Justia Construction Law Opinion Summaries

The Ninth Circuit Court of Appeals certified a question of Washington law to the Washington Supreme Court. The issue centered on how the term "collapse" was interpreted under Washington law in an insurance policy that insured "accidental direct physical loss involving collapse," subject to the policy's terms, conditions, exclusions and other provisions, but did not define "collapse" except to state that "collapse [did] not include settling, cracking, shrinking, bulging or expansion." The Washington Court concluded that in the insurance contract, "collapse" means "substantial impairment of structural integrity." "Substantial impairment of structural integrity" means substantial impairment of the structural integrity of a building or part of a building that renders such building or part of a building unfit for its function or unsafe and, under the clear language of the insurance policy here, must be more than mere settling, cracking, shrinkage, bulging, or expansion. View "Queen Anne Park Homeowners Ass'n v. State Farm Fire & Cas. Co." on Justia Law

The Montara Owners Association (homeowners) sued developer and general contractor, La Noue Development, LLC for damages caused by design and construction defects in the building of the Montara townhomes. The defects included problems with the framing, siding, decking, and windows, resulting in water intrusion and water damage. La Noue, in turn, filed a third-party complaint against multiple subcontractors, including Vasily Sharabarin, dba Advanced Construction (Sharabarin), who provided siding work on four buildings. Before trial, La Noue settled with the homeowners for $5 million (eliminating the first-party litigation from the case) and also reached settlements with most of the third-party subcontractors. La Noue did not settle with Sharabarin. Because of various pretrial rulings, the only claims submitted to the jury were La Noue’s breach of contract claims against Sharabarin and two other subcontractors. Before trial, the trial court granted summary judgment in favor of Sharabarin on La Noue’s claim for contractual indemnity, on the ground that the indemnification provision on which La Noue had relied was void under ORS 30.140. The trial court also held that the court would decide whether La Noue could recover the attorney fees that it had incurred in defending against the homeowners’ claims as consequential damages for Sharabarin’s breach of contract and that the court would resolve that issue after trial. In its post-trial ruling on the attorney fee issue, the court ultimately held that La Noue could not recover attorney fees as consequential damages in the case, even after trial, and denied La Noue’s claim for those attorney fees. The issues this case presented for the Supreme Court's review centered on: the proper application of ORS 30.140; whether it was error for the trial court to give an instruction on the economic waste doctrine in the absence of any evidence on the alternative measure of damages, diminution in value; and whether a third-party plaintiff can recover attorney fees as consequential damages for a third-party defendant’s breach of contract when the attorney fees were incurred in the first-party litigation in the same action. The Supreme Court concluded that it was error to have given the economic waste instruction. The Court affirmed on the Court of Appeals' decisions as to the other issues presented, and remanded for the trial court to consider the general contractor’s substantive right to attorney fees. View "Montara Owners Assn. v. La Noue Development, LLC" on Justia Law

After a jury trial, Defendant was found guilty of felony theft. The Supreme Court affirmed, holding (1) there was sufficient evidence for the jury to reasonably conclude that Defendant possessed the requisite intent to deprive; (2) the district court did not abuse its discretion when it imposed no sanction for the State’s discovery violation; (3) the district court erred when when it allowed evidence of Defendant’s prior felony conviction, but the error was harmless; (4) the district court did not commit plain error when it prohibited defense counsel from questioning a police officer about Defendant’s “nonstatements” made during his interview following his arrest; and (5) Defendant waived his right to challenge the district court’s response to the jury question under the invited error doctrine. View "Toth v. State" on Justia Law

Cody McDonald was injured while working on the construction of a building. RTK Construction, Inc. hired Ponderosa Enterprises Inc. to frame the building, and Ponderosa hired McDonald as an independent contractor to assist with the framing. McDonald brought suit against Ponderosa and RTK, alleging, inter alia, negligence and violation of the Montana Occupational Safety and Health Act (MOSHA). The district court granted partial summary judgment on the MOSHA claims, concluding that because McDonald was an independent contractor at the time of his injury, Ponderosa and RTK did not owe him any duties of safety under MOSHA. RTK was subsequently dismissed from the case, and a jury found that Ponderosa was not negligent. The Supreme Court affirmed, holding that MOSHA does not create a duty for employers to meet certain safety guidelines with respect to independent contractors. View "McDonald v. Ponderosa Enters., Inc." on Justia Law

In 2010, the United States Department of the Navy entered into an agreement with Contracting Systems, Inc. II ("CSI"), per which CSI served as the general contractor for the construction of an addition to, and renovations of, the Navy/Marine Corps Reserve Training Center in the Lehigh Valley. CSI, in turn, subcontracted with Appellee, Clipper Pipe & Service, Inc. for the performance of mechanical and heating, ventilation, and air conditioning work. Clipper filed suit against CSI and its surety, the Ohio Casualty Insurance Company (collectively "Appellants"), in the United States District Court for the Eastern District of Pennsylvania, asserting that CSI had failed to pay approximately $150,000 to Clipper, per the terms of their agreement. Among other claims, Clipper advanced one under the Contractor and Subcontractor Payment Act (CASPA). Appellants moved for summary judgment, arguing that CASPA did not apply to public works projects, because a governmental entity does not qualify as an "owner" under the statutory definition, as such an entity is neither a "person" nor an "other association." The federal district court denied relief on Appellants' motion. Among other aspects of its holding, the court followed "Scandale Associated Builders & Eng'rs, Ltd. v. Bell" which held that a governmental entity may be an "owner" under CASPA, since the statutory definition of "person" does not exclude the federal government, and the purpose of CASPA is to protect contracting parties. Clipper prevailed at the subsequent jury trial, and the district court awarded interest, penalties, and attorney fees. Appellants appealed to the United States Court of Appeals for the Third Circuit. The Pennsylvania Supreme Court accepted certification from the Third Circuit to determine whether a CASPA applied to the public works project in this case. After review, the Supreme Court concluded that CASPA did not apply to a construction project where the owner was a governmental entity. View "Clipper Pipe v. Ohio Casualty Ins." on Justia Law

A homeowner sued a general contractor for allegedly shoddy and incomplete work in connection with a major home remodeling contract. The homeowner’s complaint also contained a cause of action against the general contractor’s license bond company, seeking to recover for the contractor’s having “grossly deviated” from the plans and specifications for the job. To support his action, the homeowner explicitly alleged in the complaint that the contractor was licensed at all times. The contractor cross-complained against the homeowner for unpaid work. The cross-complaint included a copy of their written contract which showed the contractor’s license number. To that, the homeowner simply filed a general denial of all allegations. When the case came to trial, the homeowner (contrary to the applicable local rule requiring plaintiffs to identify all controverted issues) did not identify licensure as a controverted issue. The contractor’s attorney did not obtain a verified certificate from the Contractors’ State License Board showing the contractor was licensed at all times during his performance. But when the contractor was about to rest his case on the cross-complaint, the homeowner’s attorney made a motion for nonsuit based on the absence of such a verified certificate as required under Business and Professions Code section 7031, subdivision (d). The trial judge deferred immediate ruling on the homeowner’s nonsuit motion. "As the contractor learned to his chagrin, it [...] takes at least six days to obtain a verified certificate from the License Board even if one drives overnight to Sacramento to pick it up in person." While the contractor was eventually able to obtain a verified certificate of licensure from the License Board, he could not do so until after the close of the trial, in which he prevailed on his claim for unpaid work from the homeowner. Because no certificate of licensure could be produced, the trial judge reluctantly granted the homeowner’s nonsuit motion, by judgment notwithstanding the verdict (JNOV). This appeal followed. After review, the Court of Appeal reversed that judgment in favor of the homeowner, with instructions to the trial judge to grant judgment in favor of the general contractor as against the homeowner. "We conclude this is one of those relatively rare cases where a party can be bound by a judicial admission made in an unverified complaint. Here, the judicial admission that the general contractor was licensed, compounded by the homeowner’s failure to comply with the local rule requiring identification of all controverted issues, rendered the question of licensure assuredly uncontroverted for purposes of section 7031. Because of the judicial admission, the rule of 'Advantec Group, Inc. v. Edwin’s Plumbing Co., Inc.' (153 Cal.App.4th 621 (2007)) does not apply." View "Womack v. Lovell" on Justia Law

In 2003, the governors of Cedar Rapids Lodge obtained the rights to build an AmericInn franchise. The company used Lightowler as the project architect. Lightowler used a standard form agreement that specified that its terms would be governed by the law of North Dakota. After changes requested by the Fire Marshal and for compliance with franchise standards, Lightowler submitted revised plans in February, 2004. Construction began in January 2004. In July, 2004, Lidberg of AmericInn led a construction site visit attended by the governors, and Olson, a Lightowler engineer. Lidberg and Olson prepared reports detailing deficiencies. The last act performed by Lightowler on the project was a response to the contractor in September, 2004. Lidberg led a second site visit in October, 2004, produced a report identifying additional deficiencies, and sent it to Siebert and Lightowler. The hotel opened for business in December, 2004, but problems continued. In December, 2009 Cedar Rapids Lodge brought claims against its former governors and others involved in the hotel project and alleging professional negligence by Lightowler. The Eighth Circuit affirmed summary judgment in favor of Lightowler, concluding that the claim was barred by the statute of limitations under either North Dakota or Iowa law. View "Cedar Rapids Lodge & Suites, LLC v. Lightowler Johnson Assocs., Inc." on Justia Law

At issue in this residential construction dispute was whether the statutory cap on exemplary damages is waived if not pleaded as an affirmative defense or avoidance. The trial court affirmed an exemplary damages award in excess of the statutory cap because Petitioner did not assert the cap until her motion for a new trial. The court of appeals affirmed the exemplary damages award, concluding that the statutory cap on exemplary damages did not apply because Petitioner failed to expressly plead the cap as an affirmative defense. The Supreme Court (1) reversed the court of appeals’ judgment in relation to the exemplary cap, holding (i) the exemplary damages cap is not a matter ”constituting an avoidance or affirmative defense” and need not be affirmatively pleaded because it applies automatically when invoked and does not require proof of additional facts, and (ii) because Petitioner timely asserted the cap in her motion for new trial, the exemplary damages must be capped at $200,000; and (2) affirmed in all other respects. View "Zorilla v. Aypco Constr. II, LLC" on Justia Law

Lori Ihli appealed a district court judgment dismissing her claims against Anthony Lazzaretto, d/b/a Lazzaretto Construction ("Lazzaretto"). In June 2011, Ihli's Minot home flooded. Ihli contacted Lazzaretto for an estimate to repair the home, and in February 2012, she accepted Lazzaretto's bid proposal. Lazzaretto began working on Ihli's home; however, a dispute arose between the parties regarding the quality of the work, and Lazzaretto ceased working on the home. In November 2012, Ihli applied for federal disaster relief funding to repair or replace her house through the City of Minot Disaster Recovery Homeowner Rehabilitation and Reconstruction Program. Ihli sought estimates from two construction companies, Real Builders, Inc. and Wright Brothers, to "repair" and complete the project. Ihli then sued Lazzaretto, alleging he damaged her property by performing remodeling work in a negligent manner. After commencing the suit against Lazzaretto, she learned she was eligible for the disaster relief funding in "late August 2013." In Ihli's deposition, Ihli stated that program administrators inspected the house and recommended the house be torn down and replaced, instead of being repaired. After Ihli commenced the suit against Lazzaretto and learned of her eligibility for disaster relief funding and after Ihli's counsel granted Lazzaretto's counsel an extension to file Lazzaretto's answer to Ihli's complaint, Ihli allowed the house to be demolished. Before the house was demolished, Ihli's attorney had advised Ihli to take photos or video of the property before the house was torn down. Ihli never informed Lazzaretto of the plan to demolish the house. After the house was demolished, Lazzaretto served its answer. In June 2014, Lazaretto moved for sanctions, requesting the case be dismissed due to Ihli's spoliation of evidence. Ihli then moved to amend her complaint, seeking to add a claim for breach of contract. After a hearing on both motions, the district court denied Ihli's motion to amend the complaint, granted Lazzaretto's motion for sanctions, and dismissed Ihli's claims. On appeal, Ihli argued the district court erred in dismissing her case as a sanction for spoliation of evidence because the sanction was overly severe and an abuse of discretion. Ihli also argued the district court erred in denying her motion to amend the complaint because Lazzaretto was on notice of the proposed breach of contract claim and would not have been prejudiced. Under the facts of this case, the Supreme Court concluded the district court did not abuse its discretion in imposing the sanction of dismissal and denying Ihli's motion to amend. View "Ihli v. Lazzaretto" on Justia Law

Plaintiffs Heidi and James Glassford appealed a superior court decision denying their motion for summary judgment and granting it to defendant Dufresne & Associates, P.C. on plaintiffs' claims of negligent misrepresentation and violation of the Vermont Consumer Protection Act (CPA). Plaintiffs were homeowners who purchased their home direct from the builder, D&L Homes by Design, LLC (D&L). D&L hired defendant to certify that the on-site mound sewage disposal system constructed for the home satisfied state permitting requirements. On April 19, 2005, the Vermont Agency of Natural Resources issued a Wastewater System and Potable Water Supply Permit for construction of the sewage disposal system on the property, subject to receiving a certification pursuant to 10 V.S.A 1973(e). On October 20, 2005, defendant's employee sent the certification required by the statute. On December 20, 2005, plaintiffs signed a purchase-and-sale agreement to purchase the home from D&L. Although the seller represented that the home and property had received all the necessary permits, plaintiffs never saw the certificate or the letter from the Agency stating that the certification requirement was satisfied. Sometime thereafter, plaintiffs hired an attorney in connection with the closing. On January 13, just prior, plaintiffs' attorney prepared a certificate of title that noted the wastewater and water supply permit. In February 2006, the sewage disposal system failed. In November 2008, plaintiffs hired defendant to investigate the system's failure because they knew defendant had inspected the system prior to their purchase. Defendant prepared a report stating that he had "completed the original" inspection in 2005 and found the system had been installed according to the permitted design. Plaintiffs received other opinions about the disposal system's failure both before and after hiring defendant to inspect the system. Plaintiffs filed a complaint in superior court alleging pecuniary losses from defendant's failure to properly inspect the sewage disposal system and subsequent misrepresentation about the construction of the system in the certification to the Agency. Upon review of the superior court decision, the Supreme Court found that the completion and filing of defendant's certificate was a prerequisite to D&L's ability to sell the home, the certificate was unrelated to the sale. The law required that it be sent only to the government agency that issued the permit. Furthermore, there was no allegation that D&L used the certificate as part of its sales pitch, and no allegation that defendant had any part in the sales. The standard for CPA liability required that a person be directly involved in the transaction that gave rise to the claimed liability. That standard was not met here. Accordingly, the Court affirmed the superior court's decision. View "Glassford v. Dufresne & Associates, P.C." on Justia Law