Justia Construction Law Opinion Summaries
Lovely, et al. v Baker Hughes, Inc., et al.
A construction contractor’s employees were injured on the job and received workers’ compensation benefits from their employer. The workers later brought a negligence suit against three other corporations: the one that had entered into the construction contract with their employer, that corporation’s parent corporation, and an affiliated corporation that operated the facility under construction. The three corporations moved for summary judgment, arguing that all three were “project owners” potentially liable for the payment of workers’ compensation benefits and therefore were protected from liability under the exclusive liability provision of the Alaska Workers’ Compensation Act. The superior court granted the motion, rejecting the workers’ argument that status as a “project owner” was limited to a corporation that had a contractual relationship with their employer. After review, the Alaska Supreme Court concluded a project owner, for purposes of the Act, "must be someone who actually contracts with a person to perform specific work and enjoys the beneficial use of that work." Furthermore, the Court found the workers raised issues of material fact about which of the three corporate defendants satisfied this definition. Judgment was therefore reversed and the matter remanded for further proceedings. View "Lovely, et al. v Baker Hughes, Inc., et al." on Justia Law
Lemartec Engineering & Construction v. Advance Conveying Technologies, LLC
In this construction law case, the Supreme Court reversed the order of the circuit court granting summary judgment in favor of Appellee, holding that Appellee was not entitled to claim preclusion or issue preclusion even though the federal court found in Appellee favor in a parallel federal case. The dispute in this case arose out of a contract between two subcontractors in a construction project. In the federal case, subcontracting parties litigated questions related to the fabrication of the salt conveyor system. The federal district court ruled in favor of Appellee. Appellant filed a second lawsuit in state court against subcontractors involved in the federal case. Appellee filed a motion for summary judgment, arguing that the judgment in the federal litigation compelled judgment in its favor in the state court litigation. The district court granted summary judgment for Appellee on both claim preclusion and issue preclusion. The Supreme Court reversed, holding (1) under Noel v. Noel, 334 N.W.2d 146 (Iowa 1983), and Pagel v. Notbohm, 186 N.W.2d 638 (Iowa 1971), Appellee waived its claim preclusion argument; and (2) that the state district court ruling took too broad an approach to what the "issue" was in the federal lawsuit. View "Lemartec Engineering & Construction v. Advance Conveying Technologies, LLC" on Justia Law
In re Mobile Mini, Inc.
The Supreme Court conditionally granted Mobile Mini, Inc.'s petition for writ of mandamus and directed the trial court to vacate its order denying Mobile Mini's motion to designate a responsible third party in a construction worker's personal injury suit, holding that the trial court was obligated to grant Mobile Mini's motion to designate a responsible third party under the circumstances of this case. Mobile Mini, the owner of a construction trailer, was sued for injuries Luis Covarrubias received when a wind gust blew the door of the trailer closed on his hand. Mobile Mini filed a motion to designate Nolana Self Storage, LLC, the owner of the construction site, as a responsible third party so a jury could determine whether Nolana caused or contributed to Covarrubias's injury. The trial court denied Mobile Mini's request. The court of appeals denied Mobile Mini's mandamus petition. The Supreme Court conditionally granted the petition and directed the trial court to vacate its order denying Mobile Mini's motion to designate Nolana as a responsible third party, holding that Mobile Mini's discovery response disclosing Nolana as a potentially responsible third party was timely even though it was served after the statute of limitations had expired on Covarrubias's tort claims. View "In re Mobile Mini, Inc." on Justia Law
Mississippi State Board of Contractors v. Hobbs Construction, LLC
At stake in this appeal before the Mississippi Supreme Court was the ability of Hobbs Construction, LLC, to continue doing business in the state as a commercial general contractor. The Mississippi State Board of Contractors revoked the certificate of responsibility (COR) held by Hobbs. The chancery court granted Hobbs’s motion for a preliminary injunction and enjoined the Board’s revocation decision during the pendency of the appeal. Later the chancery court entered an order reversing the Board’s decision and reinstating Hobbs’s COR. The Board appealed, arguing that the chancery court erred because the Board’s revocation decision was supported by substantial evidence, was not arbitrary and capricious, was within the Board’s power to make, and did not violate Hobbs’s statutory or constitutional rights. The Board argued also that the chancery court erred by granting a preliminary injunction. The Supreme Court determined the Board violated Hobbs’s constitutional right to due process of law by not providing sufficient notice of the charges that were considered at the revocation hearing and were a basis for the revocation decision, therefore it affirmed the chancery court's. Furthermore, the Supreme Court found the chancery court did not err by granting a preliminary injunction. View "Mississippi State Board of Contractors v. Hobbs Construction, LLC" on Justia Law
McDonald v. Fidelity & Deposit Co. of Maryland
The Supreme Court reversed the decision of the district court granting summary judgment in favor of Plaintiffs in this action seeking to recover delinquent contributions to various trust funds for construction on a state construction project, holding that the right of action under a payment bond statute extends to any amount due an employee, meaning any amount that is traceable specifically to an employee. One of the subcontractors hired to work on the project failed to make contributions to various trust funds for its employees' work on the project, as required by trust agreements and a collective bargaining agreement. The trusts (Plaintiffs) sought to recover the delinquent contributions from the public payment bond associated with the project by suing Defendant, the surety for the payment bond. The district court granted summary judgment for Plaintiffs. On appeal, the parties disputed whether Utah Code 63G-6-505(4) limits the right of action on a payment bond to amounts due to an employee or encompasses claims for any amounts due for an employee or on the employee's behalf. The Supreme Court reversed, holding that the right of action under the public payment bond statute contemplates recovery of any specific benefit that is due a person in the sense of being traceable to that person. View "McDonald v. Fidelity & Deposit Co. of Maryland" on Justia Law
Oaks v. Parkerson Construction, LLC
Jeanne Oaks and Parkerson Construction, LLC ("Parkerson"), were engaged in a dispute concerning Parkerson's reconstruction of Oaks's fire-damaged residence in Huntsville, Alabama. Parkerson initiated the action, claiming that Oaks owed it more than $50,000 for its work. Oaks filed counterclaims alleging, among other things, that Parkerson misrepresented itself and performed deficient work. Parkerson moved the trial court to order that Oaks's counterclaims be arbitrated based on a provision in an unauthenticated work-authorization agreement that was attached to the motion. The trial court granted Parkerson's motion and ordered that Oaks's counterclaims be arbitrated. The Alabama Supreme Court reversed the trial court's arbitration order, however, because Parkerson did not meet its burden of establishing the existence of a contract calling for arbitration. View "Oaks v. Parkerson Construction, LLC" on Justia Law
Lexington Insurance Co. v. Chicago Flameproof & Wood Specialties Corp.
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
Hensel Phelps Construction Co. v. Department of Corrections and Rehabilitation
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
Liberty Mutual Fire Insurance Co. v. Fowlkes Plumbing, L.L.C.
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
Wanke, Industrial, Commercial, etc. v. AV Builder Corp.
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