Justia Construction Law Opinion SummariesArticles Posted in U.S. 6th Circuit Court of Appeals
MI Bldg. & Constr. Trades Council v. Snyder
Project labor agreements (PLAs) are used in the construction industry to set common conditions of employment for large projects involving multiple subcontractors and unions. On a public construction project, a PLA can be entered into by the governmental unit paying for the project or by its general contractor; the other party is a labor organization. If the governmental unit enters into a PLA, all contractors bidding on the project must agree to abide by it. Opponents argue that PLAs discourage nonunion contractors from bidding on government contracts and increase construction costs. Proponents, such as the trades councils, claim that PLAs enhance job-site cooperation and reduce labor disputes. The federal government has gone back and forth on allowing PLAs. Michigan passed the first version of the Fair and Open Competition in Governmental Construction Act in 2011, restricting the use of PLAs on publicly funded projects. Following entry of an injunction, that version was superseded by an amended act, passed in 2012. The district court enjoined the current version as preempted by the National Labor Relations Act. The Sixth Circuit reversed, finding that the act furthers Michigan’s proprietary goal of improving efficiency in public construction projects, and is no broader than necessary to meet those goals. View "MI Bldg. & Constr. Trades Council v. Snyder" on Justia Law
United States v. Greco
Greco worked at MetroHealth, a county-owned health-care provider in Cleveland, from 1997 until 2009, supervising independent contractors who worked on MetroHealth construction projects, selecting contractors for small-scale no-bid maintenance projects, and authorizing payment for their work. Greco used his authority to facilitate a bribery scheme set up by his boss and Patel, the vice-president of a construction company. The participants became nervous and Greco took action to hide his involvement in the scheme, but Patel contacted the government and confessed; in exchange for a reduced sentence, Patel provided detailed information about the scheme. Greco was convicted of bribery and conspiracy to commit bribery involving programs receiving federal funds (18 U.S.C. 666(a)(1)(B) and 371), violation of and conspiracy to violate the Hobbs Act (18 U.S.C. 1951), making false tax returns (26 U.S.C. 7206(1)), and conspiracy to commit mail fraud (18 U.S.C. 1349) and was sentenced to 112 months’ imprisonment and required to pay $994,734.84 in restitution to MetroHealth. The Sixth Circuit affirmed, rejecting arguments that the court improperly applied a 12-level enhancement based on an erroneous loss calculation; improperly applied a two-level enhancement for obstruction of justice; and imposed a substantively unreasonable sentence. View "United States v. Greco" on Justia Law
United States v. Kurlemann
For more than 20 years, Kurlemann built and sold luxury homes in Ohio. In 2005-2006 he borrowed $2.4 million to build houses in Mason. When neither sold, he enlisted realtor Duke, who found two straw buyers, willing to lie about their income and assets on loan applications that Duke submitted to Washington Mutual. Both buyers defaulted. Duke pled guilty to seven counts, including loan fraud and making false statements to a lending institution, and agreed to testify at Kurlemann’s trial. A jury convicted Kurlemann of six counts, including making false statements to a lending institution, 18 U.S.C. 1014; and bankruptcy fraud, 18 U.S.C. 157. The district court sentenced Kurlemann to concurrent 24-month sentences and ordered him to pay $1.1 million in restitution. The district court sentenced Duke to 60 months. The Sixth Circuit affirmed the bankruptcy fraud conviction, based on Kurlemann’s concealment of his interest in property, but reversed and remanded his false statements conviction, finding that the trial court improperly instructed the jury that concealment was sufficient to support conviction. The court also reversed Duke’s sentence, finding that the court failed to explain the sentence it imposed. View "United States v. Kurlemann" on Justia Law
Forrest Constr., Inc. v. Cincinnati Ins. Co.
Forrest Construction was the named insured on a commercial general liability policy with Cincinnati Insurance. In 2004, Forrest was hired toconstruct a home for the Laughlins. A dispute arose over the amount owed and Forrest filed suit. The Laughlins counter-sued based on alleged defects in the workmanship of the construction, particularly the foundation. Forrest notified Cincinnati Insurance of the counter-complaint and requested defense. Cincinnati Insurance based its denial on an exclusion in the policy for work done by the insured its position that the underlying complaint did not allege damage caused by a subcontractor, thereby rendering the subcontractor exception to the “your work” exclusion inapplicable. Forrest sued, alleging breach of contract, bad-faith denial, and violation of the Tennessee Consumer Protection Act. The district court found that Cincinnati Insurance had breached its contract. The Sixth Circuit affirmed, holding that Cincinnati Insurance was given sufficient notice of the facts giving rise to its obligation to defend and that, under Tennessee law, “property damage” occurs when one component (here, the faulty foundation) of a finished product (the house) damages another component. View "Forrest Constr., Inc. v. Cincinnati Ins. Co." on Justia Law
Wall v. Circle C Constr., L.L.C.
Circle C contracted to construct buildings at the Fort Campbell military base. The agreement included determinations of hourly wages for electrical workers. Circle C has had government contracts for 20 years; its co-owner and a bookkeeper attended training on the prevailing wage requirement for federal government contracts. PT was Circle C’s subcontractor on 98 percent of the electrical work, but did not have a written contract. Circle C provided PT with the wage determination excerpts from its contract, but did not explain the Davis-Bacon Act (40 U.S.C. 3142) prevailing wage requirements nor verify whether PT submitted its own payroll certifications, nor monitor PT’s eight employees’ work on the project, nor take measures to ensure payment of proper wages. One of the PT electricians claimed violation of the federal False Claims Act, 31 U.S.C. 3729(a)(2). The Department of Labor found inaccurate or false payroll certifications. The district court awarded treble damages: $1,661,423.13. The Sixth Circuit affirmed summary judgment in favor of plaintiffs, but remanded for recalculation of the damages. Circle C, an experienced contractor, made false statements, acted in reckless disregard of the truth or falsity of the information, and the false statements were “material” to the government’s decision to make payment.View "Wall v. Circle C Constr., L.L.C." on Justia Law
Mason & Dixon Lines Inc. v. Steudle
Access to the Ambassador Bridge between Detroit and Windsor, Ontario necessitated traversing city streets. The state contracted with the Company, which owns the Bridge, to construct new approaches from interstate roads. The contract specified separate jobs for the state and the Company. In 2010, the state obtained a state court order, finding the Company in breach of contract and requiring specific performance. The Company sought an order to open ramps constructed by the state, asserting that this was necessary to complete its work. The court denied the motion and held Company officials in contempt. In a 2012 settlement, the court ordered the Company to relinquish its responsibilities to the state and establish a $16 million fund to ensure completion. Plaintiffs, trucking companies that use the bridge, sought an injunction requiring the state to immediately open the ramps. The district court dismissed claims under the dormant Commerce Clause, the motor carriers statute, 49 U.S.C. 14501(c), and the Surface Transportation Assistance Act, 49 U.S.C. 31114(a)(2). The Sixth Circuit affirmed. For purposes of the Commerce Clause and statutory claims, the state is acting in a proprietary capacity and, like the private company, is a market participant when it joins the bridge company in constructing ramps. View "Mason & Dixon Lines Inc. v. Steudle" on Justia Law
Glover v. Birkett
Defendant was convicted of the assault of another inmate. He retained trial counsel to pursue his appeal of right, but the attorney failed to timely file. He filed delayed application for leave to appeal in the Michigan Court of Appeals, which was denied for lack of merit. The Michigan Supreme Court denied appeal. Defendant pursued state collateral proceedings and filed a motion for relief in the trial court, alleging ineffective assistance for failing to timely pursue appeal. The trial court denied the motion, and the higher courts denied subsequent applications for leave to appeal the denial. The district court conditionally granted a habeas petition, finding that counsel was ineffective for failing to timely pursue appeal of right. The Sixth Circuit affirmed. When counsel’s constitutionally deficient performance deprives a defendant of an appeal that he otherwise would have taken, prejudice is presumed with no further showing. Appellate review of the denial of collateral relief is not a sufficient substitute for direct appeal; an applicant denied leave to appeal does not receive the benefit of oral argument, nor does the defendant have a right to appointed counsel on post-conviction review. View "Glover v. Birkett" on Justia Law
V&M Star Steel v. Centimark Corp.
V&M filed suit against Centimark alleging breach of contract and negligence after metal roof sheeting panels being installed at its steelwork facility fell into an electrical substation, causing loss of power for more than 30 hours. Damages for repairs and lost profits were around $3 million The district court granted Centimark summary judgment, ruling that V&M failed to produce sufficient evidence of causation to sustain either legal claim. The Sixth Circuit reversed and remanded, holding that genuine issues of material fact exist.View "V&M Star Steel v. Centimark Corp." on Justia Law
HDC, LLC v. City of Ann Arbor
The city accepted a proposal to develop city-owned property. The developer formed companies to develop and own the affordable housing portion of the project. The city gave the developer an option to purchase the property under certain conditions. The developer failed to meet a condition that it obtain a demolition permit by a specific date. The city terminated the agreement. The developer alleged violations of the Fair Housing Act, 42 U.S.C. 3601, and state laws, claiming that the city knew or should have known that the condition was impossible to meet and actually terminated the agreement because the project would accommodate handicapped tenants. The district court dismissed. The Sixth Circuit affirmed. The facts alleged do not plausibly support findings: that the city designed the agreement to fail by including a condition it should have known that plaintiffs, sophisticated developers, could not meet; that the city did not want to house the handicapped; or that termination caused handicapped individuals to suffer disproportionately more than others. View "HDC, LLC v. City of Ann Arbor" on Justia Law
Brown v. Mills
Petitioner, serving 387 months for drugs and weapons offenses, filed a pro se action he characterized as habeas corpus (28 U.S.C. 2241). The district court characterized the suit as a civil rights action and dismissed for failure to pay the filing fee. The petitioner has a long history of abusive litigation and may not proceed in forma pauperis, under the "three strikes" rule, 28 U.S.C. 1915(g). The Sixth Circuit affirmed. The district court properly characterized the claim, which stated that it was asserting a âcivil tort action for civil rightâs violation,â alleged violations of the First Amendment, and sought monetary damages. The district court effectively warned the petitioner about the consequences of recharacterization in a 2002 order, stating that he âshall not be permitted to file any further actions in forma pauperis without first obtaining leave."