Justia Construction Law Opinion Summaries

Plaintiff filed suit challenging a noncompetitive bid contract between Fresno Unified and Contractor for the construction of a middle school, alleging that the project should have been competitively bid because the lease-leaseback arrangement did not create a true leaseback or satisfy the criteria for the exception in section 17406 of the Education Code. The trial court sustained demurrers filed by Fresno Unified and Contractor. The court concluded that the competitive bidding process required by section 17417 is subject to the exception contained in section 17406 and plaintiff adequately alleged three grounds for why section 17406’s exception did not apply to the lease-leaseback arrangement. The court also concluded that Government Code section 1090’s prohibition of such conflicts extends to corporate consultants. Plaintiff has stated a violation of Government Code section 1090 by alleging facts showing Contractor, as a consultant to Fresno Unified, participated in the making of a contract in which Contractor subsequently became financially interested. Accordingly, the court reversed the judgment. View "Davis v. Fresno Unified Sch. Dist." on Justia Law

This appeal stemmed from a condominium construction project in Stratton. Owner-developer The Stratton Corporation and Intrawest Stratton Development Corporation (collectively "Stratton") sued the project's general contractor, Engelberth Construction, Inc., seeking to recover for alleged construction defects and faulty workmanship that resulted in water damage to the project. Engelberth filed third-party complaints for indemnification against its subcontractors. The trial court granted summary judgment to Engelberth on Stratton's claims, finding the claims barred by the statute of limitations. Given its summary judgment ruling, and without objection, the court dismissed Engelberth's third-party claims as moot. Engelberth later sought to amend the dismissal order to provide that the third-party claims were dismissed without prejudice. The court denied its request, and Engelberth appealed. Finding no reversible error, the Supreme Court affirmed. View "Stratton Corp. v. Engelberth Construction, Inc." on Justia Law

Appellant submitted a bid for a highway project in Sublette County, Wyoming and was the low bidder. The Board of County Commissioners of Sublette County awarded the contract to another bidder, a contractor that was from Sublette County. Appellant filed a complaint in the district court alleging that by not entering into the contract with Appellant, the Commissioners violated Wyo. Stat. Ann. 16-6-102(a). The district court found in favor of the Commissioners on all claims. On appeal, the Supreme Court held section 16-6-102(a) inapplicable and remanded the case for a determination of whether the award was appropriate. On remand, the district court held generally in favor of the Commissioners, finding that the Commissioners’ award was within their discretion and appropriate. The Supreme Court reversed, holding that the Commissioners’ utilization of an undisclosed preference for Sublette County contractors in awarding the public contract opened for competitive bid constituted an illegal exercise of discretion. Remanded for a determination of damages. View "W. Wyo. Constr. Co., Inc. v. Bd. of County Comm’rs" on Justia Law

The Department of Industrial Relations determined that plaintiff Vector Resources, Inc. failed to pay the appropriate prevailing wages to its workers on a public works project for the San Diego Unified School District. The Department's director's decision was based on regulatory language in a document entitled "Important Notice To Awarding Bodies And Other Interested Parties Regarding Shift Differential Pay In The Director's General Prevailing Wage Determinations," which was posted on the Department's Web site. The Important Notice addresses shift differential pay for various crafts used on public works projects, and was augmented by additional regulatory language in a "Note" that the Department placed on the cover page of prevailing wage shift provisions ("the Stamp"). Vector filed a declaratory relief action against the Department, seeking a declaration that the Important Notice and Stamp were invalid and unenforceable as "underground regulations" because they were not promulgated in compliance with the notice and hearing requirements of the Administrative Procedure Act (APA). Vector and the Department filed cross-motions for summary judgment. The trial court granted the Department's motion on the ground that under Government Code section 11340.9, subdivision (g), the Important Notice and the Stamp were exempt from the notice and hearing requirements of the APA because they were part of an overall prevailing wage determination process that constituted "rate setting." Vector argued on appeal that the grant of summary judgment to the Department was made in error because: (1) the Department admitted that the shift premium rule is a regulation; (2) the Department admitted that that regulation was not adopted in compliance with the APA; (3) the Department failed to prove that the shift premium regulation establishes or fixes rates within the meaning of Government Code section 11340.9, subdivision (g); (4) the court erred in failing to specifically cite the evidence it relied on to grant summary judgment; (5) the court's written order ignored the law and the admissible evidence; and (6) the Department's motion relied upon inadmissible evidence. Finding no reversible error, the Court of Appeal affirmed. View "Vector Resources, Inc. v. Baker" on Justia Law

At issue in this case was an insurance coverage dispute arising from underlying construction defect litigation in which Corona homeowners sued the developer, plaintiff-appellant Centex Homes for work performed by Centex’s subcontractors. One of the subcontractors, Oak Leaf Landscape, Inc., was insured by defendants-respondents, St. Paul Fire & Marine Insurance Company and St. Paul Mercury Insurance Company (Travelers). Centex was named as an additional insured on the Travelers’s policy. Centex appealed an order and judgment sustaining without leave to amend defendants’ demurrer to the seventh and eighth causes of action of the original complaint filed by Centex. The seventh and eight causes of action for declaratory relief centered on coverage and Centex’s right to independent counsel pursuant to Civil Code section 2860. Upon review of the dispute, the Court of Appeal agreed with the trial court’s ruling that the claims were neither “ripe” nor “actual”, and affirmed the judgment. View "Centex Homes v. St. Paul Fire & Marine Ins. Co." on Justia Law

Pacific appealed the Board's suspension of its license as the sanction for failing to notify the Board that a judgment had been entered against Pacific. Jerry McDaniel and his wife Delma own two corporations, Pacific and Gold Coast Drilling, Inc. The trial court found that Pacific did not substantially comply with the requirement that the contractor be licensed while performing work. Pacific argued that the judgment was not “substantially related” to its “construction activities” within the meaning of Bus. & Prof. Code 7071.17, and so Pacific’s license should not have been suspended. The court concluded that Gold Coast was obligated to notify the Board of the unsatisfied stipulated judgment where the stipulated judgment falls within the ambit of section 7071.17 and the stipulated judgment was unsatisfied; the evidence supports the trial court’s finding that Gold Coast did not “act[] reasonably and in good faith” to maintain its license; and, therefore, the court affirmed the judgment of the trial court. View "Pacific Caisson & Shoring v. Bernards Bros." on Justia Law

Weitz contracted with Hyatt to build an Aventura, Florida assisted-living facility, which was completed in 2003. Hyatt obtained post-construction insurance from defendants. Weitz was neither a party nor a third-party-beneficiary. The policies exclude faulty workmanship and mold, except to the extent that covered loss results from the faulty workmanship, such as business interruption losses. The construction was defective. Hyatt notified defendants of a $11 million loss involving moisture and mold at the care center, settled that claim for $750,000, and released defendants from claims relating to the care center. Hyatt next discovered moisture, mold, and cracked stucco at the residential towers. Hyatt gave defendants notice, but bypassed inevitable defenses based upon policy exclusions, and sued Weitz. Weitz sued its subcontractors and its own construction contract liability insurers. Weitz settled with Hyatt for $53 million and was indemnified by its insurers for $55,799,684.69. Weitz sued, claiming coverage under defendants’ policies, based on equitable subrogation or unjust enrichment. The Eighth Circuit affirmed dismissal, recognizing that Weitz, as subrogee, was subject to any defense Hyatt would have faced, and that Hyatt had discharged defendants from liability; that suit was barred by the contractual period of limitations; that Weitz was barred from suing for damage to the plaza because Hyatt did not give defendants notice of that damage; and that Weitz had already collected several million more than it paid. View "Weitz Co. v. Lexington Ins. Co." on Justia Law

Plaintiff Robert Occhifinto filed suit against defendant Robert S. Keppler Mason Contractors, LLC (Keppler) and others seeking damages for alleged defective construction of an addition to his warehouse. In the liability action, Keppler was defended by its insurance carrier, Mercer Mutual Insurance Company, under a reservation-of-rights agreement. Before trial in the liability action, Mercer filed an action for a declaratory judgment challenging its obligation to provide coverage and to defend Keppler in the liability action. Occhifinto, on Keppler s behalf, contested the claims raised by Mercer, and filed counterclaims asserting that Mercer had a duty to defend and indemnify Keppler under the policy, and that Mercer was obligated for the counsel fees incurred in defending the declaratory judgment action. In the declaratory judgment action, the parties filed cross-motions for summary judgment on the insurance coverage question. The trial court held that Mercer was required to indemnify Keppler for damages covered by the insurance policy. The court therefore denied Mercer's motion for summary judgment and granted partial summary judgment to Occhifinto, reserving the claim for counsel fees until conclusion of the liability action. The liability action proceeded, and Occhifinto lost. After trial, Occhifinto sought to recover counsel fees from Mercer pursuant to Rule 4:42-9(a)(6), which authorized an award of counsel fees in an action upon a liability or indemnity policy of insurance in favor of a successful claimant. The trial court denied Occhifinto's motion, holding that he was not a successful claimant in the liability action because he was not entitled to indemnity coverage in the liability action. In an unpublished opinion, the Appellate Division affirmed that determination. The Supreme Court reversed, finding Occhifinto was a successful claimant and therefore was entitled to attorneys' fees. View "Occhifinto v. Olivo Construction Company" on Justia Law

The Tenth Circuit Court of Appeals certified a question of Oklahoma law to the Oklahoma Supreme Court. In April 2008, plaintiffs Shannon and Eric Walker requested several samples of hardwood flooring from BuildDirect.com Technologies, Inc., a Canadian corporation, through BuildDirect's website. The next month they arranged, over the telephone, to purchase 113 boxes of flooring from BuildDirect. BuildDirect emailed a two-page written Contract entitled "Quotation" to Ms. Walker, who signed and dated the Contract and returned it to BuildDirect via fax. The Contract described the type, amount, and price of the flooring purchased by the Walkers. And, it included 14 bullet points setting forth additional terms. The sixth bullet point stated: "All orders are subject to BuildDirect's 'Terms of Sale.'" The Walkers alleged that after they installed the flooring, they discovered that their home was infested with nonindigenous wood-boring insects. According to the Walkers, the insects severely damaged the home, and caused the home to be subject to quarantine and possible destruction by the United States Department of Agriculture. The question the federal appeals court posed to the Oklahoma Supreme Court was whether a written consumer contract for the sale of goods incorporated by reference a separate document entitled "Terms of Sale" available on the seller's website, when the contract stated that it was "subject to" the seller's "Terms of Sale" but did not specifically reference the website. In response, the Oklahoma Court held that Oklahoma law did not recognize a "vague attempt at incorporation by reference" as demonstrated in this case. Under the Oklahoma law of contracts, parties may incorporate by reference separate writings, or portions thereof, together into one agreement where: (1) the underlying contract makes clear reference to the extrinsic document; (2) the identity and location of the extrinsic document may be ascertained beyond doubt; and (3) the parties to the agreement had knowledge of and assented to its incorporation. View "Walker v. BuildDirect.com Technologies, Inc." on Justia Law

In 2004, Miller sought to build a four-unit condominium project on her Monona lot. The process stalled while Miller bought another lot, amended the plan, and abated an unexpected asbestos problem. She had unsuccessful negotiations with her neighbor, a former mayor, who trespassed on her property at the direction of city officials and took photographs for use at a planning commission meeting to oppose her project. Citations were issued for creating a public nuisance and working without a proper permit; the Wisconsin Department of Natural Resources issued a “stop work” order because of asbestos; Miller was required to erect a fence; and she was told that weeds were too high and was ordered to remove various structures. A court rejected three out of four citations issued against her, stating that, although “some of the efforts to enforce compliance were unreasonable,” Miller had not pointed to any similarly situated person who had been treated differently. Monona refused to adjust the taxes on Miller’s property to reflect the demolitions. Officials continued to trespass by parking cars on her property. In 2010, Miller filed suit, asserting equal protection violations. The district court dismissed, finding that Miller had not identified a suitable comparator and that there was no evidence that Miller had been treated unfairly because of her sex. The Seventh Circuit affirmed, noting conceivable rational reasons for various actions and requirements. View "Miller v. City of Monona" on Justia Law