Construction Law Review is an update and discussion of current trends in construction law, published by attorneys at Pepper Hamilton LLP with offices in Philadelphia, New York, Boston, Washington DC, Pittsburgh, Princeton, Wilmington, Silicon Valley, Orange County, Los Angeles, Harrisburg, Detroit, and Berwyn.
This case arises out of the alleged breach of contract and defective design for the construction of a new hospital in San Francisco. During construction, property owner and plaintiff Chinese Hospital Association (“Chinese Hospital”) became aware of alleged defects involving the designs provided by its subcontractor, architect-defendant Jacobs Engineering Group, Inc. (“Jacobs”). Chinese Hospital terminated its contract with Jacobs for convenience mid-construction.
In May of 2010, the United States, acting through the Department of Defense (the “Government”) awarded a contract to James Talcott Construction, Inc. (“Talcott”) to replace existing housing for military families at the Malmstrom Air Force Base in Great Falls, Montana. Talcott was required to construct thirteen buildings, each comprising seventy housing units. Each building was to be constructed with concrete foundations and wood framing, and the project’ design called for wooden floor joists and subfloor decking to be enclosed in crawlspaces. The contract stated that the “structural drawings and specification represent the finished structure… [but] do not indicate the method of construction. The contractor will provide all measures necessary to protect the structure during construction.” The plans and specifications were silent as to ventilation of the crawlspaces.
Subcontractor Skyrise Construction, Inc. (“Skyrise”) sued general contractor Annex Construction, Inc. (“Annex”) for breach of contract, promissory estoppel, negligent misrepresentation, and violations of Wisconsin and Illinois trade practices statutes. Skyrise primarily based its claims on an assertion that the parties entered into a subcontract, which Annex breached when it removed Skyrise from the project and completed the work with an alternative subcontractor. Both Skyrise and Annex filed motions for summary judgment. The District Court denied Skyrise’s motion and granted Annex’s motion.