Construction – Construction Law Musings- Richmond, VA

Where Breach of Contract and Tortious Interference Collide

Originally posted 2022-01-03 09:00:05.

Claims for breach of contract are numerous in the construction law world. Without these claims we construction attorneys would have a hard time keeping the doors open. A 2021 case examined a different sort of claim that could arise (though, “spoiler alert” did not in this case) during the course of a construction project. That type of claim is one for tortious interference with business expectancy.

In Clark Nexsen, Inc. et. al v. Rebkee, the U. S. District Court for the Eastern District of Virginia gave a great explanation of the law of this type of claim in analyzing the following basic facts:

In 2018, Clark Nexsen, Inc. (“Clark”) and MEB General Contractors, Inc. (“MEB”) responded to Henrico County’s (“Henrico”) Request for Proposals (“RFP”) for the design and construction of a sport and convocation center (the “Project”). Henrico initially shortlisted Clark and MEB as a “design-build” team for the Project, but later restarted the search, issuing a second RFP. Clark and MEB submitted a second “design-build” proposal, but Henrico selected Rebkee Co. (“Rebkee”) for certain development aspects of the Project. MEB also submitted proposals to Rebkee, and Rebkee selected MEB as the design-builder for the Project. MEB, at Rebkee’s request, solicited proposals from three design firms and ultimately selected Clark as its design partner. From December 2019 to May 2020, Clark and MEB served as the design-build team to assist Rebkee in developing the Project. In connection therewith, Clark developed proprietary designs, technical drawings, and, with MEB, several cost estimates. In February 2020, MEB submitted a $294,334.50 Pay Application to Rebkee for engineering, design, and Project development work. Rebkee never paid MEB. Henrico paid MEB $50,000.00 as partial payment for MEB’s and Clark’s work. MEB then learned that Rebkee was using Clark’s drawings to solicit design and construction proposals from other companies. On July 23, 2020, Rebkee told MEB that Henrico directed it to cancel the design-build arrangement with MEB and Clark and pursue a different planning method. MEB and Clark sued and Rebkee for, among other claims, tortious interference with a business expectancy. Rebkee moved to dismiss the tortious interference claim. Continue reading Where Breach of Contract and Tortious Interference Collide

Are Construction Contract Limitation of Liability Clauses on the Way Out in Virginia?

Remember BAE Systems and Fluor? This post is the third here at Construction Law Musings relating to this case which is a seemingly never-ending source for content. In the prior post discussing this case, the Court found that Va. Code 1-4.1:1 which bars waiver of a right to payment before work is performed did not apply because Fluor had provided work before execution of the contract or any change orders.

In the most recent opinion in this long-running litigation, and after a motion to reconsider by Fluor that was granted, the Court re-examined this finding along with the contractual language found in the Limitation of Damages (LOD) clause and came to the opposite conclusion regarding certain change orders that remained unpaid by BAE. Continue reading Are Construction Contract Limitation of Liability Clauses on the Way Out in Virginia?

Uniwest Rides Again (or, Are Architects Subject to Va. Code Section 11-4.1?)

Originally posted 2018-10-03 11:07:55.

In 2010, the Virginia Supreme Court held in Uniwest Const., Inc. v. Amtech Elevator Servs., Inc., that Va. Code Sec. 11-4.1 renders completely void and unenforceable any indemnification provision in a construction contract between a contractor and subcontractor that seeks to indemnify the indemnified party from its own negligent acts. In short, the Virginia Supreme Court stated that such overly broad provisions violate Section 11-4.1.

A recent case out of the Eastern District of Virginia Federal District Court examined a provision in a contract between a designer/architect and a contractor or owner on a project. In Travelers Indem. Co. of Conn. v. Lessard Design Inc. the Court examined the application of Section 11-4.1 to the following provision of a design contract where Lessard, the indemnitor, agreed to:

[i]ndemnify, defend and hold the Owner, Owner’s Developer, and Owner’s and Owner’s Developer’s wholly owned affiliates and the agents, employees and officers of any of them harmless from and against any and all losses, liabilities, expenses, claims, fines and penalties, costs and expenses, including, but not limited to reasonable attorneys’ fees and court costs relating to the services performed by the Architect hereunder . . .

Continue reading Uniwest Rides Again (or, Are Architects Subject to Va. Code Section 11-4.1?)

OSHA/VOSH Roundup

Originally posted 2015-08-03 09:00:14.

In an unusual flurry of occupational safety related activity, the Virginia courts decided two cases in the last week relating to either the review of occupational safety regulations themselves or their enforcement.

In Nat’l College of Business & Technology Inc. v. Davenport (.pdf), the Virginia Court of Appeals considered what constitutes a “serious” violation of the exposure to asbestos Virginia Occupational Safety & Health (VOSH) regulations. The facts found by the Salem, Virginia Circuit Court were that employees of the petitioner college were exposed to asbestos insulation when they were required to enter a boiler room to retrieve paper files. However, no evidence was presented regarding the length of time or level of exposure at the Circuit Court level. Despite the lack of evidence regarding the level or extent of exposure, the Circuit Court upheld the VOSH citation for exposure and the level of violation at a “serious” level with the attendant penalty.

The Virginia Court of Appeals disagreed with the second finding. The appellate court determined that the lack of evidence regarding the level of exposure (whether length or extent) made the serious level violation an error. The Court stated that merely presenting evidence that asbestos is a carcinogen is not enough given the number of carcinogenic materials in existence and then remanded the case back to Circuit Court to reconsider the penalty level.

In a second case, Steel Erectors Ass’n of America v OSHA (.pdf ), the petitioner, SEAA, challenged a 2010 directive from OSHA regarding the enforcement of 2001 safety standards regarding steel construction, claiming that the enforcement change was an illegal regulation. The 4th Circuit Court of Appeals, in an exercise of discretion, determined that SEAA or one of its members would need to challenge any attempt at enforcement when OSHA tried to invoke its new policy. What the 4th Circuit said SEAA could not do was to challenge the enforcement policy without any pending enforcement action.

What these two cases show, aside from the fact that, yes, the Courts will occasionally look at these types of cases, is that not all cases are cut and dried. With the assistance of an experienced Virginia construction lawyer, a construction professional may be able to challenge an administrative enforcement action. Also, the help of such an attorney can certainly help head off a failed challenge such as that by SEAA with its attendant expense and headaches.

As always, I welcome and encourage your comments below, please share your thoughts. Also, please subscribe to keep up with the latest Construction Law Musings.

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Six Years as a Solo Construction Attorney! How Time Flies

Originally posted 2016-07-01 09:00:07.

It seems like only yesterday that I ventured out on my own and started my solo construction law practice back in 2010. The reaction and fulfillment since I announced my move on July 1, 2010 has been great. Friends, clients, colleagues and, most importantly, my wonderful family have helped my practice grow beyond what I could have envisioned six years ago. Continue reading Six Years as a Solo Construction Attorney! How Time Flies