Justia Construction Law Opinion Summaries

RICS executed a note secured by a mortgage on real estate. Meanwhile, TLA entered into a contract with RICS to provide architectural and engineering services for the project and recorded two documents related to its work on the project. Subsequently, TLA filed a petition to enforce its mechanics' lien. No claimant timely entered an appearance in TLA's mechanics' lien litigation to preserve the priority of their claims. Months later, Petra purchased the note and mortgage, which had not been recorded by the previous owner. Meanwhile, the superior court entered a consent order signed by RICS and TLS in the mechanics' lien litigation. RICS subsequently conveyed the property, and the court placed the property into receivership. Petra later filed a motion to file an answer and statement of claim out of time in the mechanics' lien proceedings. The court granted the motion, thereby restoring the mortgage's priority over TLA's mechanics' lien. The property was sold to Petra through a receivership action. The Supreme Court reversed the superior court's grant of Petra's motion, thereby restoring the priority of TLA's mechanics' lien, holding that the motion justice erred in determining that Petra's failure to file a timely statement of claim was the result of "excusable neglect." View "R.I. Constr. Servs., Inc. v. Harris Mill, LLC" on Justia Law

Plaintiff sold a parcel of land adjacent to a golf club to New South Properties (New South) for development as a residential community. New South hired Hunter Construction Group (Hunter) to prepare the parcel for construction. Hunter built erosion control structures and devices, including a silt collection basin. However, a dam Hunter constructed to form the silt collection basin ruptured, causing mud, water, and debris to flood the golf course. As a result of the damage to the golf course, Plaintiffs filed an action against New South, Apple Creek and Hunter, alleging negligence, nuisance, trespass, and violations of the Sedimentation Pollution Control Act (SPCA). The trial court granted summary judgment to Defendants on the SPCA claim. Plaintiffs appealed and withdrew their appeal against all defendants except Hunter. The court of appeals affirmed. Without considering the merits of Plaintiffs' appeal, the Supreme Court affirmed as modified, holding that because Hunter was never cited for a violation for section 113A-66 of the SPCA, Plaintiffs did not have standing to bring a civil action against Hunter pursuant to section 113A-66. View "Applewood Props., LLC v. New S. Props., LLC" on Justia Law

The issue before the Supreme Court centered on the grant of summary judgment in favor of Respondent Action Concrete Contractors, Inc. in a mechanic's lien foreclosure action. Owners Elvira Chappelear, Craig Chappelear, Premier Southern Homes, LLC, Henry G. Beal, Jr. and First Citizens Bank and Trust Co., Inc. argued on appeal there were material issues of fact and that the grant of summary judgment was inappropriate. The Supreme Court disagreed after its review of the trial court record and affirmed. View "Action Concrete v. Chappelear" on Justia Law

Prince was the general contractor for construction of an apartment building. Rybaltowski was an employee of a waterproofing company. His boss took Rybaltowski to the project site to perform an unpaid demonstration of the proposed caulking of windows. While Rybaltowski was at the site, a beam supporting masonry equipment fell on him. Less than an hour after the accident, Prince signed a subcontract with the waterproofing company. The insurance policy at issue was a Commercial General Liability Insurance policy with an exclusion from coverage for bodily injury to any contractor arising out of or in the course of the rendering or performing services of any kind or nature whatsoever by such contractor. “Contractor” was defined to include employees of subcontractors. The district court entered judgment in favor of the insurer, finding it had no duty to defend. The Seventh Circuit reversed and remanded, reasoning that the policy can be interpreted so that services are not provided until the contractor begins compensated work on the project. View "Atl. Cas. Ins. Co. v. Prince Contractors, Inc." on Justia Law

The Wicks Law requires public entities seeking bids on construction contracts to obtain separate specifications for three subdivisions of the work to be performed. Until 2008 when the law was amended to raise the threshold, the Wicks Law applied to contracts whose cost exceeded $50,000. The new, higher thresholds, unlike the old one, were not uniform throughout the State. Plaintiffs claimed, inter alia, that the amendments violated the Home Rule section of the State Constitution by unjustifiably favoring the eight counties with higher thresholds. Supreme Court dismissed the complaint, holding that Plaintiffs lacked standing to assert the Home Rule cause of action and that, in any event, the challenged amendments did not violate the Home Rule section because they "were enacted in furtherance of and bear a reasonable relationship to a substantial State-wide concern." The Appellate Division affirmed. The Court of Appeals affirmed as modified, holding (1) at least one plaintiff had standing to assert the Home Rule claim, but that claim failed on the merits; and (2) most of Plaintiffs' other claims failed, but four causes of action challenging the apprenticeship requirements as applied to out-of-state contracts should be reinstated. View "Empire State Chapter of Associated Builders & Contractors v. Smith" on Justia Law

Ground Control, LLC appealed the grant of summary judgment in favor of Capsco Industries, W.G. Yates & Sons Construction and Harrah's Entertainment, Inc. The parties contracted to build the "Margaritaville Spa and Hotel" in Biloxi. The circuit court held in part that Ground Control's failure to obtain a certificate of responsibility rendered its contract with Capsco null and void. After its review of the circuit court record, the Supreme Court agreed (and affirmed) that the lack of the certificate of responsibility rendered the contract null and void. However, the Court reversed the grant of summary judgment in part so that the circuit court could determine whether Ground Control was entitled to recover based on claims of unjust enrichment and/or quantum meruit. View "Ground Control, LLC v. Capsco Industries, Inc." on Justia Law

Plaintiffs served as the general contractor and the project developer for construction of a student housing complex at the University of Connecticut (UConn). UConn procured a commercial general liability (CGL) policy for the project, which insured Plaintiffs and their work. Defendant, American Motorists Insurance Company (AMICO), was the issuing insurer's successor in interest. UConn alleged that Plaintiffs breached the agreement with UConn, and Plaintiffs demanded that AMICO defend against UConn's claims. AMICO denied coverage. Plaintiffs settled their claims with UConn and then brought this action against Defendant for breach of contract and bad faith. The U.S. district court certified three questions of law for the Connecticut Supreme Court's consideration. The Court answered (1) allegations of unintended defective construction work by a subcontractor that damages nondefective property may trigger coverage under a CGL policy; (2) under the plain language of the insurance policy in this case, there is no cause of action based on AMICO's failure to conduct a discretionary investigation of claims for coverage; and (3) in global settlements encompassing multiple claims, the insured has the burden of proving that a pre-suit settlement is reasonable in proportion to claims that the insurer has a duty to defend. View "Capstone Bldg. Corp. v. Am. Motorists Ins. Co." on Justia Law

Guardian Builders, LLC, and Wayne Tackett (collectively "Guardian") appealed an order that denied its motion to vacate or modify an arbitration award entered in favor of Randy and Melissa Uselton. In April 2010, the Useltons sued Guardian alleging several claims arising from Guardian's construction of a house. Guardian subsequently filed a motion to compel arbitration, and the circuit court granted that motion. The arbitrator entered a final award in favor of the Useltons in the amount of $452,275.20. Upon review, the Supreme Court construed Guardian's motion to vacate or modify the arbitration award of as a notice of appeal under Rule 71B, thus effectuating the appeal of the award to the circuit court. However, because the clerk of the circuit court never entered the award as the judgment of that court, the circuit court's order denying Guardian's motion to vacate or modify was void. "Essentially, Guardian's appeal remains pending in the circuit court, awaiting further procedures under Rule 71B. Further, because Guardian has appealed from the arbitration award under Rule 71B, that award could not be entered as the judgment of the court under 71C. Thus, the circuit court lacked authority to enter a judgment on the award under Rule 71C and to award Better Business Bureau fees and facility costs in connection with the entry of that judgment." View "Guardian Builders, LLC v. Uselton " on Justia Law

SAMS contracted with Environs to provide architectural services for construction of a Homewood Suites hotel in Fort Wayne. Environs was to be paid a flat fee of $70,000. The contract stated: The Owner [SAMS] agrees that to the fullest extent permitted by law, Environs Architects/Planners, Inc. total liability to the Owner shall not exceed the amount of the total lump sum fee due to negligence, errors, omissions, strict liability, breach of contract or breach of warranty. The hotel was nearly complete when serious structural defects were discovered. The building department condemned the structure. Attempts to remedy failed; the hotel was demolished without opening. SAMS estimated its loss at more than $4.2 million. While SAMS’s suit against Environs was pending, the Indiana Supreme Court held that the “economic loss rule” applies to construction contracts under Indiana law: a party to a contract cannot be liable under a tort theory for any purely economic loss caused by negligent performance of the contract, absent any personal injury or damage to other property. The district court applied the rule to grant summary judgment rejecting SAMS’s negligence claim and held that SAMS’s recovery on its breach of contract claim would be limited to $70,000. The Seventh Circuit affirmed. View "Sams Hotel Grp., LLC v. Environs, Inc." on Justia Law

Compass Construction and First Baptist Church were named as defendants in an action arising from a construction accident. Ultimately, First Baptist prevailed against the plaintiff in the main action and on its cross-claim for indemnity against Compass. First Baptist was awarded attorneys fees as part of its indemnity claim, but the parties disagreed about the appropriate hourly rate at which the fee for First Baptist's attorney should be calculated. In the main action, First Baptist's insurance company assigned an attorney to represent First Baptist. The attorney had a written fee agreement with the insurance company providing that attorney would be paid $170 per hour. In an alternative fee recovery clause, however, the agreement provided that if anyone other than the insurance company was required to pay attorney's fees, the attorney's hourly rate would be $300. The trial court calculated the award at the higher rate. The court of appeal reversed. The Supreme Court reversed, holding that the alternative fee recovery clause was valid. Remanded for reinstatement of the judgment awarding attorney's fees. View "First Baptist Church of Cape Coral, Fla., Inc. v. Compass Constr., Inc." on Justia Law