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Pennsylvania Supreme Court Holds that General Contractor was Immune from Suit by Employee of Subcontractor Under Workers’ Compensation “Statutory Employer” Doctrine 0

Pennsylvania Supreme Court Holds that General Contractor was Immune from Suit by Employee of Subcontractor Under Workers’ Compensation “Statutory Employer” Doctrine

In a case which has attracted a great deal of attention from construction and insurance industry groups, and prodded the filing of numerous amici curiae briefs, the Pennsylvania Supreme Court in Patton v. Worthington Associates, overturned a $1.5 million jury verdict and ruled in favor of the defendant general contractor based on the “statutory employer” immunity doctrine under Pennsylvania’s Workers’ Compensation Act (the “Act”).

Pennsylvania Superior Court Upholds Pennsylvania Choice-of-Law Provision in Restrictive Covenant Dispute Involving California Employee 0

Pennsylvania Superior Court Upholds Pennsylvania Choice-of-Law Provision in Restrictive Covenant Dispute Involving California Employee

In Synthes USA Sales, LLC v. Peter Harrison and Globus Medical, Inc., No. 12 EDA 2013, the Superior Court of Pennsylvania applied a Pennsylvania choice-of-law provision in an employment agreement containing confidentiality and non-solicitation provisions in a dispute over an employee who worked in California. In Pennsylvania, so-called “restrictive covenants” and “non-competes” are enforceable if they are incident to an employment relationship, reasonably necessary to protect the employer’s legitimate interests, reasonably limited in duration and geographical scope, and supported by adequate consideration. California law, in contrast, is notoriously hostile to restrictive covenants, with a statute rendering most employment restrictive covenants unenforceable.

Contractor’s Violation of Pennsylvania’s HICPA Registration Requirement Does Not Bar Quantum Meruit or Mechanics Lien Claims 0

Contractor’s Violation of Pennsylvania’s HICPA Registration Requirement Does Not Bar Quantum Meruit or Mechanics Lien Claims

The Pennsylvania Home Improvement Consumer Protection Act, 73 P.S. § 517.1, et. seq. (“HICPA”), became effective on July 1, 2009. The HICPA is designed to protect purchasers of home improvement services from contractors engaging in fraudulent business practices. It requires contractors who perform more than $5,000 of work per year, and whose company is worth less than $50,000,000, to register with the Pennsylvania Office of the Attorney General (“OAG”), and comply with HICPA’s substantive requirements. The HICPA requires contractors to enter into written contracts for performance of improvements, specifies provisions which must be included in the written contract (§ 517.7(a)), and identifies other provisions the inclusion of which makes the contract voidable by the owner (§ 517.7(e)). Finally, certain acts on the part of contractors, including failure to register with the OAG (id. § 517.9) are prohibited by the HICPA, which sets forth criminal penalties for fraud (§ 517.8). Significantly, a violation of the Act is also deemed to be a violation of the Unfair Trade Practices and Consumer Protection Law, 73 P.S. § 201-1 et. seq.

Prejudgment Interest on Claims for Consequential Damages for Breach of  Contract are not Recoverable as of Right Under Pennsylvania Law 0

Prejudgment Interest on Claims for Consequential Damages for Breach of Contract are not Recoverable as of Right Under Pennsylvania Law

Parties often specify in their construction contracts what amounts are recoverable for various events of breach. These provisions can impact not only the award of damages, but also whether amounts should be added to the award for recovery of prejudgment interest under Pennsylvania law. In Cresci Construction Services, Inc. v. James H. Martin, the Pennsylvania Superior Court considered the circumstances under which recovery of prejudgment interest is mandatory as opposed to discretionary. In that case, the plaintiff contractor brought suit against the defendant homeowner, and the homeowner counterclaimed for breach of contract.

Performance of Corrective Work Does Not Extend the Deadline to File Mechanics’ Lien Claims in Pennsylvania 0

Performance of Corrective Work Does Not Extend the Deadline to File Mechanics’ Lien Claims in Pennsylvania

Mechanics’ liens are powerful remedies for contractors involved in payment disputes with owners of construction projects in Pennsylvania, but the six month deadline under the Mechanics’ Lien Law is strictly construed and contractors who delay filing them may lose their rights. In Neelu Enterprises, Inc. v. Agarwal, the Pennsylvania Superior Court considered the deadline for a contractor to file lien claims “within six months after the completion of his work” set forth in Section 502 of the Pennsylvania’s Mechanics’ Lien Law. Specifically, the two issues in the case were whether the deadline begins to run after a contractor is terminated and whether the deadline can be extended by the subsequent performance of corrective or remedial work.

Copyrighted Designs Afford Basis for Federal Court Claims for Infringement by Architects Seeking Payment for Their Design Drawings 0

Copyrighted Designs Afford Basis for Federal Court Claims for Infringement by Architects Seeking Payment for Their Design Drawings

Disputes can arise when a design professional prepares plans for an owner and the owner then uses those plans without compensating the architect. In H2L2 Architects/Planners, LLC v. Tower Investments, Inc., a case from the Eastern District of Pennsylvania, the court considered the pleading requirements for unpaid architects to assert claims for payment against owners/developers for architectural design and drawings under federal law.

Pennsylvania Appellate Court Finds No Bad Faith When Insurer Demands Examination Under Oath of Insured’s Indicted Principal 0

Pennsylvania Appellate Court Finds No Bad Faith When Insurer Demands Examination Under Oath of Insured’s Indicted Principal

On cross appeals from a $1.4 million judgment, the Superior Court of Pennsylvania, in Portside Investors, L.P. v. Northern Ins. Co. of N.Y., affirmed judgment in favor of an insured for breach of a property insurance policy, but also affirmed judgment in favor of the insurer on the insured’s statutory claim for bad faith under 42 Pa.C.S.A. § 8371.