Justia Construction Law Opinion Summaries

A couple entered into an agreement with a construction company to build a home on their property. The contract was signed at a time when the construction company’s registration as a contractor had lapsed, which violated the Idaho Contractor Registration Act (ICRA). During construction, numerous problems arose, including water leaks, mold, improper grading, and unfinished work. The couple paid substantial sums and alleged that the company issued fraudulent invoices for work not performed. After failed attempts to resolve the issues, the couple sued for breach of contract, breach of implied warranty of merchantability, and fraudulent billing. The construction company counterclaimed, arguing it was prevented from completing the work and that its registration lapse was inadvertent.The District Court of the Second Judicial District, Clearwater County, initially dismissed the construction company’s counterclaims due to its failure to register under ICRA. Later, the court granted summary judgment to the construction company, dismissing the couple’s claims and finding the contract void and unenforceable because of the registration violation. The court reasoned that neither party could enforce the contract and denied all claims arising from it, including those for breach of contract and fraudulent billing.On appeal, the Supreme Court of the State of Idaho reviewed the summary judgment de novo. The Court held that while ICRA prohibits an unregistered contractor from enforcing a contract, it does not bar the innocent project owner from doing so. Contracts entered in violation of ICRA are voidable, not void, and remain enforceable at the option of the project owner. The Supreme Court reversed the district court’s dismissal of the couple’s breach of contract claim and remanded for further proceedings, clarifying that the project owner may pursue claims under such a contract. Attorney fees were denied, but costs were awarded to the prevailing party. View "Kumm v. Work Shops & Sons " on Justia Law

Maria Diaz contracted with a franchisee, SOL Pools, LLC, to build a swimming pool, while SOL Pools operated as a franchisee of Premier Franchise Management, LLC. Diaz initially brought a small claims action in 2022 against SOL for breach of contract and property damage, resulting in a default judgment in her favor. Subsequently, in 2023, Diaz filed suit in district court against both SOL and Premier, alleging breach of contract, fraud, negligence, and violations of the Home Repair Fraud Act, including claims against Premier based on apparent authority. SOL again failed to appear, leading to a default judgment against SOL for damages and punitive damages.The District Court of Oklahoma County allowed Premier to amend the pretrial conference order to assert the defense of res judicata, relying on the prior small claims judgment. The district court then vacated the default judgment against SOL, dismissed Diaz’s claims against SOL with prejudice, and dismissed Diaz’s apparent authority claims against Premier based on claim preclusion. The district court certified its order for immediate appeal under Oklahoma law, and Diaz sought review by petition for certiorari.The Supreme Court of the State of Oklahoma granted certiorari. It held that the district court did not abuse its discretion by permitting Premier to amend the pretrial conference order to add the defense of res judicata. However, it found that the district court erred in dismissing Diaz’s apparent authority claims against Premier without first developing the necessary factual record to determine whether claim preclusion applies under Oklahoma law. The Supreme Court reversed the district court’s certified interlocutory order in part and remanded for further proceedings consistent with its opinion. View "DIAZ v. PREMIER FRANCHISE MANAGEMENT, LLC" on Justia Law

Derek and Keisha Hall hired Jose Silva to construct their new home and financed the project through Priority One Bank, where Harvey Lott served as the loan officer. The Halls later discovered construction defects and alleged that Silva, Lott, and the bank engaged in a secret arrangement for personal profit, including unauthorized loan disbursements and a failure to conduct proper inspections. The Halls also claimed Silva lacked a contractor’s license and that the relationship between Silva and Lott involved improper payments. Both Lott and the bank denied these allegations, asserting that bank inspections were for their own benefit and that loan advances sometimes occurred before work was completed, in line with their agreement.The Halls brought several claims against the bank, Lott, and Silva in the Jefferson Davis County Circuit Court, including breach of contract, fraud, and conspiracy. In response, the bank and Lott sought summary judgment, but the circuit court denied their motion, finding that genuine issues of material fact remained. Subsequently, the Halls moved to strike a provision in the loan agreement, arguing it was unconscionable and deprived them of legal remedies. The circuit court granted this motion, holding the provision was void, invalid, and unconscionable.The Supreme Court of Mississippi reviewed the case on interlocutory appeal. It held that the Halls’ “Motion to Strike Contract Provision” was not an appropriate procedural vehicle to challenge the enforceability of a contract provision, as motions to strike under Mississippi Rule of Civil Procedure 12(f) are limited to pleadings, not contract clauses. The court reversed the circuit court’s order striking the provision and remanded the case for further proceedings, directing that any challenge to the provision’s enforceability must follow the proper procedures for dispositive motions. View "Priority One Bank v. Hall" on Justia Law

In 2019, a county initiated a project involving the drilling of new foundations for guy wires attached to a communications tower. The county hired a general contractor, which then subcontracted drilling work to another company. An employee of the subcontractor, while working near the site, carried a steel cable into contact with an overhead high voltage power line owned by an electric cooperative, resulting in his electrocution and subsequent death. The power line was not part of the communications tower and the contractors were not working on it.The estate of the deceased employee sued the electric cooperative, the general contractor, and the subcontractor in the Circuit Court of Accomack County, alleging negligence under Virginia’s Overhead High Voltage Line Safety Act (OHVLSA) for failing to implement safety measures near the power line. The circuit court dismissed the subcontractor based on the exclusivity provision of the Virginia Worker’s Compensation Act. The general contractor settled with the estate, and the electric cooperative also settled before a verdict was reached. Subsequently, the electric cooperative’s insurer, as subrogee, filed a federal suit seeking indemnification from the contractors under the OHVLSA. The United States District Court for the Eastern District of Virginia dismissed the claim, holding that the work performed fell within an exemption in the OHVLSA.On appeal, the United States Court of Appeals for the Fourth Circuit certified two questions of Virginia law to the Supreme Court of Virginia. The Supreme Court of Virginia held that the exemption in Virginia Code § 59.1-413 applies to the contractors’ work on the communications tower, thereby excluding them from the OHVLSA’s requirements. As a result, the court found the second certified question—concerning indemnification requirements—to be moot. View "A&N Electric Cooperative v. Dietzel Enterprises" on Justia Law

A taxpayer challenged a California school district’s use of a “lease-leaseback” arrangement with a contractor for constructing a new middle school. The plaintiff alleged the $36 million construction contract violated California’s competitive bidding statutes and conflict of interest laws. The district had selected the contractor from a prequalified pool and entered into preconstruction agreements, then executed lease-leaseback contracts for the project. The project was funded entirely by the proceeds of bonds approved by local voters, not by contractor-provided financing.Previously, the Superior Court of Fresno County dismissed the complaint, but on the first appeal, the California Court of Appeal, Fifth Appellate District, held that the plaintiff had stated claims for both competitive bidding and conflict of interest violations. After further proceedings and another appeal, the California Supreme Court confirmed that the validation statutes did not bar the action, and the case proceeded to a bench trial. The trial court found the lease-leaseback arrangement qualified for the statutory exception to competitive bidding and rejected the conflict of interest claim, concluding the contractor was not an “officer” or “employee” for purposes of the conflict of interest statute.On appeal, the California Court of Appeal, Fifth Appellate District, held that the conflict of interest claim was properly rejected because the contractor did not act as an officer or employee of the district. However, the court concluded that the competitive bidding exception did not apply because the project was financed by public bonds, not by the contractor. The court held that the proper remedy under Education Code section 17406(d)—enacted after the initial appeal—was to require the contractor to disgorge its net profit ($236,129), not the full contract amount. The judgment was reversed in part, and the trial court was directed to enter judgment requiring the contractor to refund its profit to the district. View "Davis v. Fresno Unified School Dist." on Justia Law

A subcontractor performed fabrication and machining services for a general contractor on a filtration plant project. The arrangement included a provision that the subcontractor would be paid only after the general contractor received payment from the owner. When payment to the subcontractor ceased due to a dispute between the general contractor and the owner, the subcontractor filed two construction liens against the property to secure payment, attaching multiple invoices to each lien. The liens themselves did not state the date the claim was due, but included invoices bearing various dates.After the subcontractor filed suit to enforce the liens and for other related claims, the owner removed the case to the United States District Court for the Southern District of Mississippi. The owner moved to dismiss, arguing that the liens were invalid because they did not “specify the date the claim was due” as required by Mississippi Code Section 85-7-405(1)(b). The district court agreed, finding that neither the liens nor the attached invoices clearly identified the last date labor, services, or materials were supplied, and dismissed the complaint with prejudice. The subcontractor appealed to the United States Court of Appeals for the Fifth Circuit.The Fifth Circuit found no clear controlling Mississippi precedent on whether attaching invoices with dates, but without clear explanation of what those dates represent, satisfies the statutory requirement. It certified the question to the Supreme Court of Mississippi. The Supreme Court of Mississippi held that simply attaching invoices with dates that do not plainly indicate the last date labor, services, or materials were supplied does not satisfy the requirement that an enforceable lien “specify the date the claim was due” under Section 85-7-405(1)(b). The certified question was answered in the negative. View "Cuevas Machine Company, Inc. v. Calgon Carbon Corporation" on Justia Law

BBC, LLC, contracted Germer Construction, Inc. to provide construction services for a subdivision development. A dispute arose regarding the amount owed, leading to arbitration as required by contract. The arbitrator awarded Germer nearly $1,000,000, including costs and fees. BBC sought a court order to vacate the arbitration award, while Germer requested confirmation of the award and entry of judgment. Germer also moved for a temporary restraining order and preliminary injunction, claiming BBC was dissipating assets. The district court granted an ex parte temporary restraining order restricting BBC’s asset transfers. At a hearing, the district court required BBC to post a $1,000,000 surety bond and Germer a $250,000 bond, characterizing them as “equivalent” to supersedeas bonds, then dissolved the restraining order and denied preliminary injunctive relief.BBC petitioned the Idaho Supreme Court for writs of prohibition or mandamus to vacate the district court’s order and prohibit further pre-judgment asset restrictions, arguing the district court lacked authority to require the bond or injunctive relief solely to secure a potential monetary judgment. The Idaho Supreme Court stayed the district court’s order and sought briefing from Germer and the Attorney General.The Supreme Court of Idaho held that the district court exceeded its authority by requiring BBC to post a surety bond to secure a potential money judgment for an unsecured debt. The court found no rule, statute, or inherent equitable power authorizing such relief in this context. The court issued a writ of review, vacating the district court’s order, including both bond requirements. BBC was found to have no adequate, speedy remedy at law, and the requested writs of prohibition and mandamus were denied. The case was remanded for further proceedings consistent with the opinion. View "BBC LLC v. LATAH COUNTY DISTRICT COURT" on Justia Law

In October 2021, while working on a roofing project at a resort in Hancock, the plaintiff, an employee of a subcontractor, fell from the roof and sustained severe injuries. The plaintiff’s employer, MBT Construction Corp., had been subcontracted by the defendant, a general contractor, to carry out the roof replacement. The subcontract did not specify which party was responsible for jobsite safety, provision of safety equipment, or worker training. On the day of the incident, the plaintiff detached his safety harness to move shingles and fell before reattaching to another safety line. MBT had previously received citations from OSHA for safety violations, but both MBT and the defendant had a longstanding business relationship.The plaintiff filed a negligence and negligent hiring suit against the defendant in the Superior Court, arguing that the defendant failed to supervise and enforce safety protocols and had hired MBT despite knowledge of its inadequate safety history. The defendant moved for summary judgment, asserting it did not owe a duty of care to the plaintiff and that state law did not recognize a negligent hiring claim in these circumstances. The Superior Court judge agreed, finding that the defendant lacked control over MBT’s work and that the plaintiff, as the subcontractor’s employee, could not bring a negligent hiring claim against the general contractor.The Supreme Judicial Court of Massachusetts reviewed the case upon transfer. It affirmed summary judgment for the defendant, holding that the general contractor did not owe a duty of care to the plaintiff because it did not retain or exercise control over the injury-producing safety measures. The Court also held that Massachusetts law does not recognize an independent negligent hiring duty owed by a general contractor to a subcontractor’s employee for injuries arising from the subcontractor’s work under these facts. The judgment for the defendant was affirmed. View "Suquilanda v. Skyway Roofing, Inc." on Justia Law

Two infrastructure companies formed a joint venture to bid on a Colorado highway express lane project, relying on engineering designs from a subsidiary of one partner. After winning the contract, the joint venture entered a subcontract with the engineering firm that incorporated many of their earlier terms but added a liability cap. During the project, disputes arose over the design work, resulting in multiple redesigns and delays. The engineering firm submitted change orders for additional work, but the joint venture either failed to process them according to contract procedures or “shelved” them as litigation began.The engineering firm sued the joint venture in the United States District Court for the District of Colorado, claiming breach of contract and unjust enrichment. The joint venture counterclaimed for breach of both the subcontract and the original teaming agreement, and later added a negligent misrepresentation claim. The district court dismissed the negligent misrepresentation counterclaim under the economic-loss rule and later granted summary judgment to the engineering firm on the teaming agreement counterclaim, holding that the subcontract superseded the earlier agreement and imposed a liability cap. The joint venture sought to add fraud counterclaims more than a year after the final pretrial order, but the district court denied this as untimely and prejudicial. The court also rejected the joint venture’s attempt to concede liability and assume the plaintiff’s role at trial, and denied its Rule 50 motions.On appeal, the United States Court of Appeals for the Tenth Circuit reviewed the district court’s rulings. The appellate court held that the district court did not err in denying the joint venture’s various motions, including its attempt to add new counterclaims, to instruct the jury on an implied duty of good faith and fair dealing, or to enter judgment against itself. The Tenth Circuit affirmed the district court’s judgment in favor of the engineering firm on all claims and counterclaims. View "AECOM Technical Services v. Flatiron | AECOM" on Justia Law

A national flooring retailer contracted with a Louisiana-based construction management company for the construction of a retail store in Metairie, Louisiana. The relationship soured after the retailer terminated the agreement, allegedly due to delays. Shortly after termination, the construction company disputed that it had breached the contract and demanded payment for work performed. The retailer did not respond to the payment demand.The construction company filed suit in the United States District Court for the Middle District of Louisiana under the Louisiana Private Works Act, seeking recovery for the work performed. The retailer moved to compel arbitration based on the agreement’s dispute resolution provision and also sought to transfer the case. The district court granted the transfer to the United States District Court for the Eastern District of Louisiana and denied the motion to compel arbitration without prejudice. When the motion to compel arbitration was renewed in the new court, the district court denied it again, concluding the retailer had not followed the prerequisite steps outlined in the contract’s dispute resolution process.On appeal, the United States Court of Appeals for the Fifth Circuit conducted de novo review. The appellate court determined that the arbitration clause in the contract, which gave the retailer sole discretion to elect arbitration, was a contract of adhesion under Louisiana law. Applying state contract principles and relevant Louisiana Supreme Court precedent, the court found that the lack of mutuality and the imbalance in bargaining power rendered the clause unenforceable. The court held that the arbitration provision was adhesionary and thus invalid, and affirmed the district court’s denial of the motion to compel arbitration. View "MAPP v. Floor and Decor" on Justia Law