Justia Construction Law Opinion Summaries

Ballard obtained a $280,000 loan from SBH to construct the Stone Fence residence, then requested another $90,000 to finish the property. There was insufficient equity to cover that amount; SBH lent him $20,000. Ballard obtained construction loans on properties in Bradley. Grant was the SBH loan officer for all three properties. Ballard submitted required Sworn Contractor’s Statements and Owner’s Payment Authorizations to the Kankakee County Title Company (KCTC), identifying the material and labor costs supposedly associated with his work on the Bradley properties. Ballard obtained $188,000 for the Bradley properties, where no work was performed. Ballard used the funds to complete Stone Fence. An SBH employee discovered Ballard’s scheme. Ballard was charged with three counts of bank fraud, 18 U.S.C. 1344. At trial, Ballard admitted that he had misdirected funds; he argued a “good faith” defense that Grant and his supervisors knew and authorized Ballard’s acts and pressured him to complete Stone Fence. Ballard also claimed he did not read or sign the loan documents, implying that someone forged his signature. After Ballard was convicted, his attorney obtained a previously undisclosed audio recording of Grant, made during a prior, unrelated criminal investigation. The Seventh Circuit affirmed the district court in granting a new trial, finding the recording material. View "United States v. Ballard" on Justia Law

A subcontractor hired by a property owner's contractor to repair flood damage to the owner's property was not injured in its business or property by reason of a pattern of racketeering allegedly carried out by the property owner's insurance company and its independent consultants to reduce the amount paid on the property owner's insurance claims for reimbursement of the repair costs. In this case, the Fourth Circuit held that the property owner's subcontractor, Slay's Restoration, was not proximately caused by conduct of the insurance company, and Slay's Restoration therefore failed to state a plausible claim under the Racketeer Influenced and Corrupt Organizations Act (RICO) against the insurance company and its consultants upon which relief could be granted. Therefore, the court affirmed the district court's dismissal of Slay's Restoration's complaint. View "Slay's Restoration, LLC v. Wright National Flood Insurance Co." on Justia Law

The court of appeals affirmed a jury verdict for Jacklyn Donevant in her wrongful termination action against the Town of Surfside Beach, finding her cause of action fit within the public policy exception to the at-will employment doctrine. Donevant was fired because she carried out her mandatory responsibility under the law to enforce the provisions of the South Carolina building code. Donevant discovered unpermitted construction work she determined to be in violation of the building code, and she issued a stop work order. She was fired a few days later. The Town appealed, contending the court of appeals misinterpreted the "public policy exception." The South Carolina Supreme Court determined the Town misinterpreted the public policy exception: "Donevant was enforcing the building code and therefore enforcing a clear mandate of public policy when she issued the stop-work order. ... Under the circumstances of this case, firing Donevant for carrying out her mandatory responsibility to enforce the building code violates public policy." View "Donevant v. Town of Surfside Beach" on Justia Law

Dickinson Elks Building, LLC, appealed a judgment awarding Rick and Janan Snider, doing business as RJ Snider Construction ("RJ Snider"), $198,255.08 for unjust enrichment and quantum meruit claims. In 2011, RJ Snider contracted with Granville Brinkman to furnish materials and labor for construction work on real property owned by Dickinson Elks. RJ Snider's principal place of business was located in Washington. In 2012, RJ Snider applied for a contractor license from the North Dakota Secretary of State, and the license was issued on in February 2012. RJ Snider provided services and materials for Dickinson Elks' property from December 26, 2011, to November 30, 2012. Dickinson Elks paid RJ Snider for all of the services and materials it provided between December 26, 2011, and February 1, 2012. RJ Snider billed Dickinson Elks $174,642.10 for the services and materials it provided from March 15, 2012, until November 30, 2012. Dickinson Elks did not pay any of this amount. In January 2013, RJ Snider recorded a construction lien against Dickinson Elks' property. In May 2014, Dickinson Elks served RJ Snider with a demand to start a lawsuit to enforce the lien and record a lis pendens within 30 days of the demand. RJ Snider sued Dickinson Elks in June 2014, seeking foreclosure of the construction lien and a money judgment. RJ Snider recorded a notice of lis pendens on July 28, 2014. Dickinson Elks moved for summary judgment, arguing RJ Snider's complaint should be dismissed under N.D.C.C. 43-07-02 because RJ Snider was not a licensed contractor when it started work on the property. Dickinson Elks also argued RJ Snider did not have a valid construction lien, because RJ Snider did not record a lis pendens within 30 days of receiving the demand to enforce the lien. The district court partially granted the motion and entered a judgment forfeiting RJ Snider's construction lien because RJ Snider did not record a lis pendens within 30 days of receiving Dickinson Elks' demand to enforce the lien as required under N.D.C.C. 35-27-25. The court concluded RJ Snider's claims were not precluded under N.D.C.C. 43-07-02. RJ Snider amended its complaint, claiming it was entitled to a money judgment against Dickinson Elks under the principles of quantum meruit and unjust enrichment. The North Dakota Supreme Court concluded RJ Snider was not precluded from maintaining its claims; however, the Court reversed and remanded for the district court to determine whether any of the damages awarded were for services and materials provided before RJ Snider was licensed. View "Snider v. Dickinson Elks Building, LLC" on Justia Law

At issue in this case was whether Aspen Insurance (UK) Ltd. And Lloyd’s Syndicate 2003 (collectively, “Aspen”) had to reimburse Black & Veatch Corporation (“B&V”) for costs B&V incurred due to damaged equipment a subcontractor made for power plants in Ohio and Indiana. The district court held Aspen did not have to pay B&V’s claim under its commercial general liability (“CGL”) insurance policy because B&V’s expenses arose from property damages that were not covered “occurrences” under the Policy. Because the only damages involved here were to B&V’s own work product arising from its subcontractor’s faulty workmanship, the court concluded that the Policy did not provide coverage and granted Aspen’s motion for partial summary judgment. B&V appealed. The Tenth Circuit found that the Policy contained a choice-of-law clause, making the Policy subject to New York law. The Court also found a trend among state supreme courts that supported the contention that construction defects could constitute “occurrences” under CGL policies, and that contractors have coverage for the unexpected damage caused by defective workmanship done by subcontractors. The Tenth Circuit predicted the New York Court of Appeals would decide that the damages here constituted an “occurrence” under the Policy, and as such, vacated the district court’s summary judgment decision and remand for further proceedings. View "Black & Veatch Corp. v. Aspen Insurance" on Justia Law

In this action alleging, inter alia, breaches of fiduciary duty and the implied warranty of habitability, the Supreme Court affirmed the district court’s grant of summary judgment and a directed verdict against The Gables at Sterling Village Homeowner’s Association (the Association) but vacated the district court’s award of attorney fees.The Association filed this action against the property developer who built the Gables at Sterling Village, the builders, and their principles after property owners began to notice problems in the planned unit development. The property owner asserted a counterclaim for indemnification. The district court granted (1) summary judgment against the Association, concluding that the Association lacked contractual privity with the property developer; (2) the property developer’s motion for directed verdict on the Association’s claim for breach of fiduciary duty; and (3) the property developer’s post-trial motion for indemnification of attorney fees. The Supreme Court affirmed in part and vacated in part, holding (1) the district court did not err in granting summary judgment and directed verdict; but (2) the property developer should have tried his indemnification claim rather than raise it by post-trial motion. View "Gables at Sterling Village Homeowners Ass’n v. Castlewood-Sterling Village I, LLC" on Justia Law

In this action alleging, inter alia, breaches of fiduciary duty and the implied warranty of habitability, the Supreme Court affirmed the district court’s grant of summary judgment and a directed verdict against The Gables at Sterling Village Homeowner’s Association (the Association) but vacated the district court’s award of attorney fees.The Association filed this action against the property developer who built the Gables at Sterling Village, the builders, and their principles after property owners began to notice problems in the planned unit development. The property owner asserted a counterclaim for indemnification. The district court granted (1) summary judgment against the Association, concluding that the Association lacked contractual privity with the property developer; (2) the property developer’s motion for directed verdict on the Association’s claim for breach of fiduciary duty; and (3) the property developer’s post-trial motion for indemnification of attorney fees. The Supreme Court affirmed in part and vacated in part, holding (1) the district court did not err in granting summary judgment and directed verdict; but (2) the property developer should have tried his indemnification claim rather than raise it by post-trial motion. View "Gables at Sterling Village Homeowners Ass’n v. Castlewood-Sterling Village I, LLC" on Justia Law

The underlying action was initiated by homeowners from two residential developments in Rocklin against appellants Centex Homes and Centex Real Estate Corporation (Centex) for alleged defects to their homes. Centex and cross-defendant and respondent St. Paul Fire and Marine Insurance Company (St. Paul) have a history of insurance coverage disputes. St. Paul was an insurer for subcontractor Ad Land Venture (Ad Land), and agreed to defend Centex as an additional insured subject to a reservation of rights. Centex filed a cross-complaint against its subcontractors and St. Paul that sought, as the seventh cause of action, a declaration that Centex was entitled to independent counsel under Civil Code section 28601 because St. Paul’s reservation of rights created significant conflicts of interest. Centex appealed after the trial court granted St. Paul’s motion for summary adjudication of Centex’s seventh cause of action. Centex argued any possible or potential conflict was legally sufficient to require St. Paul to provide independent counsel. The Court of Appeal disagreed. Alternatively, Centex contended independent counsel was required because counsel appointed by St. Paul could influence the outcome of the coverage dispute and St. Paul controlled both sides of the litigation. The Court of Appeal concluded that because Centex failed to establish a triable issue of material fact regarding these assertions, the Court affirmed the judgment. View "Centex Homes v. St. Paul Fire & Marine Ins. Co." on Justia Law

At issue was whether this common law action alleging construction defects resulting in both economic loss and property damage was subject to the prelitigation notice and cure procedures set forth in the Right to Repair Act, Cal. Civ. Code 895-945.5. After noting that the answer depended on the extent to which the Act was intended to alter the common law, the Supreme Court held that the Legislature intended that the Act was to supplant the common law with new rules governing the method of recovery in actions alleging property damage rather than to supplement common law remedies with a statutory claim for purely economic loss. Thus, the court held that the present suit for property damage was subject to the Act’s prelitigation procedures, and the court of appeal properly ordered a stay until those procedures were followed. View "McMillin Albany LLC v. Superior Court of Kern County" on Justia Law

Weis, a stonework firm, was required by a collective-bargaining agreement (CBA) to contribute to the Laborers’ Pension Fund for each hour worked by Union members. Weis complied for many years, then began using more skilled marble setters and finishers on its jobs, gradually stopped hiring Union members, ceased paying into the Fund, and terminated its CBA with the Union. The Fund, a multiemployer pension plan governed by ERISA and the Multiemployer Pension Plan Amendment Act, served notice that Weis owed more than $600,000 in withdrawal liability. Weis paid but challenged the assessment in arbitration, invoking 29 U.S.C. 1383(b): An employer in the building and construction industry is subject to withdrawal liability only if, after its contribution obligation ceases, it continues to perform work in the jurisdiction of the CBA of the type for which contributions were previously required. The Fund argued that the arbitrator misread the phrase “previously required” to mean “previously collected by the plan.” A district judge confirmed the award but denied Weis attorney’s fees. The Seventh Circuit affirmed. The Fund waived its statutory-interpretation argument by failing to raise it in arbitration and did not meaningfully challenge the arbitrator’s factual determinations. The judge did not abuse his discretion in denying Weis’s motion for attorney’s fees. View "Laborers' Pension Fund v. W.R. Weis Company, Inc." on Justia Law