Justia Construction Law Opinion Summaries

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In 2014, plaintiffs filed suit against defendants Shappell Industries and Toll Brothers, Inc. (the Developer) for construction defects arising out of the construction of two residences in a community called San Joaquin Hills. The complaint also named Doe defendants, including two causes of action against unnamed engineers, Does 101-125. Plaintiffs claimed that in 2017, some two years and nine months after the suit was filed, the Developer produced discovery that identified Petra Geosciences, Inc. On August 2, 2017, while the matter was still stayed pending the judicial reference proceeding, plaintiffs filed an amendment to the complaint naming Petra as Doe 101. At the same time, it filed a certificate of merit as required by section 411.35 (certificate of merit required before serving the complaint in a malpractice action against an engineer). Plaintiffs personally served Petra with the summons and complaint on August 9, 2017, three years and 38 days after the complaint was filed. The trial court dismissed plaintiffs’ complaint against defendant Petra because plaintiffs had not served Petra with a summons and complaint within three years, as required by Code of Civil Procedure section 583.210. Plaintiffs appealed the subsequent dismissal, contending the court erred in computing the three-year period. The Court of Appeal found the trial court had stayed the matter for nine months while the parties engaged in a prelitigation alternative dispute resolution procedure mandated by a contract. The court did not exclude that period from the three-year calculation. The question was, did that stay affect service, thereby extending the time to serve Petra? The Court concluded it likely did, but that remand was necessary for further findings. View "Steciw v. Petra Geosciences, Inc." on Justia Law

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Defendant-respondent Jennie Pylican moved to suppress evidence she unlawfully possessed methamphetamine and drug paraphernalia on the evening of October 12, 2017. At that time, an officer observed Pylican enter a storage facility after hours. When she left, the officer followed and observed her make a turn without signaling. Pylican was initially stopped for the traffic violation and later questioned about her presence in a storage facility after hours. The district court granted the motion, holding that the arresting officer unconstitutionally extended the stop when he questioned Pylican regarding her presence in the storage facility. In the alternative, the district court ruled that the officer unconstitutionally extended both the scope and duration of the seizure by requiring Pylican to exit her car. In an unpublished opinion, the appellate court affirmed the district court’s order granting Pylican’s motion to suppress, holding that the officer did not provide any evidence of suspicious activity at the storage facility that would justify Pylican’s extended detention on that basis. On appeal to the Idaho Supreme Court, the State argued the district court erred in grantion Pylican's motion because: (1) the deputy had reasonable suspicion to question Pylican regarding her presence in the storage facility; and (2) the deputy’s order to exit the vehicle did not unconstitutionally extend the duration of the stop. After review of the district court record, the Supreme Court reversed the district court’s order and remanded for further proceedings. View "Idaho v. Pylican" on Justia Law

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Pulte, a residential developer, was sued for construction defects by the owners of 38 homes. Many subcontractors worked on the projects, under contracts requiring each subcontractor to indemnify Pulte and to name it as an additional insured on the subcontractor’s commercial general liability insurance. Pulte cross-complained against subcontractors who worked on the homes. Travelers, the insurer for four subcontractors, provided a defense. The “Blanket Additional Insured Endorsements” to Travelers’s named insureds’ policies stated that the “person or organization is only an additional insured with respect to liability caused by ‘your work’ for that additional insured. Travelers filed a complaint in intervention against the insurers for seven subcontractors (respondents), who declined to provide a defense, seeking equitable subrogation. Pulte settled the homeowners’ claims and its claims against all the subcontractors. The court concluded that it “would not be just” to find respondents jointly and severally liable for the costs Travelers sought to recover. There was considerable variation in the number of homes each respondent worked on. The homeowners’ complaints did not indicate which subcontractor worked on which home, and no evidence was presented as to whether the work of any subcontractor was defective. The court of appeal affirmed. Pulte was entitled to indemnity and defense from each respondent only with respect to its own scope of work. Travelers was "not seeking to stand in Pulte’s shoes. It is seeking to stand in a different, more advantageous" shoes. View "Carter v. Pulte Home Corp." on Justia Law

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Dunbar, a Service Disabled Veteran Owned Small Business (SDVOSB), was awarded an Army Corps of Engineers ditch and tributary project in Arkansas. Dunbar then hired a subcontractor, Harding Enterprises, to work on the project. After Harding Enterprises defaulted, Dunbar made a demand on the bond guaranteed by Hanover, which Hanover denied. Hanover then filed suit seeking a declaration that it had no obligations under the bond and seeking to have the bond rescinded based on illegality of the subcontract. The Eighth Circuit reversed the district court's grant of summary judgment in favor of Hanover, holding that the district court erroneously concluded that the subcontract was undisputedly in violation of 13 C.F.R. 125.6(b)(2) because the percentage that Dunbar spent on contract performance relative to the prime contract price could not be conclusively ascertained until conclusion of performance of the prime contract. The court also held that the potential that Hanover may have liability under the False Claims Act if it were to perform under the bond does not justify discharging Hanover from its obligations and rescinding the contract. View "Hanover Insurance Co. v. Dunbar Mechanical Contractors, LLC" on Justia Law

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Plaintiff Skanska USA Building Inc. served as the construction manager on a renovation project for Mid-Michigan Medical Center–Midland (the Medical Center); plaintiff subcontracted the heating and cooling portion of the project to defendant M.A.P. Mechanical Contractors, Inc. (MAP). MAP obtained a commercial general liability insurance policy (the CGL policy) from defendant Amerisure Insurance Company (Amerisure). Plaintiff and the Medical Center were additional named insureds on the CGL policy. In 2009, MAP installed a steam boiler and related piping for the Medical Center’s heating system. MAP’s installation included several expansion joints. Sometime between December 2011 and February 2012, plaintiff determined that MAP had installed some of the expansion joints backward. Significant damage to concrete, steel, and the heating system occurred as a result. The Medical Center sent a demand letter to plaintiff, asserting that it had to pay for all costs of repair and replacement. Plaintiff sent a demand letter to MAP, asserting that MAP was responsible for all costs of repair and replacement. Plaintiff repaired and replaced the damaged property, at a cost of $1.4 million. Plaintiff then submitted a claim to Amerisure, seeking coverage as an insured. Amerisure denied the claim. The issue this case presented for the Michigan Supreme Court's review centered on whether the unintentional faulty subcontractor work that damaged an insured’s work product constituted an “accident” under a commercial general liability insurance policy. Because the Court concluded the answer was yes, it reversed the Court of Appeals’ judgment to the contrary. View "Skanska USA Building, Inc. v. M.A.P. Mechanical Contractors, Inc." on Justia Law

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The Supreme Court affirmed Defendant's conviction of attempted deliberate homicide, holding that a challenged jury instruction did not undermine the fundamental fairness of the proceeding. After a jury trial, Defendant was convicted of attempted deliberate homicide. On appeal, Defendant argued that the district court's "specific purpose" jury instruction warranted review under either the doctrine of plain error or ineffective assistance of counsel and that the prosecutor's comment warranted plain error review by the Supreme Court. The Supreme Court affirmed, holding (1) the trial court's instruction did not result in a manifest miscarriage of justice, and the claimed error by trial counsel in failing to object to the instruction did not prejudice Defendant; and (2) the prosecutor's conduct did not warrant plain error review. View "State v. St. Marks" on Justia Law

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The Miller Act, 40 U.S.C. 3131, protects subcontractors against nonpayment for work performed on federal government construction projects by requiring the prime contractor to provide a payment bond on which the subcontractor can then make a claim for payment. A&C, a subcontractor on an air base project in Qatar, claims that it was not paid approximately $8.5 million for work it performed on the project, so it filed suit against the prime contractor’s two sureties, Zurich and The Insurance Company of the State of Pennsylvania. As strict preconditions to payment, the Miller Act requires that subcontractors provide a notice of nonpayment within 90 days after the last day of work performed and then file suit within one year of the last date of work. The district court found that A&C missed both deadlines and granted the sureties summary judgment. The Seventh Circuit affirmed. Rejecting A&C’s argument that its last day of work was much later than asserted by the sureties and that it gave “too much notice,” the court strictly construed the requirement be “within 90 days.” View "A&C Construction & Installation Co., WLL v. Zurich American Insurance Co." on Justia Law

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ACC, the subcontractor on a Corps flood protection project, filed suit against the prime contractor, Hirani, for breach of contract and the providers of Hirani's payment bond, Colonial, under the Miller Act for unpaid labor and materials. The district court entered judgment in favor of ACC and awarded damages against both defendants. The DC Circuit remanded the case to the district court to make findings of fact as to when the Prime Contract was terminated and whether ACC performed labor or supplied material on April 29 and/or April 30. In the event that Colonial and Hirani cannot meet their burden to show that ACC's Miller Act claim was untimely, then this court can resolve the parties' other Miller Act contentions. If Hirani and Colonial show that termination occurred before April 29 or that ACC performed no labor or supplied no material on April 29 or 30, the court can then address the Miller Act statute of limitations issue. The court affirmed the restitution damages award against Hirani on ACC's contract claim where ACC has not provided the court with any basis to deviate from the principle of D.C. law that restitution, not quantum meruit, is the proper remedy where there is an express contract between the parties. The court deferred addressing other issues raised by the parties. View "United States v. Hirani Engineering & Land Surveying, PC" on Justia Law

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After defending the general contractor in two construction defect actions, general liability insurer St. Paul Mercury Insurance Company (St. Paul) sought reimbursement of defense costs under an equitable subrogation theory against six subcontractors (defendants) that had worked on the underlying construction projects and whose contracts required them to defend the general contractor in suits involving allegations related to their work. After a bench trial, the court denied St. Paul’s claim. Relying on Patent Scaffolding Co. v. William Simpson Constr. Co., 256 Cal.App.2d 506, 514 (1967), the trial court concluded St. Paul had not demonstrated it was fair to shift all of the defense costs to defendants because their failure to defend the general contractor had not caused the homeowners to bring the construction defect actions. St. Paul argued this conclusion misconstrued the law governing equitable subrogation and therefore constitutes an abuse of discretion. To this, the Court of Appeal agreed: (1) a cause of action based on equitable subrogation allowed an insurer to step into the shoes of its insured and recover only what the insured would be entitled to recover from the defendants; and (2) the appropriate inquiry should have been whether defendants’ failure to defend the general contractor caused St. Paul to incur the defense costs, not whether that failure caused the underlying lawsuits. Judgment was reversed and the matter remanded to the trial court to grant judgment in St. Paul's favor and for a determination of defense costs each defendant owed. View "Pulte Home Corp. v. CBR Electric, Inc." on Justia Law

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Plaintiff Riverbend Condo Association appealed a superior court order dismissing its complaint against defendant Groundhog Landscaping and Property Maintenance, Inc., on res judicata grounds. In 2017, plaintiff brought a breach of contract action against defendant. Neither party appeared at the scheduled trial management conference set by the superior court. The superior court thus canceled trial and dismissed the case. Plaintiff filed a "motion to reopen," asking the court to reopen the matter and reschedule the trial management conference. The superior court denied the motion, stating that plaintiff's pleading constituted an untimely motion to reconsider. Plaintiff thereafter brought a second action, alleging among other things, breach of contact. Defendant moved to dismiss, arguing that the action was barred by res judicata. The trial court ultimately granted defendant's motion. On appeal, plaintiff contended its complaint was not barred by the trial court’s dismissal of its first action against defendant, as that dismissal was not a final judgment on the merits. Finding no reversible error, the New Hampshire Supreme Court affirmed. View "Riverbend Condo Association v. Groundhog Landscaping & Property Maintenance, Inc." on Justia Law