Justia Construction Law Opinion Summaries

At issue in this extraordinary writ proceeding was whether Nev. Rev. Stat. 11.259(1) compels dismissal where the initial pleading in an action alleging nonresidential construction malpractice was served without filing the attorney affidavit and expert report required by Nev. Rev. Stat. 11.258(1) and (3). The Supreme Court granted the writ, holding that a defective pleading served in violation of section 11.258 is void ab initio and of no legal effect and, thus, cannot be cured by amendment. The Court held that because the initial pleadings served by certain real parties in interest in this case did not include the attorney affidavit and expert report as required by section 11.258, those pleadings were void ab initio, and the district court did not have discretionary authority to allow the parties to amend their pleadings to cure their failure to comply with section 11.258. View "Otak Nevada, L.L.C. v. Dist. Court" on Justia Law

K & L Homes appealed a district court judgment based upon a jury verdict in favor of Neal Leno and Susan Leno ("the Lenos"). On appeal, K & L Homes argued: (1) the district court erred by deciding K & L Homes had not sufficiently raised the defense of fault by the Lenos in its answer; (2) the court erred by refusing to instruct the jury on comparative fault, the court erred by denying K & L Homes' request for inspection and not allowing a defendant to testify on his observations during a jury viewing; and (3) the court erred by ruling K & L Homes had not disclaimed any implied warranties as a matter of law. The Lenos purchased a newly-constructed house from K & L Homes. The Lenos alleged they noticed cracks, unevenness, and shifting due to improper construction not long after purchasing the house from K & L Homes. Initially, the Lenos claimed K & L Homes was negligent, breached the parties' contract, and breached implied warranties. The Lenos claimed the parties' contract implied warranties that the house would be built according to the applicable codes, that it would fit its purpose as a residence, and that it would be constructed according to engineering standards and in a workmanlike condition. K & L Homes requested the jury be instructed on comparative fault, but the district court denied the proposed comparative fault instruction. The district court decided K & L Homes had not adequately pled fault, and comparative fault did not apply to Lenos' cause of action. The district court also found, as a matter of law, that K & L Homes had not disclaimed any implied warranties in a Homeowners' Guide given to the Lenos at the closing on the house. Upon review, the Supreme Court agreed with the findings made by the district court and affirmed its decisions as to all issues raised on appeal. View "Leno v. K & L Homes" on Justia Law

Stephen and Dawn Steadele contracted with Montana Component Housing Corporation (MCHC) to construct a home. MCHC did not complete the home by the deadline and eventually abandoned the project without completing the home. The Steadeles filed suit against MCHC. The district court entered a default judgment against MCHC when it failed to respond to the suit. The Steadeles then requested payment from Colony Insurance Company, MCHC's insurer. Colony denied coverage and refused to pay because MCHC never notified it of the Steadeles' claim. The Steadeles then filed this action, arguing that Colony's refusal to issue payment on the underlying judgment was a violation of Mont. Code Ann. 33-18-201, which prohibits unfair claim settlement practices. The district court granted summary judgment to Colony. The Supreme Court affirmed, holding that the district court did not err in granting summary judgment to Colony because MCHC's failure to notify Colony of the Steadeles' claim was a material breach of MCHC's obligations under the policy. View "Steadele v. Colony Ins. Co." on Justia Law

In 2003, the company entered into contracts with the government for roof repairs of two government buildings. Due to delays the projects were not completed and accepted by the government until September and October 2005. At the time, Federal Acquisition Regulations required that a performance report be prepared for each construction contract for $550,000 or more, 48 C.F.R. § 36.201. The company received negative interim performance evaluations from the resident engineer for both projects in February, 2004. In March, 2006, the resident engineer issued proposed negative final performance evaluations for both projects. The company protested the proposed evaluations, asserting that subcontractors and other problems, beyond its control, caused the delays. In final performance evaluations, the engineer assigned an overall performance rating of unsatisfactory and assigned unsatisfactory ratings for each project in 15 individual categories. The contracting officer issued a final decision that the unsatisfactory performance appraisal was justified. The Claims Court rejected the company's suit. The Federal Circuit affirmed. A contractor is responsible for the unexcused performance failures of its subcontractors and the complaint did not allege facts that would excuse the delays. View "Todd Constr., L.P. v. United States" on Justia Law

Appellant/Respondent Harleysville Mutual Insurance Company ("Harleysville") issued a series of standard CGL policies to the Respondent developers or their predecessors (collectively "Crossmann") for a series of condominium projects in the Myrtle Beach area of South Carolina. The exterior components of the condominium projects were negligently constructed, which resulted in water penetration and progressive damage to otherwise nondefective components of the projects. The homeowners settled their lawsuits against Respondents. Crossmann then filed this declaratory judgment action to determine coverage under Harleysville's policies. Upon review of the lower court’s order, the Supreme Court reversed a finding of joint and several liability against the developers and its insurer, and found the scope of Harleysville's liability was limited to damages accrued during its "time on the risk." In so ruling, the Court adhered to its holding in “Joe Harden Builders, Inc. v. Aetna Casualty & Surety Co.”: “[u]sing our ‘time on risk’ framework, the allocation of the damage award against Crossmann must conform to the actual distribution of property damage across the progressive damage period. Where proof of the actual property damage distribution is not available, the allocation formula adopted herein will serve as an appropriate default method for dividing the loss among Crossmann's insurers.’ The Court remanded the case to the trial court for further consideration of the "time on risk" allocation. View "Crossmann Communities v. Harleysville Mutual" on Justia Law

In May 2002, Respondent Eagle Windows & Doors, Inc.’s predecessor purchased Eagle & Taylor Company’s assets (Eagle I) from Eagle I's bankruptcy estate. In 2000, homeowners constructed a residence using defective windows manufactured by Eagle I. In 2006, homeowners settled their construction claims against the Appellant contractor. The contractor and its insurer (Appellants) then brought this contribution suit against Respondent as successor to Eagle I. The circuit court granted respondent's motion to dismiss, holding (1) dismissal was required under Rule 12(b)(6) because a bankruptcy order expressly precluded any state law successor liability actions since the sale was "free and clear" under 11 U.S.C. 363(f) of the Bankruptcy Code; and (2) that dismissal was proper under Rule 12(b)(1) of the state rules of civil procedure because the bankruptcy court in Ohio which issued the Eagle I order retained jurisdiction over any claims against respondent for successor liability. Upon review, the Supreme Court found that Appellants' claim did not arise under either the settlement agreement or the order, nor did their claim relate to Eagle I. Rather, it was predicated upon Respondent's post-sale conduct which, Appellants contended, exposed it to successor liability under South Carolina state law. The Supreme Court concluded the court erred in dismissing this suit, and remanded the case for further proceedings. View "Nationwide Mutual v. Eagle Windows" on Justia Law

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