arbitration Archives - Attorney Scott S. Orenstein

AN OVERVIEW OF CONSTRUCTION CONTRACT DISPUTES

Scott Orenstein
(203) 640-8825
CONSTRUCTION CONTRACT DISPUTE PRACTICE GROUP

During a construction project, many different types of disputes may arise between the parties. A contractor may claim entitlement to additional contract time and/or additional compensation because of changed conditions, extra work, delay, acceleration, lost productivity, defective plans and specifications, and the like. Similarly, an owner may claim damages for defective work and/or a contractor’s failure to complete the work on time. In addition, the owner or the contractor may have reason to make claim against the project’s architect or engineer due to a deficient design and/or a failure to properly provide construction administration services.

Our Construction Contract Dispute Practice Group typically assists general contractors, construction managers, subcontractors and/or suppliers with any of the foregoing issues, but occasionally we assist owners and/or design professionals as well.

CONTRACT REVIEW

Today, having good, written contracts is a must. No longer should anyone rely upon “handshake” or verbal contracts. Verbal agreements are legally binding, but the lack of a written contract increases the potential that the parties may disagree upon their respective duties and obligations.

Scott Orenstein
03.31.2022
Connecticut Construction Law, Construction Contract Dispute, Construction Law
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A RECENT SUPREME COURT DECISION DRAMATICALLY AFFECTS SUBCONTRACTORS’ RIGHTS

In Girolametti v. Michael Horton Assocs., Inc., the Supreme Court determined when a subcontractor’s rights will be affected by an arbitration in which the subcontractor did not participate. Girolametti v. Michael Horton Assocs., Inc., 332 Conn. 67, 71 (2019). This decision was based upon “the rule of claim preclusion,” which prevents the re-litigation of a claim once the claim has had a full and fair hearing “regardless of what additional or different evidence or legal theories might be advanced in support of it.” Id. at 75. In order for claim preclusion to apply, the following requirements must be met:
(1) The prior judgment must have been rendered on the merits by a court of competent jurisdiction;
(2) The parties to the prior and subsequent actions must be the same or in privity;
(3) There must have been an adequate opportunity to litigate the matter fully; and
(4) The same underlying claim must be at issue.
Id. After applying these requirements in Girolametti, the Supreme Court held that the owner’s claims against the subcontractors were barred because they were either brought or could have been brought in the owner’s arbitration against the general contractor.

The Contract and Not Common Sense Determines the Proper Parties to an Arbitration

Many construction contracts require the parties to resolve their disputes through alternate dispute resolution procedures such as mediation and arbitration. Arbitration is intended to be a cost effective alternative to litigation. The issue of whether arbitration works as well as intended will be the subject of a future post on this Blog but the topic of discussion here is the question of determining the proper parties to any given arbitration. The answer is counterintuitive.

When it comes to arbitration, there are several well settled rules. For example, courts favor arbitration, arbitration is a creature of contract, and no party will be forced to arbitrate when it has not agreed to do so. In light of the foregoing, you might believe that a party, who is named in a demand for arbitration, files an answer to the demand, and participates in the arbitration hearing, has agreed to arbitrate and should be held liable for any arbitrator’s award that enters against it. If you did believe that, however, you’d be wrong.

In CDIFUND, LLC v. Lenkowski, disputes arising out of home construction contracts were arbitrated. CDIFUND, LLC v. Lenkowski, 2011 Conn. Super.

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