Construction Law Insights

Gentry Locke Rakes & Moore, LLP v. Pride Constr., LLC, 2020 U.S. Dist. LEXIS 185605, 2020 WL 5947590 (W.D. Va. Oct. 6, 2020)

Gentry Lock Rakes & More, LLP (“Gentry Locke”) brought a state law claim against its former client Pride Construction, LLP (“Pride”) for $130,851.52 in unpaid legal services after representing Pride in an arbitration and insurance claim related to a construction project.

Marathon Res. Mgmt. Grp., LLC v. C. Cornell, Inc., 2020 U.S. Dist. LEXIS 109892, 2020 WL 3442322 (E.D. Va. Jun. 23, 2020)

In March 2018, defendant C. Cornell, Inc. d/b/a Certa Pro Painters of College Station (“Certa Pro”) obtained a default judgment against Marathon Residential Management Group, LLC (“Marathon”) in the district court of Brazos County, Texas (“Texas Court”) for breach of contract for failure to pay Certa Pro for painting and cleaning rooms in a building in College Station, Texas, as invoiced to Marathon on August 22, 2017 and September 11, 2017. The Texas Court awarded Certa Pro $40,263.00 for its unpaid invoices, $15,000 in reasonable attorneys’ fees, pre- and post-judgment interest, and costs. In December 2018, Marathon sued Certa Pro in Richmond Circuit Court, and Certa Pro removed the action to federal court.

Sullivan Mech. Constrs., Inc. v. KBE Bldg. Corp., 2020 U.S. Dist. LEXIS 91751, 2020 WL 2735726 (W.D. Va. May 26, 2020)

In November 2017, the Commonwealth of Virginia and the Rector and Visitors of the University of Virginia (collectively “Owner”) contracted with KBE Building Corporation (“KBE”) for KBE to construct upper-class student housing (the “Project”). KBE and Sullivan Mechanical Contractors Inc. (“Sullivan”) entered into a $5.1 million subcontract for Sullivan to perform plumbing and HVAC work at the Project (the “Subcontract”). KBE paid Sullivan $4.9 million on the Project, but Sullivan alleged that it was stilled owed $579,000.00. On March 16, 2020, Sullivan filed its Complaint and on March 18, 2020 Sullivan served KBE through KBE’s registered agent. KBE’s answer was due on April 8, 2020. On April 9, 2020, Sullivan filed a motion for entry of default judgment against

Manganaro MidAtlantic, LLC v. KBE Bldg. Corp, 2020 U.S. Dist. LEXIS 160144 (W.D. Va. Sep. 1, 2020)

In November 2017, the Commonwealth of Virginia and the Rector and Visitors of the University of Virginia (collectively “Owner”) contracted with KBE Building Corporation (“KBE”) for KBE to construct upper-class student housing (the “Project”). Federal Insurance Company (“Federal”) issued a payment bond on behalf of KBE for the Project. In February 2018, KBE and Atlantic Constructors, Inc. (“Atlantic”) entered into a subcontract for Atlantic to provide fire protection work at the Project. Atlantic completed its work on the Project in November 2019. Atlantic alleged that KBE breached the subcontract, KBE and Federal breached the payment bond, and that Atlantic was owed $168,175.00 for its completed work.

Flour Fed. Sols., LLC v. Bae Sys. Ordinance Sys., 2020 U.S. Dist. LEXIS 106997, 2020 WL 3304196 (W.D. Va. June 18, 2020)

In 2011, the United States Army (“Army”) awarded BAE Systems Ordinance Systems, Inc. (“BAE”) a basic ordering agreement under which BAE was responsible for modernization projects at the Radford Army Ammunition Plan in Radford, Virginia (the “Plant”). BAE issued a request for proposal to Flour Federal Solutions, LLC (“Flour”) for the design, construction, and commission of a temporary facility on October 7, 2015. Later in October, the Army modified the contract, which changed the location of the facility. In December, the Army changed the project to a permanent facility instead of a temporary facility. On December 30, 2015, BAE and Flour executed a subcontract for Flour to design a temporary facility. Throughout 2016, BAE issued several modifications to Flour reflecting the modifications BAE received from the Army. In March 2016, BAE directed Flour to begin construction of a permanent facility. On September 1, 2016, BAE issued another

Byrne v. City of Alexandria, 842 S.E.2d 409 (Va. May 28, 2020)

Thomas Byrne (“Byrne”) owned a home in within the “Old Historic Alexandria District” (“Property”) of the City of Alexandria (“City”). The central part of the Property was built in the 1780s but the front section was added in the 1870s in the then-prevailing Victorian architectural style. The City adopted an ordinance that provided “no building or structure … shall be erected [within the historic district] unless approved by the review board or, on appeal, by the governing body of the locality as being architecturally compatible.” The Property needed renovations and repairs when purchased by Byrne, so he submitted it plans for this work to the Board of Architectural Review (“BAR”), obtained the necessary approvals from the BAR, obtained the necessary permits, and proceeded with the work. Byrne’s proposal, however, did not include the removal or alteration of an existing fence along the property that was erected in the 1960s and consisted of a low brick “knee wall” surmounted by cast iron fencing.

During the reconstruction work, Byrne demolished the existing wall and fence to permit access for the renovation work. The BAR issued a violation notice to Byrne because he failed to obtain the approval prerequisite to the demolition and replacement of the fence. Byrne submitted a plan to install a Victorian metal “wicket and spear” fence pierced by two gates, a pedestrian gate and an eight-foot-wide double gate. The BAR referred Byrne’s application to the city staff, which concluded the “wicket and spear” design was architecturally and historically appropriate, but the eight-foot wide double gate was out of scale for pedestrian gates in the district. The BAR approved a “Certificate of Appropriateness” as to the materials and design of the fence, but with the condition that the width of the double gate not exceed six feet. Byrne appealed the BAR’s decision to the City Council, which held a hearing on Byrne’s appeal on February 24, 2018 and unanimously affirmed the decision of the BAR. Byrne appealed the City Council’s decision to the City of Alexandria’s Circuit Court. In response, the City filed a demurrer and a motion craving oyer of the legislative record that had been before the City Council when it made its decision. The court granted the City’s motion craving oyer. After the legislative record was filed, the court sustained the City’s demurrer and dismissed Byrne’s petition with prejudice on January 9, 2019. Byrne appealed to the Supreme Court of Virginia, arguing that the circuit court erred in (1) granting the City’s motion craving oyer and (2) sustaining the City’s demurrer.

The Court held that the circuit court did not err in granting the City’s motion craving oyer of the legislative record in Byrne’s appeal. A motion craving oyer is a remedy afforded to a litigant who has been sued on a claim based upon a document mentioned in a claimant’s pleading but not made a part of the record. The motion should be granted only where the missing document is essential to the claim. Here the legislative record was essential to Byrne’s claim.

The Court held that the circuit court did not err in sustaining the City’s demurrer. The legislative record filed contained a number of documents, including the meeting minutes of the initial BAR meeting, the recommendations of the City’s staff, the minutes of the second BAR meeting, the transcript of the public hearing held by the BAR, Byrne’s appeal to the City Council, the City’s staff’s report to the City Council, the transcript of the public hearing held by the City Council, and the minutes of the City Council’s final meeting. Virginia Code § 15.2-2306(A)(3) provides that, upon appeal from a decision of a locality’s governing body, the circuit court may reverse the governing body’s decision if the court finds, on review, that the decision of the governing body is contrary to law or that the decision was arbitrary and constituted an abuse of discretion. A city council acting on a certificate of appropriateness performs a legislative function. Such actions are presumed correct. Legislative action is reasonable if the matter in issue is fairly debatable. An issue is fairly debatable when the evidence offered in support of the opposing views would lead objective and reasonable persons to reach different conclusions. Reasonable and objective persons might readily have reached different conclusions with regard to the architectural and historical appropriateness of the width and placement of Byrne’s proposed gate. That issue was fairly debatable. The legislative record added to the pleadings as a result of the motion craving oyer makes clear that the City Council, when deciding Byrne’s appeal, had all the essential facts before it, considered all the opinions and arguments presented by interested parties, and made its decision within its lawful authority.

PLDR Law Scott Kowalski 1 PLDR Law Mark Burgin 1

Thomas Wolf 002 Kenneth Stout 002 Jason Goldsmith 002 

Am. Cigar Factory, LLC v. City of Norfolk, 2020 Va. Cir. LEXIS 116 (City of Norfolk Cir. Ct. Aug. 14, 2020)

American Cigar Factory, LLC (“ACF”) purchased property located in the City of Norfolk (the “Property”) in September 2014 and developed plans to rehabilitate the American Cigar Factory building (the “Historic Structure”). Because the Historic Structure had fallen into disrepair, ACF reduced the four-story structure to three and a half walls – with no roof – and shored the south-facing wall with steel beams and concrete barriers. On June 29, 2015, ACF received a letter from the City of Norfolk (“City”) code enforcement official stating that the Historic Structure was unsafe and uninhabitable, ACF had 35 days to repair the building, and, if ACF failed to comply, the Historic Structure would be demolished. On October 9, 2016, an upper portion of the west-facing brick wall collapsed during a hurricane. Three days later, the City notified ACF that intended to demolish all structures on the Property. On October 14, 2016, the Court granted a temporary injunction. The

Advanced Training Grp. Worldwide, Inc. v. ProActive Techs. Inc., 2020 U.S. Dist. LEXIS 141855 (E.D. Va. Aug. 7, 2020)

ProActive Technologies, Inc. (“ProActive”) filed two motions in limine: (1) preclude ATG from introducing any evidence relating to any claimed damages; (2) preclude expert testimony from ATG’s rebuttal expert John M. Falk (“Falk”). Advanced Training Group Worldwide, Inc. (“ATG”) filed three motions in limine: (1) preclude any reliance by ProActive on the Business Judgment Rule or the Advice-of-Counsel defense; (2) preclude expert testimony from ProActive’s expert James A. Hughes, Jr. (“Hughes”) to the extent that it offers impermissible legal opinions; (3) preclude certain testimony from Adam Newbold (“Newbold”).

Pro-Telligent, LLC v. Amex Int'l, Inc., 2020 U.S. Dist. LEXIS 64191 (E.D. Va. Feb. 28, 2020)

The United States Agency of International Development (“USAID”) awarded Amex International, Inc. (“Amex”) a contract, portions of which Amex subcontracted to Pro-Telligent. Pro-Telligent completed its work and invoiced Amex, who, in turn, invoiced USAID for Pro-Telligent’s work. By invoicing USAID, Amex certified that prior payments had been made to Pro-Telligent from previous payments received by Amex from USAID and that timely payments would be made from the proceeds covered by Amex’s then current payment applications. Amex received progress payments from USAID. Despite Pro-Telligent’s multiple demands for payment, Amex did not pay Pro-Telligent. Amex owed Pro-Telligent $279,660.27.

Marroquin v. Dan Ryan Builders Mid-Atlantic, LLC, 2020 U.S. Dist. LEXIS 42300, 2020 WL 1171963 (W.D. Va. Mar. 11, 2020)

On September 23, 2017, Oscar and Olga Marroquin (the “Marroquins”) and Dan Ryan Builders Mid-Atlantic, LLC (“Dan Ryan”) entered into a contract (the “Contract”) for Dan Ryan to sell a residential home. The Marroquins signed a Limited Warranty Agreement issued by Quality Builders Warranty Corporation (“QBW”), which was attached to the Agreement of Sale. On October 31, 2017, the Marroquins took possession of the property, but alleged that it was not free from structural defects, would not pass without objection in the trade, was not constructed in a workmanlike manner, and was not fit for habitation. Between February 23, 2018 and May 3, 2018, the Frederick County Inspection Department issued a series of Correction Orders to Dan Ryan concerning the issues with the construction of the Marroquins’ home. In April 2018, the Marroquins emailed Dan Ryan a list of issues related to the home. On July 10, 2018, a building code official sent a

Comfort Sys. of Va. v. P. J. Potter Enters., 2020 Va. Cir. LEXIS 19 (City of Chesapeake Cir. Ct. Feb. 11, 2020)

Comfort Systems of Virginia, Inc., et al (“Petitioners”) engaged in an arbitration with P. J. Potter Enterprises, Inc., et al (“Respondents”). The Petitioners are located in Chesapeake and the Respondents are located in Suffolk. Prior to the final arbitration award (“Order”), a settlement agreement containing the agreement to arbitrate, a signed term sheet setting forth the particulars of the arbitration, and meetings with the arbitrator occurred in Virginia Beach. The final telephone conference resulting in the arbitrator’s issuance of the Order was held while one attorney was in South Carolina and the arbitrator was not in Virginia Beach.

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