Justia Construction Law Opinion Summaries

A contractor entered into a public works contract to modernize a building at a Santa Clara County community college. Will was the subcontractor for the heating, ventilation, and air conditioning (HVAC) work. The subcontract provided that the project was to be built according to the specifications of the prime contract. The subcontract and general contract did not specify whether Will was required to fabricate any material necessary to complete the HVAC work. The subcontract required Will to “pay not less than the [applicable prevailing wage] to all laborers, workmen, and mechanics employed by him at the project site.” California’s prevailing wage law generally requires that workers employed on public works be paid the local prevailing wage for work of a similar character. (Lab. Code,1771.) Since 1991, Will has fabricated materials at a permanent, offsite facility it operates in Hayward. An employee of Will complained to the Department of Industrial Relations, Division of Labor Standards Enforcement alleging he should have been paid prevailing wages for work related to the project, involving the fabrication of sheet metal at the Hayward facility. DLSE issued a civil wage and penalty assessment. The Department of Industrial Relations reversed, in favor of Will. The trial court reversed. The court of appeal held that offsite fabrication is not covered by the prevailing wage law if it takes place at a permanent, offsite manufacturing facility and the location and existence of that facility is determined wholly without regard to the particular public works project. View "Sheet Metal Workers’ Int'l. Ass'n v. Duncan" on Justia Law

Carnell, a "minority-owned" corporation, filed suit against the Housing Authority and Blaine based on claims of race discrimination, retaliation, and breach of contract. The court held that a corporation can acquire a racial identity and establish standing to seek a remedy for alleged race discrimination under Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d, but that the district court properly dismissed one of the defendants from liability on plaintiff's race discrimination claims; the district court abused its discretion in permitting the use of particular impeachment evidence, which should have been excluded as unfairly prejudicial under Federal Rule of Evidence 403; and the district court properly reduced certain damages awarded to plaintiff on its contract claims, but decided that the strict notice requirements of the Virginia Public Procurement Act, Virginia Code 2.2-4300 through 4377, required the court to narrow further the scope of recoverable contract damages. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings.View "Carnell Construction Corp. v. Danville RHA" on Justia Law

Developer obtained a loan from Bank to construct a commercial and condominium project. Bank secured its loan with two deeds of trust, the first of which attached before construction began on the project. Developer failed to pay the general contractor (Contractor) several million dollars for the project, and after Developer had sold many of the units, Contractor recorded a mechanics’ lien against the project. Contractor then sought to foreclose on its lien against Developer, the unit owners, and their lenders. The Owners and Lenders contested the foreclosure, arguing that they were equitably subrogated to Bank’s first deed of trust and thus had priority over Contractor’s mechanics’ lien. The trial court concluded that Contractor’s lien had priority. The Supreme Court reversed, holding (1) Ariz. Rev. Stat. 33-992(A), which gives mechanics’ liens priority over liens recorded after construction begins on real property, does not preclude assignment by equitable subrogation of lien that attached before construction began on the project; and (2) when a single mortgage burdens multiple parcels, a third party may be entitled to equitable subrogation when that party has paid a pro rata amount of the obligation and obtained a full release of the parcel at issue from the mortgage. Remanded. View "Weitz Co., LLC v. Heth" on Justia Law

A Homeowner contracted with a Builder to build a home on property owned by the Homeowner. The Builder contracted with a Plumber to put in the plumbing at the house. After the home was completed, the Builder and the Homeowner sued the Plumber for damages allegedly caused by plumbing leaks, alleging breach of contract, breach of express warranty, and negligence. The trial court granted summary judgment for the Plumber, reasoning (1) the Homeowner could not recover contract damages because it was not a party to the plumbing subcontract, nor could the Builder recover contract damages because it had not suffered any compensable damage; and (2) the plaintiffs did not have a negligence claim because they did not allege violation of any tort duty independent of the contract. The Supreme Court reversed, holding that the court of appeals erred in concluding that the pleadings and summary judgment evidence negated the existence of a negligence claim. View "Chapman Custom Homes, Inc. v. Dallas Plumbing Co." on Justia Law

At issue in this case was whether Washington State courts have jurisdiction over a civil case arising out of a contract in which the tribal corporation waived its sovereign immunity and consented to jurisdiction in Washington State courts. The Washington Supreme Court held that it did not infringe on the sovereignty of the tribe to honor its own corporation's decision to enter into a contract providing for jurisdiction in Washington State courts. View "Outsource Servs. Mgmt. v. Nooksack Bus. Corp." on Justia Law

After leaving Gensler, an architectural firm with projects throughout the world, where he had been a Design Director, Strabala opened his own firm, 2Define Architecture. Strabala stated online that he had designed five projects for which Gensler is the architect of record. Gensler contends that Strabala’s statements, a form of “reverse passing off,” violated section 43(a) of the Lanham Act, 15 U.S.C.1125(a). The district court dismissed, ruling that, because Strabala did not say that he built or sold these structures, he could not have violated section 43(a), reading the Supreme Court decision Dastar Corp. v. Twentieth Century Fox (2003), to limit section 43(a) to false designations of goods’ origin. The Seventh Circuit vacated, reasoning that Gensler maintains that Strabala falsely claims to have been the creator of intellectual property. View "M. Arthur Gensler, Jr. & Assocs., Inc. v. Strabala" on Justia Law

The Developer converted a vacant building into a residential condominium by gutting and refitting it. The Developer purchased Commercial Lines Policies covering bodily injury and property damage from Nautilus, covering periods from June 1998 through June 2000. The policies define occurrence as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions,” but do not define accident. The policies exclude damage to “that particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the ‘property damage’ arises out of those operations;” eliminate coverage for damage to “that particular part of any property that must be restored, repaired or replaced because ‘your work’ was incorrectly performed on it;” and contain an endorsement entitled “Exclusion—Products-Completed Operations Hazard.’ Construction was completed in 2000; the Developer transferred control to a board of owners. By May 2000, one homeowner was aware of water damage. In 2005, the Board hired a consulting firm, which found that the exterior brick walls were not fully waterproofed and concluded that the deterioration had likely developed over many years, even prior to the condominium conversion, but that the present water penetration was the result of inadequate restoration of the walls. The Board sued the Developer. Nautilus denied coverage and obtained a declaratory judgment. The Seventh Circuit affirmed, reviewing the policy and finding that the shoddy workmanship, of which the board complained, was not covered by the policies; that Nautilus did not unduly delay pursuing its declaratory suit; and that the alleged damage to residents’ personal property occurred after the portions of the building were excluded from coverage.View "Nautilus Ins. Co. v. Bd. of Dirs. of Regal Lofts Condo Ass'n" on Justia Law

Appellant-homeowners filed a complaint against Respondent-contractor for negligence and breach of warranty arising from construction defects in their homes. After a trial, the jury awarded verdicts for each homeowner. Appellants and Respondent subsequently filed motions for costs and attorney fees, which the district court denied. The Supreme Court (1) affirmed the district court’s order denying Appellants’ motion for a new trial for attorney misconduct, and (2) affirmed the district court’s denial of costs or attorney fees to Appellants, but reversed the court’s order as it related to Respondent’s motion for costs and attorney fees because the court failed to apply the full, applicable legal analysis in this instance. Remanded.View "Gunderson v. D.R. Horton, Inc." on Justia Law

In 2008, Plaintiff purchased a home in Bar Harbor, Maine from Defendants for $2.9 million. After his purchase, Plaintiff spent in excess of $1.5 million in repairs to the property. Plaintiff brought suit against Defendant to recover damages for the repairs, alleging, among other claims, breach of contract, fraud, and negligent misrepresentation. A federal district court entered summary judgment in favor of Defendants, concluding (1) Maine’s implied warranty of habitability did not apply under the circumstances of this case, and Defendants had no duty of disclosure; and (2) Defendants were not entitled to attorney’s fees. The First Circuit affirmed, holding that the district court (1) properly granted summary judgment for Defendants on Plaintiff’s breach of contract, fraud, and negligent misrepresentation claims; and (2) properly entered judgment on the record for Plaintiff on Defendants’ counterclaim for attorney’s fees. View "Thompson v. Miles" on Justia Law

The respondents, two developers and an architectural firm, Stevens & Wilkinson of South Carolina, Inc. (S&W), entered into a Memorandum of Understanding (MOU) with the City of Columbia as part of a larger project team to develop a publicly-funded hotel for the Columbia Metropolitan Convention Center. The City eventually abandoned its plan under the MOU, and the respondents brought suit on several causes of action including breach of contract and equitable relief. The City moved for summary judgment arguing the MOU was not a contract and therefore the contract claims failed. The circuit court agreed and, rejecting the equitable claims as well, granted summary judgment in favor of the City. The respondents appealed and the court of appeals affirmed in part and reversed in part. The Supreme Court reversed. Because the MOU was comprised of agreements to execute further agreements, there was no meeting of the minds on numerous material terms which had not yet been defined. Accordingly, the court of appeals was reversed with respect to that portion of the court's judgment; the Supreme Court held the MOU was unenforceable as a matter of law. The Supreme Court agreed with the circuit court and reinstated its judgment in favor of the City. View "Stevens & Wilkinson of South Carolina, Inc. v. City of Columbia" on Justia Law