Justia Construction Law Opinion Summaries

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

Plaintiff Victor Virgin Construction Corporation appealed a Superior Court remitting a jury award following an advisory jury finding of breach of contract and negligent misrepresentation by defendant New Hampshire Department of Transportation (DOT). DOT cross-appealed, asking that the award be further reduced. In 2008, Virgin bid on a DOT project to replace a stone box culvert located underneath Depot Road in Hollis. Virgin submitted the lowest bid and was awarded the contract. After completion of the project, DOT paid Virgin the sum agreed to in the contract with only a minor upward adjustment. Virgin sued DOT for both breach of contract and negligent misrepresentation. The trial court denied DOT's request to bifurcate the trial; subsequently the jury found in favor of Virgin. DOT then moved for a new trial or to set aside the jury's damages award. The trial court granted remittitur, but did no enter a finding of liability on the breach of contract claim, finding that the award could only be sustained on the negligent misrepresentation claim. Virgin then appealed, seeking the full amount of damages awarded by the jury. The Supreme Court found that Virgin's negligent misrepresentation claim for money damages was capped by statute, therefore it was not entitled to the full amount of damages originally awarded by the jury. That cap does not apply to breach of contract, however, and because the trial court did not include findings with regard to liability on the breach of contract claim, the case was remanded for further proceedings.View "Victor Virgin Construction Corp. v. New Hampshire Dep't of Transportation" on Justia Law

Project labor agreements (PLAs) are used in the construction industry to set common conditions of employment for large projects involving multiple subcontractors and unions. On a public construction project, a PLA can be entered into by the governmental unit paying for the project or by its general contractor; the other party is a labor organization. If the governmental unit enters into a PLA, all contractors bidding on the project must agree to abide by it. Opponents argue that PLAs discourage nonunion contractors from bidding on government contracts and increase construction costs. Proponents, such as the trades councils, claim that PLAs enhance job-site cooperation and reduce labor disputes. The federal government has gone back and forth on allowing PLAs. Michigan passed the first version of the Fair and Open Competition in Governmental Construction Act in 2011, restricting the use of PLAs on publicly funded projects. Following entry of an injunction, that version was superseded by an amended act, passed in 2012. The district court enjoined the current version as preempted by the National Labor Relations Act. The Sixth Circuit reversed, finding that the act furthers Michigan’s proprietary goal of improving efficiency in public construction projects, and is no broader than necessary to meet those goals. View "MI Bldg. & Constr. Trades Council v. Snyder" on Justia Law

Greco worked at MetroHealth, a county-owned health-care provider in Cleveland, from 1997 until 2009, supervising independent contractors who worked on MetroHealth construction projects, selecting contractors for small-scale no-bid maintenance projects, and authorizing payment for their work. Greco used his authority to facilitate a bribery scheme set up by his boss and Patel, the vice-president of a construction company. The participants became nervous and Greco took action to hide his involvement in the scheme, but Patel contacted the government and confessed; in exchange for a reduced sentence, Patel provided detailed information about the scheme. Greco was convicted of bribery and conspiracy to commit bribery involving programs receiving federal funds (18 U.S.C. 666(a)(1)(B) and 371), violation of and conspiracy to violate the Hobbs Act (18 U.S.C. 1951), making false tax returns (26 U.S.C. 7206(1)), and conspiracy to commit mail fraud (18 U.S.C. 1349) and was sentenced to 112 months’ imprisonment and required to pay $994,734.84 in restitution to MetroHealth. The Sixth Circuit affirmed, rejecting arguments that the court improperly applied a 12-level enhancement based on an erroneous loss calculation; improperly applied a two-level enhancement for obstruction of justice; and imposed a substantively unreasonable sentence. View "United States v. Greco" on Justia Law

Clark, the owner and president of an East St. Louis Illinois company, was charged with making false statements in violation of 18 U.S.C. 1001(a)(3). Clark’s company had entered into a hauling services subcontract with Gateway, general contractor on a federally funded highway project in St. Louis, Missouri. Employers must pay laborers working on certain federally-funded projects the “prevailing wage,” calculated by the Secretary of Labor based on wages earned by corresponding classes of workers employed on projects of similar character in a given area, and maintain payroll records demonstrating prevailing wage compliance, 40 U.S.C. 3142(b) The indictment charged that Clark submitted false payroll records and a false affidavit to Gateway, representing that his employees were paid $35 per hour, when they actually received $13-$14 per hour. The district court dismissed for improper venue, finding that when a false document is filed under a statute that makes the filing a condition precedent to federal jurisdiction, venue is proper only in the district where the document was filed for final agency action. The Seventh Circuit reversed. Although the effects of the alleged wrongdoing may be felt more strongly in Missouri than in Illinois, the Southern District of Illinois is a proper venue. View "United States v. Clark" on Justia Law

ACT brought this suit against PCI and First National, alleging claims of breach of contract, quantum meruit, and recovery on a payment bond under the Miller Act, 40 U.S.C. 3131(b). Because United States ex rel. Celanese Coatings Co. v. Gullard was clearly irreconcilable with intervening higher authority, the court overruled it and held that the Miller Act's statute of limitations was a claim-processing rule, not a jurisdictional rule. Because nothing on the face of ACT's complaint indicated that it did not work on the project or rent equipment to PCI within one year of the date it filed the complaint, the complaint could not have been dismissed if the district court had treated the Miller Act's statute of limitations as a claim-processing rule. Accordingly, the court vacated and remanded. View "Air Control Tech. v. Pre Con Indus." on Justia Law

The Town of Kearny hired Brandt-Kuybida Architects to design and plan the construction of a new public safety facility. Construction began in 1994. The general contractor, Belcor Construction, signed a "Certificate of Substantial Completion" in late 1995. Approximately ten days later, the architects signed the same Certificate. The Certificate defined the date of substantial completion in language similar to that of the construction contract. The signatories to the Certificate, however, left the "date of issuance" and the "date of completion" of the project blank. In Spring1996, the Town's Construction Official issued the first Temporary Certificate of Occupancy (TCO), limited to the police section of the building. Structural defects in the facility surfaced shortly after the Kearny Police Department took occupancy, including leaks, buckled tiles and cracks in the walls. By 2007, ceilings in the facility had fallen and pipes had separated and pulled, all of which were attributed to uneven settlement. The Town never issued a final certificate of occupancy and on February 8, 2007, had the building vacated. Belcor initiated arbitration proceedings against the Town because the Town withheld final payment under the contract. Belcor and the Town resolved their dispute by Stipulation of Settlement. Both the Stipulation of Settlement and the related Town of Kearny Resolution identified the date of substantial completion of the facility as February 1, 1996. The issues before the Supreme Court were: (1) when could a building be considered substantially complete for purposes of calculating the ten-year period of the statute of repose; and (2) whether the Comparative Negligence Act and the Joint Tortfeasors Contribution Law authorized the allocation of fault to defendants who obtained dismissals pursuant to the statute of repose. The Supreme Court concluded after review that (1) the ten year period of the statute of repose started when the first Temporary Certificate of Occupancy was issued for the facility; and (2) when the claims against a defendant are dismissed on statute of repose grounds, fault may be apportioned to the dismissed defendant under the Comparative Negligence Act and the Joint Tortfeasors Contribution Law. View "Townof Kearny v. Brandt" on Justia Law

In this interlocutory appeal, the Secretary appealed the district court's order granting Odebrecht a preliminary injunction barring the Department's enforcement of a Florida law known as the Cuba Amendment, 2012 Fla. Laws 196, section 2. The Amendment prevented any company that did business in Cuba - or that was in any way related to a company that did business in Cuba - from bidding on state or local public contracts in the State of Florida. The court concluded that Odebrecht has demonstrated a substantial likelihood of success on its claim that the Cuba Amendment violated the Supremacy Clause of the Constitution under principles of conflict preemption; Odebrecht would have suffered irreparable harm absent the injunction; the balance of harms strongly favored the injunction; and the injunction did not disserve the public interest. Accordingly, the court affirmed the judgment. View "Odebrecht Construction, Inc. v. Secretary, FL DOT" on Justia Law

This appeal stemmed from a protracted contract dispute arising out of the construction of Meridian’s new City Hall. The City brought suit against the project’s construction manager, Petra, Inc., alleging that Petra breached the parties’ agreement in a number of ways. The City further claimed that Petra was not entitled to any additional fees for its work. Petra counterclaimed, seeking an equitable adjustment of its construction manager fee. After trial, the district court entered its findings of fact and conclusions of law, ruling against the City on all but one of its claims and awarding Petra an additional fee for its services. The court awarded Petra $595,896.17 in costs and $1,275,416.50 in attorney fees, but stayed enforcement of the judgment pending appeal. The City appealed. Finding no error in the district court's judgment in favor of Petra, the Supreme Court affirmed. View "City of Meridian v. PETRA Inc." on Justia Law

The Phenix City Board of Education ("the Board") sought mandamus relief from the Russell Circuit Court's denial of the Board's motion to dismiss or, in the alternative, for a summary judgment on claims brought against it by The Lisle Company, Inc. ("Lisle"). Because the Board is immune from suit pursuant to § 14, Ala. Const. 1901, the Supreme Court granted the Board's petition and issued the writ. View "Lisle Company, Inc. v. Phenix City Board of Education" on Justia Law