Colonial Mechanical Corporation, Issue No. 1

May  2001

The Contractors Critic
Colonial Mechanical Corporation
Reporting on Safety, Productivity, and Honesty in the Construction Industry.

Litigation, Liens and High Accident Rate

Colonial loses jury trial in explosion case

Crestar Bank hired Colonial Mechanical Corporation to install a petroleum tank at one of Crestar’s buildings. The tank exploded causing a massive fire and $200,000 in property damage. Colonial tried to blame James River Petroleum for the fire and explosion according to their court complaint. James River Petroleum answered that Colonial Mechanical itself was guilty of contributory negligence, and that Colonial was engaged in ultra-hazardous and dangerous activities. Unlike the vast majority of civil cases, this suit was not settled. Instead it went to a jury trial. The jury entered a verdict against Colonial Mechanical and in favor of James River Petroleum.  click here to continue

Liens are an unnecessary evil in the construction industry. Many construction customers know how maddening it is to try and obtain bank financing where there is some claim or lien, no matter how frivolous, against your property. That is why it is important for construction customers to be concerned about whether a contractor is likely to file liens against its customers, rather than negotiate a solution. A lien against your property by a contractor is as effective a claim against your equity as a bank’s mortgage, according to the Engineering News Report (June 26, 2000, pg. 123).

Colonial Mechanical has filed liens against several of its construction customers, even though Colonial’s dispute was actually with another contractor. As described elsewhere in this brochure, when Colonial had a dispute with its general contractor, Prestige Construction on the Waddell Buildings job, Colonial filed several liens not against Prestige but against the property of the hapless landowner, IMC Enterprises. Colonial also filed a lien against the owner of the American Racquet Club, during Colonial’s dispute with the Jesson & Frantz general contractor.

In another example, in July 2000 Colonial had a payment dispute with its general contractor, KCI, over its work at a Kinko’s retail space at 1111 E. Main St. in Richmond, Virginia. The $91,415 lien was actually filed against the landowner, Bank of America.

Colonial filed a lien against the owners of the Hilton Hotel project at the Richmond International Airport job, even though their claim was against Kenbridge Construction Company, the general contractor, totaling $71,551.

Colonial filed a lien against the Wilmer-Seminary over a $112,707 dispute over its work at a seven-acre shopping mall at Chamberlayne and Seminary Avenue in Henrico, Virginia.

To a construction customer, its contractor’s safety record should be an important issue. Any contractor’s employees injured on the job could end up suing the construction customer who owned the job site where the accident took place. There are several legal theories that require the property owner to closely supervise the contractor and to make sure they are working safely. The worker compensation laws generally do not allow a worker to sue their own employer, so that leaves the job site owner as the remaining target for any litigation.

In this light, construction customers should be concerned about Colonial’s increasing accident rate. Colonial Mechanical’s own in-house publication admits that their accident rate is up over 20% in the first three quarters of 2000, compared to the same period in 1999. Colonial admits that the fourth quarter of 2000 is going to be even worse.

Colonial has been forced to spend well over $400,000 on worker compensation and medical costs during the first nine months of 2000. Every one of those 32 injured workers, especially those with high medical bills and hospital stays, is potentially a plaintiff who could sue Colonial’s customers.