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SLDF Case Updates

2010

February 2010 - KBS Construction v. McCullough Plumbing, Inc. (construction trust fund)
On Feb. 2, ASA filed an amicus curiae brief in this case pending for review before the Wisconsin Supreme Court seeking to uphold the state's Construction Trust Fund Statute. In this case, general contractor KBS and subcontractor McCullough got into a dispute on a condominium project and KBS stopped paying McCullough. At substantial completion, McCullough let the job. KBS then sued, and the subcontractor prevailed and was awarded its contract amount. However, the general contractor had not set up a statutorily-required trust account to protect the funds due to McCullough. When the subcontractor went to collect the judgment, KBS's bank accounts were dry and McCullough could not recover. Because the court had also found that the subcontractor must prove criminal theft in order to trigger liability and did not, McCullough had no recourse for payment. ASA's brief asserts that "there are many subcontractors working in Wisconsin, relying on the trust fund statute to safeguard them against misappropriation of funds, rightfully belonging to them, by prime contractors." Furthermore, in requiring a sub to prove criminal theft "the court of appeals upheld not only a clearly erroneous finding of fact, but a dangerous one" that would impose a burden of proof irrelevant to the civil proceedings.

January 2010 - Nationwide Mutual Insurance Company v. L.C.I.2, Inc. (indemnity; additional insured)
ASA, joined by ASA of New Mexico, filed an amici curiae brief with the New Mexico Court of Appeals on Jan. 29, 2010, arguing that an "additional insured" provision may not be used to get around New Mexico's 25-year-old anti-indemnity law. In this case, a general contractor, LCI2, seeks to require a subcontractor's insurer, Nationwide, to defend and indemnify it as an additional insured in a lawsuit filed by an employee of the subcontractor who was injured due to non-delegable duties of the general contractor. In their brief, ASA and ASANM pointed out that "the trial court's decision runs directly contrary to the prior case law and is contrary to the fundamental public policy as recognized by" New Mexico courts. New Mexico has strong law which voids as against public policy indemnity for injuries that arise in whole or in part from the negligence of the indemnified party.

2009

November 2009 - Mid-Ohio Mechanical v. Eisenmann Corporation (mechanic's liens/time-and-material invoices)
On Nov. 2, the Ohio Court of Appeals, 5th Appellate District agreed with ASA that a general contractor cannot add new hurdles to justify delaying payment of time and material invoices. ASA, joined by ASA of Ohio, filed two friend-of-the-court briefs  in this case. Subcontractor Mid-Ohio Mechanical performed work under a T&M contract on part of the construction and installation of the paint line of a factory. Eisenmann did not pay Mid-Ohio’s invoices and Mid-Ohio filed a mechanic’s lien, which Eisenmann and the project owner released by posting a cash bond. Eisenmann first claimed that Mid-Ohio did not have the right to file a lien because it merely installed equipment. The trial court agreed, and Mid-Ohio appealed since the installation constituted alteration of the building itself. In a May 22, 2006, friend-of-the-court brief , ASA argued that the lower court decision denying the lien “ignores the plain language of the Ohio Mechanic’s Lien statutes, contradicts recent Ohio precedent and destabilizes the foundation of the construction industry." The appellate court agreed, ruling that the subcontractor’s work and materials are “as a matter of law, improvements to a building, fixture, appurtenance or other structure” and subject to lien. With that victory, Mid-Ohio tried to collect a cash deposit made in lieu of its mechanic’s lien. Eisenmann Corp. filed a second appeal, challenging Mid-Ohio’s right to collect the cash bond on the grounds that it does not have to honor Mid-Ohio Mechanical’s claim because of the “wastefulness,” “extravagance,” etc., of its time-and-material (T&M) invoices, and that Mid-Ohio has to take additional procedural steps to collect the cash bond. In a second brief filed on Nov. 2, 2007, ASA argued that “Eisenmann seeks to create procedural hurdles for contractors and subcontractors who cooperate with an owner seeking to provide such alternate security” and fails to substantiate its case in “any provision of the Ohio Civil Rules or any applicable Ohio case law.” The court of appeals agreed, stating that a T&M contract does not entitle a contractor to question an invoice unless the work was improperly performed.

September 2009 - Board of Education of Worcester County v. BEKA Industries, Inc. (sovereign immunity; no damage for delay)
ASA, joined by ASA of Baltimore and the D.C. Metropolitan Subcontractors Association, filed an amici curiae brief with the Maryland Court of Special Appeals, arguing that subcontractors are entitled to damages when they incur costs because of delays that aren't their fault. In this case, the school board contracted with BEKA for site work for a new elementary school. Due to circumstances acknowledged as beyond the subcontractor's control, BEKA's work was delayed almost six months. Later, disputes arose over the amounts owed to the subcontractor. With more than $1.1 million in outstanding debts owed to it, BEKA sued to recover damages and won. On appeal, the school board is arguing that it has sovereign immunity under Maryland state law and is exempt from judgments in excess of $100,000, and that the no-damage-for-delay clause in BEKA's contract is enforceable. In its brief, ASA stated "the ability of a governmental entity to breach solemn contracts would serve as a disincentive for private industry to contract with the government."

August 2009 - Questar Builders, Inc. v. CB Flooring, Inc. (bid shopping; termination for convenience)
The Maryland Court of Appeals upheld the duty to act in good faith and deal fairly in construction contracts in an Aug. 25, 2009, opinion in Questar Builders, Inc. v. CB Flooring, Inc. The court vacated the Circuit Court's ruling, but sent the case back to determine for sure if Questar acted in bad faith when it terminated CB Flooring "for convenience." In this case, a subcontractor was terminated after submitting a change order request for extra costs arising out of design changes. The general contractor then used the subcontractor's original bid to obtain a competitor's agreement to perform the same work for $1,000 less than the original subcontractor, flouting the duty of good faith and fair dealing in contracts. On Feb. 17, 2009, ASA, ASA of Baltimore and the D.C. Metropolitan Subcontractors Association filed an amici curiae brief which asserted that "a holding carving...an exception to the reach of good faith and fair dealing covenant would not only poison business relationships and eliminate business certainty, but also do great damage to the ability of subcontractors to rely on their signed contracts as a reliable indicator of future work and expected revenues" and would make subcontracts "illusory and meaningless." The Court of Appeals agreed, holding that "Questar's contention that it was entitled to terminate the Subcontract for any reason whatsoever goes to far and is inconsistent with the terms of the Subcontract. To be sure, a right to terminate in the absence of the other party's breach does not equate necessarily with the right to terminate based on a whim. We shall not read into the Subcontract such unfettered power."

July 2009 - DR Horton, Inc. v. BD Foundations, et al. (broad-form indemnity)
The Colorado Court of Appeals sided with subcontractors in its July 9, 2009, decision in DR Horton, Inc. v. BD Foundations, et al., affirming a trial court's ruling that a design-build contractor cannot shift the liability for its design errors to subcontractors through a contractual indemnity clause. On Nov. 14, 2008, ASA, joined by ASA of Colorado, filed an amicus curiae brief in this case. ASA and ASAC argued that the non-negotiable nature of the indemnity clause, and thus the clause itself, is against public policy: "Allowing a general contractor to recover under an indemnification clause in a subcontract without proof that a subcontractor caused damages only increases the disproportionate power of the general contractor." An amicus for the contractor contested that Horton's arguments had merit based on a railroad indemnity case, but the court agreed with ASA and ASAC that the issue was not preserved for appeal and could not be considered.

July 2009 - Dealers Electrical Supply Co. v. Scoggins Construction Company, Inc. (remedies for nonpayment)
The Texas Supreme Court upheld the payment rights of lower-tier contractors with its July 3, 2009, decision which found that payment bonds were not a supplier's only remedy for securing payment for work performed from a contractor. In Dealers Electrical Co. v. Scoggins Construction Company, Inc., Dealers missed the payment bond filing deadlines established by the McGregor Act (the Texas "little" Miller Act), but argued that it could use Texas's Construction Trust Fund Act to recover $80,000 it was owed for electrical parts. ASA filed two "friend of the court" briefs in this case, supporting the petition for review on May 13, 2008, and on Aug. 18, 2008, to support a second petition following the Supreme Court's refusal to hear the case. In its second brief , ASA, joined by the Houston Hispanic Chamber of Commerce (HHCC), pointed out a recent decision that supports Dealers’ position that “courts…should not lightly interpret one statutory claim to override another.” Furthermore, the brief states, “the McGregor Act payment bond complements [other remedies], but it is not – and was never designed to be – an adequate substitute for them.” The court agreed with these arguments and reversed the appeals court decision, but sent the case back to the lower court to decide the applicable remedy issues.

May 2009 - Galeb-Miller Development, LLC v. Markham Contracting, Inc. (false documents, mechanic's liens)
In a May 19, 2009, decision , the Arizona Court of Appeals, Division One, reversed a decision that would have unduly penalized lien claimants, especially on large, multi-lot properties. In Galeb-Miller Development v. Markham Contracting, the developer, Galeb-Miller failed to pay Markham in a timely manner for its work, and did not provide the subcontractor with the required notice that its liens were bonded off. The trial court found Markham Contracting's filing of five lien notices "groundless" and required it to pay damages for the supposedly unnecessary notices, citing Arizona's False Documents Act. On Nov. 7, 2008, ASA, joined by ASA of Arizona, Arizona Builders' Alliance, and Associated General Contractors of America, Arizona Chapter, filed a "friends of the court" brief asking the court to reconsider the fine, which was calculated on a per lot basis rather than per notice. In its brief, ASA urged the court to consider the chilling effect such heavy fines would have on contractors' lien rights, and that upholding this ruling would "tip the balance of power between developers and subcontractors sharply - and unfairly - in favor of developers." The Court of Appeals agreed and vacated all damages, offsets and interest in favor of the specialty trade contractor.

April 2009 - Great American Insurance v. Los Angeles Unified School District (breach of implied warranty)
On Apr. 30, 2009, ASA and ASA of California, with the support of 11 other construction trade associations filed a "friend of the court" brief in a case before the California Supreme Court which will determine whether contractors need to prove intentional concealment of facts when bringing a breach of implied warranty claim against a public owner. In this case, a completion contractor was asked to return half of additional funds paid for defects beyond a pre-punch list on a cost-plus contract with a guaranteed maximum price. The trial court stated that the contractor and its surety must prove that the school district withheld information in order to keep the funds in keeping with its breach claim. ASA and ASAC disagree, stating that "being required to prove that material facts were intentionally concealed by the owner will only cause contractors to constantly question the accuracy of plans and specifications, thereby lending to a direct increase in the overall costs of construction as contractors will now be forced to independently verify the accuracy and completeness of plans and specifications provided to them." The brief was fully funded through ASAC's fundraising effort.

2008

August 2008 - John Patrick Lowe, Trustee for NA Flash Foundation v. Palmetco, Inc. (bankruptcy preference)
In an Aug. 18 decision , the U.S. Court of Appeals, Fifth Circuit, ruled in favor of a supplier that sought to block a Chapter 7 bankruptcy trustee from reaching back to recover payments made by a bankrupt contractor when those subcontractors and suppliers can no longer perfect liens to recover from the owner. The court ruled that the supplier was protected by Texas construction trust fund law, and that the supplier would have recovered the full amount of its claim in bankruptcy liquidation. In a brief filed Nov. 28, 2007, ASA argued that to rule otherwise would dramatically increase the risks to subcontractors and suppliers who extend credit to others in the construction industry, potentially disrupting the practice throughout the industry.

August 2008 -
Intra-American Foundation & Drilling v. Evanston Insurance Company (insurance coverage - breach of contract exclusion)
On Aug. 19, 2008, ASA, joined by ASA of California (ASAC), filed a letter of support asking the California Supreme Court to consider a case that would allow insurers to deny claims on the basis of "breach of contract" regardless of the underlying facts of the injury. In this case, subcontractor Intra-American settled a general contractor’s “breach of contract” suit against it for causing property damage to a neighboring property. When the subcontractor sought to recover from insurer Evanston under its CGL policy, Evanston denied the claim because of a non-standard Breach of Contract Exclusion written into the policy stating that coverage did "not apply to claims for breach of contract … whether 'bodily injury', 'property damage', … or an 'occurrence' is alleged." Intra-American sued for improper denial of coverage, and a trial court and a jury found in favor of Intra-American. However, a court of appeals ruled against the subcontractor, allowing the exclusion to stand. ASA and ASAC urged the high court to review the case based on the underlying facts. ASA and ASAC stated that a decision against Intra-American “would allow coverage to be defined based on actions beyond the control of the insured,” and that it could “lead to blackmail of the insured by the injured party ‘unless you agree to X, I will assert my claim as a breach of contract claim and you won’t be covered.’”

July 2008 -
Crawford v. Weather Shield Mfg. (construction defect, duty to defend)
In a July 21 decision , the California Supreme Court upheld an appeals court decision to enforce a subcontract provision that made a non-negligent subcontractor bear the costs of defending a developer against a suit brought by homeowners, citing the separation of the duty to defend from the duty to indemnify. ASA's Nov. 28, 2006, a friend-of-the-court brief asked the court to overturn based on California law "bars general contractors and developers from requiring their non-negligent subcontractors to defend them in litigation." However, the indemnity reform law took effect after the claim was filed, and does not apply in this case. ASA's brief built on an ASA victory earlier in the year in which the California Supreme Court, prompted by an amicus letter filed by ASA, decided to grant review of the appeals court's decision. In this case, subcontractor Weather Shield Manufacturing Inc. challenged a lower court ruling that found it responsible for a developer's defense costs because of a subcontract provision "to defend any suit or action" founded upon any claim "growing out of the execution of the work." ASA's brief points out that California's current law does not separate a general indemnity obligation from the duty to defend and that the California Legislature enacted the anti-indemnity law to protect the public and businesses from negligent parties that would simply pass their liabilities on to others without consequence.

May 2008 - Tricon Kent Co. v. Lafarge North America, Inc., et al. (no damages for delay)
On May 1, the Colorado Court of Appeals agreed with ASA, rulingthat the trial court did not err when it awarded damages to a subcontractor under the "active interference" exception to "no damages for delay." This was the first ruling in Colorado on the validity and enforceability of such clauses. ASA's Feb. 27, 2007 brief stated that, if enforceable, "no damages for delay" clauses ought to be strictly construed against the owner and contractor, and exceptions should apply given sufficient evidence. In this case, subcontractor work was delayed due to a revised project schedule, but no allowances were made by the general contractor. Tricon was able to provide evidence that Lafarge knew of the impact of project delays and proceeded to require Tricon to stick to its previous schedule anyway.

2007

December 2007 - U.S. Fire Insurance Co. v. J.S.U.B. (insurance - coverage of construction defects)
On Dec. 20, 2007, the Supreme Court of Florida ruled that unexpected and unintended property damage arising out of the work of a subcontractor constitutes a covered occurrence of property damage under the general contractor's CGL policy. In this clear victory for construction subcontractors, the court cited the arguments made by amici curiae, including ASA, in its decision. In its August 2006 friend-of-the-court brief , ASA argued that excluding coverage would render the provisions of a standard CGL policy superfluous and effectively defraud a contractor who relies on the plain meaning of the policy language.

December 2007 - Auto-Owners Insurance Co. v. Pozzi Window Coverage. (insurance - coverage of construction defects)
On Dec. 20, 2007 the Supreme Court of Florida ruled that damage to defective windows themselves, even though installed by a subcontractor did not constitute property damage. In an August 2006 amicus curiae brief , ASA joined several other construction associations urging the Court to affirm a federal district court decision holding that a standard CGL policy insuring a general contractor covers the cost of correcting construction defects allegedly arising from the work of a subcontractor. ASA argues that standard CGL policies would not make sense if the "subcontractor provision" providing overage for damage resulting from "work performed by a subcontractor on behalf of the named insured" does not mean what it says. Although ASA finds little to distinguish between damage to the defective work itself and other work, for the purposes of the definition of property, the court appears to believe that its ruling is consistent with its ruling in J.S.U.B. (see above).
 

2007

November 2007 - Myrex Industries v. Suretec Insurance Company (timeliness of little Miller Act notice)
On Nov. 19, 2007, ASA asked the Texas Supreme Court to hear and reverse an Appeals Court decision that held that the law which extends a filing period to the next business day when the deadline falls on a weekend or holiday does not apply to payment bond claims under the McGregor Act. The Appeals Court held that Myrex's payment bond claim was untimely and thus invalid. ASA's letter in support of the subcontractor's appeal argues that the Appeals Court ruling sets up a potential trap for the unwary, resulting in the invalidation of otherwise meritorious claims. Unfortunately, the court denied the petition for review.

August 2007 - Lamar Homes v. Mid-Continent Casualty (construction defect) On Aug. 31, 2007, the Texas Supreme Court issued a ruling agreeing with ASA that that property damage caused by a defective foundation is covered by a building contractor's general liability insurance, which most contractors and insurance agents assume includes coverage for "completed operations." In Feb. 2006, ASA joined several other construction associations on an amicus curiae brief arguing that the "marketing" of general liability insurance policies "emphasizes the availability of coverage for various categories of defective work," and that "the premium charged ... would be excessive to say the least," if the insurer's argument - that defective construction is not covered by the standard policy language - succeeded. The case was sent to the Texas Supreme Court on certified questions from the U.S. Court of Appeals for the Fifth Circuit, after ASA filed an amicus brief in that court on Jan. 11, 2005, which made similar arguments.

April 2007 - TA Operating v. Solar Applications (mechanic's liens)
On April 27, the Supreme Court of Texas granted the petition for review in the case. Argument of the case is expected to take place in September or October of 2007. ASA previously filed a brief in May 2006 urging the Texas Supreme Court to overturn an appeals court decision that would force subcontractors to release their liens in order to preserve their customers' rights to payment from the owner in any case where the prime contract requires unconditional lien releases to be submitted with the application for final payment.

April 2007 - Dugan & Meyers Constr. Co., Inc. v. Ohio Dept. of Adm. Servs. (owner warranty of defective plans)
In an April 25 decision , the Supreme Court of Ohio limited the Spearin doctrine, which provides that owners warrant that their plans are suitable for construction, to owner representations about job site conditions, declining to allow contractors to collect damages resulting from delays caused by owner-provided plans that are defective. ASA filed a friend-of-the-court brief on March, 27 2006, urging the high court to reverse an appeals court decision in Dugan & Meyers Constr. Co., Inc. v. Ohio Dept. of Adm. Servs., and allow contractor Dugan & Meyers Construction Inc. to collect damages for delays it experienced due to inaccurate and incomplete plans on an Ohio State University (OSU) project it led. ASA later filed another brief in September 2006 urging the Ohio Supreme Court to review the case because of its importance to the construction industry, and the court agreed to review the case in December 2006. After being discharged from the project by OSU, Dugan & Meyers filed a complaint in the Court of Claims seeking damages for delays. The Court of Claims ruled that the principal cause of the delays were the deficient plans, and that OSU had breached the contract. A Court of Appeals reversed that decision on the grounds that the contract contained a “no damages for delay” clause, which was legal in Ohio at the time, and that it included a specific procedure to be followed for changes and extensions. Dugan & Meyers did not file any requests for extensions, and the appeals court refused to hold that OSU had implicitly warranted that its plans were constructible, accurate and complete, or that an implied warranty took precedence over the express contractual terms. The Ohio Supreme Court agreed.

February 2007 -
Fowler & Peth, Inc. v. Regan (Colorado Trust Fund Statute)
A U.S. District Court for the District of Colorado decision threatened to eliminate one of the three main ways in which subcontractors and suppliers can recover payments for the work they perform under the state's mechanic's lien laws. ASA and ASA of Colorado (ASAC) defended the payment recovery option provided by the state's Trust Fund Statute throughout the appeals process. On Feb. 5, the Colorado Supreme Court concluded that the Trust Fund Statute "protects subcontractors, laborers, and material suppliers who add value to property but are unable to recover monies owed to them through the lien claim process." In the case of Fowler & Peth, Inc. v. Regan, a roofing material supplier had not been paid but did not follow lien claim procedures to perfect a lien on property. The supplier decided, however, to exercise its right to payment recovery as prescribed under the Trust Fund Statute, which permits a direct claim on funds held in trust for its work. ASA and ASAC filed a joint friends-of-court brief in September 2005 asking the 10th U.S. Circuit Court of Appeals to overturn a ruling by the U.S. District Court for the District of Colorado. The District Court ruled that the trust fund protections applied only when the lien claim process for a lien on property had been followed, but ASA and ASAC argued that the ruling was flawed because it would render the Trust Fund Statute's protection redundant, and therefore, useless. The Circuit Court referred the question to the Colorado Supreme Court. ASA and ASAC filed a joint brief with the high court and ASA member attorney Gilbert Egle of Denver-based Preeo, Silverman, Green & Egle, presented oral arguments in the case on ASA's and ASAC's behalf.

2006

November 2006 -
Welsbach Electric v. MasTec North America
(pay-if-paid, venue)
In a Nov. 20 decision , the New York Court of Appeals fashioned a limited exception to the policy of not enforcing pay-if-paid clauses in construction contracts. The court asserted that New York lien law "seeks to protect New York subcontractors from the oppressive use of bargaining power" but permitted enforcement of pay-if-paid terms in a contract between two out-of-state contractors whose contract for electrical work on a project in New York contained a choice-of-law provision specifying Florida law, and a pay-if-paid provision, which Florida law allows. In July 2006, ASA filed a friend-of-the-court brief arguing that contractors cannot circumvent the state's policy by using venue provisions that apply out-of-state laws. The court concluded, however, that the out-of-state contractors are "sophisticated commercial entities that knowingly and voluntarily entered into the subcontract," and that "the checkered history of pay-if-paid clauses" provided insufficient grounds upon which to void the parties' choice of law. Despite the court's decision, it is likely to have limited application. Choice-of-law provisions in New York contracts on private improvements of $250,000 or more that designate out-of-state laws as controlling are void under the state prompt pay law that went into effect on Jan. 14, 2003.

November 2006 - Templeton Development Corp. v. Dick Emard Electric, Inc. (Venue – dispute resolution)
In October, ASA filed a letter with the California Court of Appeal for the 3rd Appellate District supporting the request of Dick Emard Electric to publish the court’s decision holding that contract clauses that compel subcontractors to arbitrate or mediate disputes outside the state are unenforceable. The court granted the request in November. Originally the court had not intended to publish the decision, which would have meant it could not have been used as a precedent.

October 2006 -
KSW Mechanical Services, Inc. v. American Protection Insurance Company
(insurance)
ASA filed a friend-of-the-court brief with an appeals court in New York in a case that is likely to have important implications concerning the kinds of damages claims that insured parties can make against the carriers of owner-controlled insurance programs (OCIPs).

September 2006 - Eschbach Bros. v. Contracting Systems, Inc. (pay-if-paid)
In a Sept. 12 decision, a Superior Court in Pennsylvania rejected a trial court’s argument that the Pennsylvania Contractor and Subcontractor Payment Act created a “pay-if-paid” clause in every construction contract. The non-precedential Superior Court decision concluded that “the parties never argued during trial that the provisions of the Contractor and Subcontractor Payment Act at issue were incorporated into the parties’ written contract, contrary to the parties’ contract, or negated the condition precedent established in the contract. Therefore, we find any argument with regard thereto to be waived.” In a February 2006 friend-of-court brief , ASA argued that that the trial court had ignored the state law and inferred a payment clause not intended by the parties or created by the contract language.

February 2006 - Lamar Homes v. Mid-Continent Casualty (construction defect)
On Feb. 1, ASA filed an amicus curiae brief, joined by the AGC Texas Building Branch and by PHCC, requesting the Texas Supreme Court to rule that property damage caused by a defective foundation is covered by a building contractor's general liability insurance, which most contractors and insurance agents assume includes coverage for "completed operations." The brief argues that the "marketing" of general liability insurance policies "emphasizes the availability of coverage for various categories of defective work," and that "the premium charged ... would be excessive to say the least," if the insurer's argument - that defective construction is not covered by the standard policy language - succeeds. The case was sent to the Texas Supreme Court on certified questions from the U.S. Court of Appeals for the Fifth Circuit, after ASA filed an amicus brief in that court on Jan. 11, 2005, which made similar arguments (AGC and PHCC were not parties to that brief).

2005 and Prior

November 2005 - Environmental Energy Partners v. Siemens Building Technologies (mechanic's liens)
ASA has asked the Missouri Supreme Court to overturn an appeals court decision that would allow a general contractor to make a claim of tortious interference against an unpaid subcontractor, based on the subcontractor's filing of a mechanic's lien and settlement of its lien claim with a construction owner. In its amicus curiae brief, filed on Nov. 30, ASA states that, if allowed to stand, the appeals court decision would have devastating effects by opening the door to unwarranted tortious interference claims by general contractors.

October 2005 – Dublin Suites v. Shook, Inc. (Delay Damages – Subcontractor’s Liability to Owner)
On Oct. 26, the Ohio Supreme Court agreed with ASA's brief and overturned an appeals court ruling that allowed an owner to directly sue a subcontractor, with whom the owner had no privity of contract, for delay damages.

September 2005 - Mikula v. Miller Brewing (Worker Injury - hold harmless and additional insured)
On Sept. 8, the Wisconsin Supreme Court denied ASA's request that it review an appeals court decision forcing a subcontractor to indemnify a project owner for personal injuries to a third party caused by the owner's allegedly faulty freight elevator.

July 2005 - National Union Fire Insurance Company of Pittsburgh v. Wadsworth Golf (payment bond claim - waiver of defenses)
On July 21, Maryland's highest court ruled that a payment surety's failure to send a response to a claim within 45 days, as required by the AIA's A312-1984 bond form, prevented the surety from disputing the claim, and required the claim to be paid in full. In May, ASA filed an amicus curiae ("friend of the court") brief arguing that if subcontractors have to meet the time deadlines for claims as they are stated in a bond form, then the sureties should have to meet their time deadlines as well.

February 2005 - Gem Plumbing v. Rossi (Mechanic's Liens - due process)
On Feb. 22, Rhode Island's Supreme Court reversed a trial court decision that the filing of a notice of mechanic's lien violates the owner's right to due process under the U.S. Constitution. ASA filed an amicus brief in the case urging reversal of the trial court decision because its reasoning would have invalidated existing liens in at least 48 states, by forcing subcontractors to sue the project owner in advance of filing a mechanic's lien. Just prior to the Supreme Court's decision (and after the trial court's decision), ASA's Rhode Island chapter successfully amended Rhode Island's mechanic's lien law to clarify the owner's right to a hearing after a lien is filed, which proved crucial:
"Tipping the scales in favor of constitutionality is the combination of the claimant's statutory preexisting interest in the property [argued in ASA's brief] and the availability of a prompt post-deprivation hearing [thanks to the amendment by ASA's Rhode Island chapter]."

January 2005 - Walsh Construction v. Mutual of Enumclaw (Worker Injury – additional insured)
Click here to read the Oregon Supreme Court's ruling that a general contractor, named as an "additional insured" on a subcontractor's general liability insurance policy, did not have coverage under the policy "for losses arising in whole or in part from the [general contractor]'s fault," under Oregon's anti-indemnity statute. Last August, ASA filed a "friend of the court" brief   in the case, and last October, ASA filed a memorandum of additional authorities.

2004

October 2004 - ISEC Inc. v. Diamond Building Group (Payment – pay-if-paid)
Do pay-if-paid terms violate public policy in your state? The question is still an open one in Arizona, thanks to a brief filed by ASA in an Arizona court of appeals. The court overturned summary judgment against the unpaid subcontractor, which was based on a pay-if-paid clause, and remanded the case for a trial. The court's opinion says in one place that pay-if-paid clauses "do not violate public policy" (para. 17), but says in another place that "To the extent that ASA in its amicus brief raises public policy issues not raised by either party, we do not consider the merits of those arguments" (para. 29). In other words, ASA's brief is now mandatory reading for lawyers who collect unpaid accounts for Arizona subcontractors. Has your lawyer read the brief?

May 2004 - J.A. Jones Construction v. Lehrer McGovern Bovis (Payment for delays - "No Damage for Delay")
ASA's amicus brief helped convince the Nevada Supreme Court to recognize exceptions to enforcement of "no damage for delay" clauses. Footnote 6 of the Court's decision references a 77-page article that was attached to ASA's brief, to support its conclusion that "an instruction including ... exceptions should have been given" to the jury.

April 2004 - Interstate Contracting Corp. v. City of Dallas (Payment- Pass- Through Claims)
The Texas Supreme Court ruled that subcontractors are permitted, under Texas law, to recover owner-caused damages without suing the general contractor, by reaching a "pass-through" agreement with the general contractor permitting the subcontractor to sue the owner in the general contractor's name. The case presented "difficult issues of first impression for this Court," but ASA's amicus brief walked the court, step-by-step, to the proper conclusion .

January 2004 - American Family v. The Pleasant Company (Construction Defect - denial of coverage under standard general liability terms)
View the Wisconsin Supreme Court’s final decision and ASA’s amicus curiae brief in a case holding that standard Commercial General Liability (CGL) insurance policies cover claims for defective construction that are made against the insured contractor. The court essentially adopted ASA’s argument that various provisions of the policy would be superfluous if construction defect coverage were excluded, defrauding contractors who buy a policy assuming that those provisions do have meaning and are not superfluous (see ¶47 of the decision).

September 2003 - Mahoney v. Team America 3, Inc. (Worker Injury - safety regulation requiring "overhead protection")
View ASA's amicus brief and the final decision in an Ohio Supreme Court case holding that a hard hat provides sufficient "overhead protection" to satisfy an Ohio safety regulation requiring that "Overhead protection shall be provided for employees on a scaffold exposed to hazards from overhead," where the only overhead hazard comes from an adjacent scaffold employing toeboards to block falling debris.

May 2003 - Star Electrical Contractors v. Stone Building Company (Worker Injury - "hold harmless" indemnity)
View ASA's amicus brief and the final decision in an Alabama Supreme Court case holding that subcontractors are not automatically liable to indemnify general contractors against worker injury claims in cases where the subcontractor refuses to defend a general contractor who subsequently settles with the injured worker.

November 2002 - Barton-Malow Co. v. Grunau Co.
View ASA's amicus brief and the final decision in a Florida Court of Appeals case holding that subcontractors could not be forced to pay a general contractor's defense costs in a construction defect lawsuit, where the "hold harmless" clause in the subcontracts was unenforceable under Florida's anti-indemnity law.

April 2002 - Chrysler v. Merrell & Garaguso, Inc. (Worker Injury - "additional insured" indemnity)
View ASA's amicus brief and the final decision in a Delaware Supreme Court case holding that "additional insured" requirements "may, under certain circumstances, be unenforceable" under Delaware's Anti-Indemnity Law.