United States Court of Appeals for the Fourth Circuit enforces provision of A.I.A. Form Agreement that defeats the discovery rule concerning when a claim accrues for purposes of statute of limitations; holding that the provision does not violate either Maryland or Nebraska law.

Harbor Court Assoc. v. Leo A. Daly Co.,
179 F.3d 147 (4th Cir. 1999)

The plaintiffs, Harbor Court Associates and Murdock Development Company (“HCA/Murdock”) were the developers of Harbor Court Complex, located in the Inner Harbor area of Baltimore, Maryland. On April 28, 1983, HCA/Murdock hired Leo Daly (“Daly”), an architect with a principal place of business is in Nebraska, to design and construct the project. The parties used an A.I.A. document, which stated that, for disputes arising out of the contract: “any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than the relevant Date of Substantial Completion of the Work, and [as to any failures occurring after substantial completion] not later than the date of issuance of the Final Certificate of Payment.” Continue reading “United States Court of Appeals for the Fourth Circuit enforces provision of A.I.A. Form Agreement that defeats the discovery rule concerning when a claim accrues for purposes of statute of limitations; holding that the provision does not violate either Maryland or Nebraska law.”

The Appellate Division of the Supreme Court of New York holds that seller of a building may seek indemnification from a mechanical engineer whose negligent design caused seller to have to pay the new owner for costs arising out of the design flaws. The Court also holds that the economic loss doctrine did not bar a claim for professional malpractice.

17 Vista Fee Assocs. v. Teachers Ins. and Annuity Assoc. of America,
1999 N.Y. App. Div. LEXIS 7981 (July 15, 1999)

The plaintiffs/third-party plaintiffs 17 Vista Fee Associates and 17 Vista Associates (“17 Vista”) entered into a sale agreement with defendant Teachers Insurance and Annuity Association of America (“TIAA”), pursuant to which 17 Vista was to construct an office building at 17 State Street in Manhattan, and to sell it to TIAA upon completion. To obtain a certificate of occupancy for the building, the sales agreement required 17 Vista to perform several tasks, including construction of the building’s smoke purge system. 17 Vista retained Third-Party Defendant Jaros Baum & Bolles (“JB&B”), a mechanical engineer, to perform design services for the building. Continue reading “The Appellate Division of the Supreme Court of New York holds that seller of a building may seek indemnification from a mechanical engineer whose negligent design caused seller to have to pay the new owner for costs arising out of the design flaws. The Court also holds that the economic loss doctrine did not bar a claim for professional malpractice.”

The Supreme Court of California holds that an obligee may not recover in tort for a surety’s breach of covenant of good faith and fair dealing implied in a performance bond.

Cates Constr., Inc. v. Talbot Partners et al.,
1999 Cal. LEXIS 4847 (Co. July 29, 1999)

In 1989, defendant Talbot Partners (“Talbot”) hired plaintiff Cates Construction, Inc. (“Cates”) to build a condominium project in Malibu, California. The construction contract required Cates to have the project ready for occupancy in eight months. The contract also required Cates to furnish a performance bond and a labor and materials bond, both of which were subsequently issued by Transamerica Insurance Company (“Transamerica”). Continue reading “The Supreme Court of California holds that an obligee may not recover in tort for a surety’s breach of covenant of good faith and fair dealing implied in a performance bond.”