Category Archives: Delay Claims

Everything’s Bigger in Texas, Including the Construction Litigation (Part 2 of 3)

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This is the second of a three-part series exploring the Texas Supreme Court’s decision in Zachry Construction Corp. v. Port of Houston Authority of Harris County.  A summary of the case can be found at Part 1 of the series.  Part 3 will address the lien waiver issues raised by the decision.  This post considers the “no-damages-for-delay” aspects of the case, specifically exceptions to enforcement of such contract clauses.

What Zachry Says About No-Damages-for-Delay Clauses

The Texas Supreme Court began its analysis by noting that as a general rule, a contractor can assume the risk of, and not seek damages for, construction delays by agreeing to a no-damages-for-delay clause (“NDFD clause”) in a construction contract.  The court, however, then went on to note five “generally recognized exceptions” to the enforcement of such clauses:

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Filed under Case law from other states, Delay Claims, NC case law, No Damages for Delay Clauses

It’s Not Enough to Read Before Signing; Always Strive to Understand Before Signing

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An unpublished decision from the North Carolina Court of Appeals yesterday demonstrates how important it is to not only read, but also to fully understand, legally binding documents before signing them.

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Filed under Indemnity Claims, Lien Law, NC case law, No Damages for Delay Clauses

Everything’s Bigger in Texas, Including the Construction Litigation (Part 1 of 3)

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Because my practice is focused almost exclusively on construction projects in North Carolina, I focus far more attention on local case law developments than on appellate decisions from other states.  But every now and again, a decision from some far-flung jurisdiction gets published that is just too big, too fascinating and too important to overlook.

Zachry Construction Corp. v. Port of Houston Authority of Harris County, handed down by the Supreme Court of Texas (the “Texas Supreme Court”) on August 29, 2014, is just such a decision.

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Filed under Case law from other states, Delay Claims, No Damages for Delay Clauses

Bound, But Determined: How Subs Might Evade Terms Binding Them to Decisions of Architects

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It’s typical for subcontracts to include a clause binding the subcontractor to the decisions of the project architect.  Such terms help general contractors and construction managers at-risk avoid obligations to subs below that can’t be passed through to owners above.  That’s a sensible and enforceable risk allocation most of the time.

But not all of the time.

Sometimes, the architect doesn’t play fairly.  Sometimes, the prime contractor fights hard for itself, but not hard enough for its subs.  And sometimes, a statute might provide a remedy when the subcontract does not.

On such occasions, as discussed below, subcontractors might avail themselves of an escape hatch:

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Filed under Change Orders, Delay Claims, NC case law, Subcontractors

When Resolving Construction Disputes, Three Is Company, Too

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You’re a general contractor on a large commercial construction project impacted by significant delays.  You place most of the blame for the delays on the project architect, who you contend issued a wrongful stop work order arising from the performance of one of your subcontractors and performed other construction administration services negligently.  Both you and the sub have incurred significant extended general conditions as a result of the work suspension, and you invite the sub to make a delay claim you intend to pass through as a component of your own claim to the owner, who, under the contract documents, is legally responsible for the acts of its architect.

The sub wants to participate in a pre-litigation mediation you’ve scheduled with the owner, but you’re hesitant to oblige.  The owner, after all, will spend mediation blaming your sub for the issues giving rise to the stop work order, and you worry your sub’s presence could actually hamper, rather than facilitate, the settlement negotiations.

Wednesday WisdomAre you better off refusing the sub’s request to participate in the mediation, trying to settle with the owner first, and then circling back to resolve open issues with your sub once things are squared away up-the-chain?

That would be a risky play, as a 2011 North Carolina Court of Appeals decision demonstrates.

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Filed under Construction Risk Management, Damages, Delay Claims, NC case law

4th Circuit: Substantial Completion Occurs When Your Contract Says It Occurs

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There is no milestone more significant to a commercial construction project than substantial completion.  For an owner, it’s the long-awaited moment it can make beneficial use of its investment.  For prime contractors, it’s the moment the owner’s rights to terminate and/or assess liquidated damages is cut off.  For subcontractors, it’s the moment contractual warranties typically begin to run.  The list goes on and on.

Monday MemoIn light of how many legal rights and defenses are tied to the moment of substantial completion, you would think that contracting parties would take extra care to (1) define what constitutes “substantial completion” and (2) ensure that “substantial completion” is achieved in accordance with that carefully crafted contractual definition.

That’s not always the case, as a 2013 decision from the U.S. Court of Appeals for the Fourth Circuit (which includes North Carolina) reveals.

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Filed under Construction Risk Management, Contract Review & Negotiation, Damages, Delay Claims, Federal law, policy & news

Construction Tweets of the Week for the Week Ending Friday, October 25, 2013

1.  Scott Wolfe of Zlien.com tweeted about the pros and cons of filing a claim of lien on real property in advance of a construction mediation.  The linked blog post notes that while a claim of lien might enhance the claimant’s negotiation leverage, it might simultaneously generate adversarial tension up the chain, which in turn could make a mediated resolution more difficult to achieve.

It’s an interesting strategic question, particularly now that N.C. Gen. Stat. § 44A-23(d) expressly gives subs and suppliers the option to file their lien claims within 120 days of the prime contractor’s date of last furnishing, as opposed to their own date of last furnishing.  More than ever, timing is everything.    Continue reading

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Filed under Construction Risk Management, Delay Claims, Federal law, policy & news, Federal Procurement, Lien Law, State law, policy & news, Subcontractors

10 Big Changes to Bidding, Performing & Making Verified Claims On NCDOT Projects

I represent a number of highway/heavy contractors, all of whom know that doing business with the North Carolina Department of Transportation (“NCDOT” or the “Department”) requires careful attention to the agency’s “Standard Specifications for Roads and Structures.”  NCDOT’s Standard Specs contain both front-end “General Requirements” (what would be called “General Conditions” on virtually any other public or private construction contract) and back-end standards for all aspects of highway work — from earthwork, pipe culverts, subgrade and asphalt pavements to signing, materials, pavement markings and electronic signalization.As my highway/heavy clients also know, the NCDOT’s Standard Specs are regularly revised every 4-6 years.  Last year, NCDOT issued the 2012 version of its highway construction bible, updating the 2006 version.  This post focuses on what I consider to be the ten most significant changes to NCDOT’s front-end “General Requirements.”  As you will see below, these ten revisions affect how contractors obtain, perform and make claims on NCDOT work.

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Filed under Contract Review & Negotiation, Delay Claims, Feature story, Highway Contracts, State law, policy & news

Foul Weather, Contract Time and Excusable Delay

Would snow tonight = excusable delay for contractors tomorrow?  Image courtesy of The Weather Channel.

Would snow tonight give rise to excusable delay tomorrow? Image courtesy of The Weather Channel.

Is it just me, or has it been exceedingly gray and wet in Raleigh-Durham, NC so far in 2013?  Heck, forecasters are even calling for 3-6 inches of snow overnight in the Triangle (note to self: pick up milk, bread and other essentials during the lunch break, before the grocery stores shelves are predictably and thoroughly picked over).

The unusually dreary skies around here of late have me thinking about the intersection between the weather and construction delay claims.  Specifically, I’ve been ruminating on this question: when is a contractor’s project delay excused by nasty weather?

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Celebrity Delay Claim of the Century?

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My weekly round-up of what’s making news in the construction industry turned up a story out of Las Vegas, Nevada about a developer suing an owner for compensable delay.  It seems that the $50 million project, involving the conversion of a private residence into a museum, has never really gotten off the ground.

And Mr. Las Vegas is smack-dab in the middle of it.

The conversion of Wayne Newton’s Sin City estate, “Casa de Shenandoah,” into ”Graceland West” involves construction of an exhibition space, a theater, a zoo and a visitors’ center, among other attractions.  But the developer is alleging that it can’t make meaningful progress so long as Mr. Newton and his family refuse to relocate to a new $2 million home the developer is building on the 40-acre property.  “It is quite clear that it was always their intention to remain in the Mansion regardless of the terms of the agreement,” the lawsuit alleges.

Some of the developer’s other allegations strike this construction lawyer as somewhat — ahem — “unusual”:

The company claims Newton’s home was in a “sad state of disrepair” when it purchased the land for $19.5 million in June 2010, with his horses uncared for and 6-feet-tall animal manure piles covering the grounds.

“The penguin ponds were disgustedly dirty, full of algae and were endangering the penguins, all of whom were sick and many had died,” the lawsuit reads.

– From the AP’s coverage, which you can read in full here.

Probably goes without saying that Mr. Newton won’t be singing “Danke Schoen” to his developer anytime soon.

For his part,  Mr. Newton contends the developer failed to acquire permits, failed to communicate with Mr. Newton, failed to turnover required financial statements and bullied its employees.  In other words, it looks like this dispute might have legs, and could stay interesting.

So I’ll be keeping my eyes on the story going forward.  Who knows?  Maybe the outcome will contain a valuable lesson or two for the construction bar.  But that’s of secondary concern.  For the love of Pete, save the penguins!

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