What Counts as Adequate Opportunity to Cure?
June 13, 2022 —
Christopher G. Hill - Construction Law Musingsqimono @ PixabayHere at Musings, we like to discuss (likely more than readers would like) the fact that in Virginia, the contract is king and its terms will be looked at carefully by the courts. One of those provisions that will be looked at carefully is the so-called “cure period.” The “cure period” is the time that a subcontractor has to fix any non-compliant construction after receiving notice of any deviation from the contract documents that must be fixed.
In United States ex rel Allan Myers VA, Inc. v. Ocean Construction Services, Inc. the federal court for the Eastern District of Virginia examined what it means to grant a proper opportunity to cure. The Ocean Construction Services case arises from a contractual dispute between Allan Myers VA Inc. and Ocean Construction Services Inc., or OCS, involving renovation work performed in sections of Arlington National Cemetery. Presently before the court is Myers’ motion for partial summary judgment, arguing that the undisputed facts demonstrate that it was not provided with a three-day cure period, a contractual prerequisite to OCS terminating the subcontract for default.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Is a Text a Writing?
June 10, 2024 —
Michael Yelle - Ahlers Cressman & Sleight PLLCIs a text message a writing? Project communication is constantly evolving, and text messages are an increasingly common way teams share pictures, video, and provide project updates. When texting is part of the communication flow on a project, contractors and owners might text approvals for extra work, notices of changed conditions, or other information that could be a basis for a change order.
In a text exchange about a compensable event, the notice, reply, and approval are all saved on the phone. But contracts often contain specific requirements for a contractor or subcontractor to request changes and authorization to proceed may be specifically required in writing.
For example, the Associated General Contractors of Washington – 2018 Standard Subcontract says the “Subcontractor shall make no claims for extras unless the same shall be agreed upon
in writing by Contractor prior to performance of any such extra work.” (emphasis added).
The AGC subcontract doesn’t define “writing,” so the subcontractor and contractor might wonder if a text message exchange about a potentially compensable event was an “agreement in writing.”
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Michael Yelle, Ahlers Cressman & Sleight PLLCMr. Yelle may be contacted at
michael.yelle@acslawyers.com
Wheaton to Require Sprinklers in New Homes
November 06, 2013 —
CDJ STAFFThe town of Wheaton, Illinois is considering a change to its building codes, based on the recommendations made in the 2012 building code, released by the International Code Council. Eighty-two towns in Illinois already require new homes to have fire sprinklers. Wheaton did not adopt any changes from the 2006 or 2009 building code; they are currently using the standards of the 2003 edition.
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Quick Note: Unenforceable Language in Arbitration Provision
November 06, 2018 —
David Adelstein - Florida Construction Legal UpdatesAlthough arbitration is a dispute resolution provision provided for in a contract, the scope of judicial review of an arbitrator’s award is still governed by law. There are limited circumstances in which an arbitrator’s award can be challenged under the law. One of those circumstances is not because a party believes that an arbitrator applied the incorrect law.
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David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
California Court of Appeals Says, “We Like Eich(leay)!”
March 30, 2016 —
Garret Murai – California Construction Law BlogTime is money.
And nowhere can than be best observed than on a construction project.
Project delays can mean lost profits for owners, liquidated damages for general contractors, and increased material, labor, field overhead, and home office overhead costs for general contractors and subcontractors alike.
Pricing the impact of delays, however, can be thorny. Particularly, for home office overhead.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Anatomy of a Construction Dispute- An Alternative
February 05, 2015 —
Christopher G. Hill – Construction Law MusingsOver the past three weeks, I’ve discussed three “stages” of a construction dispute from the claim, to how to increase the pressure for payment, to the litigation. While these three steps are all too often necessary tools in your construction collection arsenal, they are expensive and time consuming. No well run construction business can or should budget for litigation. The better practice would be to engage a construction attorney early in the process and avoid the dispute altogether if possible. Unfortunately, even the best of planning can lead to the need to hire a construction lawyer for the less pleasant task of assisting you in getting paid.
This post is about an alternative to the scorched earth of stage 3 of the process that can and should be at least considered either before or after the complaint or demand for arbitration has been filed. I am of course speaking about voluntary mediation. Why did I emphasize “voluntary?” Because to me mandatory mediation (as required in many construction contracts) is a bit like forced volunteerism, it is something that the parties will go through to “check a box” but will not have their hearts in it. Remember, by the time the mandatory mediation clause kicks in, the parties are likely at an impasse in their construction dispute and are ready to fight. Being forced to mediate, especially from the party seeking payment, can (and in my experience often does) make the parties just go through the motions at best and be hostile to the process at worst. Neither of these attitudes are conducive to resolving a dispute.
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Christopher G. Hill, Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
History of Defects Leads to Punitive Damages for Bankrupt Developer
March 01, 2012 —
CDJ STAFFThe South Carolina Court of Appeals has ruled that evidence of construction defects at a developer’s other projects were admissible in a construction defect lawsuit. They issued their ruling on Magnolia North Property Owners’ Association v. Heritage Communities, Inc. on February 15, 2012.
Magnolia North is a condominium complex in South Carolina. The initial builder, Heritage Communities, had not completed construction when they filed for bankruptcy protection under Chapter 11. The remaining four buildings were completed by another contractor. The Property Owners’ Association subsequently sued Heritage Communities, Inc. (HCI) alleging defects. The POA also sued Heritage Magnolia North, and the general contractor, BuildStar.
The trial court ruled that all three entities were in fact one. On appeal, the defendants claimed that the trial court improperly amalgamated the defendants. The appeals court noted, however, that “all these corporations share officers, directors, office space, and a phone number with HCI.” Until Heritage Communities turned over control of the POA to the actual homeowners, all of the POA’s officers were officers of HCI. The appeals court concluded that “the trial court’s ruling that Appellants’ entities were amalgamated is supported by the law and the evidence.”
Heritage also claimed that the trial court should not have allowed the plaintiffs to produce evidence of construction defects at other Heritage properties. Heritage argued that the evidence was a violation of the South Carolina Rules of Evidence. The court cited a South Carolina Supreme Court case which made an exception for “facts showing the other acts were substantially similar to the event at issue.” The court noted that the defects introduced by the plaintiffs were “virtually identical across all developments.” This included identical use of the same products from project to project. Further, these were used to demonstrate that “HCI was aware of water issues in the other projects as early as 1998, before construction on Magnolia North had begun.”
The trial case ended with a directed verdict. Heritage charged that the jury should have determined whether the alleged defects existed. The appeals court noted that there was “overwhelming evidence” that Heritage failed “to meet the industry standard of care.” Heritage did not dispute the existence of the damages during the trial, they “merely contested the extent.”
Further, Heritage claimed in its appeal that the case should have been rejected due to the three-year statute of limitations. They note that the first meeting of the POA was on March 8, 2000, yet the suit was not filed until May 28, 2003, just over three years. The court noted that here the statute of limitation must be tolled, as Heritage controlled the POA until September 9, 2002. The owner-controlled POA filed suit “approximately eight months after assuming control.”
The court also applied equitable estoppel to the statute of limitations. During the time in which Heritage controlled the board, Heritage “assured the unit owners the construction defects would be repaired, and, as a result, the owners were justified in relying on those assurances.” Since “a reasonable owner could have believed that it would be counter-productive to file suit,” the court found that also prevented Heritage from invoking the statute of limitations. In the end, the appeals court concluded that the even apart from equitable tolling and equitable estoppel, the statute of limitations could not have started until the unit owners took control of the board in September, 2002.
Heritage also contested the jury’s awarding of damages, asserting that “the POA failed to establish its damages as to any of its claims.” Noting that damages are determined “with reasonable certainty or accuracy,” and that “proof with mathematical certainty of the amount of loss or damage is not required,” the appeals court found a “sufficiently reasonable basis of computation of damages to support the trial court’s submission of damages to the jury.” Heritage also claimed that the POA did not show that the damage existed at the time of the transfer of control. The court rejected this claim as well.
Finally, Heritage argued that punitive damages were improperly applied for two reasons: that “the award of punitive damages has no deterrent effect because Appellants went out of business prior to the commencement of the litigation” and that Heritages has “no ability to pay punitive damages.” The punitive damages were upheld, as the relevant earlier decision includes “defendant’s degree of culpability,” “defendants awareness or concealment,” “existence of similar past conduct,” and “likelihood of deterring the defendant or others from similar conduct.”
The appeals court rejected all of the claims made by Heritage, fully upholding the decision of the trial court.
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NY Estimating Consultant Settles $3.1M Government Project Fraud Case
November 23, 2020 —
Eva Fedderly - Engineering News-RecordVJ Associates, a Hicksville, N.Y., estimating consultant, has agreed to pay $3.13 million in civil and criminal penalties to settle charges that the firm overbilled and falsified hours on multiple federal and state government-funded transportation and other contracts in New York and Massachusetts, the U.S. Attorney's office in Boston announced on Oct. 29.
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Eva Fedderly, Engineering News-Record
ENR may be contacted at ENR.com@bnpmedia.com
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