Justia Construction Law Opinion Summaries
Articles Posted in Construction Law
Delaware River Joint Toll Bridge Commission v. George Harms Construction Co., Inc.
The Delaware River Joint Toll Bridge Commission (Commission), a bi-state entity created by an interstate compact between New Jersey and Pennsylvania, sought to replace the I-95 Scudder Falls Bridge. The Commission decided to use a Project Labor Agreement (PLA) for the project, which required contractors to hire at least 75% of their workforce from specified local unions. George Harms Construction Company, Inc. (Harms), which had a collective bargaining agreement with a different union, challenged the PLA, arguing it was unlawful because it excluded their union.The trial court denied Harms' request for a preliminary injunction and dismissed Harms' counterclaims, ruling that New Jersey’s competitive bidding laws did not apply to the Commission. However, it also dismissed the Commission’s complaint, stating the lawsuit was not properly authorized by the Commission as a whole. The Appellate Division affirmed the dismissal of the Commission’s complaint but reversed the dismissal of certain counterclaims, concluding that the Commission lacked authority to use a PLA because New Jersey and Pennsylvania did not have complementary or parallel laws on PLAs.The Supreme Court of New Jersey reversed the Appellate Division’s judgment. It held that the plain language of the Compact authorizes the Commission to require the use of a PLA in a publicly bid construction project. The Court found that the Commission’s broad powers under the Compact include the authority to use PLAs, even though the Compact does not explicitly mention them. The Court also determined that the Appellate Division erred in looking beyond the Compact to state laws that do not mention the Commission. The case was remanded for further proceedings consistent with this opinion. View "Delaware River Joint Toll Bridge Commission v. George Harms Construction Co., Inc." on Justia Law
Keiland Construction v. Weeks Marine
Keiland Construction, L.L.C. entered into a construction subcontract with Weeks Marine, Inc. for a project in Louisiana. Weeks terminated the contract for convenience, leading to a dispute over compensation. Keiland submitted pay applications and demobilization costs, which Weeks partially paid. The disagreement centered on whether the contract required lump-sum payments for work completed before termination or if it converted to a cost-plus basis upon termination.The United States District Court for the Western District of Louisiana held a bench trial and found the contract ambiguous. It construed the ambiguity against Keiland, the drafter, and ruled in favor of Weeks. The court awarded Keiland damages based on Weeks’s interpretation of the contract but denied Keiland’s claims for direct employee and demobilization costs. The court also awarded Weeks attorneys’ fees and costs, though less than requested, and denied Weeks’s motion for post-offer-of-judgment fees and costs.The United States Court of Appeals for the Fifth Circuit reviewed the case. It affirmed the district court’s findings, agreeing that the contract was ambiguous and that the ambiguity should be construed against Keiland. The appellate court upheld the district court’s rulings on damages, attorneys’ fees, and costs, including the denial of post-offer-of-judgment fees and costs. The court also affirmed the award of prejudgment interest to Keiland, finding no abuse of discretion.In summary, the Fifth Circuit affirmed the district court’s judgment in all respects, including the interpretation of the contract, the award of damages, attorneys’ fees, costs, and prejudgment interest. View "Keiland Construction v. Weeks Marine" on Justia Law
El-Jamaly V Kirco Manix Construction Llc
The plaintiff, an employee of a subcontractor, was electrocuted while carrying a long-handled aluminum tool at a construction site. The tool either touched or came close to a high-voltage power line owned by the defendant utility company. The plaintiff sustained severe injuries, including amputations and a traumatic brain injury. He filed a lawsuit against the general contractor and the utility company, alleging negligence and premises liability.The Wayne Circuit Court denied the defendants' motions for summary disposition. The Michigan Court of Appeals reversed, holding that the general contractor was not liable under the common work area doctrine and that the utility company did not owe a duty of care to the plaintiff. The plaintiff sought leave to appeal to the Michigan Supreme Court.The Michigan Supreme Court held that the plaintiff presented sufficient evidence to survive summary disposition. The court found genuine issues of material fact regarding three of the four elements of the common work area doctrine for the general contractor. Specifically, there were factual disputes about the height of the power lines and whether the general contractor took reasonable steps to guard against the danger. The court also found that multiple subcontractors were exposed to the risk, satisfying the requirement of a high degree of risk to a significant number of workers in a common work area.Regarding the utility company, the court found genuine issues of material fact about whether the power lines were properly maintained and whether the injury was foreseeable. The court concluded that the utility company had a duty to ensure the safety of the power lines, given the pre-injury communications and the known dangers of high-reaching conductive tools.The Michigan Supreme Court reversed the Court of Appeals' decision and remanded the case to the trial court for further proceedings. View "El-Jamaly V Kirco Manix Construction Llc" on Justia Law
Lithko Contracting v. XL Insurance America, Inc.
A commercial tenant and landlord entered into a contract for the construction and lease of a warehouse, with the landlord also acting as the general contractor. The contract included a waiver of subrogation, where both parties waived subrogation against each other for certain losses, including those caused by their subcontractors. After the warehouse sustained weather damage, the tenant’s insurer sought to recoup insurance payments by suing the subcontractors.The Circuit Court for Baltimore City granted summary judgment in favor of the subcontractors, concluding that they were intended beneficiaries of the waiver of subrogation in the contract between the tenant and landlord. The court did not consider any extrinsic evidence regarding the parties' intent. The Appellate Court of Maryland reversed this decision, finding that the waiver of subrogation in the contract did not unambiguously benefit the subcontractors and that the subcontractors were not intended third-party beneficiaries.The Supreme Court of Maryland reviewed the case and held that the waiver of subrogation in the contract between the tenant and landlord did not extend to the subcontractors. The court found that the language of the waiver was unambiguous and did not show an intent to benefit the subcontractors. However, the court found that the waiver of subrogation included in the subcontracts was ambiguous regarding whether it applied to the tenant’s insurer’s claims against the subcontractors. Therefore, the court held that extrinsic evidence was needed to determine the parties' intent regarding the scope of the subrogation waiver in the subcontracts.The Supreme Court of Maryland affirmed the Appellate Court's decision, reversing the Circuit Court's summary judgment in favor of the subcontractors, and remanded the case for further proceedings to consider extrinsic evidence. View "Lithko Contracting v. XL Insurance America, Inc." on Justia Law
SR Construction v. RE Palm Springs II
The case revolves around a dispute between SR Construction (SRC), a construction company, and RE Palm Springs II, L.L.C. (RPS), a company formed to take title to a hotel property. SRC was hired to build a hotel in California but was terminated before completion, leaving it with a demand for $14 million in unpaid work. After several failed attempts to recover its dues, SRC held onto certain personal property left over from the hotel project. The bankruptcy court ordered SRC to turn over the personal property, which SRC appealed.The lower courts had a series of interactions with this case. The bankruptcy court initially ordered SRC to turn over the personal property. SRC appealed this decision, challenging the bankruptcy court's power to order the turnover and the validity of the most recent hotel owner's claim to the personal property. The district court affirmed the bankruptcy court's decision, concluding that the bankruptcy court had jurisdiction to interpret and enforce the Sale Order. It also affirmed the bankruptcy court's conclusion that Hall had obtained title to the Personal Property and had not waived its right to the Personal Property by taking it "as is."The United States Court of Appeals for the Fifth Circuit affirmed the lower courts' decisions. The court concluded that the bankruptcy court's order was part of its undisputed power to order the sale of a bankruptcy debtor's assets. It also rejected SRC's arguments about ownership of the assets in this case. The court found that the bankruptcy court had jurisdiction to enter the Turnover Order because that order interpreted and enforced the Sale Order. It also concluded that because the Turnover Order is integral to and inseparable from RPS's bankruptcy, it is a core matter. Therefore, issuing the Turnover Order was entirely within the bankruptcy court's authority. The court also affirmed the conclusion that title to the Personal Property passed from SRC to Palm Springs, then to RPS, and finally to Hall. View "SR Construction v. RE Palm Springs II" on Justia Law
Busher v. Cook
The case involves a class action lawsuit brought by homeowners in the Falcon Ridge subdivision in Billings, Montana, against Buscher Construction and Development, Inc., and other related entities and individuals (collectively referred to as the "Buschers"). The homeowners alleged that the Buschers negligently designed and developed the subdivisions, failed to construct homes to mitigate against the possibility of differential settlement on hydro-collapsible soils, and failed to disclose material adverse facts known to them as the original owners of all the lots within the subdivision.The District Court of the Thirteenth Judicial District, Yellowstone County, certified the class action. The Buschers appealed this decision, arguing that the proposed class did not satisfy the prerequisites for class certification under Montana Rule of Civil Procedure 23(a) and that the court abused its discretion by certifying the class under Rule 23(b)(3).The Supreme Court of the State of Montana affirmed the lower court's decision. The court found that the proposed class satisfied the commonality and typicality requirements of Rule 23(a). The court also found that the class action was superior to other methods for fairly and efficiently adjudicating the controversy, as required by Rule 23(b)(3). The court concluded that the homeowners' claims were not dependent upon individual conduct but on the Buschers' alleged uniform negligence. The court also noted that the lower court has the discretion to revisit certification if class claims no longer predominate as the case proceeds. View "Busher v. Cook" on Justia Law
United States v. Vinas
The case revolves around Agustin Vinas, who was convicted under 18 U.S.C. § 1958 for attempting to hire a hitman to murder a contractor and his business partner. Vinas, a subcontractor, claimed that the contractor owed him $8,500 for construction work and had threatened to harm him and his family when he tried to collect the debt. Vinas was arrested after a series of meetings with an undercover law enforcement officer posing as a hitman. He pleaded guilty to using facilities of interstate commerce in the commission of murder-for-hire, and the government agreed to dismiss the second count related to interstate travel in the commission of murder-for-hire.The District Court for the District of Rhode Island sentenced Vinas to time served, which amounted to nearly two years in pretrial detention. The government had recommended a sentence of ten years' imprisonment, arguing that a substantial sentence was necessary for specific and general deterrence. However, the defense argued for a sentence of time served, citing Vinas's attempts to peacefully collect the debt, the threats he received from the contractor, his mental health issues, and his efforts towards rehabilitation while in pretrial custody.The government appealed the sentence to the United States Court of Appeals for the First Circuit, arguing that the sentence was substantively unreasonable given the seriousness of the crime. The government also contended that the District Court had categorically refused to consider general deterrence and had created a disparity with defendants in other cases who were given longer sentences for the same statutory violation. The Court of Appeals affirmed the District Court's decision, finding that the sentence was within the expansive universe of reasonable sentences and that the District Court had adequately considered the sentencing factors set forth in 18 U.S.C. § 3553(a). The Court of Appeals also found that the government had not preserved its arguments regarding general deterrence and sentencing disparity, and that these arguments did not meet the plain error standard. View "United States v. Vinas" on Justia Law
CBRE v. Superior Court of San Diego County
The case involves a worker, Jake Johnson, who was injured while working as an electrician on a construction project managed by CBRE and owned by Property Reserve, Inc. (PRI). Johnson was employed by PCF Electric, a subcontractor hired by Crew Builders, the general contractor for the project. Johnson filed a complaint against CBRE, PRI, Crew, and PCF for damages. CBRE and PRI moved for summary judgment based on the Privette doctrine, which generally protects entities that hire independent contractors from liability for injuries sustained by the employees of the independent contractor. The trial court denied the motion, finding a triable issue of fact as to when CBRE and PRI hired Crew for the project.The Court of Appeal, Fourth Appellate District, Division One, State of California, disagreed with the trial court's decision. The appellate court found that a written contract was not required to invoke the Privette doctrine, and the undisputed facts established that CBRE and PRI delegated control over the tenant improvements to Crew prior to Johnson’s injury. The court also found that no exception to the Privette doctrine applied. The court concluded that because no triable issues of material fact precluded summary judgment, CBRE and PRI were entitled to relief. The court ordered the trial court to vacate its previous order and enter a new one granting summary judgment to CBRE and PRI. View "CBRE v. Superior Court of San Diego County" on Justia Law
Pinkham v. Plate
The case involves Scott and Natalie Pinkham, who contracted with Three Peaks Homes, LLC, for the construction of a custom home. The construction did not go as planned and the contract was terminated before the home was completed. Three Peaks subsequently filed two $600,000 mechanics’ liens against the Pinkhams’ home. The Pinkhams then filed a complaint against David Plate, Rebeccah Jensen, Three Peaks, Rebel Crew Construction, LLC, and Legacy Management Enterprises, LLC, asserting several causes of action.The district court denied the Pinkhams’ motion for summary judgment. Later, the Pinkhams’ attorney, Lance Schuster, filed a motion to withdraw as counsel for Plate, Jensen, Three Peaks, and Legacy, which the court granted. The court ordered Appellants to appoint another attorney or appear in person within twenty-one days of service of the order, failing which, the court may enter default judgment against them. The court clerk served a copy of the withdrawal order on Appellants via first class mail.The Pinkhams moved for the entry of default and default judgment against Appellants and for dismissal of Appellants’ counterclaims with prejudice. The district court granted the Pinkhams’ motion without a hearing. Appellants later secured new counsel and filed a motion to set aside the default and default judgment under Idaho Rule of Civil Procedure 60(b)(1), (4), and (6). The district court denied Appellants’ motion.On appeal, the Supreme Court of the State of Idaho affirmed the district court’s decision denying the motion to set aside the default and default judgment. The court held that the district court did not err in concluding that Appellants failed to demonstrate good cause to set aside the entry of default. The court also held that Appellants have failed to establish a right to relief under Rule 60(b). The court declined to award attorney fees on appeal. View "Pinkham v. Plate" on Justia Law
Lusardi Construction Co. v. Dept. of Industrial Rel.
The case involves Lusardi Construction Company (Lusardi), a prime contractor, and its subcontractor, Pro Works Contracting Inc. (Pro Works). Pro Works violated certain Labor Code provisions by failing to hire apprentices for a construction project. The Department of Industrial Relations and the Division of Labor Standards Enforcement (DLSE) cited Pro Works for these violations and ordered Lusardi to pay penalties. Lusardi's administrative appeal was unsuccessful, and it subsequently filed a petition for writ of administrative mandamus, which the superior court denied. Lusardi argued that the superior court erroneously concluded that it knew of Pro Works's violations and that the joint and several liability provision applied.The Superior Court of San Diego County affirmed the DLSE's decision, concluding that Lusardi had knowledge of Pro Works's violations and was liable for the penalties. The court also found that substantial evidence supported the findings relating to the amount of the penalty assessment. The court rejected Lusardi's claim of due process violations, stating that Lusardi was put on notice of the potential for being held jointly and severally liable for Pro Works’s apprentice hiring violations.The Court of Appeal, Fourth Appellate District Division One State of California affirmed the lower court's decision. The court held that the superior court did not err in interpreting the statute, which provides two inclusive and alternative ways for imposing liability on a prime contractor for penalties resulting from the subcontractor’s violations. The court also found that substantial evidence supported the penalty imposed. The court concluded that Lusardi was not denied due process when it refused to enforce its subpoena or ask for a continuance to secure the witness’s attendance. View "Lusardi Construction Co. v. Dept. of Industrial Rel." on Justia Law