Indianapolis Chapter CSI

March Chapter Meeting: Mock Trial

Drewry Simmons Vornehm, LLP & The Cast of the
CSI Education & Programs Committees Presents…

THE LEGAL IMPLICATIONS OF DETAILED SPECIFICATIONS: A MOCK TRIAL

     Where the Owner and Architect specify the type of brick to be used by manufacturer and trade name and the Contractor constructs the Project using the brick, which party bears responsibility when that brick is subsequently defective? Does the Owner impliedly warrant to the Contractor that the brick is suitable for the particular purpose for which it was intended? Does the Contractor breach its warranty to the Owner by using bricks with a latent manufacturing defect? Following your initial review of the Case Background below and after hearing the arguments presented at the mock trial presentation at this month’s chapter meeting, you get to be the judge. How would you rule in this case?

Case: Board of State University v. Construction Surety Company
The names identified in this case have been changed for purposes of this mock trial presentation.

Case Background: In March 2002, the Board of State University (“The U”) contracted with ABC Construction Co. (“ABC”) to construct four campus buildings. The U had previously entered into a relationship with XYZ Architecture (“XYZ”) to provide architectural and engineering services for the campus construction. XYZ, with assistance from The U’s in-house staff architects, prepared and reviewed the construction contracts and bids and drafted the specifications for construction methods and materials, and engaged in some materials selection.

     In 2002, ABC began construction of the buildings. As instructed, ABC “laid up” sample panels of the four types of brick listed in the masonry specifications. The U and XYZ viewed the panels but did not like them, and after consulting with the brick supplier, they ordered a fifth panel of a blend of bricks to be laid up. Happy with the blend, The U and XYZ instructed ABC to use it on the buildings.

     Eventually, the bricks had efflorescence issues, cracks in exterior walls, and they had begun to spall and deteriorate. Following a series of other Project events, and despite the onset of the brick-related problems, The U deemed ABC’s buildings to be “substantially complete” in April 2004. In June 2006, Construction Surety Company (“Surety”), who was the performance bond surety and contract assignee who had stepped in on behalf of ABC following ABC’s financial difficulties, submitted documents stating that all work was complete, and requested final payment. XYZ certified that the four buildings were complete and final payment could be made, and, in September 2006, The U executed the certificate for final payment.

     The U, as Project Owner, sued Surety for breach of contract and for the costs of repairs to the defective brick work done on the four campus buildings.