Justia Construction Law Opinion Summaries

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

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

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

On a winter night in 2014, strong winds blew through the town of Georgia, Vermont, causing a partially constructed livestock barn to collapse. Commercial Construction Endeavors, Inc. (CCE), the contractor building the barn, sought recompense for the resulting losses from its insurer, Ohio Security Insurance Company. However, insurer and insured disagreed as to policy coverage for costs incurred by CCE in removing the remains of the collapsed barn and rebuilding it to its pre-collapse state. Ultimately, CCE sued Ohio Security for breach of contract. In successive summary-judgment rulings, the trial court held that the contractor’s rebuilding expenses were covered under the policy, but the cost of debris removal was not. Ohio Security cross-appealed the first ruling and CCE appealed the second; the Vermont Supreme Court reversed the first ruling and affirmed the second. The Court determined the additional collapse coverage applied only to “Covered Property,” which was business personal property; CCE did not dispute that the barn was not business personal property and thus was not “Covered Property.” Therefore, the court’s first summary-judgment ruling was reversed. The debris removal was not a loss involving business personal property. As a result, it was not a loss to “Covered Property” at that term was defined by the policy at issue. View "Commercial Construction Endeavors, Inc. v. Ohio Security Insurance Company" on Justia Law

Oil Capital Ready Mix, LLC; Agape Holdings, LLP; Scott Dyk; and Samuel Dyk (collectively “Dyk”) appealed a judgment awarding Skaw ND Precast LLC (“Skaw”) $69,295 in damages for conversion of its property. In March 2013, Skaw entered into a five-year agreement with Tioga Ready Mix (“Tioga”), a company which produced ready-mix concrete product, to rent a two-acre parcel of land to conduct its business. The base rent for the site was $700 per month, subject to reductions if Skaw purchased designated quantities of ready-mix product from Tioga. The agreement provided it would remain in effect until December 31, 2018, and it did not allow either party to unilaterally cancel the agreement. In spring 2015, Skaw learned that Tioga had arranged to sell Tioga’s assets at a public auction, including the two-acre parcel of property where Skaw conducted its business. Skaw’s owners attended the auction sale in May 2015. The auction service notified all attendees that Skaw’s assets on the premises were not part of the sale, that there was a lease in place between Skaw and Tioga, and that the lease went with the land. Dyk was the successful bidder at the auction and entered into a commercial purchase agreement with the sellers which did not include Skaw’s product inventory or equipment and stated the sale was subject to “rights of tenants,” but did not list Skaw as a tenant. Once Dyk got its ready-mix plant running, Skaw began purchasing concrete ready-mix product from Dyk for its business. When presented with the contract between Skaw and Tioga, Dyk renegotiated the terms; Dyk and Skaw agreed to increase monthly rental payments to $750 per month. During a scheduled shut down of both companies' operations, Dyk built an earthen berm around Skaw’s equipment which prevented Skaw from accessing it. Dyk also transported Skaw’s concrete pad and blocked inventory off of Skaw’s two acres to an area adjacent to Dyk’s offices. Other Skaw assets were transported to undisclosed locations. When Skaw discovered the berm, Dyk informed Skaw that Skaw abandoned their temporary rental agreement in December 2015 and that law enforcement would be notified if there were “any attempts to breach the peace or trespass” on the property. Skaw replied that the 2013 lease was still valid and had not been abandoned, and that Skaw planned to return to the property and continue operations. Dyk argued on appeal of the conversion damages award that the district court erred in ruling the 2013 agreement between Skaw and Tioga was a lease rather than a license. Because the North Dakota Supreme Court concluded the district court’s findings of fact were not clearly erroneous, it affirmed the judgment. View "Skaw ND Precast, LLC v. Oil Capital Ready Mix, LLC, et al." on Justia Law

After a bench trial, a trial court issued a judgment and order which held, among other things, that Wright & Morrissey owed J & K Tile Co. $42,000 plus interest under a Memorandum of Understanding (MOU) between the parties, and that Wright & Morrissey unlawfully withheld J & K Tile Co.’s retainage check in violation of the Vermont Prompt Pay Act. Following this decision a few months later, the court further held that each party was the prevailing party in a portion of the litigation and should be awarded attorney’s fees regarding that portion. Wright & Morrissey appealed, and J & K Tile Co. cross-appealed. With regard to the retainage, the Vermont Supreme Court determined the trial court did not err. However, with respect to the prevailing party issue, the Supreme Court determined “a fee award should not be apportioned among claims that arise from a common core of facts.” Although not all of the evidence was relevant to all the claims, all the evidence, and all the theories of liability, related to the same common core of facts. J & K Tile Co. itself treated the claims as arising from a common core of facts, as evidenced by their combining the failure-to-mediate and breach-of-contract allegations into a single count. The Supreme Court concluded the trial court should have determined who was the substantially prevailing party as a whole, considering all the claims together. Accordingly, it reversed the order regarding attorney’s fees and remanded the matter to the trial court for further proceedings. View "J & K Tile Company" on Justia Law

Parke Bancorp (“Parke”) made a loan to 659 Chestnut LLC (“659 Chestnut”) in 2016 to finance the construction of an office building in Newark, Delaware. 659 Chestnut pleaded a claim in the Superior Court for money damages in the amount of a 1% prepayment penalty it had paid under protest when it paid off the loan. The basis of 659 Chestnut’s claim was that the parties were mutually mistaken as to the prepayment penalty provisions of the relevant loan documents. Parke counterclaimed for money damages in the amount of a 5% prepayment penalty, which it claimed was provided for in the agreement. After a bench trial, the Superior Court agreed with 659 Chestnut and entered judgment in its favor. After review, the Delaware Supreme Court reversed and directed entry of judgment in Parke’s favor on 659 Chestnut’s claim. Although Parke loan officer Timothy Cole negotiated on behalf of Parke and represented to 659 Chestnut during negotiations that there was a no-penalty window, the parties stipulated that: (1) everyone knew that Cole did not have authority to bind Parke to loan terms; and (2) everyone also knew that any terms proposed by Cole required both final documentation and approval by Parke’s loan committee. It was evident to the Supreme Court that 659 Chestnut did not offer clear and convincing evidence that Parke’s loan committee agreed to something other than the terms in the final loan documents. Accordingly, it Directed entry of judgment for Parke. View "Parke Bancorp Inc., et al. v. 659 Chestnut LLC" on Justia Law

JRC Construction, LLC, appealed a judgment entered after a jury awarded Larry Pavlicek $217,244.55 in damages against JRC. The jury found JRC breached a contract with Pavlicek relating to construction work performed by JRC. JRC argued the district court erred in denying its motion and renewed motion for judgment as a matter of law because Pavlicek failed to prove he had a contract with JRC. Finding no reversible error, the North Dakota Supreme Court affirmed. View "Pavlicek v. American Steel Systems, Inc., et al." on Justia Law

The federal United States District Court for the Middle District of Georgia certified questions of Georgia law to the Georgia Supreme Court regarding the scope of the “acceptance doctrine” in negligent construction tort cases. At issue was whether and how the acceptance doctrine applied as a defense against a claim brought by a subsequent purchaser of allegedly negligently constructed buildings. Thomaston Crossing, LLC (the “original owner”) entered into a construction contract with appellee Piedmont Construction Group, Inc. to build an apartment complex in Macon. Piedmont then retained two subcontractors – appellees Alan Frank Roofing Company and Triad Mechanical Company, Inc. – to construct the roof and the HVAC system, respectively. In 2014, the complex was completed, turned over to, and accepted by the original owner. In 2016, the original owner sold the apartment complex to appellant Thomaston Acquisition, LLC (“Thomaston”) pursuant to an “as is” agreement. Shortly after the sale, Thomaston allegedly discovered evidence that the roof and HVAC system had been negligently constructed. Thomaston filed suit against Piedmont, asserting a claim for negligent construction of the roof and HVAC system and a claim for breach of contract/implied warranty. Piedmont then filed a third-party complaint against Alan Frank Roofing and Triad Mechanical because both companies had allegedly agreed to indemnify Piedmont for loses arising out of their work. Each of the appellees later moved for summary judgment based in part on the defense that Thomaston’s negligent construction claim is barred by the acceptance doctrine. The Georgia Supreme Court concluded the acceptance doctrine applied to Thomaston’s claim, and that “readily observable upon reasonable inspection” referred to the original owner’s inspection. “Without any real claim of privity, Thomaston nevertheless contends that it should be treated like the original owner because it is the current owner-occupier of the property. But doing so would undermine the acceptance doctrine’s foundational purpose of shielding contractors from liability for injuries occurring after the owner has accepted the completed work, thereby assuming responsibility for future injuries. There is no ‘current owner-occupier’ or ‘subsequent purchaser’ exception to the acceptance doctrine, and the facts of this case do not compel us to recognize one here.” View "Thomaston Acquisition, LLC v. Piedmont Construction Group, Inc." on Justia Law

Appellants, Sorokine and Koudriavtseva, are husband and wife. DBS and Kornach are California licensed contractors; DBS worked on their San Rafael house, while Kornach did not. Kornach, a longtime friend of Sorokine’s, had purchased materials for DIY projects at the property because of the discounts afforded to licensed general contractors. Sorokine does not speak English; Kornach often interpreted for Sorokine. After Koudriavtseva fired DBS, she hired unlicensed builders to complete the work and remedy alleged defects. DBS sued, alleging breach of contract and foreclosure of mechanic’s lien. Appellants’ response named as cross-defendants DBS, Komach, and ACIC, which had issued a surety bond to Kornach. The court of appeal reversed a directed verdict against appellants on a claim they violated an Internal Revenue Code provision and awarding $20,000 in sanctions and $122,995 in attorney fees against them. There was no evidence that appellants knew that 1099s issued to Komach were incorrect. The court also reversed directed verdicts against appellants on claims they had asserted against others; appellants were unable to prove damage because the trial court had granted a motion in limine preventing appellants from introducing evidence of payments made to an unlicensed contractor. The court also reversed an award of cost of proof damages to Kornach based on requests for admissions propounded by a different party. View "Design Built Systems v. Sorokine" on Justia Law