Justia Construction Law Opinion Summaries

The United States Federal District Court for the Western District of Washington certified a question of law to the Washington Supreme Court. Cox Construction was the general contractor of a remodeling project. Cox hired Baker & Son Construction, Inc. as a subcontractor. A Baker employee allegedly caused a two-by-four to fall from a railing and strike Ronnie Cox, owner of Cox Construction, who later died from his injury. Baker allegedly called an insurance agent to alert them of the incident. The agent told Baker that no action needed to be taken because at that time, no claim existed. A few months later, Baker received a wrongful death claim from an attorney representing Cox’s widow. Baker notified its insurer, Preferred Contractors Insurance Company (PCIC) of the claim. PCIC denied coverage, but agreed to defend Baker under a reservation of rights. The certified question to the Washington Supreme Court related to the “claims-made” nature of the policy and the timing of Baker’s tender of Ms. Cox’s claim. The Supreme Court replied to the certified question that in light of RCW 18.27, a contractor’s commercial general liability insurance policy that requires the loss to occur and be reported within the same policy year, and provides neither neither prospective nor retroactive coverage violates Washington’s public policy. View "Preferred Contractors Ins. Co. v. Baker & Son Constr., Inc." on Justia Law

The Alaska Department of Revenue audited a non-resident corporation doing business in Alaska. The Department issued a deficiency assessment based in part on an Alaska tax statute requiring an income tax return to include certain foreign corporations affiliated with the taxpaying corporation. The taxpayer exhausted its administrative remedies and then appealed to the superior court, arguing that the tax statute the Department applied was facially unconstitutional because: (1) it violated the dormant Commerce Clause by discriminating against foreign commerce based on countries’ corporate income tax rates; (2) it violated the Due Process Clause by being arbitrary and irrational; and (3) it violated the Due Process Clause by failing to provide notice of what affiliates a tax return must include, and therefore is void for vagueness. The superior court rejected the first two arguments but ruled in the taxpayer’s favor on the third argument. The Department appealed, claiming the superior court erred by concluding that the statute was void for vagueness in violation of the Due Process Clause. The taxpayer cross-appealed, asserting that the court erred by concluding that the statute did not violate the Commerce Clause and was not arbitrary. After review, the Alaska Supreme Court reversed the superior court’s decision that the statute was facially unconstitutional on due process grounds, and affirmed the court’s decision that it otherwise was facially constitutional. View "Alaska Dept. of Revenue v. Nabors International Finance, Inc. et al." on Justia Law

A general contractor hired a subcontractor to provide material for a project at a state park. After the project was completed, the general contractor sent the subcontractor a check described as “final payment.” The subcontractor, believing it was owed more, initially refused to accept the check. Months later, the subcontractor cashed the check but then attempted to repay the amount to the general contractor. The general contractor refused repayment, claiming that the subcontractor’s cashing the check constituted satisfaction of its claim of payment. The superior court granted summary judgment to the general contractor, ruling that the evidence established an accord and satisfaction. The Alaska Supreme Court held there was a genuine dispute of material fact about two requirements for an accord and satisfaction: whether the payment was tendered in good faith, and whether there was a bona fide dispute about the amount owed. The superior court's judgment was therefore vacated, and the case remanded for further proceedings. View "Smallwood Creek, Inc. v. Build Alaska, LLC" on Justia Law

In federal court, Plaintiff Timothy Martin sued the Department of Corrections (DOC) and three DOC-employed medical providers, alleging Eighth Amendment to the United States Constitution violations under 42 U.S.C. 1983, and medical malpractice under state law. Following the defendants’ motion for summary judgment, the federal district court certified three questions of Washington state law to the Washington Supreme Court, all relating to whether RCW 7.70.150’s requirement of a certificate of merit for medical malpractice suits against state agents was constitutional. The Washington Court held that RCW 7.70.150 was invalid on its face based on Putman v. Wenatchee Valley Med. Ctr., PS, 216 P.3d 374 (2009), and on statutory language that did not differentiate between private and public defendants. Because the Supreme Court answered certified question 1 in the affirmative, it did not reach the federal court's remaining questions. View "Martin v. Dep't of Corrections" on Justia Law

Koch Construction, Inc.; Marilyn Koch, Personal Representative of the Estate of Michael P. Koch; and Koch Property Investments, Inc. (collectively “appellants”) appealed the judgment and amended judgment entered in favor of Toman Engineering Company (“Toman”). Michael Koch owned and operated Koch Construction and Koch Property Investments (“KPI”). Toman provided engineering services to Koch Construction on various projects, including designing a stormwater management system for the Koch Meadow Hills residential development project in Dickinson, North Dakota. Michael died in August 2017. The stormwater management system included a detention pond referred to as the Marilyn Way Stormwater Pond, which was the detention pond at issue in this case. In 2016, Janet Prchal, Dean Kubas, and Geraldine Kubas, owners of property near the Koch Meadow Hills development, sued the City of Dickinson and KPI for damages, alleging the development of Koch Meadow Hills caused water to drain and collect on their properties. The Prchal lawsuit was settled in September 2018, and the settlement required modifications to be made to the Marilyn Way Stormwater Pond before June 30, 2019. The reconstruction work on the detention pond occurred during the summer and fall of 2019. Toman served a summons and complaint on Koch Construction and Marilyn Koch, to collect unpaid amounts for engineering services Toman provided to the defendants in 2017. Toman filed the complaint in the district court in June 2019. The appellants argued the district court erred in deciding they committed intentional spoliation of evidence and dismissing their counterclaim as a sanction. After review of the district court record, the North Dakota Supreme Court concluded the district court abused its discretion when it dismissed the appellants’ counterclaim as a sanction for spoliation of evidence. Judgment was reversed and the matter remanded for a new trial. View "Toman Engineering Co. v. Koch Construction, et al." on Justia Law

The South Carolina Supreme Court granted review of a court of appeals' decision affirming a trial court's finding that Respondents Fred's, Inc. (Fred's) and Wildevco, LLC (Wildevco) were entitled to equitable indemnification from Petitioner Tippins-Polk Construction, Inc. (Tippins-Polk). Respondent Fred's was a Tennessee corporation that operated a chain of discount general merchandise stores in several states, including South Carolina. Respondent Wildevco is a South Carolina limited liability company that owned a tract of undeveloped commercial property in Williston, South Carolina. In February 2005, Wildevco and Fred's entered into a lease agreement in which Wildevco agreed to construct a 16,000-square-foot commercial space located in Williston, South Carolina, according to Fred's conceptual design specifications. In turn, Fred's agreed to lease the property for ten years. In April 2005, Wildevco entered into a contract with general contractor Tippins-Polk for the construction of the Fred's store and adjoining strip center. Pursuant to the lease agreement between Wildevco and Fred's, Wildevco was the party responsible for "keep[ing] and repair[ing] the exterior of the [] Premises, including the parking lot, parking lot lights, entrance and exits, sidewalks, ramps, curbs," and various other exterior elements. Fred's was responsible for maintenance of the interior of the premises. Five years after the Fred's store opened, on a sunny day in March, Martha Fountain went to the Williston Fred's to purchase light bulbs. Her toe caught the sloped portion of the ramp at the entrance of the store, causing her to trip and fall. Fountain sustained serious injuries to her hand, wrist, and arm and has undergone five surgeries to alleviate her pain and injuries. Fountain and her husband filed a premises liability suit against Fred's and Wildevco, alleging Respondents breached their duty to invitees by failing to maintain and inspect the premises and failing to discover and make safe or warn of unreasonable risks. Pertinent to this appeal, Tippins-Polk argued the court of appeals erred in finding a special relationship existed between it and Fred's and in finding Respondents proved they were without fault as to the Fountain premises liability claim. Because the Supreme Court found Respondents failed to establish they were without fault in the underlying action, judgment was reversed. View "Fountain v. Fred's, Inc., et al." on Justia Law

Panterra GP, a licensed general contractor, sued the defendants, seeking more than $2,609,666 for work it allegedly performed on a construction project. The contract between the parties mistakenly referred to Panterra Development, an entity that is not a licensed contractor. Panterra GP, the general partner in Panterra Development, actually performed the remodeling work at issue. The Bakersfield permit applications, building permits, and certificate of occupancy correctly referred to Panterra GP as the contractor. The action was dismissed without leave to amend, based on Business and Professions Code section 7031(a); the court stated that a party may not rely on equitable principles to reform a contract in order to overcome the failure of the party identified in the construction contract as the contractor to have a valid contractor’s license as required by the statute.The court of appeal vacated. Section 7031(a) has no applicability to claims asserted by Panterra GP because it was licensed as a contractor at all relevant times. The defendants tried to argue, before trial, that Panterra Development was the true contractor, but that contention was untenable at the pleadings stage. Courts may not turn a demurrer into a contested evidentiary matter by determining the “proper interpretation” of the evidence. View "Panterra GP, Inc. v. Superior Court" on Justia Law

William Greenwood was in the business of salvaging valuable materials from old buildings. Greenwood was insured by Mesa Underwriters Specialty Insurance Company through a policy sold by Dixie Specialty Insurance. Greenwood was later sued by adjoining building owners who complained he had damaged their property, and Mesa denied coverage based, in part, on a policy exclusion for demolition work. Greenwood later brought suit against his insurers alleging breach of contract and bad-faith denial of coverage. Greenwood averred that his business was actually “deconstruction” rather than demolition, but the trial court granted summary judgment to the insurers. Finding no reversible error in that judgment, the Mississippi Supreme Court affirmed the trial court. View "Estate of Greenwood v. Montpelier US Insurance Company, et al." on Justia Law

Jeanne and Nevin Tergesen appealed a judgment dismissing their complaint and awarding Nelson Homes, Inc. damages for its breach of contract counterclaim. The Tergesens argued the district court erred in dismissing their rescission and breach of contract claims, and the court erroneously found the Tergesens breached the contract. After review, the North Dakota Supreme Court concluded the district court did not err in dismissing the Tergesens’ claims or finding the Tergesens breached the contract, but the court did err in calculating the amount of prejudgment interest on Nelson Homes’ damages. View "Tergesen, et al. v. Nelson Homes" on Justia Law

Glacier Northwest Inc. claimed the International Brotherhood of Teamsters Local Union No. 174 (Local 174) was liable for concrete product loss during a strike and for an alleged misrepresentation by a union representative that Glacier claims interfered with its ability to service a concrete mat pour. The trial court ruled the strike-related claims were preempted by the National Labor Relations Act (NLRA) and granted summary judgment for Local 174 on the misrepresentation claims. Glacier appealed, and the Court of Appeals reversed on the preemption issue but affirmed the trial court’s dismissal of the misrepresentation claims. The Washington Supreme Court granted review and accepted amicus curiae briefing from the American Federation of Labor and Congress of Industrial Organizations, to address whether an employer’s state tort claims against its truck drivers’ union were preempted by the NLRA, and whether any claims that were not preempted were properly dismissed by the trial court. The Supreme Court concluded the NLRA preempted Glacier’s tort claims related to the loss of its concrete product because that loss was incidental to a strike arguably protected by federal law. The Court also affirmed the dismissal of Glacier’s misrepresentation claims because the union representative’s promise of future action was not a statement of existing fact on which those claims could be properly based, and because the statement was not a proximate cause of Glacier’s losses. View "Glacier Nw., Inc. v. Int'l Bhd. of Teamsters Local Union No. 174" on Justia Law