July 2007 – Construction Law

Court of Claims Ruling Upheld – Contractor Entitled to Reimbursement from Government Under Unit Contract

Jul 23 2007

Harrison & Burrowes Bridge Constructors, Inc. v. New York, 839 N.Y.S.2d 854 (N.Y. App. Div. 2007)

The claimant filed suit in the Court of Claims seeking additional compensation for its rehabilitation and resurfacing of eight bridges under a unit-price contract with the State of New York. The state offered several reasons for its refusal to pay the claimant for labor and materials supplied under the contract.

First, the contract required the state to pay the claimant for the total number of markers installed, including any markers damaged by traffic. The state refused to pay for an additional 1,478 replacement markers installed by the claimant, arguing that the bid proposal, upon which the contract was based, only covered the installation of 868 markers. Affirming the Court of Claims, the appellate court found that the state should pay for the additional 1,478 replacement markers. Although the contract (which required the claimant to replace damaged markers) did not specify who would be obligated to pay for those markers, the court reasoned that the contract did not require the claimant to include the cost of replacing markers in its bid.

Economic Loss Rule Remains Alive and Well in Texas

Jul 19 2007

Pugh v. Gen. Terrazzo Supplies, Inc., 243 S.W.3d 84 (Tex. Ct. App. 2007), petition for review filed (Mar. 24, 2008)

In this case, the court affirmed a take-nothing summary judgment in favor of a materials supplier based on the economic loss rule. Pugh arose out of a residential construction project involving an exterior insulated finishing system (“EIFS”). After discovering alleged water damage to their home’s wood frame and interior wood flooring, the homeowners sued the masonry subcontractor and veneer supplier for negligence, “product liability (marketing defect),” and breach of the “implied warranties of good and workmanlike service and habitability.”

In a motion for summary judgment, the material supplier argued that the economic loss rule barred the homeowners’ claims for negligence and strict liability.

Massachusetts Building Code Does Not Render Either Engineer or Architect Liable for Unsafe Working Conditions on Owner’s Site

Jul 14 2007

Garcia v. Federics, 2007 WL 2367672 (Mass. Super. Ct. July 9, 2007)

In this case, the Superior Court granted a motion for summary judgment brought by the architect and engineer of a project on claims asserted by a construction worker injured on the job. As grounds for its ruling, the court found that neither the contract between the owner and the construction company nor the contract for architect’s services assigned responsibility to the architect or engineer for safety issues on the project. Thus, the court found that the architect and engineer did not have a contractual duty to protect the worker against unsafe working conditions.

In reaching its decision, the court rejected plaintiff’s argument that the Massachusetts Building Code created a duty for the architect and engineer to control safety conditions. Specifically, the court noted that the Massachusetts Building Code places the responsibility for the conditions of the building on the owner of the building rather than the architect or engineer. Plaintiff’s additional claims also failed because he could not demonstrate a reasonable expectation of proving that the architect and the engineer had a duty of care to the worker. The cross-claims by the owner failed because the architect and the engineer were not directly liable to the worker.

K&L Gates’ Arbitration World, Summer 2007

Jul 01 2007

By K&L Gates attorneys Wing L. Cheung, Martha J. Dawson, Ira S. Kaufman, Ian Meredith, Sarah A. Munro, Glenn R. Reichardt, Thomas M. Reiter, Stephen A. Smith, Sarah Turpin and Tiffany Yeung.

Arbitration World highlights the significant developments and issues in international arbitration that matter to in-house counsel and company executives with responsibility for dispute resolution.

Welcome to the Fourth Edition of “Arbitration World,” a publication from K&L Gates’ Arbitration Group which aims to highlight significant developments and issues in international arbitration that matter to executives and in-house counsel with responsibility for dispute resolution.

In this edition we look back at the firm’s third annual London International Arbitration Seminar at the Mandarin Oriental Hotel in Knightsbridge in April and look forward to hosting a similar event in San Francisco on 4-5 October 2007 (details in the Forthcoming Events section on the back page).

We are pleased to include a guest contribution from Petter Tornquist of Setterwalls, the leading Swedish law firm, on the new rules of the Arbitration Institute of the Stockholm Chamber of Commerce.

Archive:July 2007