Construction Law Insights

Uretek, ICR Midatlantic, Inc. v. Adams Robins Enters., 2017 U.S. Dist. LEXIS 205740, 2017 WL 6391489 (W.D. Va. Dec. 14, 2017)

Adams Robinson Enterprises, Inc. (“Adams Robinson”), a Kentucky corporation with its principal place of business in Ohio, and Uretek, ICR Midatlantic, Inc. (“Uretek”), a North Carolina corporation, entered into a subcontract, under which Uretek agreed to perform certain work for a construction project in Charlottesville. Adams Robinson also secured a payment bond from Liberty Mutual. The parties agreed that Ohio law would govern the subcontract and that they would submit any dispute arising under the subcontract to arbitration.

WCC Cable, Inc. v. G4S Tech., LLC, 2017 U.S. Dist. LEXIS 208728 (W.D. Va. Dec. 15, 2017)

Defendants G4S Technology LLC (“G4S”) and Liberty Mutual Insurance Company (“Liberty Mutual,” and collectively with G4S, “Defendants”) had each filed a Motion to Stay, or in the Alternative, Dismiss or Transfer, Based Upon the First-to-File Rule and a Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a). Additionally, Defendants had each filed a Motion to Dismiss for Failure to State a Claim, each of which sought dismissal of plaintiff WCC Cable, Inc.’s (“WCC”) Complaint.

Emerald Point, LLC v. Hawkins, 294 Va. 544, 808 S.E.2d 384 (2017)

Plaintiff tenants lived in an apartment unit located in the Emerald Point Apartments in Virginia Beach (the “City”), which was managed by the Breeden Company, Inc. (“Breeden”) for the owner, Emerald Point, LLC. The unit was heated by a natural gas furnace. On the evening of November 26, 2012, the alarm in the carbon monoxide detector in the unit sounded. A maintenance worker sent by Breeden replaced the batteries in the device. Shortly after he left, the alarm sounded again.

U-Haul Real Estate Co. v. City Council of Falls Church, 2017 Va. Unpub. LEXIS 36 (Va. Dec. 28, 2017)

U-Haul Real Estate Company (“U-Haul”) owned property in the City of Falls Church. The land adjacent to U-Haul was owned by Northern Virginia Regional Park Authority (“NVRPA”). This land boarded a stream bed and, due to their proximity to the stream, a portion of U-Haul’s property and nearly all of NVRPS’s property are located within a resource protection area (“RPA”), as designated by the Falls Church City Code (“City Code”).

Heard Constr., Inc. v. Waterfront Marine Constr. Co., 2018 Va. Cir. LEXIS 14 (Cir. Ct. City of Chesapeake Jan. 10, 2018)

Although the opinion only refers briefly to facts related to the case, it appears that the plaintiff sued the defendant regarding a lost bid for a project for the Navy. In their motion to set aside the jury verdict, Defendants contended that the only document produced by Plaintiff at trial showed an anticipated $887,150 in lost profits, and impermissibly considered overhead as profit. Plaintiffs replied that the jury’s direct damages award was reasonably calculated and fully supported by the evidence. Plaintiff had been able to produce a bid spreadsheet and detailed testimony through its president, in support of its claim. While such evidence is weak, the jury accepted it, and it was deemed sufficient to support such award. The court denied the Defendants’ motion in this respect.

United States v. John C. Grimberg Co., 2017 U.S. Dist. LEXIS 173362, 2017 WL 4698217 (E.D. Va. Oct. 19, 2017)

A subcontractor sued the prime contractor and the contractor’s surety to recover payment for work performed on a federal construction project, including costs incurred as a result of a delay not attributable to the subcontractor’s performance. After the action was filed, prime contractor paid the subcontractor for work performed but not for costs incurred due to delay. The subcontractor then sought partial summary against the surety for its delay damages.

Atkins v. A.H. Elec. Contrs., LLC, 2017 Va. Unpub. LEXIS 27, 2017 WL 4681945 (Va. Oct. 19, 2017)

A.H. Electric Contractors, LLC (the “LLC”) filed a complaint against Tamika Atkins (“Atkins”) for enforcement of a mechanic’s lien against her home. The complaint alleged that the LLC entered into a written contract with Atkins in 2014 under which the LLC would perform certain home repairs and that Atkins pay for the work performed. Atkins filed a counterclaim in which she asserted a claim for breach of contract alleging that the LLC failed to complete its work under the contract.

Taja Invs., LLC v. Peerless Ins. Co., 2017 U.S. App. LEXIS 19855, 2017 WL 4534788 (4th Cir. 2017)

Taja Construction LLC was renovating a row house owned by affiliate Taja Investments LLC (together, “Taja”) when the east wall of the house collapsed. Taja sought to recover the cost of repairs under its insurance policy, issued by Peerless Insurance Company (“Pearless”). Peerless determined that the collapse was caused by Taja’s failure to support the building’s foundation properly while excavating the basement, and it denied Taja’s claim under a policy exclusion for defects in construction or workmanship. Peerless also denied the claim under a separate exclusion for damages resulting from movement of the earth’s surface. Taja filed suit against Peerless for breach of its insurance policy.

HB 823 General contractors; waiver or diminishment of lien rights; subordination of lien rights.

Provides that a general contractor may not waive or diminish his lien rights in a contract in advance of furnishing any labor, services, or materials. The bill further provides that, notwithstanding the prohibition against waiving or diminishing such a lien right, a general contractor may, prior to or after providing any labor, services, or materials, contract to subordinate his lien rights to prior and later recorded deeds of trust, provided that such contract is (i) in writing and (ii) signed by any general contractor whose lien rights are being subordinated pursuant to such contract. This bill is identical to SB 319.

M&C Hauling & Constr., Inc. v. Hale, 2018 Va. Cir. LEXIS 114 (Cir. Ct. Fairfax Cnty. June 28, 2018)

In Virginia, a party has five years to bring a claim based on a written contract, but only three years to sue for breach of a verbal or non-written contract. In this case, the sub-subcontractor’s claim was out of time unless certain unsigned documents were considered to be a written contract.

Construction suretyship is a tripartite relationship where a surety issues bonds to guarantee a contractor’s obligation for performance and payment to an “obligee.” Sureties expect that their bond obligations will mirror the contractor’s obligations as defined by the operative contracts. However, in certain circumstances, the surety’s liability may be greater than the contractor’s obligations and exceed the operative contract terms.

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