Justia Contracts Opinion Summaries

Berkeley appealed the judgment against it in a construction dispute regarding a building on the Merced Campus. After the University denied Berkeley's claim for compensation for work performed, Berkeley filed suit alleging causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, and breach of the implied covenant of the correctness of the plans and specifications.The Court of Appeal held that the jury's findings were not fatally inconsistent and the verdict was not against the law; the trial court did not err in instructing the jury that specification 03300 of the contract constituted a performance specification, and Berkeley was required to exercise its skill and judgment in selecting the means, methods, and equipment necessary to meet the end result called for in the specification; there was no abuse of discretion or deprivation of a fair trial; Berkeley has not demonstrated any prejudicial error in the trial court's exclusion of evidence of the total cost method of calculating damages; and Berkeley has not established any reversible error in the trial court's award of mediation fees as costs. However, the court held that the expert witness fees were improperly included in the award of costs and therefore must be modified. The court otherwise affirmed the judgment. View "Berkeley Cement, Inc. v. Regents of the University of California" on Justia Law

Petitioners sought a writ of mandate and declaratory relief, alleging that the City of Monterey Park breached its duty under Labor Code section 1072 to award a 10-percent bidding preference only to contractors who declare in their bids they will retain existing employees for at least 90 days. The trial court held that there was no such duty and ruled in favor of the City.The Court of Appeal held that words "shall declare as part of the bid" in Labor Code section 1072, subdivision (a), mean the bidder must state in its bid whether it will retain the employees of the prior contractor for 90 days. If the public agency (or "awarding authority") gives the statutory preference to bidders who do not agree in their bids to retain the employees of the prior contractor for at least 90 days, a bidder who makes the commitment is not really getting a statutory preference. The court held that whether a variance is inconsequential is a question of fact, subject to review for substantial evidence, that is not properly decided on demurrer. Therefore, the court reversed and remanded with directions for the trial court to vacate its order sustaining the demurrer without leave to amend and to enter a new order overruling the demurrer. View "International Brotherhood of Teamsters v. City of Monterey Park" on Justia Law

The Court of Appeal affirmed the superior court's denial of JMS's petition for writ of administrative mandate seeking to set aside an administrative decision by the District that allowed a contractor to substitute another subcontractor in the place of JMS on a construction project. The court held that the hearing officer had jurisdiction to approve the request for substitution under Public Contract Code section 4107; neither substitution hearing nor the substitution decision affected a fundamental vested right; the hearing afforded JMS the due process required for a substitution hearing; substantial evidence supported the substitution decision; and thus the petition was properly denied. View "JMS Air Conditioning & Appliance Service, Inc. v. Santa Monica Community College District" on Justia Law

The owners of units in Sienna Court Condominiums, a newly-constructed 111-residential-unit Evanston property sued, alleging that the developer, TR, sold the units with latent defects that resulted in water infiltration and other conditions that rendered the individual units and common areas unfit for habitation. The complaint alleged breach of an express warranty and breach of an implied warranty of habitability against TR, the general contractor, the architect and engineering design firms, material suppliers and several subcontractors. TR and the general contractor were bankrupt. The unit owners obtained relief from the automatic bankruptcy stay. TR and the general contractor had two separate insurance policies, each providing coverage of $1 million per occurrence with $2 million aggregate limits. Plaintiffs had recovered approximately $308,000 from TR through a warranty escrow fund required by Evanston ordinance. Subcontractors and the material suppliers asserted that they were not subject to an implied warranty of habitabililty. The circuit court denied their motion to dismiss. The Illinois Supreme Court reversed, holding that a purchaser of a newly constructed home may not assert a claim for breach of an implied warranty of habitability against a subcontractor who took part in the construction of the home, where the subcontractor had no contractual relationship with the purchaser. View "Sienna Court Condominium Assoc. v. Champion Aluminum Corp." on Justia Law

The Second Circuit affirmed the district court's summary judgment dismissal of all claims in the Second Amended Complaint against defendants in an action stemming from construction projects with the U.S. Army Corps of Engineers. The court held that MES's claims failed to articulate any support for its accusations that Safeco breached its contractual obligations or engaged in bad faith or tortious conduct. The court noted that the claim that Safeco acted inappropriately by attending the cure meetings was particularly frivolous. In this case, MES failed to identify any good faith basis, in law or on the basis of the agreements at issue, for its assertion that Safeco had no right to take steps to meet its obligations under the surety bonds. The court sua sponte awarded Safeco double costs. View "M.E.S., Inc. v. Safeco Insurance Co. of America" on Justia Law

Shannon Bakke appeals a judgment in favor of Magi-Touch Carpet One Floor & Home, Inc. and denial of her motion to amend her complaint. Bakke entered into a contract with Magi-Touch for the installation of floor tiles, a shower base, and related products in a bathroom within Bakke's home. Magi-Touch arranged to have the shower base and tile installed by VA Solutions, LLC, an independent contractor. Bakke contended the shower door was improperly installed; the improper installation resulted in the shower door imploding, and the implosion caused damage to property in and around the shower requiring the bathroom door and trim to be repainted. Bakke argued the district court erred in concluding she could not pursue a claim against Magi-Touch because Magi-Touch was not liable for the acts of its independent contractor. Bakke also asserts the district court erred in denying, as futile, her motion to amend her complaint to assert a contract claim against Magi-Touch. Assuming Bakke properly asserted a claim for breach of the parties' contract, the North Dakota Supreme Court held the delegation of Magi-Touch's obligation to provide labor to VA Solutions did not preclude a cause of action against Magi-Touch for a breach of the contract. Further, the Court held the existence of the independent contractor did not relieve Magi-Touch of its obligation to perform under the terms of its contract with Bakke. In the context of a claim for a breach of the parties' contract, the amendment was not futile and should have been allowed. The Court affirmed as to all other issues, and remanded this case for further proceedings. View "Bakke v. Magi-Touch Carpet One Floor & Home, Inc." on Justia Law

The City of Olympia, Washington contracted with NOVA Contracting, Inc. to replace a deteriorating culvert. The contract contained a "notice of protest" provision, which was taken from the Washington Department of Transportation's "standard Specifications for Road, Bridge, and Municipal Construction (2012) manual. NOVA sued the City for breach of the implied covenant of good faith and fair dealing; the City moved to dismiss based in part on NOVA's filature to file a protest first before taking the City to court. The trial court dismissed NOVA's claim, but the Court of Appeals reversed. The Washington Supreme Court has addressed this written notice issue twice before; the Court of Appeals interpreted those holdings, however, as only applying to claims for cost of work performed and not claims for expectancy and consequential damages. The Supreme Court held the two prior cases applied even to claims of expectancy and consequential damages. Therefore, the Court reversed the appellate court and remanded this case for further proceedings. View "NOVA Contracting, Inc. v. City of Olympia" on Justia Law

Kinder filed suit against Manning, alleging that Manning breached a contract to build a pumping station. The Eighth Circuit affirmed the district court's judgment in favor of Manning, holding that Kinder committed the first material breach of contract by threatening to assess delay-related damages without any justification, interfering with the relationship between Manning and EarthTec, and failing to provide adequate assurances that Manning would be paid for its work. The court also held that the district court correctly found that Kinder wrongfully terminated the contract and that evidence at trial supported the damage award. View "Randy Kinder Excavating, Inc. v. JA Manning Construction Co." on Justia Law

A general construction contractor, S&P, filed suit against its secondary insurance provider, US Fire, after US Fire refused to cover damages S&P incurred when a courthouse construction project went awry. The Fifth Circuit affirmed the district court's grant of summary judgment to US Fire, holding that US Fire's policy allowed it to count the arbitration agreements as "Other Insurance." The court explained that an indemnity agreement fell under the plain language of the "Other Insurance" provision of US Fire's policy because it was a mechanism by which an insured arranged for funding of legal liabilities for which US Fire's policy also provided coverage. Under the reasoning of RSR Corp. v. International Insurance Co., 612 F.3d 851 (5th Cir. 2010), settlement proceeds resulting from an indemnity agreement also counted as "Other Insurance." The court also held that S&P failed to meet its burden to show allocation of the settlement proceeds between covered and noncovered damages. View "Satterfield and Pontikes Construction v. US Fire Insurance Co." on Justia Law

In this breach of contract case stemming from the failure to pay for labor and materials provided by a construction subcontractor (Petitioner) to a general contractor through six construction contracts, the Court of Appeals affirmed the judgments of the circuit court and the court of special appeals in favor of Respondents.The Court of Appeals held (1) where there has been an invocation of the Maryland Construction Trust Statute, there must be a showing that the statute applies to the contracts in dispute; (2) Md. Code Real Prop. 9-204(a) contains a requirement that the contracts be subject to the Maryland Little Miller Act or the Maryland Mechanics’ Lien Statute; and (3) Petitioner failed to demonstrate that the protections afforded by the Maryland Construction Trust Statute were applicable. View "C&B Construction, Inc. v. Dashiell" on Justia Law