Justia Construction Law Opinion Summaries

This appeal stemmed from the disputed assignment of certain construction work on the Tappan Zee Hudson River Crossing Project. UBC appealed the district court's conclusion that a May 4th arbitration award was not final and that the arbitrator did not exceed his authority by issuing a May 12th arbitration award. Under a heightened standard of deference, the court concluded that it must defer to the arbitrator’s interpretation of Article 10, Section 3(D) of the Project Labor Agreement (PLA) as allowing him to alter the short‐form award when rendering his written opinion. The PLA does not define the term “short‐form,” nor does it specifically require that the second decision echo the result of the first.  The court concluded that, absent any such definitions or provisions, the arbitrator had the authority to interpret Article 10, Section 3(D) as allowing him to change or alter the first award in order to ensure full consideration of the three criteria required under Article 5, Section 8 of the National Plan for the Settlement of Jurisdictional Disputes in the Construction Industry. Accordingly, the court confirmed the May 13th Award and vacated the May 4th Award. View "United Brotherhood of Carpenters v. Tappan Zee Constructors, LLC" on Justia Law

A certified question of Oregon law was certified to the Oregon Supreme Court from the United States Court of Appeals for the Ninth Circuit. The question arose out of a construction contract dispute in which a homeowner's association sued a builder in state court for construction defects. The homeowner's association and the builder settled, and the settlement included an unconditional release and covenant not to execute against the builder. When the homeowner's association attempted to garnish the builder's liability insurance policy, however, the insurer claimed that it had no liability because the settlement unconditionally released its insured from any liability. The state trial court agreed, and the builder appealed. Meanwhile, in response to the state trial court's conclusion that the settlement agreement eliminated the insurer's liability, the homeowner's association and the builder amended their settlement agreement to eliminate the unconditional release and covenant not to execute. Pursuant to the new agreement, the builder initiated this action in federal court against its insurer. In the federal court action, the insurer argued that the state court already had determined that, given the terms of the original settlement, the builder could not recover under its insurance policy and that the parties lacked authority to create any new insurance coverage obligation by amending their settlement agreement. The federal district court agreed. On appeal, the Ninth Circuit certified a question on whether the homeowner's association and the builder could amend their settlement agreement in such a way as to revive the liability of the builder's insurer. After review, the Oregon Court concluded that, although the parties possessed authority to amend the terms of their settlement agreement, they could not do so in a way that retroactively revived the liability that was eliminated in their original agreement (at least not on the basis of the legal theories that they proposed). View "A&T Siding, Inc. v. Capitol Specialty Ins. Corp." on Justia Law

Defendant Capitol Specialty Insurance Co. moved to dismiss this appeal on mootness grounds. According to Capitol, the issues to be decided in the appeal pertained to the terms of an agreement settling an underlying construction defect case, but those terms were superseded by amendments to the agreement adopted during the pendency of the appeal. The Oregon Supreme Court concluded that, because the amendments to the settlement agreement did not have the effect of superseding the terms of the original agreement, a judicial decision about that original agreement will have a practical effect on the rights of the parties. Consequently, the appeal was not moot, and the motion to dismiss was denied. View "Brownstone Homes Condo. Assn. v. Brownstone Forest Hts." on Justia Law

Nagle and Fink were co-owners and executives of concrete manufacturing and construction businesses. The businesses entered into a relationship with a company owned by a person of Filipino descent. His company would bid for subcontracts on Pennsylvania transportation projects as a disadvantaged business enterprise. Federal regulations require states that receive federal transportation funds to set annual goals for participation in transportation construction projects by disadvantaged business enterprises, 49 C.F.R. 26.21. If his company won the bid for the subcontract, Nagle and Fink’s businesses would perform all of the work. Fink pled guilty to conspiracy to defraud the United States. A jury found Nagle guilty of multiple charges relating to the scheme. The Third Circuit affirmed Nagle’s conviction, upholding the admission of electronic evidence discovered during searches of the businesses’ offices, but vacated both sentences, based on loss calculation errors. View "United States v. Nagle" on Justia Law

This case centered on a question of priority between two lien creditors: who was entitled to be paid first from the proceeds of a mortgage foreclosure sale, the creditor who recorded its lien against the property first, or a second creditor who recorded later, but did so as part of a refinancing in which it discharged preexisting mortgages and judgment liens on the same property. Eastern Savings Bank, FSB, the second creditor to record its lien, argued that the doctrine of equitable subrogation protected its right to receive the proceeds of the foreclosure sale first, even though it recorded its mortgage after the first creditor, CACH, LLC recorded its judgment. The Court of Common Pleas and the Superior Court both disagreed, and held that CACH was entitled to be paid before Eastern Savings under Delaware's pure race recording statute. Eastern Savings appealed. Eastern Savings argued that the Superior Court erred by failing to apply the doctrine of equitable subrogation to place the priority of its mortgage above CACH's lien. After review, the Supreme Court disagreed and found that the doctrine of equitable subrogation as inapplicable to the facts of this case. Thus, the parties' priorities are governed by Delaware's race recording statute, and the judgment of the Superior Court was affirmed. View "Eastern Savings Bank, FSB v. Cach, LLC" on Justia Law

Defendants, an unlicensed residential builder; his businesses; and Denaglen Corp., a check-cashing service, appealed the Court of Appeals' decision to affirm the grant of summary judgment in favor of plaintiffs, homeowners who contracted to have their home restored following a flood. On appeal, this case raised four issues: (1) whether MCL 339.2412(1), which prohibited an unlicensed builder from "bring[ing] or maintain[ing] an action . . . for the collection of compensation," prevents an unlicensed builder from defending on the merits against claims asserted against him by a homeowner; (2) whether MCL 339.2412(1) provided a homeowner with an independent cause of action for damages arising from the statute's violation; (3) whether a contract for the services of an unlicensed builder was void ab initio or whether it may have some form of continuing legal existence; and (4) whether the trial court abused its discretion in refusing to set aside the default of defendant Denaglen Corp., the check-cashing service. In lieu of granting leave to appeal, the Supreme Court affirmed in part and reversed in part the judgment of the Court of Appeals and remanded the case for further proceedings. The Court found that the appellate court erred in granting summary judgment to the plaintiffs. While the Court of Appeals correctly held that MCL 339.2412(1) did not prevent an unlicensed builder from defending against a lawsuit on its merits and did not afford a homeowner an independent cause of action to seek damages for its violation. However, contracts between an innocent homeowner and an unlicensed residential builder were voidable by the homeowner and thereby effective in conveying rights and authorities to both parties and third parties. The Court of Appeals therefore erred when it declared the contract at issue void ab initio, "although that court's error was wholly understandable given the confusing state of applicable law." Finally, the trial court did not abuse its discretion by refusing to grant defendant Denaglen relief from its default. However, because the proper amount of damages remained in dispute, Denaglen was free to attempt to challenge the extent of its liability. View "Epps v. 4 Quarters Restoration, LLC" on Justia Law

HKS a Texas architecture firm, provided services for a luxury hotel in Mammoth Lakes under an Agreement that contained a Texas forum selection clause, requiring mediation, and a Texas choice of law provision.The Agreement authorized HKS to hire “[c]onsultants.” Vita, a California landscape design firm, submitted to HKS a Contract incorporating the terms of the Agreement. Neither Vita or HKS signed the Contract, but Vita performed work in 2008, during the “design phase” and sent invoices to HKS. Owner began having financial problems before construction commenced, leaving HKS with unpaid bills for its own services and those provided by “consultants.” HKS obtained a judgment against Owner in 2010 in Texas for $1,617,073.70 but was unable to recover anything. In 2013, Vita sued HKS, alleging breach of contract; unjust enrichment; quantum meruit; and breach of the implied covenant of good faith and fair dealing, seeking $370,650.53. After answering the complaint, HKS moved to enforce the forum selection clause and dismiss. The court of appeal reversed dismissal. HKS established the existence of a contract between HKS and Vita containing a forum selection clause, but Code of Civil Procedure 410.42 prohibits enforcement of construction contract provisions requiring disputes between contractors and California subcontractors to be litigated outside California. View "Vita Planning & Landscape Architecture, Inc. v. HKS Architects, Inc." on Justia Law

A subordination agreement subordinated a lien for original land financing to a new construction deed of trust. The holder of mechanics’ liens for work performed after the date of the original loan but before the date of the construction deed of trust filed suit. The district court determined that the subordination agreement only partially subordinated the lien for the original land financing to the new construction deed of trust and left the mechanics’ liens in the second-priority position. The holder of the mechanics’ liens petitioned for a writ of mandamus to compel the district court to vacate its order and recognize its mechanics’ liens as holding a first priority. The Supreme Court denied the petition for extraordinary writ, holding that the priority of the mechanic’s lien remains junior to the amount secured by the original senior lien, as (1) contractual partial subordination differs from complete subordination, and therefore, a contractual partial subordination by creditors of a common debtor do not subordinate a first priority lien to a mechanic’s lien; and (2) nothing in Nev. Rev. Stat. 108.225 changes the priority of a mechanic’s lien to a partially subordinated lien recorded before the mechanic’s lien became effective. View "In re Manhattan West Mechanic's Lien Litig." on Justia Law

Fecteau Residential Homes, Inc. (seller) was in the business of selling manufactured modular homes. In early November of 2010, Janet and Mark McKinstry (buyers) entered into a written contract with seller for the purchase of a demonstrator modular home on seller's lot. Buyers tendered a $5000 deposit toward the purchase price, obtained financing, and engaged a contractor to lay the necessary footings and foundation for the home. Shortly thereafter, however, seller's owner Vic Fecteau called buyers to offer them a new, identical modular home at the same price instead of the demonstrator model for which they had contracted for reasons related to financial difficulties in obtaining a replacement floor model from that particular manufacturer. Buyers rejected the offer, the parties argued, and Fecteau cancelled the deal and subsequently returned the $5000 deposit. Buyers purchased a slightly larger modular home from a different dealer, which required modifications to the partially completed foundation to install. Buyers then filed this action under the Consumer Protection Act, alleging that seller misrepresented its intention to sell them the demonstrator model for which they had contracted; that they relied to their detriment on the misrepresentation, in part by paying for a foundation "to meet the dimensions of the home sold to them by [seller]"; and that they incurred additional expenses when forced to install a different model. Buyers sought damages, exemplary damages, and attorney's fees. Seller moved for summary judgment, asserting that buyers had failed to establish an essential element of consumer fraud by showing a misrepresentation or omission of material fact at the time of contracting, failed to establish that they were "consumers" within the meaning of the Act, and failed to mitigate their damages. The trial court denied the motion. Following a two-day trial, the jury returned a special verdict in favor of buyers, finding that there consumer fraud, and awarded $1,000 in damages. Seller moved to offset any attorney's fee award by the $5000 deposit refunded to buyers in order to a "preclude double recovery" under the Act. The trial court found, "Given the minimal recovery, the fact that recovery was questionable from the start, and the lack of any public purpose served by this case," a reasonable fee award for recovery was $15,000. The court granted buyers' request for costs for a total of $1360. Turning to the $5000 offset, the court concluded that, under the Act, buyers were not entitled to both a return of their consideration and an award of damages, and determined that "the $5000 will be treated as a credit toward the attorney's fees." Seller subsequently moved for judgment notwithstanding the verdict to overturn the entire judgment. Buyers opposed the motion, and also moved for reconsideration of the attorney's fee award, asserting that the $5000 offset was improper. The Supreme Court found that the evidence was sufficient to find a misrepresentation or omission of material fact, and that the return of the deposit had nothing to do with buyers' claim that seller violated the Act. It found no basis for the $5000 set-off against attorney's fees ordered by the trial court. The $1000 damage award was affirmed. The attorney's fee award was modified to eliminate the $5000 set off, resulting in a total judgment of $17,360. View "McKinstry v. Fecteau Residential Homes, Inc." on Justia Law

Plaintiff filed suit against his employer, Amtrak, alleging that it discriminated against him because of his race in violation of Title VII of the Civil Rights Act, 42 U.S.C. 2000e et seq., and District of Columbia law. The district court granted summary judgment to Amtrak. After the engine plaintiff was driving passed a stop signal at the rail yard and was forced off the rails by a safety derailer, Amtrak fired him and suspended his engineer certificate. The court affirmed the judgment, concluding that no jury could reasonably conclude based on the evidence in the record that Amtrak was motivated by plaintiff's race to take the adverse actions of which he complains. View "Burley v. Nat'l Passenger Rail Corp." on Justia Law