Client Alerts & Publications
Construction Manager More at Risk?
Published Date: November 1, 2014
In Coghlin Electrical Contractors, Inc. v. Gilbane Building Co., et al, No. 2013-1300-D (Mass. Sup. Ct., June 24, 2014) (Davis, J.), the Massachusetts Division of Capital Asset Management on behalf of the Massachusetts Department of Mental Health (“Owner”) contracted with Gilbane Building Company (“CM”) to manage the construction for a psychiatric facility pursuant to a CM@R agreement. CM subcontracted the electrical scope of work to Coghlin Electrical Contractors, Inc. (“Subcontractor”). During construction, Subcontractor encountered issues resulting in additional costs as a result of CM’s purported mismanagement of the project, stemming from design changes impacting Subcontractor’s work. Subcontractor sued CM for its resulting damages and CM subsequently sued Owner by way of a third party complaint, asserting that Owner was responsible for any damages caused by the design- related changes and design errors. Owner moved to dismiss CM’s claims, arguing that the CM@R agreement obligated the CM to “indemnify, defend and hold harmless” Owner from and against “all claims, damages, losses, and expenses . . . arising out of or resulting from the performance of the Work.”
Examining the CM@R agreement, the court found that the provisions imposed upon the CM extensive design responsibilities:
The CM shall review, on a continuous basis, development drawings, specifications and other design documents. The design reviews shall be performed with a group of architects and engineers, who are either employees or independent consultants under contract with the CM. The CM shall review the design documents for clarity, consistency, constructibility, maintainability/operability and coordination among the trades.