2008 – Page 5 – Construction Law

Landscaper Must Have Proper License to Recover Damages for Breach of Contract

Apr 22 2008

Hakimi v. Cantwell Landscaping & Design, Inc., 855 N.Y.S.2d 273 (N.Y. App. Div. 2008)

Hakimi filed a breach of contract claim against Cantwell stemming from landscaping work performed on the property where Hakimi was having a new home built. Cantwell admitted that it was not licensed as a home improvement contractor at the time it did the work. In response to the lawsuit suit, Cantwell filed a mechanic’s lien and a notice of pendency against Hakimi’s property. Cantwell claimed that it did not need a home improvement contractor’s license because Hakimi was building a new house and the administrative code exempted new home construction from the home improvement licensing requirements. Hakimi moved to dismiss Cantwell’s counterclaims and the Supreme Court denied the motion. Read More

Federal Arbitration Act Does Not Preempt California Code of Civil Procedure § 1281.2; California Court May Refuse to Enforce Arbitration Agreement To Prevent Possibility of Conflicting Rulings

Apr 18 2008

Best Interiors, Inc. v. Millie and Severson, Inc., 2008 WL 1122182 (Cal. Ct. App. Apr. 11, 2008)

A dispute arose between general contractor Millie and Severson, Inc. and subcontractor Best Interiors, Inc. related to the construction of a hospital in Whittier, California. Best sued M&S, the hospital and two building inspectors, alleging various delay and disruption damages caused by improper management and inspection of the project. M&S petitioned to compel arbitration of the dispute and to stay Best’s lawsuit, based on arbitration clauses in the subcontract and the prime contract. Best opposed on the grounds that (1) the building inspectors could not be compelled to arbitrate; (2) the arbitration might result in inconsistent results; and (3) the court had authority under California Code of Civil Procedure § 1281.2 to refuse to enforce the arbitration clause. The trial court granted Best’s petition. On appeal, M&S raised two arguments. First, M&S argued that the Federal Arbitration Act, 9 U.S.C. § 1 et seq., applied to the arbitration agreement and did not give the trial court discretion to deny arbitration. Second, M&S argued that, even if California law applied to the arbitration agreement, there was no possibility of conflicting rulings. Read More

Whether Liquidated Damages Clause is Properly Invoked Depends on Whether Actual Damages Can be Determined

Apr 15 2008

Zeer v. Azulay, 2008 WL 1134239 (N.Y. App. Div. Apr. 8, 2008)

In this case, defendant contractors agreed to construct a home on property owned by plaintiffs pursuant to a written contract executed by the parties in September 2003. The parties agreed that if the contractor did not complete the project by February 29, 2004 and obtain a certificate of occupancy, it would be liable for liquidated damages of $250 per day until the work was completed. Read More

No Summary Judgment Where Counterclaim is Equal To or Greater Than Amount Demanded in Complaint

Apr 04 2008

Pronti v. Grigoriou, 853 N.Y.S.2d 718 (N.Y. App. Div. 2008)

In this case, a construction company filed a mechanic’s lien foreclosure action against a homeowner. The parties had executed a written contract providing that Pronti would find an independent contractor to install vinyl siding on Grigoriou’s residence. After Grigoriou paid the full contract price of $11,000, she refused to pay a $500 cleanup fee provided for in the contract. Grigoriou alleged that Pronti performed the work in an “unworkmanlike manner” and counterclaimed for $10,520 in damages. Read More

Economic Loss Doctrine may not Preclude Claims Against Building Contractors for Negligent Construction that Results in Foreseeable Damage to Property

Mar 30 2008

Harris v. Suniga, 344 Or. 301, 180 P.3d 12 (Or. 2008)

In this case, the defendant general contractors constructed an apartment building for a California investment company. The California investment company sold the completed apartment building to the plaintiffs, trustees for the Harris Family Trust. Following the sale, plaintiffs found the apartment building had problems with leaking water and dry rot and filed a claim for negligent construction against the defendant contractors. Prior to suit, the plaintiff and defendants were “strangers.” The plaintiffs did not purchase the apartment building from the defendants, did not contract with the defendants, and did not have any previous contact with the defendants. Plaintiffs alleged that defendants’ failure to install required flashings in the building caused the dry rot damage, and that the failure constituted negligence.

Relevant Factors in Grant of Freezing Injunction in Support of Foreign Arbitration

Mar 27 2008

Mobil Cerro Negro Ltd. v. Petroleos de Venezuela SA, 2008 WL 678144, [2008] EWHC 532 (Queen’s Bench Div., Commercial Ct.)

In this case, a freezing injunction was set aside, having been granted in support of claims which were the subject of ICC arbitration seated in New York. The parties were parties to a contract for the exploitation of oil rights, the Claimant being a US corporate and the Defendant the Venezuelan state oil company. Venezuelan legislation passed in 2007 mandated the “migration” of non-Venezuelan interests in Venezuelan oil to Venezuelan entities, and gave rise to claims under the parties’ contract. Mobil obtained a worldwide freezing injunction up to a value of $12 billion and Petroleos applied to have the injunction set aside. Read More

Suit Can Proceed Against General Contractor Based on Claims of Subcontractor’s Negligence and Public Nuisance

Mar 27 2008

New York v. Shaw Contract Flooring Servs., 853 N.Y.S.2d 694 (N.Y. App. Div. 2008)

State university brought claims against a general contractor and subcontractor for asbestos released as a result of tile work performed by the subcontractor. The trial court denied the general contractor’s motion to dismiss the negligence and public nuisance claims. The Appellate Division affirmed. Read More

The Risks and Rewards of Green Building

Mar 24 2008

New legal implications arise from building environmentally friendly

By K&L Gates attorneys Patrick J. Perrone and Loly Garcia Tor, and David Crump Jr., Director of Legal Research for the National Association of Homebuilders

Appearing in the March 24, 2008 issue of the New Jersey Law Journal, this article explores the potential risks builders may face when building and marketing “green” homes and buildings.

View the full article here.

Choice of Seat Dictates Procedural Law

Mar 20 2008

Braes of Doune Wind Farm (Scotland) Ltd. v. Alfred McAlpine Bus. Servs. Ltd., 2008 WL 678195, [2008] EWHC 426 (Queen’s Bench Div., Tech. & Constr. Ct.)

In this case an agreement to arbitrate selected the Arbitration Act 1996 as the applicable procedural law but stated that the seat of any arbitration was "Glasgow, Scotland," where the Act does not apply. It was held that, construing the contract as a whole, the arbitration was seated juridically in England, with Glasgow serving as the location of the arbitral hearing. Read More

Factors Justifying Disclosure of Documents Filed in Arbitration

Mar 19 2008

John Forster Emmott v. Michael Wilson & Partners Ltd., 2008 WL 576947, [2008] EWCA Civ 184 (Ct. of App., Civil Div.)

In this case, the Court of Appeal upheld an order permitting the disclosure of documents filed in a London arbitration to the courts of certain overseas jurisdictions in related proceedings. In the London arbitration Wilson had originally made claims of fraud against the claimant Emmott but had subsequently withdrawn them. Wilson repeated those allegations in the overseas proceedings to which Emmott was not a party. Read More

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