Justia Construction Law Opinion Summaries

In 2003, the VA entered into a contract with Reliable for electrical improvements at a VA medical center, requiring installation of three backup generators, “new and of the most suitable grade.” Federal Acquisition Regulation 52.211-5, incorporated by reference, requires that supplies be “new, reconditioned, or remanufactured,” and defines “new” as “composed of previously unused components.” Reliable sub-contracted to Fisk, which contracted with DTE. In 2004, DTE delivered two Cummins Power Generation generators to the construction site. The VA’s senior resident engineer inspected the generators and determined that they were not “new.” He wrote to Reliable, stating: They show a lot of wear and tear including field burns to enlarge mounting holes. Are they new and will you certify them as such? I cannot pay you … without that certification. Fisk and Reliable initially agreed that the generators did not meet the contract specification. After investigation, they concluded that the generators, manufactured in 2000, had been previously purchased by others but never used. Fisk obtained different generators, which were accepted by the VA. In 2007, Reliable submitted a claim, seeking $1,100,000 for additional costs incurred as a result of rejection of the original generators. In 2013, the Board of Contract Appeals denied Reliable’s claim. The Federal Circuit vacated, holding that the Board erred in its interpretation of the contract. View "Reliable Contracting Grp., LLC v. Dep't of Veterans Affairs" on Justia Law

After a jury trial in 1983, Petitioner was found guilty of murder in the first degree and aggravated robbery. Petitioner was sentenced as a habitual offender to an aggregate term of life imprisonment. In 2005, Petitioner filed a pro se petition requesting permission to proceed in the trial court with a petition for writ of error coram nobis. The petition was denied. Petitioner then filed a second petition requesting permission to proceed in the trial court with a petition for writ of error corm nobis. The Supreme Court denied the petition, holding (1) to the extent Petitioner again alleged a Brady violation and asserted that erroneous evidence was used to establish that he was a habitual offender, these two claims were asserted in Petitioner’s first petition and were an abuse of the writ; (2) Petitioner’s remaining claims were either without merit or outside the purview of a coram-nobis proceeding; and (3) even if Petitioner had presented grounds sufficient to support issuance of the writ, his failure to act with due diligence would constitute good cause to deny the petition. View "Williams v. State" on Justia Law

In 2004, Berkeley issued a use permit for construction of a building with 51 residential rental units and ground floor commercial space. Permit condition 10 provides: “Before submission for building permit, the applicant shall submit floor plans and schedules … showing the location of each inclusionary unit and the sales or rental prices…. and that the unit rent or sales price complies with Chapter 23C.12” (Inclusionary Housing Ordinance). The Ordinance was designed to comply with Government Code section 65580, requiring a general plan to contain a housing element stating how the local agency will accommodate its share of regional need for affordable housing. The ordinance requires that 20 percent of all newly constructed residential units be reserved for households with below-median incomes and rented at below-market prices. The development took more than seven years. The city sought a declaration that the condition was valid, conceding that the ordinance has been preempted by the Costa-Hawkins Rental Housing Act (Civ. Code, 1954.50), but arguing that it may enforce the condition, the validity of which was not previously challenged. The court of appeal affirmed judgment in favor of the city. View "City of Berkeley v. 1080 Delaware, LLC" on Justia Law

Lydig Construction was the general contractor on a large public works project. Martinez Steel was the original steel supply subcontractor on the project. Lydig sued Martinez for additional costs Lydig incurred because Martinez failed to timely supply steel for the project; Lydig, with the public agency's approval, had been required to replace Martinez as the steel supplier. Lydig moved for a right to attach order and a writ of attachment and presented the trial court with its business records and declarations from its employees. Martinez opposed Lydig's motion and presented declarations from one of its employees that set forth its contention Lydig owed it for, among other items, steel Martinez had delivered to the project. Martinez filed a cross-complaint in which it alleged claims that, if successful, would entirely offset Lydig's claims against it. The trial court granted Lydig's motion and issued writs of attachment in the amount of $203,315. The court of appeal affirmed, rejecting Martinez's contentions that its cross-complaint, as a matter of law, prevented the trial court from issuing a writ of attachment against it and that Lydig's application for a writ of attachment was not supported by substantial evidence. View "Lydig Constr., Inc. v. Martinez Steel Corp." on Justia Law

Belasco bought a new Manhattan Beach residence in 2004 from the builder (Wells). In 2006, Belasco filed a complaint with the Contractors State License Board, alleging construction defects. Belasco and Wells settled the dispute in 2006, with Wells paying $25,000 and Belasco executing a release and a Civil Code 15241 waiver of all known or unknown claims. In 2012, Belasco sued, based on an alleged roof defect discovered in 2011. The trial court entered summary judgment, finding the action barred by the settlement. The court of appeal affirmed, rejecting arguments that: the 2006 general release and waiver for patent construction defects is not a “reasonable release” of a subsequent claim for latent defects under section 929 and the Right to Repair Act (section 895); a reasonable release can only apply to a “particular violation” and not to a latent defect under section 945.5(f), and the 2006 settlement was too vague to be a valid; section 932 authorizes an action on “[s]ubsequently discovered claims of unmet standards;” public policy prohibits use of a general release and section 1542 waiver to bar a subsequent claim for latent residential construction defects; and a genuine issue of fact existed concerning fraud and negligence claims that would void the settlement under section 1668. View "Belasco v. Wells" on Justia Law

In 2004, K-Con entered into a contract with the federal government to construct a Coast Guard building in Port Huron Michigan for $582,641. Once K-Con finished, the government imposed liquidated damages of $109,554 for tardiness of 186 days in completion. KCon sued, seeking remission of the liquidated damages on two grounds—that the contract’s liquidated-damages clause was unenforceable and that KCon was entitled to an extension of the completion date. KCon also requested additional compensation based on work performed in response to government requests that K-Con alleges amounted to contract changes. The Court of Federal Claims held that the contract’s liquidated damages clause was enforceable; that K-Con did not comply with the written-notice precondition for invoking the contract clause governing changes; and that K-Con’s claim for an extension on the completion date must be dismissed for lack of jurisdiction. The Federal Circuit affirmed. K-Con failed to comply with the changes clause, and its after-the-fact speculations about what would have happened had it complied do not create a genuine dispute of material fact regarding whether it should be excused for its failure. View "K-Con Bldg. Sys., Inc. v. United States" on Justia Law

During a highway paving project a storm caused recently applied primer to emulsify in rainwater. The oil splashed onto passing vehicles, causing damage. The vehicle owners brought claims against the State, which the State paid. A.M. Welles, Inc. (Welles), the general contractor on the job, reimbursed the State for what it paid to the vehicle owners. The State then sued Liberty Mutual Fire Insurance Co. (Liberty), the insurer for the job, seeking indemnification for the costs that Welles did not cover. Welles, in turn, sued the subcontractors for the project, Montana Materials, Inc., RSJ, Inc., and GLJ, Inc. (collectively, “Jensen”), seeking indemnification under the subcontract. The district court granted summary judgment for Jensen on Welles’s indemnification claim and dismissed the State’s action against Liberty for failure to prosecute. The Supreme Court vacated and remanded, holding that the district court (1) erred in denying Welles’s motion for summary judgment, as Welles was entitled to indemnification under the subcontract; and (2) abused its discretion by dismissing the State’s action against Liberty for failure to prosecute. Remanded. View "A.M. Welles, Inc. v. Mont. Materials, Inc." on Justia Law

Christopher Walton and Tammara Duhn hired Jacob Hatch and his construction company (collectively, Hatch) as the general contractor to build a custom home in a subdivision. Hatch drew up two proposed written contracts, but Walton and Duhn would not sign either one. Nevertheless, construction began. A dispute over what Walton and Duhn owed Hatch led Hatch to terminate his involvement in the project before the house was finished. Walton and Duhn sued Hatch for breach of contract, among other claims. The district court entered judgment in favor of Walton and Duhn and awarded damages. The Supreme Court reversed in part and affirmed in part, holding that the district court (1) erred in calculating the damages that Walton and Duhn suffered as a result of Hatch’s improper billing practices; (2) erred in finding liability and awarding damages for breach of an implied warranty that the home would be built in a skillful and workmanlike manner; and (3) did not abuse its discretion in denying Walton’s and Duhn’s application for attorney fees. View "Walton v. Hatch" on Justia Law

Property owner Crescent City Property Partners, L.L.C., and a builder, Greystar Development and Construction, LP, entered into a contract in March, 2002 for the construction of a mixed-use development in Lafayette. Alleging defects in the builder's performance, and pursuant to the arbitration clause in the construction contract, Crescent filed an arbitration claim against Greystar in 2008, also naming as a defendant Greystar's surety, American Manufacturers Mutual Insurance Company. In response, Greystar filed a third party demand against various subcontractors. The Supreme Court granted writs in consolidated cases to consider whether the court of appeal correctly vacated the arbitration award, which had been confirmed by the district court. The court of appeal vacated the award on the basis the arbitration panel, in applying a statute of peremption incorrectly, disturbed a vested right of the plaintiff and, thus, the panel violated the plaintiff's due process rights. The court of appeal found the arbitration panel's interpretation of the law placed an impossible burden on the plaintiff, a burden the panel deemed fundamentally unfair, thereby requiring vacatur of the arbitration panel's award. After its review, the Supreme Court found that the court of appeal essentially misinterpreted the laws concerning arbitration, and, thus, erred in failing to limit its review to the factors mandating vacatur articulated in La. Rev. Stat. 9:4210. In reversing the court of appeal's decision, the Court reiterated well-settled law that otherwise fairly and honestly obtained arbitration awards may not be overturned merely for errors of fact or law. View "Crescent Property Partners, LLC v. American Manufacturers Mutual Insurance Co." on Justia Law

FTR has constructed buildings for public entities for 15 years. In 1999, FTR submitted the winning bid of $7.345 million to construct a District school. During construction, FTR submitted approximately 150 proposed change orders (PCO). FTR claimed some were necessary because the District’s plans were inadequate or misleading. The District denied most of the PCOs on the grounds that the work was covered under the basic contract, the amounts claimed were excessive, or that a PCO was not timely under the contract. Construction was completed in 2001. Public Contract Code 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 court of appeal held that the trial court properly assessed penalties against District because it did not timely release retained funds; properly rejected the District's action under the False Claims Act, Government Code 12650; and properly assessed prejudgment interest. The court erred in its interpretation of a contract provision imposing time limitations to submit 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 "FTR Int'l, Inc. v. Rio Sch. Dist." on Justia Law