Justia Construction Law Opinion Summaries

Articles Posted in North Dakota Supreme Court
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Blue Appaloosa, Inc., appealed a judgment affirming an Industrial Commission order determining it violated N.D. Admin. Code ch. 43-02-03 by beginning construction of a treating plant prior to obtaining a permit or filing a bond with the Commission. Finding no reversible error, the North Dakota Supreme Court affirmed. View "Blue Appaloosa v. NDIC" on Justia Law

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Koch Construction, Inc.; Marilyn Koch, Personal Representative of the Estate of Michael P. Koch; and Koch Property Investments, Inc. (collectively “appellants”) appealed the judgment and amended judgment entered in favor of Toman Engineering Company (“Toman”). Michael Koch owned and operated Koch Construction and Koch Property Investments (“KPI”). Toman provided engineering services to Koch Construction on various projects, including designing a stormwater management system for the Koch Meadow Hills residential development project in Dickinson, North Dakota. Michael died in August 2017. The stormwater management system included a detention pond referred to as the Marilyn Way Stormwater Pond, which was the detention pond at issue in this case. In 2016, Janet Prchal, Dean Kubas, and Geraldine Kubas, owners of property near the Koch Meadow Hills development, sued the City of Dickinson and KPI for damages, alleging the development of Koch Meadow Hills caused water to drain and collect on their properties. The Prchal lawsuit was settled in September 2018, and the settlement required modifications to be made to the Marilyn Way Stormwater Pond before June 30, 2019. The reconstruction work on the detention pond occurred during the summer and fall of 2019. Toman served a summons and complaint on Koch Construction and Marilyn Koch, to collect unpaid amounts for engineering services Toman provided to the defendants in 2017. Toman filed the complaint in the district court in June 2019. The appellants argued the district court erred in deciding they committed intentional spoliation of evidence and dismissing their counterclaim as a sanction. After review of the district court record, the North Dakota Supreme Court concluded the district court abused its discretion when it dismissed the appellants’ counterclaim as a sanction for spoliation of evidence. Judgment was reversed and the matter remanded for a new trial. View "Toman Engineering Co. v. Koch Construction, et al." on Justia Law

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Grinnell Mutual Reinsurance Company appealed a district court judgment ordering it to pay Larry Pavlicek $214,045.55 under a commercial general liability insurance (CGL) policy Grinnell had with JRC Construction. Grinnell argued the district court misinterpreted the insurance policy, and that it was not required to indemnify JRC Construction because its work product was defective. In 2013, Pavlicek hired a contractor to construct a steel building on his property. JRC Construction installed the concrete floor and floor drain for the project. Another subcontractor installed the in-floor heating system for the concrete floor. After JRC completed the floor drain, it failed to properly install the concrete floor, and its attempts to repair the concrete damaged the drain. Pavlicek sued JRC for breach of contract relating to the defective work. In February 2020, Pavlicek filed a supplemental complaint against Grinnell, alleging it was required to satisfy the judgment as JRC’s insurer. Grinnell claimed it had no obligation to indemnify JRC under the CGL policy. The district court concluded JRC’s defective work on the concrete floor was not covered under the CGL policy, but damage to the floor drain was covered. Because removal and replacement of the floor and in-floor heat were necessary to repair the drain the court concluded the CGL policy covered all of those costs. The North Dakota Supreme Court found that although the CGL policy provided coverage to repair the floor drain, it did not cover the cost of replacing the concrete floor because that damage was the result of JRC’s defective work. The district court erred in finding the CGL policy covered the entire concrete floor replacement because replacement of the floor was the only way to repair the floor drain. Further, the Supreme Court found the district court erred in concluding the CGL policy provided coverage for replacement or repair of the in-floor heating system beyond that which may be necessary to repair the drain. View "Pavlicek v. American Steel Systems, Inc., et al." on Justia Law

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Jeanne and Nevin Tergesen appealed a judgment dismissing their complaint and awarding Nelson Homes, Inc. damages for its breach of contract counterclaim. The Tergesens argued the district court erred in dismissing their rescission and breach of contract claims, and the court erroneously found the Tergesens breached the contract. After review, the North Dakota Supreme Court concluded the district court did not err in dismissing the Tergesens’ claims or finding the Tergesens breached the contract, but the court did err in calculating the amount of prejudgment interest on Nelson Homes’ damages. View "Tergesen, et al. v. Nelson Homes" on Justia Law

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Tioga Properties, LLC, appealed a district court judgment awarding Wades Welding, LLC $27,669.90 relating to Wades Welding’s lawsuit for enforcement of construction liens and unjust enrichment. Janice Ellsworth owned Tioga Properties. Tioga Properties owned a restaurant and home (referred to by the parties as a “mobile home”) adjacent to each other in Tioga, North Dakota. Susan Gordon leased the restaurant from Tioga Properties. Gordon delivered rent payments to John Ellsworth Jr., Janice Ellsworth’s son. Gordon resided in the home but had no written lease for that property. In late 2016 and early 2017, Gordon hired Wades Welding to repair the home and restaurant. Wades Welding performed $19,840 of work on the home and $2,500 of work on the restaurant. Wades Welding delivered the invoices for its work to Ellsworth Jr. A day after Wades Welding completed its work at the home, Ellsworth evicted Gordon from the restaurant and home. Ellsworth Jr. supervised the eviction and Gordon left both properties within 48 hours. In December 2017, Wades Welding recorded construction liens against the properties after Tioga Properties failed to pay for the repairs. Tioga Properties sold the restaurant in July 2019. In September 2019, Tioga Properties served on Wades Welding a demand to enforce the home lien. In October 2019, Wades Welding sued Tioga Properties for breach of contract, foreclosure of the construction liens and unjust enrichment. Tioga Properties denied the allegations, claiming it did not authorize Wades Welding's work on the properties. The district court found Wades Welding's construction liens on both properties were valid, and ordered foreclosure of the home lien. The court found the lien on the restaurant was unenforceable due to a service error, but nonetheless awarded Wades Welding the amount of the repaired under the doctrine of unjust enrichment. Finding no reversible error in the district court's judgment, the North Dakota Supreme Court affirmed judgment in favor of Wades Welding. View "Wades Welding v. Tioga Properties" on Justia Law

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Woodrock, Inc. appealed the grant of summary judgment dismissing its negligence and other claims against McKenzie County, North Dakota. In September 2018, Woodrock sued the County for violations of N.D.C.C. ch. 48-01.2 and negligence. Woodrock alleged the County hired Edwards Gravel & Trucking, LLC to supply aggregate to aggregate stockpiles, the County did not obtain a payment bond from Edwards Gravel, Woodrock furnished materials for use in the project, and Edwards Gravel did not pay Woodrock for the materials. Woodrock claimed that the County violated N.D.C.C. section 48-01.2-10 and was negligent by failing to obtain a bond from Edwards Gravel and that the County was liable to the subcontractors and material suppliers who worked on the project. Woodrock requested damages in the amount of $298,629.54. On appeal to the North Dakota Supreme Court, Woodrick argued the district court erred in concluding a project to stockpile aggregate materials was not a public improvement and the bond requirement under N.D.C.C. 48-01.2-10 did not apply. The Supreme Court concluded supplying aggregate materials to stockpiles for general use in maintaining and repairing county roads did not constitute “construction of a public improvement.” Therefore, the Court affirmed the district court's judgment. View "Woodrock, Inc. et al. v. McKenzie Cty." on Justia Law

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Minn-Kota Ag. Products, Inc. appealed a district court order dismissing Minn-Kota’s appeal of findings of fact, conclusions of law and order issued by the North Dakota Public Service Commission (PSC) for lack of standing and affirming an administrative law judge’s (ALJ) order denying Minn-Kota’s petition to intervene. In 2017, Minn-Kota began construction of a large, $20 million grain handling facility near the municipalities of Barney and Mooreton, North Dakota. During construction of the facility, Minn-Kota received proposals to provide electric power to the facility from Otter Tail Power Co., an electric public utility, and Dakota Valley Electric Cooperative, a rural electric cooperative. Minn-Kota determined Otter Tail would provide cheaper and more reliable electric service and chose Otter Tail as its preferred provider. Dakota Valley protested Otter Tail’s application and requested a hearing. Otter Tail and Dakota Valley were represented at the hearing, and each offered evidence and testimony. Minn- Kota was not a formal party represented at the hearing and, other than the testimony offered by Schuler, Minn-Kota did not contribute to the hearing. In December 2017, the PSC held a work session to contemplate and discuss Otter Tail’s application. The concerns expressed by the PSC at the work session made it clear the PSC was likely going to deny Otter Tail’s application. As a result, Minn-Kota submitted a petition to intervene, which an ALJ determined Minn-Kota submitted after the deadline to intervene had passed, and denied it. Minn-Kota argued it has standing to appeal the PSC’s decision because it participated in the proceedings before the PSC, and the PSC’s decision should be reversed because it was not supported by the facts or law. In the alternative, Minn-Kota argued the case should have been remanded to the PSC and it should have been allowed to intervene and introduce additional evidence into the record. The North Dakota Supreme Court determined Minn-Kota had standing, but did not provide a compelling argument on how Otter Tail did not adequately represent its interests at the administrative hearing or throughout the entirety of the proceedings. Therefore, the Court affirmed in part, reversed in part, and thus affirmed the PSC's order. View "Minn-Kota Ag Products, Inc. v. N.D. Public Service Commission, et al." on Justia Law

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Gentek Building Products, Inc. appealed after a jury awarded Richard and Angela Palmer damages of $10,791, plus interest. Gentek also appealed an order awarding attorney fees of $80,379 to the Palmers, and taxation of costs and disbursements. In 2003, the Palmers purchased and installed “Driftwood” steel siding from Gentek on their home in Williston. Gentek provided a lifetime limited warranty for the siding. In September 2011, the paint began to peel on the siding installed on the south side of the home. In January 2012, the Palmers submitted a warranty claim to Gentek. Gentek offered the Palmers the option of either a cash settlement or replacement with a substitute siding under the warranty, since Gentek had discontinued producing the type of siding originally installed. While the Palmers opted to have their siding replaced with a substitute, Gentek had difficulty finding a contractor willing to perform the warranty work due to the oil boom in the area. Thousands of others also experienced delaminated pain on their siding and filed warranty claims with Gentek, resulting in a class action lawsuit filed in federal district court in Ohio. The federal district court entered a final order and judgment approving a class action settlement. In 2014, the Palmers filed this suit against Gentek, alleging breach of warranty by failing to replace the defective siding. Gentek defended by arguing the Palmers were bound by the federal court's final class action settlement. The North Dakota Supreme Court concluded the North Dakota district court did not err in holding the Palmers were not bound by the federal district court’s final order and judgment approving a class action settlement. Furthermore, the Supreme Court concluded that the court erred in its award of attorney fees and in not ruling on Gentek’s objection to costs and disbursements. The order awarding attorney fees and taxation of costs and disbursements was reversed, however, and the matter remanded for further proceedings. View "Palmer, et al. v. Gentek Building Products, Inc." on Justia Law

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Oil Capital Ready Mix, LLC; Agape Holdings, LLP; Scott Dyk; and Samuel Dyk (collectively “Dyk”) appealed a judgment awarding Skaw ND Precast LLC (“Skaw”) $69,295 in damages for conversion of its property. In March 2013, Skaw entered into a five-year agreement with Tioga Ready Mix (“Tioga”), a company which produced ready-mix concrete product, to rent a two-acre parcel of land to conduct its business. The base rent for the site was $700 per month, subject to reductions if Skaw purchased designated quantities of ready-mix product from Tioga. The agreement provided it would remain in effect until December 31, 2018, and it did not allow either party to unilaterally cancel the agreement. In spring 2015, Skaw learned that Tioga had arranged to sell Tioga’s assets at a public auction, including the two-acre parcel of property where Skaw conducted its business. Skaw’s owners attended the auction sale in May 2015. The auction service notified all attendees that Skaw’s assets on the premises were not part of the sale, that there was a lease in place between Skaw and Tioga, and that the lease went with the land. Dyk was the successful bidder at the auction and entered into a commercial purchase agreement with the sellers which did not include Skaw’s product inventory or equipment and stated the sale was subject to “rights of tenants,” but did not list Skaw as a tenant. Once Dyk got its ready-mix plant running, Skaw began purchasing concrete ready-mix product from Dyk for its business. When presented with the contract between Skaw and Tioga, Dyk renegotiated the terms; Dyk and Skaw agreed to increase monthly rental payments to $750 per month. During a scheduled shut down of both companies' operations, Dyk built an earthen berm around Skaw’s equipment which prevented Skaw from accessing it. Dyk also transported Skaw’s concrete pad and blocked inventory off of Skaw’s two acres to an area adjacent to Dyk’s offices. Other Skaw assets were transported to undisclosed locations. When Skaw discovered the berm, Dyk informed Skaw that Skaw abandoned their temporary rental agreement in December 2015 and that law enforcement would be notified if there were “any attempts to breach the peace or trespass” on the property. Skaw replied that the 2013 lease was still valid and had not been abandoned, and that Skaw planned to return to the property and continue operations. Dyk argued on appeal of the conversion damages award that the district court erred in ruling the 2013 agreement between Skaw and Tioga was a lease rather than a license. Because the North Dakota Supreme Court concluded the district court’s findings of fact were not clearly erroneous, it affirmed the judgment. View "Skaw ND Precast, LLC v. Oil Capital Ready Mix, LLC, et al." on Justia Law

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SWMO, LLC appealed district court orders granting partial summary judgment to Mon-Dak Plumbing and Heating, Inc. and RK Electric relating to their work performed on a building owned by SWMO. SWMO contracted with Eagle Rigid Spans for the construction of a commercial building in Williston, North Dakota. Eagle was the general contractor and Mon-Dak and RK Electric were subcontractors for the project. Mon-Dak and RK Electric contracted with Eagle to provide HVAC, plumbing, and electrical work on the building. During construction, SWMO noticed defects in the materials and workmanship and believed the building was not properly constructed. The trial court ultimately awarded Mon-Dak $125,600 and RK Electric $114,242 from funds deposited into court by SWMO. SWMO claimed disputed issues of fact precluded summary judgment. The North Dakota Supreme Court determined The district court provided no analysis of the documents in its summary judgment orders. "By not addressing the evidence submitted by SWMO, the district court in effect found Mon-Dak’s and RK Electric’s evidence was more persuasive." In viewing the evidence in a light most favorable to SWMO at the time of the motions, SWMO raised a genuine issue of material fact, and Mon-Dak and RK Electric were not entitled to judgment as a matter of law. Although the court later found at trial that Eagle materially misrepresented the true amounts paid to its subcontractors, the court did not make findings on whether Eagle misrepresented the payments made to Mon-Dak and RK Electric. The Court therefore reversed and remanded for further findings relating to amounts Mon-Dak and RK Electric were entitled to recover from funds SWMO deposited into court; the parties' remaining arguments were without merit or not necessary to the Court's decision. The trial court was affirmed in all other respects. View "SWMO, LLC v. Eagle Rigid Spans Inc., et al." on Justia Law