Fairfield Connecticut Building Expert Directory

Miller Act Bond Claims Subject to “Pay If Paid”. . . Sometimes

November 04, 2019 — Christopher G. Hill - Construction Law Musings
The Federal Miller Act is a great tool that subcontractors and suppliers on Federal projects can use for collection of wrongfully withheld amounts due. However, as a recent federal case from the Eastern District of Virginia points out, the construction contract’s terms affect when a subcontractor or supplier can use this great collection tool and how much it can recover. In Aarow v Travelers the Court looked at the interaction between a typical termination clause, a “pay when paid” clause, and the Miller Act. The key facts are these. The general contractor on the project at issue, Syska, did not get paid some disputed amounts by the owner and subsequently did not pay Aarow, the plaintiff and a subcontractor on the project. Aarow then refused to continue work and was terminated by Syska who then took over the completion of the work. Aarow sued, seeking damages for the value of its work prior to the termination. Travellers, the surety defended stating that, if Aarow was properly terminated for cause by Syska, then Aarow was not entitled to payment under the contract until such time as the work was completed and accepted by the owner. The termination clauses are set out in the linked opinion. The Court agreed with Travelers, stating that the pay when paid clause created a situation whereby Aarow could not stop work merely because of a non-payment by Syska attributed to non-payment by the owner. The Court was clear in stating that the Miller Act trumps “pay when paid” in instances where the only cause for non-payment is non-payment by an owner. The Court then reasoned that it is the interaction between the termination and “pay when paid” provisions, and not the “pay when paid” clause itself, that exonerated Travelers because it created the default by Aarow due to its refusal to continue work. In short, Aarow was properly terminated for cause because it left the job without justification and therefore Travelers was not liable. Read the court decision
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Reprinted courtesy of The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

Capitol View-Corridor Restrictions Affect Massing of Austin’s Tallest Tower

October 17, 2023 — David M. Brown - Engineering News-Record
The stepped-back profile of a 66-story skyscraper in Austin, which will be the state capital’s tallest building when completed this fall, is a consequence of the city's height and massing limits to keep the view corridor to the capitol's dome unblocked. Reprinted courtesy of David M. Brown, Engineering News-Record ENR may be contacted at enr@enr.com Read the full story... Read the court decision
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Enforcement Of Contractual Terms (E.G., Flow-Down, Field Verification, Shop Drawing Approval, And No-Damage-For-Delay Provisions)

May 04, 2020 — David Adelstein - Florida Construction Legal Updates
What you contractually agree to matters, particularly when you are deemed a sophisticated entity. This means you can figuratively live or die by the terms and conditions agreed to. Don’t take it from me, but it take it from the Fourth Circuit’s decision in U.S. f/u/b/o Modern Mosaic, Ltd. v. Turner Construction Co., 2019 WL 7174550 (4th Cir. 2019), where the Court started off by stressing, “One of our country’s bedrock principles is the freedom of individuals and entities to enter into contracts and rely that their terms will be enforced.” Id. at *1. This case involved a dispute between a prime contractor and its precast concrete subcontractor on a federal project. The subcontractor filed a Miller Act payment bond lawsuit. The trial court ruled against the subcontractor based on…the subcontract’s terms! So, yes, what you contractually agree to matters. Example #1 – The subcontractor fabricated and installed precast concrete panels per engineering drawings. However, the parking garage was not built per dimensions meaning the panels it fabricated would not fit. The subcontractor had to perform remedial work on the panels to get them to fit. The subcontractor pursued the prime contractor for these costs arguing the prime contractor should have field verified the dimensions. The problem for the subcontractor, however, was that the subcontract required the subcontractor, not the prime contractor, to field verify the dimensions. Based on this language that required the subcontractor to field verify existing conditions and take field measurements, the subcontractor was not entitled to its remedial costs (and they were close to $1 Million). Furthermore, and of importance, the Court noted that the subcontract contained a flow down provision requiring the subcontractor to be bound by all of the terms and conditions of the prime contract and assume those duties and obligations that the prime contractor was to assume towards the owner. While this flow-down provision may often be overlooked, here it was not, as it meant the subcontractor was assuming the field verification duties that the prime contractor was responsible to perform for the owner. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

House Passes $25B Water Resources Development Bill

June 27, 2022 — Tom Ichniowski - Engineering News-Record
A key federal infrastructure bill advanced with approval in the House of a measure providing $25.3 billion to help finance 22 Army Corps of Engineers storm and flood protection, ecological restoration, harbor dredging and other projects around the country. Reprinted courtesy of Tom Ichniowski, Engineering News-Record Mr. Ichniowski may be contacted at ichniowskit@enr.com Read the full story... Read the court decision
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Undercover Sting Nabs Eleven Illegal Contractors in California

January 27, 2014 — Beverley BevenFlorez-CDJ STAFF
A sting operation conducted in Rancho Murieta, California on January 16th by the Statewide Investigative Fraud Team, with assistance from the state Department of Consumer Affairs Division of Investigation netted “11 people accused of illegal, unlicensed home improvement contracting,” reported the Merced Sun-Star. The news source stated that “the statewide drought” provided “a new angle in approaching conservation-minded property owners, according to the Contractors State License Board.” The accusations included “illegal contracting after seeking bids for exterior painting, fencing and landscaping jobs,” according to the Merced Sun-Star. The eleven individuals received notices to appear in Sacramento Superior Court for arraignment March 27th. Read the court decision
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Pennsylvania Federal Court Finds No Coverage For Hacking Claim Under E&O Policy

July 25, 2022 — Celestine Montague & Paul A. Briganti - White and Williams LLP
On June 9, 2022, the U.S. District Court for the Eastern District of Pennsylvania held, on summary judgment, that an insured was not entitled to coverage under a Professional Errors and Omissions (E&O) policy for loss allegedly resulting from a hacking incident. See Construction Fin. Admin. Servs., Inc. v. Federal Ins. Co., No. 19-0020, 2022 U.S. Dist. LEXIS 103042 (E.D. Pa. June 9, 2022). Applying North Carolina and Pennsylvania law, the court reasoned that: (1) coverage was barred by the policy’s unauthorized computer access, or “breach,” exclusions; and (2) the insured violated a condition in the policy that required the insurer’s consent to settlements and the violation prejudiced the insurer. The insured, Construction Financial Administration Services, Inc. (CFAS), was a third-party fund administrator for construction contractors. In April 2018, the CFAS received email requests from what it believed to be one of its clients, SWF Constructors (SWF), to disburse $1.3 million from an SWF account to a foreign company. CFAS authorized the payments, despite not having received a copy of any executed agreement between SWF and the foreign company. After the funds were disbursed, SWF advised that it had not authorized or requested the payments to the foreign company. In response, CFAS placed approximately $1.2 million of recovered and borrowed funds into the SWF disbursement account. SWF then sent a letter advising CFAS that the requests from the foreign company did not include documentation required under the contract between SWF and CFAS. It was later determined that the emails had been initiated by a fraudster who had gained unauthorized access to the sender’s email account. Reprinted courtesy of Celestine Montague, White and Williams LLP and Paul A. Briganti, White and Williams LLP Ms. Montague may be contacted at montaguec@whiteandwilliams.com Mr. Briganti may be contacted at brigantip@whiteandwilliams.com Read the court decision
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Managing Infrastructure Projects with Infrakit – Interview with Teemu Kivimäki

June 09, 2016 — Aarni Heiskanen – AEC Business
Finland has been in the vanguard in adopting building information modeling (BIM) for infrastructure construction. In this interview I discuss with Teemu Kivimäki, CEO of DCS Finland, how Infrakit helps in projects that use BIM. Can you say a few words about the background of your company and how Infrakit came about? The background of DCS Finland (short for Digital Construction Solutions Finland) is in research done in University of Oulu where I worked as a research scientist on construction automation from 2007 to 2010. We were doing research with big infrastructure construction companies, exploring ways to improve worksite management and data flow. Read the court decision
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Reprinted courtesy of Aarni Heiskanen, AEC Business
Mr. Heiskanen may be contacted at aarni@aepartners.fi

Stormy Seas Ahead: 5th Circuit to Review Whether Maritime Law Applies to Offshore Service Contract

July 26, 2017 — Richard W. Brown & Afua S. Akoto - Saxe Doernberger & Vita, P.C.
Earlier this year, the 5th Circuit applied the Davis factors to determine the validity of an indemnity clause in a Master Services Contract. In Larry Doiron Inc. et al., v. Specialty Rental Tool & Supply LLP et al., the court affirmed the notion that if a contract provides services on navigable waters aboard a vessel, a maritime contract exists, even if the contract calls for incidental or insubstantial work unrelated to the use of a vessel. With this decision, plaintiffs were granted indemnification for a crane injury and all was well on the open seas. The 5th Circuit made waves, however, on July 7, 2017, when it agreed to rehear the case en banc. In its petition for rehearing, defendant STS argued that: (1) the original opinion conflicted with Supreme Court precedent by applying tort law principles to a contract case; (2) the court misapplied the Davis factors and the decision was contrary to Davis because the historical treatment of specialty well service work has been established as non-maritime; (3) the court needed to address whether a contract is subject to maritime or land-based law in the context of offshore mineral exploration. Reprinted courtesy of Richard W. Brown, Saxe Doernberger & Vita, P.C. and Afua S. Akoto, Saxe Doernberger & Vita, P.C. Mr. Brown may be contacted at rwb@sdvlaw.com Ms. Akoto may be contacted at asa@sdvlaw.com Read the court decision
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