Construction Law Insights

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”):

Tingler v. Graystone Homes, Inc., 834 S.E.2d 244 (Va. Oct. 29, 2019)

In 2009, George and Crystal Tingler (the “Tinglers”) executed a construction contract with Graystone Homes, Inc. (“Graystone”) to construct a new home on property owned by a family run company, Belle Meade Farm, LLC (“Belle Meade”). The contract did not mention Belle Meade, but it was the owner of the land on which the home was built and it made the payments due under the contract to Graystone. The Tinglers claimed they entered into the contract on behalf of their principal, Belle Meade, and that Belle Meade was in privity of contract with Graystone. Alternatively, the Tinglers argued that Belle Meade was an intended third-party beneficiary.

Pole Green Dev. Co., LLC v. Columbia Gas Transmission, LLC, 785 Fed. Appx. 106 (4th Cir. Oct. 29, 2019)

Pole Green Development Company, LLC (“Pole Green”) sued Columbia Gas Transmission, LLC (“Columbia Gas”) after Pole Green’s prospective agreement to purchase property for residential development fell through because of a pipeline easement held by Columbia Gas. In its amended complaint Pole Green asserted inverse condemnation, unlawful taking, breach of contract, and intentional interference. The district court dismissed the case and Pole Green appealed.

Krauss v. Apex Custom Homes, LLC, 2019 Va. Cir. LEXIS 1203 (Loudoun Cnty. Cir. Ct. Nov. 26, 2020)

On March 24, 2015, Paul and Holly Krauss (“Krausses”) contracted with Scott Prendergast (“Prendergast”) and Apex Custom Homes, LLC (“Apex Homes”) for the construction of a home (the “Home”) and with Daniel Morgan (“Morgan”) and Apex Custom Pools, LLC (“Apex Pools”) for the construction of a swimming pool at the Home (the “Pool”). Prendergast was the sole member of Apex Homes. Morgan was the sole member of Apex Pools. Apex Pools, through Morgan, used Apex Homes’ general contractor license, but neither Prendergast nor Apex Homes knew that Morgan used the general contractor’s license of Prendergast or that Morgan was unlicensed when Prendergast referred the Krausses to Apex Pools. Before the bench trial, Apex Pools filed for bankruptcy.

In re Kerlavage v. America's Home Place, Inc., 2019 Va. Cir. LEXIS 1188 (Spotsylvania Cnty. Cir. Ct. Dec. 16, 2019)

In re Kerlavage v. America's Home Place, Inc., 2019 Va. Cir. LEXIS 1187 (Spotsylvania Cnty. Cir. Ct. Dec. 23, 2019)

According to Jeffrey Kerlavage’s (“Kerlavage”) Amended Complaint, he contracted with America’s Home Place, Inc. (“AHP”) in June and July of 2014 to build a home. Construction began in October of 2014. AHP hired several subcontractors to perform work on the home. Specifically, Indoor Comfort Experts, LLC (“ICE”) to install an HVAC system, Building Services Group d/b/a Cary Quality Insulation and Building Products (“Cary Quality”) to install a vapor barrier within the crawl space, Vangorder Contracting, LLC (“Vangorder”) for carpentry in the crawl space, Brandonbilt Foundation, Inc. (“Brandonbilt”) to waterproof the home and lay a foundation drain in the crawlspace, and PermaTreat Pest Control Company (“PermaTreat”) to remediate mold in the home. After

Appalachian Power Co. v. Wagman Heavy Civil, Inc., 2018 U.S. Dist. LEXIS 201259, 2019 WL 6188303 (W.D. Va. Nov. 20, 2019)

Wagman Heavy Civil, Inc. (“Wagman”) and the Virginia Department of Transportation (“VDOT”) contracted for the design and construction of a highway interchange project (the “Project”). Wagman and the Appalachian Power Company (“APCO”) entered into a written contract (the “Written Contract”) for APCO to remove and relocate its utility structures (the “Work”) in order to facilitate construction for the Project.

Radiance Capital Receivables v. Foster, 2019 Va. LEXIS 135 (Va. Oct. 24, 2019)

On February 21, 2006, Robert D. Foster (“Foster”) and Wilson Building, LLC (“Wilson Building”) executed a promissory note in favor of New South Federal Savings Bank (“New South”) based on a construction loan. On March 2, 2006, Foster and James M. Wilson (“Wilson”) executed a Continuing Guaranty agreement (“Guaranty”) with New South in which they personally guaranteed and promised to pay all of Wilson Building’s debt. In the Guaranty, Foster and Wilson agreed to “waive[] the benefit of any statute of limitations or other defenses affecting the … Guarantor’s liability” under the agreement. Wilson Building eventually defaulted on the promissory note and notice of default and demand for payment was sent to Foster and Wilson on August 27, 2010. On November 23, 2015, Radiance Capital Receivables Fourteen, LLC (“Radiance Capital”), the assignee of New South and holder of the promissory note and Guaranty, filed a complaint against

Faneuil, Inc. v. 3M Co., No. 181202, 2019 WL 4891274 (Va. Oct. 3, 2019)

Plaintiff Faneuil, Inc. (“Faneuil”) entered into a subcontract with 3M Company (“3M”) to provide customer services in support of 3M’s contract with Elizabeth River Crossings Opco, LLC (“ERC”) to assess and collect tolls at facilities between Norfolk and Portsmouth, Virginia. Under the contract between Faneuil and 3M, 3M agreed to pay Faneuil $2.52 million in annual base compensation in equal monthly payments; 3M could reduce those base payments for a fiscal quarter if the previous quarter included fewer than expected toll transactions; 3M must reimburse Faneuil for

James River Stucco, Inc. v. Monticello Overlook Owners’ Ass’n, No. CL16-408, 2019 Va. Cir. LEXIS 468 (Cir. Ct. Sep. 30, 2019)

In the case-in-chief, plaintiff, James River Stucco, Inc. (“James River”), alleged that defendant, Monticello Overlook Owners’ Association (“Monticello”), breached their Agreement (“Agreement” or “Contract”) by failing to pay its outstanding balance. Monticello counterclaimed that James River had itself breached first by hiring subcontractors, thereby failing to staff the job with a sufficient number of appropriately skilled “employees” as the Contract provided. Id. The Court held that the Contract did not require James River to use only workers who were on its own payroll.

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