Wednesday, December 25, 2013

Moore Brothers Co. v. Brown & Root, Inc. case brief

Moore Brothers Co. v. Brown & Root, Inc. case brief summary
207 F.3d 717 (2000)

CASE SYNOPSIS
In an action on a construction contract, defendant surety appealed a summary judgment order of the United States District Court for the Eastern District of Virginia in favor of plaintiff subcontractors, defendant contractor appealed an award of damages against it for additional "change in scope" work and an early completion bonus, and plaintiffs cross-appealed the court's denial of prejudgment interest on part of the award.

CASE FACTS
Plaintiff subcontractors sued defendant surety and defendant contractor seeking payment for additional "change in scope" work on a construction contract and an early completion bonus. The district court granted summary judgment against defendant surety and awarded plaintiffs damages against defendant contractor for the change in scope work and the bonus. Defendants appealed the judgments against them and plaintiffs cross-appealed the denial of prejudgment interest on part of the award.

DISCUSSION

  • The court on review affirmed summary judgment against defendant surety where it did not include an express "pay when paid" condition precedent in the contract payment bond and could not assert the clause contained in the subcontract between plaintiffs and defendant contractor as a defense.
  • The court affirmed the award of damages for the change in scope work because defendant contractor's actions contributed to failure of funding for the work, waiving performance of the "pay when paid" condition precedent under the prevention doctrine.
  • The court remanded for consideration of whether the "pay when paid" condition was waived as to the bonus claims.
  • The court affirmed the denial of prejudgment interest on part of the award.

CONCLUSION
The court affirmed summary judgment against defendant surety where it did not include "pay when paid" condition precedent in bond and could not assert clause contained in construction contract between plaintiff subcontractors and defendant contractor; affirmed ruling that defendant contractor was liable for "change in scope" work; remanded issue of "pay when paid" condition regarding bonus claims; and affirmed denial of prejudgment interest.

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