Upon Owner's Termination-for-Convenience, Contractor Must Cease All Work and Cancel All Orders

Quality Asphalt Paving, Inc. v. Dept. of Transp. & Public Facilities, 71 P.3d 865 (Alaska 2003)

In this case, a state agency accepted bids on a contract to widen a state highway.  Shortly after the state awarded the contract to a contractor, the state terminated it under a termination-for-convenience clause in the contract.  The contractor sued for costs and damages.  A hearing officer awarded damages to the contractor, but did not award prejudgment interest.  The trial court affirmed, and the parties appealed.

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Reasonable Methods for Computing Damages are Actual Total Method and Jury Verdict Method

Power Constructors, Inc. v. Taylor & Hintze, 960 P.2d 20 (Alaska 1998)

In this case, a contractor brought a legal malpractice action against its former law firm and several attorneys.  The contractor’s case was a “trial-within-a-trial” approach, which required the contractor to demonstrate the merits of its underlying case (concerning a deficient powerline construction project) as part of its malpractice case.  At trial, the jury returned a verdict for the contractor, and both parties appealed the damages award in the jury’s verdict.

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Disfavored Total Cost Method of Calculating Damages May Be Used Only in Limited Circumstances

Geolar, Inc. v. Gilbert/Commw. Inc. of Mich., 874 P.2d 937 (Alaska 1994)

In this case, a contractor sued an electric company for breach of contract against the company’s agent for tortious interference with contract.  The contractor also sued the electric company for breach of contract, and calculated its damages based on direct costs, lost of efficiency costs, and delay costs.  The trial court dismissed the contractor’s claim for intentional interference with contract, but the breach of contract claim went to trial, where a jury based an award of damages to the contractor on the contractor’s calculation.

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Use of Total Cost Method of Calculating Damages Fails to Prove Cause of Damages

Conom Alaska v. Bell Lavalin, Inc., 842 P.2d 148 (Alaska 1992)

In this case, when a dispute arose regarding the schedule for completing construction, the subcontractor sued the general contractor for professional negligence and breach of contract.  The trial court granted the contractor’s motion to dismiss the professional negligence claim because the subcontractor failed to adequately establish a basis for the jury to determine the amount of damages.  The subcontractor appealed.

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State Agency Entitled to Liquidated Damages Even Though Agency Caused Delay

Southeast Alaska Constr. Co., Inc. v. Dept. of Transp. & Public Facilities, 791 P.2d 339 (Alaska 1990)

This case concerned a public construction project that suffered from design and material deficiencies.  When the contractor failed to complete the project, the agency sued and won on a claim for liquidated damages.  The contractor appealed, arguing that because the agency was responsible for the delay, it should not be entitled to damages.

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General Contractor's Recovery for Invalidation of Contract Limited if Contractor Was on Notice of Statutory or Regulatory Violation

Earthmovers of Fairbanks, Inc. v. Dept. of Transp. & Public Facilities, 765 P.2d 1360 (Alaska 1989)

In this case, the Supreme Court of Alaska considered as a case of first impression what remedy is appropriate for a contractor who is awarded a public contract that turns out to violate a statute or regulation.  The facts concerned Earthmovers of Fairbanks (EM), the apparent low bidder for a public project.  When a discrepancy was discovered in the second lowest bid and corrected as permitted by the applicable Standard Specification, the state agency awarded the project to the second lowest bidder.  EM sued and won a permanent injunction.  EM also prevailed on appeal, and the contract was awarded to EM on April 27.  However, on April 30, the Supreme Court of Alaska reversed itself and on May 1, it entered a stay.  Subsequently, EM sued the state agency for damages. 

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Liquidated Damages Clause in Prime Contract is Incorporated in Subcontract when Subcontract Contains Conduit Clause

Indus. Indem. Co. v. Wick Constr. Co., 680 P.2d 1100 (Alaska 1984)

In this case, the Alaska State Housing Authority (ASHA) awarded a contract for the construction of a courthouse and office building to a general contractor.  The prime contract featured a liquidated damages clause limiting the contractor’s liability to $400 per day of delay.  The subcontract between the general contractor and subcontractor included a so-called “flow down” or “conduit clause” incorporating the liquidated damages clause from the prime contract.  When the general contractor sued the subcontractor for delays, the trial court awarded the general contractor $765,654.00 in total damages.  The subcontractor appealed, arguing that the liquidated damages clause applied.

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