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The Punch List
Construction and Surety Law News
Summer 2014
Vol. 4
 

We are pleased to celebrate BrigliaMcLaughlin's six-year anniversary this month, and take this opportunity to express our sincere gratitude to our clients, friends, and professional colleagues in the industry.

 

We were humbled to start the year with recognition from the Transportation Research Board (TRB), of the National Academies, for our work in co-authoring a substantive white paper titled "Legal Issues Involving Surety for Public Transportation Projects."  The firm received the John C. Vance Award for what the TRB coined "a paper of outstanding merit."  The paper is intended as a resource for public transportation agencies in addressing and navigating surety issues.  Please click here for a copy.  

 

Given our passion for issues that affect our clients and the industry, our firm's lawyers have also spoken at a number of industry events in the first half of the year, including the ABA/Fidelity and Surety Law Committee Mid-Winter meeting in New York, the ABA/Forum on the Construction meeting in New Orleans and we presented a webinar for the Virginia State Bar on construction topics.

 

Below are some recent client successes, along with a summary of some recent legal trends we hope you find useful.

 

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

 

Sincerely,

 

BrigliaMcLaughlin, PLLC

Shannon J. Briglia and Lauren P. McLaughlin 

Robert J. Dietz, Shoshana E. Rothman, and

Shiva S. Hamidinia

General Contractor Client Wins Directed Verdict
 
THE RESULTS OF THIS CASE DEPEND UPON A VARIETY OF UNIQUE FACTORS.  CASE RESULTS DO NOT GUARANTEE OR PREDICT A SIMILAR RESULT IN ANY FUTURE CASE.

 

BrigliaMcLaughlin recently assisted a general contractor client in obtaining a directed verdict against two sub-subcontractors in a multi-day bench trial in Maryland state court.  BrigliaMcLaughlin also successfully defended the claims brought against a general contractor on Kohl's Department Store projects in Easton, Maryland and Roanoke, Virginia. 

 

The sub-subcontractors attempted to assert claims against the general contractor arising out of a settlement agreement between the general contractor and a subcontractor.  The court granted the general contractor's motion for a directed verdict, ruling that the terms of the settlement agreement were unambiguous and did not require the general contractor to pay the unsubstantiated claims of the sub-subcontractors.  The court further ruled that the sub-subcontractors failed to properly substantiate their claims.

 

To learn more about BrigliaMcLaughlin's Construction Risk Management and Litigation practice, click here.

Banking Client Obtains Award For Damages At Trial
 
THE RESULTS OF THIS CASE DEPEND UPON A VARIETY OF UNIQUE FACTORS.  CASE RESULTS DO NOT GUARANTEE OR PREDICT A SIMILAR RESULT IN ANY FUTURE CASE.

 

In March 2014, BrigliaMcLaughlin tried a case on behalf of a national banking client on a defaulted promissory note in the Arlington County Circuit Court. Following trial and post-trial briefing on the enforceability of a negotiable instrument by a holder, the court issued a letter opinion awarding judgment in favor of BrigliaMcLaughlin's client for the full amount of the default and interest from the date of the default.

 

To learn more about BrigliaMcLaughlin's Commercial Disputes practice, click here.

Surety Client Awarded Summary Judgment In Federal Court On An Indemnity Agreement

 

THE RESULTS OF THIS CASE DEPEND UPON A VARIETY OF UNIQUE FACTORS.  CASE RESULTS DO NOT GUARANTEE OR PREDICT A SIMILAR RESULT IN ANY FUTURE CASE.

 

In September 2013, BrigliaMcLaughlin obtained summary judgment in the U.S. District Court for the Eastern District of Virginia, on behalf of a surety client against corporate and individual indemnitors in connection with claims paid by the surety on several of its bonds.

 

The surety issued performance and payment bonds on behalf of its principal on thirteen federal projects across the country, and in return, received a general indemnity agreement from the corporate principal and individuals. When the principal defaulted on several of the federal projects, the surety incurred losses in the nature of payment bond claims, consulting fees, and attorneys' fees, which it sought to recover in the federal court litigation.

 

Following argument by Shoshana Rothman, the federal court ruled that under the terms of the indemnity agreement, the surety was entitled to judgment for all claimed damages, including the amounts paid to bond claimants, the surety's construction consultant, and the surety's attorneys.  

 

To lean more about BrigliaMcLaughlin's Surety Representation practice, click here.

Federal Circuit Rejects Narrow Standard For Breach Of The Duty Of Good Faith And Fair Dealing Claims 

 

Over the years, the long-standing legal theory of breach of an implied duty of good faith and fair dealing has been eroding. Contractors seeking to sue the government for breaching this implied duty were frequently unsuccessful because of the difficult legal burden for proving such a claim. In a recent case with far-reaching implications, however, the Federal Circuit decided that the Court of Federal Claims erred when it applied the wrong legal standard to a government contractor's claim for breach of the duty of good faith and fair dealing.

 

In Metcalf Construction Company, Inc. v. United States, 742 F.3d 984 (Fed. Cir. 2014), the Federal Circuit examined a contract between the Navy and Metcalf Construction Company ("Metcalf") for the construction of military housing in Hawaii and explained that the duty of good faith and fair dealing imposes obligations on both contracting parties that includes the duty not to interfere with the other party's performance and not to act so as to destroy the reasonable expectations of the other party regarding the fruits of the contract.  Read more    

Maryland Federal Court Finds A Second-Tier Subcontractor's Email Is Sufficient Notice To Allege A Miller Act Claim

 

In United States ex rel. Cummins-Wagner Co., Inc. v. Fidelity and Deposit Co. of Maryland, Civil Action No. 13-164, 2013 WL 4829051 (D.Md. Sept. 9, 2013), the U.S. District Court for the District of Maryland concluded that a second-tier subcontractor's email to the prime contractor containing the amounts owed to it was sufficient notice to allege a Miller Act claim, and denied the surety's motion to dismiss.

 

Cummins-Wagner, a second-tier subcontractor, provided equipment and materials to the mechanical subcontractor in connection with the construction of a building for the National Institute of Standards and Technology. When the mechanical subcontractor abandoned the project before completing its subcontract and filed for bankruptcy, the prime contractor contacted Cummins-Wagner requesting information concerning the balance owed to Cummins-Wagner. In response, and within ninety days of having delivered its equipment, Cummins-Wagner sent an email to the prime contractor indicating the amount of the remaining balance due, and then later provided copies of its outstanding invoices. Nearly four months later, Cummins-Wagner sent a letter to the prime contractor and surety demanding payment for the outstanding balance, which was denied by the surety. Cummins-Wagner then brought suit.  Read more
Articles In This Issue
1. General Contractor Client Wins Directed Verdict
2. Banking Client Obtains Award For Damages At Trial
3. Surety Client Awarded Summary Judgment In Federal Court On Indemnity Agreement
4. Federal Circuit Rejects Narrow Standard For Breach Of The Duty Of Good Faith And Fair Dealing Claims
5. Email Is Sufficient Miller Act Notice

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Firm News:
  

Shannon Briglia was selected by her peers to be included in the 2014 Edition of The Best Lawyers in America for her work in the practice areas of Construction Law and Litigation-Construction. 

 

This honor is the result of an exhaustive and rigorous peer-review survey comprising more than five million confidential evaluations by top attorneys.

  

  

Upcoming Events:

 

BrigliaMcLaughlin is looking forward to seeing many of our colleagues at the ABA Forum on the Construction Industry's Fall Meeting, Bulldozers, Cranes & Claims at the Hilton Chicago on October 26-27, 2014. 

 

More information on the program can be found here.

 
We hope to see you at this exciting event!       

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 we are available to speak 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.