Justia Construction Law Opinion SummariesArticles Posted in Real Estate Law
Liu v. Christopher Homes, LLC
The developer (“Developer”) of a residential community hired a general contractor (“Contractor”) to construct homes in the community, and Contractor subcontracted with Subcontractor for construction services. Subcontractor performed services on several homes, including Appellant’s. Because Subcontractor was not fully paid, it recorded liens on properties within the community, including Appellant’s. Subcontractor filed a civil action against Developer, Contractor, Appellant, and other homeowners, seeking to foreclose on its liens. Appellant filed a cross-claim against Developer and Contractor for breach of contract and seeking to recover attorney fees as damages. The district court denied Appellant’s request to recover attorney fees, concluding that, under the standard set forth in Horgan v. Felton regarding the recovery of attorney fees in cloud-on-title cases, because the breach of contract in this case related to title of real property, and because Appellant failed to allege and prove slander of title, she could not recover the attorney fees that she sought as special damages. The Supreme Court reversed the district court’s judgment to the extent that it denied Appellant’s request for special damages, holding that Horgan did not apply to preclude such recovery in this case. View "Liu v. Christopher Homes, LLC" on Justia Law
State Ctr., LLC v. Lexington Charles Ltd. P’ship
At issue in this case was the State Center Project, a $1.5 billion redevelopment project intended to revitalize property owned by the State in Baltimore. In 2005, the State issued a public request for qualifications to solicit a master developer for the project. The State Center, LLC was chosen as the master developer. The Maryland Department of General Services (“DGS”), the Maryland Department of Transportation (“MDOT”) and the State Center, LLC negotiated for the Project, entering a series of agreements between 2007 and 2010 to complete the Project in a timely manner. In 2010, Plaintiffs, property owners in downtown Baltimore and taxpayers, filed suit against the DGS, MDOT, and the State Center and its subsidiaries, seeking a declaratory judgment that the formative contracts for the Project were void and seeking an injunction to halt the Project. The trial court voided the formative contracts, concluding that they violated the State Procurement Law. The Court of Appeals vacated the judgment of the circuit court and remanded with directions to dismiss Plaintiffs’ complaint with prejudice, holding that Plaintiffs’ claims were barred by the doctrine of laches due to an unreasonable delay in bringing their claims, causing prejudice to the defendants.View "State Ctr., LLC v. Lexington Charles Ltd. P’ship" on Justia Law
DTJ Design, Inc. v. First Republic Bank
Downing, Thorpe & James Design, Inc. (DTJ) was an architectural firm incorporated in Colorado. Thomas Thrope, one of DTJ’s three founding principals, was allowed to practice individually as a foreign architect in Nevada, but DTJ was not allowed to practice as a foreign corporation in Nevada. In 2004, DTJ contracted with a Nevada developer to provide architectural services for a Las Vegas subdivision owned by Prima Condominiums, LLC (Prima). Prima obtained a loan from First Republic Bank in exchange for a promissory note secured by a deed of trust on one of the subdivision’s units. After Prima defaulted on its payments, DTJ recorded a notice of mechanic’s lien against the property for unpaid services. First Republic then foreclosed and purchased the property. DTJ subsequently brought an action against First Republic for lien priority and unjust enrichment. The district court granted summary judgment for First Republic. The Supreme Court affirmed, holding (1) because DTJ had failed to comply with Nevada’s statutory registration and filing provisions, it was barred from maintaining an action in Nevada for compensation for its architectural services; and (2) Thorpe’s individual status had no bearing on whether DTJ could bring or maintain an action for compensation for its services.View "DTJ Design, Inc. v. First Republic Bank" on Justia Law
Ogea v. Merritt
The issue before the Supreme Court in this case centered on the limitation of liability afforded to a member of a limited liability company (LLC). In 2007, Mary Ogea signed a contract entitled "Custom Home Building Agreement" for Merritt Construction, LLC, to build a home on an undeveloped parcel of land she owned. On behalf of the LLC, its sole member, Travis Merritt, signed the contract. The contract did not specifically describe the type of foundation to be provided for the home. After the construction work had advanced well past the point of building the foundation and framing the home, Ogea hired another concrete contractor to pour a driveway and patio. This concrete contractor informed Ogea that he believed there were problems with the concrete work for the home's foundation. Ogea then hired a licensed engineer, Charles Norman, to inspect the structure. Norman conducted several inspections and concluded there were indeed significant problems with the slab foundation. Ogea notified the LLC of the problems with the foundation. Based on her consultations with Norman, Ogea requested a refund of all monies she paid to the LLC (approximately $94,000) and sought demolition of the unfinished home. The LLC did not reply to the refund request. Ogea did not make the final installment payment called for in the contract, and the LLC ceased all work on the home. Ogea then sued the LLC and Merritt individually. Ogea sought to recover the money she had expended for the home, plus other damages under the New Home Warranty Act. The district court rendered judgment against both Merritt and the LLC "in solido" for various items of damages. Both Merritt and the LLC appealed. The court of appeal reduced the amount of the general damage award, but affirmed the imposition of personal liability on Merritt. After reviewing the record and the controlling legal principles, the Supreme Court reversed the lower courts' judgment of personal liability against Merritt and dismissed the claims against him. View "Ogea v. Merritt" on Justia Law
Shaw v. Acadian Builders & Contractors, LLC
The issue before the Supreme Court in this matter centered on whether defects in load-bearing walls were a result of "any defect" due to noncompliance with the buildings standards subject to a one year peremptive period, or whether they constituted a "major structural defect" subject to a peremptive period of five years. This case stemmed from damages caused by a home flooding. The District Court found the defects in the four exterior load-bearing walls constituted a major structural defect under the Act to which the five-year warranty period applied and awarded plaintiff Barbara Shaw damages. The Court of Appeal reversed, finding the plaintiff's claim was for a defect in workmanship subject to a one year peremptive period. After review, the Supreme Court reversed, finding the record supported the failure of the load-bearing walls affected the "load-bearing functions to the extent the home becomes unsafe, unsanitary, or is otherwise unlivable," as provided by La. Rev. Stat. 9:3143. Thus, it constituted a major structural defect and the five-year warranty applied. View "Shaw v. Acadian Builders & Contractors, LLC" on Justia Law
Wagner v. Crossland Construction Company, Inc.
Patrick Wagner appealed the grant of summary judgment that held as a matter of law that his property was burdened by either an express or an implied roadway easement, and that dismissed his claims for injunctive relief and damages against Crossland Construction Company, Inc., Baker Hughes Oilfield Operations, Inc., M & K Hotshot & Trucking, Inc., and Titan Specialties, Ltd. Upon review of the matter, the Supreme Court concluded that, as a matter of law, the language in the warranty deed at issue in this case did not create or reserve an express easement. Furthermore, the Court concluded genuine issues of material fact precluded the district court from resolving whether an implied easement exists. Accordingly, the Court reversed and remanded the case for further proceedings.View "Wagner v. Crossland Construction Company, Inc." on Justia Law
Vermont v. Gillard
Defendants appealed their convictions for unlawful trespass. Green Mountain Power Corporation (GMP) is an electric utility that operates several wind-power sites throughout Vermont. Construction required cutting trees, excavating, and blasting rock to produce a "crane road" on which the turbines could be erected by crane. Because a portion of the crane road would be within 100 feet of the GMP's leased property's boundary line, some blast safety zones actually extended into neighboring land owned by Donald and Shirley Nelson, who strongly opposed the project. The Nelsons allowed a group to protest the wind-power site by setting up camp on the portion of the Nelsons' land that fell within a blast safety zone. This prompted GMP and its blasting subcontractor to increase their safety measures, risking a delay of construction of more than five weeks and threatening GMP's eligibility for the federal tax credits. In Fall 2011, GMP initiated a civil suit against the Nelsons for nuisance and interference with contract. While the suit was pending, Defendants passed through an existing property line and entered a portion of the crane-road construction site located on land disputed by the Nelsons and GMP. GMP halted construction, and a representative asked defendants to leave. Although aware of the boundary dispute, defendants refused to leave, claiming permission from the Nelsons, who they maintained owned the disputed land. GMP then contacted local police, who arrived at the scene and asked defendants to leave. Defendants again refused and were arrested. Upon review, the Supreme Court concluded that the trial court did not abuse its discretion by not dismissing the case in the interests of justice.View "Vermont v. Gillard" on Justia Law
Donatelli v. D.R. Strong Consulting Eng’rs, Inc.
Steve and Karen Donatelli hired D.R. Strong Consulting Engineers Inc. to help the Donatellis develop their real property. Before development could be completed, the Donatellis suffered substantial financial losses and lost the property in foreclosure. The Donatellis sued D.R. Strong for breach of contract, violation of the Consumer Protection Act (CPA), negligence, and negligent misrepresentation. D.R. Strong moved for partial summary judgment on the CPA and negligence claims. D.R. Strong argued that the negligence claims should have been dismissed under the economic loss rule because the relationship between the parties was governed by contract and the damages claimed by the Donatellis were purely economic. The trial court and Court of Appeals held that as a matter of law, the Donatellis' negligence claims were not barred. Finding no error in that analysis, the Supreme Court affirmed. View "Donatelli v. D.R. Strong Consulting Eng'rs, Inc." on Justia Law
Big Lake Lumber, Inc. v. Sec. Prop. Invs., Inc.
Mark Hilde hired Big Lake Lumber (Big Lake), Wruck Excavating (Wruck), and J. DesMarais Construction (DesMarais) to help him build a "spec home." 21st Century Bank (Bank) recorded a mortgage against the property to finance the purchase of the property and the home construction. After the Bank foreclosed on its mortgage, Big Lake commenced this mechanic's lien foreclosure action. The district court found that the mechanic's liens of Big Lake and DesMarais related back to the date Wruck commenced work on the improvement project, and thus, the mechanic's liens of Big Lake and DesMarais had priority over the mortgage of the Bank. The court of appeals reversed. The Supreme Court reversed, holding (1) the court of appeals erred by adopting and then applying a new "integrated analysis" to find the Bank's mortgage superior to the liens; and (2) the district court did not clearly err when it found that Wruck, Big Lake, and DesMarais contributed to the same project of improvement, and accordingly, under the relation-back doctrine, the mechanic's liens of Big Lake and DesMarais had priority over the Bank's mortgage.View "Big Lake Lumber, Inc. v. Sec. Prop. Invs., Inc." on Justia Law
Lennar Corp. v. Markel Am. Ins. Co.
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