Proceed Wisely, Ninja Contractor, Because Suing Your DOT May Have Limitations
No self-respecting Ninja goes into battle without a plan, right? You need to know your environment, your opponent and the rules of the battle. For you Ninja contractors, it’s a good thing to fully understand your potential recovery before you spend countless months and thousands of dollars pursuing a claim against your state DOT for breach of contract, misrepresentation or other cause of action.
Recently, in Victor Virgin Construction Co. v. N.H. Department of Transportation, 75 A.3d 1136 (N.H. 2013) (pdf), the New Hampshire Supreme Court held that a contractor’s claim for negligent misrepresentation against the DOT was statutorily capped at $475,000. The Contractor filed a breach of contract claim, as well as a negligent misrepresentation claim, against the DOT for its alleged failure to adjust the contract price after changes by the DOT increased the scope of work and caused almost a year of construction delays. (Remember my earlier post about “no damages for delay” clauses?)
In Victor Virgin, a jury awarded the Contractor approximately $1.5 million on its negligent misrepresentation claim. Following the verdict, the trial court held that no reasonable jury could have awarded more than $779,078, concluding that any more than that amount was purely speculative. Inexplicably, the trial court did not enter a finding on the breach of contract claim. Both parties appealed.
On appeal, the New Hampshire Supreme Court concluded that the damages against the DOT were statutorily capped. Section 541-B:14, I (Supp. 2012) of the New Hampshire Code provides as follows:
All claims arising out of any single incident against any agency for damages in tort actions shall be limited to an award not to exceed $475,000 per claimant and $3,750,000 per any single incident.
Applying the statute, the appellate court held that the Contractor’s damages were limited to $475,000, despite the jury award of $1.5 million. The Supreme Court sent the case back to the trial court on the breach of contract claim—so the Contractor will get another chance.
So, when you have a claim, what does it mean to Be Wise Ninja Contractor? I have previously talked about 10 things to do when pursuing a claim, but I think its important to go back to the basics. These include:
- Read, read, read your contract. This sets the basis for the types of claims that are available, how disputes will be handled, and whether you will be limited in your recovery of damages.
- Understand the law in your jurisdiction. Each state is different and what may be recoverable in one state may be barred in another state. What one state says about economic losses or indemnification provisions, may be dramatically different in another state.
- Don’t go it alone. Depending on the size of the claim, you are wise to get professional assistance, whether talking about a claims consultant for preparing damage calculations, a scheduling expert for proving entitlement to delays, or a construction lawyer for advising you through the initial evaluation and advocating for you through the claims process.
Many times, inexperienced Ninja contractors race straight into battle without having a plan or strategy. But you should not…you should be wise.