Construction Law Insights

Cove v. Wallen, 2020 Va. Cir. LEXIS 31 (Fairfax Cnty. Cir. Ct. Mar. 11, 2020)

Plaintiffs Edward and Pamela Cover, along with Defendants Millard Wallen, III and Dianna Wallen and Jeff and Cathy Black formed LLCs for the purpose of purchasing and developing the Stonecroft Business Park (“Stonecroft Project”) in Chantilly, Virginia. Their combined business entity, Stonecroft Business Park, LLC borrowed $13,700,000 from La Jolla Bank to finance the Stonecroft Project. The loan was personally guaranteed by the Coves, Wallens, and Blacks, individually. In September 2010, the venture defaulted on the loan, and the successor bank to La Jolla filed suit in the Eastern District of Virginia seeking over $13.8 million. After the Blacks declared bankruptcy, the Coves and Wallens settled the lawsuit with the bank in late 2011. In return for releasing the Coves

Mid-Atlantic Arena, LLC v. City of Va. Beach, 2020 Va. Unpub. LEXIS 16 2020 WL 2780000 (Va. May 28, 2020)

The City of Virginia Beach (“City”) and United States Management, LLC (“USM”) entered into a development agreement (“DA”) for USM to construct an entertainment and sports arena in Virginia Beach. USM assigned its rights under the DA to Mid-Atlantic, LLC (“MAA”). As developer, MAA had to construct the arena in accordance with a master plan and obtain financing for the endeavor. The City offered to lease some of its most valuable real estate for the arena, provide $78 million in infrastructure improvements to support the arena, and significant tax incentives. The City retained the right to approve MAA’s construction loan commitment and documents evidencing and securing the construction loan (the “Construction Loan Documents”). The City’s review and

Advanced Training Grp. Worldwide, Inc. v. ProActive Techs. Inc., 2020 U.S. Dist. LEXIS 68221 (E.D. Va. Apr. 17, 2020)

ProActive Technologies, Inc. (“ProActive”) provides services in the military simulation and training system marketplace. Advanced Training Group Worldwide, Inc. (“ATG”) provides advanced tactical training services for the military, but had never bid on or performed a federal government contract. On November 21, 2011, ProActive contacted ATG about exploring mutual business opportunities. On June 8, 2012, ProActive send ATG a draft Memorandum of Understanding (“Draft MOU”) regarding the formation of a joint venture between ATG and ProActive called Raptor Training Services, LLC (“RTS” or “JV”) to bid and perform the Special Operations Forces RAPTOR III IDIQ contract with the United States Army (the “RAPTOR Contract”). The Draft MOU set

James G. Davis Constr. Corp. v. FFTJ, Inc., 841 S.E.2d 642 (Va. May 14, 2020)

On February 19, 2016, James G. Davis Construction Corporation (“Davis”), the general contractor, and H&2 Drywall Contractors (“H&2”) entered into a $1,269,396 subcontract with 10% retainage for H&2 to complete the drywall and metal framing for the project. H&2 entered into a Credit Application and Agreement with FTJ, Inc. f/k/a Ciesco Inc. (“FTJ”) for the purchase of materials. Renan Buendia, principal of H&2, personally guaranteed to pay FTJ any amounts owed by H&2. Davis, H&2, and FTJ entered into a joint check agreement, whereby: (i) FTJ would send invoices to Davis and H&2; (ii) Davis would write joint checks payable to H&2 and FTJ and deliver the checks to H&2; and (iii) H&2 would endorse the check and turn it over to FTJ.

Wasa Props., L.L.C. v. Chesapeake Bay Contrs., Inc., 103 Va. Cir. 423 (City of Chesapeake Cir. Ct. Dec. 11, 2019)

 In April 2015, Wasa Properties, L.L.C. (“Wasa”) and Chesapeake Bay Contractors, Inc. (“CBC”) executed a contract for CBC to complete utility work at Lake Thrasher (the “Contract”). Wasa alleged that CBC breached the Contract and caused $405,584.90 in damages by incorrectly installing water lines, which damaged other utility lines. The Contract contained the following (the “Indemnification Provision”):

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