Justia Construction Law Opinion Summaries

This case concerned the remedy under Louisiana law for the purchaser of a newly constructed home with a construction defect that has not resulted in actual physical damage to the home. The court held that the Louisiana New Home Warranty Act, La. Rev. Stat. Ann. 9:3141, 9:3150, provided the exclusive remedy against a builder for a purchaser of a new home. The court also held that a claim brought under the Act must allege that the defect in question resulted in actual physical damage to the home. Accordingly, the court affirmed the judgment of the district court dismissing the case. View "Gines v. D.R. Horton, Inc., et al" on Justia Law

This litigation arose from the construction of a 143-unit condominium complex. Plaintiff Long Trail House Condominium Association appealed a trial court’s order granting summary judgment to defendant general contractor Engelberth Construction, Inc. on its complaint. The Association argued that the court erred in: (1) applying the economic loss rule to bar its negligence claim; and (2) dismissing its breach of implied warranty claim. Upon review of the trial court record, the Supreme Court affirmed, finding no error in the trial court's decision. View "Long Trail House Condominium Assoc. v. Engelberth Construction, Inc." on Justia Law

An owners association for a construction defect action against a condominium developer, seeking recovery for damage to its property and damage to the separate interests of the condominium owners who composed its membership. In response, the developer filed a motion to compel arbitration based on a clause in the recorded declaration of covenants, conditions, and restrictions providing that the association and the individual owners agreed to resolve any construction dispute with the developer through binding arbitration. The trial court determined that the clause embodied an agreement to arbitrate between the developer and the association but invalidated the agreement upon finding it marked by slight substantive unconscionability and a high degree of procedural unconscionability. The court of appeal affirmed. The Supreme Court reversed, holding that the arbitration clause bound the association and was not unconscionable. View "Pinnacle Museum Tower Ass'n v. Pinnacle Market Dev." on Justia Law

WR sought to develop a medical office building by executing a long-term ground lease to a developer, who would design, finance, construct, and own the facility, leasing space to WR. WR requested proposals, describing a 30-year ground lease for a 30,000 square foot medical facility. Citadel submitted a proposal. Negotiations followed. WR signed an “Authorization to Proceed” stating that WR “will only be responsible for architectural and engineering fees in the event [W R] does not execute its space leases and ground lease.” Citadel hired attorneys, architects, engineers; refined plans: conducted zoning review, and began securing financing. Negotiations failed. WR terminated the relationship, just as Citadel was preparing to commence construction. WR refused to pay expenses unless it received the plans; entered into contracts with Citadel’s architect and engineer; used their plans and built the facility. The district court rejected Citadel’s claims. The parties settled with respect to pre-construction costs and fees. The Seventh Circuit affirmed. Citadel failed to show that WR agreed to complete the arrangement. When the relationship ended, they had not agreed on essential lease terms. No language in the agreement required the parties to negotiate in good faith, nor did it establish a framework for the negotiation process. View "Citidal Grp. Ltd. v. Washington Reg'l Med. Ctr." on Justia Law

Respondent/cross-appellant Precision Construction, Inc. solicited bids from subcontractors for the design and installation of an early suppression, fast response sprinkler system. Certified Fire Protection, Inc. submitted a bid. Precision notified Certified that it won the bid, and Precision entered into a contract with the owner to complete the project. Certified obtained a copy of the subcontract along with a set of construction plans and sprinkler system specifications. The subcontract’s provisions required Certified to complete the preliminary design drawings of the sprinkler system within two weeks and to obtain a certificate naming Precision as an additional insured. Over the next few weeks, Precision asked Certified several times to sign the subcontract and provide the additional-insured certificate. Certified objected to the subcontract as imposing terms that differed from the bid specifications. It complained that the unanticipated terms changed the scope of work and that it would have to amend its bid accordingly. Certified also took exception to some of the generic contractual provisions, including the additional-insured requirement. Nonetheless, Certified hired specialists to work on the Precision contract, and began work. Precision and Certified communicated several more times about getting the subcontract signed. Eventually Precision terminated its relationship with Certified for refusing to sign the subcontract, for not providing the additional-insured endorsement, and for incorrect designs. At Precision’s request, Certified submitted an itemized billing for the work it had performed; its bill reported costs of $25,185.04, which included design work and permit fees for the project. Precision deemed the costs too high and never paid. Certified placed a mechanic’s lien on the property and sued to recover for its design-related work. Certified’s complaint sought to foreclose the mechanic’s lien and damages for unjust enrichment, quantum meruit, and breach of contract. On appeal, Certified argued that the district court failed to determine whether a contract for the design-only work existed but conceded that the parties never reached agreement on the full design and installation contract. Certified also asserted that the district court erred in concluding that Precision was neither unjustly enriched nor liable to Certified in quantum meruit because Precision did not benefit from the work performed. On cross-appeal, Precision argued that the district court abused its discretion in denying Precision’s motion for attorney fees. Because the Supreme Court agreed with the district court that Certified did not provide sufficient evidence to establish either an implied-in-fact contract or unjust enrichment, the Court affirmed. Additionally, the Court affirmed on cross-appeal the district court’s order denying attorney fees. View "Certified Fire Prot. v. Precision Constr." on Justia Law

In consolidated appeals, the Supreme Court addressed whether a claim for fraud in the inducement was available when the basis for the claim contradicts the very language of the contract at issue in the parties’ dispute. Upon review of the facts of this case, the Court concluded that when a fraudulent inducement claim contradicts the express terms of the parties’ integrated contract, it fails as a matter of law. Additionally, the Court addressed the propriety of the damages awarded by the jury under a separate claim for breach of contract. The Court affirmed the compensatory damages award in this case, but reversed the punitive damages award, as the Court reversed the finding of fraud on which the punitive damages were based. View "Road & Highway Builders v. N. Nev. Rebar" on Justia Law

After agreeing to purchase a new townhouse, the Smiths leased it back to the builder, Ryan Homes, to use for six months as a model home. Ryan Homes converted the garage into a sales office. When the Smiths took possession, they used the converted garage as additional living space. The developer sought a mandatory injunction forcing the Smiths and Ryan Homes to convert the space back to a functional garage. The chancellor ruled in favor of defendants. The recorded subdivision plan and declaration of restrictions do not prohibit conversion of a garage to living space. The partition wall of the garage conversion is not sufficiently visible to the public to trigger an architectural review requirement and fears about parking problems are overly speculative. View "Reybold Venture Grp. XI-A, LLC. v. Smith" on Justia Law

The Wetlands Protection Act, G.L. c. 131, 40, requires a conservation commission to issue a decision on a requested order of conditions within 21 days after holding a public hearing on the applicant's notice of intent to perform work covered by the act. Following the owner’s request for an extension, a hearing on his application for construction of a pile-supported pier and floating dock was held on April 6; the commission voted to deny the application on April 27 and mailed notice on April 28, 22 days after the hearing. The department reversed, based on the commission’s failure to timely act. In the meantime, the commission issued an enforcement order, based on work being done on the applicant’s property. The Supreme Judicial Court held that an applicant may waive the statutory time restriction, but any waiver must be voluntary in fact, its duration defined and reasonable in length, and notice of the waiver's duration must be a matter of public record, available to all interested persons. In this case, the applicant is entitled to proceed under the order issued by the department. View "Garrity v. Conservation Comm'n of Hingham" on Justia Law

David Bennett and Bennett & Bennett Construction, Inc. ("Bennett") appealed the trial court's denial of their motion to compel arbitration of the claims alleging fraud in the inducement and the tort of outrage brought against them by Barbara and Leotes Skinner. The Skinners entered into a construction-services contract with Bennett, pursuant to which Bennett was to renovate and remodel their residence located in Oxford. After disagreements developed between the parties, the Skinners sued Bennett, alleging claims of breach of contract; breach of warranty; fraud in the inducement; assault and battery; the tort of outrage; and negligence, wantonness and recklessness. Bennett moved to compel arbitration of all claims, arguing that, because each of the claims alleged by the Skinners arose from the construction-services contract or were related to the construction-services contract, the claims were subject to arbitration. Furthermore, Bennett argued that the tort-of-outrage claim arose out of a disagreement concerning the construction-services contract and that the Skinners should not be allowed to avoid arbitration because they cast their claim as a tort. The Skinners responded, arguing that their agreement to the arbitration clause in the contract was obtained fraudulently. The trial court denied Bennett's motion. Upon review, the Supreme Court concluded that the Skinners' tort-of-outrage claim arose out of a disagreement concerning the construction-services contract and thus was a proper claim for arbitration. The Court reversed the trial court's ruling and remanded the case for further proceedings. View "Bennett v. Skinner " on Justia Law

KM Upstream, LLC and Newpoint, Inc. entered into a contract whereby Newport would construct for KM's amine plant. Newpoint subcontracted with Elkorn Construction, Inc. to build the foundation and perform other work. Elkhorn subsequently filed a lien statement with the county clerk. Elkhorn later filed a complaint against KM for, inter alia, foreclosure of the lien as a mechanic's lien. Newpoint was later added as a defendant. The district court granted summary judgment to Elkhorn to allow foreclosure on the mechanic's lien. The Supreme Court (1) affirmed the grant of summary judgment; but (2) reversed and remanded the district court's determination that $181,369 of Elkhorn's lien claim was disputed and its subsequent order subtracting that amount from Elkhorn's judgment. View "KM Upstream, LLC v. Elkhorn Constr., Inc." on Justia Law