Justia Construction Law Opinion Summaries

Daniel Stolz worked for a subcontractor on a construction project when he was injured in an accident on the job site. Prior to the accident, Messer had obtained authority from the Ohio Bureau of Workers’ Compensation to act as the self-insuring employer on the project, which gave Messer responsibility for providing workers’ compensation coverage for its own employees as well as the employees of enrolled subcontractors on the project. Stolz brought negligence claims against Messer Construction, the general contractor, and several subcontractors. A federal district court granted summary judgment to Messer as the self-insuring employer but denied summary judgment to the subcontractors, concluding that an enrolled subcontractor on a self-insured construction project is immune from claims made by its own employees but not from those made by employees of other enrolled subcontractors. The federal court then certified a question of state law to the Supreme Court. The Supreme Court answered that subcontractors enrolled in a self-insured construction project plan are immune from tort claims for workplace injuries from employees of other enrolled subcontractors on the same project. View "Stolz v. J & B Steel Erectors, Inc." on Justia Law

In 2006, Dr. Terry McMillin and his wife Leslie purchased a new home in Tupelo. Unhappy with contractor Jamie Ewing’s failure to respond to their repair requests, plus their discovery of a document (a blue card, noting a failed home inspection) listing the name of a different contractor as the contractor responsible for their home’s construction, the McMillins began the process of unraveling just who was responsible for building their new home. Ultimately, this case stemmed from an error by the City of Tupelo’s Permit Manager Marilyn Vail in handling the withdrawal of one licensed contractor and mistakenly substituting the name of another licensed contractor, when in actuality, a licensed contractor was not working on the home. The circuit court held a bench trial and awarded $9,319.23 in damages to repair the home and $105,894.39 in legal fees related to another case involving the construction but denied the McMillins’ request for attorneys’ fees in this case. The City appealed, and the McMillins cross-appealed. After review, the Supreme Court concluded that the circuit court erred in finding that the City was not immune from liability. The Court therefore reversed the circuit court’s judgment and render judgment in favor of the City. View "City of Tupelo v. McMillin" on Justia Law

Dale Ladd hired Hammerhead Contracting & Development, LLC to build a house. After a dispute arose regarding the amount owed for the construction of Ladd’s home, Brandon Holmes filed a Laborer’s, Mechanic’s, or Materialman’s Lien on behalf of the LLC for the amount of $101,676, the additional amount Hammerhead asserted that Ladd owed. Ladd filed suit against Holmes to remove the lien. Hammerhead then filed an amended complaint against Ladd seeking judgment for the $101,676. The cases were consolidated. The circuit court (1) granted Ladd’s motion to dismiss Hammerhead’s complaint because of its failure to give the notice required by Ark. Code Ann. 18-44-115; (2) granted summary judgment in favor of Ladd on Ladd’s complaint and ordered the lien canceled; and (3) found that Ark. Code Ann. 18-44-115(a)(4), which bars suit by a contractor who fails to provide statutory notice, is constitutional. The Supreme Court reversed, holding that the circuit court erred in finding that the direct-sales exception in Ark. Code Ann. 18-44-115(a)(8) to the residential preconstruction-notice requirement can never apply to a contractor. View "Hammerhead Contracting & Dev. v. Ladd" on Justia Law

This litigation arose from the construction of a "Johnny Janosik" furniture store in Laurel. The Plaintiff-appellant LTL Acres Limited Partnership (LTL) was the owner of the Janosik Building. Defendant-appellee Butler Manufacturing Company (Butler) provided pre-engineered components which were used to build the roof and exterior walls. Defendant-appellee Dryvit Systems, Inc. (Dryvit) supplied a product used on the exterior finish of the walls, to protect and seal them. Dryvit warranted its product for ten years from the "date of substantial completion of the project." The building was completed in 2006. Unfortunately, the building had issues with water infiltration from the beginning. By February 2012, cladding began to crack and buckle. The water infiltration and delamination persisted through 2013 despite attempts to fix the issues. LTL brought this action in 2013, alleging breach of warranty, breach of contract, and negligence claims against Butler; and breach of warranty and breach of contract claims against Dryvit. The Superior Court granted summary judgment to both Butler and Dryvit on the grounds that the actions against both were barred by the applicable statute of limitations. It held that the action against Butler was barred by 10 Del. C. sec. 8127,which is a six year statute of limitations relating to alleged defective construction of an improvement to real property. After review, the Supreme Court concluded that summary judgment in favor of Butler was proper. The Superior Court ruled that LTL’s action against Dryvit was barred by a four year statute of limitations set forth in 6 Del. C. sec. 2-725. Dryvit gave LTL a ten year express warranty. The Superior Court described the warranty as a “repair and replacement warranty” and reasoned that such a warranty cannot be one that extended to future performance. It therefore concluded that the statute of limitations for an action on the warranty expired not later than four years after the Dryvit product was tendered and applied to the building; that is, not later than four years after 2006. The Supreme Court concluded that grant of summary judgment in favor of Dryvit was inappropriate, and had to be reversed. The case was remanded for further proceedings. View "LTL Acres Limited Partnership v. Butler Manufacturing Co." on Justia Law

Pursuant to Public Contract Code section 7107, when a project owner pays a direct contractor the amount it had previously withheld as retentions, the direct contractor must pay its subcontractors their share of the retention within seven days or face penalties. The court concluded that, in this case, the decision by the owner to stop withholding future retentions and pay full progress payments to the contractor was not equivalent to a payment by the owner of past retentions under section 7107. Accordingly, the court concluded that the subcontractor is not entitled to late payment penalties under section 7107. The court affirmed the trial court's judgment. View "Blois Construction v. FCI/Fluor/Parsons" on Justia Law

Linh Duc Duong, doing business as Classy Nails, appealed after a bench trial awarded Welch Construction & Excavating, LLC, $30,825, plus interest, for the balance due on a construction contract. Welch Construction sued Duong, alleging the parties contracted for Welch Construction to remodel a vacant retail space in Kirkwood Mall into a Classy Nails salon for $92,225. Welch Construction alleged it completed the work and Duong failed to pay the balance of $30,825 due under the contract. Duong answered and counterclaimed, denying he owed an outstanding balance under the contract and alleging Welch Construction breached the contract by failing to remodel the retail space in a timely and workmanlike manner according to his specifications. Duong claimed he was entitled to a setoff against any balance owed under the contract for his damages caused by Welch Construction's failure to complete the work before Thanksgiving 2013 and failure to construct the salon according to his specifications. Duong sought lost profits and damages for repairing the work according to his specifications. After review, the Supreme Court concluded the district court did not clearly err in finding: (1) the parties did not orally contract for a specific completion date for the construction project; (2) Welch Construction did not unreasonably delay completion of the project; and (3) Duong failed to establish his damages for costs to repair and lost profits for Welch Construction's claimed failure to complete the project according to his specifications. View "Welch Construction & Excavating, LLC v. Duong" on Justia Law

Respondent, a contractor, and Appellant, a homeowner, entered into a contract under which Respondent agreed to install automation, sound, surveillance, and landscaping systems in Appellant’s residence. Respondent did not have an electrical contractor’s license when it bid the contract and began the work but did receive a license before it completed the work. When the parties disagreed on the performance of the contract, Appellant refused to tender further payment to Respondent, and Respondent filed a notice of lien against Appellant’s residence. Respondent filed a complaint alleging breach of contract, breach of the covenant of good faith and fair dealing, foreclosure of notice of lien, and declaratory relief, alleging that an electrical license was not required for the work performed on Appellant’s residence and that its lien was proper and perfected. The district court granted summary judgment in favor of Respondent. The Supreme Court reversed, holding that genuine issues of material fact existed regarding whether Respondent’s work on Appellant’s residence required a license and whether Respondent completed the contract in a workmanlike manner, thereby possibly negating Appellant’s obligation to make final payment under the contract. Remanded. View "Tom v. Innovative Home Sys." on Justia Law

In 2008, Mutual Bank (UCB’s predecessor) made loans to the investors to purchase three properties and agreed to loan the investors $700,000 for repairs and renovations. The $700,000 was placed in escrow, but the parties did not enter into a written escrow agreement. Once the investors exhausted other resources on repairs, they requested the $700,000, but never received the money. In 2009, the FDIC shut down Mutual Bank for gross negligence. UCB acquired Mutual’s loans and assets. The investors made repeated demands on UCB to release the $700,000 in escrow but did not receive the money. In 2010, UCB brought suit against the investors to foreclose on the properties and enforce related promissory notes and guarantees. The investors brought counterclaims, including a claim that UCB’s refusal to release the escrow funds constituted a breach of contract. The district court dismissed, citing the Financial Institutions Reform, Recovery, and Enforcement Act, 12 U.S.C. 1823(e)(1)(A), and the Illinois Credit Agreement Act. The Seventh Circuit affirmed. The escrow agreement that forms the basis for the counterclaim tends to diminish the interests of the FDIC and its assignee UCB. Since the agreement was not properly memorialized in writing, the agreement does not meet the requirements of section 1823(e). View "United Cent. Bank v. Davenport Estate LLC" on Justia Law

Hoover General Contractors – Homewood, Inc. ("HGCH"), appealed a circuit court order denying its motion to compel arbitration of its dispute with Gary Key regarding work performed by HGCH on Key's house in Jasper after that house was damaged by a fire. Six months after Key sued HGCH asserting claims stemming from HGCH's work rebuilding Key's house after a fire, HGCH moved the trial court to compel Key to arbitrate those claims pursuant to an arbitration clause in the contract Key had entered into with HGCH. The trial court denied HGCH's motion to compel; however, that denial was error because Key failed to establish through substantial evidence that HGCH had waived its right to arbitration by substantially invoking the litigation process. Accordingly, the order entered by the trial court denying HGCH's motion to compel arbitration was reversed by the Supreme Court and the case remanded for the trial court to enter a new order compelling Key to arbitrate his claims ursuant to the terms of his contract with HGCH. View "Hoover General Contractors - Homewood, Inc. v. Key" on Justia Law

Defendant was a general contractor that builds “spec” houses (houses built without pre-existing construction contracts in anticipation of eventual sale to the public). On May 30, 2000, defendant and plaintiff entered into a purchase and sale agreement for a house. Although most of the construction had been completed, the agreement specified that defendant would make changes to the interior of the house. Specifically, defendant agreed to upgrade some of the flooring, install an air conditioning unit, and install a gas dryer in the laundry room. After defendant made those changes and the parties conducted a walk-through inspection, the sale closed on July 12, 2000. The primary question in this construction defect case was which of two statutes of repose applied when a buyer enters into a purchase and sale agreement to buy an existing home. Although each statute provided for a 10-year period of repose, the two periods of repose ran from different dates. One runs from “the date of the act or omission complained of;” the other ran from the date that construction is “substantial[ly] complet[e].” In this case, the trial court found that plaintiff filed her action more than 10 years after “the date of the act or omission complained of” but less than 10 years after the construction was “substantial[ly] complet[e].” The trial court ruled that the first statute, ORS 12.115(1), applied and accordingly entered judgment in defendant’s favor. The Court of Appeals affirmed. After review of the parties' arguments on appeal, the Supreme Court found no reversible error in the Court of Appeals' decision and affirmed. View "Shell v. Schollander Companies, Inc." on Justia Law