Justia Construction Law Opinion Summaries

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

Walsh is a nationwide builder; superintendents have discretion over hiring and pay of hourly workers. Walsh has rules against racial discrimination but superintendents are generally in charge. Plaintiffs worked for Walsh in 2002 and earlier and claimed that superintendents practiced, or tolerated, racial discrimination. Plaintiffs submitted a statistics indicating that black workers were less likely to work overtime; contended that some superintendents used words such as “nigger” or failed to prevent journeymen from doing so; and claimed that derogatory graffiti appeared in toilets or break sheds. Walsh claims that these were the work of subcontractors’ employees and that sites had different superintendents whose practices differed. The district court certified hostile work environment and overtime classes for the 262 Walsh sites in the Chicago area. The Seventh Circuit reversed. The 12 named plaintiffs cannot represent either class, since none worked for Walsh after 2002, but the classes extend into the indefinite future. The overtime class defined members as persons who did not earn more “because of their race.” Using a future decision on the merits to specify the scope of the class makes it impossible to determine who is in the class until the case ends. Plaintiffs may choose to propose site- or superintendent-specific classes. View "Bolden v. Walsh Constr. Co." on Justia Law

In 2004-2005, Costa & Son Construction performed site work for the general contractor (Braitt) on such a project in Bridgewater. After Braitt terminated the relationship Costa sued, alleging breach of contract and violations of G.L. c. 93A. Costa sought to recover damages under a payment bond obtained by Brait from Arch Insurance, G.L. c. 149, 29. Brait asserted similar counterclaims against Costa. Arch argued that Costa had relinquished any right to claim against the bond pursuant to a provision of his subcontract with Brait. The trial court granted Brait and Arch directed verdict with respect to claims under the bond. A jury returned a verdict for Costa, against Brait. The Massachusetts Supreme Court vacated the directed verdict. A subcontractor on a public construction project for which a payment bond has been obtained by the general contractor pursuant to G.L. c. 149, 29, may not by private agreement forgo its right to pursue payment under the bond. The court also vacated the portion of the amended judgment granting consequential damages to Costa; consequential damages were precluded by the contract. View "Costa v. Brait Builders Corp." on Justia Law

Contractor contracted to build a restaurant in Minnesota, promising to pay each subcontractor, upon receipt of payment from the owner, the amount to which the subcontractor was entitled. Appellant became the subcontractor for carpentry and drywall work. Upon completing its work, Appellant was not paid the full amount owed. After Contractor settled a dispute with the restaurant, it offered Appellant a smaller sum, claiming it was Appellant's pro rata share of the settlement proceeds. Appellant rejected the offer and sued Contractor and its Owner in state court. Owner and his wife subsequently filed a petition for Chapter 7 bankruptcy relief, with the debt to Appellant unsatisfied. Appellant commenced this adversary proceeding to have the debt declared nondischargeable. The bankruptcy appellate panel (BAP) determined that neither 11 U.S.C. 523(a)(4) nor 11 U.S.C. 523(a)(6) barred discharge of the debt. The Eighth Circuit Court of Appeals affirmed, holding (1) Owner was not a section 523(a)(4) fiduciary by reason of a Minnesota statute or Owner's Minnesota common law duties, nor did Contractor's use of its own property amount to embezzlement; and (2) the BAP did not err in finding no malicious injury, which resolved the section 523(a)(6) issue. View "Reshetar Sys., Inc. v. Thompson" on Justia Law

Winforge claimed that defendants breached a hotel development agreement between the parties, causing delay and costs that caused Winforge to default on the separate construction loan agreement between the parties. Defendants cross-claimed that Winforge breached the development agreement. The district court ruled in favor of the defendants and found that the parties had never entered into a final, enforceable contract. The Seventh Circuit affirmed. Even a signed writing is not a contract if there is no mutual assent or “distinct intention common to both;” the parties continued to exchange new drafts of the Scope of Work even after they had signed the Agreement. To the extent that defendants incurred any obligations, their failure to perform was not a breach because that failure was due to Winforge’s deficient performance of Winforge’s duties. View "Winforge, Inc. v. Coachmen Indus., Inc." on Justia Law

Budrik sued Wegman for injuries sustained in an accident on a construction site managed by Wegman and was demanding almost presented a realistic possibility of a potential loss above the policy limit, $1 million), but failed to warn Wegman of this possibility. Wegman sued Admiral for failure to act in good faith, alleging that it would promptly have sought indemnity from its excess insurer, AIG (policy limit $10 million). Budrik filed suit four years before Wegman notified AIG, which denied coverage for failure to timely notify. Budrik obtained a judgment of slightly more than $2 million. The district court dismissed Wegman’s suit against Admiral, and, on remand, granted a stay, pending state court resolution of Wegman’s suit against AIG. The Seventh Circuit dismissed appeal of the stay. Although Wegman’s suit against Admiral in federal court and against AIG in state court, are related, they do not satisfy the conditions for abstention.; the district court is not finished with the case. The stay really is a stay, and not a dismissal. View "R.C. Wegman Constr. Co. v. Admiral Ins. Co." on Justia Law

Plaintiff-Appellant Mid-Continent Casualty Company ("Mid-Continent") brought a declaratory judgment action seeking determination of its coverage obligations related to construction defect litigation. Defendant-Appellee, The Village at Deer Creek Homeowners Association, Inc. (the "Association"), moved to dismiss, requesting that the district court not exercise jurisdiction over Mid-Continent's action. Weighing the five factors set forth in "State Farm Fire & Casualty Co. v. Mhoon," (31 F.3d 979, 982–83 (10th Cir. 1994)), the district court declined jurisdiction in favor of resolution in Missouri state court and dismissed the action. Mid-Continent appealed, arguing the district court's application of the "Mhoon" factors amounted to an abuse of discretion. Upon review of the district court record, the Tenth Circuit affirmed its order granting the Association's motion to dismiss. View "Mid-Continent Casualty Co. v. Greater Midwest Builders, LTD" on Justia Law

Torrance Bunch and Fernando Sanchez-Garcia were each convicted by a jury of conspiracy to possess with intent to distribute 500 grams or more of methamphetamine. The jury also found Bunch guilty of three counts of distribution of five grams or more of methamphetamine. On appeal, Bunch alleged that he was denied his Sixth Amendment right to counsel, and Sanchez-Garcia contended that the district court erred in denying his motion for a mistrial and committed other trial-related errors. The Eighth Circuit Court of Appeals affirmed, holding (1) by repeatedly rejecting all options except self-representation, after having been warned of the consequences, Bunch necessarily chose self-representation, and thus, the district court's ruling did not violate Bunch's rights under the Sixth Amendment; (2) the prosecutor's comments during closing argument were not improper, and thus Sanchez-Garcia was not entitled to a mistrial; (3) the district court did not commit plain error by proceeding with a joint trial; and (4) the district court did not abuse its discretion by admitting a recording of a telephone call into evidence. View "United States v. Sanchez-Garcia" 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