Justia Construction Law Opinion Summaries

Picerne Construction Corp. agreed to build an apartment complex for Castellino Villas. After construction started, Castellino refinanced the property, replacing the original lender with Bank of the West. Picerne subsequently claimed money due, recorded a mechanic’s lien, and brought this action against Castellino and Bank of the West to foreclose on the lien. Following a bench trial, the trial court entered judgment in favor of Picerne. Castellino argued on appeal: (1) Picerne did not have a valid mechanic’s lien because it did not record its claim within 90 days after substantial completion of the project; (2) the doctrine of judicial estoppel prevented Picerne from taking contrary positions at arbitration and at trial; (3) Picerne did not timely record a claim of mechanic’s lien as to nine distinct buildings within the project; and (4) the trial court erred in calculating the amount of the lien. Bank of the West agreed that Picerne failed to timely record its claim of mechanic’s lien. In addition, Bank of the West contends (5) that Picerne’s complaint against it is time-barred because Picerne did not name Bank of the West as a defendant in the original complaint even though it was aware of facts indicating it had a claim against the bank. After review, the Court of Appeal concluded: (1) Picerne timely recorded its mechanic’s lien; (2) Castellino failed to demonstrate the applicability of judicial estoppel; (3) the property constituted one residential unit; (4) the trial court overstated the principal sum due and failed to subtract the $115,453.50 setoff from the principal sum, but the other claims of error with regard to the lien amount have no merit; and (5) the action against Bank of the West was not time-barred because Picerne timely substituted Bank of the West in place of a Doe defendant when Picerne learned of the bank’s interest in the property. The Court modified the judgment to provide that the mechanic’s lien was in the amount of $2,416,855.06 and affirmed the judgment as modified. View "Picerne Construction v. Castellino Villas" on Justia Law

Church entered into an engineering contract with Civil Engineer (Engineer) to design site plans for a rain tank system. Church entered into a contract with General Contractor (GC) for the construction of the rain tank. After GC installed the rain tank, the tank collapsed. Engineer designed and GC installed a different storm water management system, but Church refused to pay GC for installing the new storm water system. GC sued Church for payment, and Church counterclaimed against GC for breach of contract. Church filed a third-party claim against Engineer for repair and replacement costs it was found to owe GC because of the rain tank collapse. Church filed a separate suit against Engineer. The circuit court concluded that the rain tank collapse was the failure of Engineer, entered judgment for GC on its claims against Church, and awarded Church damages for delay and other damages associated with removing and replacing the rain tank. Engineer appealed. The Supreme Court (1) affirmed the judgment of the circuit court finding Church’s claims timely and Engineer liable on Church’s breach of contract claims; and (2) reversed the circuit court’s judgment granting Church damages in the form of construction loan interest that was not incurred as a result of the breach of contract. Remanded. View "William H. Gordon Assocs. v. Heritage Fellowship, United Church of Christ" on Justia Law

Plaintiff, Hub Construction, supplied rebar and other materials to the general contractor on a construction project on property owned by defendant, Esperanza Charities. At issue is whether a mechanic's lien is invalid because the plaintiff lienholder did not strictly comply with the then-effective statutory requirement governing proof that the preliminary written notice was served on the defendant property owner by certified mail. Esperanza stipulated that the notice was served by certified mail, that the U.S. Postal Service website tracking certified mail items showed the notice was delivered, and that defendant actually received the notice. However, Esperanza contends that the lien is invalid because Hub has no return receipt, and the applicable statute at the time required proof that notice was served. The trial court dismissed the case. The court reversed, concluding that, while strict compliance with the notice provisions of the mechanic's lien law is required, the applicable precedents do not require or justify applying that rule to the statutory provisions governing proof that the required notice was properly given. A stipulation eliminates the need for proof. View "Hub Construction Specialties v. Esperanza Charities" on Justia Law

Over the course of seven years, Circle C, a contractor that built 42 warehouses at Fort Campbell Army base, paid some electricians about $9,900 less than the Davis-Bacon (40 U.S.C. 3142) wages specified in its contract with the Army. The government obtained a damages award of $763,000 under the False Claims Act, 31 U.S.C. 3729, arguing that all of the electrical work was “tainted” by the $9,900 underpayment and, therefore, worthless. The Sixth Circuit, reversed the damage award and remanded for entry of an award of $14,748. Actual damages are the difference in value between what the government bargained for and what the government received. The government bargained for the buildings and payment of Davis-Bacon wages. It got the buildings but not quite all of the wages. The shortfall was $9,916--the government’s actual damages. That amount tripled is $29,748 (31 U.S.C. 3729(a)(1)(G)). Minus a $15,000 settlement payment, Circle C is liable for a total of $14,748. View "Wall v. Circle C Constr., LLC" on Justia Law

Demien, the unsuccessful bidder for the construction of a new firehouse, filed suit against the District under 42 U.S.C. 1983, alleging that the District violated federal and state constitutional rights, as well as state law, in the bidding process. The district court dismissed the complaint. The court concluded that it need only determine whether Damien has Article III standing under Federal law and not whether Damien has standing under Missouri law. Determining that Demien has Article III standing, the court concluded that Demien has abandoned its claims under the First Amendment by failing to argue them before the district court, and that Demien failed to allege that the District deprived Demien of any entitlement, and so it failed to state a claim under the Fourteenth Amendment Due Process Clause. The court concluded that, under Missouri law, there is no property right to the lowest bidder, and standing to bring a state court claim of deprivation of property rights does not establish a protected property interest. In this case, the District stated that it may accept the lowest bid, but does not need to. Accordingly, the court affirmed the judgment. View "Demien Construction Co. v. O'Fallon Fire Protection Dist." on Justia Law

Dannelly Enterprises, LLC ("Dannelly"), appealed a circuit court order granting a motion to compel arbitration filed by Palm Beach Grading, Inc. ("PBG"). In the fall of 2006, PBG entered into negotiations with Corvias Military Living, LLC, f/k/a Picerne Military Housing LLC; Picerne Construction/FRK, LLC; Rucker-Picerne Partners, LLC; and Rucker Communities, LLC (collectively, "the contractors"), to perform work on a project known as the Ft. Rucker RCI Family Housing, Munson Heights, Phase 1A, at Fort Rucker, Alabama. Apparently, in preparing to bid on the project, PBG contacted various subcontractors, including Dannelly, to get bids for various aspects of the project that PBG would be responsible for if it entered into an agreement with the contractors to complete the project. Although the work order issued by PBG stated that "[a] Sub-contract will be created by PBG for billing purposes," neither party submitted into evidence such a contract between PBG and Dannelly. PBG argued that Donnelly accepted benefits under existing contracts because Dannelly was hired by PBG to perform work on the project and was paid for the work it completed. The Supreme Court found, however, that PBG did not present any argument as to why it believed Dannelly was not simply operating under and benefiting from the agreement between PBG and Dannelly, which was memorialized by PBG's work order. The Court concluded that PBG failed to demonstrate that the arbitration provision in the master subcontract agreement applied to the third-party claims it asserted against Dannelly. Furthermore, there was a genuine issue of material fact as to whether Dannelly and PBG entered into PBG's standard subcontract agreement. The case was reversed and remanded to the circuit court for further proceedings. View "Dannelly Enterprises, LLC v. Palm Beach Grading, Inc." on Justia Law

Stark, an excavation and paving company, typically handles about 250 jobs per year in central and southern Illinois. The Occupational Safety and Health Administration (OSHA) issued Stark several citations at two worksites in 2008, following inspections. Another OSHA inspection, 17 days later, resulted in a citation for a willful excavation cave-in protection violation. The Secretary proposed penalties of $2000 for the eyewear violation, $35,000 for the spoil piles violation, and $70,000 each for the cave-in protections violations. An ALJ affirmed the citation for the eyewear violation and the $2000 penalty, affirmed the spoil piles violation and awarded a $20,000 penalty, and determined that the cave-in protection violations were serious violations rather than willful violations and imposed a $7,000 penalty for each, for a total penalty of $36,000. The Occupational Safety and Health Review Commission affirmed as to the spoil piles violation and the serious cave-in protection violation, but vacated the eyewear violation. As to the earlier cave-in protection violation, the Commission determined that it should be characterized as willful rather than serious and assessed a penalty of $60,000, for a total penalty of $87,000. The Seventh Circuit denied a petition for review. Stark failed to demonstrate that it had a safety policy that was effectively enforced. View "Stark Excavating, Inc. v. Perez" on Justia Law

In 2011, Henderson Square Condominium Association sued, alleging: breach of the implied warranty of habitability, fraud, negligence, breach of the Chicago Municipal Code’s prohibition against misrepresenting material facts in marketing and selling real estate, and breach of a fiduciary duty. The defendants were developers that entered into a contract with the city for a mixed use project, the Lincoln-Belmont-Ashland Redevelopment Project. Sales in the project had begun in 1996. The trial court dismissed, finding that plaintiffs failed to adequately plead the Chicago Municipal Code violation and breach of fiduciary duty and that counts were time-barred under the Code of Civil Procedure (735 ILCS 5/13-214). The appellate court reversed. The Illinois Supreme Court affirmed. A condominium association generally has standing to pursue claims that affect the unit owners or the common elements. A question of fact remains as to whether defendants’ failure to speak about construction deficiencies or to adequately fund reserves, coupled with earlier alleged misrepresentations, amounted to fraudulent concealment for purposes of exceptions to the limitation and repose periods. It is possible that minor repairs, along with the limited nature of water infiltration, reasonably delayed plaintiffs’ hiring of professional contractors to open the wall and discover latent defects. The date when plaintiffs reasonably should have known that an injury occurred and that it was wrongfully caused was a question of fact. View "Henderson Square Condo. Ass'n v. LAB Townhomes, LLC" on Justia Law

In 2013, plaintiff Fagen, Inc. filed this lawsuit seeking to recover damages for work it had done in the construction of a wind park located in Bingham County. It named as defendants Lava Beds Wind Park, LLC; Exergy Development Group of Idaho, LLC; and XRG Development Partners, LLC (collectively “Defendants”); and Tabor Wind Farms, LLC. The district court entered an order dismissing Plaintiff’s claims against Tabor pursuant to a stipulation of those parties. Plaintiff then filed an amended complaint against the remaining defendants, alleging causes of action to foreclose a mechanic’s lien, to recover damages for breach of contract, and to recover damages in quantum meruit. Plaintiff moved for summary judgment seeking a judgment against Lava Beds and Exergy Development for breach of contract. In opposition to that motion, defendants filed two affidavits, which merely contained vague and conclusory allegations. The district court denied defendants’ motion to continue the hearing on summary judgment. During the hearing, Plaintiff stated that it withdrew its claim to foreclose a mechanic’s lien and its claims against XRG, which resolved these Defendants’ motion for summary judgment. Defense counsel admitted that Lava Beds and Exergy Development had breached their contract with Plaintiff, but he argued that one of the affidavits showed a need for further discovery at least as to the issue of damages. The court took the motion for summary judgment under advisement, then granted Plaintiff’s motion. It held that the conclusory affidavits submitted by Defendants were insufficient to create a genuine issue of material fact precluding summary judgment. On the same date, the court entered an order granting Defendants’ motion for summary judgment. Lava Beds and Exergy Development's motion for reconsideration was denied, and they appealed. Finding no reversible error, the Supreme Court affirmed the trial court's decision. View "Fagen v. Lava Beds Wind Park" on Justia Law

This case was an appeal of an amended judgment awarding damages for breach of contract, court costs, and attorney fees in connection with a contract to construct five wind farms. Because the parties had stipulated to that portion of the judgment regarding the damages for breach of contract, those issues were not subject to appellate review. Because the only challenge to the award of attorney fees was raised for the first time on appeal, the Supreme Court did not consider it. The Court therefore affirmed the amended judgment and the award of costs and attorney fees on appeal. View "Fagen v. Rogerson Flats Wind Park" on Justia Law