Gibbons Law Alert

Gibbons Law Alert

Gibbons Law Alert

Tagged: Construction

Agreements to Arbitrate Will Be Enforced Against Unit Owners Even Where the Claims of the Condominium Association Will Be Litigated

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Posted in Alternative Dispute Resolution

On October 3, 2013

Purchasers of units in planned real estate developments, such as condominium complexes, often enter into purchase agreements with the developer that contain arbitration provisions requiring the purchasers to arbitrate any claims they may have arising out of the construction and sale of the unit. In Hudson Tea Buildings Condo Assoc. v Block 268 LLC, the New Jersey Appellate Division recently considered questions over the enforceability of such provisions in a lawsuit involving some claims that were subject to the arbitration provision and some that were not.

Contractor’s Violation of Pennsylvania’s HICPA Registration Requirement Does Not Bar Quantum Meruit or Mechanics Lien Claims

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Posted in Construction Liens / Contract Claims

On September 30, 2013

The Pennsylvania Home Improvement Consumer Protection Act, 73 P.S. § 517.1, et. seq. (“HICPA”), became effective on July 1, 2009. The HICPA is designed to protect purchasers of home improvement services from contractors engaging in fraudulent business practices. It requires contractors who perform more than $5,000 of work per year, and whose company is worth less than $50,000,000, to register with the Pennsylvania Office of the Attorney General (“OAG”), and comply with HICPA’s substantive requirements. The HICPA requires contractors to enter into written contracts for performance of improvements, specifies provisions which must be included in the written contract (§ 517.7(a)), and identifies other provisions the inclusion of which makes the contract voidable by the owner (§ 517.7(e)). Finally, certain acts on the part of contractors, including failure to register with the OAG (id. § 517.9) are prohibited by the HICPA, which sets forth criminal penalties for fraud (§ 517.8). Significantly, a violation of the Act is also deemed to be a violation of the Unfair Trade Practices and Consumer Protection Law, 73 P.S. § 201-1 et. seq.

The Limited “Refund” Remedy Under the New Jersey Consumer Fraud Act Does Not Apply to Violations of the Home Improvement Practices or Home Improvement Contractor Registration Regulations

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Posted in Construction Litigation / Contract Claims

On September 6, 2013

The New Jersey Consumer Fraud Act (“CFA”) provides powerful remedies that can be used by aggrieved parties to a construction contract. While the treble damages and attorneys’ fees remedies have traditionally received greater attention by parties and the courts, the CFA also references a refund remedy in N.J.S.A. §§ 56:8-2.11, -2.12 that aggrieved consumers have relied upon to seek refunds of amounts paid under construction contracts that violated the CFA, particularly where they had not been able to demonstrate an ascertainable loss entitling them to treble damages. However, the recent Appellate Division decision in Logatto v. Lipsky effectively eliminates the availability of the refund remedy in virtually all CFA cases, including cases arising out of construction contracts, as well as those involving alleged violations of the Home Improvement Practices and Home Improvement Contractor Registration regulations.

Prejudgment Interest on Claims for Consequential Damages for Breach of Contract are not Recoverable as of Right Under Pennsylvania Law

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Posted in Construction Litigation / Contract Claims

On August 27, 2013

Parties often specify in their construction contracts what amounts are recoverable for various events of breach. These provisions can impact not only the award of damages, but also whether amounts should be added to the award for recovery of prejudgment interest under Pennsylvania law. In Cresci Construction Services, Inc. v. James H. Martin, the Pennsylvania Superior Court considered the circumstances under which recovery of prejudgment interest is mandatory as opposed to discretionary. In that case, the plaintiff contractor brought suit against the defendant homeowner, and the homeowner counterclaimed for breach of contract.

New Jersey’s Prompt Payment Act Does Not Apply to Contracts for the Upkeep and Maintenance of Land

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Posted in Construction / Construction Litigation

On May 24, 2013

New Jersey’s Prompt Payment Act (“PPA”) can be a valuable tool available to contractors, subcontractors, sub-subcontractors, and product suppliers that are owed money on New Jersey construction projects, as aggrieved parties can recover interest on unpaid amounts at prime plus one (1%) percent in the event payment is not made within the time period provided by the PPA and attorneys’ fees. N.J.S.A. § 2A:30A-2. In TBI Unlimited, LLC v. Clearcut Lawn Decisions, LLC, the United States District Court for the District of New Jersey considered the scope of the PPA, which is only the subject of a handful of written opinions.

Defective Lien Notices Can Be Amended Under New York’s Lien Law if Defects Are Not Substantial

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Posted in Construction Liens

On April 27, 2013

New York’s mechanic’s lien law sets forth seven items that must be included in a claimant’s notice of lien. See New York Lien Law § 9. While the statute states that the lien notice “shall” include each of the seven items, a recent New York Supreme Court decision demonstrates that failure to include one or more of these seven items can have varying consequences depending upon whether the omission is considered a substantial or a technical defect. See Avon Contractors v. D.C.M. of New York, LLC, et al. In Avon, plaintiff-general contractor D.C.M. of New York, LLC (“DCM”) moved to discharge a mechanic’s lien filed by subcontractor J.E. Berkowitz, L.P. (“JEB”), claiming that the notice of lien violated subdivisions 1 and 1-a of New York Lien Law Section 9 (which provides that a lien notice must include “1. The name and residence of the lienor; and if the lienor is a partnership or corporation, the business address of such firm, or corporation, the names of partners and principal place of business, and if a foreign corporation, its principal place of business within the state; [and] 1-a. The name and address of the lienor’s attorney, if any”). Specifically, DCM claimed JEB’s lien should be discharged because the lien notice was defective because it listed a P.O. Box...

A Contractor’s Repair Estimate Provides Evidence of an Ascertainable Loss Under the New Jersey Consumer Fraud Act

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Posted in Construction / Construction Litigation

On April 10, 2013

The New Jersey Consumer Fraud Act (“CFA”) allows parties to recover damages if they have suffered an ascertainable loss. See N.J.S.A. 56:8-19. In the recent decision from the New Jersey Appellate Division, Pope v. Craftsman Builders, Inc., the court considered the type of evidence that can provide proof of an ascertainable loss in the context of a CFA claim involving a construction project.

Not All Wrongs are the Same: The Florida Supreme Court Holds That a Contractor That Knowingly Hires an Unlicensed Subcontractor Can Recover for Breach of Contract Against That Subcontractor

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Posted in Construction / Construction Litigation

On April 3, 2013

Like other states, Florida regulates parties in the construction industry and requires that contractors performing certain work be properly licensed. See Flor. Stat. Ch. 489. If an unlicensed contractor enters into a construction contract it cannot enforce that contract. See Flor. Stat. Ch. 489.128. In the recent decision in Earth Trades, Inc. v. T&G Corp., the Florida Supreme Court considered the impact of this law in a contract dispute between an unlicensed subcontractor and a general contractor, where the subcontractor claimed that the general contractor knew that it was unlicensed.

Caveat Venditor (Supplier Beware): The Importance of Accurate Accounting When Providing Materials to Contractors Working on Multiple Projects

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Posted in Construction / Construction Liens

On March 20, 2013

A recent New Jersey Appellate Division case imposes a significant burden on lien-claimant material suppliers that supply materials to contractors on multiple construction projects. As discussed in the February 13, 2013, article “A Duty to Inquire Under Lien Law,” New Jersey Law Journal, Vol. 211 – No. 6, the court in L&W Supply Corp. v. DeSilva, addressed what is necessary for a material supplier to satisfy its obligation to apply payments on the account from which the payment obligation arises in order to preserve its construction lien rights, if any.

United States v. Washington State Department of Transportation – Rains, Drains, and CERCLA Claims

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Posted in Construction / Environmental and Green Issues

On July 27, 2010

Judge Robert J. Bryan of the United States District Court for the Western District of Washington recently issued two opinions in United States v. Washington State Department of Transportation that could have significant implications on the scope and extent of liability under the Comprehensive, Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §9601 et seq., particularly at urban river sites and harbors. Both decisions examine the liability of the Washington State Department of Transportation (“WSDOT”) at the Commencement Bay/Nearshore Tidelands Superfund Site.

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