negligence Archives - Attorney Scott S. Orenstein

A Recent Supreme Court Decision Found an Owner of a Construction Company Personally Liable to the Owners of a Project

As most people are aware, one of the benefits of doing business as a corporation or limited liability company is that, generally speaking, the owners of the company cannot be held personally liable for the company’s debts. The exception to that general rule is that a court may pierce the corporate veil and hold the company owners personally liable if the company owners are found to have improperly used the corporate form, or have used the corporate form to commit wrongful acts. Nonetheless, even a cursory of the caselaw indicates that plaintiffs do not often prevail when they are attempting to pierce the corporate veil.

The statement of the law with regard to piercing the corporate view is quite simple. In All Phase Builders, LLC v. New City Rests., 2011 Conn. Super. LEXIS 1793, *20-21, 2011 WL 3483368 (Conn. Super. Ct. July 12, 2011), the court ruled:

“In order to pierce the corporate veil, a plaintiff must plead and prove that the corporate shield can be pierced under either the instrumentality rule or the identity rule. The instrumentality rule requires… proof of three elements: (1) Control …; (2) that such control must have been used by the defendant to commit fraud or wrong …;

Recent Local Law Shows that the Law’s Understanding of Blasting is not Improving

In 2003, I published an article in The Journal of Explosives Engineering entitled “The Laws Governing Blasting,” in which I explained that, despite the fact that blasting is the most widely used method for rock removal on construction projects, court decisions pertaining to blasting damage claims often wrongfully hold blasters liable for alleged damage their blasting could not have possibly caused. As my article explains, these decisions reach the wrong conclusion because of a general misunderstanding of the science governing blasting. By citing technical and legal sources, the article demonstrates that courts often ignore scientific evidence in favor of lay testimony that the blasting caused damage because cracks were noticed after the building shook. However, years of research by the United States Bureau of Mines (“USBM”) demonstrates that such anecdotal evidence is not reliable or accurate.

A fundamental principle from the USBM research stated in USBM Bulletin 8507 is that blast generated vibrations that are measured at the nearest structure at less than 2 inches per second at 40 Hz are not likely to cause damage to typical residential construction. (For a full discussion of the scientific information pertaining to the USBM research, see my earlier article).

Connecticut Statutes Provide Assistance with Receiving Prompt Payment on Public and Private Construction Projects

Under Connecticut law, an owner should pay its general contractor within 30 days of having received the general contractor’s application for payment; the general contractor, in turn, is required to pay its subcontractors and suppliers within 30 days of having received payment from the owner; and the subcontractors should then pay their sub-contractors and suppliers within 30 days of having received payment from the general contractor and so on down the line. See Gen. Stat. § 49-41a and Conn. Gen. Stat. § 42-158j.

The provisions in § 49-41a and § 42-158j are substantially similar except that:

1.) Only private owners are required to make payment to their general contractors within a specified number of days after receiving an application for payment; and

2.) The statute only applies to public projects for which a payment bond is required, which is any public works project whose contract amount exceeds $100,000.

Both statutes also have similar enforcement procedures. Either a subcontractor on a public project to which the statute applies or general contractors and subcontractors on a private project can make demand for payment by way of registered or certified mail and, within 10 days,

You Should (Almost) Never Request a Jury for a Construction Case

Construction Contract disputes are complicated legal matters. Both sides usually have valid points to make. The winner is determined by the application of relatively complex facts to the law. Such cases often involve information beyond the knowledge and understanding of the average juror. Although it is true that most judges do not have a construction background either, judges have likely heard a prior construction case; and, as trained jurists, have a good understanding of the legal arguments that are being raised. In addition, judges are being paid to pay attention to your case. Conversely, the average juror has no understanding of construction or the law; typically does not want to be serving as a juror; and is missing out on a day’s pay. In light of the foregoing, I almost never recommend that my clients request a jury.

There is one area, however, where choosing a jury may be the right choice. Until relatively recently, it was understood that a contractor had no claim for damages arising out of a bid protest. See Lawrence Brunoli, Inc. v. Town of Branford, 247 Conn. 407, 412 (1999) (holding that the only remedy to be afforded unsuccessful bidders under the municipal bidding statutes is injunctive relief);

Scott Orenstein
06.01.2013
Bid Protest, Connecticut Construction Law, Connecticut construction lawyer, Construction Attorney, Construction Law, Public Owner

Court Rules That the Government Contractor Defense is Not Applicable to Road Reconstruction Projects

As articulated by the United States Supreme Court, the government contractor defense provides that “[l]iability for design defects in military equipment cannot be imposed, pursuant to state law, when (1) the United States approved reasonably precise specifications; (2) the equipment conformed to those specifications; and (3) the supplier warned the United States about the dangers in the use of the equipment that were known to the supplier but not to the United States.” Boyle v. United Techs. Corp., 487 U.S. 500, 512 (U.S. 1988). The Connecticut Supreme Court recognized the government contractor defense in Miller v. United Technologies Corp., 233 Conn. 732 (Conn. 1995). Nonetheless, a Connecticut Superior Court has just refused to apply the government contractor defense to a claim arising out of a road reconstruction project.

In Fox v. Town of Stratford, 2012 Conn. Super. LEXIS 1443 (Conn. Super. Ct. June 1, 2012), the plaintiff alleged that his property was damaged by flooding caused by a road reconstruction project. The contractor asserted that, under the authority of Miller and Boyle, it cannot be held liable for plaintiff’s alleged damages because it strictly complied with the government’s plans and specifications.

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