Month: November 2012

Virginia Supreme Court Adopts Supervisor Liability Cause of Action

In an extension of wrongful discharge liability, the Virginia Supreme Court recently concluded in the recent majority decision in VanBuren v. Grubb that supervisors could be sued in tort for their involvement in a wrongful discharge.

The majority court rejected the minority position that only an employer has the ability to hire or fire employees, and focused on the underlying motivations of the supervisor to determine actionability against him or her. Proponents argue the decision allows a plaintiff to make claim against the actual wrongdoer; opponents argue the decision provides an unfair club to plaintiffs open to potential abuse.

Regardless of one’s views, it is an important decision for anyone in a supervisory capacity to consider in carrying out their supervisory duties.

General Contractor is Necessary Party to Suit on Bond Bonding Off Mechanic’s Lien

Virginia’s mechanic’s lien code makes provision for a mechanic’s lien to be bonded off by a surety, and for suit thereafter to brought against the sureties on the “bond off” bond per Virginia Code Sec. 43-71. The statute does not address whether the principal under the bond, typically the general contractor, is also a necessary party to an action under that statute against the surety; however, Judge McCahill of the Twentieth Judicial Circuit of Virginia recently ruled that the principal / general contract is a necessary party. The case is ADS Construction, Inc. v. Bacon Construction Co., CL-74720, Loudoun County, October 18, 2012, VLW 012-8-173.

In it, Bacon Construction bonded off ADS Construction’s mechanic’s lien, and the bond replacing the mechanic’s lien was posted by Westfield, as surety, and Bacon Construction, as principal. ADS Construction subsequently brought suit against Westfield and Bacon Construction, but is bond action only asserted claim against Westfield, and not Bacon Construction. Westfield demurred to the bond claim on the grounds that Bacon Construction was a necessary party to the claim against the bond. Although the statute does not address naming the bond principal or general contractor as a party to such a bond action Judge McCahill agreed with Westfield, and sustained the demurrer; relying upon several Virginia Supreme Court cases, including principally Walt Robbins, Inc. v. Damon Corp., 232 Va. 43 (1986) and George W. Kane, Inc. v. NuScope, Inc., 243, 503 (1992). He also refused to allow ADS Construction to amend because more than the requisite six months had already expired under Virginia Code Sec. 43-17.

GAO Sets Notice Standard for Price Realism Evaluations

On October 18, 2012, the General Accountability Office (GAO) issued its decision in Emerigent Technologies, Inc., B-407006 addressing an agency’s use of price realism evaluations. While the GAO reaffirmed that agency’s have that discretion, the GAO emphasized that before an agency can do so it must provide clear notice alerting offerors of that intention.

The decision notes GAO’s position that price realism evaluation involves assessment of offerors’ low fixed prices to determine whether they reflect a lack of understanding of the contract requirements or risk inherent in the offerors’ approach. Noting in the solicitation that a price evaluation factor includes reasonableness generaly was deemed insufficient to meet the notice requirement, and instead the GAO concluded that the solicitation notice must contain express language alerting offerors to the possibility that a decision to submit low pricing might be considered as reflecting upon their understanding or ability to perform.

Click Here to view a copy of the decision.

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