June 2003 |
||
In This Issue
Contractor's Telephone Calls to Inform Owner of the Status of the Project Can Constitute Labor for Determining Last Date of Work for Mechanic's LienCourts in Ohio have traditionally been very liberal in determining what constitutes a last date of work on a construction project for purposes of determining the expiration of a contractor's or subcontractor's mechanic's lien rights. Basically Courts have ruled that if the work is necessary to complete the project (even if a relatively minor punchlist item) then this is a legitimate last date of work so long as the purpose of the work was not to artificially extend lien rights. The principle was vindicated and may have been extended in a recent trial court decision by Judge Travis of the Franklin County Common Pleas Court in the case of Gauer-Jeffrey Design & Construction v. Roderick H. Dillon, Case No. 02CVE-04-4570. Judge Travis ruled that a project manager's telephone calls to inform the owner of the status of certain items constituted labor for the purposes of determining the last date of work. He then applied the general rule that if the labor and materials were provided at the request and with the knowledge of the owner, to remedy defects in the original work, this is sufficient to establish a new period from which the time for filing the Affidavit of Mechanic's Lien is to be computed. Therefore, subcontractors and contractors may justifiably rely upon the owner's request to remedy certain defects as the basis for determining their last date of work for the purposes of filing a mechanic's lien. The interesting twist on this case is that even something like walking the job site to inspect the work or contacting the customer to report the status of work may also constitute "labor" and be relied upon for the last date of work. Mechanical Contractors Strike Out on FeesIn a long running legal battle with the University of Cincinnati involving unbid work on a "lease-leaseback" project, the Mechanical Contractors have sought not only to have their principle vindicated but also to recover their attorney's fees or other monetary damages. An earlier Court of Appeals decision suggested that some sort of money damages were appropriate and remanded the case back to the Court of Claims who subsequently ruled that no money damages were proven in this case. The second Tenth District Court of Appeals decision rendered on April 10, 2003 (No. 02AP-689) found that (1) "reliance" for a promissory estoppel claim was lacking because the University did not represent that competitive bidding would apply norwas there a court ruling declaring the unbid process illegal; (2) that the prior declaratory judgment statute did not entitle one to attorney's fees; and (3) while attorney's fees might potentially be recoverable against the State under R.C. § 2335.39 that opportunity was lost when these fees were not sought within 30 days after final judgment, thereby denying any recovery of monetary damages to the successful litigants. In conclusion, the Court of Appeals, repeated that "monetary damages may potentially be available as a remedy where injunctive relief no longer provides a practical remedy to disappointed bidders" but warned:
This case re-emphasized the great difficulty presented in bid challenge cases, particularly the difficulty in receiving any sort of compensation should the contract be unlawfully denied the disgruntled bidder. Prompt action is always required to seek injunctive relief. When Has a Contractor Substantially Performed?It is a general rule that a party must substantially perform its obligations under a contract to recover for breach of contract. A case of the Franklin County Court of Appeals recently dealt with this important issue and found that a contractor does not breach a contract when the amount of non-conforming work is nominal, or in other words, the unperformed or wrongfully performed work does not destroy the value or purpose of the contract. Hansel v. Creative Concrete & Masonry Constr. Co., 148 Ohio App. 3d 53 (2002). In that case there was inadequate thickness of concrete as well as cracking and spalling. The deficiencies were not enough to warrant replacement of the concrete driveway, so the court found that a deduction could be made by the owner for the cost of repair but allowed the contractor to recover the balance of contract because it had still substantially performed its contractual obligations. Firm NewsThe Construction Law group has been named by Chambers USA as the second most outstanding construction law team in Ohio and Don Gregory was named as the second highest rated individual in the state for construction law. Mike Copley and Stu Harris won a jury verdict in the Gauer-Jeffrey case. Mike Copley serves on ABC's and CISCA's task forces on mold and has been regularly speaking and writing on mold issues for several national associations. CreditsKegler, Brown, Hill & Ritter's Construction Law Newsletter is prepared by Donald W. Gregory for the Construction Law practice group. To subscribe to any Kegler Brown publication, please use our Subscribe Form. To unsubscribe from any Kegler Brown publication, please use our Opt-Out Form. This publication, as well as an archive of previous publications, is also available from our Publications Archive. The Construction Law Newsletter is designed to provide general information about the subjects discussed. It is not meant to be all-inclusive or comprehensive. Kegler Brown is not rendering any legal or professional advice by way of this publication. © 1989-2008, Kegler, Brown, Hill & Ritter Co., L.P.A.
|
||
|
|
|
Member firms of the State Capital Group practice independently and not in a relationship for the joint practice of law. |
© 2008, Kegler, Brown, Hill & Ritter Co., LPA.