Justia Construction Law Opinion Summaries

Appellant City of Allentown (City) contracted with appellee A. Scott Enterprises, Inc. (ASE), to construct a new public road. After arsenic-contaminated soil was discovered at the worksite, the City suspended work on the project. Following testing, it was determined construction could resume if precautions were taken. Accordingly, the City instructed ASE to obtain revised permits and proceed with the project. However, the existing contract did not include terms regarding the potential for contaminated soil, despite the fact the City was aware there might be contamination prior to entering into the contract, and ASE declined to proceed, explaining it would incur substantial additional costs due to the contaminated soil. The parties made several attempts to reach an agreement in which ASE would continue the construction, but to no avail. Consequently, ASE sued the City to recover its losses on the project, alleged breach of contract, and sought compensation under theories of quantum meruit and unjust enrichment, as well as interest and a statutory penalty and fee award for violations of the prompt pay provisions of the Procurement Code. After a trial, a jury found the City breached its contract with ASE and also withheld payments in bad faith. In this discretionary appeal, the issue this case presented for the Supreme Court's review was whether an award of a statutory penalty and attorney fees under the prompt payment provisions of the Commonwealth’s Procurement Code was mandatory upon a finding of bad faith, irrespective of the statute’s permissive phrasing. The Court held such an award was not mandatory, and therefore reversed the order of the Commonwealth Court and remanded the case to the trial court for further proceedings. View "A. Scott Enterprises v. City of Allentown" on Justia Law

After TEC, a subcontractor, submitted a written bid to Flintco, a general contractor, to perform glazing work on a project, Flintco used TEC's bid price in compiling its own bid to the owner of the project. Flintco was awarded the contract and sent TEC a letter of intent to enter into a subcontract and a standard-form subcontract, both of which documents differed materially from TEC’s bid. TEC refused to enter into a subcontract. Flintco secured another subcontractor for that scope of work and sued TEC on a theory of promissory estoppel seeking the difference between TEC’s bid and the amount Flintco was required to pay the replacement subcontractor. The trial court entered judgment for TEC. The court concluded that Flintco failed to demonstrate that there was no substantial evidence to support the trial court’s finding that Flintco did not reasonably rely on TEC’s bid price without considering the material conditions stated in TEC’s bid, the proposed subcontract Flintco sent TEC constituted a counteroffer because it contained material variations from the conditions in TEC’s bid, and the counteroffer gave TEC the right to withdraw its bid. Accordingly, the court affirmed the judgment. View "Flintco Pacific v. TEC Mgmt. Consultants" on Justia Law

In 2011, Horning won the subcontract for roofing work at the Dayton Veterans Affairs Medical Center. The Davis‐Bacon Act, 40 U.S.C. 3141–43, requires contractors who perform construction for the federal government to pay their workers the “prevailing wage.” Department of Labor regulations at that time set the base rate for a Dayton Sheet Metal Worker at $26.41 per hour; the fringe benefit rate was another $16.82 an hour. The workers were properly classified and received the appropriate base rate. All employees who work at Horning for more than 90 days are eligible for insurance; some receive vacation days. After a year, they become eligible for matching contributions to a 401(k) account. Accountants advised Horning about the amount to deposit into its benefits trust to comply with ERISA and Davis‐Bacon. Horning deducted a flat hourly fee from the paycheck of each Medical Center worker, regardless of whether the employee was eligible for any benefits. The amount did not correspond to the actual monetary value of the benefits each individual employee received. The Union filed a qui tam action under the False Claims Act, 31 U.S.C. 3729–3733, rather than filing under Davis-Bacon. The Seventh Circuit affirmed judgment in favor of Horning. Under the False Claims Act, the Union had to show that Horning knowingly made false statements (or misleading omissions) that were material to the government’s payment decision. The Union did not proffer enough evidence to permit a reasonable jury to conclude that Horning acted with such knowledge. View "Sheet Metal Workers Int'l Assoc. v. Horning Invs., LLC" on Justia Law

In August 2005, D.R. Horton, Inc. completed construction of the Smiths' home, and the Smiths closed on the property and received the deed. Thereafter, the Smiths experienced a myriad of problems with the home that resulted in severe water damage to the property. D.R. Horton attempted to repair the alleged construction defects on "numerous occasions" during the next five years, but was ultimately unsuccessful. In 2010, the Smiths filed a construction defect case against D.R. Horton and seven subcontractors. In response, D.R. Horton filed a motion to compel arbitration. The Smiths opposed the motion, arguing, inter alia, that the arbitration agreement was unconscionable and therefore unenforceable. The circuit court denied D.R. Horton's motion to compel arbitration, finding that the arbitration agreement was unconscionable. D.R. Horton appealed, but finding no error in the circuit court's decision, the South Carolina Supreme Court affirmed. View "Smith v. D.R. Horton, Inc" on Justia Law

William Charles Construction (WCC) entered into a labor agreement with the Illinois Department of Transportation for the “Biggsville” construction project to expand a section of Rt. 34 to four lanes. A jurisdictional dispute between two unions, each claiming the right for their member drivers to operate large trucks involved in the excavation work, was resolved by an arbitrator. Later, a Joint Grievance Committee (JGC) determined, under a subordinated collective bargaining agreement, that WCC owed the Teamsters back pay and fringe benefit contributions ($1.4 million) for having assigned the operation of heavy trucks to the International Union of Operating Engineers rather than the Teamsters. A second JGC award determined that WCC was liable for two days’ back pay for having assigned work to two Teamsters in violation of other Teamsters’ seniority rights. WCC filed a declaratory action under the Labor-Management Relations Act, 29 U.S.C. 185. The court granted the Teamsters summary judgment, finding that WCC filed its complaint outside the statute of limitations. The Seventh Circuit reversed the grant of summary judgment to the Teamsters and dismissed the Teamsters’ counterclaim for enforcement of one of the JGC awards. WCC's challenge to the awards is not barred by the statute of limitations because WCC did not receive notice of their final entry. The greater of the two JGC awards is void because WCC did not agree to arbitration by the JGC. View "William Charles Constr. Co., LLC v. Teamsters Local Union 627" on Justia Law

Plaintiffs brought a wrongful death action against Kamehameha Investment Corporation (KIC), the developer of a hillside area, and Sato and Associates, Inc. and Daniel Miyasato (collectively, Sato), the civil engineer. KIC tendered defense against Plaintiffs’ claims to Sato pursuant to a hold harmless clause in a project consultant agreement between Sato and KIC. KIC filed a cross-claim against Sato, alleging that Sato had agreed to defend and indemnify KIC against Plaintiffs’ claims. The trial court granted KIC’s motion for partial summary judgment against Sato. Relying on Pancakes of Hawaii, Inc. v. Pomare Properties Corp., the Intermediate Court of Appeals (ICA) affirmed, concluding that Sato had a contractual duty to defend KIC in the wrongful death action. The Supreme Court vacated the ICA’s judgment, holding (1) Haw. Rev. Stat. 431:10-222 renders invalid any provision in a construction contract requiring the promisor to defend “the promisee against liability for bodily injury to persons or damage to property caused by or resulting from the sole negligence of willful misconduct of the promisee, the promisee’s agent or employees, or indemnitee”; (2) Pancakes does not apply to defense provisions in construction contracts; and (3) the scope of a promisor’s duty to defend imposed by a construction contract is determined at the end of litigation. Remanded. View "Arthur v. State, Dep’t of Hawaiian Home Lands" on Justia Law

The Armed Career Criminal Act (ACCA) imposes a 15-year mandatory minimum sentence on a defendant convicted of being a felon in possession of a firearm who has three prior convictions “for a violent felony,” including “burglary, arson, or extortion,” 18 U.S.C. 924(e). To determine whether a prior conviction is a listed crime, courts apply the “categorical approach,” asking whether the elements of the offense sufficiently match the elements of the generic (commonly understood) version of the enumerated crime. When a statute defines multiple crimes by listing multiple, alternative elements, a sentencing court must discern which of the alternative elements was integral to the defendant’s conviction, by employing the “modified categorical approach” and examining a limited class of documents from the record of a prior conviction. Mathis pleaded guilty to being a felon in possession of a firearm. He had five prior Iowa burglary convictions. Under the generic offense, burglary requires unlawful entry into a “building or other structure.” The Iowa statute (702.12) reaches “any building, structure, [or] land, water, or air vehicle.” The district court applied the modified categorical approach, found that Mathis had burgled structures, and imposed an enhanced sentence. The Eighth Circuit affirmed, reasoning that the Iowa statute’s list of places did not establish alternative elements, but rather alternative means of fulfilling a single locational element. The Supreme Court reversed. Because the elements of Iowa’s law are broader than those of generic burglary, Mathis’s prior convictions cannot give rise to ACCA’s sentence enhancement. The “underlying brute facts or means” by which the defendant commits his crime make no difference; even if the defendant’s conduct fits the generic definition, the mismatch of elements saves him from an ACCA sentence. Construing ACCA to allow a sentencing judge to go further would raise serious Sixth Amendment concerns because only a jury, not a judge, may find facts that increase the maximum penalty. A statute’s listing of disjunctive means does not mitigate the possible unfairness of basing an increased penalty on something not legally necessary to the prior conviction. View "Mathis v. United States" on Justia Law

In 2008, a field engineer for Verdigris Valley Electric Cooperative (Employer) met with a contract electrician for Integrated Service Company LLC (INSERV) in Catoosa, concerning the installation of additional underground electrical service. They discussed the location of the additional service to the building and decided to use an existing junction box which the engineer observed was surrounded by a yellow metal barricade. He would later note: "I normally recommend that our members [customers] install a protective post an [sic] each corner of a pad mounted device in high traffic areas such as the INSERV plant, to help protect from getting ran [sic] over by vehicles or other equipment. I would never suggest having a barrier of any kind in front of any opening or door on VVEC equipment." Employer's work crew, consisting of Employer was dispatched to install additional underground electrical service to INSERV. The four-man crew consisted of Jones, Jackson, Day, and Tiger. Jones and Jackson were journeymen electricians and Jones was the foreman. Day and Jason Tiger were apprentices. Tiger had been in the journeyman apprentice program for approximately nine months of a four-year program. At the time of his death, Tiger had been certified only in the climbing school portion of his journeyman training. Day had worked for Employer only one month. When the crew arrived at the work site, they found the junction box surrounded by a yellow painted steel barricade, erected presumably to protect it from being struck by vehicles or trailers. The record did not establish who erected or owned the barricade, but Employer owned the junction box and associated electrical equipment. Affixed to the junction box was a warning concerning hazardous voltage and underground power cables and a notice from Employer. Despite this, Tiger was electrocuted attempting to make a connection to the junction box. His widow sued Employer and INSERV pursuant to "Parret v. UNICCO Service Co.," (127 P.3d 572), asserting that Employer knew that injury or death was substantially certain to result from the task Tiger and his coworkers were directed to complete and the conditions in which they were required to work. The District Court denied the employer's motion for summary judgment but granted a second motion for summary judgment after additional discovery. The Court of Civil Appeals affirmed. The Supreme Court reversed after its review of the trial court record, finding material issues of fact remained in dispute. View "Tiger v. Verdigris Valley Electric Cooperative" on Justia Law

In 2012, Lacey & Associates, LLC, contracted with Everest Homes, LLC, to purchase a commercial building. In addition, Lacey and Everest executed an escrow agreement for the release of additional funds to Everest if the roof was replaced after title had transferred to Lacey. After title passed to Lacey, Everest entered into a contract with the Williams Group, a contractor, to replace the roof. The Williams Group then hired Andrea Pizano to remove the old roof and HVAC units, which service she performed. In early 2013, Pizano sued alleging the Williams Group did not pay the contractual amount of $11,085, as agreed by the two parties. She filed a mechanic's lien on Lacey's building one day before she filed her petition. The lawsuit sought judgment against the Williams Group in the amount of $11,085, plus interest. The Williams Group never filed an answer. The trial court thereafter entered a default judgment against the Williams Group, awarding Pizano $11,085, an attorney's fee of $2,500.00 and court costs of $461.81. Pizano then sought to foreclose her lien against Lacey and be awarded court costs and attorney fees. She requested that the property be sold to satisfy the judgment. Lacey answered and included a "Cross-motion for Summary Judgment," contending that the new roof leaked so badly that large barrels had to be placed inside the building to catch the water. Therefore, no party was entitled to be paid for the roof. Lacey also asserted that Pizano's motion should be denied because Lacey had no contract with Pizano, and also that the plaintiff failed to file the required pre-lien notice. The trial court granted Pizano's summary judgment motion in part, and denied Lacey's counter-motion for summary judgment. Lacey appealed and Pizano counter-appealed. The Court of Civil Appeals held that Pizano successfully preserved her subcontractor's lien, but found that genuine disputes of fact remained as to the amount owed to Pizano and the enforceability of the lien. The Supreme Court found that the Legislature intended amounts less than $10,000 to be exempt from pre-lien notice. Having provided such an exception, the wording of the applicable statute persuaded the Court that "if a claimant filed a claim of $10,085 without a pre-claim notice, the claim would be enforceable up to $9,999. We do not believe that the claim would be completely unenforceable if it exceeded that legislatively-approved amount by a mere $86." The trial court's order entitling Pizano to a reduced judgment amount of $9,999.00 and an award of attorneys' fees and costs was affirmed. This case was remanded to the trial court to issue a judgment consistent with the law as expressed in the Supreme Court's opinion. View "Pizano v. Lacey & Assoc., LLC" on Justia Law

Centerpoint Builders was hired as the general contractor to build an apartment complex. Centerpoint contracted with a subcontractor to install wooden roof trusses. Centerpoint purchased the trusses directly from Trussway, Ltd., the truss manufacturer. Merced Fernandez, an independent contractor, was rendered paraplegic when a truss broke while he was walking across it. Fernandez sued several entities, including Centerpoint and Trussway, and eventually settled. Centerpoint filed a cross-action against Trussway alleging that Trussway was required to indemnify Centerpoint for any loss arising from Fernandez’s suit. Trussway filed its own indemnity cross claim against Centerpoint. Centerpoint sought partial summary judgment, arguing that it was a seller under Tex. Civil Prac. & Rem. Code Ann. chapter 82 and was thus entitled to indemnity as a matter of law. Chapter 82 entitles the “seller” of a defective product to indemnity from the product manufacturer for certain losses. The trial court concluded that Centerpoint was a seller under chapter 82. The court of appeals reversed, concluding that Centerpoint did not fit the statutory definition of a seller and was therefore not eligible to seek indemnity. The court of appeals affirmed. The Supreme Court affirmed, holding that Centerpoint, as the general contractor, was not a “seller” entitled to seek indemnity under chapter 82. View "Centerpoint Builders GP, LLC v. Trussway, Ltd." on Justia Law