Construction Law Insights

Sherman v. South Grading, Inc., 2019 Va. Cir. LEXIS 10 (City of Chesapeake Cir. Ct. Jan. 28, 2019)

Heather Sherman (“Sherman”), judgment creditor/garnishor, obtained a judgment against Southern Grading, Inc. (“SGI”), judgment debtor. Sherman caused the court to issue a summons in garnishment on November 21, 2017. Sherman then served the garnishment summons on Virtexco Corporation (“Virtexco”) on November 30, 2017. Virtexco filed a garnishment answer that stated that it held no funds owed to SGI. Sherman disagreed and asked the court to determine Virtexco’s potential liability. A garnishment proceeding is a separate proceeding in which the judgment creditor enforces the lien of his execution against property or contractual rights of the judgment debtor which are in the hands of a third person, the garnishee. The judgment creditor stands on no higher ground than the judgment debtor and can have no rights greater than the judgment debtor possess. Raley v. Haider, 286 Va. 164, 170 (2013). Upon service the summons on the garnishee, the debts already due to the judgment debtor when the summons in garnishment is served upon the garnishee and any indebtedness of the garnishee to the garnishee to the judgment debtor which arises between the date of service of such summons on the garnishee and the return date of the summons is subject to garnishment.

JES Constr., LLC v. Bd. of Contrs., Dep't of Prof'l & Occupational Regulation, 2018 Va. App. LEXIS 361, 2018 WL 6738972 (Va. App. Dec. 26, 2018)

On February 19, 2015, JES Construction, LLC (“JES”) contracted with a homeowner to make certain foundation repairs to the home (the “Contract”). The Contract provided that JES would obtain a permit for its work. On April 23, 2015, six days into the project, the homeowner contacted JES and inquired about whether a permit was obtained. JES said that it had requested a permit, but it had not been delivered. On April 24, 2015, the homeowner learned from Henrico County that JES had not yet applied for a permit. The next day, JES applied for a permit, but the request was rejected. JES corrected the deficiency and Henrico County issued the permit on May 15, 2015.

Loch Levan Land L.P. v. Bd. of Supervisors, No. 181043, 2018 Va. LEXIS 204 (Va., Dec. 18, 2018)

In the early 1990s, the plaintiffs (collectively “HHHunt”) built an upscale housing development known as “Wyndham” in northern Henrico County (the “County”), abutting the Hanover County line. The Chickahominy River marks the border between the counties. To access the development, HHHunt also constructed Dominion Club Drive, a “spine” road connecting Wyndham with surrounding arteries. HHHunt’s original plans showed Dominion Club Drive extending into Hanover County, where it also owned several non-contiguous parcels of land. The physical road however, terminated in a cul-de-sac on the Henrico County side of the river. Since 1991, Henrico County’s Major Thoroughfare Plan has included Dominion Club Drive as built, but not the planned extension into Hanover County. In 1992, HHHunt posted a separate bond to extend Dominion Club Drive to the Chickahominy. Over the next 25 years, HHHunt updated the bond several times, but never constructed the road. In the interim, as a cost-saving measure, HHHunt split the plat for the unbuilt extension of Dominion Club Drive into two pieces.

Mobilization Funding, LLC v. W.M. Jordan Co., 2018 U.S. Dist. LEXIS 202748, 2018 WL 6257109 (E.D. Va. Nov. 28, 2018)

Riverside Retirement Services (“Riverside”) contracted with W.M. Jordan (“Jordan”) to build the Apartments at Patriots Colony in Williamsburg, Virginia. Jordan’s project manager, Jerry Barthelemy (“Barthelemy”), approved payments to subcontractors. On December 12, 2016, Jordan and Mexarg Contractors, LLC (“Mexarg”) entered into a subcontract (the “Subcontract”). On January 10, 2018, Mexarg’s subcontractors complained that Mexarg had not paid them. On January 20, 2018, Mexarg submitted a payment application to Jordan. Barthelemy approved Mexarg’s payment application, but did not notify Mexarg that he had approved the payment application. On January 30, 2018, Mexarg entered into a loan agreement with Mobilization Funding, LLC (“Mobilization”) for up to $361,155.00 and was secured by contract assignments, among other collateral (the “Loan Agreement”). On January 31, 2018, Jordan entered into a Joint Check Agreement (“JCA”) with Mexarg and Mobilization. During the JCA and Loan Agreement, Mobilization did not know about Mexarg’s failure to pay subcontractors.

A.E. v. Ashford Gateway TRS Corp. Grp., 2018 U.S. Dist. LEXIS 198948, 2018 WL 6106375 (E.D. Va. Nov. 21, 2018)

A.E. (a child) and her family were attending a family reunion in a Marriott Hotel ballroom in Arlington, Virginia. During the reunion, a large light fixture fell from the ceiling on A.E.’s head. Prior to the incident, Marriott, Humphrey Rich Construction Group, Inc. (“Humphrey”), and Cabling Solutions of Rutherford County, LLC (“Cabling Solutions” and collectively the “Defendants”) all participated in the design, installation, and/or inspection of the ballroom as part of a renovation. Two days before the incident, Cabling Solutions removed the lenses in the ballroom’s lighting in order to gain access to the work above the ceiling, negligently reinstalling them without properly securing them. A.E. filed a lawsuit against the Defendants in the Circuit Court for the City of Richmond. Cabling Solutions removed the case to Federal District Court and moved to transfer venue form the Richmond Division to the Alexandria Division of the Eastern District of Virginia.

JK Moving & Storage, Inc. v. Winmar Constr., Inc., 2018 U.S. Dist. LEXIS 194932, 2018 WL 5985678 (E.D. Va. Nov. 13, 2018)

JK Moving & Storage, Inc. (Plaintiff) is a Virginia corporation in the moving, storage, and relocation industry sued Winmar Construction, Inc. (Defendant), a commercial interior and hospitality construction company. The lawsuit was originally filed in Virginia state court and removed to Federal District Court. After a two-day trial, a jury awarded Plaintiff just over $74,000, the full amount of its complaint. Plaintiff then filed a bill of costs in the amount of over $12,000, and attorney’s fees of $399,915.50. Defendant objected to the requested attorney’s fees as well as the costs.

Mediko, P.C. v. Roanoke, 2018 Va. Cir. LEXIS 623 (Cir. Ct. Roanoke Cnty, Nov. 9, 2018)

Roanoke County (the “County”) serves as the fiscal agent for the Western Virginia Regional Jail Authority (“WVRJA”) and handles procurements for the WVRJA. On November 8, 2016, the County published a request for proposals (“RFP”) for healthcare services for inmates of the jail pursuant to the Virginia Public Procurement Act (“VPPA”). The RFP requested sealed, formal proposals from qualified firms and stated that the contract would not necessarily be awarded to the lowest bidder, but would be awarded to the proposer who could best meet the requirements based on the criteria enumerated in Virginia Code § 2.2-4301. Mediko, P.C. (“Mediko”) submitted a bid. After various meetings and conversations, Mediko thought the County and WVRJA had

InDyne, Inc. v. Beacon Occupational Health & Safety Servs., 2018 U.S. Dist. LEXIS 182031, 2018 WL 5270331 (E.D. Va. Oct. 23, 2018)

InDyne, Inc. (“InDyne”) submitted a proposal to the United States Air Force (“Air Force”) for a contract to provide services and support for the Solid State Phased Array Radar System and proposed Beacon Occupational Health & Safety Services, Inc. (“Beacon”) as a subcontractor to provide certain medical services. Before submitting the proposal to the Air Force, InDyne and Beacon entered into a teaming agreement (the “Teaming Agreement”). On March 5, 2018, InDyne was awarded the contract with the Air Force. On March 30, 2018, InDyne requested a best and final offer from Beacon for the scope of work to be included in the potential subcontract between InDyne and Beacon. On April 4, 2018, Beacon replied with a letter arguing that the Teaming

United States v. Lyon, 2018 U.S. App. LEXIS 29046 (4th Cir. Oct. 16, 2018)

A jury convicted brothers Dennis Joe Lyon and Daniel Frank Lyon, Jr. of counts related to a scheme in which they provided worthless surety bonds to obtain a construction contract from the United States Department of Veterans Affairs (“VA”). Dennis Lyon was convicted of conspiracy to defraud the United States, 14 counts of major fraud against the United States by obtaining money under false pretenses, and 3 counts of wire fraud. The court sentenced Dennis Lyon to 10 years imprisonment, followed by 3 years of supervised release, and ordered $4,030,577.42 in restitution. Daniel Lyon was convicted of 13 counts of major fraud against the United States by obtaining money under false pretenses. The court sentenced Daniel Lyon to 4 years imprisonment, followed by 3 years supervised release, and ordered $3,707,985.87 in restitution. The Lyons appealed, challenging the court’s admission of evidence regarding two prior surety fraud schemes and the sufficiency of the evidence to support their convictions.

Fluor Enters. v. Mitsubishi Hitachi power Sys. Ams., 2018 U.S. Dist LEXIS 176250, 2018 WL 4956513 (E.D. Va. Oct. 12, 2018)

Mitsubishi Hitachi Power Systems Americas, Inc. (“Mitsubishi”) and Virginia Electric and Power Company (“VEPCO”) entered into a Turbine Supply Agreement (“TSA”) for Mitsubishi to sell turbine generators to VEPCO for use in a power generating facility in Brunswick County (the “Brunswick Project”). VEPCO contracted with Fluor Enterprises, Inc. (“Fluor”) for Fluor to construct the Brunswick Project (the “Fluor Contract”). Under the Fluor Contract, Fluor was responsible to engineer, procure, and construct the Brunswick Project. Around the same time VEPCO entered into the Fluor Contract, it assigned the TSA to Fluor through a Partial Assignment, Agreement (the “Assignment Agreement”), but VEPCO retained the obligation to pay Mitsubishi per the terms of the

Akian, Inc. v. Spotsylvania Cty. Pub. Schs., 2018 Va. Cir. LEXIS 329 (cir. Ct. Spotsylvania Cnty. Sept. 21, 2018) 

Spotsylvania County Public Schools (“Spotsylvania County”) and Akian, Inc. entered into a construction contract for a contract price of $687,095.00 to make alterations and additions to Spotsylvania County’s Family Resource Center building (the “Project”). Several major delays and issues arose related to the Project and Spotsylvania County failed to pay Plaintiff $197,675.29 of the Contract price. Plaintiff sued Spotsylvania County for breach of contract, unjust enrichment, and quantum meruit. In response, Spotsylvania County filed a plea in bar on the unjust enrichment and quantum meruit claims, arguing that sovereign immunity bars such quasi-contract claims against a Virginia Public School Board.

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