Construction and Engineering Lawyers & Attorneys : K&L Gates Law Firm : Financing, Development, Dispute Resolution, Government Contracting

Great West Contractors, Inc. v. WSS Ind. Constr., Inc., 162 Cal. App. 4th 581 (2008)

WSS Industrial Construction, a steel subcontractor, sued general contractor Great West Contractors, to recover for work performed on a public works project in Riverside, California.  At the time that WSS submitted its bid proposal to Great West, WSS had applied for but not yet obtained a corporate contractor’s license.  WSS did receive a license after the bid was accepted, but only after it had already ordered multiple sets of shop drawings and some of the material necessary for the project.  WSS initiated the lawsuit by suing Great West and its surety, Fidelity and Deposit Company of Maryland, for $91,000 due under the contract and subsequent change orders.

At trial, Great West and Fidelity moved for a nonsuit on the grounds that WSS was statutorily barred, pursuant to Business and Professions Code section 7031, from any recovery because WSS was not duly licensed at all times during performance of the contract.  The trial court determined that WSS’s president had held valid individual licenses at all times and that, in any event, WSS was not required to have a license for the work that it performed prior to receiving its license.  The court held that “there was substantial compliance with the licensing during the contract and work was performed in good faith.”  The jury awarded WSS $220,000 in damages, including statutory penalties and interest.  Great West and Fidelity appealed after the court rejected their post-trial motions for a new trial, vacation of judgment and judgment notwithstanding the verdict.

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K-2, Inc. v. Fresh Coat, Inc., 2007 WL 5101191 (Tex. App. 2008)

In this case, the court held that the Texas Product Liability Act did not provide a product seller with the right of indemnity against a product manufacturer for that seller’s independent liability under a contract.

Several homeowners sued their builder, its subcontractor which installed synthetic stucco cladding (EIFS) on their houses and the EIFS manufacturer after experiencing water penetration leading to structural damage.  After the claims made by the homeowners and the home builder against the subcontractor were settled, the subcontractor obtained a judgment against the manufacturer for indemnification of the amounts it paid in the settlement.  The manufacturer appealed that portion of the judgment finding it liable to indemnify the subcontractor for the amount it paid to settle the home builder’s claims because it was paid under an indemnity clause in the subcontract. It did not dispute that part of the judgment obligating it to indemnify the subcontractor for settlement of the homeowners’ claims. 

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WTC Captive Ins. Co. v. Liberty Mut. Fire Ins. Co., 2008 WL 1748196 (S.D.N.Y. Apr. 15, 2008)

After the World Trade Center disaster in September 2001, the City of New York created a captive insurance company, funded by a grant from the Federal Emergency Management Agency, to insure the costs of lawsuits arising from the WTC clean-up efforts.  Liberty Mutual was the primary insurer and had agreed to defend and indemnify the city against claims including, but not limited to, bodily and personal injury.  A group of secondary insurers agreed to provide the same coverage if the Liberty Mutual policy became exhausted.  All of the policies were retroactive to September 11, 2001.

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Geonie v. O.D. & P. N.Y., Ltd., 855 N.Y.S.2d 495 (N.Y. App. Div. 2008)

An injured worker, Geonie, filed a negligence suit against multiple defendants, including the general contractor, after stepping into an opening left by the removal of a tile from a raised floor in a computer room.  Geonie argued that defendants failed to provide adequate safety devices to protect against an elevation-related hazard and failed to adequately supervise the work area.  He further claimed that because the removed tile was discussed at weekly safety meetings, the defendants had, at least, constructive notice of the problem.  The trial court dismissed Geonie’s claims under New York Labor Law and his negligence claim against the general contractor.

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Hakimi v. Cantwell Landscaping & Design, Inc., 855 N.Y.S.2d 273 (N.Y. App. Div. 2008)

Hakimi filed a breach of contract claim against Cantwell stemming from landscaping work performed on the property where Hakimi was having a new home built.  Cantwell admitted that it was not licensed as a home improvement contractor at the time it did the work.  In response to the lawsuit suit, Cantwell filed a mechanic’s lien and a notice of pendency against Hakimi’s property.  Cantwell claimed that it did not need a home improvement contractor’s license because Hakimi was building a new house and the administrative code exempted new home construction from the home improvement licensing requirements.  Hakimi moved to dismiss Cantwell’s counterclaims and the Supreme Court denied the motion.

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Best Interiors, Inc. v. Millie and Severson, Inc., 2008 WL 1122182 (Cal. Ct. App. Apr. 11, 2008)

A dispute arose between general contractor Millie and Severson, Inc. and subcontractor Best Interiors, Inc. related to the construction of a hospital in Whittier, California.  Best sued M&S, the hospital and two building inspectors, alleging various delay and disruption damages caused by improper management and inspection of the project.  M&S petitioned to compel arbitration of the dispute and to stay Best’s lawsuit, based on arbitration clauses in the subcontract and the prime contract.  Best opposed on the grounds that (1) the building inspectors could not be compelled to arbitrate; (2) the arbitration might result in inconsistent results; and (3) the court had authority under California Code of Civil Procedure § 1281.2 to refuse to enforce the arbitration clause.  The trial court granted Best’s petition.  On appeal, M&S raised two arguments.  First, M&S argued that the Federal Arbitration Act, 9 U.S.C. § 1 et seq., applied to the arbitration agreement and did not give the trial court discretion to deny arbitration.  Second, M&S argued that, even if California law applied to the arbitration agreement, there was no possibility of conflicting rulings.

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Zeer v. Azulay, 2008 WL 1134239 (N.Y. App. Div. Apr. 8, 2008)

In this case, defendant contractors agreed to construct a home on property owned by plaintiffs pursuant to a written contract executed by the parties in September 2003.  The parties agreed that if the contractor did not complete the project by February 29, 2004 and obtain a certificate of occupancy, it would be liable for liquidated damages of $250 per day until the work was completed.

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Pronti v. Grigoriou, 853 N.Y.S.2d 718 (N.Y. App. Div. 2008)

In this case, a construction company filed a mechanic’s lien foreclosure action against a homeowner.  The parties had executed a written contract providing that Pronti would find an independent contractor to install vinyl siding on Grigoriou’s residence.  After Grigoriou paid the full contract price of $11,000, she refused to pay a $500 cleanup fee provided for in the contract.  Grigoriou alleged that Pronti performed the work in an “unworkmanlike manner” and counterclaimed for $10,520 in damages.

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New York v. Shaw Contract Flooring Servs., 853 N.Y.S.2d 694 (N.Y. App. Div. 2008)

State university brought claims against a general contractor and subcontractor for asbestos released as a result of tile work performed by the subcontractor.  The trial court denied the general contractor’s motion to dismiss the negligence and public nuisance claims.  The Appellate Division affirmed.

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Kennerson v. LaBarbera, 536 F. Supp. 2d 305 (W.D.N.Y. 2008)

In this case, a subcontractor sued a general contractor and a surety for failure to make payments for work performed on a construction project for a county water authority.  The surety filed cross-claims against the general contractor pursuant to an indemnification agreement.  The water authority asserted indemnification claims against the surety.  The surety subsequently settled the claims against the general contractor and moved for summary judgment as to all cross-claims.  The district court granted the motion.

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Eaton Elec., Inc. v. Dormitory Auth. of New York, 852 N.Y.S.2d 363 (N.Y. App. Div. 2008)

In this case, plaintiff contracted with Dormitory Authority of New York to perform electrical work in the renovation of a library.  Plaintiff experienced delays and financial problems, eventually forcing it to assign its payment interest in the construction contract to AXA Global Risks U.S. Insurance Company in exchange for financial assistance.  Later, in return for payment from Dormitory Authority, AXA executed a release to discharge Dormitory Authority from any claims of liability in relation to the underlying construction project.  That release later became problematic when plaintiff sought an additional $12 million from Dormitory Authority as reimbursement for unanticipated and unforeseen additional costs incurred on the project.  Dormitory Authority moved for summary judgment, arguing that AXA had released it from any such liability.  The Supreme Court denied Dormitory Authority’s motion, reasoning that AXA lacked authority to release any such claims.

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Lepp v. V.M.S. Realty Trust, 2008 WL 375971 (Mass. App. Div. Feb. 8, 2008)

This is a per curiam decision by the Massachusetts Appellate Division that addresses the liability of homebuilders and vendors.  In Lepp, the purchasers of a newly built home sued the vendor of the home for breach of contract for failure to install the agreed upon insulation.  The purchasers also sued the builder, who was an employee of the vendor, for breach of contract, breach of the implied warranty of good workmanship, intentional infliction of emotional distress and violation of M.G.L. c. 93A — the Massachusetts Consumer Protection Act.  The trial court found for the plaintiffs on all counts in a jury-waived trial and the defendants appealed.

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CZAR, Inc. v. Heath, 939 A.2d 837 (N.J. Super. Ct. App. Div. 2008)

In this case, a homeowner brought claims against a custom kitchen contractor under New Jersey’s Consumer Fraud Act.  During the construction of a new home, the homeowner had contracted directly with a custom kitchen contractor for the installation of custom kitchen cabinets, interior doors, a front door, and certain moldings.  The trial concluded that the home improvement practice regulations found in N.J.A.C. 13:45A-16.1 to 16.2 were not applicable to plaintiff and, therefore, dismissed the CFA claims.  The trial court reasoned that the kitchen contractor's work was not a “home improvement” within the meaning of the regulation because the construction and installation of the doors, cabinets, and moldings were part of the construction of a new residence and, therefore, excluded from the definition of “home improvement.”

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Ohio Cas. Ins. Co. v. Time Warner Entm’t Co., L.P., 244 S.W.3d 885 (Tex. App. Feb. 6, 2008)

In this case, a general contractor brought a declaratory judgment action against its subcontractor’s primary and umbrella insurers to recover the cost of removing and replacing fiber optic cable that the subcontractor installed improperly.  Although the trial court granted summary judgment in favor of the general contractor, the Dallas Court of Appeals reversed.

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Vanderbeek v. San Jacinto Methodist Hosp., 246 S.W.3d 346 (Tex. App. 2008)

A plumber working on a remodel project for San Jacinto Methodist Hospital cut and capped a drainage pipe from a sink in an adjacent room.  Although he instructed a hospital employee that the sink was out of order and should not be used, hospital employees poured a drain cleaner into the sink when it wouldn’t drain.  When the plumber returned to remove the drainage line cap, a caustic liquid came out of the pipe, causing him chemical burns.  He sued the hospital for negligence for allowing caustic drain cleaner into the sink when he had given notice it was not to be used.

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Atlantis Int’l Constr. Servs., Inc. v. Sluggo, LLC, 71 Mass. App. Ct. 1106 (2008) (Unpublished)

In this unpublished decision, the Massachusetts Appeals Court held that an owner could be held liable for fraud, breach of contract and violation of the Massachusetts Consumer Protection Act (M.G.L. c. 93A) for inducing a general contractor continue work based on the promise that the general contractor’s numerous disputed change order requests would be paid in full.  After completion of the project the owner refused to pay many of the general contractor’s change orders.

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Intercon Constr., Inc. v. Williamsport Mun. Water Auth., 2008 WL 239554 (M.D. Pa. Jan. 28, 2008)

This case involved standard breach of contract claims and counterclaims between a general contractor and a public municipal authority.  In addition, the municipal authority also sued a performance bond surety on claims of bad faith. The municipal authority alleged that the manner in which the surety investigated and denied coverage under the performance bond, and its withholding of certain information from the authority, constituted bad faith under the Pennsylvania bad faith insurance statute.

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U.S. Fid. & Guar. Co. v. E. Contractors, Inc., 2008 WL 190758 (D. Mass. Jan. 15, 2008)

In this case, the Federal District Court for the District of Massachusetts issued an order on a Motion to Intervene and Dissolve Attachment.  The motion to intervene was allowed and the petition for dissolution was allowed in part and denied in part.  Plaintiff was an issuer of security bonds and defendant was a construction company.  Plaintiff issued a series of bonds to secure defendant’s performance on several construction projects.  Defendant defaulted on the projects and subsequently plaintiff successfully secured an ex parte attachment of four of defendant’s properties.  Another insurance company that had also entered into surety agreements with the defendant previously secured a judgment against the defendant for $8,342,233.27.  This judgment was never satisfied due to defendant’s insolvency.  The insurance company claimed an interest in the attached properties.

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Ins. Co. of New York v. Central Mut. Ins. Co., 850 N.Y.S.2d 56 (N.Y. App. Div. 2008)

In this case, the First Department examined cross-motions for summary judgment in relation to contractual indemnification.  Plaintiffs – the property owner and general contractor in a related personal injury action – brought this action against a subcontractor, S&S Construction Group.  Plaintiffs sought a declaration that S&S’s liability insurer, Central Mutual Insurance, was required to defend and indemnify plaintiffs in connection with the underlying action.  According to plaintiffs, the contract between the general contractor/plaintiff and S&S required S&S to obtain insurance covering plaintiffs.

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Murray's Iron Works, Inc. v. Boyce, 158 Cal. App. 4th 1279 (2008)

In this case, the California Court of Appeal addressed whether the prompt payment penalty statute was properly applied against the owner and, in doing so, provided a definition for progress payments under the statute.

California requires that an owner pay its contractor any progress payment due as to which there is no good faith dispute within 30 days following receipt of a demand for payment.  If there is a good faith dispute between the owner and contactor, the owner may withhold no more than 150 percent of the disputed amount.  Any amount wrongfully withheld by the owner is subject to a penalty of 2 percent per month on the improperly withheld amount, in lieu of any interest otherwise due.  The prevailing party is also entitled to attorney’s fees and costs.  (Cal. Civ. Code § 3260.1.)  Other statutes establish similar requirements for progress payments between contractors and subcontractors (Bus. & Prof. Code § 7108.5) and for payment of retention (Cal. Civ. Code § 3260).

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Luby v. Rotterdam Square, L.P., 850 N.Y.S.2d 252 (N.Y. App. Div. 2008)

In this negligence action, plaintiff sustained injuries when he fell over a transition flare of a handicapped ramp.  That ramp had been constructed by defendant Clifford H. Quay & Sons fourteen years earlier pursuant to a contract between Quay and another defendant, Rotterdam Square.  The architectural firm that designed the plans pursuant to which the ramp was constructed was also named as a defendant.  Two issues were at stake.

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Leyden v. Spaulding & Slye Co., Inc., 2008 WL 241085 (Mass. Super. Ct. Jan. 3, 2008)

In this case the Superior Court granted an architect’s motion for summary judgment on claims brought against it by a construction worker for personal injuries sustained when the worker fell through a collapsed sump pump grate.  The defendant architect argued it was entitled to summary judgment because it owed no duty of care to the plaintiff.

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Worth & Co., Inc. v. Dept. of Labor & Ind., 938 A. 2d 239 (Pa. 2007)

In this case, the Supreme Court of Pennsylvania decided the appeal of a general contractor, whose final payment was being withheld by a public school district on account of the GC’s subcontractor’s failure to pay prevailing wages to its workers.  Under the authority of regulations issued by the Department of Labor & Industry’s prevailing wage division, the Department had instructed the school district to withhold final payment from the general contractor, because workers of the subcontractor remainied unpaid following the subcontractor’s default and eventual bankruptcy.

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Berish v. Bornstein, 71 Mass. App. Ct. 1101 (2007) (Unpublished)

In this unpublished decision, the Massachusetts Appeals Court addressed the implied warranty of habitability as applied to construction of a residential condominium development.  Plaintiffs, who were trustees of a condominium association, appealed from the trial court’s ruling that faulty window installation in the units was not a latent defect and that faulty chimney attachments were not a safety threat to condominium unit inhabitants.  Plaintiffs also challenged the judge’s findings that certain other claims were time-barred.  The defendants (the condominium developer, an original trustee of the condominium trust, and the general contractor) cross-appealed from the judge’s ruling on the timeliness of plaintiffs' claims for breach of the implied warranty of habitability and for negligence.

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Am. Ins. Co. v. Siena Constr. Co., 2007 WL 4711517 (Mass. Super. Ct. Dec. 24, 2007)

In this case, the Superior Court considered two consolidated cases that both arose out of an explosion of a newly constructed building.  In both cases the plaintiffs were insurance companies acting as subrogees.  Defendants (general contractors and subcontractors) moved for summary judgment on the ground that recovery was barred by “Waiver of Subrogation” clauses found in the contracts.  The plaintiffs argued that the waiver of subrogation clause did not extend to damages caused by a defendant's gross negligence or its violation of a statute or regulation.  In addition, they argued that the subcontractors were not protected by the waiver of subrogation clause.

The original judge in the case held that analogous case law concerning exculpatory clauses supported a denial of defendants’ summary judgment motion.  The judge also held that, by its terms, the waiver of subrogation clause did not include subcontractors.  In the consolidated case, the new judge accepted the rulings of prior judge and the motions for summary judgment were allowed in part and denied in part.  Plaintiffs’ claims were allowed to proceed but as to defendants with valid waiver of subrogation clauses (contractors not subcontractors) recovery was limited to damages arising from defendant’s gross negligence, or negligence premised on a violation of statute or regulation.

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Am. Safety Cas. Ins. Co. v. Olympia, 162 Wash.2d 762, 174 P.3d 54 (2007)

The Washington Supreme Court affirmed summary judgment for the City of Olympia against American Safety Casualty Insurance Company where the contractor (whose rights the surety was pursuing) failed to comply with contractual notice procedures.  During construction, the contractor had written letters purporting to reserve its right to bring a claim at a later date.  The contractor defaulted, and the surety completed the job.  After completion, the surety presented Olympia with a Request for Equitable Adjustment.  Though Olympia expressed a willingness to enter into negotiations if the surety provided sufficient supporting documentation, Olympia ultimately rejected the surety’s claim for failing to comply with the contract’s claims provisions.  When the surety filed suit, the Thurston County Superior Court granted Olympia summary judgment, which was then overturned by Division Two.

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V.L. Rendina, Inc. v. City of Harrisburg, 938 A.2d 988 (Pa. 2007)

In this case, a plurality of the Pennsylvania Supreme Court held that a municipality may apply its business privilege tax to the gross receipts from construction work performed within its borders regardless of whether the contractor maintained a “base of operations” within the municipality.  Reversing a Commonwealth Court decision in favor of the construction company, the majority focused on whether the company’s activities in Harrisburg fell within the definitive of “business” contained in the City’s tax ordinance.

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Capital Heat, Inc. v. Buchheit, 848 N.Y.S.2d 481 (N.Y. App. Div. 2007)

In this case, the court awarded recovery in quantum meruit to plaintiff for heating and cooling services it had provided at the defendant's residence.  The court explained that:  (i) by issuing invoices, (ii) the plaintiff established an expectation that it would receive payment for its services, (iii) the invoices established the reasonable value of those services, and (iv) the defendant did not dispute that the plaintiff performed the heating and cooling work in good faith or of acceptable quality.

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Madigan v. Trace Constr., Inc., 878 N.E.2d 568 (Mass. App. Ct. 2007)

In this case, the Appeals Court dismissed an action seeking discharge of several mechanics’ liens encumbering plaintiff’s real estate.  The plaintiff, who was the owner of the encumbered property, claimed that because the general contractors entered into contracts with a tenant of the plaintiff, not the plaintiff, it was inappropriate to encumber plaintiff’s real property with a mechanic’s lien.  The Appeals Court affirmed the Superior Court dismissal, holding that summary discharge of a mechanic’s lien by the court was inappropriate and that defendants were entitled to discovery. 

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Grand Crossing, L.P. v. U.S. Underwriters Ins. Co., 2007 WL 4591989 (S.D.N.Y. Dec. 18, 2007)

This case concerned an insurance policy claim made for partial coverage of settlement in a wrongful death action based on a construction site fatality.  The Southern District of New York denied the parties' cross-motions for summary judgment. 

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Marcor Remediation, Inc. v. County of Broome, 847 N.Y.S.2d 702 (N.Y. App. Div. 2007)

In this case, defendant hired the plaintiff contractor to perform lead abatement work.  The contractor sued for breach of contract and quantum meruit, alleging that the county had failed to pay for work performed.  The terms of the contract prohibited plaintiff from bringing any action arising out of the contract unless plaintiff “strictly complied with all requirements relating to the giving of notices and information with respect to such claim . . . .”  The contract further required plaintiff to file a “verified, detailed statement” in order to claim that it performed revised work under the contract, as plaintiff claimed here.  Plaintiff appealed after the action was dismissed by the trial court.

The appellate court affirmed, finding that plaintiff had failed to provide a "verified, detailed statement."  The court explained:   “compliance with notice of claim provisions of a municipal contract constitutes a condition precedent to the commencement of an action for breach of contract which may only be avoided if the municipality acted in a manner that precluded the other party from complying.”

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Baker v. City of Plattsburgh, 847 N.Y.S.2d 300 (N.Y. App. Div. 2007)

In this case, plaintiff sought recovery of property damages due to water runoff caused by a utilities renovation and paving project carried out by defendants on an adjacent property.  The Supreme Court granted defendants’ summary judgment motion, dismissing the causes of action against them alleging that water runoff caused property damage.  However, defendants’ motion papers did not specifically address the remaining causes of action for trespass, due process rights violations and zoning ordinance violations, and thus those claims remained.

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Fabcon East, LLC v. Steiner Bldg. Co. NYC, 848 N.Y.S.2d 267 (N.Y. App. Div. 2007)

In this case, the court upheld an award of damages and contractually-based attorneys’ fees to plaintiff, finding sufficient support for the conclusion that defendant had breached the parties’ construction subcontract and the implied covenant of good faith and fair dealing.  However, the court reduced the attorneys’ fee award in the amount of $19,250.50 -- the amount of fees incurred by plaintiff in a separate action commenced against it by a sub-contractor.  The court explained:  “the subcontract provision dealing with an award of contractual attorney’s fees to the prevailing party in a covered action did not include the New Jersey action, to which [defendant] was not a party.”

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Colin C&M Corp. v. Bacon Constr. Co., 2007 WL 4711503 (Mass. Super. Ct. Dec. 7, 2007)

In this case, the Superior Court considered a subcontractor’s claims against a general contractor and the general contractor’s counterclaims relating to a public high school construction project.  In finding for the general contractor, the court found that the subcontractor was not entitled to damages because it walked off of the project and therefore failed to comply in strict accordance with the subcontract.  Further, the court found that the general contractor was entitled to damages because it had to finish the subcontractor’s work and pay outstanding invoices to the subcontractor’s vendors.

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Butt v. Bovis Lend Lease LMB, Inc., 2007 WL 4260519 (N.Y. App. Div. 2007 Dec. 6, 2007)

In this case, plaintiff sued for common law negligence and Labor Law violations, seeking to recover for injuries allegedly sustained when he fell from ladder while plastering a ceiling beam of an interior stairwell at a public school.  Defendants included the City of New York which owned the premises, the Board of Education which operated and maintained the premises, the general contractor, and the construction manager.  Defendants moved to dismiss the Labor Law violations on summary judgment, arguing that the work the plaintiff was performing when he was injured was outside the scope of his contract, and thus was not covered by the Labor Law.  The court denied the motion, finding that such a defense only applied to the benefit of parties who did not have authority to supervise or control the work at issue.  The court explained that such a defense would not apply to the owner’s liability because injury to a worker may not be circumscribed by contract.  Further, conflicting evidence had been presented as to whether the work was outside the scope of the contract., and so the issue was not capable of resolution on summary judgment. 

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Urbina v. 26 Court St. Assocs., LLC, 847 N.Y.S.2d 67 (N.Y. App. Div. 2007)

This case involved causes of action for negligence, violations of Labor Law §§ 200, 240(1) and 241(6), and loss of consortium brought by an electrician, Urbina, and his wife.  Plaintiffs sought to recover damages for injuries sustained when a platform upon which Urbina was kneeling collapsed at a construction site.  That platform had been installed by the drywall subcontractor, R&J Construction Corp. for its own use.  Plaintiffs brought claims against the owner of the premises, the lessee of the premises, and R&J.  The issues on appeal involved the reasonableness of the damages awarded to plaintiffs, and contractual indemnification between defendants. 

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Oates v. Larkin, 2007 WL 4442361 (Mass. Super. Ct. Dec. 5, 2007)

In this case, the Superior Court considered motions to dismiss brought by multiple defendants.  The case arose out of a large-scale condominium construction project.  Plaintiff was president of the association of unit owners and the defendants bringing motions to dismiss were the developer, its board of managers, the construction manager and the architect (who sought to join the motion to dismiss filed by the construction manager).  The developers’ and managers’ motions to dismiss were denied, provided that plaintiff complied with an order to amend the complaint.  The motion to dismiss by the construction manager was allowed in part, denied in part and the architect’s motion to join was allowed.

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BMC West Corp.  v. Horkley, 144 Idaho 890, 174 P.3d 399 (2007)

BMC West provided materials to contractor Davies for work on Horkley's commercial structure.  All sales were on an open account.  Davies did not fully pay BMC, so BMC filed liens “on the land on which the buildings were located, and on the buildings themselves.”  BMC then sued Horkley for payment and to foreclose the liens.  Horkley asserted the “open account defense,” which applies when a materialman “relies exclusively on the general credit of the purchaser, and does not look to the land, structure or building as additional security for the materials sold on credit.”  To avoid the defense and make the lien valid, the materials “must be furnished with special reference to their use in a particular building.”

Because BMC had tracked the materials sold to Davis for use on Horkley's building, it was not relying on Davies' general credit alone.  Since BMC was able to track the materials used to a specific project, the court granted summary judgment in favor of BMC.  The Idaho Supreme Court affirmed, including an award of attorney fees.

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Wysocki v. Kel-Tech Constr. Inc., 847 N.Y.S.2d 166 (N.Y. App. Div. 2007)

Here, the court denied the defendants’-contractors’ summary judgment motion to dismiss the breach of contract claims brought against them by plaintiffs-construction workers.  The court reasoned that the plaintiffs’ contractual rights would be independent of a collective bargaining agreement whether or not Labor Law § 220 was incorporated into the public works contracts at issue.  The court explained that Labor Law § 220 applies across the board, making its requirements non-negotiable.  Therefore, the collective bargaining agreement did not have any bearing on the public works contracts at issue in the case.

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Felice v. Am. A.W.S., Corp., 846 N.Y.S.2d 656 (N.Y. App. Div. 2007)

In this action, plaintiffs sought to recover for personal injuries and property damages arising out of defendant's renovation of plaintiffs’ residence.  Plaintiffs alleged that defendant had negligently performed the work, resulting in water leaks and the formation of mold.  Defendant sought leave to interpose an amended answer which included, inter alia, the affirmative defense of statute of limitations.  Defendant contended that the plaintiffs' causes of action sounded in negligence and thus were governed by a three-year statute of limitations. 

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James Corp. v. N. Allegheny Sch. Dist., 2007 WL 4208589 (Pa. Commw. Ct. Nov. 30, 2007)

In this case, the Commonwealth Court of Pennsylvania held that the trial court properly measured acceleration damages sustained by a general contractor under the “measured mile” theory of recovery.  In a multi-phased construction project entered into by the school district and James Corporation, the district delayed James’ performance by failing to obtain permits in a timely manner, by requiring extra work which interfered with the planned sequence of work, by relocating fencing and reconfiguring the erosion and sedimentation pond, and by requiring removal of asbestos (which was not in the contract).  Amidst the delay, the district abandoned the contract schedule, refused to consider the time impact on the contractor’s planned sequence, and then terminated the contractor after substantial completion.  The trial court awarded James damages for acceleration/compression of work, unpaid invoices, prevailing wages withheld, attorneys’ fees and expenses.

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Am. Envtl. Contractors, Inc. v. Garber Constr. Co., Inc., 2007 WL 4358169 (Mass. Super. Ct. Nov. 26, 2007)

The Superior Court heard a jury-waived trial in which the plaintiff subcontractor sought damages from the defendant general contractor after an unexpected roof collapse created the need for substantial extra work on the project.  The general contractor and the project manager executed several change orders for extra work after the collapse.  The subcontractor claimed that it was not compensated for the full amount of extra work by the general contractor.  The general contractor claimed it was owed the money by the project manager and filed a third-party complaint.

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United States ex rel. E&H Steel Corp. v. C. Pyramid Enters., Inc., 509 F.3d 184 (3d Cir. 2007)

This litigation arose after a steel supplier on a U.S. government construction project asserted a claim against a payment bond issued by the general contractor (to which it had no contractual privity) pursuant to the Miller Act (40 U.S.C. § 3131).  Because the Miller Act limits the availability of such bond claims to either entities in contractual privity with the bond issuer (the GC) or those entities having contractual privity with a "subcontractor,” the key issue was whether the entity with which the supplier contracted was a “subcontractor.”  The District Court for the District of New Jersey, applying a number of a factors, determined that it was not a subcontractor and dismissed the bond claim.  

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Mulcaire v. Buffalo Structural Steel Constr. Corp., 846 N.Y.S.2d 838 (N.Y. App. Div. 2007)

In this case, a construction worker and a family member alleged Labor Law and common law negligence causes of action for injuries plaintiff sustained while installing floor decking in a building undergoing construction.  Plaintiff slipped and fell through an uncovered opening approximately 18 feet to the floor.  The trial court granted in part and denied in part plaintiffs' motion for summary judgment, and denied defendants' motion for summary judgment.  Defendants appealed.

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