Federal Court in North Carolina Holds That Impracticability of Arbitration Clause Which Required Decision Within 30 Days of Selection of Arbitrators Did Not Render It Invalid Because Incorporated AAA Rules Allowed for Extension of Arbitration Period

Tribal Casino Gaming Enterprise v. W.G. Yates & Sons Constr. Co., 2016 U.S. Dist. LEXIS 86100 (W.D. NC July 1, 2016)

Tribal Casino Gaming Enterprise (the “Casino”) contracted with joint general contractors, W.G. Yates & Sons Construction Company and Rentenback Constructors Inc. (the “Contractor”) for an expansion of the Casino’s facility in Cherokee, North Carolina.  Following completion, two parking decks constructed during the project partially collapsed.  The Casino contended that the parking deck failures resulted from the Contractor’s faulty work.

The Casino submitted a demand for arbitration with the American Arbitration Association (“AAA”), asserting contractual, tort, and statutory claims against the Contractor.  The Contractor filed a motion with the Western District of North Carolina seeking to stay the AAA arbitration.  Citing the doctrine of contractual impossibility and due process concerns, the Contractor argued that the arbitration clause in the parties’ contract was unenforceable because it required that the arbitral panel issue an award within 30 days, which the Contractor contended was unreasonable under the circumstances of the complex dispute. Continue reading “Federal Court in North Carolina Holds That Impracticability of Arbitration Clause Which Required Decision Within 30 Days of Selection of Arbitrators Did Not Render It Invalid Because Incorporated AAA Rules Allowed for Extension of Arbitration Period”

New Jersey Federal District Court Holds That Arbitration Clause In AIA A201-1997 Does Not Apply To Post Construction Disputes

Blackman & Co., Inc., v. GE Bus. Fin. Servs., Inc., 2016 U.S. Dist. LEXIS 87904 (D.N.J. July 7, 2016)

Grove Street Realty Urban Renewal, LLC (“Grove Street”) contracted with Blackman & Co., Inc. (“Blackman”) to manage a project (the “Project”) to construct a four-story apartment building in West Deptford, New Jersey between 2007 and 2009 (the “Contract”).  The Contract incorporated AIA Document A201-1997General Conditions of the Contract for Construction.

GEBFS acquired the Project from Grove Street pursuant to foreclosure proceedings in 2012.  Three years after it acquired the Project (and six years after construction was complete), GEBFS filed a $4,000,000 Demand for Arbitration with the American Arbitration Association (“AAA”) against Blackman for alleged post-construction defects, asserting claims for breach of contract and breach of implied warranty.  Blackman filed an action in response to GEBFS’ Demand for Arbitration, seeking a judgment that the dispute was not governed by any agreements to arbitrate. Continue reading “New Jersey Federal District Court Holds That Arbitration Clause In AIA A201-1997 Does Not Apply To Post Construction Disputes”

Supreme Court of Pennsylvania Holds That Under Prompt Payment Act, Imposition of Penalty and Attorneys’ Fees Is Discretionary, Not Mandatory, Upon Finding of Bad Faith

Scott Enters., Inc. v. City of Allentown, 2016 Pa. LEXIS 1503 (Pa. July 19, 2016)

The Supreme Court of Pennsylvania reversed an order of the Commonwealth Court and held that the prompt payment provisions of the Commonwealth Procurement Code, 62 Pa. C.S. §3931-3939 (the “Prompt Payment Act”), do not mandate an award of penalty interest and attorneys’ fees upon a finding that the government withheld payments from the contractor in bad faith. Continue reading “Supreme Court of Pennsylvania Holds That Under Prompt Payment Act, Imposition of Penalty and Attorneys’ Fees Is Discretionary, Not Mandatory, Upon Finding of Bad Faith”