Justia Contracts Opinion Summaries

In this dispute over an arbitration clause within a contract, the Supreme Court held that the minor children who joined Plaintiffs, their parents, in bringing this action seeking damages for construction defects in their home may be compelled to arbitrate along with their parents on the basis of direct-benefits estoppel.Plaintiffs, Jack and Erin Skufca, signed a purchase agreement with Taylor Woodrow Communities-League City, Ltd. to build a home in Texas. The agreement included an arbitration provision. Plaintiffs sued both Taylor Woodrow Communities-League City, Ltd. and Taylor Morrison of Texas, Inc., for construction defects and fraud, alleging that less than a year after they moved in, the home developed mold issues that caused their minor children to be ill. The petition listed Jack and Erin as plaintiffs individually, as well as Erin as next friend of the couple's children. Taylor Morrison moved to compel arbitration, but the trial court denied the motion as it pertained to the children. The court of appeals affirmed. The Supreme Court reversed, holding that the minor children sued based on the contract and were subject to its terms, including the arbitration clause. View "Taylor Morrison of Texas, Inc. v. Skufca" on Justia Law

The Supreme Court affirmed the judgment of the superior court in favor of Plaintiff in this case arising from a construction contract, holding that Defendant was not entitled to relief on his assignments of error on appeal.Specifically, the Supreme Judicial Court held that the trial justice (1) did not err in applying the doctrine of merger by deed; (2) did not make a mistake in calculating damages; (3) did not err in denying Defendant's claim that Plaintiff breached the parties' contract; (4) did not err in finding that the implied warranty of habitability did not apply to this case; and (5) properly found that the subcontractors' mechanics' liens were assignable to Plaintiff. View "Premier Land Development v. Kishfy" on Justia Law

Justin Shafer appealed a district court judgment confirming an arbitration award against Diamond Development & Custom Homes, L.L.C. Shafer argued the district court erred by failing to increase the amount of damages he was awarded. He also argued the North Dakota Supreme Court should narrowly expand the standard for reviewing an arbitration award. The Court declined Shafer’s request to expand the standard of review, and concluded the district court did not err in confirming the arbitration award. View "Shafer v. Scarborough, et al." on Justia Law

The Supreme Court affirmed the judgment of the trial court in this action to foreclose a materialmen's lien to recover for material and labor Ed Suvada expended in renovating a cabin for George and Christine Muller, holding that their was no error.Suvada brought this action to foreclose his materialmen's lien on the Muller property and also alleged breach of contract. The Mullers counterclaimed, alleging breach of contract and fraud. A jury awarded Suvada damages on his materialmen's lien claim and in favor of the Mullers on both of their claims but awarded damages only on the breach of contract claim. The Supreme Court affirmed, holding that the circuit court did not err or abuse its discretion. View "Suvada v. Muller" on Justia Law

Gregory and Sue Tadych filed suit after the one-year limitation period to bring a construction defect suit expired. The trial court entered summary judgment, dismissing the suit and upholding the contractual limitation. The Court of Appeals affirmed. The Washington Supreme Court found the contractual limitation here was substantively unconscionable and, therefore, void and unenforceable. "The one-year limitation provision provides a substantially shorter limitations period than plaintiffs are otherwise entitled to under RCW 4.16.310 and benefits the contractor at the expense of the rights of the homeowner." Judgment was reversed and the matter remanded for trial. View "Tadych v. Noble Ridge Constr., Inc." on Justia Law

Vought sued for the balance due on his contract for the renovation of Stock’s house, additional compensation under a disputed change order, and penalties for the violation of a prompt-payment statute, Civil Code section 8800. Stock did not dispute the unpaid amount Vought had earned for finished work, including approved change orders, but disputed the claim for additional compensation and sought liquidated damages for delay. The court held that Vought was entitled to the undisputed balance due plus approximately half the disputed amount of additional compensation; that Stock was entitled to approximately half the amount he claimed as liquidated damages; and that Stock had not violated section 8800 by withholding final payment. The court held that neither side was entitled to attorney fees under section 8800 or to costs under Code of Civil Procedure section 1032.The court of appeal affirmed in part. Stock was not prohibited from withholding the $79,000 otherwise due based on his good faith claim for liquidated damages. Vought was not relieved of the obligation to pay liquidated damages for the delay that it caused although it was not responsible for the entire delay. Neither party was the prevailing party under section 8800 but Vought was the prevailing party for purposes of recovering costs under section 1032; it secured a “net monetary recovery.” View "Vought Construction Inc. v. Stock" on Justia Law

The Supreme Court affirmed the judgment, decree of foreclosure, and order of sale by the district court, and the orders and actions contained within these documents, holding that there was no error or abuse of discretion.Thermal Design, Inc. filed a complaint to foreclose its construction lien against Mark and Pam Duffy and Central Copters, Inc. The complaint also asserted claims against TNT Building Systems. A jury found that TNT, acting as an agent of Central Copters, entered into a contract with Thermal Design for the insulation system, and both TNT and Central Copters were jointly and severally liable for breaching the contract with Thermal Design. As to a crossclaim between TNT and Central Copters, the jury found that both parties breached their agreement but that only TNT incurred damages. The district court entered a final order restating that, as a matter of law, Thermal Design had a valid construction lien attaching to both the Duffys’ real property and Central Copters’ building that should be foreclosed. The Supreme Court affirmed, holding that the district court did not err or abuse its discretion in the proceedings below. View "Thermal Design, Inc. v. Thorson" on Justia Law

The Supreme Court held that public policy prohibits an agreement between a builder-vendor and a homebuyer to disclaim and waive the warranty of workmanship and habitability implied in every contract entered into between the buyer-vendor and homebuyer and to replace it with an express warranty.Plaintiff entered into a preprinted purchase agreement with M & RC II, LLC to buy a home that M & RC II's affiliate, Scott Homes Development Company, would build. Plaintiff later sued M & RC II and Scott Homes (together, Defendants) for breach of the implied warranty of workmanship and habitability. Defendant moved for summary judgment on the ground that Plaintiff had waived the implied warranty per the purchase agreement. The trial court granted summary judgment for Defendant. The court of appeals reversed. The Supreme Court affirmed, holding that the public policy underlying the implied warranty of workmanship and habitability clearly outweighed enforcement of the waiver of that warranty in the purchase agreement. View "Zambrano v. M & RC II LLC" on Justia Law

The United States Federal District Court for the Western District of Washington certified a question of law to the Washington Supreme Court. Cox Construction was the general contractor of a remodeling project. Cox hired Baker & Son Construction, Inc. as a subcontractor. A Baker employee allegedly caused a two-by-four to fall from a railing and strike Ronnie Cox, owner of Cox Construction, who later died from his injury. Baker allegedly called an insurance agent to alert them of the incident. The agent told Baker that no action needed to be taken because at that time, no claim existed. A few months later, Baker received a wrongful death claim from an attorney representing Cox’s widow. Baker notified its insurer, Preferred Contractors Insurance Company (PCIC) of the claim. PCIC denied coverage, but agreed to defend Baker under a reservation of rights. The certified question to the Washington Supreme Court related to the “claims-made” nature of the policy and the timing of Baker’s tender of Ms. Cox’s claim. The Supreme Court replied to the certified question that in light of RCW 18.27, a contractor’s commercial general liability insurance policy that requires the loss to occur and be reported within the same policy year, and provides neither neither prospective nor retroactive coverage violates Washington’s public policy. View "Preferred Contractors Ins. Co. v. Baker & Son Constr., Inc." on Justia Law

Cal-Am, a developer and operator of RV and mobile-home parks leased the Yuma Sundance RV Resort from its owner, intending to construct a new banquet and concert hall on the property. The property owner provided the funding for the construction. Cal-Am managed the project. Cal-Am hired a contractor, Nickle, to design and construct the hall, who then hired Edais Engineering to survey the property and place construction stakes to mark the Hall’s permitted location. No contract existed between Edais and Cal-Am. Edais acknowledges that its placement of the stakes was defective. Cal-Am was forced to adjust its site plan, eliminating eight RV parking spaces. Cal-Am sued Edais for claims including negligence. The trial court granted Edais summary judgment on the negligence claim finding that Cal-Am could not recover its purely economic damages. The court of appeals affirmed.The Arizona Supreme Court affirmed, repudiating its 1984 Donnelly Construction holding that a design professional’s duty to use ordinary skill, care, and diligence in rendering professional services extends both to persons in privity with the professional and to persons foreseeably affected by a breach of that duty. Under Arizona’s current framework, which repudiated foreseeability as a basis for duty, design professionals lacking privity of contract with project owners do not owe a duty to those owners to reimburse purely economic damages. View "Cal-Am Properties, Inc. v. Edais Engineering, Inc." on Justia Law