Justia Professional Malpractice & Ethics Opinion SummariesArticles Posted in Construction Law
Cal-Am Properties, Inc. v. Edais Engineering, Inc.
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
Brunobuilt, Inc. v. Strata, Inc.
BrunoBuilt, Inc. appealed a district court’s dismissal of its claims against Strata, Inc., Chris Comstock, H. Robert Howard, and Michael Woodworth (collectively, “the Strata Defendants”). BrunoBuilt filed a professional negligence action against the Strata Defendants alleging that when the Strata Defendants rendered engineering services for the Terra Nativa Subdivision they failed to identify a pre-existing landslide and negligently failed to recommend construction of infrastructure that would stabilize and prevent further landslides within the Subdivision. A home BrunoBuilt had contracted to build and the lot on which the dwelling was located were allegedly damaged as a result. The district court dismissed BrunoBuilt’s claims after holding that the parties had entered into an enforceable settlement agreement, or alternatively, that summary judgment was warranted in favor of the Strata Defendants based on the economic loss rule. After review of the situation, the Idaho Supreme Court affirmed the district court judgment because the parties entered into an enforceable settlement agreement. View "Brunobuilt, Inc. v. Strata, Inc." on Justia Law
Smith v. Gebhardt
The Supreme Court reversed the order of the circuit court dismissing Petitioners’ civil action as a sanction for alleged discovery violations, holding that the circuit court abused its discretion by imposing the sanction of dismissal.Petitioners bought this civil action against Respondent alleging unfair and deceptive acts, breach of express and implied warranties, breach of contract, and other causes of action. Respondent eventually filed a second motion to dismiss the civil action as a sanction for alleged discovery violations. The circuit court identified ten instances of alleged wrongful conduct by Petitioners and granted Respondent’s motion to dismiss. The Supreme Court reversed, holding that, even assuming that there was a discovery violation, the circuit court’s imposition of the extreme sanction of dismissal was an abuse of discretion. View "Smith v. Gebhardt" on Justia Law
Superior Steel, Inc. v. Ascent at Roebling’s Bridge, LLC
The Supreme Court affirmed in part and reversed in part the judgment of the court of appeals reversing the judgment of the trial court in this action arising from a construction dispute.Two subcontractors - the steel fabricator and the steel erector and installer - on a condominium project brought suit against the project owner, developer, and general contractor after the subcontractors proceeded with extra work outside the scope of the original bid documents but were never paid for either that work or the retainage amount owed under the steel fabricator’s contract with the general contractor. The circuit court entered judgment in favor of Plaintiff for the cost of the extra work and unpaid retainage. The general contractor prevailed on its indemnification cross-claim against the other two defendants and on the negligence cross-claim asserted against it by the other two defendants. The court of appeals reversed. The Supreme Court held that the court of appeals (1) erred by reversing the trial court’s judgment against the owner for unjust enrichment; (2) properly reversed the trial court’s judgment against the general contractor for breach of contract; and (3) properly found that the trial court should have instructed the jury on the owner and developer’s breach of contract claim but erred in finding the negligence instruction deficient. View "Superior Steel, Inc. v. Ascent at Roebling’s Bridge, LLC" on Justia Law
Lomas v. Kravitz
In this appeal, the Pennsylvania Supreme Court was asked to determine whether a trial court erred by denying a motion to recuse the entire bench of the Court of Common Pleas of Montgomery County. Appellant James Kravitz was the sole officer, director, and shareholder of several companies known as the Andorra Group, which included Appellants Cherrydale Construction Company, Andorra Springs Development, Inc., and Kravmar, Inc., which was formally known as Eastern Development Enterprises, Incorporated (“Eastern”). Kravitz also owned a piece of property known as the Reserve at Lafayette Hill (“Reserve”). Andorra Springs was formed to develop residential housing on sections of the Reserve. In 1993, Andorra Springs hired Cherrydale as the general contractor to build the homes on the Reserve. Eastern operated as the management and payroll company for the Andorra Group. Appellee Roy Lomas, Sr., d/b/a Roy Lomas Carpet Contractor was the proprietor of a floor covering company. Cherrydale and Lomas entered into a contract which required Lomas to supply and install floor covering in the homes being built by Cherrydale. Soon thereafter, Cherrydale breached that contract by failing to pay. Lomas demanded that Cherrydale submit Lomas’ claim to binding arbitration as mandated by the parties’ contract. The parties arbitrated the matter, and a panel of arbitrators entered an interim partial award in favor of Lomas, finding that Cherrydale breached the parties’ contract. Following Kravitz’s unsuccessful attempt to have the interim award vacated, the arbitrators issued a final award to Lomas. Judgment was entered against Cherrydale in the Court of Common Pleas of Montgomery County. Important to this appeal, then-Attorney, now-Judge Thomas Branca represented Lomas throughout the arbitration proceedings. Since the entry of judgment, Kravitz actively prevented Lomas from collecting his arbitration award by, inter alia, transferring all of the assets out of Cherrydale to himself and other entities under his control. In March 2000, Lomas commenced the instant action against Appellants. Then-Attorney Branca filed the complaint seeking to pierce the corporate veil and to hold Kravitz personally liable for the debt Cherrydale owed to Lomas. Approximately one year later, then-Attorney Branca was elected to serve as a judge on the Court of Common Pleas of Montgomery County. Prior to taking the bench, then Judge-Elect Branca withdrew his appearance in the matter and referred the case to another law firm. After several years of litigation, the parties agreed to a bifurcated bench trial. Although Appellants acknowledged that they were unaware of any bias or prejudice against them on the part of Judge Rogers or any other judge of the Court of Common Pleas of Montgomery County, Appellants maintained that Judge Branca’s continued involvement and financial interest in the case created an “appearance of impropriety” prohibited by the Code of Judicial Conduct. Specifically at issue before the Supreme Court was whether the moving parties waived their recusal claim and, if not, whether the claim had merit. The Court held that the recusal issue was untimely presented to the trial court and, thus, waived. View "Lomas v. Kravitz" on Justia Law
Twist Architecture v. Board of Architect Examiners
Out-of-state architects engaged in the illegal practice of architecture by holding themselves out as being licensed in Oregon. The Oregon Board of Architect Examiners (board) petitioned for certiorari review of the Court of Appeals decision to reverse in part the board’s determination that respondents (the Washington firm Twist Architecture & Design, Inc., and its principals, Callison and Hansen), engaged in the unlawful practice of architecture and unlawfully represented themselves as architects. The board argued respondents, who were not licensed to practice architecture in Oregon, engaged in the “practice of architecture” when they prepared master plans depicting the size, shape, and placement of buildings on specific properties in conformance with applicable laws and regulations for a client that was contemplating the construction of commercial projects. The board further argued that respondents’ use of the term “architecture” in the logo on those master plans and the phrase “Licensed in the State of Oregon (pending)” on their website violated the law prohibiting unlicensed individuals from representing themselves as architects or indicating that they were practicing architecture. The Oregon Supreme Court agreed with the board, reversed the Court of Appeals, and affirmed the board's order. View "Twist Architecture v. Board of Architect Examiners" on Justia Law
Ryan Contracting Co. v. O’Neill & Murphy, LLP
Meagher & Geer, PLLP (MG) represented Ryan Contracting Company (Ryan) in an action to foreclose on several mechanic’s liens. Later, represented by O’Neill & Murphy, LLP (O’Neill), Ryan brought suit against MG for legal malpractice arising out of MG’s allegedly defective filing and foreclosure of Ryan’s mechanic’s liens. The district court granted MG’s motion to dismiss on the ground that O’Neill failed to timely file expert witness affidavits. Ryan then brought suit against O’Neill for legal malpractice arising out of O’Neill’s representation of Ryan in the MG lawsuit. The district court granted summary judgment for O’Neill, concluding that the mechanic’s liens were not perfected, not because of MG’s conduct, but because of Ryan’s error in not filing the pre-lien notice to the property owner required by Minn. Stat. 514.011. The court of appeals reversed in part, concluding that Ryan was exempt from the pre-lien notice requirement under section 514.011, and there were genuine issues of fact regarding the other issues. The Supreme Court affirmed as modified, holding that the court of appeals did not err in concluding that Ryan was not required to give pre-lien notice to enforce its mechanic’s liens. View "Ryan Contracting Co. v. O’Neill & Murphy, LLP" on Justia Law
Cedar Rapids Lodge & Suites, LLC v. Lightowler Johnson Assocs., Inc.
In 2003, the governors of Cedar Rapids Lodge obtained the rights to build an AmericInn franchise. The company used Lightowler as the project architect. Lightowler used a standard form agreement that specified that its terms would be governed by the law of North Dakota. After changes requested by the Fire Marshal and for compliance with franchise standards, Lightowler submitted revised plans in February, 2004. Construction began in January 2004. In July, 2004, Lidberg of AmericInn led a construction site visit attended by the governors, and Olson, a Lightowler engineer. Lidberg and Olson prepared reports detailing deficiencies. The last act performed by Lightowler on the project was a response to the contractor in September, 2004. Lidberg led a second site visit in October, 2004, produced a report identifying additional deficiencies, and sent it to Siebert and Lightowler. The hotel opened for business in December, 2004, but problems continued. In December, 2009 Cedar Rapids Lodge brought claims against its former governors and others involved in the hotel project and alleging professional negligence by Lightowler. The Eighth Circuit affirmed summary judgment in favor of Lightowler, concluding that the claim was barred by the statute of limitations under either North Dakota or Iowa law. View "Cedar Rapids Lodge & Suites, LLC v. Lightowler Johnson Assocs., Inc." on Justia Law
Glassford v. Dufresne & Associates, P.C.
Plaintiffs Heidi and James Glassford appealed a superior court decision denying their motion for summary judgment and granting it to defendant Dufresne & Associates, P.C. on plaintiffs' claims of negligent misrepresentation and violation of the Vermont Consumer Protection Act (CPA). Plaintiffs were homeowners who purchased their home direct from the builder, D&L Homes by Design, LLC (D&L). D&L hired defendant to certify that the on-site mound sewage disposal system constructed for the home satisfied state permitting requirements. On April 19, 2005, the Vermont Agency of Natural Resources issued a Wastewater System and Potable Water Supply Permit for construction of the sewage disposal system on the property, subject to receiving a certification pursuant to 10 V.S.A 1973(e). On October 20, 2005, defendant's employee sent the certification required by the statute. On December 20, 2005, plaintiffs signed a purchase-and-sale agreement to purchase the home from D&L. Although the seller represented that the home and property had received all the necessary permits, plaintiffs never saw the certificate or the letter from the Agency stating that the certification requirement was satisfied. Sometime thereafter, plaintiffs hired an attorney in connection with the closing. On January 13, just prior, plaintiffs' attorney prepared a certificate of title that noted the wastewater and water supply permit. In February 2006, the sewage disposal system failed. In November 2008, plaintiffs hired defendant to investigate the system's failure because they knew defendant had inspected the system prior to their purchase. Defendant prepared a report stating that he had "completed the original" inspection in 2005 and found the system had been installed according to the permitted design. Plaintiffs received other opinions about the disposal system's failure both before and after hiring defendant to inspect the system. Plaintiffs filed a complaint in superior court alleging pecuniary losses from defendant's failure to properly inspect the sewage disposal system and subsequent misrepresentation about the construction of the system in the certification to the Agency. Upon review of the superior court decision, the Supreme Court found that the completion and filing of defendant's certificate was a prerequisite to D&L's ability to sell the home, the certificate was unrelated to the sale. The law required that it be sent only to the government agency that issued the permit. Furthermore, there was no allegation that D&L used the certificate as part of its sales pitch, and no allegation that defendant had any part in the sales. The standard for CPA liability required that a person be directly involved in the transaction that gave rise to the claimed liability. That standard was not met here. Accordingly, the Court affirmed the superior court's decision. View "Glassford v. Dufresne & Associates, P.C." on Justia Law
Audette & v. Cummings
Defendant, Suzynne D. Cumminngs and S.D. Cummings & Co., PC, appealed a Superior Court order awarding $44,403 to plaintiffs, Robert Audette and his company, H&S Construction Services, LLC (H&S), for breach of contract. Defendants provided various accounting and business services to Audette and his then-partner, Paul Fogarty, including helping them to start their construction business partnership, as well as preparing tax returns for both the business and Audette and Fogarty personally. In 2007, defendants helped Audette and Fogarty dissolve their partnership. One of the final acts defendants worked on for H&S was the placement of a mechanic's lien on a property on which H&S worked: the municipality halted construction on the project when H&S was approximately ninety-five percent complete. The lien placed on the property was for $44,403. Ultimately, plaintiffs’ 120-day statutory lien had not been timely secured or recorded, therefore it had lapsed. Plaintiffs brought suit against defendants in November 2009 for failing to secure the lien. The trial court found for plaintiffs and awarded damages in the amount of $44,403. Finding no error in the Superior Court's judgment, the Supreme Court affirmed. View "Audette & v. Cummings" on Justia Law