Articles 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

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Plaintiffs, owners of condominium units that were destroyed by Hurricane Katrina, sued defendants after defendants failed to complete construction of the rebuild. Plaintiffs appealed the district court's grant of summary judgment in favor of defendants, based on the district court's finding that the 24-month construction obligations in the Purchase Agreements were not illusory and, therefore, the parties' contracts were exempted from the Interstate Land Sales Full Disclosures Act (ILSA), 15 U.S.C. 1701, et seq. The court found that the language of the Purchase Agreements did not negate plaintiffs' abilities to seek damage and specific performance remedies. Accordingly, the court affirmed the district court's grant of summary judgment. View "Hillman, et al v. Loga, III, et al" on Justia Law

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This case arose from a contract entered into by the parties where Ewing agreed to construct tennis courts for the school district. At issue was the interpretation of a Commercial General Liability (CGL) insurance policy under Texas law. The district court held that a CGL policy's contractual liability exclusion applied in this case and that no exception restored coverage. The insured construction company faced liability, if at all, because it contracted to construct usable tennis courts for the school district and it had allegedly failed to perform. The court held that the district court correctly interpreted the contractual liability exclusion and correctly applied that exclusion with respect to the insurer's duty to defend the construction company. The court held, however, that the district court was premature in applying the exclusion to the insurer's duty to indemnify. View "Ewing Construction Co., Inc. v. Amerisure Ins. Co." on Justia Law

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Three primary insurers and one excess carrier appealed the district court's determination on summary judgment of their duties to defend a contractor who allegedly was responsible for a fire that occurred during construction. The district court held that the three primary insurers must split the costs initially spent by one of them defending the insured, while the excess insurer could not recover any of its defense costs from the primary insurers. The court concluded that National Union could seek reimbursement for its defense costs from Continental, Columbia, and North American through contractual subrogation. The district court did not err in its allocation of Continental's defense costs among Continental, Columbia, and North American. Therefore, the court affirmed the district court's judgment in part and reversed in part, and the court remanded for further proceedings. View "Continental Casualty Co. v. North American Specialty Ins., et al." on Justia Law

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The City of New Orleans appealed a jury verdict for Rosedale Missionary Baptist Church finding that the city violated the church's Fourteenth Amendment right to due process by demolishing the church building without notice. At issue was whether the suit should be dismissed because the church's procedural and substantive due process claims were unripe. The court dismissed the suit as unripe where the church did not allege a substantive due process claim that was independent of its procedural due process claim and where the court could not address the procedural due process claim without knowing the outcome of the takings claim, which was not before the court.