An Interesting Look at Mechanic’s Lien Priority and Necessary Parties
May 13, 2019 —
Christopher G. Hill - Construction Law MusingsAs regular readers of Construction Law Musings are well aware, I like to discuss mechanic’s liens. Whether it is their picky nature, the way court’s treat them or the soon to take effect changes in the form, mechanic’s liens are a topic near and dear to my heart as a construction attorney.
This past month the Fairfax Circuit Court took on the intersection of mechanic’s lien priority under Virginia Code section 43-21 (the lien priority statute) and what constitute necessary parties that must be named in any enforcement suit. In Marines Plumbing, LLC v. Durbin, et al., the Court discussed an all too typical scenario. Marines Plumbing performed repair work on the defendants’ property and the defendants did not pay for the work. Marines Plumbing recorded a memorandum of lien and subsequently sued to enforce that lien. In filing its suit, Marines Plumbing failed to name the trustees and lender on a deed of trust securing the loan on the property. Needless to say, the Defendants moved to dismiss the action for failure to name necessary parties (lender and trustees).
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Ohio Court of Appeals Affirms Judgment in Landis v. Fannin Builders
April 20, 2011 —
Beverley BevenFlorez CDJ STAFFThe Ohio Court of Appeals affirmed the judgment in Landis v. William Fannin Builders. Landis contracted Fannin Builders to build their home. The case involved staining problems on the T1-11 siding chosen by the plaintiffs.
After a year and a half of discussion on how to resolve the problem of uneven staining on the siding, Landis filed suit “against Fannin Builders, alleging claims for breach of contract, breach of the express limited warranty, and violation of the Ohio Consumer Sales Practices Act (“OCSPA”). Fannin Builders, in turn, filed a third-party complaint against 84 Lumber, alleging claims for breach of contract and indemnification. With the trial court’s leave, Fannin Builders also later amended its answer to add a counterclaim against appellees for breach of contract and unjust enrichment. In the counterclaim, Fannin Builders alleged that appellees still owed it $3,908.98 for the construction of appellees’ home.”
“In its decision, the trial court found in appellees’ favor on their breach of contract claim and against appellees on their claims for breach of the express limited warranty and violation of the OCSPA. Additionally, the trial court found in Fannin Builders’ favor on its counterclaim for breach of contract and against Fannin Builders on its third-party claims for breach of contract and indemnity. The trial court determined that appellees’ damages amounted to $66,906.24, and after setting off the $3,908.98 that appellees owed Fannin Builders under the construction contract, the trial court awarded appellees $62,997.26. The trial court reduced its decision to judgment on May 18, 2010.”
Fannin Builders appealed this judgment and assigned the following errors:
[1.] The Trial Court Erred as a Matter of Law by Concluding that Appellant Breached its Contract with Appellees when it provided a Semi-Transparent Oil-Based Stain that Simply did not Meet their Approval.
[a.] The Contract does not Contain a Satisfaction Clause.
[b.] Even if the Court Implies a Satisfaction Clause, the Court Should Apply an Objective Standard.
[2.] The Trial Court Erred as a Matter of Law by Failing to Consider Appellant’s Right to Cure.
[3.] The Trial Court committed Reversible Error by not Assessing Damages Using “Diminished Value Standard,” and by Creating a Remedy that Constitutes Economic Waste.
[4.] The Trial Court Erred as a Matter of Law by Concluding that Appellant is Barred from Seeking Indemnification When 84 [Lumber] Never Fulfilled its Obligations Pursuant to the Settlement Agreement Entered on August 2, 2005.
In response to the first assigned error, the Court of Appeals stated: “Because the failure to provide siding of a uniform color, not appellees’ displeasure, breached the contract, we reject Fannin Builders’ contention that the trial court implied a satisfaction clause into the contract and found a breach of that clause. Accordingly, we overrule Fannin Builders’ first assignment of error.”
The Court of Appeals overruled the second assignment of error and provided the following reasoning: “Although Fannin Builders depends upon a term of the limited warranty for its right to cure, the trial court concluded that no breach of the limited warranty occurred. Fannin Builders breached the duty of workmanlike conduct implicit in the construction contract, not the limited warranty requiring it to satisfy the BIA’s Quality Standards. Consequently, the limited warranty does not apply to this case, and thus, it does not prevent appellees’ recovery of damages.”
The Appeals Court found “the trial court’s award of damages” was “both reasonable and supported by competent, credible evidence,” and therefore concluded “that the trial court did not err in setting appellees’ damages at $62,997.26.” The Fannin Builders third assignment of error was overruled.
The fourth and final assignment of error was also overruled by the Court of Appeals. “While Fannin Builders correctly asserts that 84 Lumber never installed the replacement siding, it ignores the fact that it ordered 84 Lumber to remove the replacement siding from appellees’ property. Thus, Fannin Builders precluded 84 Lumber from completely performing under the August 2, 2005 letter agreement. […] Consequently, Fannin Builders cannot now claim that the letter agreement is unenforceable or that it is entitled to indemnification from 84 Lumber. Because Fannin Builders assumed all liability for the defective siding in the letter agreement, it is responsible for appellees’ damages.”
James A. Zitesman, Columbus, Ohio Business Attorney, compared the case to Jones v. Centex (Ohio App. 2010), which had a different verdict:
“The common thread is the implied warranty of good workmanship. In the Jones case, the Court found that the buyers had in fact waived all implied warranties, including the implied warranty of good workmanship. In the contract between Jones and Centex, the builder stated that it “…would not sell the property to Purchasers without this waiver.” Probably should have been a sign to the buyers.
In the Landis case, the Court stated, “Contracts for the future construction of a residence include a duty, implied by law, that the builder must perform its work in a workmanlike manner.” The Court gave significant weight to the concept of the implied warranty of good workmanship. The builder relied upon the BIA Warranty which limits builders’ liability and exposure to legal issues. The trial court concluded there was no breach of the limited warranty, rather the builder “breached the duty of workmanlike conduct implicit in the construction contract, not the limited warranty requiring it to satisfy the BIAs Quality Standards.”
The Supreme Court of Ohio has accepted the Jones v. Centex Homes case for review.
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Keeping KeyArena's Landmark Lid Overhead at Climate Pledge Arena Redevelopment Is A 22,000-Ton Balancing Act
November 30, 2020 —
Nadine M. Post - Engineering News-RecordMost contractors would jump at the chance to have a roof overhead during a major rebuild. But for the team turning earthquake-prone Seattle’s 411,000-sq-ft KeyArena into the 932,000-sq-ft Climate Pledge Arena, the city-owned facility’s historic helmet has been a 44-million-lb design and construction headache.
Reprinted courtesy of
Nadine M. Post, Engineering News-Record
Ms. Post may be contacted at postn@enr.com
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Colorado Senate Bill 15-177: This Year’s Attempt at Reasonable Construction Defect Reform
February 18, 2015 —
Zach McLeroy – Colorado Construction LitigationOn February 10, 2015, Senators Scheffer and Ulibarri introduced Senate Bill 15-177, which is sponsored in the House by Representatives DelGrosso and Singer. SB 15-177 amends the prerequisites, found in the Colorado Common Interest Ownership Act (“CCIOA”), for an association to file a construction defect action. The bill has been assigned to the Senate Committee on Business, Labor, and Technology but not yet scheduled for hearing.
The major points of the bill include: 1) enforcement of a mediation or arbitration provision contained in the original governing documents of a common interest community, even if subsequently amended or removed; 2) the addition of a requirement that mediation take place before a construction defect action can be filed; 3) heightened requirements that an association board provide advanced notice to all unit owners, together with a disclosure of projected costs, duration, and financial impact of the construction defect claim; 4) the addition of a requirement that the board obtain the written consent of a majority of the owners of units, and; 5) a requirement that prior to the purchase and sale of a property in a common interest community, the purchaser receive notice that binding arbitration may be required for certain disputes.
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Zach McLeroy, Higgins, Hopkins, McLain & Roswell, LLCMr. McLeroy may be contacted at
mcleroy@hhmrlaw.com
Another Reason to Always Respond (or Hensel Phelps Wins One!)
September 16, 2019 —
Christopher G. Hill - Construction Law MusingsHere at Construction Law Musings, Hensel Phelps Construction Co. is best known as the company that got whipsawed between indemnity rules and the lack of a statute of limitations for state agencies. However a recent case out of the Federal District Court for the Eastern District of Virginia gave them a win and illustrates, once again, that failing to appear or respond is never a good option.
In Hensel Phelps Construction Co. v. Perdomo Industrial LLC, the Alexandria, VA federal court looked at an arbitration award entered for Hensel Phelps and against Perdomo under the Federal Arbitration Act. The facts of the case showed that Perdomo “double dipped” into the deep end of refusal or failure to respond. First of all, the contract required arbitration and any award was enforceable in any state or federal court having jurisdiction. Based upon this language, Hensel Phelps filed a demand for arbitration with the American Arbitration Association against Perdomo and its surety, AAA sent notice to both Perdomo and Surety, and. . . neither responded or appeared at what was ultimately 8 days of hearings. After hearing Hensel Phelp’s evidence and the total lack of defenses from Perdomo and Surety, the panel issued an award in favor of Hensel Phelps, finding Perdomo LLC in default and holding Perdomo LLC and Allied World jointly and severally liable in the amount of $2,958,209.71 and Perdomo LLC individually liable in the amount of $7,917,666.30 plus interest.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
BOO! Running From Chainsaw Wielding Actor then Falling is an Inherent Risk of a Haunted Attraction
December 10, 2015 —
Laura C. Williams, R. Bryan Martin & Lawrence S. Zuckerman – Haight Brown & Bonesteel LLPIn Griffin v. The Haunted Hotel, Inc. (filed 10/23/15; certified for publication 11/20/15), the California Court of Appeal, Fourth Appellate District, affirmed summary judgment in favor of the defendant haunted attraction operator holding that the risk of a patron being frightened, then running away and falling is inherent in the fundamental nature of a haunted house attraction. The Court further determined there was no evidence the operator acted recklessly or unreasonably increased such risks beyond those inherent in the attraction.
In October 2011, Plaintiff attended The Haunted Trail attraction, which featured actors in costumes jumping out holding prop weapons to scare patrons walking along a trail through Balboa Park. The Haunted Trail also employed a scare tactic known as the “Carrie” effect, in which the patrons walk through a fake exit and suddenly a chainsaw wielding actor appears and charges at the patrons for one final jolting scare.
It was during this final scene of The Haunted Trail’s “Carrie” effect that Griffin became frightened by an actor brandishing a chainsaw causing him to suddenly run away in fear. As he was fleeing, Griffin fell and injured his wrist.
Reprinted courtesy of Haight Brown & Bonesteel LLP attorneys
Laura C. Williams,
R. Bryan Martin and
Lawrence S. Zuckerman
Ms. Williams may be contacted at lwilliams@hbblaw.com
Mr. Martin may be contacted at bmartin@hbblaw.com
Mr. Zucker may be contacted at lzucker@hbblaw.com
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Duty to Defend For Accident Exists, But Not Duty to Indeminfy
March 05, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe Seventh Circuit found there was a duty to defend the additional insured under the policy, but not a duty to indemnify. Kmart Corp. v. Footstar, Inc., 2015 U.S. App. LEXIS 1775 (7th Cir. Feb. 4, 2015).
By agreement, Footstar operated the footwear department in hundreds of Kmart stores around the country. Footstar's footwear departments were in designated areas of the Kmart stores. Section 18.1 of the Master Agreement required Footstar to defend and indemnify Kmart from "all damage . . . arising out of Footstar's performance or failure to perform under this Agreement." The same section also required Footstar to obtain additional insurance coverage for Kmart.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Appeal of an Attorney Disqualification Order Results in Partial Automatic Stay of Trial Court Proceedings
October 11, 2017 —
Howard M. Garfield & Renata L. Hoddinott - Haight Brown & Bonesteel LLPIn URS Corporation v. Atkinson/Walsh Joint Venture (No. G055271 filed September 26, 2017), Division Three of the Fourth Appellate District dealt with, for the first time, the question of whether an appeal of an attorney disqualification order results in an automatic stay of the trial proceedings and, if so, how far the automatic stay extends.
The underlying action involved a construction dispute between a contractor and subcontractor. During the pendency of that action, one party’s counsel filed a motion to disqualify another party’s counsel based on an alleged misuse of mediation-privilege protected documents. The trial court granted the disqualification motion and the disqualified counsel promptly filed a notice of appeal. The trial court then denied an application to stay proceedings pending the appeal, rejecting the assertion that the appeal automatically stayed the underlying proceedings.
Reprinted courtesy of
Howard M. Garfield, Haight Brown & Bonesteel LLP and
Renata L. Hoddinott, Haight Brown & Bonesteel LLP
Mr. Garfield may be contacted at hgarfield@hbblaw.com
Ms. Hoddinott may be contacted at rhoddinott@hbblaw.com
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