Justia Construction Law Opinion Summaries

Plaintiffs-Appellants Doug Zink and Ted Keller appealed a district court judgment that dismissed their complaint, denied their motions, and awarded Enzminger Steel attorney's fees and costs. Enzminger Steel contracted with Doug Zink to supply components for a new grain drying site. The contract listed Zink as the purchaser, but Zink and his son Jeremy signed the contract. Doug Zink and Keller contend that they had formed a partnership for the purposes of constructing and operating the site. They further alleged that it was this partnership and not the Zinks separately, that entered into the contract with Enzminger Steel. Sometime after construction began, Zink and Keller learned that certain unsuitable components had been used in the site's construction. Zink and Keller refused to make payments under the contract. Two separate breach of contract actions followed, one brought by Enzminger Steel and one brought by Zink and Keller. At trial, the district court repeatedly questioned whether the alleged partnership between Zink and Keller was a ruse to allow Keller to practice law without a license. Keller later told the court that he and Zink had entered into an unwritten partnership agreement to share profits and losses. The court replied, "[T]he agreement that you are in is to share profits off this lawsuit which is not allowed." Neither Zink nor Keller produced any documents to prove the partnership. The district court entered an order denying all of the motions in this case and dismissed the action brought by Zink and Keller with prejudice. On appeal, Zink and Keller argued that the district court abused its discretion by denying the various motions in this case, ordering them to prove that a partnership existed, and awarding attorney's fees and costs to Enzminger Steel. Upon review, the Supreme Court found that while the district court had the power to dismiss a case in the absence of a party's motion, it must provide the parties with adequate notice and an opportunity to respond. Because Doug Zink did not have adequate notice or an opportunity to respond, the dismissal of his case with prejudice was reversed. The Court remanded the case for further proceedings.

Petitioner Willard Ryals appealed a trial court's order enforcing a creditor's judgment against him in favor of Respondent Lathan Company, Inc. (Lathan). In 2004, Lathan sued Ryals Construction Company for breach of a construction sub-contract. The contract called for Ryals to obtain workers' compensation insurance for the project. Lathan claimed it made an advance payment for the insurance. When Ryals failed to get the insurance, Lathan sued. No one appeared on behalf of Ryals on the trial date. A default judgment was entered on behalf of Lathan. Two years later, Lathan tried to collect on its default judgment by serving a post-judgment discovery request on Ryals Construction. The request went unanswered. Lathan filed a motion for sanctions, naming "Ryals Real Estate," Willard Ryals and Ryals Construction Company. Through counsel, Willard Ryals moved to strike the motion for sanctions which the trial court granted. Lathan then amended its complaint to substitute Willard Ryals with fictitious parties. Rather than re-allege the allegations of its first complaint, Lathan sought to hold Ryals Real Estate and Willard Ryals liable as alter egos for the judgment it held against Ryals Construction Company. After a bench trial, the trial court determined that Lathan's amended complaint did not technically substitute Willard Ryals and Ryals Real Estate for fictitiously named parties in the original complaint; it added them and asserted a new cause of action. The court found that Willard Ryals and Ryals Construction were liable for the creditor judgment. Willard Ryals appealed, arguing that the trial court lacked jurisdiction over Lathan's amended complaint. Upon careful consideration of the trial court record and the applicable legal authority, the Supreme Court dismissed the case as void: "The trial court's attempt to treat Lathan's amended complaint as a new action was in words only and was not sufficient to commence a new action." Accordingly, the trial court did not have jurisdiction to enter its judgment against Willard Ryals and Ryals Real Estate.