Justia Construction Law Opinion Summaries

The raise-or-waive rule barred consideration of the argument brought before the Supreme Court on appeal in this breach of a promissory note case.In a prior appeal in this case, the Supreme Court affirmed a judgment of the superior court in favor of the Judgment Creditor against the Judgment Debtors in the amount of nearly $4 million plus post-judgment interest on claims for breach of a promissory note and breach of a guaranty of that note. In this second appeal, one of the judgment debtors (Judgment Debtor) appealed from an order of the superior court directing that Judgment Creditor be substituted for Judgment Debtor as the party to litigate Judgment Debtor’s claims in receivership proceedings. The Supreme Court affirmed, holding that the issue raised on appeal was not properly before the court due to the raise-or-waive rule. View "Tri-Town Construction Co. v. Commerce Park Associates 12, LLC" on Justia Law

Plaintiff’s action to recover under an insurance policy for the loss of her house caused when a renter (who had an option to purchase) demolished it. The trial court determined the insurance policy at issue excluded for such a loss. Within two months of renting the property, plaintiff learned the renter demolished the house. The renter agreed to rebuild a house on the remaining foundation. The renter started, but did not finish, rebuilding the house. Plaintiff thereafter made a claim on her insurance policy. The Idaho Supreme Court found after review of this matter, that the words in an insurance policy were to be given the meaning applied by lay people in daily usage. One such clause implicated the intentional destruction of the house as compared to accidental loss or inadequate remodeling. The renter’s actions in demolishing plaintiff’s house down to the foundation would not be considered by lay people as the “remodeling” of the house. He did not make alterations to an existing structure; he demolished that structure. There was no house left to remodel. Plaintiff had authorized the renter to perform some remodeling, such as installing new flooring, countertops, light fixtures, paint and other cosmetic improvements, but there was no evidence in the record that he did any remodeling at all, much less that the direct cause of the loss of the Plaintiff’s house was caused by any remodeling that had been done. Accordingly, the Supreme Court affirmed the trial court’s judgment in favor of the insurance company. View "Fisher v. Garrison Property & Casualty Ins. Co." on Justia Law

Aliant Bank, a division of USAmeribank ("Aliant"), sued various individuals and business entities involved in a failed effort to develop the Twelve Oaks subdivision in Odenville, alleging that, as a result of those defendants' conspiracy and wrongful actions, Aliant's security interest in the property upon which the Twelve Oaks subdivision was to be built had been rendered worthless. The Circuit Court ultimately entered a number of orders either dismissing Aliant's claims or entering a summary judgment in favor of the various defendants. Aliant filed three appeals. In appeal no. 1150822, the Alabama Supreme Court reversed summary judgment against Aliant: (1) on the negligence and breach-of-fiduciary duty claims asserted against the Board members in count four of Aliant's complaint; (2) on the fraudulent-misrepresentation and fraudulent-suppression claims asserted against Bobby Smith and Twelve Oaks Properties in count seven of Aliant's complaint; and (3) on the conspiracy claims asserted against Smith, Twelve Oaks Properties, Four Star Investments, Mize, and Billy Smith in count seven of Aliant's complaint. The Court affirmed summary judgment against Aliant and in favor of the various Twelve Oaks defendants in all other respects. In appeal no. 1150823, the Court reversed the summary judgments entered against Aliant on the fraudulent misrepresentation and conspiracy claims asserted against Pfil Hunt, and his management company Wrathell, Hunt & Associates, LLC, in count seven of Aliant's complaint; however, the Court affirmed those summary judgments with regard to all other claims asserted by Aliant against Hunt and WHA. Finally, in appeal no. 1150824, the Court affirmed summary judgment against Aliant and in favor of the Engineers of the South, LLC defendants on all counts. View "Aliant Bank v. Four Star Investments, Inc." on Justia Law

At issue in this case was the applicability of a broad, absolute insurance pollution exclusion clause to a claim based on negligent installation of a hot water heater that led to the release of toxic levels of carbon monoxide in a residential home. Zhaoyun "Julia" Xia purchased a new home constructed by Issaquah Highlands 48 LLC. Issaquah Highlands carried a policy of commercial general liability insurance through ProBuilders. Soon after moving into her home, Xia began to feel ill. A service technician from Puget Sound Energy investigated Xia's home and discovered that an exhaust vent attached to the hot water heater had not been installed correctly and was discharging carbon monoxide directly into the confines of the basement room. The claims administrator for ProBuilders, NationsBuilders Insurance Services Inc. (NBIS), mailed a letter to Xia indicating that coverage was not available under the Issaquah Highlands policy. As a basis for its declination of coverage, NBIS rested on two exclusions under the policy: a pollution exclusion and a townhouse exclusion. NBIS refused to either defend or indemnify Issaquah Highlands for Xia's loss. When a nonpolluting event that was a covered occurrence causes toxic pollution to be released, resulting in damages, the Washington Supreme Court believed the only principled way for determining whether the damages are covered or not was to undertake an efficient proximate cause analysis. Under the facts presented here, the Court found ProBuilders Specialty Insurance Co. correctly identified the existence of an excluded polluting occurrence under the unambiguous language of its policy. However, it ignored the existence of a covered occurrence negligent installation-that was the efficient proximate cause of the claimed loss. Accordingly, coverage for this loss existed under the policy, and ProBuilders's refusal to defend its insured was in bad faith. View "Xia v. Probuilders Specialty Ins. Co." on Justia Law

In 1990, after Denver determined that it needed a new airport, a group of citizens formed the Stapleton Redevelopment Foundation to develop the former Stapleton International Airport. The Stapleton Redevelopment Foundation created a master plan to convert the former airport site. In 1995, the private, nonprofit Stapleton Development Corporation (“SDC”) was formed to lease and sell the former airport property. SDC selected Forest City as the master developer for redevelopment of the property. Forest City sold the vacant residential lot at issue here to a professional home builder, Infinity Home Collection at Stapleton, LLC (Infinity), with whom Respondent/Cross-Petitioner Tad Rogers had contracted to build a home. When Infinity purchased the lot from Forest City, the lot was vacant, did not have utilities, and still needed to be graded to its final configurations. Rogers ultimately purchased the lot and the home from Infinity. The home included a foundation drain system designed to collect ground water into a sump pit and to pump that water into the yard by way of a sump pump. Because of the high water table beneath his house, coupled with calcite leaching from the recycled concrete aggregate base course used to construct the roads, calcite built up in the foundation drain around Rogers' house. In turn, this water and calcite buildup made his basement uninhabitable and caused his sump pump to run and discharge more water. This case presented an issue of whether contractual privity was necessary for a home buyer to assert a claim for breach of the implied warranty of suitability against a developer. The Colorado Supreme Court held that, because breach of the implied warranty of suitability was a contract claim, privity of contract was required in such a case. Here, because the home buyer did not have contractual privity with the developer, he could not pursue a claim against the developer for breach of the implied warranty of suitability. View "Forest City v. Rogers" on Justia Law

This case centered on the design and construction of a single-family residence in Pitkin County, Colorado. Heritage Builders, Inc. (“Heritage”) was retained as the general contractor by the original owners of the property, Karen and Courtney Lord. Pitkin County issued a certificate of occupancy for the home in September 2006. In November 2011, Richard Goodman purchased the property from the Lords. Then, sometime between March and June 2012, Goodman discovered the alleged construction defects in the home. Goodman gave Heritage informal notice of his construction defect claims in July 2013. In this original proceeding, the issue presented for the Colorado Supreme Court’s review was whether the statute of repose in section 13-80-104(1)(a), C.R.S. (2016), barred a general contractor’s third-party claims brought in response to a homeowner’s claim for construction defects discovered in the fifth or sixth year following substantial completion of an improvement to real property. The Court held that such claims were timely, irrespective of both the two-year statute of limitations in section 13-80-102, C.R.S. (2016), and the six-year statute of repose in section 13-80-104(1)(a), so long as they are brought at any time before the ninety-day timeframe outlined in section 13-80-104(1)(b)(II). View "In re Goodman v. Heritage Builders" 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

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

The Riverwalk at Arrowhead Country Club and Magnolia North Horizontal Property Regime developments were constructed between 1997 and 2000. After construction was complete and the units were sold, the purchasers became aware of significant construction problems, including building code violations, structural deficiencies, and significant water-intrusion problems. In 2003, the purchasers filed suit to recover damages for necessary repairs to their homes. Lawsuits were filed by the respective property owners' associations (POAs), which sought actual and punitive damages for the extensive construction defects under theories of negligent construction, breach of fiduciary duty, and breach of warranty. As to the Riverwalk development, individual homeowners also filed a class action to recover damages for the loss of use of their property during the repair period. The defendants in the underlying suits were the related corporate entities that developed and constructed the condominium complexes: Heritage Communities, Inc. (the parent development company), Heritage Magnolia North, Inc. and Heritage Riverwalk, Inc. (the project-specific subsidiary companies for each separate development), and Buildstar Corporation (the general contracting subsidiary that oversaw construction of all Heritage development projects), referred to collectively as "Heritage." The issues presented to the Supreme Court by these cases came from cross-appeals of declaratory judgment actions to determine coverage under Commercial General Liability (CGL) insurance policies issued by Harleysville Group Insurance. The cases arose from separate actions, but were addressed in a single opinion because they involved virtually identical issues regarding insurance coverage for damages. The Special Referee found coverage under the policies was triggered and calculated Harleysville's pro rata portion of the progressive damages based on its time on the risk. After review of the arguments on appeal, the Supreme Court affirmed the findings of the Special Referee in the Magnolia North matter, and affirmed as modified in the Riverwalk matter. View "Harleysville Group Ins. v. Heritage Communities, Inc." on Justia Law

Defendant Veterans Parkway Developers, LLC (“VPD”) appealed a Superior Court order granting injunctive relief and requiring an accounting in this suit by RMW Development Fund, II, LLC (“RMW”) stemming from VPD’s management of Veterans Parkway Apartments, LLC (the “Company”). The order at issue granted RMW an interlocutory injunction: (1) enjoining VPD from using funds in its possession or control to construct a second entrance to an apartment complex in Columbus (the “Property”), constructed and managed by the Company; (2) prohibiting VPD from using funds for any purpose other than the normal day-to-day expenses of the Property; and (3) requiring VPD to submit a monthly report of its expenses to the superior court, with copies to counsel for the parties. RMW filed suit against VPD alleging VPD’s breach of contract by its entering into an unauthorized management agreement and thereby paying an unauthorized management fee, and a claim for “promissory estoppel,” stemming from VPD’s alleged failure to use some of the Company’s funds for partial repayment of a development loan; RMW asked for VPD’s removal as manager of the Company and for the costs of litigation. Prior to the filing on the complaint, the Company had purchased a 60-foot strip of land for the purpose of creating a second entrance to the Property. At a hearing on the injunction, RMW argued that it could not undo any construction of the second entrance to the Property. VPD countered that RMW was, in reality, concerned about money being spent on the construction of the second entrance instead of being used to repay the loans made by RMW, and that any appropriate redress was monetary damages. Ultimately the injunction was granted and VPD appealed. The Supreme Court found after review of this matter that the trial court's injunction was not supported by the record, and that court abused its discretion in granting the injunction. The Supreme Court reversed the trial court and remanded this matter for further proceedings. View "Veterans Parkway Developers, LLC v. RMW Development Fund II, LLC" on Justia Law