> Negotiate and draft appropriate termination clauses in project contracts.
> Benefit from expert analysis of current case law.
> Master the subtle differences between different types of termination, and know when each applies.
> Identify all the potential remedies for the terminated contractor whether justified or wrongful.
> Understand and enforce the duty to mitigate.
> Identify and apply the different immunities.
> Accurately value the costs involved in termination.
> Determine what constitutes default and the grounds for a default termination.
> Define the contractor’s, owner’s, and designer’s right to suspend work.

> Formal Change Orders and Constructive Changes
> Challenging the finality of an Executed Change Order
> Contractor Certifications and False Claims
> Changes Resulting From Breach of Implied Warranties, and Non-disclosure of Superior Knowledge
> Changes Resulting From Ambiguous Specifications
> Changes That Result From Delays and Interferences
> Changes Resulting From Impossibility or Impracticability of Performance
> Notice Requirements for Changes and Related Claims
> Pre-Litigation Advice for Change Order Claims
> Preparing and Defending a Claim for Damages: A Practical Guide

Grand Acadian (developer) began preliminary development of an RV resort in Louisiana. Hurricanes Katrina and Rita struck Louisiana. Rather than completing the RV resort, the developer leased half of its property to the Federal Emergency Management Agency (FEMA) for an emergency housing mobile home park. FEMA contracted with Fluor (design-builder) to design and construct the mobile home park. Approximately a month after the design-builder, a subcontractor, and/or sub-subcontractor began work, FEMA ordered construction to cease at the site. In an underlying lawsuit, the developer sued the design-builder, subcontractor, and sub-subcontractor for allegedly destroying the clay base of the soil and destroying the property’s usefulness for commercial development. The developer claimed that the design-builder, subcontractor, and sub-subcontractor failed to provide for adequate drainage prior to using heavy machinery on the site. The design-builder demanded that the subcontractor’s commercial general liability (CGL) insurance provider, United National Insurance (insurer), pay the design-builder’s defense costs in the underlying lawsuit. The design-builder was an additional insured under the CGL policy. Claiming that it owed no duty to defend or indemnify the design-builder, the insurer brought a declaratory judgment action against the design-builder and subcontractor. The design-builder counterclaimed. The parties filed summary judgment motions.

The insurer pointed out that the CGL policy excluded coverage to the “particular part of any property that must be restored, repaired, or replaced because ‘your work’ was incorrectly performed on it.” In the insurer’s view, the exclusion excluded the developer’s claims for the cost of restoring, repairing, or replacing the alleged damage to its property. The insurer also argued that the exclusion’s products-completed operations hazard exception was not applicable because the work was not completed. The design-builder insisted that the exclusion was not applicable because the work was not ongoing when the alleged property damage occurred. The design-builder asserted that the CGL policy’s products-completed operations hazard clause was triggered because the project was abandoned when FEMA cancelled the contract. The court determined that the design-builder did not complete the work called for in the contract. The purpose of FEMA’s contract with the design-builder was the construction of a mobile home park. In the underlying lawsuit, the developer alleged that the job site was left as a “mud hole” and remained in the same condition. The CGL policy’s products-completed operations hazard clause was triggered, however, because the project was abandoned when FEMA ceased operations. At least some damage alleged by the developer, such as erosion, occurred after FEMA halted work. Consequently, the property damage occurring after the project was abandoned was covered under the products-completed operations hazard clause. Since the policy’s exclusions did not unambiguously exclude the developer’s claims in the underlying litigation, the insurer had a duty to defend the design-builder. The design-builder’s motion for partial summary judgment was granted; the insurer’s motion for summary judgment was denied.

Martin Brothers Contractors (contractor) entered into a contract with Virginia Military Institute (owner) to renovate its campus dining facility. Changes requested by the owner delayed the project by 270 days. The contractor claimed site delay damages amounting to $225,937, and home office delay damages amounting to $204,305, plus the cost of recovery. The owner admitted that the contractor was without fault for the delay, but paid only $99,646 of the contractor’s claimed damages. The owner contended that the contractor’s amount of damages was limited by the terms of its contract. The contract stated that unreasonable owner caused delays were treated as change orders and were subject to a maximum markup of 15% for overhead and profit. The contractor conceded that the contract purported to limit recoverable damages, but argued that such terms were void and unenforceable as against public policy under Va. Code Ann. § 2.2-4335 (damages statute). The contractor filed suit for the full amount of damages sought. Both parties motioned for summary judgment. The owner’s motion for summary judgment was granted after the trial court concluded that the provisions were enforceable as liquidated damages which were expressly permitted by the damages statute and further that the owner was not unfairly insulated from damages for delay. The contractor appealed.

The owner argued that all of the claimed home office expenses and all site expenses beyond the $99,646 it paid were excluded by the markup provisions of its contract. The owner maintained the provisions constituted liquidated damages which were permitted under the damages statute. The court noted that the contract’s markup provisions provided compensation to the contractor for added work required by the owner’s change orders, but provided no compensation for additional expense incurred as a result of delay. The provisions were liquidated damage provisions only insofar as they covered additional expenses incurred for contract administration, plus agreed profit for extra work required by the owner. They were not an agreed upon formula for calculating damages for delay, and thus were not liquidated damages for the purposes of the damages statute. Because the provisions were not covered by the damages statute, they operated as a bar to most of the contractor’s delay expenses and were thus void and unenforceable as against public policy under the damages statute. Reversed and remanded.

The Ohio Department of Transportation (ODOT) requested bid proposals for a project involving the construction of highway ramps. In preparation for submitting a bid for the ODOT project, Complete General Construction (contractor) solicited quotes from prospective subcontractors. Kard Bridge Products (subcontractor) faxed its original quote to the contractor for structural steel components. Within a few hours, the subcontractor submitted a revised quote to the contractor due to a mistake in the original quote. The contractor was not aware of the revised quote, however, when it submitted its bid to ODOT later that morning. The contractor’s bid was based on the subcontractor’s original quote. The contractor did not learn of the revised quote until more than thirty days later, during negotiations with the subcontractor. Since the subcontractor did not honor its original quote, the contractor entered into a subcontract with another company. The contractor sued the subcontractor for breach of contract, promissory estoppel, and detrimental reliance. The trial court entered judgment in favor of the subcontractor. The contractor appealed.

The contractor insisted that the subcontractor’s original quote constituted a firm offer under Ohio Revised Code § 1302.08 (statute). In the contractor’s view, the subcontractor was obligated to honor its original quote. The court concluded that, even if the original quote constituted a firm offer, the contractor’s claim under the statute failed because the contractor did not accept either the original or revised quote by issuing a purchase order to the subcontractor. The court determined that the contractor reasonably relied on the subcontractor’s original quote to the extent that it incorporated that quote in its bid. Although the subcontractor’s revised quote did not revoke the original quote, however, the subcontractor was not bound to perform under its original quote unless the contractor accepted its offer. The contractor’s use of the original quote in formulating its bid did not constitute acceptance of the subcontractor’s offer. After obtaining the general contract from ODOT, the contractor continued to negotiate with other structural steel subcontractors to obtain reduced bid prices. The contractor’s acknowledgement that it engaged in bid shopping undermined its assertion that it accepted the subcontractor’s original quote. Because the contractor engaged in bid shopping, the doctrine of promissory estoppel was inapplicable. The trial court did not err in determining that the subcontractor was not bound to honor its original quote. Affirmed.

Villaje Del Rio (owner) was the owner and developer of a project involving the construction of a large multi-use residential, office, and retail development. The owner ultimately terminated the general contractor and the project failed. The lender declared the owner in default of the mortgage note. Prior to declaring bankruptcy, the owner filed suit against multiple defendants, including the lender. George Geis (creditor), the owner’s principal, purchased the owner’s litigation claims from the owner’s trustee in bankruptcy. The creditor asserted a claim against the lender for recovery of fraudulent conveyances. The creditor alleged that the lender, by forcing the owner to approve the general contractor’s requests for payments, overpaid the general contractor by more than $2.8 million. The lender filed a motion to strike the creditor’s designation of the creditor and other witnesses as experts.

The lender objected to the creditor’s proposed testimony on the issue of solvency on the basis that it did not meet the standard for admissibility under Federal Rule of Evidence 702. The lender also objected to the creditor’s designation of other individuals as experts on the issues of solvency and overpayment. The creditor did not attempt to show that he had any knowledge, skill, experience, or education in matters of solvency. Instead, the creditor focused on his personal knowledge of the owner’s financial condition based on his experience managing the owner’s operations. Although the creditor may have possessed sufficient personal knowledge to testify as a lay witness about the owner’s solvency, the creditor failed to demonstrate under Rule 702 that he was qualified to testify generally as an expert on the issue of solvency. In addition, the creditor failed to show that his proposed testimony was of an expert nature. The proposed testimony was merely descriptive of the owner’s operations. The creditor’s designation was stricken to the extent that he intended to testify as an expert on the issue of solvency. As for the other witnesses designated by the creditor, the creditor did not show that the opinions of several witnesses in regard to solvency were relevant to his fraudulent conveyance claim. The opinions were not supported by reliable methods for determining the value of the construction project at the time of the alleged overpayments. The creditor’s designation of the solvency witnesses was stricken. The creditor, however, established that the testimony of certain witnesses on the issue of overpayment was relevant to his fraudulent conveyance claim. The creditor’s theory of liability rested on his assertion that the alleged overpayments were fraudulent conveyances. The witnesses had knowledge concerning the percentage of construction completed during the relevant time period and whether that percentage corresponded to the amount of each payment made to the general contractor. The creditor’s designation of the overpayment witnesses was not stricken. The lender’s motion to strike was granted in part and denied in part.

The Pennsylvania Department of Transportation (DOT) awarded a highway renovation project to Wayne Knorr, Inc. (contractor). The project involved adding a third truck climbing lane to an existing two lane road, widening the northbound shoulder, and the demolition and replacement of an existing bridge. Under the contract, if no schedule was presented for approval by the contractor at the preconstruction meeting, Form D-476 (schedule of operations) became the official schedule. Although the contractor indicated it would provide a critical path method (CPM) schedule to the DOT, the notice to proceed was issued and a CPM schedule was never requested or produced. Because the contract’s scheduled completion dates conflicted with a prohibition on roadway paving during winter months, the contractor accelerated its excavation and drainage work to maintain the schedule’s overall progress requirements. After completing preparations for its sub-base and paving work, the contractor alleged it was continuously delayed by the DOT. The contractor filed a complaint with the Board of Claims. The contractor alleged that: the DOT plans were missing or included incorrect grades and elevations, a delayed resolution of slope instability issues caused a work suspension, missing roadway grades near the replacement bridge were delayed, and that the DOT failed to timely schedule a semi-final inspection. The DOT counterclaimed for construction engineering liquidated damages. The Board found the DOT responsible for some delays, but noted some were self-inflicted by the contractor, and it awarded the DOT damages on its counterclaim. Both parties appealed.

The DOT argued that it requested, and the contractor had indicated that it would provide a CPM schedule to monitor progress and document delays. The DOT maintained that the contractor’s failure to do so was a breach of contract. The DOT also argued that the contractor was mistakenly allowed to use a different schedule to pursue its delay and disruption claims. The contractor’s failure to submit a CPM schedule was not a material breach of the contract because providing a CPM schedule was not a contractual obligation. Although it initially appeared that the contractor would provide a CPM schedule, when it failed to do so, the contract’s schedule of operations became the official schedule by default. It was not uncommon on DOT construction projects for a contractor to use the schedule of operations as the official project schedule. The contractor had outlined its method of procedure at the preconstruction meeting and confirmed that it would proceed in accordance with the contract’s schedule of operations. The DOT had not objected when the contractor used the schedule of operations and had never requested a CPM schedule. The contract expressly provided that where no alternative project schedule was provided, the schedule of operations would become the official schedule for the project. Further, because the contractor opted not to submit a CPM schedule, its expert’s use of dates and time frames from the schedule of operations to represent an “as planned” project schedule properly allowed it to create an “as built” schedule to evaluate the duration of critical delays to the as planned schedule. As such, the delay and disruption claims were not based on a schedule entirely different from the schedule of operations. Affirmed.

L&S Basements (contractor) poured concrete basement walls and floors for new construction. The contractor often rented concrete pump trucks from Midwest Concrete Placement (rental company) when it needed to pump concrete into its work area. After the work was completed, the contractor signed a job ticket signifying that the job had been completed as requested. The ticket indicated that the terms and conditions of the contract printed on the reverse side were understood and agreed to by the customer. The back of the ticket contained an indemnification provision in which the contractor agreed to indemnify the rental company against all claims arising out of, connected with, or resulting from the operation or handling of the equipment on its jobsite. An employee of the contractor was severely injured when a hose on a rental company pump trucks ruptured and propelled concrete at his neck, back, and head. The employee settled his claims with the rental company. The rental company brought a third party claim against the contractor. Both parties motioned for summary judgment.

The contractor maintained that it was unaware of the indemnification provision in the agreement and thus there was no meeting of the minds. The contractor reasoned that because there had never been a meeting of the minds as to the essential terms of the agreement that no contract existed. The rental company contended that the contract was formed when the contractor’s agent signed the job ticket at the work site. The rental company further argued that the contractor assented to the terms of the agreement when it paid for the services and accepted performance. One of the contractor’s agent had signed two of the rental company’s job tickets. The signed job tickets served as evidence of the parties mutual intent to form a contract. Payment for the rental company’s services served as further evidence of the contract’s existence. The alleged lack of awareness of the indemnification provision was not a bar to contract formation because state law presumed that parties to a contract have read and understood the contract’s terms. Further, the contractor and the rental company had an ongoing business relationship based on renting concrete equipment and pump trucks. The contractor should have been aware of the indemnification provision given the numerous occasions it had rented such equipment in the past. The rental company’s motion for summary judgment was granted.