Justia Construction Law Opinion Summaries

Escobar was an employee of O’Donnell, a sub-subcontractor of Bayside, which was a subcontractor of Oltmans, the general contractor on a Menlo Park construction project. Escobar sued Oltmans and the property owner, alleging that Oltmans negligently cut and left unsecured a skylight opening in the building under construction, through which Escobar fell while installing scaffolding that O’Donnell was erecting for Bayside. Oltmans filed a cross-complaint against the subcontractors, alleging a right to contractual indemnity and breach of Bayside’s contractual obligation to provide certificates of insurance certifying that Oltmans was covered as an additional insured under liability policies the subcontractors were obligated to obtain. The subcontract provided indemnity to Oltmans for injury claims arising out of the scope of the subcontractor’s work “except to the extent the claims arise out of, pertain to, or relate to the active negligence or willful misconduct” of Oltmans. Reversing the trial court, the court of appeal ruled in favor of Oltmans. Under such a provision the general contractor is precluded from recovering indemnity for liability incurred as a result of its own active negligence but may be indemnified for the portion of liability attributable to the fault of others. The court noted the same question arises as to the meaning of Civil Code section 2782.05, which renders unenforceable an indemnity provision “to the extent the claims arise out of, pertain to, or relate to the active negligence or willful misconduct of that general contractor.” View "Oltmans Construction Co. v. Bayside Interiors, Inc." on Justia Law

Lend Lease (US) Construction was the general contractor on a project, and Rossi Electric Company, Inc. was a subcontractor. An employee of Rossi’s subcontractor was injured while working on the project and filed a negligence claim against Lend Lease. Lend Lease filed a third-party complaint against Rossi, alleging that, under the terms of a contract between the parties, Rossi was required to defend and indemnify Lend Lease. The superior court entered an order granting summary judgment for Rossi. The Supreme Court vacated the judgment of the superior court, holding that issues of material fact remained to be determined, and therefore, this case was not ripe for summary judgment. Remanded. View "Walsh v. Lend Lease (US) Construction" on Justia Law

Homeowners obtained loans from Bank for the construction of a new home and entered into an agreement with Contractor to complete the new home construction. When Homeowners defaulted on payments owed to Contractor and on both loans, the house was sold at foreclosure, and Homeowners filed for bankruptcy. Contractor filed a fourth amended complaint against Homeowners, who were later dismissed as parties, and Bank. Following a trial the court granted summary judgment for Bank on Contractor’s claims of fraud and civil conspiracy. The Supreme Court reversed. After remand, Contractor filed a fifth amended complaint, which differed from the fourth amended complaint in several respects. The district court determined that the election of remedies doctrine and judicial estoppel required a dismissal of Contractor’s claims. The Supreme Court reversed, holding (1) Contractor’s claims were consistently premised on the existence of a contract, and therefore, no election was required; and (2) Contractor’s claims were based on different facts and obligations, and therefore, both could be pursued. View "deNourie & Yost Homes, LLC v. Frost" on Justia Law

Lumber Specialties was hired as a subcontractor on a construction project to provide the truss package and certain engineering services. Dinsdale Construction was hired to supply the labor and building materials on the project. During a visit to the site, an employee of Lumber Specialties supplied false information to the builder regarding the structural integrity of the building. The visit was done was a courtesy to the builder and for the general goodwill of the business. The structure subsequently collapsed due to inadequate temporary bracing of the trusses. Dinsdale had not followed the industry standard temporary bracing plan. Dinsdale Construction brought suit against Lumber Specialties, alleging breach of contract and negligent misrepresentation. The jury returned a verdict for Dinsdale Construction on the negligent misrepresentation claim. The court of appeals affirmed. The Supreme Court vacated the decision of the court of appeals and reversed the district court judgment, holding (1) a defendant who is not acting in its information-giving capacity does not have a duty of care under the negligent misrepresentation tort; and (2) Lumber Specialties’ employee’s statements were excluded from the imposition of duty under the tort. View "Dinsdale Construction, LLC v. Lumber Specialties, Ltd." on Justia Law

Advent was the general contractor for the Aspen Village project in Milpitas. Advent subcontracted with Pacific, which subcontracted with Johnson. Advent was covered by a Landmark insurance policy and a Topa excess insurance policy. Johnson was covered by National Union primary and excess policies. Kielty, a Johnson employee, fell down an unguarded stairway shaft at the site and sustained serious injuries. Kielty sued Advent, which tendered its defense to its insurers and to National Union. National Union accepted under a reservation of rights. Kielty settled for $10 million. Various insurers, including Topa and National Union (under its primary policy), contributed to the settlement. National Union did not provide coverage under its excess policy. Advent sought a declaration that it was an “additional insured” under that excess policy. Topa intervened, seeking equitable contribution from National Union, and equitable subrogation. Advent dismissed its complaint with prejudice. Summary judgment was entered against Topa, for National Union. The court of appeal affirmed. While Topa’s policy was vague, National Union’s excess policy states that coverage will not apply until “the total applicable limits of Scheduled Underlying Insurance have been exhausted by the payment of Loss to which this policy applies and any applicable, Other Insurance have been exhausted by the payment of Loss.” View "Advent, Inc. v. National Union Fire Insurance Co. of Pittsburgh" on Justia Law

In 2006, Union Pacific Railroad (UP) invited contractors to bid on the purchase and removal of three abandoned railroad bridges that spanned Chicago streets. Happ’s, a scrap contractor, had worked railroads for 25 years recycling steel and railroad ties. Carney (dba Chicago Explosive) had a 20-year business relationship with Happ; the two entered “a handshake agreement” concerning the bid. UP accepted Happ’s bid, unaware of the agreement between Happ’s and Carney. Removal of the first bridge proceeded without incident. During the demolition of the larger Polk Street Bridge, a crossbeam snapped. The west girder, which was not secured or supported, fell. Plaintiff, standing north of the bridge on a gravel-covered steel plate, slid forward under the falling girder. Plaintiff’s legs were severed below his knees. Plaintiff sued UP, alleging negligence in failing to discover and disclose to Happ’s or plaintiff the presence of the steel plate and in hiring Happ’s. The trial court granted UP summary judgment. The appellate court reversed. The Illinois Supreme Court reinstated summary judgment. UP owed plaintiff no duty. There was nothing in the contract indicating that UP retained control such that Happ’s was not entirely free to do the work in its own way, nor was UP’s conduct inconsistent with the agreement. Plaintiff was an employee of Carney, not a “bystander.” UP did not build the bridge, did not possess the plans for the bridge, did not use the bridge, and had no reason to know that the steel floor plate extended several feet into the roadbed, precluding plaintiff’s premises liability claim. View "Carney v. Union Pacific R.R. Co." on Justia Law

In 2014, Lend Lease, the construction manager of the Chicago River Point Tower Project, hired Cives as a subcontractor. Cives hired Midwest Steel. Midwest had, years before, hired AES to supply Midwest with additional workers, who were co‐employed by Midwest and AES. Lend Lease entered into a “contractor-controlled insurance program” with Starr Liability with a $500,000 deductible. All subcontractors were to join in the policy. AES had, several years earlier, obtained workers’ compensation for its workers from TIC, so that injured AES‐Midwest workers could obtain workers’ compensation from either Starr (or Lend Lease under the deductible) or TIC. Four ironworkers, jointly employed by Midwest and AES and performing work for Midwest were injured on the job and sought workers’ compensation. The claims exceeded $500,000, so Lend Lease had to pay its full deductible. Starr paid the remaining claims. Lend Lease filed suit against TIC, AES’s insurer, and AES, seeking reimbursement of the $500,000. The district court dismissed. The Seventh Circuit affirmed. Lend Lease made a deal with Starr and is bound by it. The court rejected an argument that AES has been unjustly enriched; AES was not obligated to purchase an insurance policy that would cover Lend Lease's deductible. View "Lend Lease (US) Construction, Inc. v. Administrative Employer Services, Inc." on Justia Law

Schaefer’s employer, Brand Energy, was erecting scaffolding at a Dynegy power plant. Brand had complete control over the scaffold construction. Brand acquired the scaffold components from Universal, but Dynegy paid for the scaffolding and owned it. Brand workers had difficulties with the Universal components because faulty components would not readily lock. A bar popped loose and struck Schaefer on the head. Schaefer suffered serious injuries. In addition to bringing a workers’ compensation claim against Brand, Schaefer sued Universal. Because the piece of scaffolding that hit him was lost, he added claims for negligent spoliation of evidence against Brand and Dynegy. Schaefer also alleged construction negligence and failure to warn against Dynegy. The district court granted summary judgment for defendants, holding that without the missing piece, Schaefer could not prove his product liability claims; that Dynegy was not liable for any defects or negligence; and that Schaefer could not prove the spoliation claims because, without proof that the missing piece was defective, it was not possible to prove that its loss caused any damage. The Seventh Circuit affirmed in part, but reversed as to spoliation. Illinois law does not require a plaintiff to prove that he would have won his case but for the spoliation, it requires only that the plaintiff show a “reasonable probability” of success. Schaefer adduced evidence from which a jury could make this finding: the batch of scaffolding had a large number of defective pieces. View "Schaefer v. Universal Scaffolding & Equip., LLC" on Justia Law

Appellant-homeowners filed a complaint against Respondent-contractor for negligence and breach of warranty arising from construction defects in their homes. After a trial, the jury awarded verdicts for each homeowner. Appellants and Respondent subsequently filed motions for costs and attorney fees, which the district court denied. The Supreme Court (1) affirmed the district court’s order denying Appellants’ motion for a new trial for attorney misconduct, and (2) affirmed the district court’s denial of costs or attorney fees to Appellants, but reversed the court’s order as it related to Respondent’s motion for costs and attorney fees because the court failed to apply the full, applicable legal analysis in this instance. Remanded.View "Gunderson v. D.R. Horton, Inc." on Justia Law

Plaintiff filed an action against Defendants, a construction company and the owner of a building, after he was injured when a heavy conduit pipe fell on his hand while he was working at the building, alleging that Defendants violated N.Y. Lab. Law 240(1). Supreme Court granted Plaintiff’s motion for partial summary judgment on liability, concluding that the conduit, being attached to the ceiling by a compression coupling that failed, was not properly secured so as to give proper protection to Plaintiff. The Appellate Division modified the order of the Supreme Court by denying Plaintiff’s motion for summary judgment, concluding that Plaintiff failed to establish that Defendants’ failure to provide a protective device, i.e., a set-screw coupling rather than the purportedly inadequate compression coupling, was a proximate of his accident. The Court of Appeals accepted certification and held that the order of Supreme Court as modified by the Appellate Court was not property made, as Defendants’ failure to use a set screw couple was not a violation of section 240(1). View "Fabrizi v. 1095 Ave. of the Ams., LLC" on Justia Law