The Punch List
Construction and Surety Law News
Fall 2012
Vol. 2
Greetings!  This summer was a very busy time for both the construction industry and our firm. 
Some of the representative work our firm has been involved with in the last three months include:


  • BMc briefed, argued, and prevailed on a motion for summary judgment in the Western District of Virginia, yielding a final affirmative award for its client.  To read that opinion, click here.

  • BMc successfully settled a $2.2 million multi-party indemnity lawsuit in the Eastern District of Virginia on behalf of our client, a large national surety company.

  • BMc engaged in multiple rounds of dispositive briefing at the Court of Federal Claims on behalf of our client, a Native-American owned general contractor in the Midwest in a dispute with the Federal Bureau of Prisons.

  • BMc co-authored a report published in July 2012 for the Transportation Research Board (TRB), part of the National Academies, titled "Legal Issues Involving Surety For Public Transportation Projects."  To read that report, click here. 


In addition, we saw changes to Virginia's mechanic's lien statute, as well as decisions clarifying and enforcing construction contract terms.  We are pleased to bring you these latest developments in our second volume of BrigliaMcLaughlin's "Punch List." 


If you would like more information about any of the topics addressed in this newsletter, please feel free to contact us.




BrigliaMcLaughlin, PLLC

Shannon J. Briglia and Lauren P. McLaughlin 

Robert J. Dietz, Shoshana E. Rothman, and Shiva S. Hamidinia

BrigliaMcLaughlin Obtains Summary Judgment for Surety on "Overpayment" Claim Against Obligee in Federal Court 


BrigliaMcLaughlin's client, International Fidelity, recently obtained summary judgment against the Western Virginia Water Authority for contract retainage improperly disbursed to its principal during the course of the project. Lauren P. McLaughlin, argued that the surety's right to the contract retainage was irrefutable under the doctrines of assignment and equitable subrogration.   


In International Fidelity Insurance Co. v. Western Va. Water Auth., Chief Judge Conrad agreed and found that the Authority had improperly paid retainage proceeds directly to the contractor, despite its agreement to hold all retainage in an escrow account.  The Court entered judgment in favor of the surety in the amount of those improper disbursements.


To review Judge Conrad's opinion, click here.
Maryland Court Upholds One-Way Arbitration Provision

This past summer, a Maryland federal court considered whether an arbitration provision in a prime contract requiring arbitration of just "contractor claims" could be used to compel the owner to arbitrate its own claims. In PC Construction Co. v. City of Salisbury, the City of Salisbury, as owner, retained an engineer, construction manager, and general contractor to design, engineer, and construct a waste water treatment plant.  The city filed suit against all three, as well as the contractor's surety, for defective work in state court. The contractor and surety then sought to compel arbitration of the city's claims in Maryland federal court.  Read More 

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D.C. Federal Court Holds that Lack of "Flow Down" Provision Relieves Subcontractor from Requirement to Submit to Contractual Claims Process


In September, a District of Columbia federal court held that a sub-subcontractor was not required to exhaust administrative remedies before proceeding with its suit where its contract did not contain a "flow down" provision. In G.T.G. Constr. Co., Inc. v. Goel Servs., Inc., an excavation sub-subcontractor filed suit against a subcontractor, general contractor, and payment bond surety for amounts owed on a construction project for WMATA at the Ronald Reagan Washington National Airport. The defendant subcontractor sought to stay the proceedings pending the parties' submission of the dispute to the agency, as required in the prime contract and incorporated into the subcontract.  Read More 


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Virginia Supreme Court Enforces Prevailing Party Attorneys' Fees Provision in Engineering Contract


Absent an attorneys' fees provision in a contract, a party cannot typically recover attorneys' fees or expenses incurred in litigating or defending a claim. Many times, the presence of an attorneys' fees provision in a contract is a useful card to play in negotiating a claim and potentially avoiding litigation altogether. However, the terms of each attorneys' fees provision, and how each jurisdiction interprets and enforces those provisions, can vary substantially. Last month, in Dewberry & Davis, Inc. v. C3NS, Inc., Rec. No. 111661, 2012 WL 4039701 (Va. Sep. 14, 2012), the Virginia Supreme Court enforced the terms of a prevailing party attorneys' fees provision found in the parties' contract.  Read More


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BrigliaMcLaughlin's Legislative Watch


Recent Changes to Virginia's Mechanic's Lien Statute


On July 1, 2012, the Virginia mechanic's lien law was amended, relating to site improvement contractors. Now, site improvement contractors performing work in a development or to condominium units have clearer direction on how to apportion their liens and how to allocate payments between the lots.


Just prior to the effective date of the amendments, the Virginia Supreme Court released an opinion that illustrates how the new amendments will aid site improvement contractors in perfecting mechanic's liens.  Read More   


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Articles In This Issue
BrigliaMcLaughlin Obtains Summary Judgment for Surety
Maryland Upholds One-Way Arbitration Provision
D.C. Examines "Flow Down" Provisions
Virginia Enforces Prevailing Party Attorneys' Fees Provision
BrigliaMcLaughlin's Legislative Watch

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Firm News:
On October 25, 2012, Lauren McLaughlin will be speaking at a breakfast meeting sponsored by the American Subcontractors Association Metro Washington (ASA/MW) Chapter.  She will be presenting a seminar on "How to Enhance Your Contract Rights in a Troubled Economy."  This free seminar will be held at HITT Contracting in Falls Church, VA.  To register for this upcoming event, please visit:
Shannon Briglia has been invited to speak at the May 15, 2013 Speakers Series for the Philadelphia Surety Claims Association. The event will be held on Wednesday, May 15, 2013 at Maggiano's Little Italy restaurant located at 1201 Filbert Street, Philadelphia, PA 19107.  For more information about the Philadelphia Surety Claims Association please click here.  


Upcoming Events:


The American Bar Association (ABA) Forum on the Construction Industry will be holding its 2012 Fall Meeting on October 18-19, 2012 at the Sheraton Hotel in Boston, MA.  To register for this event, please click here to visit the Forum's website.  


The 33rd Annual Virginia Construction and Public Contracts Law Conference will be held on November 2-3, 2012 at the Boar's Head Inn in Charlottesville, Virginia.  The Conference is being planned by Shannon J. Briglia, and topics include bankruptcy and construction law, issues in challenging and confirming arbitration awards, and hot topics in government contracts.  To register for this conference, please click here.


We hope to see you at these   exciting events!                   


Legal Seminars Offered By BrigliaMcLaughlin:


BrigliaMcLaughlin provides

in-house legal seminars to many of our clients on lessons learned in litigating complex construction cases, and are available to speak to your employees on topics ranging from the drafting and negotiation of contracts, default and termination, litigation avoidance in a troubled economy, to employment and labor law issues that affect today's workplace.


Please contact us to schedule a seminar tailored to the needs of your business.


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