Articles Posted in Construction Law

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The Fifth Circuit affirmed the district court's decision setting aside CMR's default, grant of summary judgment in CMR's favor, and denial of plaintiff's Rule 59(e) motions for reconsideration. The court held that the district court did not abuse its discretion in setting aside the entry of default and partial default judgment, because the district court did not err when it chose to credit CMR's President's affidavit over plaintiff's evidence that CMR had notice of the lawsuit. The court also held that plaintiff was not entitled to the extraordinary relief that Rule 59(e) provided, because the evidence plaintiff wished to bring forward was already available before final judgment was entered. Finally, the court held that the district court did not err in granting summary judgment on the fraud claim stemming from the 2006 purchase of plaintiff's roof; the claims related to the 2011 repairs; and the negligence, fraud, and detrimental reliance claims surrounding the 2012 repairs. View "Koerner v. CMR Construction & Roofing, LLC" on Justia Law

Posted in: Construction Law

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Hensel, the general contractor building a new Austin public library, maintained control over the worksite through on-site management personnel, Hensel's subcontractor, HEW, worked on the project’s East Screen Wall. HEW's sub-subcontractor, CVI, was to complete demolition and excavation for the Wall. A nearly vertical 12-foot wall of “Type C” soil developed. Occupational Safety and Health Administration (OSHA) regulations mandate systems to protect employees from cave-ins. No protective systems were in place. On a rainy morning in 2015, CVI was to reinstall rebar at the base of this wall of soil, preliminary to pouring concrete footings. Concerned about the weather and the instability of the wall, CVI owner Daniels sent his employees to work on another area. Hensel's superintendent instructed Daniels to return his employees to the excavation. Daniels sent an email to HEW’s senior project manager, who gave only a cursory reply. Daniels sent his employees back to the excavation. That day, an OSHA compliance officer discovered CVI employees working at the unprotected wall. The city inspector, Hensel’s superintendent, and HEW’s superintendent were present. OSHA cited CVI and Hensel for violating 29 C.F.R. 1926.652(a)(1), pursuant to its multi-employer citation policy. OSHA considered Hensel a “controlling employer” An ALJ agreed but found that Fifth Circuit precedent that “OSHA regulations protect only an employer’s own employees,” foreclosed the citation. The Fifth Circuit reversed, deferring to OSHA’s construction of 29 U.S.C. 651, as granting authority to issue citations to controlling employers. View "Acosta v. Hensel Phelps Construction Co." on Justia Law

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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

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The Fifth Circuit reversed the district court's grant of summary judgment in favor of a general contractor in an action by the subcontractor, alleging that the general contractor fraudulently induced it into entering a settlement agreement that released the general contractor from any claims for liability under the Miller Act. In this case, Fisk was the subcontractor and DQSI was the general contractor on a post-Hurricane Katrina federal construction project. The court held that there was a genuine issue of material fact as to whether Fisk justifiably relied on DQSI's representations about Fisk's Request for Equitable Adjustment at settlement, which was an element of Fisk's fraudulent-inducement. Therefore, the court remanded for further proceedings. View "Fisk Electric Co. v. DQSI, LLC" on Justia Law

Posted in: Construction Law

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This appeal arose out of a dispute over a construction contract between Golden Nugget and Yates. On appeal, Yates challenged the dismissal of its claim for a statutory lien under the Louisiana Private Works Act (LPWA), La. Stat. Ann. 9:4822, which grants general contractors a privilege to secure payment for their work. However, the LPWA requires that the contractor must preserve their lien by filing a statement of claim or privilege in a timely manner. In this case, although Yates did not file a lien statement within the time required by statute, the court found that because Golden Nugget never filed a notice of substantial completion, Yates's lien statement was timely filed. Accordingly, the court reversed and remanded. View "Golden Nugget Lake Charles v. W. G. Yates & Son" on Justia Law

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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

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Holt and TAUG, subcontractors of the bankrupt Seiber, appealed the district court's affirmance of a prior bankruptcy court order, holding that the funds of an interpleader action, filed by EnCana, were property of the bankruptcy estate of Seiber, not EnCana, because the interpleader action extinguished the earlier construction liens of Holt and TAUG. The court upheld the validity of TAUG's chapter 56 lien where TAUG had a valid mineral lien against EnCana's property at the time EnCana was discharged from further liability to Seiber; as to Holt, the district court did not err in holding EnCana's interpleader and its deposited funds automatically satisfied its liability to Seiber, thus transferring legal possession of the funds to Seiber and the bankruptcy estate; the district court and bankruptcy courts erred in failing to draw the distinction between the act of depositing funds into the district court registry and the judicial act of discharging the depositor of any further liability; simply depositing interpleader funds does not automatically mean that the funds have been legally accepted, ownership thereof transferred, and the interpleader relieved of further duty to the court or further obligation to the parties of the dispute; the court need not address whether chapter 56 allows the liens to extend to the funds because the bankruptcy court entered an order, separate from this appeal, ruling on the interpleader and discharging EnCana; and, therefore, the court vacated and remanded for further proceedings. View "Holt Texas, Ltd., et al. v. Zayler" on Justia Law

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Plaintiffs, members of the Plaintiffs' Steering Committee for the Chinese Drywall MDL, claimed that technology counsel for Cataphora made defamatory statements that were aimed at, and caused harm in, Louisiana, thereby grounding personal jurisdiction in that state. The court concluded that the district court lacked personal jurisdiction over defendants because plaintiff failed to make a showing that the statements' focal point was Louisiana. The court vacated the district court's dismissal and remanded with instructions to transfer the matter to the United States District Court of the Northern District of California in the interest of justice. View "Herman, et al. v. Cataphora, Inc., et al." on Justia Law

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The Corps contracted with Atlantic for the construction of a child development center and Atlantic entered into a Subcontract Agreement with J-Crew for labor and materials. The Subcontract Agreement included a forum-selection clause, which provided that disputes shall be litigated in Virginia courts. Ignoring the forum-selection clause, J-Crew filed suit against Atlantic in Texas. Applying 28 U.S.C. 1404(a), the district court denied Atlantic's motion to transfer, finding that Atlantic had not met its burden of showing why the interest of justice or the convenience of the parties and their witnesses weighed in favor of transferring the case to Virginia. Atlantic subsequently petitioned the court for a writ of mandamus to dismiss or transfer the case. Because the court found that the district court did not clearly abuse its discretion by considering enforcement of the forum-selection clause under section 1404(a), instead of under Rule 12(b)(3) and section 1406; and by conducting its analysis under section 1404(a), the court denied the petition. View "In re: Atlantic Marine Const Co. Inc." on Justia Law

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This case concerned the remedy under Louisiana law for the purchaser of a newly constructed home with a construction defect that has not resulted in actual physical damage to the home. The court held that the Louisiana New Home Warranty Act, La. Rev. Stat. Ann. 9:3141, 9:3150, provided the exclusive remedy against a builder for a purchaser of a new home. The court also held that a claim brought under the Act must allege that the defect in question resulted in actual physical damage to the home. Accordingly, the court affirmed the judgment of the district court dismissing the case. View "Gines v. D.R. Horton, Inc., et al" on Justia Law