Justia Construction Law Opinion Summaries

This case arose from a contract between Roanoke Healthcare Authority (doing business as Randolph Medical Center) and Batson-Cook Company, a general contractor, to renovate the medical center, located in Roanoke. Batson-Cook received written notice from Roanoke Healthcare that work on the renovation project had been suspended. Batson-Cook notified one of its subcontractors, Hardy, of the suspension and stated that "[t]he contract has been suspended by [Roanoke Healthcare] through no fault of Batson-Cook ... or its subcontractors. [Roanoke Healthcare] is currently out of funding and has subsequently closed the facility while seeking a buyer." Liberty Mutual, the project's insurer, alleged in its answer that Roanoke Healthcare failed to pay Batson-Cook $241,940.51 for work performed pursuant to the contract. Batson-Cook sent Hardy a change order the change order deducted from the subcontract the $147,000 in equipment and materials another subcontractor Hardy hired, Johnson Controls, Inc. (JCI), had furnished for the renovation project and for which it has not received payment. JCI notified Liberty Mutual, Roanoke Healthcare, Batson-Cook, and Hardy by certified letters of its claim on a payment bond. The letters identified Batson-Cook as the general contractor and Hardy as the debtor. Liberty Mutual denied the claim. JCI sued Liberty Mutual, alleging JCI was entitled to payment on the payment bond Liberty Mutual had issued to Batson-Cook. Upon review, the Supreme Court concluded JCI was a proper claimant on the payment bond. Therefore, the circuit court erred in entering a summary judgment in favor of Liberty Mutual and denying JCI's summary judgment motion. View "Johnson Controls, Inc. v. Liberty Mutual Insurance Company " on Justia Law

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

Owners Insurance Company appealed a circuit court judgment declaring Owners was obligated to pay an arbitration award entered against Jim Carr Homebuilder, LLC ("JCH"), under the terms of a commercial general-liability insurance policy Owners had issued. Owners initiated a declaratory-judgment action against JCH seeking a declaration that it was not obligated to indemnify JCH for any judgment entered against JCH arising from a dispute that a house JCH constructed was poorly built. After the homeowners prevailed in their action against JCH, the trial court in the declaratory-judgment action entered a summary judgment holding that Owners was required to pay pursuant to the terms of the Owners policy. Upon review, the Supreme Court found that because JCH's faulty workmanship was not an "occurrence," the trial court's judgment was in error, and it was hereby reversed. View "Owners Insurance Company v. Jim Carr Homebuilder, LLC et al. " on Justia Law

Real party in interest, a homeowner's association (HOA), filed construction defect actions against Petitioners. During discovery, Petitioners disclosed some of their primary insurance agreements to the HOA pursuant to Nev. R. Civ. P. 16.1(a)(1)(D). Petitioner refused to disclose additional undisclosed policies covering it that may have been purchased by its parent companies. A special master ordered Petitioner to disclose those agreements. Petitioner objected to the order and filed this writ petition, contending that the disclosed insurance policies were more than sufficient to satisfy any judgment that may be entered against them. The Supreme Court denied the petition, holding that section 16.1(a)(1)(D) requires disclosure of any insurance agreement that may be liable to pay a portion of a judgment.View "Vanguard Piping v. Eighth Judicial Dist. Court" on Justia Law

This case presented an issue of first impression for the Supreme Court: the allocation of defense costs incurred by the common insured of several carriers. Specifically, the issue was whether one insurer with an obligation to indemnify and defend the insured had a direct claim for contribution against its co-insurer for defense costs arising from continuous property damage litigation. Furthermore, the Court considered whether such a claim was extinguished when the insured gave up its claims against the co-insurer in a release negotiated and signed only by the insured and the co-insurer. The dispute arose from construction litigation brought by the Township of Evesham against a contractor, Roland Aristone Inc. for property damage. Although plaintiff, OneBeacon Insurance Company paid half of Aristone's legal fees and defense expenses, Pennsylvania Manufacturers’ Insurance Company, which also insured Aristone, initially disclaimed coverage and did not pay any of Aristone’s defense costs. The Appellate Division affirmed the portion of the trial court’s decision allocating defense costs among the several insurers. It recognized OneBeacon’s claim for contribution against PMA and affirmed the trial court’s holding that OneBeacon’s claim was not extinguished by the release negotiated by Aristone and PMA. Upon review, the Supreme Court held that, in light of each insurer’s obligation to indemnify and defend Aristone for a portion of the period in which the continuing property damage occurred, the trial court properly held that OneBeacon had a contribution claim against PMA. View "Potomac Ins. Co. of Ill. v. Pa. Mfrs. Ass’n Ins. Co." on Justia Law

Homes built with an exterior insulation and finish system (EIFS) suffer serious water damage that worsens over time. Homebuilder began a remediation program in which it offered to homeowners to remove exterior EIFS from the homes it had built and to replace it with conventional stucco. Almost all the homeowners accepted Homebuilder's offer of remediation. Homebuilder sought indemnification for the costs from its insurers (Insurers). Insurers denied coverage, preferring instead to wait until the homeowners sued. This litigation ensued. Now, only one insurer remained. The court of appeals reversed the trial court's judgment in favor of Homebuilder, finding (1) Homebuilder failed to establish its legal liability to the homeowners to trigger Insurer's coverage; and (2) Homebuilder failed to offer evidence of damages covered by the policy. The Supreme Court reversed, holding (1) Homebuilder's settlements with the homeowners established both Insurer's legal liability for the property damages and the basis for determining the amount of loss; and (2) Insurer's policy covered Homebuilder's entire remediation costs for damaged homes.View "Lennar Corp. v. Markel Am. Ins. Co." on Justia Law

Plaintiff Mary Soileau was injured while working for the Town of Mamou when a front-end loader detached from a tractor and struck her in the leg. She named the tractor manufacturer, the Town, Smith's Hardware (where the Town rented the tractor for employees' use), the hardware store's owners and their insurance company. Trial began with only the owners and their insurer as the remaining defendants in the suit. On the third day, Plaintiff moved to dismiss the owners and their company in the presence of the jury, stating that she did not seek any damages personally against them. Hearing no objections, the trial court granted the request, but made no written (and therefore signed) judgment of dismissal. On day four, the insurer moved for a directed verdict, based on contract language that it was obligated to pay only if its insureds were legally obligated to pay. The insurer's motion was denied, and ultimately over $9 million in damages were awarded to Plaintiff. Concluding that the trial court erred in denying the insurer's motion, the appellate court reversed, dismissing the insurance company. The issue before the Supreme Court centered on the effect Plaintiff's in-court dismissal of the insured parties was during her personal injury action. Upon review, the Supreme Court concluded that the appellate court erred in its analysis, reversed and remanded the case for further proceedings. View "Solieau v. Smith True Value & Rental" on Justia Law

Prince was the general contractor for construction of an apartment building. Rybaltowski was an employee of a waterproofing company. His boss took Rybaltowski to the project site to perform an unpaid demonstration of the proposed caulking of windows. While Rybaltowski was at the site, a beam supporting masonry equipment fell on him. Less than an hour after the accident, Prince signed a subcontract with the waterproofing company. The insurance policy at issue was a Commercial General Liability Insurance policy with an exclusion from coverage for bodily injury to any contractor arising out of or in the course of the rendering or performing services of any kind or nature whatsoever by such contractor. “Contractor” was defined to include employees of subcontractors. The district court entered judgment in favor of the insurer, finding it had no duty to defend. The Seventh Circuit reversed and remanded, reasoning that the policy can be interpreted so that services are not provided until the contractor begins compensated work on the project. View "Atl. Cas. Ins. Co. v. Prince Contractors, Inc." on Justia Law

Plaintiffs served as the general contractor and the project developer for construction of a student housing complex at the University of Connecticut (UConn). UConn procured a commercial general liability (CGL) policy for the project, which insured Plaintiffs and their work. Defendant, American Motorists Insurance Company (AMICO), was the issuing insurer's successor in interest. UConn alleged that Plaintiffs breached the agreement with UConn, and Plaintiffs demanded that AMICO defend against UConn's claims. AMICO denied coverage. Plaintiffs settled their claims with UConn and then brought this action against Defendant for breach of contract and bad faith. The U.S. district court certified three questions of law for the Connecticut Supreme Court's consideration. The Court answered (1) allegations of unintended defective construction work by a subcontractor that damages nondefective property may trigger coverage under a CGL policy; (2) under the plain language of the insurance policy in this case, there is no cause of action based on AMICO's failure to conduct a discretionary investigation of claims for coverage; and (3) in global settlements encompassing multiple claims, the insured has the burden of proving that a pre-suit settlement is reasonable in proportion to claims that the insurer has a duty to defend. View "Capstone Bldg. Corp. v. Am. Motorists Ins. Co." on Justia Law

Plaintiffs entered into a contract with DJ Construction (DJ) to build a home on their property. Construction was halted two years later after Plaintiffs discovered significant water damage in the home. Plaintiffs sued DJ, seeking to recover for the damage to their home and DJ's failure to complete the house. Auto-Owners Insurance Company, DJ's insurer, denied DJ's requests for defense and indemnity against Plaintiffs' claims, determining coverage was not provided for under the terms of the policy. Plaintiffs subsequently entered into a stipulated judgment and settlement agreement with DJ in which DJ confessed judgment and assigned its rights and claims against Owners to Plaintiffs. Plaintiffs then filed suit against Owners based on Owners' failure to defend and indemnify DJ. The circuit court granted summary judgment in favor of Owners, determining there was no coverage under the policy because multiple policy exclusions applied. The Supreme Court affirmed, holding that the circuit court did not err in granting summary judgment in favor of Owners on Plaintiffs' breach of contract and bad faith claims based upon its determination that multiple policy exclusions applied. View "Swenson v. Owners Ins. Co." on Justia Law