Category Archives for "Court Decisions"

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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Does paying a subcontractor’s workers’ compensation insurance premiums entitle the general contractor to the exclusive-remedy protections of the workers’ compensation statute? Munoz v. Bulley & Andrews, LLC. Supreme Court of Illinois (2022), by Hugh Anderson

Bulley & Andrews was the general contractor on a project on South Riverside in Chicago. Several years earlier Bulley & Andrews had acquired a company called Takao Nagai Concrete Restoration. Though it was eventually renamed Bulley & Andrews Concrete Restoration (Bulley Concrete), this subsidiary company was operated as a separate entity. The two companies had […]

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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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