Justia Construction Law Opinion Summaries

A.E.M. Electric Services Corporation, a general contractor, contracted with Transtar Electric, Inc., a subcontractor, to provide electrical services for the installation of a pool at Holiday Inn. A.E.M. did not pay Transtar for its last three invoices because the owner of the project had failed to pay A.E.M. for the work performed by Transtar. A.E.M. alleged that the contract between the parties, which used the phrase “receipt of payment by contractor from the owner for work performed by subcontractor is a condition precedent to payment by contractor to subcontractor for that work”, was sufficient to establish a pay-if-paid payment provision. The court of appeals concluded that the payment provision in the contract was not specific enough to show that both parties understood and agreed that the risk of the owner’s nonpayment would be borne by Transtar instead of A.E.M. The Supreme Court reversed, holding that the use of the term “condition precedent” was an explicit statement of the parties’ intent to transfer the risk of the project owner’s nonpayment from A.E.M. to Transtar. View "Transtar Elec., Inc. v. A.E.M. Elec. Servs. Corp." on Justia Law

Ewing Construction Company entered into a contract with a school district to serve as general contractor on a project. The school district later filed suit against Ewing for faulty construction. Ewing tendered defense of the underlying suit to Amerisure Insurance Company, Ewing's insurer under a commercial package policy that included commercial general liability coverage. Amerisure denied coverage, and Ewing filed suit in federal district court seeking a declaration that Amerisure breached its duty to defend and indemnify Ewing for damages awarded in the underlying suit. The district court granted summary judgment for Amerisure, concluding that the policy’s contractual liability exclusion applied to exclude coverage because Ewing assumed liability for its own construction work pursuant to the contract such that it would be liable for damages arising out of its defective work. On appeal, the court of appeals certified questions to the Texas Supreme Court, which answered that “a general contractor that enters into a contract in which it agrees to perform its construction work in a good and workmanlike manner, without more specific provisions enlarging this obligation, does not ‘assume liability’ for damages arising out of the contractor’s defective work so as to trigger the contractual liability exclusion.” View "Ewing Constr. Co., Inc. v. Amerisure Ins. Co." on Justia Law

Ayer Properties, LLC (Ayer) purchased and converted a building into condominiums. Trustees of the Market Gallery Condominium Trust (trustees) filed an action against Ayer seeking damages stemming from Ayer’s negligent construction of elements of the building. A superior court judge found Ayer was negligent in its construction of window frames, masonry, and roof. However, the judge concluded that the economic loss rule precluded the trustees from recovering for damage resulting from the defective masonry work because it did not cause damage to any individual units. The Supreme Judicial Court (1) affirmed the judge’s decision as to the window frames and roof and remanded for entry of an order awarding additional damages for the negligently constructed masonry; but (2) reversed the judge’s decision to reduce the repair and replacement damages by twenty percent and remanded for entry of judgment in the full amount of damages established at trial. View "Wyman v. Ayer Props., LLC" on Justia Law

Moeser was a commercial loan officer at a Milwaukee bank and, in 2004, prepared a presentation on behalf of co-conspirator Woyan for a $790,000 construction loan. Woyan operated PARC, which planned to build townhouses. Other conspirators included the project’s manager, architect, and real estate agent. Moeser told his superiors that the project’s land would serve as collateral and that PARC would provide the land up front. The bank approved the loan. Before closing, Moeser learned that Woyan did not own the land and did not have the funds to purchase it. Rather than informing his superiors, Moeser loaned Woyan $30,500 to purchase the land; Woyan paid Moeser back, plus $15,000 in interest, using funds from the loan’s initial disbursement of $111,299. Although Moeser learned that the project was not progressing and that disbursements were being used for other purposes, he continued to deceive his superiors. The project was never completed and PARC defaulted on its loan. Three contractors and a lumber supplier were never fully paid. The bank foreclosed. Moeser was charged with bank fraud, corrupt acceptance of money, fraud of a financial institution by an employee, and making false statements during an investigation. Moeser and his co-defendants pleaded guilty to conspiracy to commit bank fraud, 18 U.S.C. 1344. The district court gave Moeser a below-guidelines sentence of two years’ probation, which Moeser did not appeal, but found him jointly and severally liable for full restitution. The Seventh Circuit affirmed, rejecting an argument that he should be liable for a lesser share. View "United States v. Moeser" on Justia Law

In 2006, the Federal Bureau of Prisons issued a Request for Proposals for the “design-build” construction of a federal correctional institution. The project involved a “cut-to-fill” site, meaning that the ground had to be leveled by excavating materials from one area of the site and using those materials to fill lower areas. Based on information in the solicitation documents and prior experience, BH believed the New Hampshire Department of Environmental Sciences would approve a permit for a one-step-cut-to-fill construction plan and calculated its bid price, $238,175,000, accordingly. The contract provided liquidated damages of $8,000 for each day completion was overdue. The NHDES rejected the application. BH advised the government of the implications of NHDES restrictions, but did not refuse to proceed or request that the government intervene with the NHDES. According to BH, the restrictions were contrary to generally accepted industry practice. Upon completion of cut-to-fill operations, BH submitted a Request for Equitable Adjustment, seeking $7,724,885 for excess costs. The Contracting Officer and the Claims Court rejected the request, finding that the Permits and Responsibilities clause placed the burden of obtaining and complying with state and local permits on BH “without additional expense to the Government;” that BH had not alleged violation of the implied duty of good faith; and that, because the government did not control the NHDES, there was no basis for imposing liability for constructive change. The Federal Circuit affirmed.View "Bell/Heery v. United States" on Justia Law

This case arose out of plaintiff Ferguson Fire's efforts to obtain payment for materials it supplied to defendant Preferred Fire Protection, LLC for defendant Immedion's data center. In 2007, Immedion, a telecommunications company, hired Rescom, L.L.C. to be the general contractor for improvements planned for its data center on property Immedion leased in Greenville. Rescom, in turn, hired Preferred Fire, a fire sprinkler company, as a subcontractor. In addition, Immedion directly hired Preferred Fire under a separate contract to install a special "pre-action" fire suppression system1 in its data center. To complete this work, Preferred Fire purchased materials from Ferguson Fire. Ferguson Fire began delivering materials to Preferred Fire in August, 2007, and the deliveries continued through October. In September, while its deliveries were in progress, Ferguson Fire sent a "Notice of Furnishing Labor and Materials" to Immedion advising it in relevant part that it had been employed by Preferred Fire to deliver labor, services, or materials with an estimated value of $15,000.00 to Immedion's premises. The Notice of Furnishing advised that it was being given as "a routine procedure to comply with certain state requirements that may exist," and that it was not a lien, nor any reflection on Preferred Fire's credit standing. Immedion paid Preferred approximately half of the contract price for installation of the system before receiving Ferguson Fire's Notice of Furnishing. After receiving the Notice, Immedion issued two additional checks to Preferred Fire for the unpaid balance of the contract price. Immedion paid everything it owed to Rescom, and it also paid its contractor Preferred Fire in full under the separate contract for the fire suppression system. However, Preferred Fire never paid Ferguson Fire for the materials it furnished. Ferguson brought a mechanic's lien foreclosure action against Immedion and Preferred Fire. Ferguson Fire contended (and the Supreme Court agreed) that the Court of Appeals erred in adding requirements to S.C Code Ann. 29-5-40 (2007) (governing a notice of furnishing) that were not in the statute itself and in concluding Ferguson Fire did not establish an effective lien upon which a foreclosure action could be premised. The Supreme Court reversed and remanded for further proceedings. View "Ferguson Fire v. Preferred Fire" on Justia Law

The Project area includes Treasure Island, 404 acres of landfill placed on former tidelands in San Francisco Bay, plus Yerba Buena Island, an adjacent, 160-acre, natural rock outcropping. Treasure Island and the causeway to Yerba Buena Island were constructed in the 1930s for the Golden Gate Exposition. During World War II, the area was converted to a naval station, which operated for more than 50 years. Conditions include aging infrastructure, environmental contamination, deteriorated buildings, and impervious surfaces over 65 percent of the site. In 2011, after more than a decade of planning, study, and input, the board of supervisors approved the Project, amended the general plan and code maps and text, and approved policies and standards for the redevelopment. The Environmental Impact Report (EIR) envisions a new, mixed-use community with about 8,000 residential units (about 25 percent designated as affordable units); up to 140,000 square feet of commercial and retail space; about 100,000 square feet of office space; restoration of historic buildings; 500 hotel rooms; utilities; 300 acres of parks, playgrounds, and public open space; bike and transit facilities; and a new ferry terminal and intermodal transit hub. Construction would be phased over 15-20 years. CSTI unsuccessfully challenged the EIR’s approval under the California Environmental Quality Act, Pub. Res. Code 21000. The court of appeal affirmed, rejecting an argument that the EIR should have been prepared as a program EIR, not a project-level EIR. Opponents claimed that there was insufficient detail about matters such as remediation of hazardous materials, building and street layout, historical resources and tidal trust resources, for “project-level” review. View "Citizens for a Sustainable Treasure Island v. San Francisco" on Justia Law

Defendant, Suzynne D. Cumminngs and S.D. Cummings & Co., PC, appealed a Superior Court order awarding $44,403 to plaintiffs, Robert Audette and his company, H&S Construction Services, LLC (H&S), for breach of contract. Defendants provided various accounting and business services to Audette and his then-partner, Paul Fogarty, including helping them to start their construction business partnership, as well as preparing tax returns for both the business and Audette and Fogarty personally. In 2007, defendants helped Audette and Fogarty dissolve their partnership. One of the final acts defendants worked on for H&S was the placement of a mechanic's lien on a property on which H&S worked: the municipality halted construction on the project when H&S was approximately ninety-five percent complete. The lien placed on the property was for $44,403. Ultimately, plaintiffs’ 120-day statutory lien had not been timely secured or recorded, therefore it had lapsed. Plaintiffs brought suit against defendants in November 2009 for failing to secure the lien. The trial court found for plaintiffs and awarded damages in the amount of $44,403. Finding no error in the Superior Court's judgment, the Supreme Court affirmed. View "Audette & v. Cummings" on Justia Law

Defendants, two architectural firms, were the sole entities that provided architectural services for a collection of condominium units in San Francisco. The homeowners association sued several parties involving in the construction of the condominiums, including Defendants, alleging that negligent architectural design work performed by Defendants resulted in several defects. The trial court sustained a demurrer in favor of Defendants, determining that because the final decision regarding how the homes would be built rested with the owner, Defendants owed no duty to the future condominium owners. The court of appeal reversed, concluding that, under both the common law and the Right to Repair Act, Defendants owed a duty of care to the homeowners in this case. The Supreme Court affirmed, holding (1) an architect owes a duty of care to future homeowners in the design of a residential building where the architect is a principal architect on the project, and the duty of care extends to such architects even when they do not actually build the project or exercise ultimate control over construction; and (2) the complaint int his case sufficiently alleged the causal link between Defendants’ negligence and the condominium association’s injury. View "Beacon Residential Cmty. Ass’n. v. Skidmore, Owings & Merrill" on Justia Law

The Fillers planned to demolish an unused Chattanooga factory. They knew the site contained asbestos, a hazardous pollutant under the Clean Air Act. Environmental Protection Agency regulations require removal of all asbestos before any demolition. Asbestos materials must be wetted, lowered to the ground, not dropped, labeled, and disposed of at an authorized site. Fillers hired AA, a certified asbestos surveying company, which estimated that it would cost $214,650 to remove the material safely. Fillers hired Mathis to demolish the factory in exchange for salvageable materials. Mathis was required to use a certified asbestos contractor. Mathis applied for an EPA demolition permit, showing an estimated amount of asbestos far less than in the AA survey. The agency’s asbestos coordinator contacted Fillers to verify the amount of asbestos. Fillers did not send the survey, but provided a revised estimate, far less than the survey’s estimate. After the permit issued, the asbestos contractor removed “[m]aybe, like, 1/100th” of the asbestos listed in the AA survey. Temporary laborers were hired, not equipped with protective gear or trained to remove asbestos. Fillers supervised. The work dispersed dust throughout the neighborhood. An employee of a daycare facility testified that the children were unable to play outside. Eventually, the EPA sent out an emergency response coordinator and declared the site an imminent threat. Mathis and Fillers were convicted of conspiracy, 18 U.S.C. 371, and violations of the Clean Air Act, 42 U.S.C. 7413(c). Fillers was also convicted of making a false statement, 18 U.S.C. 1001(a)(2), and obstruction of justice, 18 U.S.C.1519. The district court sentenced Mathis to 18 months’ imprisonment and Fillers to 44 months. The Seventh Circuit affirmed.View "United States v. Mathis" on Justia Law