Montana Supreme Court Rules That Statute of Repose Is an Absolute Bar to Claims and Cannot be Tolled for Any Reason, Including Concealment

Hill County High School District No. A v. Dick Anderson Construction, Inc., 2017 Mont. LEXIS 38 (Mt. Feb 7, 2017)

This action arose out of the design and construction of a new roof for a high school in Hill County, Montana. The roof was built by Dick Anderson Construction, Inc. (“Contractor”) and designed by Springer Group Architects, P.C. (“Architect”). While the parties disputed whether the roof was ever completed to the School District’s satisfaction, the school was in full use by April 1998 and final payment was issued around that same time.

Problems emerged with the roof almost immediately. The Contractor and Architect worked with the School District to address the problems through October 2003 when the Architect informed the School District that repairs were finished and that no further work was necessary. But the roof partially collapsed in 2010 and the School District filed suit the following year. Continue reading “Montana Supreme Court Rules That Statute of Repose Is an Absolute Bar to Claims and Cannot be Tolled for Any Reason, Including Concealment”

Rhode Island Supreme Court Rules That Despite Deference Afforded Arbitrator, the Award Must Be Vacated Where Arbitrator’s Decision Was Contrary to Contract Language

Nappa Constr. Mgmt., LLC v. Flynn, 2017 R.I. LEXIS 13 (R.I. Jan. 23, 2017)

Caroline and Vincent Flynn (the “Flynns”) contracted with Nappa Construction Management, LLC (“Nappa”) to construct an automobile repair facility. The parties executed the American Institute of Architects’ A101-2007 Standard Form of Agreement Between Owner and Contractor.  The contract provided that the owner could terminate the contract for cause; could order the contractor to suspend the work without cause “for such period of time as the Owner may determine”; and could terminate the contract for convenience.

Six months after Nappa commenced work, the Flynns directed Nappa to “immediately cease any further work on the project,” contending that Nappa was not constructing the flooring according to the project plans or industry standards. Thereafter, Nappa submitted a payment application that included expenses for the disputed flooring, which the Flynns declined to pay.  Nappa notified the Flynns that they were in breach of the contract and filed for mediation.  Nappa ultimately terminated the contract for nonpayment.  Continue reading “Rhode Island Supreme Court Rules That Despite Deference Afforded Arbitrator, the Award Must Be Vacated Where Arbitrator’s Decision Was Contrary to Contract Language”

Federal Court in California Rules That the Federal Arbitration Act Preempts California Statute That Requires Arbitrations Relating to California Construction Projects Take Place in California

Bell Prods. v. Hosp. Bldg. & Equip. Co., 2017 U.S. Dist. LEXIS 9183 (ND of Cal. Jan. 23, 2017)

A Contractor, Hospital Building and Equipment Company (“HBE”) entered into a subcontract with a mechanical subcontractor, Bell Products, Inc. (“Bell”), on a design-build project for a California hospital.  Bell sued HBE, asserting that HBE’s plans and specifications were deficient and failed to meet requirements of the applicable regulatory agencies, resulting in 15 months of delay to the project.  Bell initially sued HBE in State Court.  However, the case was removed to federal court, and the federal court stayed the proceedings pending conclusion of arbitration.

The subcontract provided that:  all claims between HBE and Bell shall be decided by arbitration; the arbitration shall be per the Construction Industry Rules of the American Arbitration Association; the arbitration provisions shall be governed by the Federal Arbitration Act (“FAA”) and “unless [HBE] requests the locale to be the place of the Project, the arbitration locale shall be St. Louis, Missouri.  Bell sought relief from the venue provision, based upon a California Statute, C.C.P. § 410.42(a)(1), which provides:

(a) The following provisions of a contract between the contractor and a subcontractor with principal offices in this state, for the construction of a public or private work of improvement in this state, shall be void and unenforceable:
(1) A provision which purports to require any dispute between the parties to be litigated, arbitrated, or otherwise determined outside this state.
Continue reading “Federal Court in California Rules That the Federal Arbitration Act Preempts California Statute That Requires Arbitrations Relating to California Construction Projects Take Place in California”