Justia Construction Law Opinion Summaries

The plaintiff, an employee of a subcontractor, was electrocuted while carrying a long-handled aluminum tool at a construction site. The tool either touched or came close to a high-voltage power line owned by the defendant utility company. The plaintiff sustained severe injuries, including amputations and a traumatic brain injury. He filed a lawsuit against the general contractor and the utility company, alleging negligence and premises liability.The Wayne Circuit Court denied the defendants' motions for summary disposition. The Michigan Court of Appeals reversed, holding that the general contractor was not liable under the common work area doctrine and that the utility company did not owe a duty of care to the plaintiff. The plaintiff sought leave to appeal to the Michigan Supreme Court.The Michigan Supreme Court held that the plaintiff presented sufficient evidence to survive summary disposition. The court found genuine issues of material fact regarding three of the four elements of the common work area doctrine for the general contractor. Specifically, there were factual disputes about the height of the power lines and whether the general contractor took reasonable steps to guard against the danger. The court also found that multiple subcontractors were exposed to the risk, satisfying the requirement of a high degree of risk to a significant number of workers in a common work area.Regarding the utility company, the court found genuine issues of material fact about whether the power lines were properly maintained and whether the injury was foreseeable. The court concluded that the utility company had a duty to ensure the safety of the power lines, given the pre-injury communications and the known dangers of high-reaching conductive tools.The Michigan Supreme Court reversed the Court of Appeals' decision and remanded the case to the trial court for further proceedings. View "El-Jamaly V Kirco Manix Construction Llc" on Justia Law

Plaintiff Skanska USA Building Inc. served as the construction manager on a renovation project for Mid-Michigan Medical Center–Midland (the Medical Center); plaintiff subcontracted the heating and cooling portion of the project to defendant M.A.P. Mechanical Contractors, Inc. (MAP). MAP obtained a commercial general liability insurance policy (the CGL policy) from defendant Amerisure Insurance Company (Amerisure). Plaintiff and the Medical Center were additional named insureds on the CGL policy. In 2009, MAP installed a steam boiler and related piping for the Medical Center’s heating system. MAP’s installation included several expansion joints. Sometime between December 2011 and February 2012, plaintiff determined that MAP had installed some of the expansion joints backward. Significant damage to concrete, steel, and the heating system occurred as a result. The Medical Center sent a demand letter to plaintiff, asserting that it had to pay for all costs of repair and replacement. Plaintiff sent a demand letter to MAP, asserting that MAP was responsible for all costs of repair and replacement. Plaintiff repaired and replaced the damaged property, at a cost of $1.4 million. Plaintiff then submitted a claim to Amerisure, seeking coverage as an insured. Amerisure denied the claim. The issue this case presented for the Michigan Supreme Court's review centered on whether the unintentional faulty subcontractor work that damaged an insured’s work product constituted an “accident” under a commercial general liability insurance policy. Because the Court concluded the answer was yes, it reversed the Court of Appeals’ judgment to the contrary. View "Skanska USA Building, Inc. v. M.A.P. Mechanical Contractors, Inc." on Justia Law

At issue in this case was whether plaintiff, Ronnisch Construction Group (RCG), could seek attorney fees under section 118(2), MCL 570.1118(2), of the Construction Lien Act (CLA) from defendant Lofts on the Nine, LLC (LOTN), given that plaintiff received a favorable arbitration award on its related breach of contract claim but did not obtain a judgment on its construction lien claim. After review, the Michigan Supreme Court held that the trial court could award attorney fees to RCG because RCG was a lien claimant who prevailed in an action to enforce a construction lien through foreclosure. Therefore, the Court affirmed the Court of Appeals and remanded this case back to the trial court for further proceedings. View "Ronnisch Construction Group, Inc. v. Lofts on the Nine, LLC" on Justia Law

In 2009 and 2010, the south wing of the Detroit Public Library was renovated. Defendant KEO & Associates, Inc. (KEO) was the principal contractor for this project. Defendant Westfield Insurance Company supplied KEO with a payment bond worth $1.3 million, as required by the public works bond act (PWBA). KEO was identified as the principal contractor and Westfield as the surety on the bond. KEO subcontracted with defendant Electrical Technology Systems, Inc. (ETS) to provide labor and materials for electrical work. The agreement between KEO and ETS included a pay-if-paid clause, obliging KEO to pay ETS only after KEO had been paid for the relevant portion of work performed. ETS in turn subcontracted with Wyandotte Electric Supply Company for materials and supplies, making Wyandotte a sub-subcontractor from KEO’s perspective. ETS and Wyandotte first formed a relationship in 2003, when they entered into an “open account” agreement that governed ETS’s purchases from Wyandotte. Over the course of the project, ETS paid Wyandotte only sporadically and the unpaid balance grew. Initially, Wyandotte supplied materials on credit and credited ETS’s payments to the oldest outstanding balance, but eventually Wyandotte began to ship materials only for cash on delivery. Wyandotte sent certified letters to KEO and Westfield asking for a copy of the payment bond related to the library renovation project. The letter, on Wyandotte’s letterhead, referred to the “Detroit Public Library South Wing with [ETS.]” According to Wyandotte, KEO provided a copy of the payment bond the next day. Wyandotte also sent KEO a 30-day “Notice of Furnishing” in accordance with MCL 129.207, explaining that it was one of ETS’s suppliers. Wyandotte also sent copies of the letter to Westfield, the library, and ETS. The issue this case presented for the Supreme Court's revie centered on whether actual notice was required for a sub-subcontractor to recover on a payment bond when that sub-subcontractor complied with the notice requirements set forth in MCL 129.207. Furthermore, this case raised the question of whether a PWBA claimant could recover a time-price differential and attorney fees that were provided for by the claimant’s contract with a subcontractor, but were unknown to the principal contractor holding the payment bond as well as the principal’s surety. The Supreme Court concluded that the PWBA contained no actual notice requirement for claimants that comply with the statute, that the trial court properly awarded a time-price differential and attorney fees on past-due invoices to Wyandotte, and that the trial court erred in awarding postjudgment interest under MCL 600.6013(7). Accordingly, the Court affirmed the Court of Appeals with regard to the first two issues and reversed with regard to the third. View "Wyandotte Electric Supply Co. v. Electrical Technology Systems, Inc." on Justia Law

The issue before the Supreme Court in this case was whether a limitations period applied to an action for breach of a construction contract. The Court of Appeals held that the limitations period applied in this case, and that the statute's six-year limit expired before Plaintiff Miller-Davis Company filed its complaint. The appellate court reversed the judgment of the trial court that had awarded Plaintiff damages. Plaintiff argued on appeal to the Supreme Court that a different statute of limitations for breach of contract controlled, and the period prescribed by that statute was the applicable statute for this action. Upon review of the two statutes of limitations, the Supreme Court agreed with Plaintiff. The limitation in both statutes is six years, however, the period runs from "the date the claim first accrued." The Court reversed the appellate court's judgment because there was a question about the date Plaintiff's action accrued. The Court remanded the case for further proceedings. View "Miller-Davis Co. v. Ahrens Construction, Inc." on Justia Law

At issue in this case was whether the trial court abused its discretion when it concluded that Defendants Richco Construction, Inc. (Richco) and Ronald Richards, Jr. were personally notified of the default judgment against them and denied their motion to set aside that judgment. The suit arose from a contractual relationship between Plaintiff Lawrence M. Clarke, Inc. (Clarke) and Defendant. Clarke worked on a residential subdivision in 2003, and hired Richco as a subcontractor to work on the sewer system. Richco's work did not satisfy the local governing municipality, and after efforts to repair were unfruitful, Clarke contracted with another party to finish the work. Clark filed a breach of contract and fraud complaint against Richco. The process server attempted to serve Richco at its business address on file with the state, but Richco had vacated the premises and left no forwarding address. Clarke continued in its efforts to locate Richco and refiled its complaint. The trial court permitted alternative service through mailing notice to last-known addresses and a classified advertisement in the local paper. With no response, Clarke moved for a default judgment that the court granted. Upon review of the trial court record, the Supreme Court found that the trial court abused its discretion by finding that Richco was personally notified, and that Richco was entitled to relief from the default judgment. The Court reversed and remanded the case back to the trial court for further proceedings. View "Lawrence M. Clarke, Inc. v. Richco Construction, Inc." on Justia Law

Plaintiff Richard Loweke was an employee of an electrical subcontractor. Defendant Ann Arbor Ceiling & Partition Company was also a subcontractor. Both parties were hired for work on a construction project at the Detroit Metro Airport. Plaintiff was injured at the site when several cement boards fell on him. Defendant's employees placed the boards against the wall. Plaintiff sued Defendant for negligence. Defendant moved for summary judgment, arguing that it owed Plaintiff no duty that was "separate and distinct" from the contractual duties it owed to the general contractor. The trial court granted Defendant's motion, and the appellate court affirmed the trial court. On appeal to the Supreme Court, Plaintiff argued that Defendant had a common-law duty to avoid physical harm to others from its own actions. Upon consideration of the parties' briefs and the applicable legal authority, the Supreme Court reversed the lower courts' decisions. The Court found that the trial and appeals courts misinterpreted Michigan law with respect to "duty." The Court held that the assumption of contractual obligations does not limit the common law tort duties owed to others in the performance of the contract. The Court remanded the case to the trial court for further proceedings.