Justia Construction Law Opinion Summaries

Rick Snider and Janan Snider, doing business as RJ Snider Construction ("Snider"), appealed the grant of summary judgment, forfeiting a construction lien against the property that formerly housed the Dickinson Elks Lodge later owned by private investors, the Dickinson Elks Building, LLC ("DEB"), and prohibiting Snider from recording additional liens against the property without performing additional work. The North Dakota Supreme Court was not convinced that perfecting a lien amounted to creating a lien, as argued by the Sniders. As such, the Court concluded that when a Court declares a lien is deemed forfeited or satisfied, the right to the lien for the construction services or materials provided is deemed forfeited, not just the document recording the lien and establishing its priority. The district court correctly interpreted N.D.C.C. 35-27-25 in concluding the statute barred Snider from recording another construction lien against DEB's property for the same work. The district court also correctly concluded Snider forfeited its construction lien created and attached as a matter of law under N.D.C.C. sections 35-27-02 and 35-27-03 when it failed to comply with DEB's demand to enforce the lien. View "Snider v. Dickinson Elks Building, LLC" on Justia Law

Twalker Development, LLC appealed a judgment granting KLE Construction LLC's claim for unjust enrichment and ordering Twalker to pay $87,958.74 in damages. KLE and Twalker engaged in negotiations for KLE to provide construction services to Twalker in exchange for four lots located in Twalker's development. KLE and Twalker never executed a written contract finalizing the terms of an agreement. KLE began performing construction services on the property, including preliminary dirt work related to clearing and scraping the property. KLE also hired an engineering firm to create plans to subdivide the property for future sales. KLE and Twalker disagreed about certain aspects of the project, and Twalker terminated KLE's services. Twalker continued to develop the property and did not compensate KLE for the services it provided. KLE sued Twalker for breach of contract, unjust enrichment, and forbearance. After a bench trial, the district court dismissed KLE's breach of contract claim, finding KLE failed to establish the existence of a contract. The court dismissed KLE's forbearance claim, stating forbearance was not a separate and distinct claim. The court granted KLE's unjust enrichment claim and found KLE was entitled to $90,857 in damages. The court ordered each party pay the other party's costs and disbursements. A judgment was entered in favor of KLE for $87,958.74. After review, the Supreme Court concluded the district court did not err in granting KLE's unjust enrichment claim and awarding damages. View "KLE Construction, LLC v. Twalker Development, LLC" on Justia Law

Brian Welken appealed after a jury returned a verdict in favor of Eugene Taszarek, Marlys Taszarek, Trina Schilling, Steven Taszarek, and Michael Taszarek ("Taszareks") and against Lakeview Excavating, Inc., ("Lakeview") and Welken. Lakeview was a corporation primarily involved in flood control projects, and Welken was Lakeview's president and sole shareholder. In the spring of 2012, German Township in Dickey County solicited bids for road construction projects to repair and raise the grade of a road near the Taszareks' property. Lakeview, acting through Welken, successfully bid and was selected as the contractor for the road projects. Lakeview obtained most of its field rock for the project from area farmers and ranchers with rock piles on their properties. Lakeview arranged with landowners to harvest rocks from their fields and reclaim the ground so it could again be farmed, and landowners allowed Lakeview to remove rock piles. Herb Buerkley owned land adjacent to land owned by the Taszareks, and Buerkley permitted Lakeview to enter his family's property to harvest field rock. While harvesting the rock piles from Buerkley's land, Lakeview's employees crossed into the Taszareks' land and harvested field rock. The Taszareks brought an action against both Lakeview and Welken, asserting claims of intentional trespass, conversion, and unjust enrichment arising from Lakeview's work on the German Township road-raising project. The district court held a jury trial on the Taszareks' trespass and conversion claims against Lakeview and Welken. During trial, the Taszareks' attorney asked the court to instruct the jury on the theory that Lakeview was the "alter ego" of Welken and that Welken should therefore be personally liable for any judgment. Over the objection of Welken's attorney, the court gave an instruction regarding the alter ego doctrine. After review, the Supreme Court concluded Welken failed to preserve whether the district court misapplied the law by allowing the jury to resolve whether Lakeview was the alter ego of Welken. Furthermore, the Court concluded that the trial court erred as a matter of law in inadequately instructing the jury regarding the alter ego doctrine. The Court therefore reversed the judgment and remanded for a new trial. View "Taszarek v. Welken" on Justia Law

Dickinson Elks Building, LLC, appealed after the district court forfeited a construction lien filed by Rick and Janan Snider, doing business as RJ Snider Construction, and awarded the Dickinson Elks attorney's fees. In December 2011, Snider contracted with Beaver Brinkman to perform work on real property owned by the Dickinson Elks. Snider recorded a construction lien in January 2013 against the property after it did not get paid for all of its work. In May 2014, the Dickinson Elks served Snider with a demand to start a lawsuit to enforce the lien and record a lis pendens within 30 days of the demand. Snider sued the Dickinson Elks in June 2014, seeking foreclosure of the construction lien and a money judgment. Snider recorded a notice of lis pendens in July 2014. The Dickinson Elks moved for summary judgment, arguing Snider's complaint should have been dismissed because Snider was not a licensed contractor when it started the work on the property. The Dickinson Elks also argued Snider did not have a valid construction lien, because Snider did not record a lis pendens within 30 days of receiving the demand to enforce the lien. The district court granted the motion in part and entered a judgment forfeiting Snider's construction lien because Snider did not record a lis pendens within 30 days of receiving the Dickinson Elks' demand to enforce the lien. After review, the Supreme Court concluded it did not have jurisdiction and dismissed the appeal. View "Snider v. Dickinson Elks Building, LLC" on Justia Law

Linh Duc Duong, doing business as Classy Nails, appealed after a bench trial awarded Welch Construction & Excavating, LLC, $30,825, plus interest, for the balance due on a construction contract. Welch Construction sued Duong, alleging the parties contracted for Welch Construction to remodel a vacant retail space in Kirkwood Mall into a Classy Nails salon for $92,225. Welch Construction alleged it completed the work and Duong failed to pay the balance of $30,825 due under the contract. Duong answered and counterclaimed, denying he owed an outstanding balance under the contract and alleging Welch Construction breached the contract by failing to remodel the retail space in a timely and workmanlike manner according to his specifications. Duong claimed he was entitled to a setoff against any balance owed under the contract for his damages caused by Welch Construction's failure to complete the work before Thanksgiving 2013 and failure to construct the salon according to his specifications. Duong sought lost profits and damages for repairing the work according to his specifications. After review, the Supreme Court concluded the district court did not clearly err in finding: (1) the parties did not orally contract for a specific completion date for the construction project; (2) Welch Construction did not unreasonably delay completion of the project; and (3) Duong failed to establish his damages for costs to repair and lost profits for Welch Construction's claimed failure to complete the project according to his specifications. View "Welch Construction & Excavating, LLC v. Duong" on Justia Law

Arrow Midstream Holdings, LLC and Arrow Pipeline, LLC (collectively "Arrow") appealed, and Tesla Enterprises, LLC ("Tesla") cross-appealed, a judgment dismissing without prejudice for lack of jurisdiction its action against 3 Bears Construction, LLC and Tesla for breach of contract and a declaration that Tesla's pipeline construction lien was invalid. In 2013, Arrow hired 3 Bears to be the general contractor for the construction of a pipeline located on a right-of-way easement acquired by Arrow from the Bureau of Indian Affairs over Indian trust land on the Fort Berthold Indian Reservation. 3 Bears entered into a subcontract with Tesla to supply materials and labor for the construction. 3 Bears was owned by two members of the Three Affiliated Tribes ("Tribe") and was certified under the Tribal Employment Rights Ordinance ("TERO"). 3 Bears claimed Arrow was a covered employer who was required to comply with TERO rules. After the pipeline was completed, a dispute arose between 3 Bears and Tesla concerning amounts Tesla claimed it was owed by 3 Bears for work Tesla performed. In mid-2014, Tesla sent Arrow a notice of right to file a pipeline lien under N.D.C.C. ch. 35-24. Tesla recorded the pipeline lien against Arrow in the Dunn County recorder's office in June 2014. In July 2014, Arrow commenced this action in state district court challenging the validity of the pipeline lien, seeking indemnification, and claiming 3 Bears breached the parties' contract. In August 2014, 3 Bears moved to dismiss for lack of subject matter jurisdiction. In November 2014, 3 Bears filed a complaint against Tesla and Arrow in Fort Berthold Tribal Court. 3 Bears sought a declaration that the pipeline lien was invalid, alleged Arrow had breached the master service contract, and requested an award of damages. In December 2014, the state district court agreed with 3 Bears' argument that it lacked subject matter jurisdiction over the lawsuit. The court concluded "exercising jurisdiction over this action under the circumstances presented here would infringe upon Tribal sovereignty." The court further concluded, "at the very least, Arrow and Tesla, as a matter of comity, should be required to exhaust their tribal court remedies before this Court exercises jurisdiction." The court dismissed the action "without prejudice to allow any of the parties to re-open the case without payment of another filing fee should it become necessary for purposes of enforcing the Tribal Court action or for any other reason." After review of the matter, the North Dakota Supreme Court reversed and remanded, concluding the district court had jurisdiction over this lawsuit. View "Arrow Midstream Holdings, LLC v. 3 Bears Construction, LLC" on Justia Law

Zachary Johnson and Margie Johnson contracted with Buskohl Construction Inc. as a general contractor to oversee the construction of their new house. John Buskohl was the sole shareholder, officer, and director of Buskohl Construction Inc. Due to a deteriorating relationship with the Johnsons, Buskohl walked off the job before construction was complete, leaving various "odds-and-ends" unfinished on the house. The Johnsons repaired some of the alleged deficiencies themselves and solicited bids from various contractors to fix the remaining issues. The Johnsons sued Buskohl alleging Buskohl negligently constructed the house, breached the contract, and breached the warranty to construct the house in a workmanlike manner. The jury returned a verdict in favor of the Johnsons. Buskohl moved for a new trial under N.D.R.Civ.P. 59(b), arguing irregularities in the proceedings prevented him from receiving a fair trial. The district court denied the motion. On appeal, Buskohl argued the district court abused its discretion by denying a new trial because the district court erred by: (1) failing to provide a special verdict form that categorically itemized damages; (2) allowing hearsay into evidence; (3) excluding Buskohl's expert from testifying; and (4) denying Buskohl's motion for mistrial based on improper closing argument. After review, the Supreme Court concluded the district court erred in admitting hearsay evidence that did not fall within an exclusion or exception. Accordingly, the Court reversed the district court's judgment and remanded for a new trial, because the district court's error affected Buskohl's substantial right to a fair trial. View "Johnson v. Buskohl Construction, Inc." on Justia Law

Plaintiffs-Appellants Terence and Rachel Barrett appealed the dismissal of their claims against Defendant-Appellee Harry Gilbertson (dba Harry Gilbertson Construction) in a contract dispute. Plaintiffs argued that the trial court erred in dismissing their breach of contract claims related to the construction of their house, and that the court abused its discretion in denying their motion for attorney's fees. Upon review of the trial court record, the Supreme Court concluded that Plaintiffs failed to establish Defendant breached the terms of the construction contract or that the trial court did abused its discretion in denying the Plaintiffs' claim for attorney's fees. View "Barrett v. Gilbertson" on Justia Law

Kadrmas, Lee & Jackson, Inc., ("KLJ") appealed a district court judgment awarding the City of Valley City ("City") costs and expenses the City incurred defending itself in the underlying lawsuit and pursuing its indemnity claim against KLJ. The City entered into a contract with KLJ to provide engineering services for a paving and sewer project. The City hired a general contractor for the project. The contract between the City and the contractor required the contractor to furnish all labor, materials, and equipment for the project. The contractor was required to provide a payment bond under the terms of its contract with the City, and St. Paul Fire & Marine Insurance Company ("St. Paul") was the surety under the bond. Specialized Contracting, Inc. ("SCI"), entered into a subcontract with the contractor to complete some of the work on the project. In 2007, SCI sued St. Paul for breach of its duties under the payment bond, seeking compensation for additional work SCI alleged it completed on the project for which the contractor refused to pay. St. Paul served a third-party complaint against the City for breach of contract and indemnity, alleging the concrete repair work was outside the scope of the City's contract with the contractor, the City was liable to the contractor for any additional compensation SCI was claiming against the payment bond if SCI established KLJ's decision to replace the concrete was beyond the scope of the contract, and the City was required to indemnify St. Paul for any judgments against it in favor of SCI arising from decisions made by KLJ. Upon review of the matter, the Supreme Court concluded KLJ did not have a duty to defend the City. The Court reversed the district court's judgment awarding the City costs and expenses, and remanded the case for a determination of whether KLJ was entitled to recover its costs and expenses as a prevailing party. View "Specialized Contracting, Inc. v. St. Paul Fire & Marine Ins." on Justia Law

Sisters of Mary of the Presentation Long Term Care, d/b/a Ave Maria Village ("Sisters of Mary"), appealed, and Northern Excavating Co., Inc. ("Northern") cross-appealed a trial court's judgment awarding Northern $81,694.23 plus interest at 1.5 percent and costs at $743.33, and awarding Sisters of Mary $3,231.00 in attorney's fees. In October of 2009, Sisters of Mary and Northern executed a contract wherein Northern agreed to repair a water main break on Sisters of Mary's property for the cost of its "[t]ime and [m]aterials[.]" The contract did not contain a specific price. Following completion of the repairs, Northern submitted a bill for $103,244.11 to Sisters of Mary. Sisters of Mary found the bill excessive and refused to pay, asserting the repairs only had a value of approximately $40,000. Northern filed a construction lien covering the repaired property and sued Sisters of Mary seeking $98,806.98 for breach of contract and foreclosure of the lien. Sisters of Mary answered and counterclaimed alleging breach of contract, unlawful sales practices, and invalid construction lien/slander of title. Sisters of Mary also sought a jury trial. By stipulation, issues relating to the foreclosure of the construction lien were reserved and not submitted to the jury. The jury returned a verdict awarding Northern $81,694.23 plus interest at 1.5 percent for time and materials provided under the contract. After the verdict was rendered, Sisters of Mary applied for its costs and attorney's fees. In its post-trial brief, Sisters of Mary claimed it successfully challenged Northern's lien and argued the court was required to award it all of its attorney's fees and costs associated with the action. In its own post-trial brief, Northern argued it was unreasonable to require lienholders to pay costs and attorney's fees when a lienholder does not recover the precise amount claimed in a lien. The trial court ultimately awarded Sisters of Mary a portion of its attorney's fees, explaining it was a reasonable award given Sisters of Mary failed to specify "any fees that were directly related to the construction lien issue[.]" The trial court also found Northern was the prevailing party and awarded its costs. Upon review, the Supreme Court concluded the Legislature intended to award an owner literally all of the costs and attorney's fees arising out of a lawsuit when challenging a lien was not the only disputed cause of action: "[t]here is nothing in the statute or the legislative history to support that conclusion. We recognize that Sisters of Mary must provide the court with an itemization of its attorney's fees and costs in order for the trial court to determine those related to the successful contest of the accuracy of the lien." The Court reversed the award of attorney's fees and costs and remanded that issue to the trial court. Because the district court misconstrued the fees and costs statute, the Court reversed in part and remanded for the district court to determine the reasonable amount of attorney's fees associated with contesting the accuracy of the construction lien. View "Northern Excavating v. Sisters of Mary of the Presentation" on Justia Law