June 2007 – Construction Law

General Contractor Has No Indemnification Claim Against Subcontractor Where Claims Arise Out of Contractor’s Own Failure to Supervise

Jun 24 2007

Fireman’s Fund Ins. Co. v. Falco Constr. Corp., 493 F. Supp. 2d 143 (D. Mass. 2007)

A property insurer, Fireman’s Fund Insurance Company, asserted claims against a general contractor and subcontractor after an insured home sustained fire damage. The general contractor had performed extensive renovations on the home, and the subcontractor had constructed a masonry fireplace at the home. In Counts I and II, the insurer sought recovery from the subcontractor for improperly installing the fireplace on theories of negligence and breach of contract. In Counts III and IV, the insurer brought the same claims against the general contractor for failing to supervise. The general contractor subsequently filed a cross-claim for indemnification against the subcontractor. Read More

Cancelled LLC Can Be Sued, But Cannot Sue

Jun 23 2007

Chadwick Farms Owners Assoc. v. FHC, LLC, 139 Wash. App. 300, 160 P.3d 1061 (2007)

This case presents a similar set of facts to Maple Court. Condominium developer FHC, LLC was administratively dissolved on March 24, 2003. On August 18, 2004, Chadwick Farms Homeowner’s Association filed suit against FHC, alleging construction defects. Seven months later, on March 24, 2005, FHC was administratively cancelled because it failed to reinstate during the two-year dissolution period. Two months after cancellation, FHC filed third party claims against its subcontractors, and in August 2005 moved for summary judgment against Chadwick on the ground that it was no longer a legal entity.
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Developer and Construction Manager Lose Pending Claims

Jun 22 2007

Maple Court Seattle Condo. Assoc. v. Roosevelt, LLC 139 Wash. App. 257, 160 P.3d 1068 (2007)

In June 2007, Division One of the Court of Appeals rendered its decisions in three cases involving the issue of a dissolved limited liability company’s standing to maintain claims. Maple Court illustrates the adverse impact that administrative dissolution can have on the pending claims of a developer and general contractor.

On September 23, 2002, condominium developer Roosevelt, LLC allowed itself to be administratively dissolved by the Secretary of State. Fifteen months later, Roosevelt was sued by the condominium homeowners’ association. In response, Roosevelt filed third party complaints against its construction manager and subcontractors. During the pending litigation, on September 23, 2004, Roosevelt was administratively "cancelled" pursuant to RCW 25.15.270(6) because it did not reinstate itself following the prior administrative dissolution.
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Government Agency May Compel Production of Documents in Specific Format Through Subpoena Duces Tecum

Jun 15 2007

Nat’l Labor Relations Bd. v. Champagne Drywall, Inc., 502 F. Supp. 2d 179 (D. Mass. 2007)

Under the National Labor Relations Act, the National Labor Relations Board moved for an order from the court to enforce two subpoenas duces tecum served on Champagne Drywall as part of the NLRB’s investigation of Champagne’s alleged practice of refusing to consider and hire qualified job applicants based on their union affiliation. Champagne objected because even though the data sought existed within the organization, Champagne did not possess the information in the format sought by the NLRB – namely, as a list. Read More

Archive:June 2007