Justia Construction Law Opinion Summaries

This case arose from a contract between Roanoke Healthcare Authority (doing business as Randolph Medical Center) and Batson-Cook Company, a general contractor, to renovate the medical center, located in Roanoke. Batson-Cook received written notice from Roanoke Healthcare that work on the renovation project had been suspended. Batson-Cook notified one of its subcontractors, Hardy, of the suspension and stated that "[t]he contract has been suspended by [Roanoke Healthcare] through no fault of Batson-Cook ... or its subcontractors. [Roanoke Healthcare] is currently out of funding and has subsequently closed the facility while seeking a buyer." Liberty Mutual, the project's insurer, alleged in its answer that Roanoke Healthcare failed to pay Batson-Cook $241,940.51 for work performed pursuant to the contract. Batson-Cook sent Hardy a change order the change order deducted from the subcontract the $147,000 in equipment and materials another subcontractor Hardy hired, Johnson Controls, Inc. (JCI), had furnished for the renovation project and for which it has not received payment. JCI notified Liberty Mutual, Roanoke Healthcare, Batson-Cook, and Hardy by certified letters of its claim on a payment bond. The letters identified Batson-Cook as the general contractor and Hardy as the debtor. Liberty Mutual denied the claim. JCI sued Liberty Mutual, alleging JCI was entitled to payment on the payment bond Liberty Mutual had issued to Batson-Cook. Upon review, the Supreme Court concluded JCI was a proper claimant on the payment bond. Therefore, the circuit court erred in entering a summary judgment in favor of Liberty Mutual and denying JCI's summary judgment motion. View "Johnson Controls, Inc. v. Liberty Mutual Insurance Company " on Justia Law

Northern, operated by VanDuinen, was a general contractor on public construction projects, legally required to obtain surety bonds. Hanover was Northern’s bonding agent and required Northern to enter into an Indemnity Agreement, which VanDuinen signed in his individual capacity and as Northern’s President. The Midway Airport Project was financed by the FAA and managed by Parsons. In 2008 Northern won the bid and began subcontracting. in 2009 subcontractors complained that Northern failed to pay them in accordance with the bonds and contracts. Work was halted, resulting in a separate complaint, by Parsons, for failure to complete the Project as required. The FAA opted to retain possession of remaining contract funds, $127,086.00, pending resolution of the disputes and completion of the work. Hanover received claims from subcontractors McDaniel ($127,452.78) and Rex Electric ($78,495.00) and a claim for performance from Parsons. Hanover demanded collateral under the Agreement. Northern refused to post collateral or to indemnify Hanover. In 2009 McDaniel filed for bankruptcy; the bankruptcy trustee sued Hanover seeking payment for work performed. In 2012, Hanover paid the trustee $127,452.78 to resolve both McDaniels’s and Rex Electric’s claims. Hanover resolved Parson’s claim by stepping in as general contractor and arranging for completion of the Project. Parsons paid Hanover the $127,086.00 of contract funds the FAA had withheld. Hanover sued Northern and VanDuinen. The district court granted summary judgment in Hanover’s favor. The Seventh Circuit affirmed. The Agreement is unambiguous. Northern breached it, and Hanover is entitled to contractual damages. View "Hanover Ins. Co. v. Northern Bldg. Co." on Justia Law

Tharaldson Ethanol Plant I, LLC and Tharaldson Financial Group, Inc. appealed a judgment and amended judgment ordering Tharaldson Financial to pay VEI Global, Inc., $1,150,000 plus interest, and an order granting certification under N.D.R.Civ.P. 54(b). VEI provided design and construction management services for an ethanol plant owned and operated by Tharaldson Ethanol. In 2009, Tharaldson Ethanol and VEI reached a settlement on disputed fees, agreeing Tharaldson Ethanol would pay VEI $1,350,000 for all work VEI performed through February 28, 2009. The agreement also provided Tharaldson Financial would enter into a $1,350,000 promissory note payable to VEI, and a copy of the note was attached and incorporated into the agreement. Tharaldson Ethanol and Tharaldson Financial sued VEI, claiming VEI negligently designed and constructed the ethanol plant. The complaint sought damages for breach of warranty, breach of contract, and negligence claims; and sought a declaratory judgment that Tharaldson Ethanol and Tharaldson Financial did not owe VEI anything under the settlement agreement or promissory note because of damages VEI caused by its breaches of contract and warranty and other wrongful acts. VEI answered and counterclaimed, including a breach of contract claim against Tharaldson Financial for failing to make payments on the promissory note. The district court ultimately granted VEI's motion for partial summary judgment, finding there were no genuine issues of material fact and VEI was entitled to judgment as a matter of law, and ordered VEI was entitled to judgment against Tharaldson Financial in the amount of $1,150,000, with interest. The Supreme Court dismissed Tharaldson Ethanol and Tharaldson Financial's appeal, holding that "[c]ertification under N.D.R.Civ.P. 54(b) must be reserved for 'the unusual case in which the costs and risks of multiplying the number of proceedings and of overcrowding the appellate docket are outbalanced by pressing needs of the litigants for an early and separate judgment as to some claims or parties.'" The Court concluded this case did not present "out-of-the-ordinary circumstances" or the "infrequent harsh case" warranting its immediate review. Consequently, the Court did not reach the merits of Tharaldson Ethanol and Tharaldson Financial's appeal. View "Tharaldson Ethanol Plant I, LLC v. VEI Global, Inc." on Justia Law

Technica, a subcontractor on a federal construction project in California, filed suit under the Miller Act, 40 U.S.C. 3131-3134, against Candelaria, the prime contractor, and its surety CCIC. On appeal, Technica challenged the district court's grant of summary judgment in favor of defendants. The Supreme Court and the Eighth and Tenth Circuits have held that rights and remedies under the Miller Act may not be conditioned by state laws. The court applied their reasoning and held that the limitation in California Business and Professions Code 7031(a) on the right of a non-licensed contractor to maintain an action for collection of unpaid services did not apply to an action under the Miller Act. Because the California licensing requirement is not a defense to a claim under the Miller Act, the court need not address whether Technica falls within the labor provider exception to the statute. Accordingly, the court reversed the judgment of the district court and remanded. View "Technica LLC v. Carolina Cas. Ins. Co." on Justia Law

Consumers Energy entered into a Purchase Order, under which DynaSteel, operating in Tennessee and Mississippi, would fabricate ductwork for shipment to an Essexville, Michigan power plant for installation by a third party. The PO contained a Michigan choice-of-law provision. Consumers was to pay $10,634,755. PCI, with locations in Kansas and Tennessee, was to supply the insulation requested by Consumers for $1,842,890. The contract between DynaSteel and PCI contained a Tennessee choice-of-law provision. As the project progressed, Consumers paid DynaSteel $2.9 million, but DynaSteel did not pay PCI $1,542,890 it owed. DynaSteel also owed PCI more than $3.2 million for other projects. DynaSteel allegedly comingled Consumer’s payments with funds from other projects. Under a “Payment Plan Proposal,” DynaSteel was to make payments, which would apply to the unpaid orders in chronological order (the Consumers project came last in this order). The PPP did not contain a choice-of-law provision. DynaSteel paid PCI $2.1 million, which satisfied its obligations concerning the other projects, but did not fulfill its obligation as to the Consumers project. PCI sued in Michigan, alleging that DynaSteel violated the Michigan Builders Trust Fund Act. The district court entered summary judgment for Dynasteel, reasoning that the PO between PCI and DynaSteel was controlling, that the Tennessee choice-of-law provision was binding, and that the Trust Fund Act did not apply extraterritorially by its own force. The Sixth Circuit affirmed. View "Performance Contracting Inc. v. Dynasteel Corp." on Justia Law

Defendant general contractor Super One, Inc., and various subcontractors, including defendant subcontractor T. T. & L. Sheet Metal, Inc., contracted with VIP's Industries, Inc. and VIP's Motor Inns, Inc. (VIP's) to build a hotel. Defendants began work in 1996. In early 1997, VIP's posted a "completion notice" pursuant to ORS 87.045. On or about that same date, VIP's also obtained a certificate for temporary occupancy and began accepting paying guests. However, a Certificate of Substantial Completion was not issued by the architect or accepted by VIP's as had been contemplated by the contract between the parties. After the date on which VIP's posted the completion notice, defendants continued to perform construction work. The county issued a certificate of final occupancy later that year. In 2006, plaintiff purchased the hotel and soon thereafter allegedly discovered damage. Plaintiff filed an action against defendants for negligence, nuisance, and trespass in 2007, a date more than 10 years after the posting of the completion notice but less than 10 years after the issuance of the certificate of final occupancy. Defendants moved for summary judgment, arguing that plaintiff's claims were barred by ORS 12.135. The issue this case presented to the Supreme Court was the meaning of the term "substantial completion" as used in ORS 12.135. The Court affirmed the decision of the Court of Appeals, and remanded the case to the circuit court for further proceedings. View "PIH Beaverton, LLC v. Super One, Inc." on Justia Law

Plaintiff Sunset Presbyterian Church contracted with defendant Brockamp & Jaeger to act as its general contractor and build a new church facility. Defendant then subcontracted with Anderson Roofing Company and other subcontractors to perform various specialized construction tasks. Plaintiff did not enter into a contractual relationship with any of the subcontractors. In early 2009, plaintiff allegedly discovered extensive water damage in the church, and filed an action asserting tort claims against defendants. Defendant general contractor filed an affirmative defense alleging that, by the terms of the parties' contract, plaintiff's claims accrued on the "date of substantial completion" and were time-barred. A defendant-subcontractor, which was not a party to that contract, filed an affirmative defense alleging that plaintiff's claims were barred by the statute of ultimate repose. Both defendants moved for summary judgment. The trial court granted their motions and dismissed the case. The Court of Appeals reversed. Defendants then petitioned for review. The Supreme Court concluded that defendants were not entitled to summary judgment, affirmed the decision of the Court of Appeals, reversed the decision of the trial court, and remanded the case to the trial court for further proceedings. View "Sunset Presbyterian Church v. Brockamp & Jaeger" on Justia Law

John Lanier appealed the denial of his motion to alter, amend, or vacate a judgment, and for relief from the judgment. Lanier's motion was filed after plaintiff McMath Construction, Inc. filed a "Notice of Filing of Foreign Judgment" pursuant to the Uniform Enforcement of Foreign Judgments Act ("the UEFJA"). After careful consideration, the Alabama Supreme Court concluded that under Louisiana law (the foreign jurisdiction), McMath did not properly serve Lanier. Therefore, a preliminary default judgment and the Louisiana judgment were void. Because the Louisiana judgment was void, the trial court erred when it denied Lanier's motion for relief from judgment. Accordingly, the Supreme Court reversed the trial court and remanded this case for further proceedings.View "Lanier v. McMath Construction, Inc. " on Justia Law

Owners Insurance Company appealed a circuit court judgment declaring Owners was obligated to pay an arbitration award entered against Jim Carr Homebuilder, LLC ("JCH"), under the terms of a commercial general-liability insurance policy Owners had issued. Owners initiated a declaratory-judgment action against JCH seeking a declaration that it was not obligated to indemnify JCH for any judgment entered against JCH arising from a dispute that a house JCH constructed was poorly built. After the homeowners prevailed in their action against JCH, the trial court in the declaratory-judgment action entered a summary judgment holding that Owners was required to pay pursuant to the terms of the Owners policy. Upon review, the Supreme Court found that because JCH's faulty workmanship was not an "occurrence," the trial court's judgment was in error, and it was hereby reversed. View "Owners Insurance Company v. Jim Carr Homebuilder, LLC et al. " on Justia Law

Real party in interest, a homeowner's association (HOA), filed construction defect actions against Petitioners. During discovery, Petitioners disclosed some of their primary insurance agreements to the HOA pursuant to Nev. R. Civ. P. 16.1(a)(1)(D). Petitioner refused to disclose additional undisclosed policies covering it that may have been purchased by its parent companies. A special master ordered Petitioner to disclose those agreements. Petitioner objected to the order and filed this writ petition, contending that the disclosed insurance policies were more than sufficient to satisfy any judgment that may be entered against them. The Supreme Court denied the petition, holding that section 16.1(a)(1)(D) requires disclosure of any insurance agreement that may be liable to pay a portion of a judgment.View "Vanguard Piping v. Eighth Judicial Dist. Court" on Justia Law