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Subcontract Ambiguity Could Cost Sub $3 Million

Wednesday, August 30, 2017 05:29 am

 

Ambiguity

W.C. English, Inc. v. Rummel, Klepper & Kahl, LLP, et al, 2017 U.S. Dist. Lexis 74021 (W.D. Va. May 16, 2017)

There was no dismissal on an indemnity claim where conflicting contract terms could be "harmonized using something akin to the canon of statutory construction that the specific governs the general."

W.C. English (English) was the general contractor on a Virginia Department of Transportation (VDOT) bridge construction project in Rockbridge County. English entered into a subcontract with Rummel, Klepper & Kahl, LLP (RK&K) to perform the Quality Assurance (QA) tasks required under the prime contract. The sub allegedly performed those tasks negligently, however, and VDOT issued three notices of non-conforming work. English did complete the project---late, and not until it followed VDOT’s order to demolish and replace the bridge deck, which cost an additional $3,312,823. Looking to recoup, English filed breach of contract and indemnity claims against RK&K. RK&K countered that the parties’ subcontract absolved it of any liability.

That was true, according to the terms sheet RK&K provided and both parties signed, entitled "Standard Terms and Conditions Proposal for Consulting Engineering Services Between [RK&K] and Contractor." That document stated that the sub’s performance of QA work "shall not be construed to relieve [English] from responsibility to perform the construction work" compliantly---and that "RK&K is not responsible for [English’s] failure to perform the construction work in accordance with the Construction documents."[...]

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