Damages – Construction Law Musings- Richmond, VA

Reckless Disregard is. . . Well. . .Reckless

Originally posted 2017-12-25 10:00:02.

Train wreck at Montparnasse Station, at Place ... — Image via Wikipedia

Punitive damages are hard to come by in construction law cases. This is because almost all construction contract cases are exactly that: contract cases. Between the economic loss rule and the Virginia Courts’ almost (though not completely) impregnable wall between tort and contract, punitive damages may seem completely out of the picture. Depending on your perspective and position on the construction project food chain, this fact can be either frustrating or comforting.

However, like all seemingly immutable laws, this one has an exception according to the Chesapeake County, Virginia Circuit Court. In Sawyer v. C.L. Pincus Jr. & Co. et. al. this Virginia court was faced with the following scenario. The defendants, a church and it’s contractor, were sued by Sawyer over a construction swale that was built partly on Sawyer’s property. According to the plaintiff, the only permission they gave to their neighbors at the church was to allow the church to build a drainage berm that did not encroach on their property. As stated above, the church and its contractor built a swale that encroached on the Sawyers’ property.

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Another (Non-Dragas) Chinese Drywall Decision

Originally posted 2012-08-24 11:36:29.

Here at Construction Law Musings, we’ve discussed the Dragas line of cases relating to Chinese Drywall. In those cases (for more, just plug in the word “Dragas” into the search field to the right of this post), the Court analyzed the insurance implications of remedial measures relating to Chinese Drywall. In sum, the Court admonished the contractors to make sure that they followed the terms of their insurance contracts and essentially denied coverage to a contractor that acted proactively to fix some of the issues with the drywall.

In a new case out of the Suffolk Circuit Court, Seeman v. Oxfordshire LLC, the Court analyzed a different aspect of these types of claims. Among the claims that the Suffolk County, Virginia Circuit Court analyzed in its opinion were claims under the Virgina Consumer Protection Act and claims for tort against the realty company and the drywall supplier. Both of these parties to the case demurred (a/k/a filed motions to dismiss) and the court sustained these demurrers to several of the counts on substantive grounds.

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Contractors – Make Someone Else Pay Your Attorneys’ Fees

For this week’s Guest Post Friday at Construction Law Musings, we welcome Bryan G. Scott. Bryan is an attorney at Spilman Thomas & Battle, PLC. His primary areas of practice are commercial and business litigation, construction law and litigation, insurance coverage and bad faith, and products liability defense.

If you read Construction Law Musings regularly like I do, you’re already familiar with the concept of the construction contract as “king.” As a construction practitioner, I spend a lot of time reviewing construction contracts and talking to contractors, both large and small, about issues to be addressed in their contracts. One issue near and dear to my own heart is whether the contract will provide for an award of attorneys’ fees to the prevailing party in a contract dispute. Too often, I find that my potential litigation clients neglected to address that issue in their contracts, and they pay for that mistake once things go south.

Most contractors understand that their general liability insurer will pay an attorney to defend them against third party lawsuits, and they would not dream of undertaking a project without that protection. The reality, however, is that those types of suits are relatively uncommon among construction disputes. Much more common are disputes over payment, delays, changes, and the like. It never ceases to amaze me how many contractors fail to address litigation costs for these relatively routine disputes before they arise.

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Tort or Contract? It’s All in the Pleading

If you’ve been reading Musings for any period of time, you’ve read about the fact that in most instances tort (i. e. negligence or fraud) claims and contract claims do not mix. Notice I said rarely. As is usually the case with a blanket statement like the one above, the Courts will tend to come up with exceptions.

AIU Ins. Co. v. Omega Flex Inc. out of the Western District Court in Charlottesville, Virginia is just such a case. The facts are these, Omega Flex manufactured metal tubing that was struck by lightning leading to a house fire. The insurance company (stepping into the shoes of its insured, a general contractor) sued Omega Flex under several theories, the key two being breach of warranty and negligence. I know what you’re thinking (along with me). The negligence count will be dismissed because of the economic loss rule and prior cases in Virginia and elsewhere. However, we’d be wrong to think this.

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Contractors – Know Your State’s Consumer Protection Laws

For this week’s Guest Post Friday, we welcome back Nathan B. Hinch. Nate is an attorney at the law offices of Mueller, Reece & Hinch, LLC in Bloomington, Illinois, where his practice includes advising real estate, construction, environmental, and other businesses regarding the law, and represents them in conflict mitigation and resolution efforts, including arbitration, litigation, and administrative proceedings. He can be reached at nhinch@muellerreece.com .

Most if not all States have statutes on the books seeking to protect consumers from fraudulent business transactions generally. It is essential for contractors to be aware of these laws and how their requirements affect your business operations. In this article I will highlight some key issues in one such statute in my home State, Illinois. While these statutes can vary from State to State, many of the same principles will apply. To be sure of the specifics in your State, check with an attorney licensed in that jurisdiction.

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