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Babcock Scott Babcock Newsletter Hard Hat Case Note
Paving Contractor recovers loss of productivity damages against State for owner directed work In Meadow Valley Contractors, Inc. v. State of Utah Department of Transportation, Meadow Valley entered into a contract with the Utah Department of Transportation ("UDOT") in 2002 to perform work on a portion of I-215, including the paving of multiple lanes, exits, entries and shoulders. Meadow Valley, in turn, subcontracted the paving work out to Southwest Asphalt Paving. Meadow Valley Contractors/Southwest Asphalt Paving was represented by the firm of Babcock Scott & Babcock. The Contract Specifications for the project were silent as to the means and methods of paving to use on the project. Southwest planned on paving the entire project utilizing the ribbon style method of paving. However, during a pre-pave meeting, the Project Engineer for UDOT informed Meadow Valley and Southwest for the first time that ribbon paving would not be allowed on a significant portion of the project; rather, block paving, a more expensive method, would be required in some areas. Representatives from Southwest verbally informed UDOT's Project Engineer at the pre-pave meeting and several times during the course of the project that not allowing ribbon paving would result in increased costs, production inefficiencies and scheduling problems. Each time he was informed of such, the Project Engineer directed Meadow Valley and Southwest to proceed with the work and not use ribbon paving in certain areas. Meadow Valley and Southwest incurred increased costs as a result of UDOT's directive that ribbon paving not be utilized on a significant portion of the project. After the project was completed, Meadow Valley and Southwest made a claim to UDOT for the increased costs. UDOT denied the claim, taking the position that Meadow Valley and Southwest had waived the claim because they did not provide UDOT with formal written notice of the claim as required by the contract. The Trial Court found that, even though Meadow Valley and Southwest did not provide UDOT with formal written notice of their claim for increased costs, UDOT clearly was given actual verbal notice on several occasions of the increased costs and UDOT's Project Engineer directed Meadow Valley and Southwest to proceed with the work. The Court found that the verbal notice excused Meadow Valley's and Southwest's failure to provide formal written notice. The Trial Court's decision is consistent with Thorn Construction Co. Inc. v. Utah Department of Transportation, 598 P.2d 365 (Utah 1979). In Thorn, the Utah Supreme Court held that when a Project Engineer furnishes a work directive to a contractor and is given actual notice of the adverse impacts of the directive, formal written notice under the contract is not required. ------------------------------------------------------------------------ Legislative Report S.B. 220: CAUSE OF ACTION FOR DEFECTIVE CONSTRUCTION This bill essentially codifies the economic loss rule. It limits a cause of action for defective construction to a breach of contract action, unless there is certain other property damage or personal injury. This bill deals with provisions related to the immigration status of individuals within the state. This legislation will take effect in 2009. Pertinent terms include:
------------------------------------------------------------------------ News of the Firm •· January, 2008 - Robert F. Babcock, Kent B. Scott and Brian J. Babcock were named to the Legal Elite in the area of Construction Litigation. The Legal Elite was published in the January, 2008 edition of Utah Business Magazine. •· January, 2008 - Adam T. Mow was honored by Utah Dispute Resolution as one of three outstanding community mediators for 2007. •· March, 2008 - Justin E. Scott published an article in the March, 2008 edition of the Intermountain Contractor entitled "Subcontractor Construction defects: Are you Covered?" The article can be read in its entirety by visiting the "Publications" section of Babcock Scott & Babcock's website. http://www.babcockscott.com/. •· March, 2008 - David E. Merrell participated in the BYU-Idaho Construction Management Department Industry Advisory Board Meeting on February 22nd and was a guest speaker at a Storm Water Compliance Training presented by AccenaGroup on March 26th. ----------------------------------------------------------------------- About BSB |
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