Challenging Enforceability of Liquidated Damages (In Federal Construction Context)
March 11, 2024 —
David Adelstein - Florida Construction Legal UpdatesA recent summary judgment opinion from the Armed Services Board of Contract Appeals (ASBCA), Appeals Of – BCI Construction USA, Inc.,ASBCA No. 6257, 2024 WL 773324 (2024), contains a worthy discussion regarding a contractor’s challenge to the government’s assessment of liquidated damages, specifically the enforceability of the liquidated damages rate. Although this challenge is in the federal context, this discussion would be more expansive and apply outside of the federal context.
When dealing with the enforceability of a liquidated damages, the ASBCA “examines whether the liquidated damages amount ‘is extravagant, or disproportionate to the amount of property loss, as to show that compensation was not the object aimed at or as to imply fraud, mistake, circumvention or oppression.” Appeals of – BCI Construction USA, Inc. (citation omitted).
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Fraud Claims and Breach Of Warranty Claims Against Manufacturer
March 04, 2024 —
David Adelstein - Florida Construction Legal UpdatesA recent case touches upon two issues that are noteworthy when considering fraud claims and breach of warranty claims against a manufacturer. Below contains a discussion on these claims.
Independent Tort Doctrine
“Florida’s independent tort doctrine provides that a party may not recover in tort for a contract dispute unless the tort is independent of any breach of contract.” MidAmerica C2L Inc. v. Siemens Energy, Inc., 2024 WL 414620, *6 (M.D.Fla. 2024). This means tort allegations and claims MUST be separate and distinct from performance under the contract. Id. (citation omitted).
In MidAmerica C2L, a plaintiff sued a manufacturer relating to sophisticated equipment for a coal gasification plant. The parties entered into different agreements for the equipment and a license where the plaintiff could use the manufacturer’s patented technology for its coal gasification plants. A dispute arose and the plaintiff sued the manufacturer under various legal theories. The manufacturer moved for summary judgment.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Exploring Architects’ Perspectives on AI: A Survey of Fears and Hopes
March 19, 2024 —
Aarni Heiskanen - AEC BusinessRIBA, the Royal Institute of British Architects, ran a survey in late 2023 with 500 respondents on the impact of AI on their profession. The study also explored the near-term outlook for AI adoption and use. The results reveal divided opinions among architects. A popular view is that AI threatens the profession, even though a larger portion sees tools like AI as necessary in the coming years.
The Present Use of AI
The respondents were asked, for the projects they are currently working on, how often their practice used AI in any way.
In all, 41% said that they use AI to some degree. Of those, 43% agree that AI has improved efficiency in the architectural design processes, while 24% disagree.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
GOP, States, Industry Challenge EPA Project Water Impact Rule
January 02, 2024 —
Pam McFarland - Engineering News-RecordDays after the Biden administration rule reinstated state authority under the U.S. Clean Water Act to delay or deny construction permits on projects with water quality impacts, attorneys general from 11 Republican-led states, along with the American Petroleum Association, National Hydropower Association and Interstate Natural Gas Association of America, filed suit in federal court.
Reprinted courtesy of
Pam McFarland, Engineering News-Record
Ms. McFarland may be contacted at mcfarlandp@enr.com
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Project Completion Determines Mechanics Lien Recording Deadline
April 08, 2024 —
William L. Porter - Porter Law GroupThe California mechanics lien is one of the most powerful collection remedies available to contractors, subcontractors and suppliers who are unpaid for work performed and materials supplied in relation to a California private works construction project. The mechanics lien allows the claimant to actually sell the property where the work was carried out in order to obtain payment, entirely of course, against the wishes of the property owner. There are a number of important steps to follow and timelines to be met in order to pursue this remedy.
First, Understand Your Preliminary Notice Deadline
Working within deadlines is absolutely crucial to preserving mechanics lien rights under California law. The deadlines differ, depending on whether you are a “direct” contractor, also known as “original” or “prime” contractor (one who contracts directly with the property owner) or a subcontractor or material supplier. The process begins with the serving of a “preliminary notice” no later than 20 days after the party serving the preliminary notice begins supplying labor or materials to the project. Direct contractors are only required to serve the preliminary notice on the construction lender (Civil Code section 8200-8216), whereas subcontractors and material suppliers must serve not only the construction lender, but also the owner and direct contractor (see Civil Code section 8200(e)).
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William L. Porter, Porter Law GroupMr. Porter may be contacted at
bporter@porterlaw.com
Meet the Forum's In-House Counsel: RACHEL CLANCY
November 16, 2023 —
Jessica Knox - The Dispute ResolverCompany: Lobar, Inc.
Email: rachel.clancy@lobar.com
Website: www.lobar.com
College: York College of Pennsylvania (Bachelor of Science in Marketing, 2001)
Graduate School: Florida Institute of Technology (MBA in Acquisition and Contract Management, 2004)
Law School: Penn State University, Dickinson School of Law (JD 2007)
States Where Company Operates/Does Business: Headquarters are in Dillsburg, PA; construction projects located in Pennsylvania, Maryland, New York, and West Virginia
Q: Describe your background and the path you took to becoming in-house counsel.
A: Before law school, I spent three years as a Contract Specialist writing construction contracts for the Department of Defense, Naval Facilities Command in New Jersey. I had no idea I'd eventually find my way back to construction. After law school, I spent five years in the business department of a local law firm handling corporate formations, a variety of commercial contracts, and learning some real estate law. After another four years in-house with a data and marketing company in Harrisburg, I accepted my current position with Lobar, where I've been for the last seven years.
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Jessica Knox, Stinson LLPMs. Knox may be contacted at
jessica.knox@stinson.com
CGL Policy May Not Cover Cybersecurity and Data-Related Losses
March 25, 2024 —
Susana Arce - Saxe Doernberger & Vita, P.C.The construction industry, like many other industries, has experienced an increased reliance on, and implementation of, technology in the past few years. Smart phones and tablets are used on most project sites, computers are an integral part of the planning process, and various software programs are used throughout the construction process. Likewise, much of the machinery and equipment used during construction (e.g., total stations, trucks, tower cranes) is interconnected, and in some cases, operated or monitored remotely.1
With an increase in technology comes a risk of cybersecurity and data-related losses. Many large businesses purchase Commercial General Liability (“CGL”) insurance and assume cybersecurity and data-related losses are covered. Unfortunately, this is generally not the case. CGL policies typically cover three general types of damage: bodily injury, property damage, and advertising injury.
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Susana Arce, Saxe Doernberger & Vita, P.C.Ms. Arce may be contacted at
SArce@sdvlaw.com
Drawing the Line: In Tennessee, the Economic Loss Doctrine Does Not Apply to Contracts for Services
December 11, 2023 —
Gus Sara - The Subrogation StrategistIn Commercial Painting Co. v. Weitz Co. LLC, No. W2019-02089-SC-R11-CV, 2023 Tenn. LEXIS 39 (Weitz), the Supreme Court of Tennessee (Supreme Court) considered whether the economic loss doctrine barred the plaintiff’s claims for fraud, negligent misrepresentation and punitive damages arising out of a contract with the defendant for construction services. The court held that the economic loss doctrine only applies to product liability cases and does not apply to claims arising from contracts for services. This case establishes that, in Tennessee, the economic loss doctrine does not bar tort claims in disputes arising from service contracts.
In Weitz, defendant, Weitz Co. LLC (Weitz), was the general contractor for a construction project and hired plaintiff Commercial Painting Co. (Commercial) as a drywall subcontractor. Weitz refused to pay Commercial for several of its payment applications, claiming that the applications were submitted untimely and contained improper change order requests. Commercial filed a lawsuit against Weitz seeking over $1.9 million in damages, alleging breach of contract, unjust enrichment, enforcement of a mechanic’s lien, and interest and attorney’s fees under the Prompt Pay Act of 1991. Weitz filed a counterclaim for $500,000 for costs allegedly incurred due to Commercial’s delay and defective workmanship. In response, Commercial amended its complaint to add claims for fraud, intentional and negligent misrepresentation, rescission of the contract and $10 million in punitive damages. Commercial alleged that Weitz received an extension of the construction schedule but fraudulently withheld this information from Commercial and continued to impose unrealistic deadlines.
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Gus Sara, White and WilliamsMr. Sara may be contacted at
sarag@whiteandwilliams.com