Justia Construction Law Opinion SummariesArticles Posted in Civil Procedure
KD Oak Grove, LLC v. Warren & Warren Asphalt Paving, LLC
KD Oak Grove and KP Westwood entered into two separate contracts with Coumanis Allen, a general contractor. Subsequently, Coumanis did not pay subcontractors for their work, and Warren & Warren, one of Coumanis’s subcontractors, filed construction liens on Oak Grove’s and Westwood’s separate real property. In both payment actions, Warren admitted to failing to file its lis pendens notice along with its construction liens, waiting 110 days to file it. The two separate legal actions were brought before the Chancery Court of Lamar County, Mississippi, and were assigned to separate chancellors. Oak Grove and Westwood filed separate motions for summary judgment, which were denied by the chancellors; they timely appealed. The crux of the appeals was one of statutory interpretation: whether the failure to comply with Mississippi Code Section 85-7- 405(1)(c)(i) (Supp. 2020), which required the simultaneous filing of a lis pendens notice with the commencement of the payment action, rendered Warren’s liens unenforceable and ineffective. Chancellor Sheldon erred by denying Oak Grove’s motions for summary judgment, and Chancellor Gambrell erred by denying Westwood’s motion to dissolve. Therefore, the Mississippi Supreme Court reversed the chancellors’ decisions and entered summary judgment in favor of KD Oak Grove and KP Westwood. View "KD Oak Grove, LLC v. Warren & Warren Asphalt Paving, LLC" on Justia Law
Childs et al. v. Pommer
In case number 1190525, Paul Childs and Granger Construction Company, LLC ("Granger Construction"), appealed a circuit court judgment entered in favor of Harry ("Bud") and Brenda Pommer. In their cross-appeal, case number 1190580, the Pommers appealed the trial court's judgment entered in favor of Melissa Granger ("Melissa"), as the administratrix of the estate of Daniel Granger ("Granger"), deceased. In 2014, the Pommers decided to build a garage on property that they owned in Fairhope, Alabama. Childs was referred to Bud for the work. Childs brought Granger into the project as the licensed contractor for the work. The evidence presented at trial indicated that the project experienced significant delays. Evidence was presented indicating that Granger and Childs performed some of the physical labor on the project. In March 2015, when an invoice was presented to the Pommers, Bud and Brenda told the Childs and Granger that they did not want to give them another check based on how things had been going. A "heated" meeting between the parties resulted in the Pommers hiring an attorney. Bud requested the City conduct an inspection; the garage did not pass. The Pommers subsequently hired another contractor and other companies to repair work done by Granger Construction and to complete unfinished work on the project. The Pommers ultimately sued Childs and Granger Construction for breach of contract. Childs and Granger Construction filed their answer to the amended complaint and a counterclaim, asserting breach of contract/unjust enrichment against the Pommers. After review, the Alabama Supreme Court affirmed the trial court as to Granger Construction in case number 1190525. The Court reversed the trial court as to Childs, and rendered judgment in favor of Childs. In case number 1190580, the Court affirmed the trial court. View "Childs et al. v. Pommer" on Justia Law
Lake Hills Invs., LLC v. Rushforth Constr. Co., Inc.
Lake Hills Investments LLC sued AP Rushforth (AP) for breach of contract, alleging, among other things, that the work AP conducted on the Lake Hills Village project was defective. AP counterclaimed that Lake Hills underpaid them. At trial, an affirmative defense instruction (jury instruction 9) was given, stating that “AP has the burden to prove that Lake Hills provided the plans and specifications for an area of work at issue, that AP followed those plans and specifications, and that the [construction] defect resulted from defects in the plans or specifications. If you find from your consideration of all the evidence that this affirmative defense has been proved for a particular area, then your verdict should be for AP as to that area.” The Court of Appeals held that this instruction understated AP’s burden of proof and allowed the jury to find that if any part of the construction defect resulted from Lake Hills’ plans and specifications, then the jury could find for AP. The court concluded that the error was not harmless, reversed, and remanded for a new trial. The Washington Supreme Court reversed the Court of Appeals, finding that although jury instruction 9 had the potential to mislead the jury, Lake Hills could not show it was prejudiced. The Court of Appeals' judgment was reversed and the matter remanded for the appellate court to consider issues related to the trial court's award of attorney fees. View "Lake Hills Invs., LLC v. Rushforth Constr. Co., Inc." on Justia Law
JT Construction, LLC v. MW Industrial Services, Inc.
JT Construction, LLC ("JTC"), appealed a circuit court's judgment awarding declaratory and injunctive relief to MW Industrial Services, Inc. ("MWI"). MWI contracted with Golder Associates, Inc., to provide labor and services for a construction project at Plant Gorgas, a power plant operated by Alabama Power Company. Pursuant to the terms of the contract, MWI was prohibited from "permit[ting] any lien, affidavit of nonpayment, stop payment notice, attachment or other encumbrance ... to remain on record against [Plant Gorgas] or the property upon which it is situated for ... work performed or materials finished in connection [there]with" by any subcontractor with whom MWI might also contract. JTC subcontracted with MWI to work at Plant Gorgas. The subcontract agreement ("the lien-waiver provision") precluded JTC, in accordance with the master contract, from filing a lien against property owned by Alabama Power or Southern Company. Following execution of the subcontract agreement, a dispute arose between MWI and JTC in connection with JTC's performance of its contractual obligations and the amount owed to JTC for the work it had performed. In September 2020, counsel for JTC provided a "Notice of Mechanics' Lien" indicating that JTC claimed against the real property on which Plant Gorgas was situated, a lien in connection with JTC's work under the subcontract agreement. MWI pointed out the language of the lien-waiver provision of its subcontract, and demanded that JTC withdraw the lien notice. MWI asserted that JTC had been paid for any previous work before its execution of the subcontract agreement, and demanded that JTC withdraw its notice of lien. The trial court ultimately entered an order issuing a permanent injunction and ruling in favor of MWI on its declaratory-judgment claim, prohibiting JTC from filing its lien. The Alabama Supreme Court held the trial court erred in issuing the declaratory judgment and in awarding permanent injunctive relief without prior notice to JTC, as required by Rule 65(a)(2), and that JTC was prejudiced by that error. The trial court's judgment was therefore reversed, and this case was remanded for further proceedings. View "JT Construction, LLC v. MW Industrial Services, Inc." on Justia Law
Dellinger, et al. v. Flemming, et al.
Plaintiffs Robbie Dillinger and Steve Kimbrough, LLC sued defendants Bryant Bank, Audrey Fleming and Michael Francis Flemming, III for the cost of work performed on the Flemmings’ property. The trial court issued a final judgment in favor of defendants. Later, plaintiffs filed an amended complaint adding Joe Kimbrough as a plaintiff, which the trial court struck. Kimbrough and the other plaintiffs appealed. But because the construction parties’ appeal was untimely, the Alabama Supreme Court concluded it lacked jurisdiction and dismissed the appeal. View "Dellinger, et al. v. Flemming, et al." on Justia Law
Vera v. REL-BC, LLC
The Sellers bought an Oakland property to “flip.” After Vega renovated the property, they sold it to Vera, providing required disclosures, stating they were not aware of any water intrusion, leaks from the sewer system or any pipes, work, or repairs that had been done without permits or not in compliance with building codes, or any material facts or defects that had not otherwise been disclosed. Vera’s own inspectors revealed several problems. The Sellers agreed to several repairs Escrow closed in December 2011, but the sewer line had not been corrected. In January 2012, water flooded the basement. The Sellers admitted that earlier sewer work had been completed without a permit and that Vega was unlicensed. In 2014, the exterior stairs began collapsing. Three years and three days after the close of escrow, Vera filed suit, alleging negligence, breach of warranty, breach of contract, fraud, and negligent misrepresentation. Based on the three-year limitations period for actions based on fraud or mistake, the court dismissed and, based on a clause in the purchase contract, granted SNL attorney’s fees, including fees related to a cross-complaint against Vera’s broker and real estate agent.The court of appeal affirmed. Vera’s breach of contract claim was based on fraud and the undisputed facts demonstrated Vera’s claims based on fraud accrued more than three years before she filed suit. Vera has not shown the court abused its discretion in awarding fees related to the cross-complaint. View "Vera v. REL-BC, LLC" on Justia Law
McCarthy Corporation v. Stark Investment Group
Craig Stark entered into a contract with McCarthy Corporation to construct a storage facility for recreational vehicles and boats. The relationship turned sour after McCarthy sent Stark an invoice for work Stark believed he had already paid for in full. After the parties were unable to resolve their dispute, Stark terminated McCarthy’s contract. McCarthy then filed a lien against Stark’s property and brought suit for breach of contract and to foreclose its lien. Stark, Stark Investment Group, and U.S. Bank, Stark’s construction lender on the project, counterclaimed for breach of contract, breach of the implied covenant of good faith and fair dealing, fraudulent misrepresentation, slander of title by the recording of an unjust lien, and breach of the Idaho Consumer Protection Act (“ICPA”). After a bench trial, the district court largely agreed with Stark's counterclaims and dismissed McCarthy's complaint. McCarthy appealed the district court’s findings, damages award, and attorney fees award. Finding no reversible error, the Idaho Supreme Court affirmed the district court's holdings that McCarthy breached the contract between the parties and McCarthy violated the ICPA. View "McCarthy Corporation v. Stark Investment Group" on Justia Law
Resqsoft, Inc. v. Protech Solutions, Inc.
The superior court dismissed a subcontractor’s claims against the contractor because a venue provision in the subcontract required that litigation be conducted in another state. The superior court also dismissed the subcontractor’s unjust enrichment claim against the project owner for failure to state a claim upon which relief could be granted. The subcontractor appealed the dismissals; finding no reversible error, the Alaska Supreme Court affirmed the superior court’s decisions. View "Resqsoft, Inc. v. Protech Solutions, Inc." on Justia Law
Dat Luong DBA LVDH Construction v. Western Surety Co.
The employee of a subcontractor on a state public works project sued the prime contractor’s surety bond for unpaid labor under Alaska’s Little Miller Act. The trial court ruled the employee failed to give notice to the contractor within the statutorily required 90 days of his last date of labor on the project. The trial court entered a directed verdict against the employee. The employee appealed to the superior court, which denied the appeal, and then petitioned the Alaska Supreme Court for hearing. This case presented two issues of first impression: (1) how to define “labor;” and (2) whether “notice” was effective on the date of mailing or the date of receipt. Under the Little Miller Act, the Supreme Court defined “labor” as work that was “necessary to and forwards” the project secured by the payment bond, and held the effective date of “notice” to be the date notice is sent via registered mail. The superior court judgment denying the employee's appeal was reversed and the matter remanded for further proceedings. View "Dat Luong DBA LVDH Construction v. Western Surety Co." on Justia Law
San Francisco CDC LLC v. Webcor Construction L.P.
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