Tag Archives: contractors

Two Judges Back TDOT in Disputes With Contractors Tied to Corruption

Two Nashville courts have refused to overturn the Tennessee Department of Transportation’s decisions to suspend two guardrail contractors from bidding on state contracts, according to The Tennessean.
The two contractors had been implicated in corruption investigations. The contractors — Kingston Springs-based Lu Inc. and Knoxville-based Tennessee Guardrail — argued in lawsuits that their suspensions were improper. Davidson County Chancellor Russell T. Perkins and U.S. District Court Judge Kevin H. Sharp have so far refused, preserving TDOT’s wide latitude to suspend contractors as it sees fit to protect the public’s confidence that taxpayer dollars are being spent appropriately.
Lu Inc. owner and President Novice Cole has admitted to giving $30,000 to a TDOT project supervisor who oversaw his work on a 2005 Interstate 65 widening project, but claimed in a Davidson County Chancery Court lawsuit that the state’s decision to suspend him earlier this year violated the terms of a 2006 settlement agreement he reached with the agency.
The settlement agreement ended a previous TDOT suspension of Lu that was based on allegations by a former employee that guardrails it installed were not embedded deep enough and were unsafe.
Lu was suspended again this year after former TDOT employee James Douglas Hagar was indicted in federal court on bribery charges. Hagar has admitted to accepting eight personal checks from Cole totaling $30,000 and was sentenced to six months in prison.
….Tennessee Guardrail Vice President Kevin Eugene Peel and company founder Allen Roy DeFoe are accused of destroying records requested by a federal grand jury in 2006. The grand jury had requested records of “anything of value obtained for or transferred for the direct or indirect benefit of any employee or former employee of” TDOT or other government agencies. The indictment alleges that, after receiving the subpoena, Peel and DeFoe took numerous boxes of documents to a commercial document-shredding business and had them destroyed.
TDOT decided to suspend Tennessee Guardrail because Peel is still an officer with the company and declined the company’s request for an administrative hearing to dispute the charges.
“We believe this suspension violates Tennessee Guardrail’s constitutional rights because its employee was indicted; Tennessee Guardrail was not,” Nashville attorney Courtney Smith argued for Tennessee Guardrail at an Oct. 26 hearing.

Corker Banks More than $6.5 Million

Tennessee Sen. Bob Corker raised $1.2 million in campaign money over the last three months, far outpacing his three registered challengers and bringing his balance to more than $6.5 million, reports the Tennessean after reviewing his most recent campaign finance report.
Industries that have contributed generously to the Chattanooga Republican in the past continued to send money his way. Since last November’s election, Corker has received more donations than anyone else in Congress from four industries — general contractors, building materials, the automotive industry and commercial banks — according to an analysis by the nonpartisan Center for Responsive Politics.
That analysis doesn’t include complete data from the third quarter, but disclosure forms filed with the Federal Election Commission show donors from those four industries continued to fuel Corker’s campaign fund between July 1 and Sept. 30.
Commercial-bank employees and political action committees linked to those banks donated at least $204,400 as of Sept. 30, according to the Center for Responsive Politics. In the third quarter, more than a dozen banks and financial services institutions donated to Corker, a member of theSenate’s Banking, Housing and Urban Affairs Committee. Bank of America’s federal PAC donated $4,500, and the Independent Community Bankers of America contributed $5,000.

Supreme Ruling Eases Rules for Homeowner Lawuits Against Contractors

KNOXVILLE, Tenn. (AP) — A ruling from the Tennessee Supreme Court has made it easier for homeowners to hold contractors responsible for shoddy work by subcontractors.
The court has found that contractors have a duty to perform services in a “careful, skillful, diligent and workmanlike manner” that can’t be fully delegated to another contractor they hire.
The 5-0 ruling in a case from Chattanooga over a botched roof repair job that caused a fire could have broad implications for homeowners and contractors because most home construction and repair work involves bringing in subcontractors to handle parts of the job.
The opinion written by Justice Gary Wade and released last week said this was the first time the state Supreme Court had taken up the issue of whether a contractor was absolved from liability under the contract by hiring a subcontractor.
The case began when Robert and Joanie Emerson signed a contract with Winters Roofing Co. to replace a roof. Company owner Martin Winters subcontracted out the work. When the Emersons complained that the new roof leaked, Winters brought in a different subcontractor for repairs.
The subcontractor used a propane torch on the roof and a few hours later the house caught fire. A fire investigator for the insurance company concluded the open flame roofing work started the fire, which caused more than $870,000 in damages to the home on Sept. 26, 2007.
Neither Winters nor the subcontractor had liability insurance, although Winters tried to obtain it the day after the fire and then filed a claim that said the fire happened seven days later, the ruling said.
The Emersons’ insurance company sued Winters, who argued that he wasn’t at the site while the subcontractor was working and wasn’t responsible for his mistakes.
The trial court dismissed the lawsuit, saying the couple’s insurance company couldn’t recover damages because the fire wasn’t a foreseeable part of the contract. It also said that the only way Winters could be held responsible was if it was shown that he was negligent in his hiring or supervision of the subcontractor.
Last year the Tennessee Court of Appeals overturned that decision.
“The defendant had an implied duty to perform the services required by his contract with the Emersons in a careful, skillful, diligent, and workmanlike manner,” the Supreme Court ruling says.
It concluded that while Winters had lawfully delegated his responsibility to install a proper roof to the subcontractors, he still was liable for the shoddy work.