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A True Pass-through Claim Is Not An Assignment Of Rights

Tuesday, July 03, 2012 08:05 am


Subcontractors -- Differing Site Conditions

R.E. Monks Construction Co., LLC v. Telluride Regional Airport Authority, 2012 U.S. Dist. Lexis 61157 (D. Colo. May 2, 2012)

A provision in the prime contract did not nullify a sub's right to pursue its differing site conditions claim directly against the owner by riding on a pass-through agreement with the contractor.

General contractor R.E. Monks Construction Company, LLC (Monks) sued the Telluride Regional Airport Authority (TRAA) for more than $875,000 on the basis of a differing site condition encountered while building a runway in Colorado. Monks sued on behalf of its subcontractor, Arizona Drilling & Blasting (AD&B), which incurred additional costs when it was forced to perform its drilling and blasting work under unexpectedly wet conditions.

Monks and AD&B had executed a liquidation agreement with pass-through recovery provisions under which AD&B agreed not to sue Monks. Instead, Monks could pursue AD&B's "Wet Hole Blasting Claim" directly against the owner. TRAA argued that the liquidation agreement provisions were unenforceable because the prime contract it executed with Monks prohib [...]

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