Justia Construction Law Opinion Summaries

James and Amber May hired RES Construction to build their home in Sioux Falls. RES subcontracted First Rate Excavate, Inc. to install the septic system and construct the foundation. The Mays alleged that the foundation was installed several feet below grade level, causing significant drainage and septic issues that damaged their home, yard, and neighboring properties. They sued First Rate for negligence. The circuit court dismissed the claim based on the economic loss doctrine, and the Mays appealed.The Circuit Court of the Second Judicial Circuit in Lincoln County, South Dakota, dismissed the Mays' negligence claim, citing the economic loss doctrine, which limits remedies for purely economic losses to those specified in a contract. The court reasoned that the Mays lacked privity of contract with First Rate and that their claims were barred by the six-year statute of limitations.The Supreme Court of the State of South Dakota reviewed the case. The court held that the economic loss doctrine should not be expanded beyond claims arising from transactions involving the sale of defective goods under the Uniform Commercial Code (UCC). The court noted that the doctrine is designed to prevent parties from circumventing contract remedies by seeking tort remedies for economic losses. Since the Mays' claim was based on negligence and not on a UCC transaction, the economic loss doctrine did not apply. Additionally, the court found that the lack of privity between the Mays and First Rate further precluded the application of the economic loss doctrine. The Supreme Court reversed the circuit court's dismissal and remanded the case for further proceedings. View "May v. First Rate Excavate" on Justia Law

Phillip and Jodi Peterson hired Brandon Coverdell Construction, Inc. (BCC) to perform work on their home following a hailstorm. The Petersons were dissatisfied with the quality of BCC's work, while BCC was unhappy with the Petersons' partial payment. Both parties accused each other of breaching their written agreement and filed lawsuits in the county court. The county court ruled in favor of BCC, finding that the Petersons committed the first material breach.The Petersons appealed to the District Court for Douglas County but failed to file a statement of errors. They obtained a continuance to amend the bill of exceptions in the county court. The district court eventually found that the county court had committed plain error by entering judgment in favor of BCC, concluding that the written agreement was an unenforceable illusory contract. BCC then appealed to the Nebraska Supreme Court.The Nebraska Supreme Court reviewed the case and found that the district court erred in considering the supplemental bill of exceptions, which was not properly part of the record. The Supreme Court also determined that the county court did not commit plain error. The county court's decision to focus on the issues presented by the parties, rather than the enforceability of the contract, did not result in damage to the integrity, reputation, or fairness of the judicial process. Consequently, the Nebraska Supreme Court reversed the district court's order and remanded the case with directions to affirm the county court's judgment. View "Peterson v. Brandon Coverdell Constr." on Justia Law

Donald Fleming filed a lawsuit against Caribou Creek Log Homes, Inc. and North Idaho Insulation, LLC, alleging that spray foam insulation installed by North Idaho Insulation caused significant structural damage to his residence in Montana. Fleming's claims included negligence, violations of residential construction defect statutes, the Montana Consumer Protection Act, and breach of warranties. North Idaho Insulation then filed a third-party complaint against Southwest Distributing Co. (Southwest), alleging that Southwest manufactured and sold the defective spray foam insulation and seeking indemnification and contribution.The Montana Nineteenth Judicial District Court denied Southwest's motion to dismiss for lack of personal jurisdiction, concluding that it had specific personal jurisdiction over Southwest under Montana Rule of Civil Procedure 4(b)(1). Southwest then petitioned the Montana Supreme Court for a writ of supervisory control, arguing that the District Court erred in its jurisdictional ruling.The Montana Supreme Court reviewed the case and determined that the District Court erred in concluding it had specific personal jurisdiction over Southwest. The Supreme Court found that Southwest did not transact business in Montana related to the claims and that the claims did not arise from Southwest's activities in Montana. Additionally, the Court held that the stream-of-commerce theory did not apply, as Southwest did not purposefully direct its activities toward Montana. Consequently, the Supreme Court granted the petition for a writ of supervisory control, reversed the District Court's order, and remanded the case for further proceedings consistent with its opinion. View "Southwest v. 19th Judicial Dist." on Justia Law

Curtis Park Group, LLC (Curtis Park) encountered a significant issue during the construction of a new development called S*Park, which included five buildings supported by a single concrete slab. The slab began to sag due to construction defects, and Curtis Park hired a consultant to determine the cause and necessary repairs. The repairs cost $2,857,157.78, which were fronted by the general contractor, Milender White, as per their agreement. Curtis Park had a builder’s risk insurance policy with Allied World Specialty Insurance Company (Allied World) but did not include Milender White or subcontractors as named insureds.The United States District Court for the District of Colorado reviewed the case, where Curtis Park sued Allied World for breach of contract and bad faith after Allied World denied coverage for the repair costs. The district court ruled that Curtis Park could seek coverage for the repair costs even though Milender White had absorbed these costs. The jury found in favor of Curtis Park on the breach-of-contract and statutory bad-faith claims but not on the common-law bad-faith claim. Allied World’s motions for a new trial and judgment as a matter of law were denied.The United States Court of Appeals for the Tenth Circuit reviewed the case. The court held that the district court erred in interpreting the insurance policy to allow Curtis Park to recover repair costs it had not paid and had no obligation to pay. The policy explicitly limited recovery to the amount the named insured (Curtis Park) actually spent on repairs. The Tenth Circuit reversed the jury’s verdict and remanded for a new trial, instructing that Curtis Park cannot recover the costs of repair that it did not pay. The court also vacated the remainder of the judgment and remanded for a new trial on all other issues. View "Curtis Park Group v. Allied World Specialty Insurance Company" on Justia Law

Eiden Construction, LLC (Eiden) entered into a subcontract with Hogan & Associates Builders, LLC (Hogan) for earthwork and utilities on a school construction project. Hogan sued Eiden and its bonding company, AMCO Insurance Company (AMCO), for breach of contract, claiming Eiden failed to complete its work, including draining sewage lagoons and constructing a fire pond. Eiden counterclaimed for unpaid work, arguing it was not responsible for draining the lagoons and that Hogan did not comply with the subcontract’s notice and opportunity to cure provisions. AMCO argued it was not liable under the performance bond because Eiden did not breach the subcontract and Hogan did not provide proper notice.The District Court of Uinta County found for Hogan on the claim regarding the sewage lagoons but not on other claims, ruling AMCO was not liable under the bond due to lack of notice. Eiden and Hogan both appealed. Eiden argued the court erred in finding it responsible for draining the lagoons and in awarding Hogan damages billed to an associated company. Hogan contended the court erred in not awarding damages for other work and in its calculation of prejudgment interest.The Wyoming Supreme Court affirmed the lower court’s decision. It held Eiden breached the subcontract by not draining the lagoons and that Hogan was entitled to recover costs for supplementing Eiden’s work. The court found Eiden’s late completion of the septic system justified Hogan’s directive to expedite lagoon drainage. It also ruled Hogan properly paid the supplemental contractors, despite invoices being sent to an associated company. The court rejected Hogan’s claims for additional damages, concluding Eiden complied with the notice to cure provisions for the fire pond and other work. The court also upheld the lower court’s calculation of prejudgment interest, applying the offset before calculating interest. View "Hogan & Associates Builders, LLC v. Eiden Construction, LLC" on Justia Law

In 2014, Casey Moyer entered into an agreement with Doug Lasher Construction, Inc. for the construction and purchase of a new home, which was substantially completed in November 2014. Over the next six-and-a-half years, Moyer repeatedly informed Lasher Construction about issues with the home, particularly water leakage, and received assurances that the issues would be fixed. However, the problems persisted, and Moyer and Caitlin Bower filed suit against Lasher Construction in November 2021, alleging breach of contract and violation of the Idaho Consumer Protection Act.The District Court of the Fourth Judicial District of Idaho granted summary judgment in favor of Lasher Construction, ruling that all claims were time-barred under Idaho Code sections 5-241(b) and 5-216, which require that claims arising out of a contract for the construction of real property be brought within five years of the final completion of construction. The court also found that the Idaho Consumer Protection Act claims were time-barred under the two-year statute of limitations provided by Idaho Code section 48-619. The court rejected the homeowners' arguments for equitable estoppel and the repair doctrine, concluding that they failed to show that Lasher Construction prevented them from pursuing their claims within the statutory period.The Supreme Court of Idaho affirmed the district court's decision. The court reaffirmed that the repair doctrine is not available in Idaho and upheld the district court's conclusion that the homeowners failed to establish the elements of equitable estoppel. The court also agreed that the text messages and the July 2, 2021, response to the NORA demand did not constitute enforceable independent contracts. Lasher Construction was awarded attorney fees and costs on appeal as the prevailing party. View "Moyer v. Lasher Construction, Inc." on Justia Law

Daniel Genho and Riverdale Hot Springs, LLC had a dispute over payment for construction work Genho performed at Riverdale Resort. Genho was not a registered contractor at the start of the project but became registered midway through. Riverdale refused to pay Genho and prevented him from retrieving his tools and materials. Genho filed a Mechanic’s and Materialmen’s Lien and sued for breach of contract, unjust enrichment, quantum meruit, conversion, and to foreclose on the lien.The District Court of the Sixth Judicial District of Idaho granted Riverdale’s motion for a directed verdict on the breach of contract claim but denied it on the other claims. The court found that there were two separate transactions: one before and one after Genho became a registered contractor. The court allowed the jury to consider the unjust enrichment, quantum meruit, conversion, and lien foreclosure claims. The jury found in favor of Genho, awarding him $295,568, which was later reduced to $68,681. The district court also awarded attorney fees to Genho.The Supreme Court of Idaho reviewed the case and affirmed the district court’s decision in part and reversed it in part. The court held that equitable remedies are available under the Idaho Contractor Registration Act (ICRA) for work performed after a contractor becomes registered, provided the work is severable from the unregistered work. The court affirmed the denial of a directed verdict on the unjust enrichment, quantum meruit, and lien foreclosure claims but reversed the award of attorney fees for the conversion claim, as it was not based on a commercial transaction. The court also affirmed the award of attorney fees for the foreclosure action under Idaho Code section 45-513. Neither party was awarded attorney fees on appeal. The judgment was vacated and remanded for modification consistent with the opinion. View "Genho v. Riverdale Hot Springs, LLC" on Justia Law

Graphite Construction Group, Inc. (Graphite) was hired by Des Moines Area Community College (DMACC) in 2019 for a construction project. DMACC withheld 5% of each payment as retainage, amounting to about $510,000 by January 2022. Graphite requested the release of the retainage, but the project was not yet completed. A dispute arose between Graphite and a subcontractor, Metro Concrete, Inc. (Metro), over unpaid services. Metro filed a claim, and Graphite filed a bond for twice the amount of Metro’s claim, demanding the release of the retainage.The Iowa District Court for Polk County denied Graphite’s motion to compel the release of the retainage, stating that under Iowa Code chapter 573, retainage could not be released before the project’s completion and final acceptance. The court also denied Graphite’s request for attorney fees, as Graphite had not prevailed on its retainage claim.The Iowa Court of Appeals reversed the district court’s decision, ordering the release of the retainage to Graphite but denied Graphite’s request for attorney fees. DMACC sought further review from the Iowa Supreme Court.The Iowa Supreme Court vacated the Court of Appeals' decision and affirmed the district court’s judgment. The Supreme Court held that under Iowa Code chapter 573, retainage could not be released before the project’s completion and final acceptance, and the statutory exceptions did not apply in this case. The court also upheld the denial of attorney fees to Graphite, as they were not the prevailing party. View "Rochon Corporation of Iowa, Inc. v. Des Moines Area Community College" on Justia Law

In May 2022, Jerry & John Woods Construction, Inc. ("Woods Construction") entered into a contract with John David Jordan and Carol S. Jordan to construct a house and a metal building. Woods Construction claimed the Jordans failed to pay for the work performed, leading the company to sue them in the Dallas Circuit Court for breach of contract and unjust enrichment. The Jordans moved to dismiss or for summary judgment, arguing that Woods Construction's lack of a required residential-home-builder's license barred the company from bringing civil claims. They also filed counterclaims alleging improper and negligent work by Woods Construction.The Dallas Circuit Court denied the Jordans' motion to dismiss but later granted their motion for summary judgment, finding that Woods Construction, as an unlicensed residential home builder, was barred from enforcing the construction contract under § 34-14A-14(d) of the Alabama Code. The court also declared Woods Construction's "Notice of Lis Pendens/Lien" null and void. The court certified its judgment as final under Rule 54(b), despite the Jordans' counterclaims remaining pending.The Supreme Court of Alabama reviewed the case and determined that the Rule 54(b) certification was improper. The court noted that the claims and counterclaims were closely intertwined, as both concerned the same contract and construction work. Additionally, the resolution of the Jordans' counterclaims could potentially moot Woods Construction's claims. Therefore, the court concluded that the circuit court exceeded its discretion in certifying the judgment as final and dismissed the appeal for lack of a final judgment. View "Jerry & John Woods Construction, Inc. v. Jordan" on Justia Law

A general contractor, Tocci Building Corporation, and its affiliates were involved in a dispute with their insurers, including Admiral Insurance Company, over coverage under a commercial general liability (CGL) insurance policy. The issue was whether the CGL policy covered damage to non-defective parts of a construction project caused by a subcontractor's defective work on another part of the project. Tocci sought defense and indemnity coverage under the Admiral policy for a lawsuit filed by Toll JM EB Residential Urban Renewal LLC, which alleged various issues with Tocci's work on a residential construction project.The United States District Court for the District of Massachusetts concluded that Admiral had no duty to defend Tocci. The court found that the lawsuit did not allege "property damage" caused by an "occurrence" as required for coverage under the policy. The court reasoned that the damage alleged was within the scope of the project Tocci was hired to complete and thus did not qualify as "property damage." Additionally, the court held that faulty workmanship did not constitute an "accident" and therefore was not an "occurrence" under the policy.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the district court's decision, but for different reasons. The appellate court focused on the policy's exclusions, particularly the "Damage to Property" exclusion (j)(6), which excludes coverage for property that must be restored, repaired, or replaced because the insured's work was incorrectly performed on it. The court concluded that this exclusion applied to the entire project since Tocci was the general contractor responsible for the entire construction. The court also noted that Tocci did not meet its burden of showing that any exceptions to the exclusion applied, such as the "products-completed operations hazard," because Tocci's work was not completed or abandoned. Thus, the appellate court held that Admiral had no duty to defend Tocci in the underlying lawsuit. View "Admiral Insurance Company v. Tocci Building Corporation" on Justia Law