Justia Construction Law Opinion Summaries

Plaintiffs filed this diversity action to foreclose a contractor's lien and an architect's and engineer's lien against Phoenix Land & Acquisition, LLC (Phoenix Land) and Phoenix Health, LLC (Phoenix Health), as owners of the property in dispute, and three financial institutions with recorded security interests in the property. Phoenix Land filed a counterclaim, asserting breach of contract, negligence, breach of implied warranty, breach of fiduciary relationship, and deceptive trade practices by plaintiffs. Plaintiffs appealed the district court's order denying their motion to compel arbitration of Phoenix Land's counterclaim. The court held that the district court did not err in finding plaintiffs' motion to compel arbitration on the ground that they had waived their right to arbitrate the dispute; they knew of the right and acted inconsistently with that right; and Phoenix Land suffered prejudice by plaintiffs' inconsistent actions. Accordingly, the court affirmed the judgment of the court. View "Erdman Co., et al. v. Phoenix Land & Acquisition, et al." on Justia Law

Plaintiff-Appellant Larry Snyder and Company appealed a district court's grant of summary judgment to Defendant-Appellee Clark Miller, which did business as American Underground Utilities. Snyder and Miller entered into a subcontract agreement under which Miller would install utility trenches underneath what would become a parking lot for an apartment complex. Miller performed the work, but once the asphalt for the lot was installed, the trenches settled and the parking lot was damaged. Snyder requested that Miller repair the entire parking lot, but Miller refused, arguing that the subcontract only required it to repair areas of the lot that actually settled. Upon review by the Tenth Circuit, the court affirmed the district court's order that held that the subcontract unambiguously governed the extent of the repair required by Miller. Accordingly, the Court held that no genuine issue of material fact existed regarding Miller's liability for repair work that exceeded the requirements of the subcontract. View "Larry Snyder and Co. v. Miller" on Justia Law

McKinnis Roofing and Sheet Metal and homeowner Jeffrey Hicks entered into two contracts. The first contract related to Hicks' roof, and the second contract related to copper awnings on Hicks' residence. McKinnis filed a complaint in the district court alleging that Hicks breached both contracts after Hicks refused McKinnis' demand for advance payment. After trial, he district court determined that Hicks had breached both contracts, awarding McKinnis damages in the amount of $4,419 with regard to the roofing contract and $789 with regard to the awning contract. McKinnis appealed, arguing that the district court erred in calculating the amount of damages to which it was entitled. Hicks cross-appealed and claimed that the district court erred when it determined that he breached the contracts. The Supreme Court reversed, holding that based on the facts and contract language, Hicks did not breach either contract. View "McKinnis Roofing & Sheet Metal, Inc. v. Hicks" on Justia Law

David Miller purchased a home owned by respondents Linda Lankow and Jim Betz. The home had previously been extensively remediated because of moisture intrusion damage. Respondents Donnelly Brothers and Total Service Company and defendant Diversified Contractors, Inc. did the remediation work. After discovering and notifying respondents and defendants of additional moisture intrusion damage, buyer began to repair the home. Buyer then commenced an action against respondents and defendant to recover damages. The district court excluded buyer's expert witness evidence as a sanction for the spoliation of evidence that resulted from buyer starting to make repairs to his home. The court then granted respondents' summary judgment motion on the basis that buyer could not make a prima facie case without the expert evidence. The court of appeals affirmed. The Supreme Court reversed, holding that the duty of a custodial party to preserve evidence may be discharged when the custodial party has a legitimate need to destroy the evidence and gives the noncustodial party notice sufficient to enable the noncustodial party to protect itself against the loss of the evidence. View "Miller v. Lankow" on Justia Law

In 2007, Massachusetts Defendant No. 1 Steel Products, Inc. (No. 1 Steel) was a subcontractor on a construction project at a health rehabilitation center in Massachusetts (Cape Regency project). While working on the project, No. 1 Steel determined that it needed to hire out some of the steel fabrication for which it was responsible. No. 1 Steel found Alabama Plaintiff Garrison Steel Fabricators, Inc. (Garrison). No. 1 Steel was dissatisfied with Garrison's work and refused to pay Garrison anything beyond what it had previously paid. In an attempt to collect the remaining amount owed, Garrison sent No. 1 Steel notice that it intended to file mechanic's liens on the project unless it was paid. Upon receiving the notice, No. 1 Steel filed a motion in Massachusetts court to discharge and release the not-yet-filed-lien, arguing that Garrison was not registered to do business in Massachusetts and that no written contract of the parties' agreement existed. The Massachusetts court granted the motion without stating a rationale. In 2009 Garrison sued No. 1 Steel in Alabama court, asserting claims of open account, implied contract and labor and work performed. No. 1 Steel moved to dismiss, arguing a lack of personal jurisdiction. Upon review of the record, the Supreme Court found the "specific contacts" No. 1 Steel had were not sufficient enough that it should have anticipated being haled into court in Alabama; No. 1 Steel's relationship with Garrison was limited to a one-time purchase of customized goods. The Court directed the trial court to dismiss Garrison's case because the court lacked personal jurisdiction over No. 1 Steel. View "Garrison Steel Fabricators, Inc. v. No. 1 Steel Products, Inc." on Justia Law

This case concerns a construction contract dispute between contractor Trombly Plumbing & Heating and homeowners Edward Quinn, Thomas Quinn, and Regina Gority ("Homeowners"). In the summer of 2007, Trombly and the Homeowners agreed that Trombly would perform services relating to the heating and hot water systems of Homeowners' residential vacation property. Between November 2007 and February 2008, Homeowners experienced a number of problems with the home that they attributed to Trombly's work, such as pipes freezing and furnaces shutting down and leaking.  Trombly brought an initial action for breach of contract and violation of the Prompt Payment Act (9 V.S.A. 4001-4009) seeking the balance due plus the cost of collection.  The Homeowners counterclaimed for breach of contract, negligence, intentional misrepresentation, negligent misrepresentation, fraudulent misrepresentation, and consumer fraud.  They sought actual and punitive damages, as well as litigation costs. The trial court ultimately decided that Trombly could not recover from the Homeowners and the Homeowners could not recover from Trombly, and each party would bear its own costs and fees.  The court found that the Homeowners were not liable to Trombly for anything beyond what they had already paid because the work "was not well done," there were many problems with the work, and the problems were not resolved until another plumber came to fix them.  The court thus found the Homeowners to be the prevailing parties on Trombly's claims because Trombly did not prove its case by a preponderance of the evidence.  As Trombly did not prevail on the merits of the case, the court found there could be no award of attorney's fees.  The court also dismissed all of the Homeowners' counterclaims.  It found that the evidence submitted was insufficient, given that there was no testimony from anyone who did repair work about the problems that had to be corrected or whether the amounts paid for corrective work were fair and reasonable. On appeal, Trombly argued the trial court erred by: (1) improperly placing the burden of proof on contractor with respect to homeowners' defenses and making insufficient findings to support its decision, and (2) improperly applying the "substantially prevailing party" standard under the Prompt Payment Act.  Homeowners cross-appealed, arguing the trial court erred in finding that homeowners were not qualified to offer testimony as to damages for the corrective work performed.  Upon review of the trial record and the applicable legal authority, the Supreme Court affirmed the trial court's decision with regard to all issues brought on appeal. View "Trombly Plumbing & Heating v. Quinn" on Justia Law

Developer refused to pay nearly $6.5 million under the prime contract ($5 million was due subcontractors) claiming deficient work. General contractor declined to pay a subcontractor, who sued on the surety bond. The surety asserted that term 6.f conditioned subcontractor's right to payment on contractor's receipt of payment. In the meantime, contractor settled with developer for $1 million--all it was able to pay--and subcontractor declined a pro rata share in return for a release of claims. The district court granted partial summary judgments in favor of subcontractor for an amount $91,790 less than the claimed $1,074,260. The Third Circuit reversed interpretation of the subcontract and rejection of surety's claim for proportional offset for legal fees incurred in the suit against developer, but affirmed denial of subcontractor's waiver claim, and remanded. The parties intended to share the risk of non-payment. Under 6f developer's payment to contractor is a condition precedent to contractor's obligation to pay subcontractor, yielding after six months to provide a mechanism that specifies when and for how much subcontractor may sue contractor. The contract created a mechanism for passing through subcontractor's remaining claims and pegging recovery to the amount that contractor received from developer for subcontractor's work. View "Sloan & Co. v. Liberty Mut. Ins. Co." on Justia Law

Respondent Annapolis Towne Centre (ATC), the owner and developer of a mixed-use development, entered into an agreement with petitioner Hovnanian Land Investment, a residential developer, under which ATC agreed to sell a portion of the property to Hovnanian for the construction of a residential tower. The contract required certain conditions to be met by ATC prior to the closing and contained a clause stating that any waiver of the contract had to be in writing. Before closing, Hovnanian terminated the agreement, alleging that ATC failed to meet a condition precedent. ATC sought a declaratory judgment, and both parties filed motions for summary judgment on the issue of whether ATC had complied with the condition precedent. The circuit court granted ATC's motion for summary judgment on that issue, holding that Hovnanian waived the condition precedent. The court of special appeals affirmed. The Court of Appeals reversed, holding that summary judgment was not appropriate because (1) a condition precedent may be waived by a party's conduct, despite a non-waiver clause, but whether Hovnanian's actions amounted to a waiver was a dispute of material fact; and (2) the question of whether ATC strictly fulfilled the condition also involved material questions of fact. Remanded. View "Hovnanian Land Inv. Group, L.L.C. v. Annapolis Towne Centre at Parole, L.L.C." on Justia Law

In 2006, Appellant Yvan Safar contracted with developer Per Bjorn-Roli to construct a 12-unit condominium project. Appellee Wells Fargo agreed to finance the project. By early 2007, the developer paid Appellant the entire amount of his contract, and Wells Fargo disbursed the entire loan, but the units were not complete. Appellant allegedly used his own funds to meet his payroll needs on the project. The project overran its budget, and Wells Fargo had to foreclose. Appellant contended that the bank promised to reimburse him for monies he spent in contemplating the completion of the project. After trial, the superior court found that Wells Fargo made no enforceable promise to Appellant to reimburse him. Upon review, the Supreme Court found that the bank did not make any promise or commitment to Appellant sufficient to meet the "actual promise" element of promissory estoppel. Accordingly, the Court affirmed the lower court's dismissal of Appellant's case. View "Safar v. Wells Fargo Bank, N.A." on Justia Law

After Clark and Sullivan Constructors (C&S), a general contractor, solicited bids for a public works project, Dynalectric, a subcontractor, submitted a bid to perform electrical work on the project. C&S incorporated Dynalectric's bid into its bid for the contract, and C&S was awarded the project. Subsequently, Dynalectric repudiated its obligations to C&S. C&S sued Dynalectric in district court under various theories of liability, including promissory estoppel. The district court entered judgment for C&S on its promissory estoppel claim and awarded C&S $2,501,615 in damages, which represented the difference between Dynaletric's bid and the amount C&S paid the three replacement contractors to complete the work. Dynalectric appealed, contending that the district court applied the incorrect measure of damages. The Supreme Court affirmed, holding (1) the determination of the appropriate measure of damages in any given case turns on considerations of what justice requires and the foreseeability and certainty of the particular damages award sought; and (2) the presumptive measure of damages for a general contractor that reasonably relies on a subcontractor's unfulfilled promise is the difference between the nonperforming subcontractor's original bid and the cost of the replacement subcontractor's performance. View "Dynalectric Co. of Nev., Inc. v. Clark & Sullivan Constructors, Inc." on Justia Law