During a construction project, it is not uncommon for unexpected issues to arise that result in a claim or notice letters being sent. How these issues are responded to and documented can be critical if these issues do not get resolved. We often hear construction folks say that we are here to build the project, not document it. Still, having the appropriate written documentation in place typically is required to prevail on or successfully resolve claims and other disputes.
A recent California trial court decision, United States of American et. al. v. KISAQ RQ 8A2JV, a joint venture, et. al., 2017 WL 1321454, highlights the importance of having project documentation procedures and responding to correspondence from other contracting parties.
In the KISAQ case, the project’s electrical contractor stopped work on a project after the general contractor supplemented their workforce. The general contractor and electrical contractor ultimately got involved in a lawsuit where both parties asserted various claims against each other. Before trial, the general contractor eventually moved the court for a summary judgement order regarding the electrical contractor’s lack of manpower on the project. The court denied the motion regarding the lack of manpower issue because the electrical contractor had continually responded to the general contractor’s notices that the electrical contractor was not supplying sufficient manpower to support the available work areas.
In this instance, the subcontract language was typical in that the electrical contractor would be in breach if they refused or failed to “provide enough properly skilled workers or proper materials, or maintain the work schedule.” This language led the court to determine that although the electrical contractor was required to supply enough properly skilled workers, it did not give the general contractor sole discretion to determine the size of the subcontractor’s workforce.
Significantly, the court found that the continual back and forth communications, including the letters from the electrical contractor, was enough to find there was a question of fact as to whether the electrical contractor breached its obligation to provide enough properly skilled workers. Based upon this determination, the court denied the general contractor’s motion for summary judgment. Ultimately, the electrical contractor will have to demonstrate at trial that it complied with the requirement to provide sufficient manpower on the project, but without project correspondence and documentation, the electrical contractor may have lost at this early stage of the proceeding.
This KISAQ case is a good reminder that it is a good business practice to timely respond to all notice letters and correspondence received during a construction project. If a contractor must explain its actions to a third party, like a judge or arbitrator, proper responses to communications and project documentation are the best ways to give a complete picture of the project.
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