Even Where Fraud and Contract Mix, Be Careful With Timing
April 12, 2021 —
Christopher G. Hill - Construction Law MusingsI have often discussed the limited circumstances under which a construction contract claim and a fraud claim can coexist. A recent case from the Western District of Virginia federal court demonstrates that care is necessary even in those limited circumstances.
In Fluor Fed. Sols., LLC v. Bae Sys. Ordinance Sys., the Court examined the question of a fraud statute of limitations under Virginia law. The basic facts found in the Complaint are these:
In 2011, the United States Army awarded BAE Systems Ordinance Systems Inc. a basic ordering agreement under which BAE was responsible for modernization projects at the Radford Army Ammunition Plant. This action stems from a subcontract between Fluor Federal Solutions LLC and BAE, under which Fluor agreed to design and construct a new natural gas boiler at the plant. Fluor has completed work on the project, and BAE has accepted that work. Nonetheless, Fluor claims that BAE has refused or failed to pay for the balance of the project costs. Fluor alleges that BAE received several changes to its prime contract from the Army but did not pass those changes along to Fluor until after BAE solicited a bid from Fluor and entered a contract with Fluor to build a temporary facility. Instead, BAE continued to misrepresent the scope of the project. Fluor alleges that the change in plans increased costs substantially, but that BAE withheld information about those changes so that it could solicit lower bids. Fluor alleges that it requested a copy of BAE’s prime contract on numerous occasions, but BAE failed to provide a copy of it. Instead, Fluor submitted a request under the Freedom of Information Act. It received a copy of BAE’s prime contract on Oct. 3, 2018.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Contractual Setoff and Application When Performance Bond Buys Out of its Exposure
July 02, 2024 —
David Adelstein - Florida Construction Legal UpdatesThe theory of “setoff” is an important theory in construction disputes. Florida’s Fourth District Court of Appeal recently provided worthy discussion on contractual setoffs:
Setoffs in contract claims are governed by [Florida Statute] section 46.015(2), which provides that if a plaintiff has released “any person in partial satisfaction of the damages sued for, the court shall [setoff] this amount from the amount of any judgment to which the plaintiff would be otherwise entitled at the time of rendering judgment.” The setoff statute intends to prohibit plaintiffs from getting double recoveries.
A setoff requires that settling and non-settling parties be jointly and severally liable. The settled damages must also be the same damages for which the setoff is sought; stated differently, a setoff is not proper where the trial damages to be setoff are separate and distinct from the settled damages.
Close Construction, LLC v. City of Riviera Beach Utility Special District, 49 Fla.L.Weekly D1184d (Fla. 4th DCA 2024) (internal citations omitted).
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Minneapolis Condo Shortage Blamed on Construction Defect Law
November 20, 2013 —
CDJ STAFFDemand for condos in the Minneapolis, Minnesota area is outstripping demand. Currently inventory of available condos represents less than four months’ worth of sales. But despite the demand, only three condominium buildings are under construction in the Minneapolis metropolitan area.
Some blame this on difficulty in finding financing, where some lenders are looking for projects to be sold before the builders get the money to build what they’ve just sold. Another problem is Minnesota construction defect law. “There are law firms in this town that have filed lawsuit after lawsuit on behalf of homeowners associations alleging construction defects,” said one builder, Kelly Doran, who now builds luxury apartment buildings. “”With that 10-year warranty, there’s no way I would build condos.”
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Outcry Over Peru’s Vast Graft Probe Prompts Top Lawyer to Quit
January 15, 2019 —
John Quigley - BloombergPeru’s Attorney General Pedro Chavarry quit his post amid allegations he sought to sabotage a plea deal with a major construction company and derail the country’s biggest corruption probe.
The board of supreme prosecutors accepted his resignation Tuesday and appointed Zoraida Avalos as his replacement, according to a post on the account of the attorney general’s office. Chavarry will continue to sit on the five-member board.
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John Quigley, Bloomberg
The Choice Is Yours – Or Is It? Anti-Choice-of-Laws Statutes Applicable to Construction Contracts
October 03, 2022 —
Tiffany Raush & Tanya McGill - ConsensusDocsDuring contract negotiations and review, the parties make choices about what risks they are willing to accept and at what cost. But one often overlooked choice—the choice of law applicable to the contract—can undermine carefully negotiated construction contracts and expose contractors to risks they never intended to accept.
Choice-of-law provisions are standard provisions in most contracts. These provisions allow the parties to the contract to decide which state’s laws will apply to their contract. Often, choice-of-law in the construction contract is the law of the state where the project is located and there will be no issue. But, if the project is located in an unfamiliar, the owner or prime contractor may prefer the laws of the state where the owner or prime contractor is primarily located over the laws of the state where the project is located.
Generally, most states will enforce the parties’ choice of law in a contract. But that may not be the case for construction contracts. States like Texas, California, New York, Florida, Louisiana, and others may prohibit parties from agreeing to the application of another state’s law for construction projects in their states.
Reprinted courtesy of
Tiffany Raush, Jones Walker LLP (ConsensusDocs) and Tanya McGill, University of Mississippi School of Law Student, 2023 Graduate (ConsensusDocs)
Ms. Raush may be contacted at traush@joneswalker.com
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Arizona Court Determines Statute of Limitations Applicable to a Claim for Reformation of a Deed of Trust (and a Related Claim for Declaratory Judgment)
October 16, 2018 —
Kevin J. Parker - Snell & Wilmer Real Estate Litigation BlogIn a recent Arizona Court of Appeals case, Deutsche Bank National Trust Co. v. Pheasant Grove LLC, 798 Ariz. Adv. Rep. 15 (August 23, 2018), the Court of Appeals addressed the question of what statute of limitations was applicable to a declaratory judgment claim. In that case, a bank’s deed of trust inadvertently omitted one of the lots that was supposed to secure that bank’s loan. The deed of trust should have covered lots 8 and 9, but by its terms covered only lot 8. A different bank subsequently recorded a deed of trust that encumbered lot 9. In connection with the second bank’s foreclosure of its deed of trust, the first bank sought reformation and a declaratory judgment with regard to its deed of trust, seeking to have that deed of trust cover both lots 8 and 9, as intended. The trial court determined that the first bank’s reformation claim was filed too late, and also determined that the declaratory judgment claim was filed too late, beyond the applicable statute of limitations.
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Kevin J. Parker, Snell & WilmerMr. Parker may be contacted at
kparker@swlaw.com
Federal District Court Finds Coverage Barred Because of Lack of Allegations of Damage During the Policy Period and Because of Late Notice
December 29, 2020 —
Robert Dennison - Traub LiebermanIn American Bankers Ins. Co. of Florida v. National Fire Ins. Co. of Hartford, 2020 WL 5630017 (Sept. 21, 2020), the Northern District of California of the United States District Court had occasion to consider whether allegations in an underlying complaint triggered a duty to defend and a late notice defense to coverage.
The underlying actions were a suit against the City of Walnut Creek for damages from flooding allegedly caused by the City’s failure to develop and maintain its storm drains.The City settled the cases then sued its liability insurers who issued its coverage in the period 1968 to 1986 for indemnification of the amounts spent to defend and settle the cases.The published decision involved three Travelers’ policies issued to the City between 1968 and 1976, as to which Travelers sought summary judgment as to the lack of coverage in its policies.
The district court first found that the definition of an “occurrence” in the policies, in one policy “an event or a continuous or repeated exposure to conditions which causes injury to person or damage to property during the policy period” and in the other two “an accident, including injurious exposure to conditions, which results during the period this policy is in effect, in bodily injury or property damage,” fell within the rule of Montrose Chemical Corp. v. Admiral Ins. Co. (1995) 10 Cal.4th 645, that injury or damage during the policy period must occur in order for the policy to be triggered.The court agreed with Travelers that while there were allegations of flooding for many years, the only claims/allegations of property damage were for the period 2000 and later.Therefore the property damage coverage in the policies was never triggered.
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Robert Dennison, Traub LiebermanMr. Dennison may be contacted at
rdennison@tlsslaw.com
New Survey Reveals Present-Day Risks of Asbestos Exposure in America - 38% in High-Risk Jobs, 47% Vulnerable through Second-Hand Exposure
April 08, 2024 —
The Law Offices of Justinian C. Lane, Esq. - PLLCAUSTIN, April 04, 2024 (GLOBE NEWSWIRE) -- A recent nationwide survey conducted on the risks of asbestos in America revealed that 38% of respondents have worked in high-risk industries where asbestos was present, while 47% have experienced indirect exposure through family members employed in these high-risk environments. The survey results reflect the fact that, despite the
EPA's recent ban on ongoing uses of chrysotile asbestos, the threat of exposure still looms large in the US, underscoring the urgent need for continued vigilance and action to safeguard public health.
Compounding the concern is the revelation that only 8% of Americans undergo regular testing. These findings, released today, underscore the urgent necessity for Asbestos Cancer Risk Awareness and routine testing. They emphasize the crucial importance of proactive measures to mitigate the pervasive risks associated with asbestos exposure in the United States.
The study was conducted by Researchscape on behalf of
The Law Offices of Justinian C. Lane, Esq. - PLLC, a leading firm advocating for testing and compensation for individuals exposed to asbestos on the job and their families who are at risk due to second-hand exposure.
According to the survey, 86% of respondents have never undergone any testing for asbestos exposure, while a mere 8% are tested regularly. The lack of testing is particularly concerning among the Gen X demographic who could be at risk due to secondhand exposure from a family member who worked with asbestos when it was still prevalent, with 92% reporting no testing, highlighting the potential risks associated with secondhand exposure.
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