Justia Construction Law Opinion SummariesArticles Posted in Arbitration & Mediation
McMurray Contracting, LLC v. Hardy
McMurray Contracting, LLC ("McMurray"), appealed a circuit court's denial of its second motion to compel arbitration of this case commenced by Kenneth Hardy and his wife Helen Hardy. The Hardys filed suit in December 2022 alleging they "retained" McMurray to perform restoration work to their house damaged in Hurricane Sally. The Hardys specifically alleged that McMurray "did not complete all restoration work in a good and workmanlike manner, and has refused to correct numerous deficiencies through [the Hardys'] property," and that McMurray "performed work and charged for materials that were never approved." The Alabama Supreme Court found McMurray's notice of appeal was not timely filed so as to invoke the Supreme Court's jurisdiction. Accordingly, it dismissed McMurray's appeal. View "McMurray Contracting, LLC v. Hardy" on Justia Law
McInnis Electric Company v. Brasfield & Gorrie, LLC et al.
Construction firm Brasfield & Gorrie, LLC, received the prime contract to expand the University of Mississippi Medical Center Children’s Hospital in 2017. Electrical contractor McInnis Electric Company secured the winning bid to install the electrical and low voltage systems package for the project and subsequently signed a subcontract with Brasfield & Gorrie. Terms of the subcontract incorporated the prime contract, which were related to the same project by reference. The contract provided that work was set to begin on the project on February 15, 2018. However, McInnis, was directed not to report on site until June 4, 2018, and, due to delays, was unable to begin until July 23, 2018. As work progressed, the schedule allegedly became delayed as a result of Brasfield & Gorrie’s failure to coordinate the work of the various subcontractors. McInnis averred that Brasfield & Gorrie’s failure to coordinate and facilitate the work of the various subcontractors worsened as the project progressed, and Brasfield & Gorrie experienced turnover in management. This failure allegedly delayed McInnis’s work, which was not on the path toward completion, supposedly through no fault of its own. Construction issues were amplified when on March 11, 2020, Mississippi experienced its first reported case of COVID-19. On April 1, 2020, the Mississippi Governor instituted a shelter in place order in response to the ongoing pandemic, requiring certain nonessential businesses to close and recommending social distancing to reduce the spread of the coronavirus in Mississippi. The children’s hospital was not classified as an existing infrastructure as it was a nonoperational work in progress and thus was not subject to the executive order’s exception to the governmental shutdowns. By May 8, 2020, McInnis had suffered an approximately 40 percent loss in its workforce due to employees testing positive for COVID-19. Despite the decrease in the available workforce, Brasfield & Gorrie demanded McInnis perform under its contractual obligation. McInnis took measures to continue the work. Brasfield & Gorrie further declined requests for accommodation and instead terminated McInnis on May 13, 2020. The case before the Mississippi Supreme Court here stemmed from disagreements and a broken contract between the parties, contesting whether arbitration was appropriate to settle their disputes. The trial court compelled arbitration, and the Supreme Court affirmed. View "McInnis Electric Company v. Brasfield & Gorrie, LLC et al." on Justia Law
Shake Out, LLC v. Clearwater Construction, LLC
Shake Out, LLC entered into a contract with Clearwater Construction, LLC (“Clearwater”), to repair the building Shake Out’s restaurant occupied. The relationship between the parties quickly deteriorated, resulting in Shake Out filing a lawsuit against Clearwater. The parties attempted to mediate their dispute but were unsuccessful. After the case had proceeded for some time, Clearwater sought to compel arbitration pursuant to the contract. Shake Out objected, asserting that Clearwater had waived its right to enforce the arbitration clause because it had participated in the litigation for almost ten months before seeking to compel arbitration. The district court concluded Clearwater had not waived its right to seek arbitration and entered an order compelling arbitration and staying the proceedings. Finding no reversible error in that judgment, the Idaho Supreme Court affirmed. View "Shake Out, LLC v. Clearwater Construction, LLC" on Justia Law
Lennar Homes of Tex. Land & Construction, Ltd. v. Whiteley
The Supreme Court reversed in part the opinion of the court of appeals in this interlocutory appeal concerning whether a subsequent purchaser (Purchaser) of a home is required to arbitrate her claims against the builder (Builder) for alleged construction defects, holding that the trial court erred in granting Purchaser's motion to vacate and denying Builder's motion to confirm.The trial court granted the motion to compel arbitration filed by Builder, which joined two subcontractors in the arbitration, asserting that they owed defense and indemnity obligations. The arbitrator issued an award in favor of Builder. The trial court vacated the award against Purchaser but made no ruling whether to vacate the award against the subcontractors. The Supreme Court rendered judgment confirming the award against Purchaser and remanded the case, holding (1) Purchaser was bound by the arbitration clause in the purchase-and-sale agreement under the doctrine of direct-benefits estoppel; and (2) because the record contained no ruling on whether to vacate the award against the subcontractors, remand was required. View "Lennar Homes of Tex. Land & Construction, Ltd. v. Whiteley" on Justia Law
Petrolex II LLC v. Bailey Group LLC
The Supreme Court affirmed the orders of the superior court granting motions to stay the superior court proceedings in four cases and refer them to arbitration in this construction dispute, holding that that superior court correctly found that these disagreement must be resolved through arbitration.Plaintiff substituted itself as the plaintiff and assignee of three subcontractors in in three mechanics' liens actions and then filed an additional complaint against the assignee of nine further subcontractors. Plaintiff further filed a complaint claiming it was owed $854,352 from Defendants. Defendants moved to stay the proceedings in all five cases and refer them to arbitration. The trial justice found that the language of the subcontracts required mandatory arbitration for the disputes and compelled the parties to participate in mandatory arbitration. The Supreme Court affirmed, holding that the disputes must be referred for arbitration. View "Petrolex II LLC v. Bailey Group LLC" on Justia Law
Escapes! To the Shores Condominium Association, Inc. v. Hoar Construction, LLC, et al.
Escapes! To the Shores Condominium Association, Inc. ("the Association"), individually and on behalf of certain condominium-unit owners, appealed an order denying a Rule 59, Ala. R. Civ. P. motion to vacate a judgment entered on an arbitration award in favor of Hoar Construction, LLC ("Hoar"), and Architectural Surfaces, Inc. ("ASI"). The arbitration award in favor of Hoar and ASI stemmed from the construction of a condominium building located in Orange Beach known as "Escapes! To the Shores." Hoar was the general contractor for the construction project; Stephen Hill was the architect for the construction project; and ASI was the subcontractor responsible for the installation of the exterior surfaces to the condominium building. After construction of the condominium building was substantially complete, the developer of the project sold the units and transferred ownership and management of the common areas to the Association. The Association thereafter filed suit against Hoar, ASI, and Hill seeking damages arising out of alleged construction and design defects to the condominium building, specifically, "stucco blistering and water intrusion." The Association's claims against Hoar and ASI proceeded to arbitration, but its claims against Hill remained pending in the trial court. A panel of three arbitrators issued a final award in favor of Hoar and ASI, concluding, in relevant part, that the defects to the condominium building were the result of a design defect and not a construction defect. Once the trial court entered a judgment on the arbitration award, the Association thereafter filed a Rule 59 motion to vacate that judgment. The Alabama Supreme Court concluded the Association has failed to demonstrate that the arbitration panel engaged in misconduct that would warrant vacatur. Accordingly, the order denying the Association's Rule 59 motion and the judgment entered on the arbitration award were affirmed. View "Escapes! To the Shores Condominium Association, Inc. v. Hoar Construction, LLC, et al." on Justia Law
Taylor Morrison of Texas, Inc. v. Ha
In this dispute over an arbitration clause within a contract, the Supreme Court held that the minor children who joined Plaintiffs, their parents, in bringing this action seeking damages for construction defects in their home may be compelled to arbitrate along with their parents on the basis of direct-benefits estoppel.Plaintiffs, Tony and Michelle Ha, signed a purchase agreement with Taylor Woodrow Communities-League City, Ltd. to build a home in Texas. The agreement included an arbitration provision. The Has sued both Taylor Woodrow Communities-League City, Ltd. and Taylor Morrison of Texas, Inc., for negligent construction and other claims, alleging the home developed significant mold problems due to construction defects. Plaintiffs' second amended petition named both Tony and Michelle and their three children. Taylor Morrison moved to compel arbitration, but the trial court denied the motion as it pertained to Michelle and the children. The court of appeals affirmed. The Supreme Court reversed, holding that when a family unit resides in a home and files suit for factually intertwined construction-defect claims concerning the home, a nonsignatory spouse and minor children have accepted direct benefits under the signatory spouse’s purchase agreement such that they may be compelled to arbitrate through direct-benefits estoppel. View "Taylor Morrison of Texas, Inc. v. Ha" on Justia Law
Taylor Morrison of Texas, Inc. v. Skufca
In this dispute over an arbitration clause within a contract, the Supreme Court held that the minor children who joined Plaintiffs, their parents, in bringing this action seeking damages for construction defects in their home may be compelled to arbitrate along with their parents on the basis of direct-benefits estoppel.Plaintiffs, Jack and Erin Skufca, signed a purchase agreement with Taylor Woodrow Communities-League City, Ltd. to build a home in Texas. The agreement included an arbitration provision. Plaintiffs sued both Taylor Woodrow Communities-League City, Ltd. and Taylor Morrison of Texas, Inc., for construction defects and fraud, alleging that less than a year after they moved in, the home developed mold issues that caused their minor children to be ill. The petition listed Jack and Erin as plaintiffs individually, as well as Erin as next friend of the couple's children. Taylor Morrison moved to compel arbitration, but the trial court denied the motion as it pertained to the children. The court of appeals affirmed. The Supreme Court reversed, holding that the minor children sued based on the contract and were subject to its terms, including the arbitration clause. View "Taylor Morrison of Texas, Inc. v. Skufca" on Justia Law
Vascos Excavation Group LLC v. Gold
Plaintiff and appellant, a contractor, prevailed in an arbitration against its client, the Defendant and Respondent. After finding that Plaintiff was not duly licensed because its responsible managing employee (RME) did not meet the criteria required by law, the trial court granted Defendant's petition to vacate the arbitration award on the ground that the arbitrator exceeded her powers.Plaintiff made two main arguments on appeal. It first contends the trial court misapplied the burden of proof regarding whether Plaintiff was a duly licensed contractor. The Second Appellate District rejected this argument, finding that the trial court correctly determined that Plaintiff had the burden of proof on this issue.Plaintiff also argued the trial court erroneously denied it an evidentiary hearing. In the trial court, however, Plaintiff did not seek an evidentiary hearing. It instead argued that such a hearing was not authorized by law. Therefore, the Second Appellate District held that Plaintiff forfeited the issue on appeal. View "Vascos Excavation Group LLC v. Gold" on Justia Law
Shafer v. Scarborough, et al.
Justin Shafer appealed a district court judgment confirming an arbitration award against Diamond Development & Custom Homes, L.L.C. Shafer argued the district court erred by failing to increase the amount of damages he was awarded. He also argued the North Dakota Supreme Court should narrowly expand the standard for reviewing an arbitration award. The Court declined Shafer’s request to expand the standard of review, and concluded the district court did not err in confirming the arbitration award. View "Shafer v. Scarborough, et al." on Justia Law