Washington Construction Law Blog

This case arose from poor workmanship by a flooring subcontractor.  When the GC withheld payment, the sub sued for the contract balance.  The GC counterclaimed for costs incurred due to defects and rework.

At trial, the sub moved to dismiss the GC's counterclaim on the theory that only the project owner had standing to sue because only the project owner had sustained damage.  The trial court granted that motion.

On appeal by the GC, Division 2 reversed and clarified that:

1.     The sub's poor work exposed the GC to liability to the owner, and thus the GC had standing to sue for compensable damages.

2.     The owner need not be joined as a party in the dispute because the owner ordinarily has no right of action against a sub and the GC can adequately protect whatever incidental interest the owner has in making sure that sufficient funds are recovered by the GC to make whole the problem.

Copy of opinion (Floor Express v. Daly) also available here Download file

On April 5, we covered an issue that seems to be gaining momentum -- counterclaims by the public owner under the False Claims Act for damages caused by falsely submitted claims for extra compensation.

This new case from the U.S. Court of Federal Claims is another example of this trend.  The decision contains useful guidance on two key issues -- (1) what constitutes a "false" claim and (2) what conduct by the contractor rises to the level of prosecuting the claim with "reckless disregard" of its falsity.

Copy of decision also available here Download file

In the midst of a dispute over the proper sum to pay, one side tendered a check with "final payment" written in the notation line.  The other side modified the notation to make the payment applicable only to one particular part of the dispute & then cashed the check.

The Court of Appeals held the act of cashing the check extinguished the party's claim for the remaining balance.  Addressing the altered notation, the court said it had "no effect" because it was a "unilateral modification not communicated" to the other side.

Copy of decision also available here Download file

After admitting in a guilty plea to polluting a water reservoir with concrete slurry, a Gig Harbor project manager will now spend 30 days in federal prison.

The contractor was in the middle of filling a caisson, located in the reservoir, with concrete when the concrete pumps broke.  According to the guilty plea, the project manager then directed the caisson to be evacuated of concrete, which lead to disposal of the slurry into the reservoir.