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

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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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 Ct. 1106 (2008) (Unpublished)

In this unpublished decision, the Massachusetts Appeals Court held that an owner could be held liable for fraud, breach of contract and violation of the Massachusetts Consumer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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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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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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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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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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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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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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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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N.B. Kenney Co., Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 876 N.E.2d 1175 (Mass. App. Ct. 2007)

In this case, the Massachusetts Appeals Court held that for the purposes of the statute of limitations, a subcontractor’s time to file suit begins to run at the completion of all work on a particular subcontract, including any change orders thereto. 

The defendant insurance company in this case moved for summary judgment on the basis that the plaintiff completed the change order giving rise to the complaint more than one year prior to filing suit and that the suit was therefor time-barred.  The court rejected this argument, holding that the subcontractor's work on other change orders pursuant to the same subcontract tolled the limitations period until all work on the subcontract was complete.  The court noted that continued work for the same owner or on the same location, but under a new and independent subcontract would not have tolled the limitations period.

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Rockwell Roofing, Inc. v. Jan Five Corp., 2007 WL 4248144 (Mass. Super. Ct. Nov. 15, 2007)

The Superior Court ruled on plaintiff’s motion for summary judgment on both its claim and defendant’s counterclaim.  The court allowed summary judgment in part and denied it in part.  Plaintiff subcontractor filed the action against defendant general contractor and its payment bond surety.  The defendant general contractor filed a counterclaim for breach of contract.  The subcontractor moved for summary judgment on the general contractor’s counterclaim, arguing that the general contractor failed to provide notice as required by the contract prior to performing work on the contract that was the responsibility of the subcontractor.  Summary judgment was granted, dismissing this portion of the general contractor’s counterclaim.

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Belanger v. N. Am. Specialty Ins. Co., 504 F. 3d 147 (1st Cir. 2007)

In this case, North American Specialty Insurance Company, a surety, brought a suit against its principal contractor, Seacoast Crane Company and Seacoast’s owners (the “Belangers”) to recover monies paid out under a performance bond.  NAS had issued the performance bond on behalf of Seacoast to build a corporate headquarters project for DCC Development Corporation.  In the suit, initiated in the United States District Court for the District of Maine, NAS asserted claims for indemnification, breach of contract and specific performance based on a judgment that was entered against NAS and Seacoast, and against the Belangers for breach of contract in connection with the DCC project.

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Prof’l Servs. Group v. Town of Rockland, 515 F. Supp. 2d 179 (D. Mass. 2007)

In this case, the Federal District Court for the District of Massachusetts issued a decision concerning the subversion of the public procurement process by a bidder.  The defendant-contractor colluded with a public official of the plaintiff-town to ensure that it would be the only bidder and would thereby receive the bid at an artificially high price.  The court held that this collusion violated the Massachusetts Consumer Protection Act (M.G.L. c. 93A), and that the town was entitled to double damages pursuant to that that statute because the contractor’s violations were knowing and willful.  The contractor attempted to escape liability by arguing that the employee who was responsible for the bidding and collusion was a rogue employee.  The court rejected this argument and found that the contractor’s employee was acting within the scope of his employment and therefore the contractor was liable by the doctrine of respondeat superior.

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Great N. Ins. Co. v. Architectural Env'ts, Inc., 514 F. Supp. 2d 139 (D. Mass. 2007)

On a motion for summary judgment, the Federal District Court for the District of Massachusetts held that for the purposes of the statute of repose, the limitation period began running when the temporary certificate of occupancy was issued on the building in question. 

In this case, a fire occurred at a commercial property as a result of an electrical malfunction.  The occupant’s insurer sued the mechanical and electrical contractor responsible for design and renovation of the building.  The court held that the statute of repose began to run on the date that the temporary certificate of occupancy was issued on the building, and not at the later date when the permanent certificate was issued.  Thus, the plaintiff’s claims for negligence and implied warranties were time-barred by the six-year statute of repose.  Express warranties, however, were not subject to the statute of repose and those claims survived summary judgment.

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Site, Inc. v. Peabody Constr. Co., Inc., 2007 WL 2458482 (Mass. App. Ct. Aug. 30, 2007) (Unpublished)

In this case, the Appeals Court affirmed the Superior Court’s denial of plaintiffs’ motion to vacate an arbitration award.  The defendant general contractor, Peabody Construction Company, refused to pay the plaintiff subcontractor, Site, Inc. on a subcontract after terminating the subcontractor prior to completion of the job.  The case went to arbitration.  After considering extensive evidence and testimony, the arbitrator found that the general contractor’s failure to make timely payment was a material breach of the subcontract.  Although the arbitrator found that general contractor’s material breach of the subcontract excused any subsequent failure by the subcontractor to perform its obligations under the subcontract, the arbitrator found that the subcontractor was not entitled to payment for the work it performed because the subcontractor “had not completely [and satisfactorily] performed all of its obligations under the subcontract.”

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Parker v. John Moriarty & Assocs., Inc., 2007 WL 2429719 (Mass. Super. Ct. July 29, 2007)

This case arose from personal injuries suffered by the plaintiff while working at a construction site in Brighton, Massachusetts.  The general contractor of the construction project subcontracted some aspects of the project; plaintiff was an employee of the subcontractor.  The plaintiff filed a complaint, asserting a negligence claim against the general contractor for negligently failing to provide a safe workplace and the general contractor settled.  By third-party complaint, the general contractor brought claims against the subcontractor and the subcontractor’s insurer for indemnification, contribution, and breach of contract for failure to provide insurance.  The insurer moved for summary judgment on all claims against it, arguing that the insurance policy did not provide coverage on the claims.  The insurer argued that it did not owe a duty to defend the claims and did not have a duty to indemnify because the general contractor was not covered for the claims under the additional insured endorsement and such claims were excluded from coverage under the cross-suits provision.  The general contractor opposed and filed a cross-motion for summary judgment, asserting that, as a matter of law, the policy provided coverage in that the insurer had a duty to defend and to indemnify for the settlement of the claims.  The subcontractor also moved for summary judgment in its favor on the breach of contract claim for failure to provide insurance, arguing that it had named the general contractor as an additional insured on the policy.

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Garcia v. Federics, 2007 WL 2367672 (Mass. Super. Ct. July 9, 2007)

In this case, the Superior Court granted a motion for summary judgment brought by the architect and engineer of a project on claims asserted by a construction worker injured on the job.  As grounds for its ruling, the court found that neither the contract between the owner and the construction company nor the contract for architect’s services assigned responsibility to the architect or engineer for safety issues on the project.  Thus, the court found that the architect and engineer did not have a contractual duty to protect the worker against unsafe working conditions. 

In reaching its decision, the court rejected plaintiff’s argument that the Massachusetts Building Code created a duty for the architect and engineer to control safety conditions.  Specifically, the court noted that the Massachusetts Building Code places the responsibility for the conditions of the building on the owner of the building rather than the architect or engineer.  Plaintiff’s additional claims also failed because he could not demonstrate a reasonable expectation of proving that the architect and the engineer had a duty of care to the worker.  The cross-claims by the owner failed because the architect and the engineer were not directly liable to the worker.

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Fireman’s Fund Ins. Co. v. Falco Constr. Corp., 493 F. Supp. 2d 143 (D. Mass. 2007)

A property insurer, Fireman’s Fund Insurance Company, asserted claims against a general contractor and subcontractor after an insured home sustained fire damage.  The general contractor had performed extensive renovations on the home, and the subcontractor had constructed a masonry fireplace at the home.  In Counts I and II, the insurer sought recovery from the subcontractor for improperly installing the fireplace on theories of negligence and breach of contract.  In Counts III and IV, the insurer brought the same claims against the general contractor for failing to supervise.  The general contractor subsequently filed a cross-claim for indemnification against the subcontractor.

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Nat’l Labor Relations Bd. v. Champagne Drywall, Inc., 502 F. Supp. 2d 179 (D. Mass. 2007)

Under the National Labor Relations Act, the National Labor Relations Board moved for an order from the court to enforce two subpoenas duces tecum served on Champagne Drywall as part of the NLRB’s investigation of Champagne's alleged practice of refusing to consider and hire qualified job applicants based on their union affiliation.  Champagne objected because even though the data sought existed within the organization, Champagne did not possess the information in the format sought by the NLRB – namely, as a list.

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