Justia Construction Law Opinion Summaries

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The Court of Appeals affirmed the judgment of the court of special appeals concluding that prejudgment interest on defense costs where a party breaches its duty to defend does not fall within the exception to the "modified discretionary approach" and is within the discretion of the fact-finder.The modified discretionary approach used by Maryland courts in awarding prejudgment interest generally places the award of prejudgment interest within the discretion of the trier of fact but also recognizes exceptions where a plaintiff is entitled to prejudgment interest as a matter of right. At issue was whether prejudgment interest should be awarded as a matter of right. The Court of Appeals held (1) prejudgment interest on defense costs is left to the discretion of the fact-finder; and (2) where the jury in this case was not presented with a claim of prejudgment interest, was not instructed on the issue, and did not separately state an award of prejudgment interest in the verdict, the circuit court was not authorized to award prejudgment interest. View "Nationwide Property & Casualty Insurance Co. v. Selective Way Insurance Co." on Justia Law

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The Supreme Court reversed the judgment of the circuit court concluding that the cluster development plans submitted by two developers were not subject to planning commission review under Va. Code 15.2-2232, holding that the circuit court erred.Two real estate developers proposed to build conventional subdivisions and then reconfigured their previously approved subdivisions into cluster developments. The county planning department advised the developers that they would need to undergo another comprehensive plan compliance review in accordance with section 15.2-2232 because their new plans significantly deviated from the previously approved plans. The developers sought writs of mandamus requiring the county to approve the plans and writs of prohibition preventing the county from ordering a comprehensive plan review. The circuit court ruled in favor of the developers and entered an order directing the county to approver the cluster development concept plans. The Supreme Court reversed, holding that the approvals of prior subdivision plans did not foreclose the requirement of a section 15.2-2232 review by the planning commission of different plans later submitted. View "Stafford County v. D.R. Horton, Inc." on Justia Law

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The Contractors’ State License Law (Bus. & Prof. Code 7031), allows any person who utilizes the services of unlicensed building contractors to sue for disgorgement of all compensation paid for the performance of any act or contract, even when the work performed is free of defects. CDC brought a section 7031(b) claim for disgorgement against Obayashi in 2017, more than eight years after the completion of construction of the InterContinental Hotel in San Francisco. The issue of licensure came to light during litigation concerning construction defects.The trial court dismissed, citing Code of Civil Procedure 340(a), the one-year limitations period for statutory forfeiture or penalty causes of action. The court of appeal affirmed. The one-year statute of limitations applies to disgorgement claims brought under section 7031, and the discovery rule and other equitable doctrines do not. Even if such doctrines applied to statutory disgorgement claims, they would not apply under the circumstances presented under the pleadings. The court also upheld the trial court’s award of $231,834 in contractual attorney fees; the parties’ agreement contemplated the recovery of attorney fees for non-contractual causes of action that are initiated because of an alleged breach of the parties’ contract. View "San Francisco CDC LLC v. Webcor Construction L.P." on Justia Law

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The Supreme Court reversed the judgment of the district court granting Defendant's motion to suppress physical evidence and statements based on a police officer's alleged promise of leniency, holding that there was no improper promise of leniency.The officer at issue initiated a Terry stop on a public stop after observing Defendant make a possible drug buy. The officer told Defendant if he cooperated he would not be arrested that day but may be arrested later. Three months after Defendant handed over crack cocaine and marijuana the officer charged him with possession. The trial court granted Defendant's motion to suppress, concluding that the evidence obtained after the officer promised leniency was fruit of the poisonous tree. The Supreme Court reversed, holding that the officer did not improperly promise leniency. View "State v. Hillery" on Justia Law

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In 2012, Earl contracted for the purchase of a house in Allegheny County from NVR, the seller and builder of the house. NVR's agents made representations about the house’s construction, condition, and amenities, including that the house would be constructed in a good and workmanlike manner; that NVR would remedy any deficiencies; and that the house would be constructed in accordance with relevant building codes and standards. Construction was completed around March 2013. Upon moving in, Earl encountered several material defects. NVR’s attempts to repair the defects were inadequate and exacerbated some of the issues, despite NVR’s assurances that the problems were remedied. Several promised conditions and amenities that Earl had relied upon had not been provided.Earl, claiming that NVR’s failure to provide the promised conditions and amenities of the agreement were knowing and willful, sued for violation of the Unfair Trade Practices and Consumer Protection Law (UTPCPL) and breach of implied warranty of habitability. The Third Circuit reversed the dismissal of her UTPCPL claim. Rulings by Pennsylvania appellate courts subsequent to an earlier Third Circuit holding have cast substantial doubt upon the continuing validity of prior interpretations of the UTPCPL. The economic loss and “gist of the action” doctrines no longer bar UTPCPL claims. View "Earl v. NVR Inc" on Justia Law

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The Supreme Court reversed in part the decision of the circuit court concluding that J. Clancy, Inc.'s mechanic's liens placed against certain property were valid and unenforceable and rejecting J. Clancy's breach of contract and unjust enrichment claims, holding that the trial court erred in holding that a divisible implied-in-fact contract controlled the parties' express agreement.J. Clancy, a construction company, sued Ghazanfar Khan and his company, Khan Comfort, LLC. J. Clancy sought enforcement of mechanic's liens it placed against the property and, in the alternative, brought claims for breach of contract and unjust enrichment. The circuit court concluded (1) the mechanic's liens were unenforceable because they were insufficiently itemized; (2) a divisible, implied-in-fact contract, rather than an express contract, governed the parties' relationship; and (3) J. Clancy breached the contract due to non-performance. The court then ordered J. Clancy to reimburse Khan Comfort for overpayments Khan Comfort made. The Supreme Court reversed in part and remanded the case, holding that the circuit court (1) erred in concluding that a divisible implied-in-fact contract controlled the parties' express agreement because a valid, express contract controlled the parties' obligations; and (2) erred in invalidating the mechanic's liens for inadequate itemization. View "J. Clancy, Inc. v. Khan Comfort, LLC" on Justia Law

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A construction worker was killed when concrete formwork toppled over at a worksite. Plaintiffs, the worker's surviving family members, brought a wrongful death action against the general contractor, Swinerton Builders, and formwork supplier, Atlas Construction Supply, Inc. Atlas cross-complained against Swinerton for equitable indemnity, contribution and declaratory relief. The trial court entered summary judgment in favor of Swinerton as to the wrongful death complaint. Swinerton, in lieu of seeking entry of judgment on the summary judgment order, settled with plaintiffs, wherein plaintiffs agreed to dismiss their case against Swinerton, and Swinerton waived its costs. Apparently under a shared belief that the good faith settlement determination barred Atlas' cross-complaint against Swinerton, Atlas and Swinerton stipulated to the dismissal of Atlas' cross-complaint against Swinerton. Atlas appealed the summary judgment order, the good faith settlement determination, and dismissal of its cross-complaint. Atlas argued that the trial court erred in ruling Atlas lacked standing to oppose Swinerton's motion for summary judgment. Furthermore, Atlas argued if the trial court had considered its opposition brief, the court could have reasonably denied Swinerton's motion, and Swinerton would have never settled the wrongful death complaint, never made the good faith settlement determination, and Swinerton and Atlas would never have stipulated to the dismissal of Atlas' cross-complaint. After review, the Court of Appeal determined Atlas was not aggrieved by the trial court's exoneration of Swinerton in the wrongful death action. Therefore, Atlas lacked standing to appeal the summary judgment order. With respect to the good faith settlement and dismissal of the cross-complaint, the Court determined Atlas waived its challenge by failing to make substantive legal arguments specific to those orders. Therefore, the appeal was dismissed as to the summary judgment motion, and judgment was affirmed as to all other orders. View "Atlas Construction Supply v. Swinerton Builders" on Justia Law

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A Compact between Pennsylvania and New Jersey created the Delaware River Joint Toll Bridge Commission, which is authorized to “acquire, own, use, lease, operate, and dispose of real property and interest in real property, and to make improvements,” and to "exercise all other powers . . . reasonably necessary or incidental to the effectuation of its authorized purposes . . . except the power to levy taxes or assessments.” The Commission undertook to replace the Scudder Falls Bridge, purchased land near the bridge in Pennsylvania, and broke ground on a building to house the Commission’s staff in a single location. Pennsylvania Department of Labor and Industry inspectors observed the construction; the Commission never applied for a building permit as required under the Department’s regulations. The Commission asserted that it was exempt from Pennsylvania’s regulatory authority. The Department threatened the Commission’s elevator subcontractor with regulatory sanctions for its involvement in the project. The Commission sought declaratory and injunctive relief.After rejecting an Eleventh Amendment argument, the Third Circuit upheld an injunction prohibiting the Department from seeking to inspect or approve the elevators and from further impeding, interfering, or delaying the contractors. Pennsylvania unambiguously ceded some of its sovereign authority through the Compact. The fact that both states expressly reserved their taxing power—but not other powers—indicates that they did not intend to retain the authority to enforce building safety regulations. View "Delaware River Joint Toll Bridge Commission v. Secretary Pennsylvania Department of Labor and Industry" on Justia Law

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Wayne Farms LLC appealed a circuit court order compelling it to arbitrate its claims asserted against Primus Builders, Inc., and staying the action. Wayne Farms was a poultry producer located in Dothan, Alabama. Wayne Farms sought to expand its poultry-processing facility, and, to that end, entered into a "Design/Build Agreement" with Primus in 2017, that specifically addressed work to be completed by Primus in connection with the expansion of Wayne Farms' freezer warehouse. Primus subcontracted with Republic Refrigeration, Inc.; Republic hired Steam-Co, LLC for "passivation services." Upon draining a condenser for the freezer warehouse, it was discovered that the interior of the condenser was coated with corrosive "white rust." Primus then replaced the damaged condenser at a cost of approximately $500,000 under a change order, pursuant the Design/Build Agreement with Wayne Farms. Wayne Farms paid Primus for both the original damaged condenser and the replacement condenser. Both Primus and Steam-Co have claimed that the other is responsible for the damage to the condenser. Wayne Farms sued Primus and Steam-Co asserting claims of breach of contract and negligence and seeking damages for the damaged condenser and the cost of replacing it. Primus moved the trial court to compel arbitration as to the claims asserted against it by Wayne Farms. Primus also moved the trial court to dismiss, or in the alternative, stay Steam-Co's cross-claims against it. Wayne Farms opposed Primus's motion to compel arbitration, arguing that no contract existed between the parties requiring it to arbitrate claims arising from the passivation process. The Alabama Supreme Court found that the contract between Wayne Farms and Primus specified arbitration would apply to only those disputes arising from obligations or performance under the Design/Build Agreement, Wayne Farms could not be compelled to arbitrate with Primus a dispute arising from the performance of passivation work that was not an obligation agreed to in the Design/Build Agreement. Judgment was reversed and the matter remanded for further proceedings. View "Wayne Farms LLC v. Primus Builders, Inc." on Justia Law

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The Right To Repair Act codifies a comprehensive reform to construction defect litigation applicable to residential dwellings in California. In McMillin Albany LLC v. Superior Court (2018) 4 Cal.5th 241, the California Supreme Court held that the Act was intended to displace the common law and was the "virtually exclusive remedy not just for economic loss but also for property damage arising from construction defects." In this case, plaintiff raises the same argument in McMillan, contending that the Act applies to bar State Farm's complaint.The Court of Appeal explained that McMillan was distinguishable from this case because the court is dealing with a lawsuit against an individual product manufacturer whose allegedly defective part failed after it was incorporated into the structure, causing damage to the residence. Although non-builders such as product manufacturers are subject to the Act under certain circumstances, the Act treats builders and non-builders differently. Therefore, the court held that, as applied to non-builders such as plaintiff, the Act covers claims based on negligence and breach of contract, but not those based on strict liability and breach of implied warranty. Furthermore, because the statute of repose applies, State Farm's negligence cause of action is time-barred. Thus, the court reversed and remanded with directions to allow the claims based on strict liability and implied warranty to proceed. The court remanded to the trial court with directions to vacate the order granting summary judgment without prejudice to a motion for summary adjudication on the negligence cause of action. View "State Farm General Insurance Co. v. Oetiker, Inc." on Justia Law