Joseph McCarthy, a real estate attorney in Stoel Rives’ Seattle office, was recently interviewed by television station KIRO 7 in Seattle for a segment titled “Law meant to protect Wash. homeowners instead pushing up condo prices.” The piece discusses how the consumer warranties contained in the Washington Condominium Act, found at Chapter 64.34 RCW, fostered
A New Wrinkle In Time To Claim Construction Defects
Oregon’s law on statutes of limitation and/or repose periods on construction claims is complex and ever-changing. A recent Oregon Supreme Court ruling has introduced yet another instance of differing time limits on construction defect claims. In my recent article for the Daily Journal of Commerce, I discuss Schell v. The Schollander Companies, Inc. and
Court of Appeals affirms Brightwater judgment, reviews law regarding differing site conditions and surety obligations
On November 9, 2015, Division One of the Court of Appeals affirmed a 2012 King County trial court judgment that joint-venture tunneling contractor Vinci Construction Grands Projets/Parsons RCI/Frontier-Kemper (VPFK) was liable to King County for $144 million in damages and attorney fees.
The case arose from the Brightwater project, a wastewater treatment plant north of Woodinville with a tunnel system that conveys wastewater to the plant and treated water to a marine outfall in Puget Sound. VPFK was awarded a $212 million contract to build two segments of the 13-mile tunnel system. Unfortunately, VPFK’s two tunnel-boring machines broke down several hundred feet beneath Lake Forest Park and Bothell. The machines required extensive repairs that threatened to delay the completion of the overall project.
VPFK repaired one machine and completed one tunnel segment, but King County did not accept the lengthy delay and additional cost proposed for the repair of the second machine. King County hired Jay Dee Coluccio to complete the remaining tunnel segment between Shoreline and Lake Forest Park. The Brightwater project began full operation in late 2012.
King County sued VPFK and its sureties for approximately $156 million, based on its costs arising from project delays and design modifications. VPFK counterclaimed for approximately $70 million, arguing that its delays were excused by differing site conditions and defective project design. King County acknowledged some of VPFK’s claims totaling about $4.7 million.
After a nearly three-month trial, the jury awarded $156 million in damages to King County, offset by $26 million to VPFK for its counterclaims. The court awarded King County its attorney/expert fees in the approximate amount of $14 million, for a net judgment of $144 million.
The trial and appeal involved a number of interesting issues, two of which are summarized here.
Key Aspects of Joint Check Agreements
Joint checks are a useful tool in the construction industry to give owners and prime contractors peace of mind that lower-tier subcontractors or suppliers are being paid and potential lien claims are avoided. But joint check agreements and the subsequent actions can result in unintended consequences and liability. In my recent article for the Daily
Take Care in Reaching for Deep Pockets: Don’t Let Insurance Companies Off the Hook When Drafting Settlement Agreements in Construction Defect Cases
It will happen to almost every contractor at some point — an owner or project developer will try to sue you. Hopefully your insurer agrees you are covered, and you’ve dodged a bullet. But if your insurer tells you that you are not covered, things get sticky. One common strategy is for the parties to
Protections Against Subcontractor Defaults
Subcontractor default is a construction project nightmare that can result in significant additional costs and delay completion of the project. But there are two chief options to protect against such risks — performance bonds and subcontractor default insurance. In my recent article for the Daily Journal of Commerce, I outline the unique characteristics of
The Jury’s Out: AAA Issues New Construction Industry Rules Expanding Powers of Arbitrators
There are inherent risks in proceeding to trial by jury. Juries are often unpredictable, and civil litigation also requires extensive discovery and motions practice, which can delay resolution and increase uncertainty and costs. Arbitration has long been accepted as the answer to these problems. But the changing nature of disputes, increasing costs and inefficiencies have
Five Questions an Owner Should Ask About Insurance and Bonds
Contractors often have limited liquid assets, so insurance and bonding are often the best resources available to an owner to protect against contractor default or defective work. However, not all policies and bonds are created equal, and owners should make sure these resources provide the security the owner needs. In my recent article for the
Finishing Strong vs. Finishing Wrong: Tips & Traps for Project Completion
Complex construction projects carry complex problems as they approach completion. In my recent article for the Daily Journal of Commerce, I address 10 potential pitfalls that owners, contractors and design professionals may encounter, and I offer tips to help you prepare for them.
Read the full article here.
“Finishing Strong vs. Finishing Wrong:
10 Important Termination Considerations
When terminating a contract, you want to have a high degree of confidence that termination is justified and done properly. In my recent Daily Journal of Commerce Construction column, I outline 10 important considerations in navigating this high-risk terrain.
Read the full article here.
“10 Important Termination Considerations” was originally published on Feburary 20,