John Bott v. J.F. Shea Co., Inc. And Shea/keefe, Defendants-Third Party v. Gulf Coast Grouting, Inc., Third Party
388 F.3d 530 | Court of Appeals for the Third Circuit | 2004
What This Case Means for Subcontractors
Gulf Coast Grouting was hired as a subcontractor and required by contract to name Shea/Keefe as an additional insured on its liability policy. However, Shea/Keefe's own contract administrator told Gulf Coast to name J.F. Shea instead, and Gulf Coast complied. When a worker was injured and sued, Shea/Keefe tried to claim indemnity from Gulf Coast's insurance but lost. The court ruled that by giving conflicting instructions, accepting the wrong insurance certificates without complaint, and allowing Gulf Coast to finish work and get paid in full, Shea/Keefe had waived its right to enforce the original insurance requirement.
Key Takeaways
- •If a prime contractor gives you written instructions that conflict with the contract's insurance requirements, follow the written instructions—document everything and get written confirmation. The prime may lose the right to later claim you breached the insurance clause.
- •Prime contractors cannot silently accept non-compliant insurance certificates for months, allow work to be completed and paid, then suddenly demand indemnity. Long silence and inaction equals waiver of contractual rights.
- •Always get written clarification when contract terms and job site instructions conflict. If the prime tells you to do something different than the contract says, get it in writing and keep records of all communications.
Silence and inaction for so long a period shows intention to yield a known right.
Frequently Asked Question
Can a prime contractor enforce an insurance requirement if they told me to do something different?
No, not if they gave you conflicting written instructions and then accepted your non-compliant insurance without objection while you completed the work. Courts view this as waiving the contractual right. Always document conflicting instructions in writing and get the prime's acknowledgment to protect yourself.
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