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In the January/February 2009 issue (Volume XIV Number
1) of the Katz & Stone, L.L.P. Construction Newsletter, we
alerted readers to the recent case, AMEC Civil, L.L.C. v.
Commonwealth, 74 Va. Cir. 492 (Va. Cir. Ct. 2008)
(“AMEC I”). In AMEC I, the court held that a statutory requirement
to provide written notice of a claim was satisfied
when the party entitled to receive the notice had actual notice
of the claim. As the court in AMEC I noted, “the purpose
of the notice requirement can effectively be realized
even if the notice is not in writing.” The decision in AMEC I
was appealed to the Virginia Court of Appeals, which recently
reversed the trial court on the issue of actual notice as
a substitute for written notice.
In this case, AMEC Civil, LLC
(“AMEC”) contracted with the Virginia
Department of Transportation
(“VDOT”) for the construction of
several bridges and sections of roadway
in Mecklenburg County, Virginia.
After the project was complete,
AMEC sought $24 million in
cost overruns for differing site conditions,
acceleration damages, extra
work and other charges. Virginia
Code § 33.1-387 permits a contractor to bring a “civil action”
against the state, provided an administrative claim has
been submitted to, and denied by, VDOT. The submission
of the administrative claim is a condition precedent to a contractor’s
right to bring a civil action. Specifically, Va. Code
§ 33.1-386(A) authorizes a contractor to bring an administrative
claim, with the proviso that “written notice of the
contractor’s intention to file such claim shall have been
given to the [VDOT] at the time of the occurrence or beginning
of the work upon which the claim and subsequent action
is based.” As a condition precedent to litigation a contractor
must bring an administrative claim that satisfies the
notice requirements of Va. Code § 33.1-386(A).
In AMEC I, the court held that VDOT’s actual notice of
AMEC’s claims satisfied Va. Code § 33.1-386(A)’s notice
requirement, notwithstanding the statutory requirement that
written notice be provided. The Virginia Court of Appeals,
Commonwealth v. AMEC Civil, LLC, 54 Va. App. 240 (Va.
Ct. App. 2009) (“AMEC II”), reversed AMEC I on the issue
of notice, noting that in Va. Code § 33.1-386(A), the written
notice requirement must be construed strictly, and actual
notice of claims was not a substitute for the statutorily required
written notice.
For each of the claims made by AMEC, the court reviewed
the available evidence to determine whether AMEC had
provided the proper notice to VDOT. As the court noted,
Va. Code § 33.1-386(A) requires a particular kind of notice
that announces (i) in writing (ii) the contractor’s intent to
file a claim (iii) at the time of the occurrence or beginning of
the work upon which the claim and subsequent action is
based. The AMEC II court found that AMEC had not satisfied/p>
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Va. Code § 33.1-386(A)’s notice requirement for part of
its acceleration claim and five of its other six claims.
For example, AMEC claimed charges related to drilled shaft
work. The AMEC II court noted that correspondence between
AMEC and VDOT in 2000 indicated concerns related to the
drilled shaft work and, despite beginning work on the drilled
shafts in 2001, AMEC did not provide written notice to
VDOT of its intent to assert a claim until 2003. As such,
AMEC did not satisfy the statutory requirement that notice
be given at the “time of the occurrence or at the beginning of
the work upon which the claim and subsequent action is
based.” As another example,
AMEC claimed acceleration damages
based on written notice to
VDOT in April 2004 of an intent
to file a claim for damages
“incurred to date” and not
“correctly and fully addressed by
Work Order No. 39.” The court in
AMEC II held that such notice was
not sufficient for acceleration
claims prior to April 2004
(because the notice was not given
at the time the claim occurred) or
for acceleration efforts after April 2004 unrelated to alleged
inadequacies of Work Order No. 39 (because the notice was
limited to damages related to the inadequacies of Work Order
No. 39).
The court in AMEC I also noted that certain meeting minutes
and memoranda exchanged by the parties constituted written
notice for purposes of Va. Code § 33.1-386(A). The AMEC
II court acknowledged that Va. Code § 33.1-386(A) “does
not require the sophistication of a legal pleading,” elaborating
that meeting minutes, memoranda, and even contractor
invoices could conceivably constitute proper notice, provided
such documents clearly indicated the contractor’s intent to
file a claim and were issued within the time required by Va.
Code § 33.1-386(A). The AMEC II court overruled the
AMEC I court, however, finding that no meeting minutes
expressed such an intent and noting that AMEC’s invoices
were issued much later than permitted by Va. Code § 33.1-
386(A).
Alternatively, the court noted that
a disclaimer or limitation of liability
may be void if its enforcement
would be unconscionable. As to such a distinction the
court stated, “[l]imitation of consequential damages for
injury to person in the case of consumer goods is prima
facie unconscionable but limitation of damages where the
loss is commercial is not.” As the parties engaged in a commercial
transaction, the court did not find any cause to declare
supplier’s disclaimer unconscionable.
In August 2009, AMEC filed a petition for appeal to the Virginia
Supreme Court. Although we will continue to provide
future developments in this litigation, it appears that – for the
time being – when a statute requires written notice, Virginia
courts will require such notices to be in writing.
continued from page 4
of a general contractor’s failure to post a Notice of Commencement
at the project. Thus, the decision in Rey Coliman
Contrs., Inc. is in line with accepted case law in Georgia requiring
courts to strictly construe the lien statute in favor of
the property owner and against the materialman, making
clear the importance of strict adherence to the statutory requirements
for filing a lien.
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