Justia Construction Law Opinion Summaries

Robert Lang and his construction business (collectively, “Lang”) contracted to sell Dan Ryan Builders, Inc. (“Dan Ryan”) all the lots in a housing development Lang was planning to build. When cracks appeared in the basement slab and foundation walls of a partially constructed house on one of the lots Dan Ryan had purchased, the parties amended their agreement. After further problems developed in the construction of the homes, Dan Ryan filed this lawsuit against Lang seeking monetary damages for breach of contract. After a bench trial, the district court entered judgment in favor of Dan Ryan and ordered Lang to pay Dan Ryan limited damages on the contract claim. Dan Ryan appealed, seeking additional damages. The Fourth Circuit affirmed, holding that the district court did not err in its award of damages. View "Dan Ryan Builders, Inc. v. Crystal Ridge Dev., Inc." on Justia Law

At issue in this case was the effect of a subordination agreement between fewer than all of the creditors who hold an interest in the same collateral. Appellant VCS, Inc. provided labor and materials to improve real property located in a planned unit development. The developer, Acord Meadows, secured funding for the project from America West Bank and Utah Funding Commercial. The loans were secured with trust deeds to the development properties, and the lenders entered into subordination agreements among themselves that altered the priority arrangement of their trust deeds. Because VCS was never paid for its work, it filed a mechanic’s lien covering several lots of the development, four of which were sold through a foreclosure sale after Acord defaulted on its loans from Utah Funding. VCS claimed it was entitled to payment of its mechanic’s lien because its lien had priority over Utah Funding’s liens. The district court ruled that VCS’s mechanic’s lien was extinguished by the foreclosure of Utah Funding’s liens. The Supreme Court affirmed after adopting the partial subordination approach to the issue in this case, holding that under the partial subordination approach, VCS’s mechanic’s lien was extinguished once Utah Funding’s lien was foreclosed upon. View "VCS Inc. v. Countrywide Home Loans, Inc." on Justia Law

Wilson Paving & Excavating, Inc. was one of several subcontractors retained to perform services in connection with a renovation project at Sand Springs Memorial Stadium at Charles Page High School. Specifically, Wilson Paving contracted to dig trenches and lay pipe for a storm drainage system being installed under the athletic field. Wilson Paving utilized a local staffing agency, Labor Ready, to secure temporary workers to assist on the project. Steven Broom went to the offices of Labor Ready to obtain employment. Broom was directed by Labor Ready to work with Wilson Paving at Sand Springs High School. He reported to the high school and, at the instruction of Wilson Paving, began work laying pipe. The trench in which Broom was working collapsed twice - the first time covering him in dirt to his waist and the second time covering him in dirt to his neck. People on the job site freed Broom from the neck to the waist while waiting on emergency personnel to arrive. Once on the scene, emergency personnel could not enter the trench to rescue Broom until the trench was safely reinforced. During this time, Broom remained buried from the waist down. Emergency personnel eventually removed Broom from the trench, and he was transported to the hospital where he was treated for serious injuries, including rib fractures, collapsed lungs, pulmonary contusions, blood within the chest, fluid around the spleen and kidney, and a left kidney laceration. Before the trench collapsed, one of Wilson Paving's employees, Jack Bailey, was using a backhoe to dig the trench and to retrieve pipe from an area adjacent to the trench. Wilson Paving believed the trench collapse was due to the work of another contractor who had allegedly removed a monument and flag pole near the area of the collapse but failed to alert Bailey of such before he began digging the trench. Broom pursued and received workers' compensation benefits from Labor Ready for the injuries he sustained in the accident. Broom also sued Wilson Paving for his injuries in a third-party action to collect for his injuries as a result of Wilson's employee. The trial court found in favor of Broom and entered judgment against Wilson Paving for $1,150,000.00. Broom then sought post-judgment garnishment of Wilson Paving's Commercial General Liability Policy issued by Mid-Continent Casualty Company. The trial court entered summary judgment in favor of Mid-Continent, finding that coverage for Broom's injuries was precluded under the "earth movement" exclusion clause in Mid-Continent's policy. The Court of Civil Appeals found that the earth movement exclusion clause did not prevent coverage for Broom's injuries, but affirmed summary judgment on different grounds. Upon review, the Supreme Court held that Mid-Continent's Commercial General Liability Policy provided coverage for Broom's injuries. View "Broom v. Wilson Paving & Excavating" on Justia Law

In 2011, the Town of Middletown issued an invitation for bids on a drainage improvement project. Two contractors submitted bids, including HK&S Construction Holding Corp., which provided the lowest bid. Woodard & Curran, Inc. recommended against awarding HK&S the project and in favor of negotiating a contract with the second bidder. The town counsel concluded that HK&S’s bid was non-responsive and awarded the contract to the second bidder. Plaintiff filed a complaint against the Town and Woodard & Curran alleging, among other claims, that the Town violated state and local law when it denied the contract award for the project. The superior court granted summary judgment for Defendants. The Supreme Court affirmed, holding (1) there was no error in disposing of HK&S’s claims against the Town in summary judgment where HK&S failed to submit a responsive bid; and (2) HK&S’s claim of negligence against Woodard & Curran also failed. View "HK&S Constr. Holding Corp. v. Dible" on Justia Law

After discovering a number of defects in their home, plaintiffs Hugh and Katherine Carithers filed suit against their homebuilder, Cronk Duch, in state court. Cronk Duch’s insurance company, Mid-Continent Casualty Company, refused to defend the action on behalf of Cronk Duch. The Carithers and Cronk Duch then entered into a consent judgment in the underlying action for approximately $90,000, in favor of the Carithers. The consent judgment also assigned to the Carithers Cronk Duch’s right to collect the judgment amount from Mid-Continent. The Carithers then filed this action against Mid-Continent in state court to collect from Mid-Continent on the settlement. Mid-Continent removed the case to the Middle District of Florida. The Carithers are the Plaintiffs in this action due to Cronk Duch’s assignment of its rights to them. The Fifth Circuit, after careful consideration, affirmed in part, and reversed in part, addressing a number of coverage issues related to damage from the completed house caused by the defective work of subcontractors. View "Carithers v. Mid-Continent Casualty Company" on Justia Law

A property developer filed suit against several defendants involved in a construction project asserting claims for negligence and breach of contract. Defendants filed motions to compel arbitration, which the trial court denied. The court of appeals affirmed. The Supreme Court held that the developer must arbitrate its claims against the general contractor but not its claims against the other defendants, as (1) the developer agreed to arbitrate its claims against the general contractor, and the general contractor did not waive its right to demand arbitration; (2) the developer’s argument that a contractual deadline barred the general contractor’s demand for arbitration was itself a claim that must be arbitrated; (3) the developer did not agree in the general contract to arbitrate its claims against the other defendants; (4) the developer was not equitably estopped from denying its assent to its purported agreement that the other defendants could enforce the general contract’s arbitration provisions; and (5) the subcontracts did not require the parties to arbitrate these claims. View "G.T. Leach Builders, LLC v. Sapphire V.P., L.P." on Justia Law

After Rio School District’s new school was completed, the District and its general contractor (FTR) engaged in a decade-long legal battle, resulting in a judgment for FTR exceeding $9 million. Public Contract Code section 7107 allows a public entity to withhold funds due a contractor when there are liens on the property or a good faith dispute concerning whether the work was properly performed. The trial court assessed penalties against District because it did not timely release the retained funds. The court of appeal affirmed in part. A dispute over the contract price does not entitle a public entity to withhold funds due a contractor; the doctrine of unclean hands does not apply to section 7107; the trial court properly rejected the District's action under the False Claims Act, Government Code section 12650 and properly assessed prejudgment interest, subject to adjustment for any extra work claims found untimely on remand. The trial court erred in its interpretation of a contract provision imposing time limitations to submit the contractor's claims for extra work as requiring a showing of prejudice and erred in awarding fees for work not solely related to FTR's section 7107 cause of action. View "East West Bank v. Rio School Dist." on Justia Law

Roland and Sandra Crouch appealed the grant of summary judgment in favor of North Alabama Sand & Gravel, LLC, now operating as Alliance Sand & Gravel, LLC, and Austin Powder Company ("Austin Powder") on the Crouches' claim asserting property damage resulting from Alliance Sand & Gravel's blasting operations. The Crouches sued Alliance Sand & Gravel and Austin Powder (collectively, "Alliance"), seeking compensation for damage to their property, which, they say, was caused by Alliance's blasting operations. Upon review, the Supreme Court affirmed the trial court's summary judgment in favor of Alliance on the Crouches' trespass claim. The Court reversed the summary judgment in favor of Alliance on the Crouches' claims alleging an abnormally dangerous activity, wantonness, and nuisance, and the case was remanded to the trial court for further proceedings. View "Crouch v. North Alabama Sand & Gravel, LLC" on Justia Law

The issue this case presented for the Tenth Circuit's review centered on whether the developer of a master-planned subdivision (master developer) was liable under the Interstate Land Sales Full Disclosure Act when a different developer sells units in a condominium project in the subdivision without providing a property report or making a statement of record available, as required by 15 U.S.C. 1703(a)(1)(A)-(B). RP Steamboat Springs, LLC was formed for the purpose of developing a mixed-housing, master-planned subdivision in Steamboat Springs, Colorado, called Wildhorse Meadows. RP entered into an agreement with the City of Steamboat Springs to develop Wildhorse Meadows. As master developer and initial owner of the Trailhead parcel, RP engaged in a variety of marketing activities through its listing agent, S&P Properties, for the development as a whole and for Trailhead Lodge specifically. A group of investors formed Trailhead Lodge at Wildhorse Meadows, LLC for the purpose of developing the Trailhead Lodge condominiums. Trailhead LLC hired Resort Ventures as its management company and S&P Properties as its listing and marketing agent. S&P Properties and Trailhead LLC's unsuccessfully tried to negotiate a separate project agreement for the Trailhead Lodge. RP entered into a project agreement with S&P Properties concerning Trailhead Lodge and then assigned all of its rights, title, and interest in the Trailhead Project Agreement to Trailhead LLC. RP transferred the Trailhead parcel to Trailhead LLC by special warranty deed. Two days before Trailhead LLC officially obtained ownership of the Trailhead parcel, several Buyers entered into (substantially identical) preconstruction purchase and sale agreements with Trailhead LLC. RP was not a signatory to the Contracts, but it was mentioned as the master developer. Buyers each paid a deposit toward the purchase of their respective Trailhead Lodge units. At the time Trailhead LLC entered into the Contracts with Buyers, no one had filed a statement of record with the Department of Housing and Urban Development for Trailhead Lodge, nor were Buyers provided a property report, as required by the Interstate Land Sales Full Disclosure Act. As a result of this failure, Buyers had the right to rescind the Contracts within two years after signing, which they did. The now-insolvent Trailhead LLC did not return the deposits Buyers paid under the Contracts. Buyers filed this action Trailhead LLC, RP, and S&P Properties. Among other claims, Buyers alleged Trailhead LLC, RP, and S&P Properties all qualified as developers under the Land Sales Act and that they violated the Land Sales Act by failing to file a statement of record and failing to provide a property report when Buyers purchased the condominium units. The district court subsequently granted Buyers' motion for summary judgment against Trailhead LLC on the Land Sales Act claims. Buyers later settled all claims against S&P Properties, and S&P Properties was dismissed from the case. Buyers and RP agreed to submit those Land Sales Act claims to the district court on written briefs, supporting affidavits, and stipulated facts. In its ultimate findings of fact and conclusions of law, the district court ruled that RP was not liable under the relevant provisions of the Land Sales Act. Buyers timely appealed. The Tenth Circuit concluded that because the master developer in this case, RP Steamboat Springs, LLC (RP), neither directly nor indirectly sold the condominium units at issue, it was not liable under the Land Sales Act. The Court therefore affirmed the district court's ruling in favor of RP. View "Dalzell v. Trailhead Lodge at Wildhorse" on Justia Law

Defendants, Keith McNamara, Shirley Benton, and Jerel Benton, appealed: (1) a jury verdict in favor of the plaintiffs, Richard and Mary Murray, on their claim that the defendants breached the implied warranty of workmanlike quality; (2) a Superior Court order denying their motion to dismiss the plaintiffs' New Hampshire Consumer Protection Act (CPA) claim; and (3) a Superior Court order finding that the defendants violated the CPA when they built the plaintiffs' home with latent structural defects that caused mold growth. Defendants argued that, because plaintiffs' claim was exempt from the CPA, the trial court erred by denying their motion to dismiss. Defendants added that the trial court erred by denying their motion for a judgment notwithstanding the verdict (JNOV) on the plaintiffs breach of implied warranty claim. There is no dispute that the transaction at issue here is the defendants alleged construction of the house with latent structural defects, not any representations that the defendants made to others during or after construction. The New Hampshire Supreme Court affirmed, finding that because the house was completed in 2004 and was purchased by the plaintiffs five years later and the allegedly wrongful transaction occurred more than three years before the plaintiffs "knew or reasonably should have known" of it, the construction of the house was an exempt transaction pursuant to RSA 358-A:3, IV-a and that plaintiffs' CPA claim should have been dismissed. Thus, the Court reversed the trial court's ruling on the CPA claim. However, the Court was not persuaded that defendants were insulated from liability on the breach of the implied warranty of workmanlike quality claim. Because the Court reversed the trial court's judgment on the CPA claim, defendants failed to show that they were prejudiced with respect to the breach of warranty claim. View "Murray v. McNamara" on Justia Law