Construction Litigation

The Oregon Court of Appeals recently applied the so-called “economic loss rule” to a construction dispute (Marton v. Ater Construction Co., 256 Or App 554, __ P3d __ (2013)). Among other issues, the court decided whether the prime contractor’s negligence claim against its subcontractor was barred under the economic loss rule.

Under the

Can parties waive both the commencement and length of the statutory limitation periods for construction defect actions?  Yes, answered the Fourth Appellate District, by allowing the parties to contractually preclude the application of the “delayed discovery” rule that normally triggers the commencement of the limitation time period and affirming case law permitting the shortening of the 10-year latent limitation period to four years.  The court did hold, however, that such waiver and shortening is permitted where there are sophisticated parties, in a commercial context, and perhaps that the contract must even be highly negotiated (or at least such negotiation is available).

On June 3, 2013, in Brisbane Lodging, L.P. v. Webcor Builders, Inc. (Cal. Ct. App., June 3, 2013, No. A132555) 2013 WL 2404154, the appellate court reviewed the trial judge’s granting of summary judgment in favor of the general contractor (“Webcor”) on the grounds that a provision in the 1997 version of the AIA 201 (General Conditions to the prime agreement between Owner and Contractor) unambiguously barred all claims, contract and tort, brought more than four years after substantial completion of the project, rather than four years after the Owner discovered the alleged breach or defect and within the 10-year statute of repose.  The key language for both the trial court and the appellate court was found in provision 13.7:

“13.7 Commencement of Statutory Limitation Period

“13.7.1 As between the Owner and Contractor:

“.1 Before Substantial Completion. As to acts or failures to act occurring prior to the relevant date of Substantial Completion, any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than such date of Substantial Completion ….” (AIA A201, Article 13.7.1.1 (Article 13.7.1.1), bolding and capitalization omitted.)

A 2013 decision from New York reminds us that threats can be costly. In Mometal Structures, Inc. v. T.A. Ahern Contractors Corp., from the Eastern District of New York, Mometal was hired by Ahern as structural steel subcontractor. The project was delayed for reasons that were not Mometal’s fault. Mometal tried to get the information and approvals

 Yet another California court decision has been issued requiring a contractor to return over $750,000 received for work he performed on a casino while he was unlicensed. In rejecting the contractor’s arguments against disgorgement, the court found that (a) California Business and Professions Code § 7031’s penalties applied to work performed for tribal corporations and

In my latest Daily Journal of Commerce Construction column, I discuss the issue of whether a contractor may sue a lender. This occasionally arises when a project’s owner runs into trouble and the construction lender stops funding. The argument that is occasionally advanced is that the lender knew the contractor had started work and, if

Any construction litigation party faced with responding to California’s standard form interrogatories is all too familiar with the confusing use of the undefined term “incident” and the largely inapplicable “personal injury” interrogatories in a construction case. Similarly, any construction litigator dealing with the standard form interrogatories has felt the burden of sifting through the plethora of

Following the market crash in 2008-09, the $2.8 billion Fontainebleau development in Las Vegas was halted with 70 percent of the construction completed. Naturally, numerous mechanic’s liens were filed by contractors, subcontractors, professionals and suppliers ("claimants"). In the bankruptcy proceeding, the lenders asserted novel and potentially legally destabilizing theories against the claimants’ rights: a.) the

Litigation can be one of the most time-consuming and expensive ways to resolve disputes in the construction industry. Often, parties to construction-related disputes prefer to resolve them through alternate dispute resolution procedures, such as mediation or arbitration. However, sometimes litigation cannot be avoided. In his latest article in the Daily Journal of Commerce, Guy Randles

In my recent article “You Can’t Make This Stuff Up: The Human Condition Meets Construction Law,” published in the Daily Journal of Commerce, I outline the bizarre, seemingly impossible litigation matters of the Construction and Design business. The article touches on a variety of past cases, including an employee stabbing himself in the eye during

In a recent national webinar by the Strafford Publication Group, I spoke about the key challenges facing plaintiffs in construction defect cases, including initial case evaluation, discovery issues, expert issues and allocating damages among multiple defendants. My co-presenters from two firms in Dallas, Texas followed my presentation with the key challenges facing defendants. The slides