Substituting Materials and Failure to Comply with Contractual Requirements
November 19, 2021 —
David Adelstein - Florida Construction Legal UpdatesIt is important to remember that if you are going to substitute materials from those specified, you need to make sure there is proper approval in doing so–make sure to comply with the contractual requirements to substitute materials. Otherwise, you could be in a situation where you are contractually required to remove the installed substituted materials and replace with the correct specified materials. This is not the situation you want to find yourself in because this is oftentimes a costly endeavor. This was the situation in Appeal-of-Sauer, Inc., discussed below, on a federal project. The best thing that you can do is comply with the contractual requirements if you want to substitute materials. If you are in the situation where it is too late, i.e., you already installed incorrect materials, you want to demonstrate the substituted materials are functionally equivalent to the specified materials and/or come up with an engineering solution, as required, that could be less costly then ripping out the installed material and replacing with the correct material. Even doing so, however, is not a “get out of jail free card” and does not necessarily mean there is not a strong basis to require you to install the correct specified material.
In Appeal of- Sauer, Inc., ASBCA 61847, 2021 WL 4888192 (ASBCA September 29, 2021), a federal project’s engineering requirements required cast iron piping for the above ground sanitary system. However, the prime contractor installed PVC piping instead of cast iron piping. The prime contractor believed it had the appropriate approval through its submittal. The government, through its contracting officer, directed the prime contractor to remove installed PVC piping to replace with cast iron. The government did not believe PVC piping was the functional equivalent of cast iron piping for the above ground sanitary system due to its concern with the noise level of waste materials flowing through the piping. The prime contractor submitted a claim for its removal and replacement costs which was denied by the contracting officer. On appeal with the Armed Services Board of Contract Appeals, the Board agreed with the contracting officer explaining: “While we agree that a design change could be approved by the designer of record and brought to the attention of the government before being incorporated into the design documents, the [prime contractor’s] task order required that such a design change meet the minimum requirements of the solicitation and accepted proposal. The plumbing submittal [the prime contractor] issued here, showing the use of PVC instead of cast iron for the above ground waste piping, did not meet the minimum requirements of the solicitation.” Appeal of-Sauer, Inc., supra.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Who Says You Can’t Choose between Liquidated Damages or Actual Damages?
October 11, 2017 —
Kevin Walton - Snell & Wilmer Real Estate Litigation BlogIn Colorado, courts enforce liquidated damages provisions if three elements are satisfied: (1) the parties intended to liquidate damages; (2) the amount of liquidated damages was a reasonable estimate of the presumed actual damages caused by a breach; and (3) at the time of contracting, it was difficult to ascertain the amount of actual damages that would result from a breach. But what happens when a contract gives a party a right to choose between liquidated damages or actual damages? This seems troublesome because it allows a party to set the floor for their damages without limitation if actual damages exceed the contractual amount. As a matter of first impression, the Colorado Supreme Court addressed this issue in Ravenstar, LLC v. One Ski Hill Place, LLC, 401 P.3d 552 (Colo. 2017).
In Ravenstar, plaintiffs contracted to buy condominiums from a developer. As part of their contracts, plaintiffs deposited earnest money and construction deposits equal to 15% of each unit’s purchase price. Plaintiffs breached their contract by failing to obtain financing and failing to close by the closing date. Each contract’s damages provision provided that if a purchaser defaulted, the developer had the option to retain all or some of the deposits as liquidated damages or, alternatively, to pursue actual damages and apply the deposits to that award. After plaintiffs defaulted, the developer chose to keep plaintiffs’ deposits as liquidated damages. Plaintiffs sued for return of their deposits.
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Kevin Walton, Snell & WilmerMr. Walton may be contacted at
kwalton@swlaw.com
Denver Airport Terminates P3 Contract For Main Terminal Renovation
November 12, 2019 —
Mark Shaw - Engineering News-RecordIn a move that stunned transportation planners around the country, Denver International Airport terminated the contractor team working on a $650-million terminal renovation. The move also ended the airport’s $1.8-billion public-private partnership with Great Hall Partners, a consortium led by Ferrovial Airports, with partners Saunders/JLC Infrastructure.
Mark Shaw, Engineering News-Record
Mr. Shaw may be contacted at shawm@enr.com
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Federal Contractors – Double Check the Terms of Your Contract Before Performing Ordered Changes
July 08, 2019 —
Jonathan Schirmer - Ahlers Cressman & Sleight PLLCAs federal contractors may be aware, the general rule when performing a contract for the federal government is that only the contracting officer (“CO”) can bind the government. Often, the CO delegates responsibility to a contracting officer’s representative (“COR”). While in some cases a COR may be able to bind the federal government, the contract may limit that ability exclusively to the CO.
Important for our clients, it is the responsibility of the contractor to determine whether the COR can legally bind the federal government when ordering changes to the scope of work. [1] This is true even when a COR possesses apparent authority to order changes to the work, and when the project is almost exclusively overseen by COR’s. [2]
A recent case highlights the dangers of a contractor relying on the orders of a COR when performing work outside the scope of a contract. In Baistar Mechanical Inc., a contractor was awarded a maintenance and snow removal contract with the federal government. The contract expressly stated that only the CO had contracting authority regarding additional or changed work. [3] However, Baistar, the contractor, argued it was directed by the contracting officer’s representatives to perform work outside of the contract.
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Jonathan Schirmer, Ahlers Cressman & Sleight PLLCMr. Schirmer may be contacted at
jonathan.schirmer@acslawyers.com
Tennessee Court: Window Openings Too Small, Judgment Too Large
November 18, 2011 —
CDJ STAFFThe Tennessee Court of Appeals has issued a ruling in the case of Dayton v. Ackerman, upholding the decision of the lower court, even as they found that the award was incorrectly computed. The Daytons purchased a house that had been designed and built by the Ackermans, who operated a construction business. The court noted that the warranty with the house promised that “for a period of 60 days, the following items will be free of defects in materials or workmanship: doors (including hardware); windows; electric switches; receptacles; and fixtures; caulking around exterior openings; pluming fixtures; and cabinet work.”
Soon, the Daytons began to experience problems with the house. Many were addressed by the Ackermans, but the Daytons continued to have problems with the windows. Neither side could specify a firm date when the Ackermans were contacted by the Daytons about the window problems. The Ackermans maintained that more than two years passed before the Daytons complained about the windows. The lower court found the Daytons more credible in this.
Initially, the Daytons included the window manufacturer in their suit, but after preliminary investigations, the Daytons dropped Martin Doors from their suit. Martin Doors concluded that the windows were improperly installed, many of them “jammed into openings that were too small for them.”
After the Daytons dismissed Martin Doors, the Ackermans sought to file a third party complaint against them. This was denied by the court, as too much time had elapsed. The Ackermans also noted that not all of the window installations were defective, however, the courts found that the Daytons ought not to have mismatched windows.
Unfortunately for the Daytons, the window repair was done incorrectly and the windows were now too small for the openings. The firm that did the repair discounted the windows and Daytons concealed the problem with plantation shutters, totalling $400 less than the original lowest estimate. However, the appeals court noted that it was here that the trial court made their computation error. Correcting this, the appeals court assessed the Ackermans $12,016.20 instead of $13,016.20.
Finally, the Ackerman’s expert was excluded as he had changed his testimony between deposition and trial. The trial reviewed the expert’s testimony and had it been admissible, it would not have changed the ruling.
Read the court’s decision…
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The Unwavering Un-waivable Implied Warranty of Workmanship and Habitability in Arizona
January 23, 2023 —
Robert A. Henry & Emily R. Parker - Snell & Wilmer Real Estate Litigation BlogThe Arizona Supreme Court recently issued an opinion on the scope of the implied warranty of workmanship and habitability (the “implied warranty”) in contracts between homebuyers and builder/vendors that provides clear guidance of the law in this area, specifically on the issue of whether the implied warranty can be waived or disclaimed. It is also an interesting and helpful read for those who engage in new home residential sales and real estate transactions generally.
The case:
Zambrano v. M & RC, II LLC, 254 Ariz. 53 (2022). The takeaway holding: the implied warranty of workmanship and habitability cannot, under any circumstances, be disclaimed or waived.
From a practice perspective, the foregoing is likely all one needs to ultimately know. However, the majority opinion (authored by Justice Timmer) and the dissent (authored by Justice King, and joined by Justice Bolick) are in these authors’ opinions worth a read for those who want a better understanding of the contours of how “public policy” plays into the analysis of the enforceability of contract terms, especially in the real estate context and even more particularly in connection with contracts for the sale of new homes. The careful analysis of both the majority opinion and the dissent provides an excellent history of the implied warranty, the public policy behind it, and its scope and application in the context of competing public policies, most notably the freedom to contract.
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Robert A. Henry, Snell & Wilmer and
Emily R. Parker, Snell & Wilmer
Mr. Henry may be contacted at bhenry@swlaw.com
Ms. Parker may be contacted at eparker@swlaw.com
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Dave McLain named Barrister’s Best Construction Defects Lawyer for Defendants for 2019
January 20, 2020 —
David M. McLain – Colorado Construction LitigationThe attorneys and staff at Higgins, Hopkins, McLain & Roswell are proud to announce that Law Week Colorado named Founding Member Dave McLain as the 2019 People’s Choice for Best Construction Defects Lawyer for Defendants. According to the publication:
Law Week Colorado asked its readership to weigh in on the best attorneys in just about every practice area we could think of. We received hundreds of responses and sifted through the votes for each category to determine the “People’s Choice” winner – the top attorney in each practice area according to other attorneys. And then we handed it to the “Barrister” (the hive mind of Law Week staff, supplemented by public votes and a healthy dose of additional research) to determine the Barrister’s Choice.
In recognizing Mr. McLain this year, Law Week Colorado stated:
Previously appearing in Law Week’s 2015 Barrister’s Best issue [in which he was recognized as the Barrister’s Choice as Best Construction Defects Lawyer for Defendants], David McLain participates in numerous speaking engagements on construction defects claims and is seen as a leader in the field. His extensive experience over the last two decades of practice speaks for itself.
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David McLain, Higgins, Hopkins, McLain & RoswellMr. McLain may be contacted at
mclain@hhmrlaw.com
25 Years of West Coast Casualty’s Construction Defect Seminar
May 03, 2018 —
Beverley BevenFlorez-CDJ STAFFFor a quarter of a century, West Coast Casualty’s Construction Defect Seminar has been a professional development staple of the construction defect industry. It’s the place where experts, attorneys, mediators, insurance agents, and other industry leaders have gathered to discuss current happenings, take continuing education credits, network with other industry members, and to connect with others. Celebrating its silver anniversary, this year’s seminar continues to be the construction defect community’s must-go-to event.
On May 16th-18th, the seminar will return to the Disneyland Hotel. This issue of Construction Defect Journal will provide you with information about what’s happening in and around the West Coast Casualty Seminar and to commemorate the past.
We hope to see you at this year’s West Coast Casualty’s Construction Defect Seminar. Enjoy!
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