Breach Of Duty of Good Faith And Fair Dealing Packaged With Contract Disputes Act Claim
March 27, 2023 —
David Adelstein - Florida Construction Legal UpdatesAn interesting opinion on a motion to dismiss came out of the United States Court of Federal Claims dealing with the claim that the government breached its duty of good faith and fair dealing in administering the prime contract. The contractor’s argument was that the government breached its duty of good faith and fair dealing by denying the contractor’s claim under the Contract Disputes Act (CDA). This was a creative claim and argument that deserves consideration because it tied in the contracting officer’s denial of the CDA claim for additional money with a breach of the duty of good faith and fair dealing.
In this case, Aries Construction Corp. v. U.S., 2023 WL 2146598 (Fed. Cl. 2023), a prime contractor was hired for a water pipeline construction project. The contractor encountered unexpected difficult site conditions that required additional equipment and labor. The contractor informed the contracting officer and alleged it was instructed to proceed with the additional equipment and labor. The contractor submitted a claim under the CDA but the contracting officer denied the claim. The contractor pursued the claim in the United States Court of Federal Claims arguing the government breached the contract and, of interest, breached its duty of good faith and fair dealing.
The government moved to dismiss the breach of good faith and fair dealing claim arguing that besides failing to state a cause of action the Court of Federal Claims had no jurisdiction because the breach of the duty of good faith and fair dealing was not properly presented to the contracting officer under the CDA. The Court of Federal Claims denied the government’s motion.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
The Jersey Shore gets Beach Prisms Designed to Reduce Erosion
January 22, 2014 —
Beverley BevenFlorez-CDJ STAFFThirty-five beach prisms manufactured by Smith-Midland Corporation have been installed along the Jersey shore in Ocean Gate, New Jersey. According to the Wall Street Journal, “The prisms protect homes, prevent erosion, and reduce impacts from natural disasters like Hurricane Sandy.” They “are made with a built-in parabolic curve that scatters waves away as spray instead of allowing them to crash up onto the vulnerable shoreline.”
Ocean Gate’s Mayor Paul J. Kennedy stated, "We've been losing beach year after year with the Nor'easters we get. So we came up with an idea that hopefully will work,” The Wall Street Journal reported.
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Do Not Pass Go! Duty to Defend in a Professional Services Agreement (law note)
April 03, 2019 —
Melissa Dewey Brumback - Construction Law in North CarolinaRecently a client asked me to review a contract for his Firm. The Owner, who had prepared the draft, had inserted a rather stringent “duty to defend” clause.
As I told my client, a duty to defend clause is not a good idea for a couple of reasons. First, if you agree to provide a defense, what that means is that you are footing the bill for the Owner if the Owner is sued by another party. Think about that for a minute. You are paying legal fees for someone else’s legal defense. You may or may not be able to direct the litigation or have a say in who is hired. Can you say open check book?
Secondly, and more importantly, the duty to defend is almost never insurable. What that means is that your professional liability carrier will not be footing the bill—your Firm will be doing it. This is not a case of adding the Owner as an additional insured, so do not confuse the two. Agreeing to a duty to defend is an extremely burdensome, and potentially costly, mistake.
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Melissa Dewey Brumback, Ragsdale Liggett PLLCMs. Brumback may be contacted at
mbrumback@rl-law.com
Texas Supreme Court Holds that Invoking Appraisal Provision and Paying Appraisal Amount Does Not Insulate an Insurer from Damages Under the Texas Prompt Payment of Claims Act
September 16, 2019 —
John C. Eichman & Grayson L. Linyard - Hunton Insurance Recovery BlogIn two cases decided June 28, 2019, the Texas Supreme Court held that an insurer’s invocation of a contractual appraisal provision after denying a claim does not as a matter of law insulate it from liability under the Texas Prompt Payment of Claims Act (“TPPCA”). But, on the other hand, the court also held that the insurer’s payment of the appraisal award does not as a matter of law establish its liability under the policy for purposes of TPPCA damages.
In Barbara Techs. Corp. v. State Farm Lloyds, No. 17-0640, 2019 WL 2666484, at *1 (Tex. June 28, 2019), State Farm Lloyds issued property insurance to Barbara Technologies Corporation for a commercial property. A wind and hail storm damaged the property, and Barbara Tech filed a claim under the policy. State Farm denied the claim, asserting that damages were less than the $5,000 deductible.
Barbara Tech filed suit against State Farm, including for violation of the TPPCA. Six months later, State Farm invoked the appraisal provision of the policy. More than a year after the suit was filed, appraisers agreed to a value of $195,345.63. State Farm then paid that amount, minus depreciation and the deductible. Barbara Tech amended its petition to include only TPPCA claims.
Reprinted courtesy of
John C. Eichman, Hunton Andrews Kurth and
Grayson L. Linyard, Hunton Andrews Kurth
Mr. Eichman may be contacted at jeichman@HuntonAK.com
Mr. Linyard may be contacted at glinyard@HuntonAK.com
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Candis Jones Named to Atlanta Magazine’s 2024 “Atlanta 500” List
February 26, 2024 —
Candis Jones - Lewis Brisbois NewsroomAtlanta, Ga. (February 9, 2024) – Atlanta Partner Candis R. Jones has been named to Atlanta Magazine’s 2024 “Atlanta 500” list of the most powerful law professionals in Atlanta. This is the fourth year in a row she has received this recognition.
To compile this list, the publication reviewed nominations from the public and consulted experts across various sectors. The magazine’s editors and writers considered not only the status of the nominees within their respective organizations, but also whether the nominees were visionaries who led programs for their communities and created opportunities for employees. According to Atlanta Magazine, this list is “an anthology of the power that resides in Atlanta.”
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Candis Jones, Lewis BrisboisMs. Jones may be contacted at
Candis.Jones@lewisbrisbois.com
Construction Contractor “Mean Tweets” Edition
June 04, 2024 —
Garret Murai - California Construction Law BlogBack in the day, if someone had a problem with you the rules of school yard jungle dictated that they had better tell it to your face or you had the right to call them out on it. That, of course, was back then. These days, with social media seemingly everywhere (e.g., Yelp, Twitter, Facebook, etc.), if someone has a problem with you they tell you . . . as well as the rest of the world . . . to your digital face. Jimmy Kimmel has even made it a “thing” with his celebrity “
Mean Tweets” segments.
In
Paglia & Associates Construction, Inc. v. Hamilton, 98 Cal.App.5th 318 (2023), homeowner Vanessa Hamilton was sued by her contractor Paglia & Associates Construction, Inc. doing business as Protech Construction after she posted critical comments to her blog and on Yelp about work performed by Paglia at her home.
The Paglia Case
In or about 2016, after a tree fell on her house, Hamilton’s insurer, Safeco, recommended Paglia to perform the repairs. Paglia and Hamilton entered into a repair contract in 2016 but Paglia did not finish the work until sometime in 2017 claiming that the repair was extensive because Hamilton’s circa 1923 home was in poor condition and current building codes required extensive reconstruction.
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Garret Murai, Nomos LLPMr. Murai may be contacted at
gmurai@nomosllp.com
Massachusetts High Court: Attorney's Fee Award Under Consumer Protection Act Not Covered by General Liability Insurance Policy
September 19, 2022 —
Jeffrey J. Vita & David G. Jordan - Saxe Doernberger & Vita, P.C.In the case of
Vermont Mutual Insurance Co. v. Poirier, 189 N.E.3d 306 (Mass. 2022), Massachusetts’ Supreme Judicial Court concluded that an award of attorney's fees pursuant to
Chapter 93A (Massachusetts’ Consumer Protection Act) is not covered under an insured’s general liability insurance policy. Applying Massachusetts law, the Court found that a statutory award of attorney’s fees stemming from a bodily injury claim is not reasonably considered “damages because of bodily injury” or “costs taxed against the insured” so as to trigger general liability coverage.
Facts of the Case
A Servpro company (owned by Mr. and Mrs. Poirier) was hired to clean up a basement after a sewage spill. The owners of the home were injured by fumes from chemicals used in the cleanup and accordingly brought suit against the Poiriers and their Servpro business. In the lawsuit, the homeowners alleged negligence, breach of contract, and also a Chapter 93A claim, asserting breach of warranty of merchantability and warranty of fitness for a particular purpose. Prior to trial, the plaintiffs waived the negligence and breach of contract claims and sought a bench trial on the Chapter 93A claims alone.
Reprinted courtesy of
Jeffrey J. Vita, Saxe Doernberger & Vita, P.C. and
David G. Jordan, Saxe Doernberger & Vita, P.C.
Mr. Vita may be contacted at JVita@sdvlaw.com
Mr. Jordan may be contacted at DJordan@sdvlaw.com
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Supreme Court Holds That Prevailing Wage Statute is Constitutional
November 28, 2022 —
Cassidy Ingram - Ahlers Cressman & SleightThe Supreme Court recently held
[1] that Senate Bill 5493 (“SSB 5493”), which alters the method for how the Washington State Department of Labor and Industries’ industrial statistician sets the prevailing wages for employees on public works projects, is constitutional. Prior to the enactment of SSB 5493, the industrial statistician set prevailing wages for each trade on a county-by-county basis based on either the majority or average wage rate in that specific county. Following SSB 5493’s enactment, the industrial statistician would be required to adopt the prevailing wage rate for a county solely based on collective bargaining agreements (CBAs) for that trade. If a trade has more than one CBA in a county, the highest wage rate will prevail.
SSB 5493 has negative impacts on employers because it creates the potential for wage rates to be set based on CBAs that represent the minority of hours worked in a county. The International Union of Operating Engineers, Local 302, provides an example of this. AGC began negotiations with an operators’ union for a master labor agreement, which would cover almost all operating engineers in 16 Washington State counties. When they could not reach an agreement, Local 302 called a strike against the employers. After one week of the strike, Local 302 approached small employers and negotiated a side agreement. Some of these employers were also card-carrying members of Local 302. A few weeks later, AGC ratified a new agreement with Local 302 that included lower wages than the side agreements. Because the rates in the side agreement were higher, those wage rates became the prevailing wage in 16 counties even though they represented a minority of the hours worked.
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Cassidy Ingram, Ahlers Cressman & SleightMs. Ingram may be contacted at
cassidy.ingram@acslawyers.com
