Michigan Court of Appeals Holds That Contractor Who Failed to Timely Seek a Time Extension Is Barred From Contesting Liquidated Damages

Abhe & Svboda, Inc. v. State of Michigan Department of Transportation, 2017 Mich. App. Lexis 1387 (August 29, 2017)

Contractor Abhe & Svboda, Inc. (“A&B”) entered into a contract with the Michigan Department of Transportation (“MDOT”) to clean and paint a portion of the Mackinac Bridge, with a contract completion date of October 30, 2009.  A&B missed the completion date by 644 days.  MDOT, therefore, imposed liquidated damages in the amount of $3,000 per day for each day by which completion was delayed.

In the trial court, A&B argued that MDOT’s assessment of liquidated damages was improper because a portion of the delay was caused by MDOT’s failure to approve a prerequisite to the work (scaffolding) and because site conditions were substantially worse than reasonably anticipated. Continue reading “Michigan Court of Appeals Holds That Contractor Who Failed to Timely Seek a Time Extension Is Barred From Contesting Liquidated Damages”

Ohio Supreme Court Holds Reasonableness of Liquidated Damage Provision to Be Determined Based Upon the Parties’ Knowledge at Time of Contracting Rather than After Performance

Boone Coleman Constr., Inc. v. Vill. of Piketon, 2016-Ohio-628, 2016 Ohio LEXIS 441 (Ohio Feb. 24, 2016)

A general contractor entered into a construction contract with a public agency for a road construction project with a $700 per day liquidated damages provision. The contractor completed the project over one year late, and was assessed $277,900 in liquidated damages. The original contract price was $683,300. The trial court granted summary judgment for the public agency, awarding the full amount of the liquidated damages. An intermediate appellate court overturned the ruling based upon an after-the-fact comparison of the total liquidated damages imposed in relation to the contract price, stating, “the amount of damages [as a whole] is so manifestly unreasonable and disproportionate that it is plainly unrealistic and inequitable.” The Ohio Supreme Court vacated the decision of the appellate court and remanded for further consideration. Continue reading “Ohio Supreme Court Holds Reasonableness of Liquidated Damage Provision to Be Determined Based Upon the Parties’ Knowledge at Time of Contracting Rather than After Performance”

Washington State Court Affirms $155M Jury Award Against Contractor and Surety Stemming from Claim of Default Due to Delayed Performance, Sustaining Denial of Contractor’s Differing Site Condition Defense

Joseph T. Imperiale, Pepper Hamilton LLP, Partner
James M. Kwartnik Jr., Pepper Hamilton LLP, Associate

King County v. Vinci Construction Grands Projects/Parsons RCI/Frontier-Kemper, JV, 2015 Wash. App. LEXIS 2735 (Nov. 9, 2015)

The Court of Appeals of Washington recently decided King County v. Vinci Construction Grands Projects/Parsons RCI/Frontier-Kemper, JV, a dispute between a joint venture contractor (the Contractor) and King County, Washington (the County). The dispute stemmed from problems that arose and significant delays that occurred during a major expansion of the County’s wastewater treatment system, known as the Brightwater project. The case illustrates the potential pitfalls of a contractor’s claim of differing site conditions. Continue reading “Washington State Court Affirms $155M Jury Award Against Contractor and Surety Stemming from Claim of Default Due to Delayed Performance, Sustaining Denial of Contractor’s Differing Site Condition Defense”