Justia Construction Law Opinion Summaries

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

The Foundation provides performing arts and social justice programs. Presidio Trust granted the Foundation a lease (through 2013) at below-market rates for Building 1158. The Foundation remodeled at a cost of over $300,000. Building 1158 offered a safe drop-off area for children, adequate parking, and exclusive use of the building. The Foundation’s operational revenues increased from $300,000 in 2007 to $464,000 in 2010. In 2009, the California Department of Transportation (Caltrans) began to construct a south access to the Golden Gate Bridge, which required the use of property controlled by Presidio Trust. The Trust agreed to deliver specified property—including Building 1158. Caltrans informed the Foundation it would demolish Building 1158. The Foundation began to search for another location; no comparable space was immediately found. The Foundation cancelled its 2010 summer program and its Annual Benefit. It lost students, donors, staff, and partners. The Foundation vacated Building 1158 in 2011. Caltrans paid $107,000 as just compensation for the Foundation‘s lost improvements. Weeks after vacating, the Foundation leased space in Building 386, which costs more, offers less functional space, lacks a safe drop-off zone, has less parking, lacks evening public transportation, shares restrooms with a business, and is an historical building that limits configuration of space. The Foundation sought compensation for loss of goodwill. Caltrans denied the claim and sought declaratory relief. The trial court found that, although the Foundation demonstrated it had goodwill before the taking and lost goodwill due to the taking, it did not prove a calculated “quantitative” loss. The court of appeal reversed, finding that an expert‘s quantification based on a change in cash flow was sufficient for the threshold determination of entitlement to compensation. View "Department of Transportation v. Presidio Performing Arts Foundation" on Justia Law

Kiva Lodge Condominium Owners' Association, Inc. ("Kiva Lodge") was an Alabama nonprofit corporation formed for the purpose of administering and maintaining the Kiva Dunes Clubhouse and Condominium ("Kiva Dunes") located in Gulf Shores. In 2009, Kiva Lodge contracted with Hudak & Dawson Construction Co., Inc. ("Hudak") to be the general contractor for the remediation of deficiencies in Kiva Dunes buildings that were allowing water to enter the buildings. Hudak subcontracted the stucco and/or sealant portion of the work to Don Colvin d/b/a Colvin Plastering ("Colvin"). The Hanover Insurance Company ("Hanover"), as surety for Hudak, issued to Kiva Lodge a performance bond ensuring and/or securing the full performance of Hudak's contractual obligations. In September 2012, Kiva Lodge informed Hudak and Colvin of leaks and bubbling in the stucco exterior of the buildings at Kiva Dunes caused by water intrusion. Kiva Lodge alleged that Hudak and Colvin failed to determine and/or disclose the course of the problems and the proper scope of repairs necessary. It also alleged that Hanover breached the terms of its performance bond by failing to promptly remedy the default, complete the work within the scope of the contract in accordance with the terms and conditions, or arrange for payment of an alternative contractor to complete the work. Hanover filed a motion to dismiss Kiva Lodge's claims against Hanover on the ground that, under its performance bond, its claims were time-barred, falling outside of a two-year statute of limitations. In 2015, the circuit court heard arguments concerning Kiva Lodge's motion to compel arbitration, eventually granting the stay and ordering the parties to arbitration. The court also denied Hanover's motion to dismiss. Hudak, Colvin, and Hanover timely appealed the circuit court's order. After review, the Supreme Court found no reversible error in the trial court's order and affirmed. View "Hanover Insurance Co. v. Kiva Lodge Condominium Owners' Association, Inc." on Justia Law

In this appeal, the issue presented for the Supreme Court's review was whether a contractor could maintain an action under the Contractor and Subcontractor Payment Act (CASPA) against a property owner’s agents. Beginning in 2005, Appellant Scungio Borst & Associates (SBA) entered into a series of written and oral construction contracts with Appellee 410 Shurs Lane Developers, LLC (410 SLD), which 410 SLD’s part-owner and president, Appellee Robert DeBolt, executed on 410 SLD’s behalf. Therein, SBA agreed to improve real property owned by 410 SLD in connection with the development of a condominium complex, and did so until November 2006, when SBA’s contracts were terminated with approximately $1.5 million in outstanding payments due. SBA requested payment, but 410 SLD, again through DeBolt, refused. Accordingly, SBA sued 410 SLD; its alleged successor corporation, Appellee Kenworth II, LLC; and DeBolt in his personal capacity. SBA asserted, among other claims, violations of CASPA. After careful review, the Supreme Court held that a contractor could not maintain an action under CASPA, and, accordingly, affirmed the order of the Superior Court. View "Scungio Borst & Assoc. v. 410 Shurs Lane Developers, 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