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Changes, Design Deficiencies & Owner Maladministration
Changes are the classic source of construction disputes. The name partners of Conway & Mrowiec have represented clients who faced changes and design deficiencies of an extreme nature. In addition to causing delays and reduced labor productivity, the changes in these cases presented special complex issues regarding contract interpretation, Owner's implied warranty of design, the scope of Owner's right to make changes, Owner's maladministration of the changes process, prompt and complete correction of design errors and omissions, "cardinal change," P&ID revisions, shop drawing revisions, post-Substantial Completion changes, "value engineering", material breaches, the cumulative impact of changes, the indirect cost of changes, cost accounting, contractual clauses of Owner's decisions as "final and binding," Contractor's duty to review plans, "intent is to provide all items necessary," requirement of written change orders, change order mark-up as ceiling on overhead recovery, order of precedence, notice provisions and effect of the change order documentation itself.
These cases include:
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Project:
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Office, Shop & Storage Facilities, Stickney, Illinois
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Description:
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Litigated for general contractor's $8 million claims of delay, acceleration, disruption and change order processing/overhead costs in federal court and defended public owner's liquidated damages and alleged incomplete work counterclaims of $3 million on originally $53 million project plagued by 700+ change orders
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Year:
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1997-99
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Legal Issues:
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Contractual defenses of "no damages for delay" Notice Owner's decisions as "final and binding" Change order percentage mark-up as ceiling on overhead
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Technical Issues:
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Cumulative Impact of Change Orders
Indirect Costs of Changes
Concurrent Delay
Mechanical System Design
Construction Sequencing
Resource Leveling
Cost Accounting
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Outcome:
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After discovery complete, defeated owner's motion for summary judgment. "No damages for delay," notice and "final and binding" held not applicable. Settled week before trial for recovery to general contractor and subcontractors of $6.25 million, 596 day time extension and release of owner's counterclaims. When combined with 1995 settlement, general contractor's total recovery was $13 million, 1,196 days time extension and no recovery to owner
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Attorney:
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John S. Mrowiec
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Project:
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Metropolitan Water Reclamation District of Greater Chicago, Office Shop & Storage Facilities
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Description:
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Federal court litigation of claim of general contractor seeking to terminate because of project delays on $53 million project
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Year:
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1994-95
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Legal Issues:
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Delay "No Damages for Delay" Notice Owner's Decision as "Final and Binding" Cardinal Change Differing Site Conditions
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Technical Issues:
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Fire Protection Design Foundation Design Curtainwall Design
Scheduling
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Outcome:
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After discovery, defeated owner's motion for summary judgment resulting in settlement of $6.75 million and 600 day time extension. "No damages for delay" clause held inapplicable; owner had duty to process changes and time extension requests in good faith. When combined with later 1999 settlement, general contractor's total recovery was $13 million and 1,196 days time extension
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Attorney:
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John S. Mrowiec
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Project:
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Bradley Center Arena, Milwaukee, Wisconsin
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Description:
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Trial of mechanical contractor's acceleration, reduced labor productivity and consequential damages (lost profits on collateral contracts) claims against owner and construction manager on National Basketball Association arena
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Year:
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1992
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Legal Issues:
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Acceleration Reduced Labor Productivity notice Foreseeability of Consequential Damages
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Technical Issues:
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Scheduling Weather Impact on Productivity Trade-Stacking Impact on Productivity Measurement of Damages to Other Contracts
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Outcome:
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Obtained multi-million dollar jury verdict for trade contractor after six-week trial with consequential damages exceeding direct damages; verdict upheld on appeal
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Attorney:
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John S. Mrowiec
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Project:
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Museum of Science & Industry, Chicago
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Description:
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Prepared and litigated general contractor's claims of delay, acceleration, reduced labor productivity and disputed change orders and defended against owner's liquidated damages counterclaim
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Year:
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1997-98
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Legal Issues:
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Acceleration
Notice
Contractor's Duty to Review Plans
Familiarity with Local Conditions
Intent is to Provide All Items Necessary
Means and Methods
Completion Date as Reasonable
Requirement of Written Change Orders
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Technical Issues:
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Outcome:
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After denial of owner's motion to dismiss on contractual defenses, settled favorably to general contractor
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Attorney:
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John S. Mrowiec
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Project:
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Liquid Hydrogen Plant, McIntosh, Alabama
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Description:
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Preparation and prosecution of process piping design/builder's $1.5 million extended duration, reduced labor productivity and unpaid change order claim against owner and subcontractor designer (separate time periods)
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Year:
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1995
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Legal Issues:
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Delay Causation
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Technical Issues:
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Scheduling Field Welding P&ID Revisions
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Outcome:
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Negotiated favorable settlement agreements for payments of damages to design/builder from both owner and subcontractor designer without litigation
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Attorney:
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John S. Mrowiec
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Project:
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Pulp and paper mill, Courtland, Alabama
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Description:
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Prepared and prosecuted $1.6 million extended duration, acceleration and reduced labor productivity claim in federal court litigation
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Year:
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1994
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Legal Issues:
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Delay Notice
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Technical Issues:
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Scheduling Labor Productivity Measurement
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Outcome:
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Settled favorably for $1.25 million before commencement of discovery
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Attorney:
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John S. Mrowiec
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Project:
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Butyllithium Plant, New Johnsonville, Tennessee
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Description:
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Prosecution of reduced labor productivity claim on behalf of process piping contractor on $3 million expansion
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Year:
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1994
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Legal Issues:
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Reduced Labor Productivity Notice
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Technical Issues:
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Piping Design Scheduling Productivity Measurement
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Outcome:
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Settled favorably to piping contractor without litigation
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Attorney:
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John S. Mrowiec
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Project:
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Meadow Mews Townhomes, Tinley Park, Illinois
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Description:
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Prosecuted remedial contractor's claim for payment on project requiring underpinning of townhomes. In addition to the scope of work issues, the mechanics lien foreclosure lawsuit involved all 34 townhome owners and their lenders
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Year:
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1995
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Legal Issues:
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Delay Payment Claims Defective Work
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Technical Issues:
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Scope of Work
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Outcome:
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Recovery to contractor
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Attorney:
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Timothy R. Conway
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Project:
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Motel, South Carolina
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Description:
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Defended environmental engineer against errors and omissions claim by lender who accused engineer of failing properly to perform Phase I environmental assessment
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Year:
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1995-96
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Legal Issues:
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Delay Payment Claims Defective Work
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Technical Issues:
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Outcome:
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Settled favorably
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Attorney:
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Timothy R. Conway
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