Construction Law Blog - Damages

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Posted By: John P. Ahlers | Oct 29, 2009 | Topics: Construction Defect, Construction News and Notes, Contracting, Damages, Indemnity | View Article

OREGON COURT OF APPEALS RULES THAT BUILDERS IN OREGON CAN BE SUED FOR "NEGLIGENT CONSTRUCTION" IF A BUILDING CODE VIOLATION IS INVOLVED

A recent decision by the Oregon Appeals Court allows property owners to file negligence lawsuits against contractors for building-code violations. In a construction defect case brought eight (8) years after the construction was substantially complete, the Court ruled that the breach of contract action against the contractor was barred by the six (6) year statute of limitation, however, allowed the homeowners to sue the contractor on a negligence cause of action which has a two (2) year statute of limitation with a "discovery" proviso (the cause of action must be commenced within two (2) years of discovery). Though the discovery of the alleged construction defect occurred well after the contract statute of limitations had run, the lawsuit was brought within two (2) years of the date of the discovery of the alleged defect. The Court reasoned that because the water leakage, which was at the heart of the allegation, involved possible violations of the Oregon building-code, the homeowners were allowed to bring a negligence cause of action against the contractor.

This case has far reaching implications for commercial contractors (and their insurers), involved in construction defect disputes. Since most "construction defects" involve some violation of some provision of the building code, an owner now has two (2) years from the date of discovery of the defect (irrespective whether the contract statute of limitations has expired) to bring a cause of action against builders and their insurance companies.

Abraham v. T. Henry Construction, Inc., Or. App. __, WL 2766868 (2009)

Posted By: Brett Hill | Nov 25, 2008 | Topics: Construction Defect, Damages | View Article

Second purchasers of new homes held to have limited rights against original developer

In this case, decided last month, the Court of Appeals held that second purchasers of new homes have few rights against the original developer who built the homes.

Posted By: Brett Hill | May 07, 2008 | Topics: Claims, Damages, Delay Claims, Government Contracts | View Article

Idaho Court denies GC's claim against project engineer

In Beco Constr. v. J-U-B Engineers, Inc., the Idaho Supreme Court denied a general contractor's claim against the project engineer on a public project located in Pocatello.  The general had alleged that the engineer's improper conduct and delays resulted in delays to the general's work on the project and liquidated damages assessed against the general contractor.  The general had alleged that the engineer intentionally interfered with the general's contract with the owner.  The Supreme Court denied the general's intentional interference claim because the engineer, as an agent of the owner, was acting on behalf of the owner. 

Posted By: Brett Hill | Apr 08, 2008 | Topics: Alternative Dispute Resolution (ADR), Damages | View Article

Court of Appeals reaffirms limited review of arbitration awards

The Division Two Court of Appeals denied an owner's request to modify an arbitration award entered in favor of a contractor.  The case demonstrates the limited review of an arbitration award that a court will perform. 

Posted By: Brett Hill | Mar 19, 2008 | Topics: Construction Defect, Damages | View Article

Three year statute of limitations for claims against dissolved LLCs begins to run on date of administrative dissolution

The Court of Appeals ruled this week that the three statute of limitations for claims against LLCs that have been administratively dissolved begins to run on the date the LLC is administratively dissolved. 

Posted By: John P. Ahlers | Mar 05, 2008 | Topics: Contracting, Damages | View Article

A Design Omission Does Not Automatically Create a Contract Ambiguity

Dick Pacific/GHEMM, JV ("Dick Pacific") was the general contactor for the $138.3 Bassett Hospital at Fort Wainwright, AK.  The owner of the project was the U.S. Army Corps. of Engineers.  Dick Pacific subcontracted the installation of the medical case work to ISEC, Inc. for $2.1 million.

Posted By: John P. Ahlers | Mar 04, 2008 | Topics: Damages | View Article

Contractor Uses Measured Mile Method to Calculate Loss of Efficiency Cause by Differing Site Conditions

The Army Corps of Engineers ordered a dredging contract to Bay West, Inc. to remove and transport 170,000 CY dredged materials from the Mississippi River.  The specifications provided that although the contractor was responsible for determining the character of the existing material "for its own purposes," the materials relocated could be assumed to consist of "predominantly previously dredged sand from the River channel."  The soil boring logs indicated that the soil classification was "silty organic clay, very soft and soft."

Posted By: John P. Ahlers | Feb 25, 2008 | Topics: Damages | View Article

Court Endorses the “Measured Mile” Method of Calculating Contractor Inefficiency

The Pennsylvania Appeals Court recently endorsed the "measured mile" method as the preferred method of calculating loss of productivity damages.  The court explained that this method compares the cost of completing work not subject to delay or acceleration, with the cost of completing the work during the period of impact.  The work compared may not be exactly the same as the ascertainment of damages for labor inefficiency, which generally is not susceptible to absolute exactness.

Posted By: Ryan Sternoff | Jan 02, 2008 | Topics: Change Orders, Claims, Damages, Delay Claims | View Article

American Safety v. City of Olympia: Supreme Court Affirms and Clarifies Mike M. Johnson

Last month, the Washington State Supreme Court affirmed its holding in Mike M. Johnson and reversed the Division 2 Court of Appeals in Am. Safety Cas. Ins. Co. v. City of Olympia, __ Wn.2d __, __ P.3d. __ (2007). The case again demonstrates the Washington State Supreme Court's position that contractors must strictly comply with the notice and claim procedures in their contracts, absent an "unequivocal" waiver of those procedures by the other party to the contract.

Posted By: Brett Hill | Dec 28, 2007 | Topics: Damages, Delay Claims | View Article

Flour v. Walter - Severin Doctrine in WA?

The case had a complicated procedural history and facts are largely irrelevant for most of us, but there is one issue that may appeal to prime contractors. The Division I trial court applied the Severin doctrine to dismiss Flour's attempt to assert its subcontractor's claim against the owner.

Posted By: Brett Hill | Dec 28, 2007 | Topics: Damages, Liens/Bond Claims, Recent Legislation | View Article

Court of Appeals clarifies requirements to recover against lien bond

In DBM Consulting Engineers, Inc. v. U.S. Fidelity and Guar. Co., ___ Wn. App. __, ____ P.3d. ___ (2007), the Court of Appeals clarified the steps that a lien claimant must take in order to recover against a lien bond.

Posted By: Brett Hill | Jan 03, 2008 | Topics: Damages, Liens/Bond Claims | View Article

Diamaco, Inc. v. Mettler - Prevailing party on bond and retainage claim entitled to an award of attorneys fees

In this case, the Court of Appeals held that the prevailing party in a lawsuit against a payment bond and retention is entitled to an award of its attorneys fees. However, the amount of attorney fees recoverable against the bond and retainage is in the trial court’s discretion.

Posted By: Brett Hill | Jan 03, 2008 | Topics: Change Orders, Claims, Damages, Liens/Bond Claims | View Article

Henifin Constr. v. Keystone Constr.

General contractor is the owner’s “Construction Agent” as defined under the private lien statute and, thus, subcontractor's lien for extra work authorized only by the general contractor was valid.

Posted By: Brett Hill | Jan 03, 2008 | Topics: Change Orders, Claims, Damages | View Article

American Safety v. City of Olympia

Court of Appeals clarifies waiver of contractual provisions post Mike M. Johnson. This case is no longer good law, please refer to the Supreme Court's ruling (discussed above) that overruled this case.

Posted By: Brett Hill | Jan 03, 2008 | Topics: Damages, Indemnity | View Article

MacLean Townhomes, LLC v. P.J. Interprize, Inc.

Indemnity Clause in Contract Not Limited to Tort Claims

Posted By: Brett Hill | Jan 02, 2008 | Topics: Change Orders, Claims, Damages, Delay Claims | View Article

Mike M. Johnson v. Spokane County - Contract Notice and Claim clauses are strictly enforceable

The seminal case in Washington regarding change orders and the enforceability of notice provisions in construction contracts. The Washington State Supreme Court held contractual notice provisions are strictly enforceable unless the clause has been waived by the party who benefits from the clause. The waiver must be "clear and unequivocal" for it to be valid.

Posted By: Brett Hill | Jan 03, 2008 | Topics: Claims, Damages, Liens/Bond Claims | View Article

LRS Elec. Controls v. Hamre Constr. - Pre-Claim Notice Requirements on Public Projects

Court clarifies pre-claim notice requirements for sub-tier subcontractors on public projects. All sub-tier subcontractors must provide the pre-claim notice in order to preserve their claim against the bond and retainage for materials supplied to the project.

Posted By: Brett Hill | Jan 03, 2008 | Topics: Damages | View Article

Keever & Assocs. v. Randall

In Keever & Assocs. v. Randall, 129 Wn. App. 733, 119 P.3d 926 (2005), the Division Three Court of Appeals held that a general contractor was not entitled to be compensated for an administrative supervision fee as an actual cost in a cost-plus contract.

Posted By: Brett Hill | Jan 03, 2008 | Topics: Damages, Liens/Bond Claims | View Article

Andriew v. Covey - Counterclaims Not Permitted in Frivolous Lien Proceeding

Washington's lien statute provides a specific frivolous lien proceeding for parties seeking to challenge a lien. In this case, the party defending its lien in the frivolous lien proceeding alleged a counterclaim, for money owed, against the party who initiated the frivolous lien proceeding. The Court of Appeals held that counterclaims were not permissible in a frivolous lien proceeding.