Justia Contracts Opinion Summaries

In February 1995, the State executed a contract with Perini Corporation to design and build South Woods in Bridgeton (the Project), a twenty-six building medium- and minimum-security correctional facility. Perini subcontracted with L. Robert Kimball & Associates, Inc. as the architect and engineer. Defendant Natkin & Company was designated the principal contractor for heating, ventilation, and air conditioning (HVAC). The design that Kimball provided to Perini included an underground HTHW distribution system to serve the entire Project. It also included a central plant from which the hot water was distributed to the various buildings that comprised the Project. Perma-Pipe, Inc. manufactured the underground piping used in the HTHW system. Natkin furnished and installed the underground piping system and the boilers and heat exchangers housed in the central plant. Defendant Jacobs Facilities, Inc. (formerly known as CRSS Constructors, Inc.), was retained by the State to provide construction oversight services. In 2008, the State filed a complaint against Perini, Kimball, Natkin, Jacobs, and Perma-Pipe in which it alleged that the HTHW system failed in March 2000, and on several subsequent occasions, and that these failures were caused by various defects including design defects, defective site preparation for the pipes, defective pipes, and deficient system design. The State asserted breach of contract against Perini, negligence and professional malpractice against Kimball, negligence and breach of contract against Natkin, and breach of contract against Jacobs. Against Perma-Pipe, the State asserted a claim under the New Jersey Products Liability Act (PLA), as well as breach of implied warranties, negligence, and strict liability in tort. All defendants moved for summary judgment, arguing that the Project was substantially complete well before April 28, 1998, and that, therefore, the statute of repose barred the State's complaint. The Appellate Division reversed the orders granting summary judgment in favor of defendants Perini, Kimball, Natkin, and Jacobs. The panel held that the statute of repose was triggered when defendants substantially completed their work on the entire project, no earlier than May 1, 1998, the date when the minimum-security unit and garage were certified as substantially complete. After its review, the Supreme Court held that the statute of repose does not begin to run on claims involving an improvement that serves an entire project (including those parts constructed in multiple, uninterrupted phases) until all buildings served by the improvement have been connected to it. In addition, the Court held that the statute of repose did not apply to claims relating solely to manufacturing defects in a product used in the HTHW system. View "New Jersey v. Perini Corporation" on Justia Law

Shortly before the collapse of the housing market, the Gavras, Agam, and Cohen formed a partnership to purchase, subdivide, and build two or three houses for resale in Los Altos Hills. They purchased and subdivided the property into three lots, but financial issues and personality conflicts derailed their plans. Between 2009 and 2011, they sold the vacant lots, losing close to $1.3 million on the project. In 2009, Agam and Cohen sued the Gavras for breach of the Partnership Agreement and breach of their fiduciary duties to the partnership. The Gavras filed a cross-complaint alleging breach of contract. Cohen reached a settlement with the Gavras and the cross-actions between Agam and the Gavras proceeded to trial. The court rejected the Gavras’ breach of contract claim and concluded they had breached both the Partnership Agreement and their fiduciary duties. The court awarded Agam more than $700,000 in reliance damages on the breach of contract claim, no damages on the breach of fiduciary duty claim, and about $245,000 in attorney fees. The court of appeal affirmed, rejecting the Gavras’ argument the trial court misallocated the burden of proof on Agam’s breach of contract claim and challenge to the sufficiency of the evidence. View "Agam v. Gavra" on Justia Law

Realtor Willis planned Southgate, involving the purchase of 68 acres on St. Croix, re-zoning, subdivision, building infrastructure, and selling individual lots. Willis worked with defendants Cheng and Dubois and their entities (OMEI, Ocean View) for financing, but the defendants did not actually intend to develop the property. Pollara, a 47-year veteran of the construction industry, was hired to create the subdivision’s entrance. Ultimately Cheng and Dubois stopped paying Pollara and locked him out of his site office. Pollara was never paid for repair work to the roadway after flooding. Defendants, standing on both sides of the financing, refused any extension of the financing terms; they withheld their consent to selling the land at a profit to a buyer whom Willis had found. They caused Ocean View to foreclose, acquiring the property free of Willis’s and Pollara’s interests. The jury found that Ocean View and Cheng had made intentional misrepresentations and that OMEI had made negligent misrepresentations and that Dubois had made negligent misrepresentations with respect to the building permit and proposals for the development plan, and intentional misrepresentations as to the other three subjects. The jury awarded Pollara compensatory damages of $391,626 from all of the defendants and punitive damages of $90,000 against Cheng. The Third Circuit affirmed. View "Frank C Pollara Grp. LLC v. Ocean View Inv. Holding, LLC" on Justia Law

Arch Specialty Insurance Company appealed the grant of summary judgment in favor of Amerisure Mutual Insurance Company. In 2006, Amerisure issued a Texas Commercial Package Policy to Admiral Glass & Mirror Co. The policy afforded coverage in excess of any coverage afforded by a controlled insurance program policy. Arch issued an Owner Controlled Insurance Program (“OCIP”) policy to Endeavor Highrise, LP and its contractors and subcontractors for bodily injury and property damage arising out of construction of the Endeavor Highrise. Admiral was a subcontractor insured under the OCIP policy. Endeavor sued Admiral and others for faulty work. Amerisure tendered the lawsuit to Arch as the primary insurer. Prior to Arch accepting the defense, Amerisure incurred $23,879.27 in defense fees. In April 2012, Arch withdrew from defense of the Endeavor lawsuit asserting that attorneys’ fees, defense costs, and settlements of $2,000,000.00 from defending Admiral and other subcontractor defendants exhausted policy limits. Amerisure took over the defense and incurred additional fees and costs of $114,957.14 before settling the claims against Admiral. In total, Arch paid a settlement of $1,555,000.00 and defense costs of $159,543.15 under the general coverage limit of the OCIP, and paid settlements totaling $1,472,032.61 and defense costs of $527,967.36 under the products-completed operations coverage of the OCIP policy. Amerisure sued Arch in Texas state court for breach of contract, contending that Arch wrongfully refused to defend and indemnify Admiral. Amerisure argued on appeal that the term “expenses” in the Supplementary Payments provision did not include attorneys’ fees and other costs of defense. It also argued that, even if “expenses” includes defense costs, the effect of the statement “All other terms and conditions of this Policy remain unchanged” read together with the language that the duty to defend expires when “we have used up the [policy limits] in the payment of judgments or settlements” means that the policy limits are eroded only by payment of “judgments or settlements,” not defense costs. For its part, Arch argued that “expenses” included defense costs and that the endorsement controlled over any contrary language such that it converts this policy into an eroding policy. The Fifth Circuit agreed with Arch, concluding that the endorsement transformed the policy into an “eroding limits” policy. The Court affirmed the district court’s judgment regarding the duty to indemnify, reversed the district court’s judgment regarding the duty to defend, and rendered judgment for Arch. View "Amerisure Mutual Ins. Co. v. Arch Specialty Ins. Co." on Justia Law

Robert Lang and his construction business (collectively, “Lang”) contracted to sell Dan Ryan Builders, Inc. (“Dan Ryan”) all the lots in a housing development Lang was planning to build. When cracks appeared in the basement slab and foundation walls of a partially constructed house on one of the lots Dan Ryan had purchased, the parties amended their agreement. After further problems developed in the construction of the homes, Dan Ryan filed this lawsuit against Lang seeking monetary damages for breach of contract. After a bench trial, the district court entered judgment in favor of Dan Ryan and ordered Lang to pay Dan Ryan limited damages on the contract claim. Dan Ryan appealed, seeking additional damages. The Fourth Circuit affirmed, holding that the district court did not err in its award of damages. View "Dan Ryan Builders, Inc. v. Crystal Ridge Dev., Inc." on Justia Law

In 2011, the Town of Middletown issued an invitation for bids on a drainage improvement project. Two contractors submitted bids, including HK&S Construction Holding Corp., which provided the lowest bid. Woodard & Curran, Inc. recommended against awarding HK&S the project and in favor of negotiating a contract with the second bidder. The town counsel concluded that HK&S’s bid was non-responsive and awarded the contract to the second bidder. Plaintiff filed a complaint against the Town and Woodard & Curran alleging, among other claims, that the Town violated state and local law when it denied the contract award for the project. The superior court granted summary judgment for Defendants. The Supreme Court affirmed, holding (1) there was no error in disposing of HK&S’s claims against the Town in summary judgment where HK&S failed to submit a responsive bid; and (2) HK&S’s claim of negligence against Woodard & Curran also failed. View "HK&S Constr. Holding Corp. v. Dible" on Justia Law

A property developer filed suit against several defendants involved in a construction project asserting claims for negligence and breach of contract. Defendants filed motions to compel arbitration, which the trial court denied. The court of appeals affirmed. The Supreme Court held that the developer must arbitrate its claims against the general contractor but not its claims against the other defendants, as (1) the developer agreed to arbitrate its claims against the general contractor, and the general contractor did not waive its right to demand arbitration; (2) the developer’s argument that a contractual deadline barred the general contractor’s demand for arbitration was itself a claim that must be arbitrated; (3) the developer did not agree in the general contract to arbitrate its claims against the other defendants; (4) the developer was not equitably estopped from denying its assent to its purported agreement that the other defendants could enforce the general contract’s arbitration provisions; and (5) the subcontracts did not require the parties to arbitrate these claims. View "G.T. Leach Builders, LLC v. Sapphire V.P., L.P." on Justia Law

After Rio School District’s new school was completed, the District and its general contractor (FTR) engaged in a decade-long legal battle, resulting in a judgment for FTR exceeding $9 million. Public Contract Code section 7107 allows a public entity to withhold funds due a contractor when there are liens on the property or a good faith dispute concerning whether the work was properly performed. The trial court assessed penalties against District because it did not timely release the retained funds. The court of appeal affirmed in part. A dispute over the contract price does not entitle a public entity to withhold funds due a contractor; the doctrine of unclean hands does not apply to section 7107; the trial court properly rejected the District's action under the False Claims Act, Government Code section 12650 and properly assessed prejudgment interest, subject to adjustment for any extra work claims found untimely on remand. The trial court erred in its interpretation of a contract provision imposing time limitations to submit the contractor's claims for extra work as requiring a showing of prejudice and erred in awarding fees for work not solely related to FTR's section 7107 cause of action. View "East West Bank v. Rio School Dist." on Justia Law

Defendants, Keith McNamara, Shirley Benton, and Jerel Benton, appealed: (1) a jury verdict in favor of the plaintiffs, Richard and Mary Murray, on their claim that the defendants breached the implied warranty of workmanlike quality; (2) a Superior Court order denying their motion to dismiss the plaintiffs' New Hampshire Consumer Protection Act (CPA) claim; and (3) a Superior Court order finding that the defendants violated the CPA when they built the plaintiffs' home with latent structural defects that caused mold growth. Defendants argued that, because plaintiffs' claim was exempt from the CPA, the trial court erred by denying their motion to dismiss. Defendants added that the trial court erred by denying their motion for a judgment notwithstanding the verdict (JNOV) on the plaintiffs breach of implied warranty claim. There is no dispute that the transaction at issue here is the defendants alleged construction of the house with latent structural defects, not any representations that the defendants made to others during or after construction. The New Hampshire Supreme Court affirmed, finding that because the house was completed in 2004 and was purchased by the plaintiffs five years later and the allegedly wrongful transaction occurred more than three years before the plaintiffs "knew or reasonably should have known" of it, the construction of the house was an exempt transaction pursuant to RSA 358-A:3, IV-a and that plaintiffs' CPA claim should have been dismissed. Thus, the Court reversed the trial court's ruling on the CPA claim. However, the Court was not persuaded that defendants were insulated from liability on the breach of the implied warranty of workmanlike quality claim. Because the Court reversed the trial court's judgment on the CPA claim, defendants failed to show that they were prejudiced with respect to the breach of warranty claim. View "Murray v. McNamara" on Justia Law

Atwood Health Properties, LLC contracted with Calson Construction Company to construct a medical office building. Calson engaged Gem Plumbing & Heating Co., Inc. (GEM) as a subcontractor to design and install a heating, ventilation, and air conditioning (HVAC) system. Five years after the project was completed, Atwood sold the building to Atwood Medical Properties, LLC (AMP). When AMP experienced compressor failures in the HVAC system, AMP filed suit against Atwood. Atwood paid for a new HVAC system and initiated arbitration proceedings against Calson to recover its costs. Calson, in turn, initiated an arbitration proceeding against GEM for indemnification under the parties’ contract. The two arbitration proceedings were consolidated. The arbitrator concluded that Calson should pay Atwood $358,223 and that GEM should pay Calson that same amount. The superior court confirmed the arbitration award. GEM appealed. The Supreme Court affirmed, holding that the trial justice properly confirmed the arbitration award. View "Atwood Health Props., LLC v. Calson Constr. Co." on Justia Law