Case Studies – Construction Law and Litigation for Business

Construction Law

Case Studies – Construction Litigation for Business

Margaret Sell, Ralph Rhoades, Of Counsel, and Randy Campbell, Of Counsel, have many years of collective experience in construction litigation. Our firm has represented property owners, general and trade contractors and material suppliers throughout Northern California. We have litigated almost every type construction dispute. Our expertise includes: general engineering and soils, weatherproofing, roofing and curtain wall, life safety and plumbing issues.

Contract Preparation and Risk Management | Public Works | Construction Claims | Commercial & Residential Defect Litigation | Construction Bodily Injury Litigation

Contract Preparation and Risk Management

  • As general counsel to various commercial and residential contractors and subcontractors, we have frequently been asked to 1) review, comment and revise proposed contract language for commercial and residential construction projects; 2) assist residential contractors in drafting contracts that comply with California’s somewhat Byzantine and often harsh Home Improvement Contract Law set forth in Business and Professions Code § 7150 et. seq. and 3) review insuring and bonding agreements and advise on acceptable coverages and other risk management issues.
  • In 2011, California Senate Bill 474 (SB 474) was signed into law by Governor Brown. SB474 amended Civil Code § 2782 to provide that provisions in commercial construction contracts entered into on or after January 1, 2013 that require parties to indemnify or defend an owner for its active fault, or require a subcontractor to defend, indemnify, or insure a general contractor or construction manager for the active fault of others, or to the extent that the claim does not arise out of the subcontractor’s scope of work on the project, are deemed to be against public policy and are null and void. We counseled our construction clients and assisted them in re-drafting their prime contracts, subcontracts, consulting agreements and purchase agreement to bring them into compliance with Civil Code § 2782.
  • Also in 2011, the California Legislature passed a number of new laws affecting the rights and remedies of California “mechanics”, owners and material suppliers. Many of these laws became effective between 2011 and July 1, 2012. During that time, we provided seminars to our construction clients to help then navigate these new laws and forms. We also, once again, assisted them in re-drafting their prime contracts, subcontracts, consulting agreements, purchase agreement and related form to bring them into compliance and to help maximize their recoveries.

Public Works

  • We represented a general contractor and its surety sued by a subcontractor arising out of the construction of the library and technology center at the new UC Merced campus. The subcontractor claimed damages for the contract balance as well as delay, inefficiencies, and unpaid extra work. The general contractor admitted it owed the contract balance, but denied it owed anything further because the subcontractor had abandoned the project and performed substandard work. The arbitrator agreed and found for the general contractor. The subcontractor appealed the arbitrator’s denial of the subcontractor’s claim for attorneys’ fees under the bond. In an unpublished opinion, the Court of Appeal dismissed the subcontractor’s appeal.
  • We represented a general engineering contractor who sought the return of liquidated damages after the owner delayed providing the contractor with a punch list and continued to issue change orders. At arbitration, the owner was ordered to return the liquidated damages with interest after the arbitrator found that the delay in delivering the punch list was “inexcusable” and that the assessment of liquidated damages, while demanding the contractor perform change order work at the same time, was “unjust.”
  • We represented a ready-mix concrete supplier that was denied payment because the “lightweight” concrete supplied on a public works project was allegedly “too heavy.” At arbitration, the client was awarded its contract balance and all of its attorneys’ fees.
  • We represented a grading contractor that was denied payment on its contract after the owner claimed the client caused extra costs in “delay” and “acceleration” damages. At trial, the owner’s claims were rejected and the client was awarded its full contract balance.
  • We represented a general engineering contractor who was the low bidder on a $17 million public works project. The second low bidder claimed the client’s bid was “non-responsive.” The client was ultimately awarded the project following a public hearing on the bid protest.

Construction Claims

  • We represented a rock crushing contractor who sought its mobilization and demobilization costs as well as its extended overhead after the general contractor terminated the contract. The general contractor filed a counter-claim contending the rock crushing contractor delayed the project. After 5 day arbitration, the rock crushing contractor prevailed on the counter-claim and was awarded all of its contract damages, pre-judgment interest, attorneys’ fees and costs.
  • We represented a building contractor whose progress payments and retention were withheld by the owner after all agreed upon work in the contract had been timely completed. At trial, the client was awarded all contract damages, penalties under prompt payment statutes, and attorneys’ fees.
  • We represented a dredging contractor who mobilized on a project only to have the owner cancel the contract before work began. The contractor sued for its mobilization and demobilization costs. The owner claimed there was never a contract. At trial, the court found there was in fact a contract and the client recovered the full amount of its claim.

Commercial & Residential Defect Litigation

  • We represented a lightweight concrete installer in defect litigation arising out of a small commercial building. The claimant was a second-generation owner who paid for the property “as is.” The case was notable in that our client and another defendant obtained summary judgment on the issue of standing by arguing that the claimant had knowledge of the defects at time of purchase and therefore lacked standing to sue, which remained with the original owner/seller. The judgment was affirmed on appeal, which case, George Krusi, as Trustee, etc., et al., v. S.J. Amoroso Construction Co., Inc. (2000) 81 Cal. App. 4th 995 [97 Cal. Rptr. 2d 294], remains the seminal case on the issue.

Construction Bodily Injury Litigation

  • We represented an apartment owner in a worksite injury resulting in paraplegia. The employer’s insurer refused to acknowledge its insured’s indemnity obligations or its own additional insured obligations to our client. Ultimately, the matter resolved with the employer’s insurer tendering its policy limits on behalf of our client in full resolution of the claim.
  • We represented a major general contractor in litigation arising from worksite injuries from exposure to toxic substances at the Rocky Flats Nuclear facility in Colorado. We obtained summary judgment for our client based on the statute of limitations.
  • We presented a ready-mix concrete supplier sued by a laborer who claimed he sustained permanent injuries when the chute on the ready-mix truck broke. A mistrial was declared after the jury voted 8-4 in favor of a defense verdict. The laborer ultimately dismissed the case against the client in exchange for a waiver of costs.
  • We represented a ready-mix concrete supplier sued by a laborer who claimed he sustained a permanent brain injury after he fell from the ready-mix truck that he had climbed on to discharge excess concrete that remained in a concrete pump. The laborer and his co-workers claimed the truck driver had granted him permission to climb on the truck. The truck driver denied he ever granted such permission. At trial, judgment was entered in favor of the client.
  • We represented a landscape contractor who was granted summary judgment after it was shown that it owed no duty to remove or alter a fixed sprinkler that had impaled a woman who had fallen on it while exiting her room at a Napa County golf resort.