Volume 6 - Number 35 | September 8, 2008 - Construction Claims Advisor

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You are here: Home » Volume 6 - Number 35 | September 8, 2008

Volume 6 - Number 35 | September 8, 2008

EDITOR'S NOTES | Issue 6-35: Money. For most people, it’s the driving force to go to work every day. Without money, bills don’t get paid and some of the basic necessities of life won’t be met. If an employer is late delivering paychecks or in the case of two of this week’s case summaries, progress payments, a chain reaction of problems is bound to ensue. In this week’s first case, the Corps of Engineers withheld substantial amounts from progress payments under the guise of “constructive withholdings,” prompting the contractor to file a Prompt Payments Act claim against the Corps.

In the second case, a dispute between an individual and the contractor he hired to build a home opens up a discussion on the limitations of a lien waiver for progress payments as it relates to change orders for additional work.

And lastly, a contractor suggests that an arbitrator who failed to properly disclose past involvement with one of the arbitrating parties may have influenced the arbitration’s binding decision. An appeals court ruled otherwise.

PROMPT PAYMENT ACT DOES NOT APPLY TO UNPRICED CHANGE ORDERS: The definition of what constitutes a bona fide dispute is at the core of a disagreement over interest owed for alleged late payments on an Army Corps of Engineers project.

MECHANIC’S LIEN WAIVER DID NOT COVER PAYMENT FOR EXTRA WORK: A lien waiver agreement for progress payments does not apply to payments for extra work on a home construction project, rules a state supreme court.

COURT DECLINES TO VACATE ARBITRATION AWARD DESPITE QUESTIONS REGARDING ARBITRATOR NONDISCLOSURE: An appellate court upholds an arbitration award despite a panel member’s failure to timely disclose prior case referrals from one of the parties.