Justia Contracts Opinion Summaries

In building their home, Plaintiffs purchased SuperFlex, a stucco-like material, to cover the house’s exterior. GrailCoat Worldwide, LLC and GrailCo, Inc. (collectively, GrailCoat), the manufacturers of SuperFlex, provided an express twenty-year warranty for the product. Several years after the construction of their home was completed, the product failed. Plaintiffs brought suit against GrailCoat and Hartley Construction, Inc., the company that had designed and built the home, for damages. Hartley moved for summary judgment under N.C. Gen. Stat. 1-50(a)(5), North Carolina’s six-year statute of repose for claims arising out of improvements to real property. The trial court granted summary judgment for Defendants. The Supreme Court reversed the trial court’s dismissal of Plaintiffs’ claim for breach of express warranty against GrailCoat, holding that GrailCoat knowingly and freely entered into a valid contract of sale with Plaintiffs that provided for a warranty term that exceeded the repose period, and therefore, GrailCoat waived the protections provided by the statute of repose. View "Christie v. Hartley Constr., Inc." on Justia Law

The respondents, Shared Towers VA, LLC and NH Note Investment, LLC, appealed, and petitioner Joseph Turner, individually and as trustee of the Routes 3 and 25 Nominee Trust, cross-appealed, Superior Court orders after a bench trial on petitioner’s petition for a preliminary injunction enjoining a foreclosure sale and for damages and reasonable attorney’s fees. The parties’ dispute stemmed from a commercial construction loan agreement and promissory note secured by a mortgage, pursuant to which petitioner was loaned $450,000 at 13% interest per annum to build a home. Respondents argued the trial court erred when it: (1) determined that they would be unjustly enriched if the court required the petitioner to pay the amounts he owed under the note from November 2009 until April 2011; (2) applied the petitioner’s $450,000 lump sum payment to principal; (3) excluded evidence of the petitioner’s experience with similar loans; (4) ruled that, because the promissory note failed to contain a "clear statement in writing" of the charges owed, as required by RSA 399-B:2 (2006), respondents could not collect a $22,500 delinquency charge on the petitioner’s lump sum payment of principal; and (5) denied the respondents’ request for attorney’s fees and costs. Petitioner argued that the trial court erroneously concluded that respondents’ actions did not violate the Consumer Protection Act (CPA). After review, the Supreme Court affirmed in part, reversed in part, vacated in part, and remanded: contrary to the trial court’s decision, petitioner’s obligation to make the payments was not tolled. Because the loan agreement and note remained viable, it was error for the trial court to have afforded the petitioner a remedy under an unjust enrichment theory. The trial court made its decision with regard to the payment of $450,000 in connection with its conclusion that the petitioner was entitled to a remedy under an unjust enrichment theory. Because the Supreme Court could not determine how the trial court would have ruled upon this issue had it not considered relief under that equitable theory, and because, given the nature of the parties’ arguments, resolving this issue requires fact finding that must be done by the trial court in the first instance, it vacated that part of its order and remanded for further proceedings. In light of the trial court’s errors with regard to the attorney’s fees and costs claimed by respondents, the Supreme Court vacated the order denying them, and remanded for consideration of respondents’ request for fees and costs. The Supreme Court found no error in the trial court’s rejection of petitioner’s CPA claim. View "Turner v. Shared Towers VA, LLC" on Justia Law

Plaintiff, a construction company, filed a five-count complaint in superior court against Defendants, alleging breach of contract, quantum meruit, unjust enrichment, and violation of the Prompt Payment Act. In the fifth count of the complaint, Plaintiff sought enforcement of a mechanic’s lien it recorded against Defendants’ property. Plaintiff then moved for summary judgment on its claims for breach of contract, violation of the Prompt Payment Act, and enforcement of the mechanic’s lien. The superior court granted summary judgment for Plaintiff on those three counts but made no mention of Plaintiff’s quantum meruit or unjust enrichment claims. Defendants appealed. The Supreme Court dismissed the appeal as interlocutory, as there was no final judgment on any of Plaintiff’s causes of action where two of Plaintiff’s claims were still pending. View "Warren Constr. Group, LLC v. Reis" on Justia Law

The issue at the heart of this appeal to the Tenth Circuit centered on indemnity stemming from a promise by Martin K. Eby Construction Company’s predecessor to build a water pipeline. Eby engaged another company (the predecessor to Kellogg Brown & Root, LLC), promising to indemnify claims resulting from Eby’s work. While building the water pipeline, Eby accidentally hit a methanol pipeline, causing a leak. At the time, no one knew about the leak. It was discovered over two decades later, and the owner of the methanol pipeline had to pay for the cleanup. The owner of the methanol pipeline sued to recover the expenses from Kellogg and Eby. Kellogg and Eby prevailed, but Kellogg incurred over $2 million in attorneys’ fees and costs. Kellogg invoked Eby’s indemnity promise, suing Eby and its liability insurer, Travelers Casualty and Surety Co. The district court granted summary judgment to Eby and Travelers, leading Kellogg to appeal. To resolve the Kellogg-Eby portion of the appeal, the Tenth Circuit focused on the enforceability of Eby’s promise of indemnity: the promise was broad enough to cover the pipeline owner’s claims against Kellogg for its inaction after Eby caused the leak, but the indemnity clause was not conspicuous; thus, it was unenforceable. The Kellogg-Travelers appeal turned on Kellogg’s argument that Travelers’ insurance policy covered liabilities assumed by its insured (Eby). The Tenth Circuit concluded that because the indemnity clause was unenforceable, it is as if Eby never agreed to assume Kellogg’s liabilities. In the absence of Eby’s assumption of Kellogg’s liabilities, Travelers did not insure Kellogg. Accordingly, Kellogg was not entitled to indemnity from Eby or insurance coverage from Travelers, and Eby and Travelers were entitled to summary judgment. View "Martin K. Eby Construction v. OneBeacon Insurance" on Justia Law

AIDG Properties, LLC, a real-estate holding company managed by Anjan Dutta-Gupta, purchased property. AIDG obtained loans from BankNewport (Defendant) to finance the purchase and to perform improvements. Dutta-Gupta personally guaranteed the loans. Emond Plumbing & Heating, Inc. and Tecta America New England, LLC (collectively, Plaintiffs) served as subcontractors on the project. Plaintiffs substantially completed the renovations, and BankNewport deposited the loan proceeds into AIDG’s account. After Dutta-Gupta was arrested, Defendant declared Dutta-Gupta to be in default and accelerated the loans. Defendant then set off the deposit it made previously by reversing it. As a result, AIDG was unable to pay Plaintiffs for the work they had performed. Defendant, who was granted possession of the property, later foreclosed. Plaintiffs filed a complaint seeking to recover compensation for their work under the theory of unjust enrichment. The superior court granted summary judgment for Defendant. The Supreme Court affirmed, holding that due to the absence of a relationship between Plaintiffs and Defendant and the lack of any allegation that Defendant engaged in any type of misconduct or fraud, Defendant’s retention of the property, including the improvements, was not inequitable under the Court’s jurisprudence on unjust enrichment. View "Emond Plumbing & Heating, Inc. v. BankNewport" on Justia Law

Tender Care Veterinary Hospital, Inc. ("TCVH"), appealed the grant of summary judgment entered in favor of First Tuskegee Bank on breach-of-fiduciary-duty and fraud claims stemming from a construction loan TCVH received from First Tuskegee in September 2004. The gravamen of those claims was that TCVH was injured by First Tuskegee's alleged insistence that TCVH use PJ Construction as the general contractor on the project although PJ Construction was not licensed as a general contractor in Alabama, that PJ Construction's work product was below what one would expect from a properly licensed general contractor, and that using PJ Construction resulted in delays, cost overruns, and, TCVH argued, the ultimate failure of its business. However, because TCVH's claims accrued in approximately July 2005 and TCVH did not formally assert them until after it initiated this action in April 2009, those claims were barred by the two-year statute of limitations that governed them. Accordingly, the summary judgment entered by the trial court in favor of First Tuskegee was affirmed. View "Tender Care Veterinary Hospital, Inc. v. First Tuskegee Bank " on Justia Law

Construction Manager subcontracted with Subcontractor to do work on a construction project. After the project was substantially complete, Subcontractor recorded a mechanic’s lien for unpaid work on the project. Subcontractor then filed a complaint against Construction Manager as the general contractor of the project, the owner of the property (Landowner), and the bank that financed the project (Bank) to enforce its mechanic’s lien. Construction Manager did not enter an appearance in the case. The circuit court subsequently granted an application filed by Landowner and Bank and released the real estate that had been subject to Subcontractor’s mechanic’s lien. Bank filed a motion to dismiss the mechanic’s lien claim on the basis that Subcontractor failed to timely serve Construction Manager, who it alleged to be a necessary party to the mechanic’s lien enforcement action. The circuit court agreed and dismissed the mechanic’s lien claim with prejudice. The Supreme Court reversed, holding that Construction Manager, as the general contractor, was not a necessary party to Subcontractor’s mechanic’s lien enforcement action. Remanded.View "Synchronized Constr. Servs., Inc. v. Prav Lodging, LLC" on Justia Law

Plaintiff-construction company filed suit asserting that Defendant-homeowners breached the parties’ contract in which Plaintiff agreed to complete construction work on Defendants’ home. Further, Plaintiff alleged that Defendants were unjustly enriched in failing to pay the balance owed to Plaintiff. The trial justice awarded Plaintiff $55,455 in damages plus prejudgment interest on an offer of judgment that had been deposited in the Registry of the Superior Court. Defendants appealed the decision to award prejudgment interest, and Plaintiff cross-appealed the damages award. The Supreme Court dismissed the appeals of both parties and affirmed the judgment, holding that the trial justice was not clearly wrong in awarding statutory interest in the offer of judgment and in his conclusion that Plaintiff was entitled to $55,455.View "Raiche v. Scott" on Justia Law

America's Home Place, Inc. ("AHP") appealed a Circuit Court order denying AHP's motion to compel arbitration of the claims brought by the plaintiff below, Gregory Rampey. In August 2012, Rampey and AHP entered into a contract, the terms of which provided that AHP would construct a house for Rampey in Chambers County. AHP constructed the house; however, after he took possession of the house, Rampey began to notice "settlement and sinking of the foundation," which, according to Rampey, resulted in significant structural and other damage to the house. AHP attempted to stabilize the foundation and to repair the damage to the house that had occurred as a result of the unstable foundation; those efforts were unsuccessful. Upon review of the parties' arguments on appeal, the Supreme Court concluded the trial court erred in denying AHP's motion to compel arbitration. Therefore, the Court reversed the trial court's order and remanded the case with instructions to vacate the order denying the motion to compel arbitration and to enter an order granting AHP's motion to compel arbitration.View "America's Home Place, Inc. v. Rampey" on Justia Law

In 2006, Richard Myers owned the property at issue in this case. At the time, the property was subject to a deed of trust in favor of First Horizon Home Loans. Myers enlisted Michael Horn and his company, Frontier Development Group (FDG) to build a residence on the property, which First Horizon financed. However, in April of 2007, Myers filed for bankruptcy, and First Horizon rescinded the construction loan and instructed FDG to halt construction when the project was only fifty percent complete. The structure was left exposed to the elements for fourteen months. Following Myers' bankruptcy, foreclosure proceedings were initiated, and Myers hired Kathleen Horn (Michael Horn's wife), of Windermere Real Estate/Teton Valley to list the property for sale. The Caravellas, who were Ohio residents, looking for property in the Teton Valley, contacted their real estate agent who put them in touch with Kathleen Horn who provided them with information on the stalled Myers project. Kathleen Horn eventually put the Caravellas in touch with Michael Horn. The Caravellas traveled to Idaho, met with Kathleen Horn, and spent two days inspecting the property. The Caravellas testified that Kathleen Horn minimized issues with the house, telling them that it was "in good shape,""structurally sound,"and a "great house."The Caravellas chose not to have a professional inspection performed and closed on May 5, 2008. After closing, the Caravellas and Michael Horn agreed that Horn would complete construction on the house in accordance with Myers' original plans. In reaching this agreement, the Caravellas testified that they believed they were dealing with Horn as an individual. The total contract price for the first phase of work that the Caravellas authorized was $88,500. However, the Caravellas paid FDG $138,097.24 for the first phase before refusing to pay any more. Much of the money that the Caravellas paid to FDG was for unauthorized work or work that was completed in a nonconforming or substandard manner. The Caravellas hired a second builder to complete the first phase and to remedy the substandard work. FDG initiated this action by filing a complaint to foreclose on a lien for construction services and building materials provided to, but not paid for by, the Caravellas. The Caravellas filed an amended counterclaim alleging that FDG and Horn: (1) breached the parties' contract; (2) breached the duty of good faith and fair dealing; (3) violated the Idaho Consumer Protection Act; (4) breached the implied warranty of habitability; (5) committed slander of title; (6) committed fraud and misrepresentation; (7) engaged in a civil conspiracy; and (8) acted negligently. The district court held that FDG's lien was defective and dismissed it. The district court also held that FDG breached its contract with the Caravellas by: (1) failing to complete agreed upon work in conformity with the plans and in a workmanlike manner; (2) charging the Caravellas for unauthorized and defective work; and (3) substantially overbilling the Caravellas for work and materials that were not authorized and never provided. As to the Caravellas' fraud counterclaim, the district court concluded that the Caravellas failed to establish all nine elements of fraud and dismissed the claim. The district court also concluded that Horn was not personally liable. The district court awarded the Caravellas $113,775.45 in attorney fees, $5,484.83 in costs as a matter of right, and $200.00 in discretionary costs. The Caravellas timely appealed. Upon review, the Supreme Court concluded the district court erred by applying the incorrect evidentiary standard to the Caravellas' fraud counterclaim, but that error was harmless. The Court affirmed that portion of the district court's judgment dismissing the Caravellas' fraud claim, and reversed that portion of the judgment dismissing the Caravellas' claims against Michael Horn personally. In all other respects, the Supreme Court affirmed the district court's decision.View "Frontier Development Grp v. Caravella" on Justia Law