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letter of credit in the amount of $380,000 in favor of the title
company, which was delegated the task of making progress payments
to the contractor under the construction contract; the bank
issued its irrevocable standby credit in favor of the title
company in that amount.
On September 24, 1993, Landmark Building Systems Ltd.
(Landmark) entered into a lump sum construction contract in the
amount of $375,688 (subject to certain adjustments) with WLC to
construct the building on the Lawrence Drive property. The
contract named petitioner, Mike DeCleene (petitioners’ son, who
works in the family business), and/or a representative of Excel
Engineering, as owner's representative. As owner’s
representative, petitioner and Mike DeCleene had general
authority, including the right to approve changes in design or
construction, to inspect and approve workmanship and materials,
to visit the construction site, and to determine compliance with
the contract.
Although the standby letter of credit and the construction
contract do not expressly so state, progress payments to the
contractor were to be made only with the approval of petitioner
or Michael DeCleene as owner’s representative. Excel Engineering
played a role in the design of the building, but lacked actual
authority to sign off as owner’s representative.
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Last modified: May 25, 2011