Justia Contracts Opinion Summaries

EdgeRock Development, LLC developed a planned unit development in Westfield, Indiana, comprising retail and residential projects. EdgeRock contracted with C.H. Garmong & Son, Inc. and Fox Contractors Corp. to develop the lots. When EdgeRock fell behind on payments, Garmong and Fox recorded construction liens on all five lots, including those sold to ZPS Westfield, LLC and a nonparty. The contractors sued EdgeRock for breach of contract and sought to foreclose the liens.The Hamilton Superior Court awarded the contractors most of the relief they sought, including foreclosure of the construction liens. The Indiana Court of Appeals reversed the foreclosure, concluding the liens were overstated as they were not limited to debts for improvements directly benefiting the properties to which the liens attached.The Indiana Supreme Court reviewed the case to address the validity and scope of the construction liens and the priority between the construction liens and First Bank Richmond’s mortgage lien. The court held that a construction lien secures only the debt for improvements directly benefiting the property to which the lien attaches. Therefore, the contractors can foreclose the liens on each property to recover only those amounts. The court also concluded that First Bank’s mortgage lien is senior to the construction liens for the amount loaned to satisfy Garmong’s prior construction lien but junior for the remaining amounts.The court affirmed the trial court’s judgment in part, reversed in part, and remanded for the trial court to amend the judgment consistent with its opinion. The court also noted that its holdings do not disturb the in personam judgments against EdgeRock on Garmong’s and Fox’s breach-of-contract claims. View "Edgerock Development, LLC v. C.H. Garmong & Son Inc" on Justia Law

Cashman Equipment Corporation, Inc. (Cashman) was contracted by Cardi Corporation, Inc. (Cardi) to construct marine cofferdams for the Sakonnet River Bridge project. Cashman then subcontracted Specialty Diving Services, Inc. (SDS) to perform underwater aspects of the cofferdam installation. Cardi identified deficiencies in the cofferdams and sought to hold Cashman responsible. Cashman believed it had fulfilled its contractual obligations and sued Cardi for breach of contract, unjust enrichment, and quantum meruit. Cardi counterclaimed, alleging deficiencies in Cashman's construction. Cashman later added SDS as a defendant, claiming breach of contract and seeking indemnity and contribution.The Superior Court denied SDS's motion for summary judgment, finding genuine disputes of material fact. The case proceeded to a jury-waived trial, after which SDS moved for judgment as a matter of law. The trial justice granted SDS's motion, finding Cashman failed to establish that SDS breached any obligations. SDS then moved for attorneys' fees, which the trial justice granted, finding Cashman's claims were unsupported by evidence and lacked justiciable issues of fact or law. The trial justice ordered mediation over attorneys' fees, resulting in a stipulated amount of $224,671.14, excluding prejudgment interest.The Rhode Island Supreme Court reviewed the case and affirmed the Superior Court's amended judgment. The Supreme Court held that the trial justice did not err in granting judgment as a matter of law, as Cashman failed to provide specific evidence of justiciable issues of fact. The Court also upheld the award of attorneys' fees, finding no abuse of discretion. Additionally, the Court determined that the attorneys' fees were not barred by the Bankruptcy Code, as they arose post-confirmation and were not contingent claims. View "Cashman Equipment Corporation, Inc. v. Cardi Corporation, Inc." on Justia Law

A contractor, Flintco, LLC, entered into a subcontract with Total Installation Management Specialists, Inc. (Total) for flooring work on a construction project at Oklahoma State University. Total was required to secure a performance bond from Oklahoma Surety Company (OSC). Flintco later supplemented Total's workforce due to delays and performance issues but did not notify OSC until five weeks after taking over the work.The Tulsa County District Court ruled in favor of Flintco, awarding damages against Total and OSC. OSC appealed, arguing that Flintco failed to meet the performance bond's conditions requiring a declaration of default and reasonable notice before assuming control of the work. The Court of Civil Appeals reversed the district court's judgment, finding that the notice requirement was a mandatory condition precedent, and Flintco's failure to provide timely notice relieved OSC of liability.The Supreme Court of the State of Oklahoma reviewed the case and agreed with the Court of Civil Appeals. The court held that the performance bond's notice requirement constituted a mandatory condition precedent. Flintco's failure to provide timely notice to OSC so it could exercise its performance options under the bond relieved OSC from liability. The court vacated the Court of Civil Appeals' opinion, reversed the district court's judgment, and remanded the case with instructions to enter judgment consistent with this decision. The trial court's judgments against Total were not affected by this decision. View "Flintco, LLC v Total Installation Management Specialists, Inc." on Justia Law

Neely, acting as his own general contractor, hired Grosvold to perform excavation work on his property under an oral contract. Grosvold worked from April to October 2021, but their relationship deteriorated, and Neely refused to pay for an invoice amounting to $55,858. Neely sent Grosvold a notice of alleged defects in the work, which Grosvold disputed. Grosvold then filed a complaint for breach of contract and prejudgment interest, while Neely counterclaimed for breach of contract, negligence, and construction defect.The District Court of the Third Judicial District in Anaconda-Deer Lodge County tried the case before a jury. The court refused to instruct the jury on Neely’s construction defect and negligence claims, reasoning that the evidence did not substantiate the work was done to a residence and that the case was strictly a breach of contract matter. The jury found Neely had breached the contract and awarded Grosvold $60,512.60 in damages. The court denied Grosvold’s request for prejudgment interest, finding the damages were not certain until the jury’s determination.The Supreme Court of the State of Montana reviewed the case. It affirmed the District Court’s decision not to instruct the jury on the construction defect claim, holding that the residential construction defect statute did not create an independent cause of action beyond breach of contract or tort. The court also affirmed the refusal to instruct the jury on negligence, finding that Neely’s substantial rights were not affected as the breach of contract instructions adequately covered the disputed subject matter. Finally, the court upheld the denial of prejudgment interest, concluding the amount of recovery was not capable of being made certain until the jury’s verdict. View "Grosvold v. Neely" on Justia Law

In 2005, Island Pointe, LLC contracted Complete Building Corporation (CBC) to construct a condominium project, Palmetto Pointe at Peas Island. CBC subcontracted Tri-County Roofing (TCR) for roofing and related work. In 2014-2015, Palmetto discovered construction defects and sued CBC, TCR, and others for negligence and breach of warranty. Palmetto received $6,800,000 in settlements, including $1,000,000 from CBC's insurer for a covenant-not-to-execute and $1,975,000 from four other defendants.The trial began in May 2019, and the jury found CBC and TCR liable for $6,500,000 in actual damages and $500,000 each in punitive damages. The trial court apportioned 5% liability to two other defendants, making CBC and TCR jointly and severally liable for the remaining 90% of actual damages. TCR sought setoff for the $1,000,000 payment and the settlements from the four other defendants. The trial court denied TCR's motion for setoff, except for partial amounts conceded by Palmetto.The South Carolina Supreme Court reviewed the case. It reversed the court of appeals' decision, holding that TCR is entitled to set off the full $1,000,000 paid by CBC's insurer. The court affirmed the lower court's decision regarding the settlements from Novus, Atlantic, H and A, and Cohen's, agreeing that the trial court reasonably allocated the settlement amounts. The case was remanded to the trial court for the calculation of the judgment against TCR. View "Palmetto Pointe v. Tri-County Roofing" on Justia Law

HIVE Construction, Inc. served as the general contractor for the construction of Masterpiece Kitchen, a restaurant. The contract required HIVE to follow specific architectural plans, including installing two layers of drywall on a wall separating the kitchen and dining area. Instead, HIVE installed one layer of drywall and one layer of combustible plywood without approval. A fire started within the wall, causing significant damage and forcing the restaurant to close. Mid-Century Insurance Company, as the property insurer and subrogee of Masterpiece Kitchen, paid for the damages and then sued HIVE for negligence, alleging willful and wanton conduct.The district court initially allowed Mid-Century to amend its complaint to include a breach of contract claim but later reversed this decision, requiring Mid-Century to proceed with the negligence claim. At trial, the jury found HIVE's conduct to be willful and wanton, awarding damages to Mid-Century. HIVE appealed, arguing that the economic loss rule barred the negligence claim. The Colorado Court of Appeals agreed, reversing the district court's decision and instructing a verdict in HIVE's favor.The Supreme Court of Colorado reviewed the case and concluded that the economic loss rule does not provide an exception for willful and wanton conduct. The court held that the rule barred Mid-Century's negligence claim because the duty HIVE allegedly breached was not independent of its contractual obligations. Consequently, the court affirmed the judgment of the Colorado Court of Appeals, upholding the application of the economic loss rule to bar the negligence claim. View "Mid-Century Ins. Co. v. HIVE Construction" on Justia Law

The defendant, Clough, Harbour & Associates LLP (CHA), agreed to design a new athletic field for the plaintiff, Trustees of Boston University (university). The contract included an express indemnification provision, which required CHA to indemnify the university for any expenses resulting from CHA's negligent design. A defect in CHA's design caused the university to incur expenses to fix the field. The university demanded indemnification from CHA, which CHA refused. More than six years after the field opened, the university sued CHA for breach of the indemnification provision.The Superior Court judge granted summary judgment in favor of CHA, relying on the tort statute of repose, which bars tort actions for damages arising from design defects in real property improvements six years after the improvement's opening. The judge concluded that the university's claim was barred by this statute. The university appealed the decision.The Supreme Judicial Court of Massachusetts reviewed the case. The court held that the tort statute of repose does not apply to the university's contract claim for indemnification. The court emphasized that the claim was based on an express contractual provision, not a tort duty imposed by law. The court distinguished between claims for breach of an implied warranty, which are barred by the statute of repose, and claims for breach of an express warranty or indemnification provision, which are not. The court reversed the Superior Court's decision and remanded the case for further proceedings. View "Trustees of Boston University v. Clough, Harbour & Associates LLP" on Justia Law

The Orange County Transportation Authority (OCTA) awarded a contract to OC 405 Partners Joint Venture (OC 405) for improvements to Interstate 405. OC 405 then awarded subcontracting work to Golden State Boring & Pipe Jacking, Inc. (GSB). However, the parties disagreed on the scope of the subcontract work and did not execute a written subcontract. OC 405 subsequently contracted with another subcontractor, leading GSB to file a lawsuit seeking benefit of the bargain damages, claiming OC 405 did not comply with Public Contract Code section 4107’s substitution procedures.The Superior Court of Orange County granted summary judgment in favor of OC 405 and other defendants, holding that GSB was not entitled to the protections of section 4107 because it did not meet the requirements of section 4100 et seq. Specifically, GSB was not a "listed subcontractor" in the original bid, and its proposed work did not exceed one-half of 1 percent of the prime contractor’s total bid, a threshold requirement under section 4104.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case. The court affirmed the lower court’s decision, concluding that section 4107’s substitution procedures did not apply to OC 405’s substitution of GSB. The court emphasized that the protections of section 4100 et seq. only apply to subcontractors whose proposed work exceeds the one-half of 1 percent threshold of the prime contractor’s total bid. Since GSB’s bid did not meet this threshold, it was not entitled to the protections under section 4107. The court also noted that the contractual provisions in the prime contract did not alter this statutory requirement. Thus, the judgment in favor of the defendants was affirmed. View "Golden State Boring & Pipe Jacking, Inc. v. Astaldi Construction" on Justia Law

Plaintiffs, E&I Global Energy Services, Inc. and E&C Global, LLC, sued Liberty Mutual Insurance Company for breach of contract and tort claims related to a construction project. The United States, through the Western Area Power Administration (WAPA), contracted with Isolux to build a substation, and Liberty issued performance and payment bonds for Isolux. After Isolux was terminated, Liberty hired E&C as the completion contractor, but E&I performed the work. Plaintiffs claimed Liberty failed to pay for the work completed.The United States District Court for the District of South Dakota granted summary judgment for Liberty on the unjust enrichment claim and ruled in Liberty's favor on all other claims after a bench trial. The court denied Plaintiffs' untimely request for a jury trial, excluded an expert witness report filed after the deadline, found no evidence of an assignment of rights between E&C and E&I, and ruled against Plaintiffs on their fraud, deceit, and negligent misrepresentation claims.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court held that the district court did not abuse its discretion in denying the jury trial request, as Plaintiffs failed to timely file the motion and did not justify the delay. The exclusion of the expert report was also upheld, as the district court properly applied the relevant factors and found the late report was neither substantially justified nor harmless. The court affirmed the district court's finding that there was no valid assignment of rights from E&C to E&I, meaning Liberty's promise to pay was to E&C, not E&I. The court also upheld the findings that Liberty did not have the intent to deceive or induce reliance, and that Bruce did not reasonably rely on Mattingly's statements. Finally, the court declined to address the unjust enrichment claim as Plaintiffs did not raise the argument below. The Eighth Circuit affirmed the district court's rulings in their entirety. View "E&I Global Energy Services v. Liberty Mutual Insurance Co." on Justia Law

James and Amber May hired RES Construction to build their home in Sioux Falls. RES subcontracted First Rate Excavate, Inc. to install the septic system and construct the foundation. The Mays alleged that the foundation was installed several feet below grade level, causing significant drainage and septic issues that damaged their home, yard, and neighboring properties. They sued First Rate for negligence. The circuit court dismissed the claim based on the economic loss doctrine, and the Mays appealed.The Circuit Court of the Second Judicial Circuit in Lincoln County, South Dakota, dismissed the Mays' negligence claim, citing the economic loss doctrine, which limits remedies for purely economic losses to those specified in a contract. The court reasoned that the Mays lacked privity of contract with First Rate and that their claims were barred by the six-year statute of limitations.The Supreme Court of the State of South Dakota reviewed the case. The court held that the economic loss doctrine should not be expanded beyond claims arising from transactions involving the sale of defective goods under the Uniform Commercial Code (UCC). The court noted that the doctrine is designed to prevent parties from circumventing contract remedies by seeking tort remedies for economic losses. Since the Mays' claim was based on negligence and not on a UCC transaction, the economic loss doctrine did not apply. Additionally, the court found that the lack of privity between the Mays and First Rate further precluded the application of the economic loss doctrine. The Supreme Court reversed the circuit court's dismissal and remanded the case for further proceedings. View "May v. First Rate Excavate" on Justia Law