Justia Construction Law Opinion Summaries

A trade association representing licensed contractors sued a municipal government, alleging that the city violated North Dakota’s statutory competitive bidding requirements for certain public improvement projects. The association claimed that the city self-performed various tasks during a road improvement project, despite the project’s estimated cost exceeding the statutory threshold for mandatory public bidding. After the project was substantially completed, the city adopted a new ordinance authorizing it to self-perform routine street maintenance, including milling and overlaying, regardless of cost.The case was heard in the District Court of Cass County, East Central Judicial District. The district court granted leave for the association to supplement its complaint with factual allegations about the completed project, but denied leave to challenge the newly adopted ordinance, concluding the association lacked standing because it had not shown an actual or threatened injury from action under the ordinance. After a hearing, the district court dismissed the case as moot, reasoning that because the road project had been completed, there was no ongoing controversy or relief to be granted.The North Dakota Supreme Court reviewed the appeal. It held that the public interest exception to mootness applied, since litigation regarding competitive bidding statutes has statewide significance and guides the conduct of public officials across North Dakota. The Supreme Court further determined that the association had standing to challenge the city’s ordinance, because it alleged facts showing the ordinance threatened injury to its members—licensed contractors eligible to bid on public projects. The Supreme Court reversed the district court’s dismissal and remanded for further proceedings, instructing reconsideration of whether the association may amend its complaint to challenge the ordinance. View "Associated General Contractors of North Dakota v. City of West Fargo" on Justia Law

After her property experienced water intrusion, a homeowner sued her neighbor, whose property was the source of the problem. The neighbor, in defending the lawsuit, hired a construction consulting firm to inspect both properties and to create an expert report recommending repairs. The recommendations from this report formed the basis of a settlement between the homeowner and her neighbor, and repairs were performed accordingly. After the settlement and repairs, the water intrusion problem recurred, leading the homeowner to file a new lawsuit against the consulting firm, alleging that its recommendations were negligent and defective.In the Superior Court of Orange County, the consulting firm filed an anti-SLAPP motion, asserting that its actions were protected as statements made in the course of litigation. The trial court granted the motion concerning certain claims, but denied it for claims of negligence and breach of contract as a third-party beneficiary, reasoning these arose from conduct rather than protected statements. On appeal, the California Court of Appeal previously affirmed the trial court’s partial denial, finding that the remaining claims were not based on protected activity, and remanded for further proceedings on those claims.Upon remand, the consulting firm moved for judgment on the pleadings, contending that the litigation privilege under California Civil Code section 47(b) barred the remaining claims. The California Court of Appeal, Fourth Appellate District, Division Three, affirmed the trial court’s judgment in favor of the consulting firm. The court held that the litigation privilege applied because the firm’s formulation of repair recommendations was necessarily related to a communicative act (the expert report) prepared in the course of litigation, and thus barred the homeowner’s negligence and third-party beneficiary claims. The judgment in favor of the consulting firm was affirmed. View "Fazel v. Pete Fowler Construction Services" on Justia Law

A Mississippi construction company, operating under the name MCA Construction, Inc., entered into a contract with an Alabama property owner to perform site development work on a residential subdivision in Baldwin County. The contract was executed on February 11, 2021, and at that time, the company held an Alabama general contractor’s license with a “Building Construction” (BC) classification and an unlimited bid limit. Shortly before executing the contract, the city engineer raised questions regarding whether the BC classification was adequate for the planned utility work (such as water and sewer installation) and indicated that an additional “Municipal and Utility” (MU) classification might be required before such work began. MCA sought clarification from the state licensing board and subsequently obtained the MU classification in May 2021, before starting the utility work.The property owner, RAM-Robertsdale Subdivision Partners, LLC, along with related parties, later alleged that MCA had performed defective work and failed to pay subcontractors, and they brought suit in Baldwin Circuit Court. MCA filed counterclaims for breach of contract and fraud, asserting that it had not been fully paid for its work. The RAM parties moved for summary judgment, arguing that the contract was void because MCA was not properly licensed with the MU classification at the time the contract was executed.The Baldwin Circuit Court granted summary judgment for the RAM parties, holding that the contract was void because MCA was not “duly licensed” for all aspects of the work at the time of contracting. MCA appealed. The Supreme Court of Alabama reviewed the statutory and regulatory framework, noting that MCA had a valid BC license, acted in good faith, and obtained the MU classification before performing utility work. The Supreme Court of Alabama held that substantial compliance with the licensing statute was sufficient in these circumstances and that voiding the contract was not warranted. The court reversed the summary judgment and remanded for further proceedings. View "Construction Services, LLC v. RAM-Robertsdale Subdivision Partners, LLC" on Justia Law

A developer owned all property in a residential community and petitioned a town to create a public improvement district to finance and construct infrastructure improvements, such as roads and water lines. The district’s board, composed of representatives of the developer, was authorized to levy assessments and issue bonds to fund construction. The developer and the district entered a development agreement requiring the developer to fund the improvements, and the district contracted with a construction company to perform the work. After most of the work was done, a payment dispute arose. The construction company obtained an arbitration award against the district but was not fully paid. The construction company then sued the developer and related entities for unjust enrichment, asserting that the developer received the benefit of infrastructure improvements without paying for them.The Superior Court in Maricopa County granted the developer’s motion to dismiss, concluding that, under Arizona law as interpreted in Wang Electric, Inc. v. Smoke Tree Resort, a plaintiff in an unjust enrichment claim must allege improper conduct by the property owner, and the construction company had not done so. The court also denied the construction company’s request to file an amended complaint. The Arizona Court of Appeals reversed, holding that the improper conduct requirement applied only in landlord-tenant-contractor cases, and allowed the construction company to amend its complaint.The Supreme Court of the State of Arizona reviewed the case to clarify when the improper conduct requirement applies to unjust enrichment claims. The court held that the requirement only applies when the owner is a landlord and the improvements are made at the tenant’s direction. It does not extend to situations where the owner directly arranges for improvements and pays no one for them. The court concluded that the construction company’s allegations were sufficient to state a claim for unjust enrichment against the developer. The court vacated the decision of the court of appeals, reversed the superior court’s dismissal, and remanded for further proceedings. View "MARKHAM v. CAHAVA" on Justia Law

Emily Lehmberg sued Studio E. Architecture and Interiors, Inc. and other parties over the remodeling of her home. Studio E. moved to dismiss the claims against it, arguing that Lehmberg failed to file a certificate of merit as required by Texas Civil Practice and Remedies Code Section 150.002, which mandates such a certificate for claims against certain professionals. Lehmberg contended that her claims were not based on professional services but rather on alleged dishonesty and fraud. She also argued that Studio E. had waived its right to seek dismissal by waiting more than two years to file its motion. While the case against other defendants remained pending, the trial court denied Studio E.’s motion, and Studio E. filed an interlocutory appeal.The Court of Appeals for the Fourth District of Texas reversed the trial court’s decision, holding that Section 150.002 applied, and that Studio E. had not waived its right to seek dismissal. The appellate court remanded the case to the trial court to determine whether dismissal should be with or without prejudice. The trial court dismissed the original claims against Studio E. without prejudice, but allowed Lehmberg to file an amended petition with a certificate of merit, reasserting her claims. Studio E. moved to dismiss the amended petition, arguing that reassertion was not permitted in the same lawsuit, but the trial court denied the motion. Studio E. appealed again, and the court of appeals affirmed, holding that amending the petition was proper.The Supreme Court of Texas reviewed the case and held that when claims against a defendant are dismissed without prejudice under Section 150.002, and the underlying lawsuit remains pending, the plaintiff may reassert those claims in an amended petition along with a certificate of merit. The Court affirmed the judgment of the court of appeals. View "STUDIO E. ARCHITECTURE AND INTERIORS, INC. v. LEHMBERG" on Justia Law

A worker was injured at a Manhattan construction site owned by Mezuyon, LLC during an excavation project managed by Mayrich Construction Corp. The accident occurred when the worker, who was operating a drilling rig that malfunctioned, was struck by the rear of an excavator while attempting repairs with a mechanic. The worker alleged injuries from being knocked to the ground by the excavator.The injured worker brought suit against Mezuyon, LLC, claiming common-law negligence and violations of New York Labor Law §§ 200, 240(1), and 241(6). Initially, the Labor Law § 241(6) claim was based on sections 23-9.4(h)(4) and 23-9.5(c) of the Industrial Code. After Mezuyon moved for summary judgment, the worker cross-moved to add section 23-4.2(k) of the Industrial Code as a further basis for the claim. The Supreme Court allowed the amendment but ultimately dismissed all claims except the Labor Law § 241(6) claim based on section 23-4.2(k). Mezuyon then brought a third-party action against Mayrich. The Supreme Court later granted summary judgment to Mayrich and dismissed the remaining claim. The Appellate Division, First Department, affirmed that dismissal, and the worker was granted leave to appeal to the New York Court of Appeals.The New York Court of Appeals held that section 23-4.2(k) of the Industrial Code is not sufficiently specific to serve as a predicate for vicarious liability under Labor Law § 241(6). The Court reasoned that the regulation does not mandate compliance with concrete specifications but instead states a broad, general prohibition. As such, it cannot give rise to a nondelegable duty. The Court of Appeals affirmed the order of the Appellate Division, with costs. View "Mann v Mezuyon, LLC" on Justia Law

A woman was killed when a construction crane collapsed during a storm, striking her apartment building. Her parents, acting individually and on behalf of her estate, brought a negligence and gross negligence lawsuit against several defendants, primarily three related construction and development entities. Following a jury trial, the jury found these entities had engaged in a joint enterprise that caused the woman’s death and awarded over $360 million in compensatory damages, along with $500 million in exemplary damages (which the trial court later reduced under statutory caps). The court entered judgment holding the entities jointly and severally liable for the compensatory damages, with two entities also severally liable for exemplary damages.The defendants, collectively known as the Greystar Entities, filed a single $25 million joint supersedeas bond to suspend execution of the judgment during their appeal. The plaintiffs challenged the sufficiency of this joint bond in the 191st Judicial District Court, Dallas County, arguing that Texas law capped the required bond at $25 million per debtor, not per judgment. The trial court agreed, ruling that each entity needed to post its own $25 million bond and that the joint bond could suspend execution for only one entity unless the defendants designated which one. The Greystar Entities appealed to the Fifth Court of Appeals at Dallas, which affirmed the trial court’s order.The Supreme Court of Texas reviewed the case on a petition for writ of mandamus. The Court held that, under Texas Civil Practice and Remedies Code Section 52.006(b), the $25 million cap on supersedeas bonds applies per judgment debtor, not collectively to all debtors in a single judgment. The Court also held that the trial court abused its discretion by immediately invalidating the joint bond without allowing a reasonable time for compliance. The Supreme Court conditionally granted partial mandamus relief, directing the trial court to provide additional time for each entity to post an individual bond. View "IN RE GREYSTAR DEVELOPMENT & CONSTRUCTION, L.P." on Justia Law

A regional airport authority undertook a project to remove a hill from land owned by a private property holder. Instead of purchasing the land outright, the parties entered into an agreement allowing the airport authority to remove the hill and, afterwards, to further lower the elevation of the property by overblasting, which would make future development easier for the owner. The airport authority completed the hill removal but failed to perform the overblasting. The landowner then sued for breach of contract, seeking damages for the incomplete work.The United States District Court for the Southern District of West Virginia found that the airport authority had breached the agreement and granted partial summary judgment to the landowner on liability. Both sides submitted expert reports concerning the cost to complete the required overblasting, ultimately agreeing that this cost was over $4 million. However, the district court held that the cost of completion was grossly disproportionate to the value of the property and applied the “gross disproportionality” rule, awarding only nominal damages because it found insufficient evidence of the property’s diminution in value. The landowner appealed, and the United States Court of Appeals for the Fourth Circuit certified to the Supreme Court of Appeals of West Virginia the question of whether, how, and by whom the gross disproportionality rule should be applied in such cases.The Supreme Court of Appeals of West Virginia held that, in breach of construction contract cases, the gross disproportionality rule may be applied to limit damages. The court clarified that gross disproportionality is calculated using the diminution in value approach, measuring the difference in value between the property as is and as it should have been if the contract had been fully performed. The court further held that the breaching party bears the burden of invoking and proving gross disproportionality. If the breaching party fails to meet this burden, the non-breaching party’s proven measure of damages applies. View "Corotoman, Inc. v. Central West Virginia Regional Airport Authority" on Justia Law

A state agency sought a new headquarters and training facility, issuing detailed specifications for its construction. The agency, as a public body, entered into a long-term “build-to-suit” lease with a private developer, who agreed to construct the facility to the agency’s precise needs. The developer financed the project primarily through a bank loan, with rent payments from the agency structured to cover the developer’s debt service, taxes, and insurance. The lease included provisions requiring the agency to pay unamortized construction costs if it terminated the lease early. The developer sought confirmation that the project was not subject to the state’s prevailing wage law, but the Bureau of Labor Law Compliance determined that the lease payments, as public funds, ultimately financed the construction, making the prevailing wage statute applicable.The developer appealed the Bureau’s decision to the Pennsylvania Prevailing Wage Appeals Board, which upheld the Bureau’s position, citing the financial structure and risk allocation indicating public financing. The developer then appealed to the Commonwealth Court of Pennsylvania. The Commonwealth Court reversed, holding that the lease was a bona fide lease rather than a construction contract, finding that the developer bore the financial risk, and that the agency’s payments were for rent and not directly for construction.On further appeal, the Supreme Court of Pennsylvania reviewed whether the lease constituted "public work" under the state’s Prevailing Wage Act. The Court held that risk allocation is only one of several relevant factors in determining whether public funds paid for construction. Applying a totality-of-the-circumstances analysis, the Court found that the structure of the lease, financing terms, and the agency’s obligations demonstrated that public funds did pay for construction. The Court thus concluded the prevailing wage requirements applied to the lease and reversed the Commonwealth Court’s order. View "PSP NE, LLC v. PWAB" on Justia Law

A worker at the Cherry Point oil refinery in Washington was regularly exposed to asbestos-containing insulation during his employment, which began in 1971. The insulation at issue was chosen, supplied, and installed by a subcontractor as part of the refinery’s original construction in the early 1970s. Decades after his exposure, the worker developed mesothelioma and died from the disease. His estate brought claims against numerous defendants, including the subcontractor, based on alleged asbestos exposure at the refinery.The Whatcom County Superior Court first granted summary judgment for the subcontractor, relying on Maxwell v. Atlantic Richfield Co., which held that Washington’s six-year construction statute of repose barred such claims. However, the court reconsidered and denied summary judgment after the Washington Court of Appeals issued Welch v. Brand Insulations, Inc., which found there were factual questions about whether the subcontractor’s activities were covered by the statute of repose. Due to conflicting appellate decisions, the Supreme Court of Washington granted direct review.The Supreme Court of the State of Washington held that claims against the subcontractor arising from its construction activities—specifically, its installation of asbestos insulation as part of constructing an improvement on real property—are barred by the construction statute of repose. However, the court held that claims based on the subcontractor’s independent role as a product seller or supplier, separate from its construction activities, are not barred by the statute of repose. The court affirmed in part, reversed in part, and remanded the case for further proceedings to determine which claims, if any, survive under theories of product seller or supplier liability. The court declined to address the constitutionality of the statute of repose, as that issue was not timely raised. View "Polinder v. Aecom Energy & Constr., Inc." on Justia Law