Category Archives for "Court Decisions"

Does a performance bond require termination of the principal as a condition precedent to the surety’s obligations? Arch Insurance Co. v. The Graphic Builders LLC. United States District Court (Massachusetts) (2021), by Hugh Anderson

Summary: The Graphic Builders (TGB) was the general contractor on an apartment building construction project in Boston. TGB retained a subcontractor, RCM Modular, to fabricate, deliver, and assemble modular components of the apartment building. TGB required RCM to furnish a subcontractor’s performance bond covering RCM’s work. Arch Insurance issued the required bond. Based on excerpts, […]

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Entitlement of contractor’s “Project Manager” to recourse under the project’s payment bond. Dickson v. Forney Enterprises, Inc. United States District Court (Eastern District of Maryland) (2021), by Hugh Anderson

Summary: Forney Enterprises entered into a contract with the federal government to repair and upgrade staircases in the Pentagon. Forney then entered into a subcontract with Dickson, a professional engineer, under which Dickson, as “Project Manager,” performed supervisory duties including coordinating deliveries, inspecting materials, making field measurements, and supervising demolition. After more than three years […]

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Judicial conversion of a termination for cause to a termination for convenience. Conway Construction Co. v. City of Puyallup. Supreme Court of Washington (2021), by Hugh Anderson

Summary: The City of Puyallup contracted with Conway Construction Company to build a road—reportedly America’s first arterial roadway built with pervious concrete. There were problems with the project, including contentions by the City that Conway’s work did not meet the requirements of the specifications, and site safety issues. The City eventually issued a notice of […]

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Did a supplier satisfy the requirements for making a payment bond claim by sending the notice of claim by e-mail? Johnson-Lancaster & Assocs. v. H.M.C., Inc. United States District Court (Maryland) (2021), by Hugh Anderson

Summary: Plaintiff Johnson-Lancaster supplied (and apparently installed) food service equipment as part of the renovation of the Prince George’s County Courthouse cafeteria. The subcontractor that had engaged Johnson-Lancaster failed to pay for the materials and services, resulting in a reported balance owed of $175,571. Johnson-Lancaster submitted a copy of its claim to the prime contractor, […]

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Enforceability of pay-if-paid clauses under Nevada law. APCO Construction, Inc. v. Zitting Brothers Construction, Inc. Supreme Court of Nevada (2020). by Hugh Anderson

APCO Construction was the general contractor on a Las Vegas construction project that ground to a halt in late 2008. APCO subcontracted wood-framing, sheathing, and shimming work to Zitting Construction. The subcontract stated that payment to Zitting was conditioned on APCO’s receipt of payment from the project owner, Gemstone—as the Nevada Supreme Court described it, this was “known colloquially as a pay-if-paid clause.”

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Did a subcontractor’s commercial general liability insurer have a duty to defend the project owner and construction manager in an injury lawsuit by the subcontractor’s employee? Scottsdale Insurance Company v. Columbia Insurance Group, Inc. United States Court of Appeals for the Seventh Circuit (2020). by Hugh Anderson

DH Mechanical provided heating, ventilating, and air conditioning construction services for a building construction project in Chicago. A TDH employee plunged through an unguarded opening and fell 22 feet, sustaining serious injuries. The employee sued the construction manager, Prairie Management and Development, and the project owner, Rockwell Properties, alleging negligent supervision and monitoring of the work of the subcontractors and of the worksite; the lawsuit also included claims against other project participants. The lawsuit did not contain any direct or express claims or allegations against TDH Mechanical, which was not subject to injury litigation by an employee, by virtue of the workers’ compensation laws.

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Applicability of state building codes to a project undertaken by a bi-state commission created under the U.S. Constitution’s Compact Clause. Delaware River Joint Toll Bridge Commission v. Secretary, Pennsylvania Department of Labor and Industry. United States Court of Appeals for the Third Circuit (2021). by Hugh Anderson

In 1934 the State of New Jersey and the Commonwealth of Pennsylvania enacted laws forming the Delaware River Joint Toll Bridge Commission. As stated in the Constitution (Article I), all agreements and compacts between the states must be approved by Congress—such approval was given to the toll bridge agreement between Pennsylvania and New Jersey in 1935. The Commission was granted sweeping authority to own, construct, maintain, and operate bridges and related improvements and facilities, and to “exercise all other powers…reasonably necessary to [the Commission’s] authorized purposes…,” specifically including the
exercise of powers with respect to its property and affairs. These broad powers were stated to be subject to an exception: the Commission was expressly denied the power to levy taxes.

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Applicability of statute that prohibits the contractual elimination of tort liability, to a contract clause waiving the right to subrogation. Rural Mutual Insurance Co. v. Lester Buildings, LLC. Supreme Court of Wisconsin (2019), by Hugh Anderson

Applicability of statute that prohibits the contractual elimination of tort liability, to a contract clause waiving the right to subrogation. Rural Mutual Insurance Co. v. Lester Buildings, LLC. Supreme Court of Wisconsin (2019)

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Project owner’s liability for delays arising from design review comments that deviated from the contractually-established design process. Appeals of RBC Construction Corp. Armed Services Board of Contract Appeals (2020), by Hugh Anderson

Project owner’s liability for delays arising from design review comments that deviated from the contractually-established design process. Appeals of RBC Construction Corp. Armed Services Board of Contract Appeals (2020), by Hugh Anderson

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