Alert to Contractors – California Court of Appeals (2d App. Dist.) Rules Subcontractor Price in Proposal Containing Material Conditions Rejected By Contractor Not Enforceable Notwithstanding Contractor Reliance

Marion T. Hack, Partner

Flintco Pacific, Inc. v. TEC Management Consultants, Inc., 2016 Cal. App. LEXIS 594 (Cal. App. 2d Dist. June 21, 2016)

There was an important California decision published on July 19, 2016 (decided June 21, 2016) regarding damages due to reliance on a subcontractor bid of which all General Contractors should be aware.  A general contractor can usually recover damages if a subcontractor does not honor its bid price; which price the general has relied upon in submitting its bid to the owner.  The Court of Appeals has set forth significant limitations on a general contractor’s recovery for damages usually founded under the theory of promissory estoppel. Continue reading “Alert to Contractors – California Court of Appeals (2d App. Dist.) Rules Subcontractor Price in Proposal Containing Material Conditions Rejected By Contractor Not Enforceable Notwithstanding Contractor Reliance”

Federal Claims Court Holds that Government’s Actual Knowledge of Contractor’s Delay and Acceleration Excuses Technical Non-Compliance with Time Limit for Providing Notice of Constructive Change

Nova Group/Tutor-Saliba v. United States, 125 Fed. Cl. 469 (Fed. Cl. Mar 16, 2016)

The United States Naval Facilities Engineering Command (the “Navy”) contracted with the joint venture of Nova Group and Tutor-Saliva (the “JV”) for construction of a pier at the Puget Sound Navy Shipyard in Bremerton, Washington.  The contract assigned selection of pier stability assessment methods to the JV’s discretion.  Exercising that discretion, the JV selected a SAP 2000 model for performance design loads.  Five months after the Navy had approved the JV’s design submittals, the Navy’s construction manager voiced concerns about the design and questioned the JV’s reliance upon the SAP 2000 model. Continue reading “Federal Claims Court Holds that Government’s Actual Knowledge of Contractor’s Delay and Acceleration Excuses Technical Non-Compliance with Time Limit for Providing Notice of Constructive Change”

Western District of Virginia Confronts Several Legal Issues That Frequently Impact Multi-Party Construction Disputes – Economic Loss, Damage to Other Property, Third Party Beneficiary Status, Warranties, Subrogation, and Third-Party Joinder

Allstate Insurance Company v. Structures Design/Build, LLC, 2016 U.S. Dist. LEXIS 34349 (WD VA March 17, 2016)

This construction dispute case arises from a failed pipe connector that caused water damage to a facility and insured personal property, which Hillel at Virginia Tech, Inc. (“Hillel”) owned in Blacksburg, Virginia. Hillel contracted Structures Design/Build, LLC (“Structures”) to design and construct the facility. Structures, in turn, subcontracted PJ Little Plumbing, Inc. (“PJ”) for plumbing and mechanical installation. PJ purchased the failed pipe connector from CMC Supply, Inc. (“CMC”). Allstate Insurance Company (“Allstate”) insured Hillel for the damage to the facility and the personal property.

As Hillel’s subrogee, Allstate filed a complaint against Structures and PJ. Allstate sued Structures for various state law claims. It sued PJ for negligence and breach of express and implied warranties. PJ filed a third-party complaint to join CMC on a breach of implied warranty theory. PJ and CMC moved to dismiss the claims against them. Continue reading “Western District of Virginia Confronts Several Legal Issues That Frequently Impact Multi-Party Construction Disputes – Economic Loss, Damage to Other Property, Third Party Beneficiary Status, Warranties, Subrogation, and Third-Party Joinder”