Justia Construction Law Opinion Summaries

The Eastern Municipal Water District (EMWD) hired general contractor S.J. and Burkhardt, Inc. (SJB) for a public works construction project in 2006. Safeco Insurance Company (Safeco) executed performance and payment bonds for the project. Plaintiff Golden State Boring & Pipe Jacking, Inc. (GSB) was a subcontractor for the project, completing its work by September 2006, but it did not receive payment. In March 2008, SJB sent a voluntary default letter to Safeco. In July 2008, GSB sued SJB, EMWD, and Safeco for the unpaid amounts under the contract, separately seeking payment from Safeco under its payment bond. EMWD filed a cross-complaint to interplead retained sums. Safeco made a motion for summary judgment on the cause of action for payment under the bond on the ground that GSB’s claim was untimely. The trial court granted the motion, finding that there had been three cessations of labor that triggered GSB’s duty to file a stop notice in order to secure payment under Safeco's payment bond. At a subsequent court trial on the contract claims, GSB was awarded judgment against SJB, and Safeco was awarded judgment on the interpleader action. GSB appealed the summary judgment ruling, arguing: (1) the trial court erroneously overruled its objections to evidentiary matters presented in support of Safeco’s summary judgment; and (2) the court erred in finding the action was untimely. Finding no reversible error, the Court of Appeal affirmed. View "Golden State v. Eastern Municipal Water Dist." on Justia Law

In August, 2010, Appellants, Washington County residents Raymond and Donna Mantia, hired Appellee, West Virginia contractor Shafer Electric & Construction, to build a 34 foot by 24 foot, two-car garage addition onto their house. The proposals for the garage did not comply with several requirements of Section 517.7 of the Home Improvement Consumer Protection Act. Specifically, any home improvement contract, in order to be valid and enforceable against the owner of real property, had to be legible, in writing, and contain thirteen other specific requirements. Despite the detail in the specifications for the work to be completed, the contract here only complied with subsections (5), (7), and (8) of Section 517.7(a). Notwithstanding these deficiencies, work on the project began in October, 2010, when Appellants, who owned their own excavation business, began the foundation excavation. When Appellee commenced construction of the addition, it contended that problems surfaced because of Appellants' failure to complete the excavation work properly. During the subsequent months, Appellants eventually reexcavated the foundation area for the addition and, in the process (according to Appellee), changed the design of the addition several times. Negotiations into these design changes and other necessary alterations as a result of the excavation problems occurred, but ultimately failed when Appellants apparently refused to enter into a new contract with Appellee. Upon the breakdown of the negotiations, the parties mutually agreed that Appellee would invoice Appellants for the work completed, and that Appellee would discontinue efforts on the project. Appellants refused to pay the bill. Appellee responded by filing a mechanic's lien in the Washington County Court of Common Pleas. When Appellants still had failed to satisfy the outstanding balance, Appellee filed a civil action in the common pleas court, alleging both breach of contract and quantum meruit causes of action. The Supreme Court granted allowance of appeal in this matter to determine whether the Act barred a contractor from recovery under a theory of quantum meruit in the absence of a valid and enforceable home improvement contract as defined by the Act. The Superior Court held that the Act did not bar a cause of action sounding in quantum meruit and, for slightly different reasons, the Supreme Court affirmed. View "Shafer Electric & Construction v. Mantia" on Justia Law

In 1998 the Gillespie School District hired Wight under for services preliminary to the actual designing and construction of a new elementary school building. Wight agreed to perform a “site mine investigation.” Wight hired Hanson Engineers to assess the potential for coal mine subsidence. A physical engineer at Hanson sent a letter to Wight, noting recorded subsidence events, including five to six events since 1979, affecting more than 40 structures in the area. The letter stated: “No one can predict when or if the land above the roof-and-pillar mine will subside… The owner should consider the fact that there is no economically feasible corrective action… to guarantee against future subsidence… it can be intuitively concluded that there is a relatively high risk of subsidence in the Benld/Gillespie area. The letter was not attached to the report, which noted some of its highlights. The school was built and occupied, but in 2009 was severely damaged as the result of subsidence and was condemned. The District sued Wight, alleging professional negligence, breach of implied warranty, and fraudulent misrepresentation by concealment of material fact. The court entered summary judgment in favor of Wight, based on statutes of limitations applicable to the claims. The appellate court affirmed. The Illinois Supreme Court affirmed, noting that it was expressing no opinion concerning the merits of various claims.View "Gillespie Cmty. Unit Sch. Dist. No. 7 v. Wight & Co." on Justia Law

A.E.M. Electric Services Corporation, a general contractor, contracted with Transtar Electric, Inc., a subcontractor, to provide electrical services for the installation of a pool at Holiday Inn. A.E.M. did not pay Transtar for its last three invoices because the owner of the project had failed to pay A.E.M. for the work performed by Transtar. A.E.M. alleged that the contract between the parties, which used the phrase “receipt of payment by contractor from the owner for work performed by subcontractor is a condition precedent to payment by contractor to subcontractor for that work”, was sufficient to establish a pay-if-paid payment provision. The court of appeals concluded that the payment provision in the contract was not specific enough to show that both parties understood and agreed that the risk of the owner’s nonpayment would be borne by Transtar instead of A.E.M. The Supreme Court reversed, holding that the use of the term “condition precedent” was an explicit statement of the parties’ intent to transfer the risk of the project owner’s nonpayment from A.E.M. to Transtar. View "Transtar Elec., Inc. v. A.E.M. Elec. Servs. Corp." on Justia Law

Ewing Construction Company entered into a contract with a school district to serve as general contractor on a project. The school district later filed suit against Ewing for faulty construction. Ewing tendered defense of the underlying suit to Amerisure Insurance Company, Ewing's insurer under a commercial package policy that included commercial general liability coverage. Amerisure denied coverage, and Ewing filed suit in federal district court seeking a declaration that Amerisure breached its duty to defend and indemnify Ewing for damages awarded in the underlying suit. The district court granted summary judgment for Amerisure, concluding that the policy’s contractual liability exclusion applied to exclude coverage because Ewing assumed liability for its own construction work pursuant to the contract such that it would be liable for damages arising out of its defective work. On appeal, the court of appeals certified questions to the Texas Supreme Court, which answered that “a general contractor that enters into a contract in which it agrees to perform its construction work in a good and workmanlike manner, without more specific provisions enlarging this obligation, does not ‘assume liability’ for damages arising out of the contractor’s defective work so as to trigger the contractual liability exclusion.” View "Ewing Constr. Co., Inc. v. Amerisure Ins. Co." on Justia Law

In 2006, the Federal Bureau of Prisons issued a Request for Proposals for the “design-build” construction of a federal correctional institution. The project involved a “cut-to-fill” site, meaning that the ground had to be leveled by excavating materials from one area of the site and using those materials to fill lower areas. Based on information in the solicitation documents and prior experience, BH believed the New Hampshire Department of Environmental Sciences would approve a permit for a one-step-cut-to-fill construction plan and calculated its bid price, $238,175,000, accordingly. The contract provided liquidated damages of $8,000 for each day completion was overdue. The NHDES rejected the application. BH advised the government of the implications of NHDES restrictions, but did not refuse to proceed or request that the government intervene with the NHDES. According to BH, the restrictions were contrary to generally accepted industry practice. Upon completion of cut-to-fill operations, BH submitted a Request for Equitable Adjustment, seeking $7,724,885 for excess costs. The Contracting Officer and the Claims Court rejected the request, finding that the Permits and Responsibilities clause placed the burden of obtaining and complying with state and local permits on BH “without additional expense to the Government;” that BH had not alleged violation of the implied duty of good faith; and that, because the government did not control the NHDES, there was no basis for imposing liability for constructive change. The Federal Circuit affirmed.View "Bell/Heery v. United States" on Justia Law

This case arose out of plaintiff Ferguson Fire's efforts to obtain payment for materials it supplied to defendant Preferred Fire Protection, LLC for defendant Immedion's data center. In 2007, Immedion, a telecommunications company, hired Rescom, L.L.C. to be the general contractor for improvements planned for its data center on property Immedion leased in Greenville. Rescom, in turn, hired Preferred Fire, a fire sprinkler company, as a subcontractor. In addition, Immedion directly hired Preferred Fire under a separate contract to install a special "pre-action" fire suppression system1 in its data center. To complete this work, Preferred Fire purchased materials from Ferguson Fire. Ferguson Fire began delivering materials to Preferred Fire in August, 2007, and the deliveries continued through October. In September, while its deliveries were in progress, Ferguson Fire sent a "Notice of Furnishing Labor and Materials" to Immedion advising it in relevant part that it had been employed by Preferred Fire to deliver labor, services, or materials with an estimated value of $15,000.00 to Immedion's premises. The Notice of Furnishing advised that it was being given as "a routine procedure to comply with certain state requirements that may exist," and that it was not a lien, nor any reflection on Preferred Fire's credit standing. Immedion paid Preferred approximately half of the contract price for installation of the system before receiving Ferguson Fire's Notice of Furnishing. After receiving the Notice, Immedion issued two additional checks to Preferred Fire for the unpaid balance of the contract price. Immedion paid everything it owed to Rescom, and it also paid its contractor Preferred Fire in full under the separate contract for the fire suppression system. However, Preferred Fire never paid Ferguson Fire for the materials it furnished. Ferguson brought a mechanic's lien foreclosure action against Immedion and Preferred Fire. Ferguson Fire contended (and the Supreme Court agreed) that the Court of Appeals erred in adding requirements to S.C Code Ann. 29-5-40 (2007) (governing a notice of furnishing) that were not in the statute itself and in concluding Ferguson Fire did not establish an effective lien upon which a foreclosure action could be premised. The Supreme Court reversed and remanded for further proceedings. View "Ferguson Fire v. Preferred Fire" on Justia Law

Defendant, Suzynne D. Cumminngs and S.D. Cummings & Co., PC, appealed a Superior Court order awarding $44,403 to plaintiffs, Robert Audette and his company, H&S Construction Services, LLC (H&S), for breach of contract. Defendants provided various accounting and business services to Audette and his then-partner, Paul Fogarty, including helping them to start their construction business partnership, as well as preparing tax returns for both the business and Audette and Fogarty personally. In 2007, defendants helped Audette and Fogarty dissolve their partnership. One of the final acts defendants worked on for H&S was the placement of a mechanic's lien on a property on which H&S worked: the municipality halted construction on the project when H&S was approximately ninety-five percent complete. The lien placed on the property was for $44,403. Ultimately, plaintiffs’ 120-day statutory lien had not been timely secured or recorded, therefore it had lapsed. Plaintiffs brought suit against defendants in November 2009 for failing to secure the lien. The trial court found for plaintiffs and awarded damages in the amount of $44,403. Finding no error in the Superior Court's judgment, the Supreme Court affirmed. View "Audette & v. Cummings" on Justia Law

Gambro Renal Products, Inc. hired The Facility Group, Inc. ("TFG"), as the general contractor for the construction of a facility designed to produce kidney dialysis filters in Opelika. TFG contracted with the Hardy Corporation for specialized piping work on the project. Absolute Welding Services, Inc. ("AWS"), is a subsidiary of Rayco Industrial, Inc., a subsubcontractor hired by Hardy. Although the negotiations on the subcontract at issue in these appeals were between AWS and Hardy, the subcontract was executed by Rayco and Hardy. A dispute arose over whether the exclusion of "passivation" and the installation of piping in Rayco's offer was incorporated into its subcontract. Rayco filed a complaint against Hardy, Gambro and 15 fictitiously named parties, seeking an accounting, a declaratory judgment, a reformation of the contract, and perfection of a lien. Rayco asserted claims for damages for breach of contract, unjust enrichment/quantum meruit, and "work and labor done." Both parties unhappy with the eventual trial court order resolving the dispute, appealed the order. After careful consideration of the contracts and the trial court record, the Supreme Court reversed in part, and affirmed in part. The case was remanded with instructions for further proceedings.View "Hardy Corporation v. Rayco Industrial, Inc. " on Justia Law

American General Contractors, Inc. ("AGC"), appealed a judgment assessing liability and awarding damages and interest for the cost of delays in the construction of the Williams County Law Enforcement Center in Williston. C&C Plumbing and Heating, LLP ("C&C"), the successful bidder for the mechanical prime contract, filed suit when construction the center was delayed approximately two years after "substantial completion" was supposed to have happened. The district court concluded it was appropriate for the County and AGC to share responsibility for providing temporary shelter and heat on the project. The court apportioned 47 percent of the liability for the costs of the delay for the three and one-half months of active interference to the County and 53 percent to AGC, for the four months delay inherent to the industry. The court awarded C&C approximately $73,000 on its claim against the County. After offsetting amounts owed between the parties, the court awarded AGC approximately $424,000 on its claim against the County. The court awarded Davis Masonry approximately $96,000 from AGC for masonry work completed under its subcontract with AGC, and rejected AGC's claimed offsets to that amount. Davis had provided heat, cover and shelter for the project during cold weather and sought $649,000 from the County and AGC for that expense including prompt payment interest. Davis had settled with the County for $530,000, and the court ruled AGC was responsible for 53 percent of the remaining $119,000, or $63,070. AGC argues the district court erred in determining AGC was liable for any of the costs incurred from the delay under its contract with the County. Finding no reversible error, the Supreme Court affirmed the district court. View "C&C Plumbing and Heating, LLP v. Williams County" on Justia Law