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CONSTRUCTION CASE LAW SUMMARIES
Contractor Liability

Spring 2011

PUBLISHED BY: CCL CONSTRUCTION CONSULTANTS, INC. AT SMASHWORDS
COPYRIGHT 2011 BY CCL CONSTRUCTION CONSULTANTS, INC.

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Construction Case Law Summaries
Spring 2011

In this Spring 2011 Contractor Liability cases:

• A fabricator that designed, manufactured and assembled a steel component of a project was entitled to the same statute of limitation rights as a general contractor.

• An unambiguous and explicit intent to repudiate a contract must occur before permitting suit for anticipatory repudiation.

• A contractor must have substantially performed in order to bring a breach of contract claim.

• An owner must prove its substantial performance before material breach can be asserted against its contractor.

• A subcontractor can be required to indemnify a general contractor for the general contractor’s contributory negligence but only if such indemnification is expressly required by the subcontract’s indemnification provision.

• Unjust enrichment is not an available remedy when an express contract exists.

• Documents are not protected under the work product doctrine if the documents were required to support payment claims in a cost-plus contract.

• An owner can be held negligently liable for a third party’s injury if it had reason to believe that the site’s conditions were unsafe.

• The court will strictly interpret the unambiguous language of a labor agreement.

• A worker’s claim for unpaid work hours must include the terms of the breached employment agreement.

• Indemnity obligation between two subcontractors can be implied within purchase agreements made between contractors.

A fabricator that designed, manufactured and assembled a steel component of a project was entitled to the same statute of limitation rights as a general contractor.
In Southern Insurance Co. v. Metal Depot, 2011 La. App. LEXIS 741 (La.App. 1 Cir. June 10, 2011), the court held that a contractor’s design responsibility did not deny it the protection of Louisiana’s statute of limitations for general contractors. The warehouse was completed by the contractor on September 5, 2001. On December 11, 2008 a snow storm left a large amount of snow on the roof of the warehouse that buckled the main “I” beam and collapsed the roof. The “I” beam was designed, manufactured and assembled by a steel fabricator. The owner’s insurer paid the claims for the roof collapse. On October 8, 2009, the insurer filed suit against the fabricator. The insurer claimed that the roof collapse resulted from the faulty fabrication of the main “I” beam. The suit was filed in accordance with the Louisiana Products Liability Act. The insurer sought subrogation for the damages paid to the owner. The fabricator claimed that pursuant to La. Rev. Stat. Ann. § 9:2772 the insurer’s claim was time barred by the statute’s five year limitation period. The insurer asserted that the protections of the statute were not applicable because the failure that caused the roof to collapse was a fabrication issue and was not a construction or design issue. The insurer argued that since the claim was brought under Louisiana’s Liability Act that contained a one year time period from the date the damages were sustained, the claims were timely filed. The fabricator argued that the trial court correctly applied the statute’s five year statute of limitation time period and the insurer’s claim was time barred. The court determined that the statute was applicable because the statute was not limited construction or design issues. The statute’s time limitation was applicable to a contractor that manufactured or fabricated a component integrated into the construction project. The statute stated within its first paragraph that it was applicable to any and all actions. The language indicated that all claims were subject to the statute, including claims which were brought under the Liability Act. The fabricator designed, manufactured, and assembled the “I” beam specifically for the warehouse project. Due to the fabricator’s dual capacity as the contractor and manufacturer of the component part, the court determined that it was entitled to the peremptive relied afforded by the statute. The judgment of the trial court in favor of the fabricator was affirmed.