U.S. District Court in New York Draws Distinction Between Damages Recoverable for Defective Work in Tort and for Breach of Contract – Where Tort Claim Barred By Statute of Limitations, Owner Could Not Recover for Cost of Replacement of Structure Destroyed By Fire Allegedly Resulting From Defective Work of Renovation Contractor

Regent Ins. Co. v. Storm King Contr., Inc.
2008 U.S. Dist. LEXIS 16513 (S.D.N.Y. Feb. 26, 2008)

In June 1999, the owner of The Emerson Inn hired Storm King to act as its general contractor in the remodeling and rebuilding of the Inn. Under their agreement, Storm King was not responsible for the design of the project or for compliance with applicable law, building codes, or regulations, and it was agreed that the remedy for any defective work would be limited to correction of the defects. Storm King entered into a subcontract with Sullivan Fire Protection for the installation of a fire sprinkler system. The subcontract incorporated the terms of the agreement between the owner and Storm King. Its scope of work section provided that Sullivan’s work was to be performed in accordance with the plans and specifications prepared by the design professional. Continue reading “U.S. District Court in New York Draws Distinction Between Damages Recoverable for Defective Work in Tort and for Breach of Contract – Where Tort Claim Barred By Statute of Limitations, Owner Could Not Recover for Cost of Replacement of Structure Destroyed By Fire Allegedly Resulting From Defective Work of Renovation Contractor”

Colorado Court of Appeals Holds Differing Site Condition, Mutual Mistake and Negligent Misrepresentation Claims Viable

URS Group, Inc. v. Tetra Tech FW, Inc. and Foster Wheeler Environmental Corporation
2008 Colo. App. LEXIS 159 (February 7, 2008)

The Court of Appeal of Colorado held that the plaintiff subcontractor did not assume the risk of differing site conditions and thus its claims for differing site conditions and mutual mistake were viable. Moreover, the Court held that the economic loss rule did not bar plaintiff’s negligent misrepresentation claim, because the alleged misrepresentation occurred during negotiations before the contract was formed. Continue reading “Colorado Court of Appeals Holds Differing Site Condition, Mutual Mistake and Negligent Misrepresentation Claims Viable”

U.S. District Court in Vermont Holds That Material Breach of Contract Required to Constitute Default Under Performance Bond So As to Trigger Surety Obligation and Commence Running of Statute of Limitations – Nonmaterial Breaches Preceding Abandonment Did Not Commence Running of Statute, So That Case Was Not Time Barred

John A. Russell Corp. v. Fine Line Drywall, Inc. and Acstar Insurance Co.
2008 U.S. Dist. LEXIS 13098 (D.Vt., February 21, 2008)

The United States District Court for the District of Vermont held that only a material breach of contract constitutes a default triggering the year-long period provided by 8 V.S.A. § 3663 for commencing an action.

In John Russell Corp., Subcontractor began work on the metal framing and gypsum drywall systems of a project in November 2003 and ceased work on November 10, 2004. Prior to beginning work, Subcontractor secured a performance and payment bond (the “Bond”) with Contractor as obligee. During the Fall of 2004, Subcontractor’s presence at the job site was sporadic. Daily work logs indicated that Subcontractor was absent from the job site on six occasions during September and October 2004, the periods of absence ranging from one to five days. After November 10, 2004, Subcontractor never returned to the work site. Contractor made repeated attempts to contact Subcontractor to determine whether it planned to complete performance of its obligations under the Subcontract. Subcontractor did not respond to any of those attempts and had no further communication with Contractor. By early December 2004, Contractor “suspected [that Subcontractor had] abandoned the project.” Continue reading “U.S. District Court in Vermont Holds That Material Breach of Contract Required to Constitute Default Under Performance Bond So As to Trigger Surety Obligation and Commence Running of Statute of Limitations – Nonmaterial Breaches Preceding Abandonment Did Not Commence Running of Statute, So That Case Was Not Time Barred”