Justia Construction Law Opinion Summaries

The Homeowners Association alleged that M/I’s subcontractors caused construction defects in a Hanover Park development by using defective materials, conducting faulty workmanship, and failing to comply with building codes. The Association alleged that it would be required to repair the defects and “damage to other property caused by the [d]efects.” M/I demanded a defense from Acuity as the additional insured on a commercial general liability policy that Acuity issued to one of its subcontractors on which M/I was an additional insured. Acuity sought a declaratory judgment, arguing that the complaint failed to allege any “property damage” caused by an “occurrence” as those terms are defined by the policy and interpreted by Illinois law. The circuit court granted Acuity summary judgment.The Illinois Supreme Court held that the allegations sufficiently fall within the initial grant of coverage requirement that there be “property damage” caused by an “occurrence.” The court remanded for further consideration of whether policy exclusion bar coverage. To hold that all construction defects that result in property damage to the completed project are always excluded would mean that the exclusions in the policy related to business risk become meaningless. The business risk exclusions contemplate that some construction defects that result in property damage are covered and some are not, depending on various factors. View "Acuity v. M/I Homes of Chicago, LLC" on Justia Law

Stronghold and the city entered into a 2015 contract to renovate the Monterey Conference Center. Before filing a lawsuit asserting a claim for money or damages against a public entity, the Government Claims Act (Gov. Code 810) requires that a claim be presented to the entity. Without first presenting a claim to the city, Stronghold filed suit seeking declaratory relief regarding the interpretation of the contract, and asserting that the Act was inapplicable.Stronghold presented three claims to the city in 2017-2019, based on its refusal to approve change orders necessitated by purportedly excusable delays. Stronghold filed a fourth amended complaint, alleging breach of contract. The court granted the city summary judgment, reasoning that the declaratory relief cause of action in the initial complaint was, in essence, a claim for money or damages and that all claims in the operative complaint “lack merit” because Stronghold failed to timely present a claim to the city before filing suit.The court of appeal reversed. The notice requirement does not apply to an action seeking purely declaratory relief. A declaratory relief action seeking interpretation of a contract is not a claim for money or damages, even if the judicial interpretation sought may later be the basis for a separate claim for money or damages which would trigger the claim presentation requirement. View "Stronghold Engineering, Inc. v. City of Monterey" on Justia Law

McMurray Contracting, LLC ("McMurray"), appealed a circuit court's denial of its second motion to compel arbitration of this case commenced by Kenneth Hardy and his wife Helen Hardy. The Hardys filed suit in December 2022 alleging they "retained" McMurray to perform restoration work to their house damaged in Hurricane Sally. The Hardys specifically alleged that McMurray "did not complete all restoration work in a good and workmanlike manner, and has refused to correct numerous deficiencies through [the Hardys'] property," and that McMurray "performed work and charged for materials that were never approved." The Alabama Supreme Court found McMurray's notice of appeal was not timely filed so as to invoke the Supreme Court's jurisdiction. Accordingly, it dismissed McMurray's appeal. View "McMurray Contracting, LLC v. Hardy" on Justia Law

In consolidated appeals, the City of Orange Beach ("the City") appealed a judgment entered in favor of Ian Boles in regard to a dispute over the City's inspection of Boles' property. Between 2013 and 2015 Boles constructed two eight-bedroom duplexes on property he owned located within the City limits ("the beachfront property"). In September 2015, Boles filed a building-permit application seeking a permit to construct two additional multiple-level duplexes on the beachfront property. Additionally, in October 2015, Boles filed a separate building-permit application for the construction of a single-family dwelling on another parcel of property that Boles owned within the City limits ("the Burkhart Drive property"). At the time of each permit request, Boles completed a "Home Builders Affidavit" attesting that he was the owner of the property; that he would be acting as his own contractor on the proposed project, which would not be offered for sale; and that he was, thus, exempt from the requirement that he be licensed under Alabama's Home Builders Licensure Law. The building-permit packages provided to Boles explained that a certificate of occupancy for the proposed structure would not be issued until, among other things, "a subcontractor list has been submitted to the [City's] Finance Department." Boles also received with each package a blank subcontractor form for identifying all subcontractors for the proposed project, which specified that it was due within 10 days of the issuance of the building permits. Boles proceeded with construction on the two properties without completing or returning the subcontractor form for either property. Boles's electrical subcontractor apparently contacted the City to request an electrical meter-release inspection upon completion of the electrical portion of that project; the City refused. Boles contended the City either lacked the authority to and/or were exceeding their authority in refusing to inspect the beachfront property until the City received information to which, according to Boles, it was not entitled. The Alabama Supreme Court concluded the trial court erred both in submitting Boles's damages claims to a jury and in denying the City's motion seeking a judgment as a matter of law. The trial court's judgment was reversed, and these matters were remanded for further proceedings. View "City of Orange Beach v. Boles." on Justia Law

Baldwin County Bridge Company, LLC ("BCBC"), filed suit against John Cooper in his official capacity as Director of the Alabama Department of Transportation ("ALDOT"), seeking to halt construction of a bridge that ALDOT had hired Scott Bridge Company, Inc. ("Scott Bridge"), to build over the Intracoastal Waterway in Baldwin County. That lawsuit spawned three matters before the Alabama Supreme Court. In the first, Cooper sought mandamus relief because the trial court entered an order compelling him to respond to certain discovery requests made by BCBC; he argued the information sought was protected from disclosure by the executive-privilege doctrine. On Cooper's motion, the Supreme Court stayed enforcement of the trial court's discovery order to allow the Court to consider Cooper's privilege argument. Meanwhile, the trial-court proceedings continued and, before the Supreme Court was able to rule on Cooper's mandamus petition, the trial court granted BCBC's motion for a preliminary injunction to halt construction of the bridge. Cooper appealed that injunction, arguing that it was unwarranted and that the $100,000 preliminary-injunction bond put up by BCBC was insufficient. Scott Bridge filed its own appeal challenging the preliminary injunction, while also arguing that the trial court erred by dismissing it from the case and by stating that it was not entitled to the protection of an injunction bond. After reviewing the briefs submitted by the parties in all three of these matters, the Supreme Court concluded BCBC's claim on which the preliminary injunction was based was barred by State immunity. Accordingly, the trial court had no subject-matter jurisdiction over that claim and the preliminary injunction had to be reversed. Although the Court ruled in favor of Cooper on this point, it nevertheless rejected his companion argument that the trial court should have been directed to increase the $100,000 preliminary-injunction bond on remand. The Court also rejected Scott Bridge's argument that that it was entitled to recover on the preliminary-injunction bond. Finally, because the discovery that Cooper sought to withhold based on executive privilege was being sought in conjunction with the claim that is barred by State immunity, the trial court's order compelling Cooper to produce that information was moot, as was Cooper's petition challenging that order. View "Ex parte Alabama Department of Transportation" on Justia Law

MSE Building Company, Inc. ("MSE") appealed the grant of summary judgment entered in favor of The Stewart/Perry Company ("Stewart/Perry"); Buc-ee's, Ltd., and Buc-ee's Alabama II, LLC (referred to collectively as "Buc-ee's"); and Philadelphia Indemnity Insurance Company ("Philadelphia"). Among other things, the trial court found MSE's claims against the defendants were unenforceable because MSE had violated § 34-8-1 et seq., Ala. Code 1975, which regulated contractors, by utilizing unlicensed sub-subcontractors in connection with a construction project. After review, the Alabama Supreme Court reversed summary judgment insofar as it determined that MSE's claims were barred as a matter of law under § 34-8-1 because there were material issues of disputed fact regarding whether the labor brokers utilized by MSE were required to obtain a general contractor's license under § 34-8-1. Accordingly, the summary judgment on MSE's lien claim and prompt-payment claim was also reversed. The summary judgment on MSE's negligence claim against Buc-ee's was affirmed. In addition, the summary judgment was affirmed insofar as it was entered in favor of Stewart/Perry on MSE's claims of unjust enrichment and quantum meruit, because MSE did not challenge the judgment on those claims in its appellate brief. View "MSE Building Company, Inc v. The Stewart/Perry Company, et al." on Justia Law

Construction firm Brasfield & Gorrie, LLC, received the prime contract to expand the University of Mississippi Medical Center Children’s Hospital in 2017. Electrical contractor McInnis Electric Company secured the winning bid to install the electrical and low voltage systems package for the project and subsequently signed a subcontract with Brasfield & Gorrie. Terms of the subcontract incorporated the prime contract, which were related to the same project by reference. The contract provided that work was set to begin on the project on February 15, 2018. However, McInnis, was directed not to report on site until June 4, 2018, and, due to delays, was unable to begin until July 23, 2018. As work progressed, the schedule allegedly became delayed as a result of Brasfield & Gorrie’s failure to coordinate the work of the various subcontractors. McInnis averred that Brasfield & Gorrie’s failure to coordinate and facilitate the work of the various subcontractors worsened as the project progressed, and Brasfield & Gorrie experienced turnover in management. This failure allegedly delayed McInnis’s work, which was not on the path toward completion, supposedly through no fault of its own. Construction issues were amplified when on March 11, 2020, Mississippi experienced its first reported case of COVID-19. On April 1, 2020, the Mississippi Governor instituted a shelter in place order in response to the ongoing pandemic, requiring certain nonessential businesses to close and recommending social distancing to reduce the spread of the coronavirus in Mississippi. The children’s hospital was not classified as an existing infrastructure as it was a nonoperational work in progress and thus was not subject to the executive order’s exception to the governmental shutdowns. By May 8, 2020, McInnis had suffered an approximately 40 percent loss in its workforce due to employees testing positive for COVID-19. Despite the decrease in the available workforce, Brasfield & Gorrie demanded McInnis perform under its contractual obligation. McInnis took measures to continue the work. Brasfield & Gorrie further declined requests for accommodation and instead terminated McInnis on May 13, 2020. The case before the Mississippi Supreme Court here stemmed from disagreements and a broken contract between the parties, contesting whether arbitration was appropriate to settle their disputes. The trial court compelled arbitration, and the Supreme Court affirmed. View "McInnis Electric Company v. Brasfield & Gorrie, LLC et al." on Justia Law

In 2018, Kousisis and Alpha Painting were convicted of conspiracy to commit wire fraud, 18 U.S.C. 1349, and three counts of wire fraud, 18 U.S.C. 1343. The charges arose from false documents filed concerning “disadvantaged business enterprise” status in transportation construction projects for which the U.S. Department of Transportation provided funds through the Federal Highway Administration to the Pennsylvania Department of Transportation. The district court imposed a 20-point sentencing enhancement under U.S.S.G. 2B1.1(b)(1), which corresponds to a loss of $9.50 million-$25 million, noting that the actual loss to the government was not measurable at the time of sentencing and concluding that Alpha’s “ill-gotten profits” represented an appropriate measure of loss.The Third Circuit affirmed the convictions. The defendants secured PennDOT’s money using false pretenses and the value PennDOT received from the partial performance of those painting and repair services is no defense to criminal prosecution for fraud. The court vacated the calculation of the amount of loss for sentencing purposes, noting the extreme complexity of the case. The victim’s loss must have been an objective of the fraudulent scheme; it is insufficient if that loss is merely an incidental byproduct of the scheme. The court separately vacated a forfeiture order of the entire profit amount on the contracts. View "United States v. Alpha Painting & Construction Co., Inc." on Justia Law

In 2018, the Plaintiffs each purchased real estate in Cleveland, planning to rehabilitate and redevelop the properties. Before those purchases, Cleveland declared the buildings on the properties public nuisances, condemned them, and ordered that they be demolished. Following the purchases, and after the Plaintiffs invested time and resources into renovating the buildings, Cleveland authorized private contractors to demolish them. After the demolition of the buildings, the Plaintiffs sued, arguing that the demolitions violated state laws and federal constitutional provisions. The district court granted the defendants summary judgment on the constitutional claims and declined to exercise supplemental jurisdiction over the state law claims.The Sixth Circuit affirmed. Each Plaintiff received “notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” After their purchases, Cleveland sent “new owner letters” via certified mail both to the property address and to each Plaintiff's statutory agent, including both the notice of condemnation and demolition order. Neither Plaintiff applied for required rehabilitation permits. View "First Floor Living LLC v. City of Cleveland, Ohio" on Justia Law

The Supreme Court reversed the decision of the court of appeals reversing the conclusion of the trial court that Plaintiff failed to establish Defendant's requisite minimum contacts with Tennessee, and thus the court lacked personal jurisdiction over Defendant with respect to Plaintiff's suit, holding that the trial court correctly dismissed Plaintiff's complaint.Plaintiff, a Tennessee resident, hired Defendant, an Alabama corporation with its principal place of business in Alabama, to build a house on a parcel of land in Alabama. Upon becoming dissatisfied with the quality and expense of the construction work Plaintiff filed suit in the Davidson County Chancery Court. The trial court granted Defendant's motion to dismiss for lack of jurisdiction, concluding that Defendant's contacts with Tennessee were minor and attenuated. The court of appeals reversed. The Supreme Court reversed, holding that Plaintiff failed to establish a prima facie case of the minimum contacts necessary for a Tennessee court to exercise specific personal jurisdiction over Defendant. View "Baskin v. Pierce & Allred Construction, Inc." on Justia Law