Articles Posted in U.S. 1st Circuit Court of Appeals

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This case arose from a Hampton Inn & Suites renovation and construction in Rhode Island. Stonestreet Construction, as the construction manager and general contractor, entered into a construction contract with Weybosset Hotel. Because of cost overruns and other delays, Allstate Interiors & Exteriors, one of the subcontractors on the project, filed a complaint against Stonestreet. Stonestreet counterclaimed against Allstate and brought a third-party complaint against Weybosset, bringing several state law causes of action arising from the construction project. After a trial on Stonestreet's third-party complaint against Weybosset, the district court ruled in favor of Stonestreet on its breach of contract claim and awarded damages in the amount of $571,595. The First Circuit Court of Appeals affirmed, holding that the district court did not err in (1) exercising supplemental jurisdiction following Allstate and Stonestreet's partial settlement; (2) interpreting the construction contract for the purpose of calculating damages; and (3) denying Weybosset's discovery motion regarding supplemental expert reports. View "Stonestreet Constr., LLC v. Weybosset Hotel, LLC" on Justia Law

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ROK Builders LLC (ROK) constructed a hotel for Moultonborough and had a mechanic's lien on the property. 2010-1 SFG Venture LLC (SFG) was the assignee of the construction lender and had a mortgage on the hotel. After Moultonborough filed for bankruptcy, SFG initiated an adversary proceeding against ROK in bankruptcy court, seeking a declaration that its mortgage was senior to ROK's lien to the extent the construction lender had disbursed loan funds to ROK. ROK, in turn, asserted that its lien was senior to SFG's mortgage. The New Hampshire bankruptcy court and district court entered judgment in favor of SFG. The First Circuit Court of Appeals affirmed, holding that the bankruptcy court did not err in concluding that N.H. Rev. Stat. Ann. 447:12-a established the seniority of SFG's mortgage over ROK's mechanic's lien to the extent of the amount of money the construction lender disbursed to ROK. View "ROK Builders, LLC v. 2010-1 SFG Venture, LLC" on Justia Law

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Matrix Construction Co. was a South Carolina corporation with its principal place of business in South Carolina. Matrix was the general contractor on a project to renovate schools in South Carolina. Matrix hired Contract Supply as a subcontractor. Contract Supply had a relationship with BlueTarp Financial, a company providing commercial credit to the construction industry that had its principal place of business in Maine. After Matrix accepted Contract Supply's bid, Matrix signed BlueTarp's account agreement, which stated that disputes would be governed by the laws of Maine. Matrix later learned that Contract Supply was not paying its suppliers and stopped paying Contract Supply. BlueTarp filed this action for breach of contract and unjust enrichment in the federal district court for the District of Maine invoking diversity jurisdiction. The district court dismissed the case for lack of personal jurisdiction over Matrix. BlueTarp appealed, arguing that the forum selection clause in the account agreement authorized jurisdiction in the Maine district court and, in any event, Matrix had sufficient connections with Maine to satisfy the personal jurisdiction requirements. The First Circuit Court of Appeals reversed, holding that, having found the relatedness, purposeful availment, and reasonableness factors satisfied, the district court had personal jurisdiction over Matrix. View "Bluetarp Fin., Inc. v. Matrix Constr. Co." on Justia Law

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In this appeal from the denial of a preliminary inunction, plaintiff labor unions claimed that sections 6.007-.010 of Law 222, Puerto Rico's campaign finance law, placed an unconstitutional burden on the union's First Amendment right to engage in political speech. Both the district court and the government declined to address the merits of Plaintiffs' claims. The First Circuit Court of Appeals issued an appellate injunction enjoining enforcement of the challenged provisions of Law 222 pending the final disposition of this appeal. In this opinion the First Circuit outlined the reasons it ordered entry of the appellate injunction, holding, among other things, that it was incumbent upon the district court to engage with the merits of Plaintiffs' claims. The Court also ordered the district court to enter a preliminary injunction enjoining the enforcement of certain sections of the law. View "Puertorriqueno v. Fortuno" on Justia Law

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Sharfarz hired Goguen to build an addition to his house. Despite taking full payment, Goguen never finished the job. Sharfarz had to pay another to finish the work and sued consumer-protection laws, Mass. Gen. Laws ch. 93A; Mass. Gen. Laws ch. 142A. Sharfarz obtained a default judgment of $272,745. After an evidentiary hearing to assess damages, the state judge wrote that Goguen was "both deceptive and unfair, almost from the beginning and to the end," and that his "violations" had been "willful and knowing." Goguen filed for Chapter 7 bankruptcy. Sharfarz sought to have his judgment declared nondischargeable, under a provision that bars discharge of "any debt ... for money ... to the extent obtained by ... false pretenses, a false representation, or actual fraud" 11 U.S.C. 523(a)(2)(A). The bankruptcy judge denied the petition. The First Circuit vacated and remanded for determination of the nondischargeable amount. Goguen’s false statements were both the legal and factual cause of Sharfarz’s loss. View "Sharfarz v. Goguen" on Justia Law

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Lynch is a highway construction contractor and a signatory of the Construction Industries of Rhode Island's collective bargaining agreement with Local 251, as representative of truck drivers employed by Lynch. Lynch employed 26 Local 251 members in 1995, 16 in 1997, and only 10 in 2001. Local 251's vice president, Boyajian, testified that each time a truck driver retired, Lynch would sell a truck and replace that person with a subcontractor, gradually reducing the number of bargaining unit employees. The collective bargaining agreement states that employers are not permitted to use subcontractors unless employees of the subcontractors are paid the prevailing rate. Boyajian complained to Lynch about its use of subcontractors that did not pay prevailing rate and, in 1999, filed grievances with the NLRB. Lynch and the union entered into a letter of agreement, which was later challenged as violating the National Labor Relations Act, 29 U.S.C. 158(e), by impermissibly preventing Lynch from doing business with two subcontractors. The NLRB upheld the challenge and subsequently sought enforcement. The First Circuit noted contradictory evidence that the Board failed to consider and reversed with respect to one company, while entering an order of enforcement with respect to the other. View "Nat'l Labor Relations Bd v. Int'l Bhd. of Teamsters, Local 251" on Justia Law

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Defendants were employees of subcontractor that provided concrete for Boston's Central Artery/Tunnel project, the "Big Dig." The government charged that over nine years, the company knowingly provided concrete that failed to meet project specifications and concealed that failure by creating false documentation purporting to show that the concrete provided complied with specifications. Several employees, including defendants, were convicted of mail fraud, highway project fraud, and conspiracy to defraud the government. The district court calculated the guidelines sentencing range as 87- to 108-months incarceration, then sentenced defendants to six months of home monitoring, three years of probation, and 1,000 hours of community service. The First Circuit affirmed. The district court's explanation ultimately supports the reasonableness of the sentences, based on its finding that the loss amount caused by the crimes, the most significant factor in determining the GSR, was imprecise and did not fairly reflect the defendants' culpability. The court also found that there was insufficient evidence to conclude that the defendants' conduct made the Big Dig unsafe in any way or that the defendants profited from the offenses and considered personal circumstances. View "United States v. Stevenson" on Justia Law

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A worker, injured at a construction site while working for a subcontractor, sued the developer. The developer submitted the claim to the insurer, which obtained a declaratory judgment that it was not required to indemnify or defend. The First Circuit affirmed, holding that a Contractors Exclusion clause was unambiguous and precluded coverage for any injuries arising out of operations performed for the insured by independent contractors. View "Certain Interested Underwriters at Lloyd's, London v. Stolberg" on Justia Law

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During the early 1990s, debtor Redondo entered into three construction contracts with the Authority: the Patillas project, construction of a bridge and access road; the Dorado project, replacement of a different bridge; the Mayguez project, highway improvements. The Authority retained the right to modify the plans; Redondo had the right to seek extra compensation. Redondo also could claim extra compensation for certain contingencies requiring substantial additional work. Each project encountered unanticipated problems, including unforeseen site conditions and flawed design plans. Redondo completed all three projects and submitted claims for additional amounts owed under the contracts, including claims for two subcontractors on the Mayaguez project. With the claims unresolved, Redondo filed for bankruptcy protection, 11 U.S.C. 1101-1174, and served the Authority with adversary complaints. The bankruptcy court awarded the debtor a total of $12,028,311.92 plus prejudgment interest at 6.5 percent, later reduced by $69,792.26. The district court affirmed. The First Circuit affirmed in part, rejecting claims concerning timely notice on one project and Redondo's standing to assert subcontractor claims. The court vacated and remanded calculation of extended overhead damages and the award of prejudgment interest. View "PR Highway and Transp. Auth. v. Redondo Constr. Corp." on Justia Law

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OSHA fined the employer, a public works contractor, $33,700 for violations of safety regulations relating to the excavation of a trench. The “cave-in” provision, 29 C.F.R. 1926.652(a)(1) requires protective measures, such as shoring or trench boxes, for excavations at least five feet deep and in potentially unstable soil; other rules require inspections by a competent person, and specific egress measures, 29 C.F.R. 1926.650-652. An ALJ confirmed the fine and the Occupational Safety and Health Review Commission upheld the decision. The First Circuit denied review. An employer can be charged with constructive knowledge of a safety violation that supervisory employees know or should reasonably know about. The employer did not provide any documentary evidence of safety inspections. Substantial evidence supported the decision. View "P. Gioioso & Sons, Inc. v. Occupational Safety & Health Admin." on Justia Law