragraph 7.18) and the engineer’s indemnification of owner in the Agreement between Owner and Engineer for Professional Services (E-500—2014, Paragraph 6.11).

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Surety’s entitlement to recover costs under general indemnity agreements with contractor and contractor’s owners. Arch Insurance Company v. Centerplan Construction Company, LLC. United States District Court, District of Connecticut (2019), by Hugh Anderson

Although the terms and conditions of the bonds were not significant factors in the court’s decision, it appears that the bonds on the project were similar to, perhaps the same as, the standard bonds developed by a collaboration of industry organizations (including EJCDC) and published by EJCDC. For example, the Arch performance bond appeared to require a conference of owner, contractor, and surety prior to a declaration of default—such a conference is one of the procedural steps required in EJCDC® C-610, Performance Bond, Paragraph 3.1.

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Does the Spearin Doctrine apply in a design-build setting? United States for the Use and Benefit of Bonita Pipeline, Inc. v. Balfour Beatty Construction, LLC. United States District Court, Southern District of California. (2017), by Hugh Anderson

Summary: Balfour Beatty was the design-builder for a Naval Facilities hangar replacement project at Camp Pendleton, California. Balfour Beatty subcontracted a portion of the work, also on a design-build basis, to Bonita Pipeline. Balfour Beatty provided design documents, prepared for Balfour by engineering firms, to Bonita. These design documents were expressly characterized as incomplete, and […]

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Enforceability of clause stating that engineer has no duty to contractor. Domson, Inc. v. Kadrmas Lee and Jackson, Inc. Supreme Court of South Dakota (2018), by Hugh Anderson

Summary: This case is focused on an EJCDC construction contract clause, currently set forth as Paragraph 10.07.A of EJCDC C-700 (2018). This clause was included in the road construction contract between the project owner, the Oglala Sioux Tribe, and Domson, Inc. Dakota Engineering and Kadrmas, Lee and Jackson (KLJ) were the design engineers, and KLJ […]

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Conflict of interest because of participation in peer review. In the Matter of HBI-GF, J.V. United States Government Accountability Office (2017), by Hugh Anderson

Summary: In March 2016, the Corps of Engineers retained Gannett Fleming to conduct an external peer review of the design of a six-mile cutoff wall project at the Herbert Hoover Dike embankment, at Lake Okeechobee, Florida. Gannett Fleming’s personnel, including a geotechnical engineer, reviewed project design documents, submitted more than 80 comments, and prepared findings […]

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Entitlement to arbitration under design agreement. Thomas Zimmer Builders LLC v. Kurt E. Roots and Monika Roots. Court of Appeals of Wisconsin (2018), by Hugh Anderson

Summary: In a residential construction dispute between contractor and homeowners, the homeowners (the Rootses) brought a third-party claim against architect Mark Udvari-Solner. Udvari-Solner moved to compel arbitration, based on the arbitration clause in the design agreement between the Rootses and Udvari-Solner Design Co., a corporation. The trial court denied the motion to compel arbitration, and […]

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Is an aggregate analysis a professional service that triggers the application of a certificate of merit requirement? Ronald R. Wagner & Co. LP v. Apex Geoscience Inc. Texas Court of Appeals (2018), by Hugh Anderson

Summary: Wagner was the construction contractor on a paving project. The Texas DOT (TXDOT) specifications required the contractor to provide aggregate meeting stated characteristics. During the bidding phase, Wagner had relied on a report, issued by a senior engineer at Apex Geoscience, that found that proposed aggregate from the Wilson Pit met the specification. Later, […]

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Did the payment bond issued for a design-build project provide protection to an engineering subcontractor? Aztec Engineering Group, Inc. v. Liberty Mutual Insurance Company. United States District Court, Southern District of Indiana (2017), by Hugh Anderson.

Summary: Aztec Engineering Group provided design services for the upgrade of 21 miles of state highway near Bloomington, Indiana, under a professional services subcontract with design-builder Isolux-Corson. Isolux-Corson’s work was in turn part of a Public Private Partnership to “design, build, finance, operate and upgrade” the highway. The design-build contract between the project’s Developer and […]

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Contractor-subcontractor relationship; wrongful termination of subcontractor. Randy Kinder Excavating, Inc. v. J.A. Manning Construction Co., Inc. United States Court of Appeals, Eighth Circuit. (2018), by Hugh Anderson

Summary: Kinder was the general contractor on a $10 million Corps of Engineers pumping station project on the White River in Arkansas. Manning was Kinder’s subcontractor for construction of a mechanically stabilized earth wall (a form of retaining wall). As the U.S. Court of Appeals put it, “As with many large-scale projects, this venture was […]

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