In their recent article, the Sands Anderson Marks & Miller construction litigation team commented on the Virginia Court of Appeals case, Commonwealth v. AMEC Civil, LLC, 54 Va. App. 240, 677 S.E.2d 633 (2009). Their article can be found here. (http://z.pe/j17)

The AMEC Civil Case

In the case, the Virginia Court of Appeals was called upon to interpret the language of Va. Code Ann. § 33.1-386(A) (2009) which requires that timely “written notice” of its “intention to file” a claim “at the time of the occurrence or beginning of the work upon which the claim and subsequent action is based.” The Court applied that language strictly, and held that the contractor had not met that requirement, despite actual verbal notice. AMEC Civil, LLC, at *18.

The Court of Appeals relied upon two important Virginia Procurement act cases for local governments – Flory Small Business Development Center v. Commonwealth, 261 Va. 230, 541 S.E.2d 915 (2001) and Sabre Construction Corporation v. County of Fairfax, 256 Va. 68, 501 S.E.2d 144 (1998) (“The Public Procurement Act constitutes a waiver of public bodies’ sovereign immunity, is in derogation of the common law, and, therefore, must be strictly construed.”).

Broader Application to Local Government Contracts

While the statute in question, Virginia Code § 33.1-386, only applies to construction of state highways, the holding is likely to have a broader application to other types of public contracts and is helpful to localities.

First, some localities are now constructing or improving state highways given the lack of state money. Some localities have even assumed the role of VDOT locally.

Second, local governments typically use contractual language which is very similar to the statutory language interpreted in the AMEC Civil case. Construction contracts frequently contain standard language requiring prompt written notice of claims.

Third and most importantly, the language of Virginia Code § 33.1-386 is identical to language in the Virginia Public Procurement Act. Therefore, as noted above, the AMEC Civil court relied upon the case of Flory Small Business Development Center v. Commonwealth, 261 Va. 230, 541 S.E.2d 915 (2001), in which that same language was similarly interpreted: “Contractual claims, whether for money or other relief, shall be submitted in writing no later than 60 days after final payment. However, written notice of the contractor’s intention to file a claim shall be given at the time of the occurrence or beginning of the work upon which the claim is based.” Virginia Code § 2.2-4363(A) (formerly Virginia Code § 11-69(A)). Subsection (C) of that section provides for nearly identical language to be included in every contract unless some other procedural for considering claims is agreed to by the public body.

Thus, the AMEC Civil case (and its affirmative reliance upon Flory Small Business Development Center and Sabre Construction) is a good case for local governments as well as those who do business with local governments to keep in mind.