Justia Construction Law Opinion Summaries

Circle C contracted to construct buildings at the Fort Campbell military base. The agreement included determinations of hourly wages for electrical workers. Circle C has had government contracts for 20 years; its co-owner and a bookkeeper attended training on the prevailing wage requirement for federal government contracts. PT was Circle C’s subcontractor on 98 percent of the electrical work, but did not have a written contract. Circle C provided PT with the wage determination excerpts from its contract, but did not explain the Davis-Bacon Act (40 U.S.C. 3142) prevailing wage requirements nor verify whether PT submitted its own payroll certifications, nor monitor PT’s eight employees’ work on the project, nor take measures to ensure payment of proper wages. One of the PT electricians claimed violation of the federal False Claims Act, 31 U.S.C. 3729(a)(2). The Department of Labor found inaccurate or false payroll certifications. The district court awarded treble damages: $1,661,423.13. The Sixth Circuit affirmed summary judgment in favor of plaintiffs, but remanded for recalculation of the damages. Circle C, an experienced contractor, made false statements, acted in reckless disregard of the truth or falsity of the information, and the false statements were “material” to the government’s decision to make payment.View "Wall v. Circle C Constr., L.L.C." on Justia Law

Patrick Engineering signed a 2007 contract with the City of Naperville for work on a stormwater management system. Some work was done and some payments were made, but the parties fell into a dispute over “additional services.” Patrick terminated the agreement and sued Naperville, seeking $436,392. The agreement provided that if Naperville made a verbal request for additional services, the engineers were required to confirm that request in writing and were not obligated to perform the changes until authorized in writing. This procedure was not followed; equitable estoppel became the crux of the case. The trial court dismissed. The appellate court reversed. The city did not appeal with respect to claims of quantum meruit and under the Illinois Local Government Prompt Payment Act, which remain pending in the trial court. The supreme court reversed with respect to other claims and reinstated the dismissals. While equitable estoppel may apply against municipalities in extraordinary and compelling circumstances, Illinois courts have never held that apparent authority may be applied against municipalities. To recover in equitable estoppel, plaintiff must allege specific facts showing that municipal officials possessed actual, rather than apparent, authority on which plaintiff reasonably relied.View "Patrick Eng'g v. City of Naperville" on Justia Law

Stoerr pled guilty to bid rigging, 15 U.S.C. 1; conspiracy to provide kickbacks and to defraud the United States, 18 U.S.C. 371; and assisting in the preparation of false tax returns, 26 U.S.C. § 7206(2). The convictions stemmed from kickback payments that Stoerr solicited and accepted from sub-contractors in connection with environmental remediation projects managed by Sevenson, his employer from 1980 to October 2003. In total, the district court determined that the scheme resulted in losses of $134,098.96 to the EPA and $257,129.22 to Tierra. After Sevenson learned of the kickbacks scheme, it paid Tierra approximately $241,000 to compensate for its losses. It then commenced a civil action against Stoerr in state court to recover its losses, and sought restitution in connection with Stoerr’s sentencing, under the Mandatory Victims Restitution Act, 18 U.S.C. 3663A, for reimbursement of the amount that it paid to Tierra. The district court denied Sevenson‟s request for restitution, instead ordering that Stoerr pay restitution to Tierra. The Third Circuit dismissed; as a non-party, Sevenson lacks standing to appeal. View "United States v. Stoerr" on Justia Law

In 2004-2005, Costa & Son Construction performed site work for the general contractor (Braitt) on such a project in Bridgewater. After Braitt terminated the relationship Costa sued, alleging breach of contract and violations of G.L. c. 93A. Costa sought to recover damages under a payment bond obtained by Brait from Arch Insurance, G.L. c. 149, 29. Brait asserted similar counterclaims against Costa. Arch argued that Costa had relinquished any right to claim against the bond pursuant to a provision of his subcontract with Brait. The trial court granted Brait and Arch directed verdict with respect to claims under the bond. A jury returned a verdict for Costa, against Brait. The Massachusetts Supreme Court vacated the directed verdict. A subcontractor on a public construction project for which a payment bond has been obtained by the general contractor pursuant to G.L. c. 149, 29, may not by private agreement forgo its right to pursue payment under the bond. The court also vacated the portion of the amended judgment granting consequential damages to Costa; consequential damages were precluded by the contract. View "Costa v. Brait Builders Corp." on Justia Law

Access to the Ambassador Bridge between Detroit and Windsor, Ontario necessitated traversing city streets. The state contracted with the Company, which owns the Bridge, to construct new approaches from interstate roads. The contract specified separate jobs for the state and the Company. In 2010, the state obtained a state court order, finding the Company in breach of contract and requiring specific performance. The Company sought an order to open ramps constructed by the state, asserting that this was necessary to complete its work. The court denied the motion and held Company officials in contempt. In a 2012 settlement, the court ordered the Company to relinquish its responsibilities to the state and establish a $16 million fund to ensure completion. Plaintiffs, trucking companies that use the bridge, sought an injunction requiring the state to immediately open the ramps. The district court dismissed claims under the dormant Commerce Clause, the motor carriers statute, 49 U.S.C. 14501(c), and the Surface Transportation Assistance Act, 49 U.S.C. 31114(a)(2). The Sixth Circuit affirmed. For purposes of the Commerce Clause and statutory claims, the state is acting in a proprietary capacity and, like the private company, is a market participant when it joins the bridge company in constructing ramps. View "Mason & Dixon Lines Inc. v. Steudle" on Justia Law

Andrews was designated as contractor for improvements to the sewage system, in a no-bid process involving kickbacks and bribery, having made numerous false statements in the bond application package. After the contract was terminated, he submitted a claim of $748,304, based on false statements and duplicate charges. Evidence indicated that Andrews was not capable of the project work and that the entire scheme was fraudulent. He was convicted of one count of conspiracy, 18 U.S.C. 371, four counts of wire fraud, 18 U.S.C. 1343, 1346, and 2, one count of program fraud, 18 U.S.C. 666(a)(1)(B) and 2, one count of making a false claim upon the Government of the Virgin Islands, 14 V.I.C. 843(4), and one count of inducing a conflict of interest, 3 V.I.C. 1102, 1103, and 1107. The Third Circuit affirmed the conviction, but remanded for resentencing. Errors in the indictment and jury instructions concerning honest services fraud did not affect substantial rights. Although the 151-month term of imprisonment was within the statutory maximum for Counts Two through Five, it exceeded the statutory maximum for Counts One and Six; it was not possible to determine whether the sentence was legal as to each count View "United States v. Andrew" on Justia Law

This case arose out of a contractual dispute between the city and its contractor and sub-contractor concerning the design and construction of an underground parking garage. At issue was whether the city's petition for a writ of certiorari to the court of appeals to decide whether that court erred when it determined the trial judge did not err when, having been presented with a motion to recuse him, he denied the motion rather than referred it to another judge. The court held that, since the affidavits at issue raised a reasonable question about the trial judge's impartiality that required the assignment of the motion to recuse to another judge, the court of appeals erred when it affirmed the trial judge's denial of the motion to recuse for failure to meet the requirement of USCR 23.5. Accordingly, the court reversed and remanded. View "Mayor & Alderman of the City of Savannah v. Batson-Cook Co., et al." on Justia Law

Plaintiffs appealed the dismissal of their complaint challenging a number of agreements entered into by the City of New York with respect to labor conditions on certain City construction projects. Plaintiffs argued that the agreements regulated the labor market and were therefore preempted by the National Labor Relations Act, 29 U.S.C. 151-169. The court found the project labor agreements in this case materially indistinguishable from agreements the Supreme Court found permissible under the market participation exception to preemption in Building and Construction Trades Council of Metropolitan District v. Associated Builders and Contractors of Massachusetts/Rhode Island Inc. Because the City acted as a market participant and not a regulator in entering the agreements, its actions fell outside the scope of NLRA preemption. Therefore, the court affirmed the judgment of the district court. View "The Building Industry Electric Contractors Assoc., et al. v. City of New York et al." on Justia Law

The city accepted a proposal to develop city-owned property. The developer formed companies to develop and own the affordable housing portion of the project. The city gave the developer an option to purchase the property under certain conditions. The developer failed to meet a condition that it obtain a demolition permit by a specific date. The city terminated the agreement. The developer alleged violations of the Fair Housing Act, 42 U.S.C. 3601, and state laws, claiming that the city knew or should have known that the condition was impossible to meet and actually terminated the agreement because the project would accommodate handicapped tenants. The district court dismissed. The Sixth Circuit affirmed. The facts alleged do not plausibly support findings: that the city designed the agreement to fail by including a condition it should have known that plaintiffs, sophisticated developers, could not meet; that the city did not want to house the handicapped; or that termination caused handicapped individuals to suffer disproportionately more than others. View "HDC, LLC v. City of Ann Arbor" on Justia Law

Roxco, Ltd., was hired as the general contractor for several public-construction projects for the State of Mississippi, including four building projects at the University of Mississippi, Jackson State University, and Alcorn State University. State law requires that a certain percentage of the cost of construction be retained to ensure completion. However, Mississippi Code Section 31-5-15 (Rev. 2010) allows the contractor to access that retainage by depositing with the State other acceptable security. Pursuant to Section 31-5-15, Roxco substituted securities valued at $1,055,000, deposited in a safekeeping account at Trustmark National Bank. Upon being notified of Roxco's default, the State instructed Trustmark to transfer the funds from the treasury bills into the state treasury account. By letter, Roxco directed Trustmark not to transfer the funds from the treasury bills to the State's account. Notwithstanding Roxco's letter, Trustmark deposited the funds into the State's account. Roxco filed suit against Trustmark for breach of contract and conversion. Trustmark argued that Section 31-5-15 permitted the release of the funds in the safekeeping account. A jury found in favor of Roxco and awarded $3,720,000 in damages. Aggrieved, Trustmark appealed. Finding that the trial court should have granted the motion for judgment notwithstanding the verdict, the Supreme Court reversed and remanded for further proceedings. View "Trustmark National Bank v. Roxco Ltd." on Justia Law