Justia Construction Law Opinion Summaries

Appellant City of Allentown (City) contracted with appellee A. Scott Enterprises, Inc. (ASE), to construct a new public road. After arsenic-contaminated soil was discovered at the worksite, the City suspended work on the project. Following testing, it was determined construction could resume if precautions were taken. Accordingly, the City instructed ASE to obtain revised permits and proceed with the project. However, the existing contract did not include terms regarding the potential for contaminated soil, despite the fact the City was aware there might be contamination prior to entering into the contract, and ASE declined to proceed, explaining it would incur substantial additional costs due to the contaminated soil. The parties made several attempts to reach an agreement in which ASE would continue the construction, but to no avail. Consequently, ASE sued the City to recover its losses on the project, alleged breach of contract, and sought compensation under theories of quantum meruit and unjust enrichment, as well as interest and a statutory penalty and fee award for violations of the prompt pay provisions of the Procurement Code. After a trial, a jury found the City breached its contract with ASE and also withheld payments in bad faith. In this discretionary appeal, the issue this case presented for the Supreme Court's review was whether an award of a statutory penalty and attorney fees under the prompt payment provisions of the Commonwealth’s Procurement Code was mandatory upon a finding of bad faith, irrespective of the statute’s permissive phrasing. The Court held such an award was not mandatory, and therefore reversed the order of the Commonwealth Court and remanded the case to the trial court for further proceedings. View "A. Scott Enterprises v. City of Allentown" on Justia Law

The Tennessee Department of Transportation engaged Mountain States to build two bridges over the Cumberland River at its intersection with Highway 109 in Gallatin. On May 21, 2013, the boom cable of a Terex HC 165 crane snapped while the crane operator was excavating material from under water, causing the boom—the extendable overhead arm of the crane controlled by the load-bearing wire boom cable—to collapse onto the adjacent highway. As the cable broke under tension, it whipped back to shatter the windows of the crane operator’s cab and the boom hit a passing vehicle. Though no person was injured, the subsequent OSHA investigation determined that at least four people were exposed to risk as a result of the accident. An Administrative Law Judge determined that Mountain States had committed a willful violation of the wire rope inspection standard of the Occupational Safety and Health Administration Act because, before the accident, Mountain States had knowledge that the boom cable had “visible broken wires” within the meaning of the provision requiring repair or replacement before further use. The Sixth Circuit affirmed the citation and penalty, finding substantial evidence to support findings of constructive and actual knowledge. View "Mountain States Contractors, LLC v. Perez" on Justia Law

In 2006, Dr. Terry McMillin and his wife Leslie purchased a new home in Tupelo. Unhappy with contractor Jamie Ewing’s failure to respond to their repair requests, plus their discovery of a document (a blue card, noting a failed home inspection) listing the name of a different contractor as the contractor responsible for their home’s construction, the McMillins began the process of unraveling just who was responsible for building their new home. Ultimately, this case stemmed from an error by the City of Tupelo’s Permit Manager Marilyn Vail in handling the withdrawal of one licensed contractor and mistakenly substituting the name of another licensed contractor, when in actuality, a licensed contractor was not working on the home. The circuit court held a bench trial and awarded $9,319.23 in damages to repair the home and $105,894.39 in legal fees related to another case involving the construction but denied the McMillins’ request for attorneys’ fees in this case. The City appealed, and the McMillins cross-appealed. After review, the Supreme Court concluded that the circuit court erred in finding that the City was not immune from liability. The Court therefore reversed the circuit court’s judgment and render judgment in favor of the City. View "City of Tupelo v. McMillin" on Justia Law

Stark, an excavation and paving company, typically handles about 250 jobs per year in central and southern Illinois. The Occupational Safety and Health Administration (OSHA) issued Stark several citations at two worksites in 2008, following inspections. Another OSHA inspection, 17 days later, resulted in a citation for a willful excavation cave-in protection violation. The Secretary proposed penalties of $2000 for the eyewear violation, $35,000 for the spoil piles violation, and $70,000 each for the cave-in protections violations. An ALJ affirmed the citation for the eyewear violation and the $2000 penalty, affirmed the spoil piles violation and awarded a $20,000 penalty, and determined that the cave-in protection violations were serious violations rather than willful violations and imposed a $7,000 penalty for each, for a total penalty of $36,000. The Occupational Safety and Health Review Commission affirmed as to the spoil piles violation and the serious cave-in protection violation, but vacated the eyewear violation. As to the earlier cave-in protection violation, the Commission determined that it should be characterized as willful rather than serious and assessed a penalty of $60,000, for a total penalty of $87,000. The Seventh Circuit denied a petition for review. Stark failed to demonstrate that it had a safety policy that was effectively enforced. View "Stark Excavating, Inc. v. Perez" on Justia Law

The California Department of Transportation (CalTrans) and Papich Construction Company, Inc. appealed a trial court’s issuance of a writ of mandate to vacate the award of a public works contract to Papich. DeSilva Gates Construction submitted the second-lowest bid (the first bidder was disqualified for a non-responsive bid), and included the names and description of work by all subcontractors slated to perform work exceeding one-half of one percent of the bid amount. DeSilva later sent a letter to CalTrans noting DeSilva had inadvertently supplied CalTrans with additional information on the subcontractor list "above and beyond what was required." DeSilva explained it had not listed "All Steel Fence" as a subcontractor in its bid because the value of the bid items it would perform was less than one-half of one percent of the bid and the information for All Steel Fence (submitted within 24 hours of the bid) was additional information that was not required. Papich challenged DeSilva’s bid as having changed the subcontractor list. CalTrans rejected DeSilva’s bid as nonresponsive. DeSilva protested CalTrans’s determination that its bid was nonresponsive and protested Papich’s bid. The trial court granted the writ on grounds CalTrans erroneously rejected DeSilva's bid, and erred by awarding the contract to Papich despite Papich’s failure to comply with a material requirement of the information for bids. On appeal, CalTrans and Papich argued DeSilva’s bid was nonresponsive. Appellants also argued CalTrans had discretion to waive Papich’s mistake in failing to acknowledge the addendum to the information for bids. After review, the Court of Appeal concluded the trial court did not err. DeSilva’s disclosure of a subcontractor performing work amounting to only one-tenth of one percent of the total value of the contract was not required by the Public Contract Code or CalTrans’s information for bids. The additional information was accurate, albeit unnecessary, and did not render DeSilva’s bid nonresponsive. By contrast, CalTrans initially declared Papich’s bid to be nonresponsive and then waived Papich’s mistake and determined the bid to be responsive. The Court concluded CalTrans abused its discretion by awarding Papich the contract. Accordingly, the Court affirmed the trial court’s issuance of the writ of mandate. View "DeSilva Gates Construction, LP v. Dept. of Transportation" on Justia Law

Respondents Mesiti Development, Inc., JVL Construction Company, Inc., and Brook Hollow Corporation, appealed a superior court order dismissing their counterclaims against petitioner Town of Londonderry. In 2012, the Town filed a bill of interpleader to determine whether $264,517.02 in surplus impact fees collected under the Town’s impact fee ordinance should have been refunded to the developers who paid the impact fees or to the current owners of the properties for which the fees had been paid. Although the Town’s impact fee ordinance specifies that the current owners are entitled to the refunds, the Town sought to confirm that the ordinance is consistent with the impact fee statute. The bill listed seventeen properties and their respective impact fee payors and current owners. Additional parties intervened thereafter. Several parties, including the respondents, moved to add counterclaims alleging, among other things: (1) violations of RSA 674:21, V; (2) negligence; (3) violation of fiduciary duties owed to impact fee payors; (4) violation of the public trust in government; and (5) violation of the municipal budget law. The Town filed a motion to dismiss these counterclaims, which the trial court granted. This appeal followed. Finding no reversible error in the order dismissing these claims, the Supreme Court affirmed. View "Town of Londonderry v. Mesiti Development, Inc." on Justia Law

Keepers appealed, and the City cross-appealed, from partial summary judgment awards. At issue are two questions related to Chapter 2.3 of Milford’s municipal code, which regulates “adult‐oriented establishments.” First, whether the district court improperly considered the affidavit of the police chief in granting partial summary judgment to the City. The court concluded that the district court did not “abuse its discretion” in considering the affidavit and therefore affirmed as to this issue. Second, whether the City’s requirement that sexually oriented businesses publicly post the names of their operators, officers, and significant owners violates the First Amendment. The court concluded that the district court should not have reached the merits of that issue, nor does this Court do so, because Keepers’ First Amendment challenge does not present a justiciable case or controversy under Article III of the U.S. Constitution. Even if Keepers originally had standing to challenge the public‐posting requirement based on its asserted right against compelled speech, the case has become moot on appeal. Therefore, the court vacated as to this issue and remanded with directions. View "Keepers Inc. v. City of Milford" on Justia Law

In 2012, the South Dakota Department of Revenue (Department) commenced an audit of Taxpayer’s excise tax and sales tax licenses for tax period 2009 through 2012. At issue in this case was whether Taxpayer’s construction management at-risk services provided to public and non-profit entities were subject to a contractor’s excise tax under S.D. Codified Laws 10-46A-1. Taxpayer did not remit excise tax on the gross receipts it received from its construction management at-risk services provided to public and non-profit entities. As a result of the audit, the Department issued Taxpayer a certificate of assessment for $43,020, which included excise tax and interest. The circuit court reversed the Department’s certificate of assessment, ruling that Taxpayer’s services were not subject to a contractor’s excise tax under section 10-46A-1. The Supreme Court reversed, holding that Taxpayer’s act of entering into a contract with a public entity to guarantee a satisfactorily completed public improvement project by a specific date for a specific cost was subject to excise tax under section 10-46A-1. View "Puetz Corp. v. S.D. Dep’t of Revenue" on Justia Law

Duit, an Oklahoma highway contractor, contracted with the Arkansas State Highway and Transportation Department (ASHTD) to reconstruct I-30 between Little Rock and Benton. Duit encountered soil conditions that, it alleges, differed materially from information provided by the ASHTD during bidding. Duit’s claims for compensation were denied by the ASHTD, the Arkansas State Claims Commission, and the General Assembly. Duit sued under 42 U.S.C. 1983, citing the “in re Young” exception to Eleventh Amendment immunity. Duit alleged violations of the Federal Aid Highway Act, 23 U.S.C. 101, and the Due Process and Equal Protection clauses and sought to “enjoin Defendants from accepting federal aid … until . . . they fully comply with the federally mandated differing site clause.” The court dismissed the FAHA claim because that statute is enforced exclusively by an executive agency, dismissed the due process claim because Duit’s interest in future highway contracts is not a protected property interest and because the state appeals process for claim denials satisfies procedural due process requirements. The court declined to dismiss the equal protection claim, concluding Duit sufficiently alleged that the Commission treated out-of-state-contractor Duit differently from similarly situated in-state contractors without a rational reason. The Eighth Circuit held that Duit lacks standing to bring its equal protection claim and that the court erred in not dismissing that claim. View "Duit Constr. Co. Inc. v. Bennett" on Justia Law

The Department of Industrial Relations determined that plaintiff Vector Resources, Inc. failed to pay the appropriate prevailing wages to its workers on a public works project for the San Diego Unified School District. The Department's director's decision was based on regulatory language in a document entitled "Important Notice To Awarding Bodies And Other Interested Parties Regarding Shift Differential Pay In The Director's General Prevailing Wage Determinations," which was posted on the Department's Web site. The Important Notice addresses shift differential pay for various crafts used on public works projects, and was augmented by additional regulatory language in a "Note" that the Department placed on the cover page of prevailing wage shift provisions ("the Stamp"). Vector filed a declaratory relief action against the Department, seeking a declaration that the Important Notice and Stamp were invalid and unenforceable as "underground regulations" because they were not promulgated in compliance with the notice and hearing requirements of the Administrative Procedure Act (APA). Vector and the Department filed cross-motions for summary judgment. The trial court granted the Department's motion on the ground that under Government Code section 11340.9, subdivision (g), the Important Notice and the Stamp were exempt from the notice and hearing requirements of the APA because they were part of an overall prevailing wage determination process that constituted "rate setting." Vector argued on appeal that the grant of summary judgment to the Department was made in error because: (1) the Department admitted that the shift premium rule is a regulation; (2) the Department admitted that that regulation was not adopted in compliance with the APA; (3) the Department failed to prove that the shift premium regulation establishes or fixes rates within the meaning of Government Code section 11340.9, subdivision (g); (4) the court erred in failing to specifically cite the evidence it relied on to grant summary judgment; (5) the court's written order ignored the law and the admissible evidence; and (6) the Department's motion relied upon inadmissible evidence. Finding no reversible error, the Court of Appeal affirmed. View "Vector Resources, Inc. v. Baker" on Justia Law