Articles Posted in Construction Law

by
Lumber Specialties was hired as a subcontractor on a construction project to provide the truss package and certain engineering services. Dinsdale Construction was hired to supply the labor and building materials on the project. During a visit to the site, an employee of Lumber Specialties supplied false information to the builder regarding the structural integrity of the building. The visit was done was a courtesy to the builder and for the general goodwill of the business. The structure subsequently collapsed due to inadequate temporary bracing of the trusses. Dinsdale had not followed the industry standard temporary bracing plan. Dinsdale Construction brought suit against Lumber Specialties, alleging breach of contract and negligent misrepresentation. The jury returned a verdict for Dinsdale Construction on the negligent misrepresentation claim. The court of appeals affirmed. The Supreme Court vacated the decision of the court of appeals and reversed the district court judgment, holding (1) a defendant who is not acting in its information-giving capacity does not have a duty of care under the negligent misrepresentation tort; and (2) Lumber Specialties’ employee’s statements were excluded from the imposition of duty under the tort. View "Dinsdale Construction, LLC v. Lumber Specialties, Ltd." on Justia Law

by
Plaintiff, a contractor-developer, bought a residential lot from a realtor in order to build townhomes for sale. Plaintiff filed a complaint against the original developers whose contractor had performed purportedly substandard soil work, alleging that the lot had improperly compacted backfill which required significant additional work to get it ready for construction. Plaintiff sued under the theory of breach of the implied warranty of workmanlike construction. The district court granted summary judgment for Defendants, concluding that the implied warranty did not apply to the sale of a lot without a dwelling. The court of appeals affirmed. The Supreme Court affirmed, holding that the implied warranty of workmanlike construction does not apply to a for-profit developer’s purchase of a lot with no dwelling, regardless of the work performed by the seller to make the lot buildable. View "Rosauer Corp. v. Sapp Dev., LLC" on Justia Law

by
After a bank acquired an apartment complex by deed in lieu of foreclosure the bank discovered substantial black mold in the units. The bank sued the builder, alleging, inter alia, that the builder breached the implied warranty of workmanlike construction. The district court granted summary judgment to the builder on the implied warranty claim. The court of appeals affirmed. The Supreme Court affirmed, holding that the bank may not recover under the implied warranty of workmanlike construction, as the implied warranty of workmanlike construction does not extend to a lender acquiring apartment buildings by a deed in lieu of foreclosure. View "Luana Savings Bank v. Pro-Build Holdings, Inc." on Justia Law

by
The Iowa Department of Transportation (IDOT) hired a general contractor, which was a “targeted small business” (TSB), for two public construction contracts. The general contractor subcontracted with three subcontractors, which the general contractor failed to pay in full. The subcontractors sued IDOT and the general contractor. The district court granted IDOT’s motion to dismiss and entered default judgments against the general contractor, ruling that, in absence of a bond, the subcontractors’ remedy against the state was limited to the funds IDOT retained on its contract with the general contractor. The subcontractors appealed, arguing that Iowa Code 573.2, the statute that governs subcontractors’ remedies for unpaid work on public improvements when the state waives the performance bond for a general contractor that is a TSB, allowed broader recovery rights and required IDOT to step into the TSB’s shoes to pay the balances owed them. The Supreme Court reversed, holding that section 573.2 operates as a waiver of sovereign immunity that allows subcontractors to recover from IDOT the unpaid balances TSBs owe for work on public improvements. Remanded. View "Star Equip., Ltd. v. State" on Justia Law

by
Plaintiff was a construction supply business that entered into a dispute with City over a project upgrading City's wastewater treatment facility. After City excluded Plaintiff from its list of preapproved material suppliers, Plaintiff filed this action seeking a declaration that City's preapproval process violated Iowa's public construction bidding statute and constitutional guarantees of equal protection and due process. In addition, Plaintiff sought relief under the Open Records Act, claiming that City's significant delay in responding to Plaintiff's open records request violated the Open Records Act. The district court rejected each of Plaintiff's claims. The Supreme Court (1) affirmed the judgment dismissing Plaintiff's public biding and constitutional claims, as (i) Plaintiff lacked standing to challenge City's preapproval process, and (ii) Plaintiff's constitutional claims failed on the merits; and (2) reversed the district court's ruling denying Plaintiff relief under the open records law, as City's substantial and inadequately explained delay in responding to Plaintiff's open records request violated the law. View "Horsfield Materials, Inc. v. City of Dyersville" on Justia Law

by
In this breach of contract case, the Supreme Court considered whether the district court erred in denying Defendant's motion for a new trial based on several rulings by the district court that Defendant claimed materially affected his rights and denied him a fair trial. The district court refused Defendant's request to exclude exhibits disclosed by Plaintiff the day before trial in violation of the district court's pretrial scheduling order. Additionally, the district court refused the request to declare a mistrial when Plaintiff testified to certain matters in violation of the district court's stipulated ruling on a motion in limine and denied Defendant's motion for a directed verdict. The court of appeals reversed and remanded for a new trial because it concluded the district court abused its discretion in admitting the exhibits into evidence. The Supreme Court vacated the court of appeals and affirmed the district court, holding that Defendant had not shown the district court committed any error in its decisions during the trial that substantially prejudiced Defendant's rights to a fair trial. Thus, Defendant was not entitled to a new trial. View "Fry v. Blauvelt " on Justia Law

by
An owner and contractor entered into an agreement for the construction of a new home. During construction, the owner refused to pay the contractor after discovering markups on the cost of materials. In response, the contractor halted construction and filed an action to enforce a mechanic's lien. The contractor subsequently filed a petition to foreclose the mechanic's lien. Although the contractor did not complete construction, the district court found the contractor rendered substantial performance under the contract and entered a judgment against the owner. The court of appeals affirmed. The Supreme Court affirmed in part and vacated in part the court of appeals and reversed the district court, holding that the trial court erred in concluding that the contractor had substantially completed work for the owner. Remanded. View "Flynn Builders, L.C. v. Lande" on Justia Law

by
At issue in this case was whether a subcontractor that properly performs electrical work on a jobsite, then locks up the work and transfers control to the property owner, owes a duty of care to an employee of the owner electrocuted six days later when the owner fails to deenergize the work site in contravention of various warnings and regulations. The district court granted summary judgment to the subcontractor, holding that the subcontractor owed no duty to the employee because it did not have control of the switchgear box when the employee was injured. The court of appeals reversed. The Supreme Court vacated the court of appeals and affirmed the district court, holding that, under the circumstances, the subcontractor owed no duty of care to the employee. View "McCormick v. Nikkel & Assocs." on Justia Law