Montana Supreme Court Holds That a Waiver of Consequential Damages and a Partial Limitation of Liability in a Design Contract Are Not Contrary to Montana Law

Zirkelbach Constr., Inc. v. DOWL, LLC, 2017 Mont. Lexis 591 (Mont., Sept. 26, 2017)

In interpreting a state statute which makes contractual limitations on a party’s liability unenforceable in certain instances, the Supreme Court of Montana recently upheld the validity of a contract provision in a professional services agreement between a general contractor and a designer in which the parties waived consequential damages against each other and limited the liability of the designer to $50,000.00.

Zirkelbach Constr., Inc. (“Zirkelbach”) and DOWL, LLC (“DOWL”) entered into a professional services agreement (the “Agreement”), whereby DOWL agreed to provide design work to Zirkelbach, a general contractor, for the construction of a FedEx Ground facility in Billings, Montana.  The original contract price was $122,967, but was adjusted to approximately $665,000 after the parties made several addenda to the Agreement to account for additional services. Continue reading “Montana Supreme Court Holds That a Waiver of Consequential Damages and a Partial Limitation of Liability in a Design Contract Are Not Contrary to Montana Law”

Federal Court in New Jersey Holds That Failure to Timely File an Affidavit of Merit Dooms Owner’s Claim for Breach of Contract Against GeoTech Companies

Frontier Dev. LLC v. Craig Test Boring Co., 2017 U.S. Dist. Lexis 149950 (D.N.J. Sept. 15, 2017)

On September 15, 2017, the Federal District Court for the District of New Jersey dismissed plaintiff’s, Frontier Development LLC’s, complaint for breach of contract against defendants, Craig Test Boring Co., Inc. and Craig Testing Laboratories, Inc., on the grounds that plaintiff failed to timely file an affidavit of merit as required by New Jersey statute.  The case is a reminder that plaintiffs making claims that sound in professional negligence must be aware of state statues requiring the submission of an affidavit of merit.

Plaintiff was the developer of a commercial building in Egg Harbor Township, New Jersey.  To prepare the site for construction, plaintiff was required to determine the depth of the topsoil it would have to remove and whether the soil beneath the topsoil was stable enough to support the foundations.  To do so, plaintiff engaged the services of defendants to perform geotechnical testing and prepare a soil boring report.  After receiving the report from the defendants and implementing the report’s recommendations, plaintiff claimed that the report’s conclusions were faulty and, as a result, plaintiff removed an excessive amount of topsoil and loose ground underneath the topsoil causing unnecessary delays and construction costs. Continue reading “Federal Court in New Jersey Holds That Failure to Timely File an Affidavit of Merit Dooms Owner’s Claim for Breach of Contract Against GeoTech Companies”

A Frustrating Exercise: Federal District Court in Iowa Declines to Grant Summary Judgment on Frustration of Purpose Doctrine in a Breach of Contract Case

Rembrandt Enters., Inc. v. Dahmes Stainless, Inc., No. C15-4248-LTS, 2017 U.S. Dist. LEXIS 144636 (N.D. Iowa Sept. 7, 2017)

On September 7, 2017, the Federal District Court for the Northern District of Iowa denied a motion for summary judgment by Rembrandt Enterprises, Inc. (“Rembrandt”).  In the motion, Rembrandt asked the court to grant declaratory relief and excuse the company from its breach of a contract with Dahmes Stainless, Inc. (“Dahmes”) under the doctrine of frustration of purpose.

Beginning in approximately 2014, Rembrandt, a large-scale producer of eggs and egg products, sought to expand its business.  As part of these expansion efforts, Rembrandt planned to construct an entirely new egg processing plant in Thompson, Iowa.  After reaching agreements with multiple contractors to build the new facility, on November 20, 2014, Rembrandt entered into an agreement with Dahmes for the manufacture and installation of an $8.5 million egg dryer at the new processing facility.  During the course of the new facility’s construction, however, the Midwestern United States was impacted by the Avian Flu virus which caused Rembrandt to eliminate over a million of its birds in an effort to limit the spread of the virus, cutting Rembrandt’s production capacity by approximately 50 percent.  As a result of the loss in production capacity, Rembrandt decided to scuttle the construction of the new processing facility and subsequently breached its agreement with Dahmes. Continue reading “A Frustrating Exercise: Federal District Court in Iowa Declines to Grant Summary Judgment on Frustration of Purpose Doctrine in a Breach of Contract Case”