“Circuit court litigation comes at a price, sometimes a heavy price.”
Does your contract include an attorneys fees provision? Does it include words like “reasonable” or “prevailing party?” If so, then the prevailing party may be reimbursed for its “reasonable” attorneys fees expended in the litigation or arbitration process.
On April 13, 2017, the Virginia Supreme Court held the trial court of the City of Virginia Beach abused its discretion when the plaintiff recovered the entire amount it sought from the defendant ($500), but defendant only had to pay $375 out of the $9,568.50 total attorneys fees expended to reach the judgment.
Under Virginia law, a Court or tribunal (e.g., arbitrator or arbitration panel) will typically consider at least seven different factors to determine how much is “reasonable.” Determining a reasonable amount is not a simple ratio calculation nor can it be predicted with certainty. The Court stated “merely applying a ratio between the damages actually awarded and damages originally sought will not satisfy the reasonableness inquiry.”
The Court also cautioned that parties should be careful not to overinflate their damages as “an unreasonably exaggerated claim for damages provokes a proportional response.” “This unnecessarily inflates the costs of litigation for both sides and increases the possibility that one will end up liable to the other for an exorbitant award of attorney’s fees.”
Lambert v. Sea Oats Condominium Association, Inc., Record No. 160269 (April 13, 2017).
Pirates and Arbitration
How does a pirate solve a dispute (besides walking the plank)?
Bases Covered?
Contractors, will your current insurance policy cover “your work” as a joint venture partner? The typical answer is NO.
Two Paths at the Same Time to the Same Place
“Two roads diverged in a wood, and . . .” the Prime Contractor had to take both roads at the same time to the same place.
Rules, Which Rules?
Good Idea: Include a choice of law clause in your contract to promote consistency and predictability (while reducing potential costs and risk).
Government Liability for Third-Party Delays
Generally, the Government is not responsible for delays caused by third parties, even other contractors at its own project site, unless the Government affirmatively indicates the site will be ready and available.
Keep a Pass-Thru Claim Burning, Don’t Extinguish Liability
Prime contractors, have you ever submitted a subcontractor’s claim to a public owner? Subcontractors, have you ever wanted to submit a claim against the government, but you had no contract with government?
When You Can’t Recover from a Third-Party (The Economic Loss Doctrine)
Suppose that you (the Contractor) had extra costs and want payment for those extra costs from the designer.
Barbecue and Construction Contracts
While barbecue recipes can be short and simple, contracts can be long and complicated. Fundamentally, though, recipes are very much like contracts: what’s required, how much of each part/ingredient, in what order should they be assembled/added, when, and for how long?
Show Your Work
A mentor of mine once said that process and procedures can be more important than substance and results. Like solving a math problem, how you solve it is often more important than the answer itself. The same is true in resolving construction contract disputes with public owners.
