Justia Construction Law Opinion Summaries

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Flameproof, a distributor of fire retardant and treated lumber (FRT lumber), maintained liability insurance through Lexington, covering liability for "property damage” that is “caused by an occurrence that takes place in the coverage territory.” “Occurrence” is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” “Property damage” is “physical injury to tangible property, including all resulting loss of that property,” or loss of use of property that is not physically injured. Three lawsuits arose from Flameproof’s sale of lumber to Minnesota-based contractors. The contracts called for FRT lumber meeting the requirements of the International Building Code (IBC). The complaints alleged that Flameproof “unilaterally” decided to deliver its in-house FlameTech brand lumber, which purportedly was not IBC-compliant. After the material was installed, the owners discovered that the lumber was not IBC-certified. Flameproof “admitted” that it had shipped FlameTech lumber rather than the FRT lumber advertised on its website and ordered. The FlameTech lumber was removed and replaced, damaging the surrounding materials. The lawsuits alleged negligent misrepresentation, fraudulent misrepresentation, deceptive business practices, false advertising, consumer fraud, breach of warranties, and breach of contract. Lexington sought a ruling that it owed no duty to defend Flameproof. The Seventh Circuit affirmed summary judgment for Lexington. The underlying complaints do not allege an “occurrence”—or accident—as required to trigger Lexington’s duty to defend under the policy. View "Lexington Insurance Co. v. Chicago Flameproof & Wood Specialties Corp." on Justia Law

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After Phelps was awarded a public works contract by the CDCR, another bidder successfully challenged the award, obtaining a ruling in a San Diego trial court that Phelps's bid was "non-responsive as a matter of law" due to its inclusion of "non-waivable mathematical/typographical errors." Phelps then filed suit against CDCR, seeking to recover the costs it expended on the project. The trial court held that the San Diego trial court's ruling was itself the result of a defect in the competitive bidding process caused solely by CDCR, and entered judgment in favor of Phelps. The Court of Appeal reversed, holding that judgment on the pleadings should have been granted. The court held that the language in Public Contract Code section 5110 provides that the parties to a challenged public contract may enter into that contract pending final resolution of the challenge, but if the challenge is resolved by invalidation because the public entity was at fault, the contractor may recover. Applying section 5110 in this case, the court held that the contract was invalidated for a material error in Phelps's bid, not for any defect in the competitive bidding process, much less a defect caused solely by CDCR. Therefore, section 5110 could not provide a basis for recovery. The court held that application of the doctrine of collateral estoppel would produce the same result, and rejected Phelps's late-raised alternative ground. However, the court affirmed the trial court's denial of recovery on CDCR's cross-complaint for disgorgement. View "Hensel Phelps Construction Co. v. Department of Corrections and Rehabilitation" on Justia Law

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In May 2015, the Chickasaw County School District entered into a contract with Sullivan Enterprises, Inc., for window restoration work on the Houlka Attendance Center. In July 2015, during construction, a fire began that completely consumed the attendance center. Liberty Mutual, the school district’s insurer, paid the school district $4.3 million for the damage to the building. Liberty Mutual then filed a subrogation suit against Sullivan Enterprises, Fowlkes Plumbing, LLC, and Quality Heat & Air, Inc. The United States District Court for the Northern District of Mississippi found that the waiver of subrogation did not apply to damages to the “non-Work” property, thus Liberty Mutual could proceed in litigation as to “non-Work” property damages. The United States Court of Appeals for the Fifth Circuit allowed an interlocutory appeal and certified a question to the Mississippi Supreme Court regarding whether the subrogation waiver applied to “non-Work” property. The Supreme Court determined that based on the plain meaning of the contract language, the waiver of subrogation applied to both work and non-work property. View "Liberty Mutual Fire Insurance Co. v. Fowlkes Plumbing, L.L.C." on Justia Law

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Wanke, Industrial, Commercial, Residential, Inc. (Wanke) was a company that installed waterproofing systems. It sued Scott Keck and another of its former employees in 2008 for trade secret misappropriation after they left Wanke to form a competing business, WP Solutions. The parties entered into a stipulated settlement and later litigated Keck's alleged breach of that settlement agreement. To collect, Wanke filed a creditor's suit against third party AV Builder Corp. (AVB) to recover $109,327 that AVB owed WP Solutions in relation to five construction subcontracts. Following a bench trial, the court entered judgment in Wanke's favor for $83,418.94 after largely rejecting AVB's setoff claims. Invoking assignment principles, AVB contended: (1) Wanke lacked the ability to sue given judgment debtor WP Solutions's corporate suspension; (2) Wanke's suit was untimely under section 708.230 of the Code of Civil Procedure; and (3) the trial court erred in denying its request for warranty setoffs under section 431.70. Rejecting each of these contentions, the Court of Appeal affirmed the judgment View "Wanke, Industrial, Commercial, etc. v. AV Builder Corp." on Justia Law

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In this dispute between a general contractor, Bacon Construction Co., Inc., and a subcontractor, NESC, Inc., regarding an agreement to install flooring in a college dormitory the Supreme Court affirmed the judgment of the superior court in favor NESC and awarding NESC $125,733.67 in damages, holding the trial justice did not clearly err in denying Bacon's motion for a new trial, appropriately denied Bacon's request for a remittitur and properly denied NESC's cross appeal. NESC brought this suit alleging, inter alia, breach of contract and unjust enrichment. Bacon filed a counterclaim against NESC alleging breach of contract and negligence. The jury rendered a verdict in favor of NESC. On appeal, Bacon challenged the trial justice's decision denying Bacon's motion for a new trial and its alternative request for a remittitur. NESC cross appealed from the denial of its motion to amend and its motion to reconsider its motion to amend. The Supreme Court affirmed the judgment and orders of the superior court, holding that the court did not err. View "NESC, Inc. v. Bacon Construction Co." on Justia Law

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Ismael Torres, Jr. sued Design Group Facility Solutions, Inc. (Design) for personal injuries after he fell through a skylight at a construction site. Design moved for summary judgment. The trial court initially denied the motion. Design moved for reconsideration based on new evidence under Code of Civil Procedure section 1008(a). At the hearing on the motion, the trial court granted reconsideration and, at the same time, granted the motion for summary judgment without giving Torres an opportunity to respond to the new evidence. After review, the Court of Appeal found the trial court abused its discretion: “a party unsuccessfully moving for summary judgment cannot circumvent the requirements of section 437c by subsequently moving for reconsideration under section 1008(a).” View "Torres v. Design Group Facility Soultions, Inc." on Justia Law

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In this dispute over Contractor's attorney fees the Supreme Court affirmed the judgment of the district court finding that Homeowners waived their assertion that including attorney fees in a mechanic's lien foreclosure decree violated their homestead rights, holding that Homeowners needed to raise their homestead exemption before the district court entered the foreclosure decree. This appeal stemmed from a judicial determination that Homeowners had to pay most of Contractor's unpaid bill and that Contractor was entitled to foreclosure of its mechanic's lien. Later, a revised decree was entered granting Contractor the right to foreclose a mechanic's lien against the property both for the principal amount due and for the attorney fees. When a second sheriff's sale of the residence was impending, Homeowners, for the first time, asserted that including attorney fees in the mechanic's lien foreclosure decree violated their homestead rights. The judicial court found a waiver by Homeowners. The Supreme Court affirmed, holding (1) attorney fees can be recovered in a mechanic's lien foreclosure action against the homestead; and (2) the district court correctly found that principles of res judicata and waiver barred Homeowners' assertion of a homestead exemption. View "Standard Water Control Systems, Inc. v. Jones" on Justia Law

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BrunoBuilt, Inc. appealed a district court’s dismissal of its claims against Strata, Inc., Chris Comstock, H. Robert Howard, and Michael Woodworth (collectively, “the Strata Defendants”). BrunoBuilt filed a professional negligence action against the Strata Defendants alleging that when the Strata Defendants rendered engineering services for the Terra Nativa Subdivision they failed to identify a pre-existing landslide and negligently failed to recommend construction of infrastructure that would stabilize and prevent further landslides within the Subdivision. A home BrunoBuilt had contracted to build and the lot on which the dwelling was located were allegedly damaged as a result. The district court dismissed BrunoBuilt’s claims after holding that the parties had entered into an enforceable settlement agreement, or alternatively, that summary judgment was warranted in favor of the Strata Defendants based on the economic loss rule. After review of the situation, the Idaho Supreme Court affirmed the district court judgment because the parties entered into an enforceable settlement agreement. View "Brunobuilt, Inc. v. Strata, Inc." on Justia Law

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Minn-Kota Ag. Products, Inc. appealed a district court order dismissing Minn-Kota’s appeal of findings of fact, conclusions of law and order issued by the North Dakota Public Service Commission (PSC) for lack of standing and affirming an administrative law judge’s (ALJ) order denying Minn-Kota’s petition to intervene. In 2017, Minn-Kota began construction of a large, $20 million grain handling facility near the municipalities of Barney and Mooreton, North Dakota. During construction of the facility, Minn-Kota received proposals to provide electric power to the facility from Otter Tail Power Co., an electric public utility, and Dakota Valley Electric Cooperative, a rural electric cooperative. Minn-Kota determined Otter Tail would provide cheaper and more reliable electric service and chose Otter Tail as its preferred provider. Dakota Valley protested Otter Tail’s application and requested a hearing. Otter Tail and Dakota Valley were represented at the hearing, and each offered evidence and testimony. Minn- Kota was not a formal party represented at the hearing and, other than the testimony offered by Schuler, Minn-Kota did not contribute to the hearing. In December 2017, the PSC held a work session to contemplate and discuss Otter Tail’s application. The concerns expressed by the PSC at the work session made it clear the PSC was likely going to deny Otter Tail’s application. As a result, Minn-Kota submitted a petition to intervene, which an ALJ determined Minn-Kota submitted after the deadline to intervene had passed, and denied it. Minn-Kota argued it has standing to appeal the PSC’s decision because it participated in the proceedings before the PSC, and the PSC’s decision should be reversed because it was not supported by the facts or law. In the alternative, Minn-Kota argued the case should have been remanded to the PSC and it should have been allowed to intervene and introduce additional evidence into the record. The North Dakota Supreme Court determined Minn-Kota had standing, but did not provide a compelling argument on how Otter Tail did not adequately represent its interests at the administrative hearing or throughout the entirety of the proceedings. Therefore, the Court affirmed in part, reversed in part, and thus affirmed the PSC's order. View "Minn-Kota Ag Products, Inc. v. N.D. Public Service Commission, et al." on Justia Law

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Petitioner Hensel Phelps Construction Co. (Hensel Phelps) was a defendant in construction defect litigation filed by plaintiff and real party in interest Smart Corner Owners Association (Smart Corner). Hensel Phelps moved for summary judgment contending, among other things, that Smart Corner's claims were barred by a 10-year limitations period under Civil Code section 941. Smart Corner was not a party to the contract between Hensel Phelps and the developer of a mixed-use project, to which Smart Corner was a lessee. In its motion for summary judgment, Hensel Phelps asserted that "substantial completion" under the statute had the same meaning as "substantial completion" in its construction contract with the developer. Because the parties to the construction contract agreed that "substantial completion" occurred on a certain date at the time of construction, Hensel Phelps argued that the limitations period began to run on that date. Because Smart Corner asserted its claims more than 10 years later, Hensel Phelps contended they were untimely. The trial court denied the motion, finding that the definition of substantial completion in the contract did not trigger the running of the statute. And, even if it did, Smart Corner had raised a triable issue of fact whether the definition of substantial completion under the contract had been satisfied on the date asserted by Hensel Phelps. Hensel Phelps petitioned the Court of Appeal for mandamus relief, arguing again that the date of substantial completion adopted by the parties to the contract "conclusively establishe[d]" the date of substantial completion under the statute. After review, the Court of Appeal concluded the trial court did not err by denying Hensel Phelps's motion for summary judgment. "Hensel Phelps offers no authority for the novel proposition that certain parties may, by contract, conclusively establish the date when a limitations period begins to run on another party's cause of action. ... it is clear that the statute does not simply adopt the date determined by private parties to a contract for their own purposes as the date of substantial completion." The Court therefore denied the petition. View "Hensel Phelps Construction Co. v. Super. Ct." on Justia Law