Justia Construction Law Opinion Summaries

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

The Supreme Court reversed the judgment of the court of appeals as to the applicability of the economic loss doctrine in this case, holding that the economic loss doctrine applies only in products liability cases and should not be expanded to apply outside the products liability context.In the underlying suit brought by a drywall subcontractor against a general contractor under theories of breach of contract and tort a jury awarded compensatory and punitive damages to the subcontractor. The court of appeals affirmed in part the award of compensatory damages for breach of contract, dismissed the tort claim, and reversed the award for punitive damages, holding that the economic loss doctrine applied outside the products liability context when the contract was negotiated between sophisticated commercial entities. The Supreme Court reversed, holding (1) the economic loss doctrine only applies in products liability cases and should not be extended to other claims; and (2) the economic loss doctrine did not bar the subcontractor's recovery of compensatory and punitive damages based on its tort claim. View "Commercial Painting Co. v. Weitz Co., LLC" on Justia Law

The Supreme Court reversed in part and remanded in part the judgment of the circuit court determining that Tom Smith Masonry had a valid mechanic's lien for the unpaid balance due under a construction contract with WIPI Group USA, Inc., holding that the circuit court erred in denying Smith Masonry a judgment of foreclosure on the mechanic's lien for the full amount of the recorded lien.Smith Masonry instituted a mechanic's lien foreclosure action against WIPI seeking to recover unpaid balance due under the parties' construction contract and an award of attorney fees. WIPI counterclaimed for breach of contract. The circuit court ultimately denied both parties relief, determining that Smith Masonry had a valid mechanic's lien for the unpaid contract balance but that WIPI was entitled to an offset because the work did not meet the reasonable standard for construction. The Supreme Court reversed in part and remanded or the court to enter a judgment of foreclosure in favor of Smith Masonry on its mechanics lien, holding that the circuit court erred in determining that WIPI was entitled to a wholesale offset of the amount due under the contract. View "Smith Masonry v. WIPI Group, USA" on Justia Law

Shake Out, LLC entered into a contract with Clearwater Construction, LLC (“Clearwater”), to repair the building Shake Out’s restaurant occupied. The relationship between the parties quickly deteriorated, resulting in Shake Out filing a lawsuit against Clearwater. The parties attempted to mediate their dispute but were unsuccessful. After the case had proceeded for some time, Clearwater sought to compel arbitration pursuant to the contract. Shake Out objected, asserting that Clearwater had waived its right to enforce the arbitration clause because it had participated in the litigation for almost ten months before seeking to compel arbitration. The district court concluded Clearwater had not waived its right to seek arbitration and entered an order compelling arbitration and staying the proceedings. Finding no reversible error in that judgment, the Idaho Supreme Court affirmed. View "Shake Out, LLC v. Clearwater Construction, LLC" on Justia Law

A project labor agreement (PLA) is a collective-bargaining agreement between a project owner, contractors, and unions, setting the terms and conditions of employment for a particular construction project. The terms can include recognizing a union as the workers’ exclusive bargaining representative and paying the workers union wages—even if they are not union members. The plaintiffs claim the project labor agreements violate the First and Fourteenth Amendments, the National Labor Relations Act, and the Sherman Act.The Third Circuit affirmed the dismissal of the claims, citing lack of standing. Concreteness and particularity are two Article III standing requirements but those concrete injuries must also be actual or imminent. The contractor-plaintiffs declared they never have and never will bid on PLA-covered projects, admitting they never experienced and never will experience a compelled association or economic harm. To the extent the contractors’ declarations are a proxy for determining the actuality or imminence of harm to their employees, the contractors indicate they have not and will not bid on PLA-covered projects. The employees did not plead that they did or plan to work on PLA-covered public projects. The mere fact that the contractors claim they are “able and ready” to bid or work on PLA-covered public projects does not cure their failure to bid in the past and admitted refusal to bid. View "Associated Builders & Contractors of Western Pennsylvania v. Community College of Allegheny County" on Justia Law

The Kitchen Planners, LLC, filed a petition for a writ of certiorari asking the South Carolina Supreme Court to review the court of appeals' decision in Kitchen Planners, LLC v. Friedman, 851 S.E.2d 724 (Ct. App. 2020). In that decision, the court of appeals affirmed the circuit court's order granting summary judgment to the Friedmans and dissolving Kitchen Planners' mechanic's lien. The Supreme Court granted Kitchen Planners' petition in part and affirmed as modified: the court of appeals incorrectly applied the wrong standard of decision for a motion for summary judgment when the motion was based on insufficiency of the evidence. Reviewing the circuit court's order using the correct standard of decision, however, the Court nevertheless found the court of appeals reached the correct result in affirming the summary judgment. View "The Kitchen Planners v. Friedman" on Justia Law

Scean Mitchell appealed his convictions for malice murder and other offenses in connection with the 2017 shooting death of Calvin Clark, Jr. Mitchell argued the trial court abused its discretion in admitting evidence of other acts under OCGA § 24-4-404 (b). He also argued his trial counsel was ineffective for failing to object when the trial court instructed the jury to disregard evidence of self-defense and for failing to request a jury instruction on self-defense. The Georgia Supreme Court rejected both claims: there was no abuse of discretion in admitting the Rule 404 (b) evidence because it was relevant to the issue of intent and its probative value was not substantially outweighed by its unfairly prejudicial effect; and trial counsel was not ineffective because the self-defense claim was not supported by strong evidence and was inconsistent with the defense theory counsel had reasonably pursued instead. View "Mitchell v. Georgia" on Justia Law