Justia Construction Law Opinion Summaries

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

In 2005, Roark, a Sunesis laborer, was working alone at the bottom of a trench, when the trench collapsed, killing him. The Bureau of Workers’ Compensation awarded Roark’s dependent children benefits. The dependents sought an additional award based on violations of specific safety requirements for sloping, shoring, and bracing. A hearing officer concluded that Roark’s death was the result of Sunesis’s failure to properly support the trench and ordered Sunesis to pay an additional award based on violations of Ohio Adm.Code 4123:1-3-13. On remand, a hearing officer issued factual findings based on photographs and testimony: Three sides of the trench were adequately shored. The fourth wall, which caved in on Roark, consisted of soil that Sunesis attempted to shore up by sloping the wall and inserting a steel plate above the slope. The hearing officer found no evidence that Roark disregarded instructions to work inside a large underground pipe. On rehearing, in 2012, a hearing officer identified the soil involved as soft material, Class C soil with groundwater, stating that Code Table 13-1 addresses the approximate angle of repose for sloping: The presence of groundwater requires special treatment. The commission, the Tenth District, and the Supreme Court of Ohio upheld the award. It was within the commission’s discretion to conclude that the trench was not properly shored or braced, exposing employees to the danger of moving ground and that failure to comply with the regulations proximately caused Roark’s death. View "Sunesis Construction Co. v. Industrial Commission of Ohio" on Justia Law

In 2015, Wichita and affiliated tribes made plans to build a History Center on a plot of land held by the federal government in trust for the Wichita Tribe, Delaware Nation, and Caddo Nation jointly. One of those neighbors, the Caddo Nation, claimed the land may contain remains of ancestral relatives. Before the Wichita Tribe began construction, Caddo Nation sued the Wichita Tribe for allegedly violating the procedures required by the National Historic Preservation Act (NHPA) and the National Environmental Policy Act (NEPA) throughout the planning process. Caddo Nation sought an emergency temporary restraining order preventing Wichita Tribe from continuing construction until it complied with those procedures. When the district court denied that request, Caddo Nation appealed to the Tenth Circuit Court of Appeals without seeking further preliminary relief. In the intervening year while the case was on appeal with the Tenth Circuit, Wichita Tribe completed construction of the History Center. The Tenth Circuit concluded it had no jurisdiction over this appeal because the relief Caddo Nation requested from the district court was moot. View "Caddo Nation of Oklahoma v. Wichita & Affiliated Tribes" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the court of appeals reversing the judgment of the trial court in this action arising from a construction dispute.Two subcontractors - the steel fabricator and the steel erector and installer - on a condominium project brought suit against the project owner, developer, and general contractor after the subcontractors proceeded with extra work outside the scope of the original bid documents but were never paid for either that work or the retainage amount owed under the steel fabricator’s contract with the general contractor. The circuit court entered judgment in favor of Plaintiff for the cost of the extra work and unpaid retainage. The general contractor prevailed on its indemnification cross-claim against the other two defendants and on the negligence cross-claim asserted against it by the other two defendants. The court of appeals reversed. The Supreme Court held that the court of appeals (1) erred by reversing the trial court’s judgment against the owner for unjust enrichment; (2) properly reversed the trial court’s judgment against the general contractor for breach of contract; and (3) properly found that the trial court should have instructed the jury on the owner and developer’s breach of contract claim but erred in finding the negligence instruction deficient. View "Superior Steel, Inc. v. Ascent at Roebling’s Bridge, LLC" on Justia Law

Thrasher Construction, Inc. (Thrasher) brought a third-party beneficiary action against Bruce Cope, Mary Cope, and Ike Thrash (the Copes and Thrash). Thrasher sought damages for payments owed for waterproofing the Inn by the Sea, a condominium in which the Copes and Thrash had acquired a full ownership interest by agreeing, in part, to pay all outstanding bills for work previously performed on the property. During trial, the county court dismissed the third-party beneficiary claim but allowed Thrasher to proceed on a quantum meruit theory of the case. The jury returned a verdict in favor of Thrasher for $69,290, and the county court entered judgment based on that verdict. The Copes and Thrash appealed the judgment to the Circuit Court, which affirmed the judgment of the county court. The Copes and Thrash then appealed to the Court of Appeals, arguing the facts did not support a recovery on quantum meruit. Thrasher cross-appealed, arguing the trial court erred in dismissing its third-party beneficiary claim. The Court of Appeals held quantum meruit was not the proper method of relief because the action should have proceeded as a third-party beneficiary claim. The Court of Appeals reversed the judgment and remanded for further proceedings consistent with its opinion. The Mississippi Supreme Court agreed the third-party beneficiary action was the appropriate basis for Thrasher’s recovery; however, because the trial court ultimately reached the correct result, no further proceedings were needed in this case. View "Cope v. Thrasher Construction, Inc." on Justia Law

McMillin Management Services, L.P. and Imperial Valley Residential Valley Residential Builders, L.P. (collectively "McMillin") filed suit against numerous insurance companies, including respondents Lexington Insurance Company (Lexington) and Financial Pacific Insurance Company (Financial Pacific). McMillin alleged that it had acted as a developer and general contractor of a residential development project in Brawley and hired various subcontractors to help construct the Project. As relevant here, McMillin alleged that Lexington and Financial Pacific breached their respective duties to defend McMillin in a construction defect action (underlying action) brought by homeowners within the Project. McMillin alleged that Lexington and Financial Pacific each owed a duty to defend McMillin in the underlying action pursuant to various comprehensive general liability (CGL) insurance policies issued to the subcontractors that named McMillin as an additional insured. The trial court granted Lexington's motion for summary judgment, reasoning, that there was no possibility for coverage for McMillin as an additional insured under the policies "[b]ecause there were no homeowners in existence until after the subcontractors' work was complete[ ] . . . ." On appeal, McMillin contended that the fact that the homeowners did not own homes in the Project at the time the subcontractors completed their work did not establish that its liability did not arise out of the subcontractors' ongoing operations. The trial court granted Financial Pacific's motion for summary judgment, finding McMillin did not establish homeowners in the underlying action had sought potentially covered damages arising out of the subcontractors' drywall installation. The Court of Appeal reversed as to Lexington, and affirmed as to Financial Pacific. View "McMillin Management Services v. Financial Pacific Ins. Co." on Justia Law

Liu was a Fremont licensed general contractor. Defendant, Liu's assistant, was not a contractor. The final plans for Liu's client's hillside home required excavation. Liu hired a licensed contractor, who cut into the hill, creating a 12-foot-high dirt wall with an overhanging soil ledge, with no sloping or benching, or support. Defendant oversaw construction. By December 2011, the foundation was not complete. The contractor walked off the job, which was behind schedule. Defendant hired a carpenter, rather than a licensed contractor, who understood that he was being hired as an employee of Liu’s company, and others, including Zapata. In January 2012, a city inspector handed defendant a “Stop Work Notice” based on “Excavation without required shoring and/or excavation.” Defendant did not tell the workers. Defendant consulted an engineer but never sought city approval to continue construction. He instructed the workers to work in the excavation area. The excavation wall collapsed on Zapata, killing him. Defendant was convicted of involuntary manslaughter (Pen. Code, 192(b)), and willfully violating safety orders (Lab. Code 6425(a)). The court of appeal affirmed defendant’s conviction, rejecting claims of insufficient evidence; that the court committed instructional error and improperly limited cross-examination; that he was not given adequate notice of the charges; that the prosecution failed to elect a particular criminal act; and that the statute prohibiting the willful violation of occupational safety orders was unconstitutionally vague. View "People v. Luo" on Justia Law