By: Steven B. Kaplan, Esq.
Electrical Contractors, Inc. v. Lawrence Brunoli, Inc. and North American Specialty Insurance Company, Docket No: X-07 HHD CV-20-6129731, Superior Court – Complex Litigation at Hartford
This case was brought by ECI, a listed electrical subcontractor on a State of Connecticut construction project, against the general contractor. The Memorandum of Decision issued by the trial court, per Judge Thomas Moukawsher on June 15, 2021, significantly impacts the subcontracting process for many State of Connecticut construction projects. The Court held that the mandatory subcontract form for “listed subcontractors” set forth in Conn. Gen. Stat. ⸹4b-96 precludes a general contractor’s use of “slaughter clauses” in these subcontracts.
For all State of Connecticut construction projects bid and awarded per Conn. Gen. Stat. ⸹4b-91 et seq, there is a requirement (per ⸹4b-93) that the general bidder specify its “listed subcontractors” for the Masonry, Electrical, Plumbing, and Heating, Ventilating and Air Conditioning (HVAC) trades. Section 4b-96 prescribes the mandatory subcontract form to be used by the general contractor for each listed subcontractor. These bidding laws were enacted fifty years ago, and amended through the years, but the mandatory subcontract form has never been changed. The purpose of these statutes is to protect listed subcontractors on competitively bid state projects from unfair bid shopping, bid chopping, and the imposition of unfair adhesion contracts by general contractors.
Conn. Gen. Stat. ⸹4b-96 prescribes the mandatory subcontract form to be used for these listed subcontractors: “The subcontract shall be in the following form.” The mandatory subcontract form does provide for additional details to be provided as to scope of the listed subcontractor’s work (⁋1 & ⁋1a), scheduling (⁋2), and insurance requirements (⁋3). But it does not allow for the general contractor to impose additional exculpatory clauses that go beyond any of the terms and conditions of the general contract with the State.
Significantly, the mandatory subcontract form in ⸹4b-96 requires in ⁋1a that the subcontractor assume to the Contractor all of the obligations and responsibilities that the Contractor owes to the Owner, per the applicable “plans, specifications (including all general conditions stated therein which apply to his trade) and addenda” for the subcontractor’s work. Similarly, per ⁋1b, the General Contractor must assume toward the subcontractor “all the obligations and responsibilities that the Awarding Authority by the terms of the hereinbefore described documents assumes to the Contractor,” except as applicable solely to the General Contractor.
Thus, ⁋⁋1a & 1b set forth mutual flow-through provisions—the “two-way street” — that limit both the obligations and responsibilities of the general contractor and the subcontractor to mirror those conditions that are specifically set forth in the general contract between the State and the general contractor. Nowhere, however, does Conn. Gen. Stat. ⸹4b-96 permit the General Contractor to engraft upon the mandated subcontract form an array of exculpatory clauses that do not appear in the statutory subcontract form, nor appear anywhere in the general contract or general conditions between the Owner and the General Contractor.
The mandatory subcontract form set forth in ⸹4b-96 has been routinely ignored by general contractors, who simply include the statutory subcontract as lip service, and then add an array of exculpatory clauses that shift many risks and liabilities for the general contractor’s work upon the subcontractors. These “slaughter clauses” include: blanket indemnification clauses; “pay if paid” clauses; “no damages for delays” clauses; limitations on consequential and compensatory damages; punitive (i.e., impossibly brief) notice provisions; one-way attorney’s fees provisions; and an array of risk transfer provisions.
But none of these added “slaughter clauses” are permitted by the plain terms, or clear intention, of Conn. Gen. Stat. ⸹4b-96; as such, these “slaughter clauses” are illegal and unenforceable.
If any listed subcontractor is currently performing or bidding work for the State per Conn. Gen. Stat. ⸹4b-96, these types of “slaughter clauses” should not be included in the subcontract.
Any questions on these issues can be directed to Steve Kaplan, Paul Fitzgerald, or Carolyn Young at MKRB at (860) 522-1243.
Michelson, Kane, P.C.
