Justia Construction Law Opinion Summaries

Real parties filed an action against the builders of their homes for recovery of damages allegedly resulting from defects in the construction of the homes. Petitioners moved to stay the litigation until real parties complied with the statutory nonadversarial prelitigation procedures of the “Right to Repair Act”, Cal. Civil Code 895 et seq., which applies to construction defect litigation involving certain residential construction. After the trial court denied the stay, petitioner sought a writ of mandate compelling the trial court to vacate its order denying the motion and enter a new order granting the stay as requested. The court concluded that, in light of petitioner's showing that at least one court in this district reached the opposite result in a situation similar to that before the trial court here, and the presentations of amici curiae indicating the issues are of widespread interest in the building industry, the case is not moot. The court also concluded that petitioner is entitled to a stay of the action because real parties did not comply with the requirements of Chapter 4 and accommodate petitioner’s absolute right to attempt repairs. Accordingly, the court granted the writ. View "McMillin Albany LLC v. Super. Ct." on Justia Law

The Judicial Council of California, (JCC) entered into a contract with Jacobs Facilities, a wholly owned subsidiary of Jacobs. Performance of the contract required a license under the Contractors’ State License Law. Facilities was properly licensed when it commenced work. Later, Jacobs, as part of a corporate reorganization, transferred the employees responsible for the JCC contract to another subsidiary and caused the new subsidiary to obtain a contractor’s license, while permitting the Facilities license to expire. Facilities remained the signatory on the JCC contract until a year later, when the parties entered into an assignment to the new, licensed subsidiary. JCC sued under Bus. & Prof. Code 7031(b), which requires an unlicensed contractor to disgorge its compensation. Defendants contended that Facilities had “internally” assigned the contract to the new subsidiary prior to expiration of its license; JCC ratified the internal assignment when it consented to the assignment to the new subsidiary; and Facilities had “substantially complied” with the law. After the jury found for defendants on the other defenses, the substantial compliance issue was not decidedd. The court of appeal reversed, concluding Facilities violated the statute when it continued to act as the contracting party after its license expired, and remanded for a hearing on substantial compliance. View "Judicial Council of Cal. v. Jacobs Facilities, Inc." on Justia Law

Dunnet, a highway construction company, is prequalified to bid and work on Illinois Department of Transportation (IDOT) projects and competes for federally assisted highway construction contracts. Dunnet is owned and controlled by two white males. Between 2007 and 2009, its average annual gross receipts were over $52 million. To receive federal-aid funds for highway contracts, IDOT must have a “disadvantaged business enterprise” (DBE) participation program. A DBE is a for-profit small business concern that is at least 51% owned and controlled by one or more socially and economically disadvantaged individuals. There is a rebuttable presumption that women and members of racial minority groups are socially and economically disadvantaged, but an individual owner of any race or gender may qualify as “socially and economically disadvantaged.” A firm is not an eligible DBE if the firm (including affiliates) has had average annual gross receipts over its previous three fiscal years, greater than $22.41 million. Illinois has not met its DBE participation goals. Dunnet was denied a goal waiver and was not awarded a major expressway project. The Seventh Circuit affirmed summary judgment rejecting Dunnet’s claim that IDOT’s DBE Program discriminates on the basis of race, concluding that Dunnet lacked standing to raise an equal protection challenge based on race and that the Program survived the constitutional and other challenges. View "Dunnet Bay Constr. Co. v. Borggren" on Justia Law

Electrical Wholesale Supply Co. (EWS) filed this action seeking payment for electrical materials it supplied to a commercial building remodel. EWS sued, among other defendants, Alane Fraser, the owner of the commercial property, and M.J. Bishop Concrete & Construction, Inc. (Bishop Construction), the general contractor, for foreclosure of a construction lien, breach of contract, unjust enrichment, and third party beneficiary. The circuit court denied EWS’s claims. The district court affirmed. The Supreme Court affirmed in part, reversed in part, and remanded, holding that the circuit court (1) applied the wrong statute to the lien notice issue and erred by granting summary judgment in favor of Fraser on the lien claim; but (2) did not err in concluding that EWS did not prove its unjust enrichment claim against Fraser and Bishop Construction. View "Elec. Wholesale Supply Co., Inc. v. Fraser" on Justia Law

Plaintiff filed suit challenging the religious exemption in the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119, as an unconstitutional establishment of religion. Plaintiff also argued that the Administration’s decision to temporarily suspend enforcement of some of the Act’s requirements for a transitional period deprived him of the equal protection of the laws. The district court granted the government's motion to dismiss and held that plaintiff lacked standing to bring either claim. The court agreed with the district court that plaintiff lacks standing to assert his equal protection claim because nothing in the transitional policy requires him to buy insurance. In this case, plaintiff's inability to maintain his old plan was the independent choice of his insurer. The court concluded, however, that plaintiff did have standing to bring his Establishment Clause challenge. On the merits, the court concluded that the claim fails because the qualifications for exemption are not drawn on sectarian lines. Rather, they simply sort out which faiths have a proven track record of adequately meeting the statutory goals. Moreover, the exemption promotes the Establishment Clause’s concerns by ensuring that those without religious objections do not bear the financial risk and price of care for those who exempt themselves from the tax. As configured by this specific statutory framework, that is an objective, non-sectarian basis for cabining the exemption’s reach. View "Cutler v. HHS" on Justia Law

An insolvent subcontractor failed to pay its sub-subcontractor, and the sub-subcontractor sought payment directly from the general contractor through arbitration. The general contractor declined to participate. The arbitrator awarded damages to the sub-subcontractor, who filed an action to confirm the award with the superior court. The sub-subcontractor also brought a negligence claim, contending that the general contractor knew of its subcontractor's financial instability and negligently failed to ensure that the sub-subcontractor would be paid. The superior court granted summary judgment to the general contractor on both the enforceability of the arbitration award and the viability of the negligence claim. The sub-subcontractor then appealed. After review, the Supreme Court affirmed, finding that the superior court correctly decided that whether the general contractor effectively exercised its contractual right to decline arbitration is an issue of arbitrability, and that the general contractor had no extra-contractual duty in tort to guarantee its subcontractor's payment obligations. View "GeoTek Alaska, Inc., v. Jacobs Engineering Group, Inc." on Justia Law

This case arose from a dispute over the adequacy of concrete work Nordic PCL Construction, Inc. performed on a condominium construction project as a subcontractor to LPIHGC, LLC. The parties proceeded to arbitration. An arbitrator selected by the parties issued an arbitration award in favor of LPIHGC. LPIHGC moved to confirm, and Nordic moved to vacate, the arbitration award. The circuit court denied the motion to vacate and granted the motion to confirm. The Intermediate Court of Appeals (ICA) vacated the arbitration award on the grounds that the arbitrator failed to disclose various relationships with the law firms of LPIHGC’s attorneys. The Supreme Court vacated the ICA’s judgment on appeal and the circuit court’s final judgment, thereby vacating the associated orders granting LPIHGC’s motion to confirm the arbitration award and denying Nordic’s motion to vacate the arbitration award, holding that because the factual and/or legal bases upon which the circuit court denied the motion to vacate were unascertainable, the Supreme Court was unable to appropriately review the circuit court’s ruling. Remanded for an evidentiary hearing and entry of findings of fact and conclusions of law on Nordic’s motion to vacate. View "In re Arbitration of Nordic PCL Constr., Inc. v. LIPHGC, LLC" on Justia Law

Duit, an Oklahoma highway contractor, contracted with the Arkansas State Highway and Transportation Department (ASHTD) to reconstruct I-30 between Little Rock and Benton. Duit encountered soil conditions that, it alleges, differed materially from information provided by the ASHTD during bidding. Duit’s claims for compensation were denied by the ASHTD, the Arkansas State Claims Commission, and the General Assembly. Duit sued under 42 U.S.C. 1983, citing the “in re Young” exception to Eleventh Amendment immunity. Duit alleged violations of the Federal Aid Highway Act, 23 U.S.C. 101, and the Due Process and Equal Protection clauses and sought to “enjoin Defendants from accepting federal aid … until . . . they fully comply with the federally mandated differing site clause.” The court dismissed the FAHA claim because that statute is enforced exclusively by an executive agency, dismissed the due process claim because Duit’s interest in future highway contracts is not a protected property interest and because the state appeals process for claim denials satisfies procedural due process requirements. The court declined to dismiss the equal protection claim, concluding Duit sufficiently alleged that the Commission treated out-of-state-contractor Duit differently from similarly situated in-state contractors without a rational reason. The Eighth Circuit held that Duit lacks standing to bring its equal protection claim and that the court erred in not dismissing that claim. View "Duit Constr. Co. Inc. v. Bennett" on Justia Law

Plaintiffs, property owners, entered into an oral contract with Defendant, a construction firm, for the assembly of a prefabricated house on a lot that they owned. The parties subsequently entered into a second oral agreement for the assembly of a smaller and cheaper home. Defendant failed to complete construction of Plaintiffs’ home as agreed. Citing diversity of citizenship, Plaintiffs filed suit in federal district court alleging breach of contract. Defendant counterclaimed for breach of contract. The jury found Defendant to have defaulted on its contractual obligations and awarded $150,000 in damages. Defendant appealed, challenging the sufficiency of the evidence. The First Circuit affirmed, holding that it could not be said that no rational jury could have found in favor of Plaintiffs. View "Magee v. BEA Constr. Corp." on Justia Law

The predecessor in interest to dck Worldwide Holdings, Inc. (together, Worldwide) entered into a contract with Spanish Peaks Lodge, LLC to serve as the general contractor for for a construction project. Spanish Peaks procured financing with the predecessor in interest to CH SP Acquisition LLC (together, CHSP), and CHSP took a mortgage against Spanish Peaks’ development property. When Spanish Peaks breached the parties’ contract Worldwide filed a construction lien claiming the unpaid portion of the contractor’s fee and the amount Worldwide owed to a subcontractor, Allied Steel, Inc. Allied Steel also filed a construction lien for unpaid services and materials. Allied Steel, Spanish Peaks, and Worldwide entered into a settlement agreement, and CHSP and Worldwide reached a partial settlement under which Worldwide released all of its claims against CHSP except for those at issue on appeal. The district court concluded that the unpaid portion of the contractor’s fee and the subcontractor’s fee were both secured by Worldwide in the amount of $5,476,277 and $661,767, respectively, and lienable as a matter of law. The Supreme Court reversed, holding that the district court (1) erred by concluding that the unpaid portion of the contractor’s fee was lienable; and (2) erred by concluding that the subcontractor’s fee remained alienable after Allied Steel settled its claim. View "dck Worldwide Holdings Inc. v. CH SP Acquisition LLC" on Justia Law