“Substantial completion” is a significant project milestone that carries both legal and financial ramifications. Broadly defined as the point at which the project is fit for occupancy or its intended use by the owner, it is a factual determination that must be made in the field. Many contracts designate the project architect or project engineer as the final arbiter of substantial completion, but is certification of final completion really final and binding? Not necessarily.
A California court recently said the term, as used in a statute of limitation, established a statutory standard, not a contractual standard. The AIA contract documents designated the project architect as the certifier. Certificates could be considered as evidence of when substantial completion occurred, but only a judicial finder of fact could make the ultimate determination.
The second case in this issue involved a construction manager’s insurance coverage whose commercial general liability policy excluded coverage for “professional services.” While the CM’s responsibilities arguably involved a mix of professional and non-professional functions, a federal appeals court ruled that the insurer could deny coverage altogether for claims arising out of the CM’s performance.
The third case addressed a municipality’s withholding of public records—settlement agreements with polluters—pending conclusion of the bidding process for a water treatment facility. The Alabama Supreme Court ruled that concern about bid inflation justified the temporary withholding.
