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The Term 'defect' Must Describe More Than Mere Disappointment

Thursday, December 01, 2011 06:03 am


Construction Defects -- Arbitration

Peck Ormsby Construction Co. v. City of Rigby, 2011 U.S. Dist. Lexis 98605 (D. Id. Aug. 31, 2011)

A project owner and prime contractor sought remedy from the subcontractor's surety for alleged construction defects, but the parties' couldn't name those defects.

Subcontractor Parkson Corp. (Parkson) built a cloth filtration system on a project to construct a wastewater treatment plant in the City of Rigby, Idaho. After the filtration system's installation, the City and project engineer rejected it as defective, but Parkson did not repair the alleged defects. The prime contractor, Peck Ormsby Construction Company (Peck Ormsby), and the City both sued for recovery under Parkson's maintenance bond, which guaranteed the filtration system against "defects in material or workmanship."

Peck Ormsby and the City contended that Parkson failed to repair the filtration system even though it knew--via an initial letter and a subsequent rejection letter--that the system did not meet performance standards. However, neither letter informed the sub of "defects in materials or workmanship." It appeared that the filtra [...]

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