Articles Posted in Construction Law

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Eagle Rigid Spans, Inc., ("ERS") appealed an order denying its motion for new trial and an amended judgment entered after a jury found in favor of Brandon and Constance Jalbert and awarding them $650,000 plus interest, and costs and disbursements. ERS also appealed from the district court's order overruling its objections to costs and disbursements. ERS contracted to build a multi-purpose building for the Jalberts. During and after the construction of the building the Jalberts discovered problems with the structure. The Jalberts brought suit alleging breach of contract and breach of warranty. ERS argued irregularities in the proceeding of the jury trial prevented them from having a fair trial, the jury awarded excessive damages because of the influence of passion or prejudice, sufficient evidence did not exist to justify the verdict and the trial court erred in failing to reduce the Jalbert's expert witness fees. Finding no reversible error, the Supreme Court affirmed. View "Jalbert v. Eagle Rigid Spans, Inc." on Justia Law

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Rick Snider and Janan Snider, doing business as RJ Snider Construction ("Snider"), appealed the grant of summary judgment, forfeiting a construction lien against the property that formerly housed the Dickinson Elks Lodge later owned by private investors, the Dickinson Elks Building, LLC ("DEB"), and prohibiting Snider from recording additional liens against the property without performing additional work. The North Dakota Supreme Court was not convinced that perfecting a lien amounted to creating a lien, as argued by the Sniders. As such, the Court concluded that when a Court declares a lien is deemed forfeited or satisfied, the right to the lien for the construction services or materials provided is deemed forfeited, not just the document recording the lien and establishing its priority. The district court correctly interpreted N.D.C.C. 35-27-25 in concluding the statute barred Snider from recording another construction lien against DEB's property for the same work. The district court also correctly concluded Snider forfeited its construction lien created and attached as a matter of law under N.D.C.C. sections 35-27-02 and 35-27-03 when it failed to comply with DEB's demand to enforce the lien. View "Snider v. Dickinson Elks Building, LLC" on Justia Law

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Twalker Development, LLC appealed a judgment granting KLE Construction LLC's claim for unjust enrichment and ordering Twalker to pay $87,958.74 in damages. KLE and Twalker engaged in negotiations for KLE to provide construction services to Twalker in exchange for four lots located in Twalker's development. KLE and Twalker never executed a written contract finalizing the terms of an agreement. KLE began performing construction services on the property, including preliminary dirt work related to clearing and scraping the property. KLE also hired an engineering firm to create plans to subdivide the property for future sales. KLE and Twalker disagreed about certain aspects of the project, and Twalker terminated KLE's services. Twalker continued to develop the property and did not compensate KLE for the services it provided. KLE sued Twalker for breach of contract, unjust enrichment, and forbearance. After a bench trial, the district court dismissed KLE's breach of contract claim, finding KLE failed to establish the existence of a contract. The court dismissed KLE's forbearance claim, stating forbearance was not a separate and distinct claim. The court granted KLE's unjust enrichment claim and found KLE was entitled to $90,857 in damages. The court ordered each party pay the other party's costs and disbursements. A judgment was entered in favor of KLE for $87,958.74. After review, the Supreme Court concluded the district court did not err in granting KLE's unjust enrichment claim and awarding damages. View "KLE Construction, LLC v. Twalker Development, LLC" on Justia Law

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Brian Welken appealed after a jury returned a verdict in favor of Eugene Taszarek, Marlys Taszarek, Trina Schilling, Steven Taszarek, and Michael Taszarek ("Taszareks") and against Lakeview Excavating, Inc., ("Lakeview") and Welken. Lakeview was a corporation primarily involved in flood control projects, and Welken was Lakeview's president and sole shareholder. In the spring of 2012, German Township in Dickey County solicited bids for road construction projects to repair and raise the grade of a road near the Taszareks' property. Lakeview, acting through Welken, successfully bid and was selected as the contractor for the road projects. Lakeview obtained most of its field rock for the project from area farmers and ranchers with rock piles on their properties. Lakeview arranged with landowners to harvest rocks from their fields and reclaim the ground so it could again be farmed, and landowners allowed Lakeview to remove rock piles. Herb Buerkley owned land adjacent to land owned by the Taszareks, and Buerkley permitted Lakeview to enter his family's property to harvest field rock. While harvesting the rock piles from Buerkley's land, Lakeview's employees crossed into the Taszareks' land and harvested field rock. The Taszareks brought an action against both Lakeview and Welken, asserting claims of intentional trespass, conversion, and unjust enrichment arising from Lakeview's work on the German Township road-raising project. The district court held a jury trial on the Taszareks' trespass and conversion claims against Lakeview and Welken. During trial, the Taszareks' attorney asked the court to instruct the jury on the theory that Lakeview was the "alter ego" of Welken and that Welken should therefore be personally liable for any judgment. Over the objection of Welken's attorney, the court gave an instruction regarding the alter ego doctrine. After review, the Supreme Court concluded Welken failed to preserve whether the district court misapplied the law by allowing the jury to resolve whether Lakeview was the alter ego of Welken. Furthermore, the Court concluded that the trial court erred as a matter of law in inadequately instructing the jury regarding the alter ego doctrine. The Court therefore reversed the judgment and remanded for a new trial. View "Taszarek v. Welken" on Justia Law

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Dickinson Elks Building, LLC, appealed after the district court forfeited a construction lien filed by Rick and Janan Snider, doing business as RJ Snider Construction, and awarded the Dickinson Elks attorney's fees. In December 2011, Snider contracted with Beaver Brinkman to perform work on real property owned by the Dickinson Elks. Snider recorded a construction lien in January 2013 against the property after it did not get paid for all of its work. In May 2014, the Dickinson Elks served Snider with a demand to start a lawsuit to enforce the lien and record a lis pendens within 30 days of the demand. Snider sued the Dickinson Elks in June 2014, seeking foreclosure of the construction lien and a money judgment. Snider recorded a notice of lis pendens in July 2014. The Dickinson Elks moved for summary judgment, arguing Snider's complaint should have been dismissed because Snider was not a licensed contractor when it started the work on the property. The Dickinson Elks also argued Snider did not have a valid construction lien, because Snider did not record a lis pendens within 30 days of receiving the demand to enforce the lien. The district court granted the motion in part and entered a judgment forfeiting Snider's construction lien because Snider did not record a lis pendens within 30 days of receiving the Dickinson Elks' demand to enforce the lien. After review, the Supreme Court concluded it did not have jurisdiction and dismissed the appeal. View "Snider v. Dickinson Elks Building, LLC" on Justia Law

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Linh Duc Duong, doing business as Classy Nails, appealed after a bench trial awarded Welch Construction & Excavating, LLC, $30,825, plus interest, for the balance due on a construction contract. Welch Construction sued Duong, alleging the parties contracted for Welch Construction to remodel a vacant retail space in Kirkwood Mall into a Classy Nails salon for $92,225. Welch Construction alleged it completed the work and Duong failed to pay the balance of $30,825 due under the contract. Duong answered and counterclaimed, denying he owed an outstanding balance under the contract and alleging Welch Construction breached the contract by failing to remodel the retail space in a timely and workmanlike manner according to his specifications. Duong claimed he was entitled to a setoff against any balance owed under the contract for his damages caused by Welch Construction's failure to complete the work before Thanksgiving 2013 and failure to construct the salon according to his specifications. Duong sought lost profits and damages for repairing the work according to his specifications. After review, the Supreme Court concluded the district court did not clearly err in finding: (1) the parties did not orally contract for a specific completion date for the construction project; (2) Welch Construction did not unreasonably delay completion of the project; and (3) Duong failed to establish his damages for costs to repair and lost profits for Welch Construction's claimed failure to complete the project according to his specifications. View "Welch Construction & Excavating, LLC v. Duong" on Justia Law

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Arrow Midstream Holdings, LLC and Arrow Pipeline, LLC (collectively "Arrow") appealed, and Tesla Enterprises, LLC ("Tesla") cross-appealed, a judgment dismissing without prejudice for lack of jurisdiction its action against 3 Bears Construction, LLC and Tesla for breach of contract and a declaration that Tesla's pipeline construction lien was invalid. In 2013, Arrow hired 3 Bears to be the general contractor for the construction of a pipeline located on a right-of-way easement acquired by Arrow from the Bureau of Indian Affairs over Indian trust land on the Fort Berthold Indian Reservation. 3 Bears entered into a subcontract with Tesla to supply materials and labor for the construction. 3 Bears was owned by two members of the Three Affiliated Tribes ("Tribe") and was certified under the Tribal Employment Rights Ordinance ("TERO"). 3 Bears claimed Arrow was a covered employer who was required to comply with TERO rules. After the pipeline was completed, a dispute arose between 3 Bears and Tesla concerning amounts Tesla claimed it was owed by 3 Bears for work Tesla performed. In mid-2014, Tesla sent Arrow a notice of right to file a pipeline lien under N.D.C.C. ch. 35-24. Tesla recorded the pipeline lien against Arrow in the Dunn County recorder's office in June 2014. In July 2014, Arrow commenced this action in state district court challenging the validity of the pipeline lien, seeking indemnification, and claiming 3 Bears breached the parties' contract. In August 2014, 3 Bears moved to dismiss for lack of subject matter jurisdiction. In November 2014, 3 Bears filed a complaint against Tesla and Arrow in Fort Berthold Tribal Court. 3 Bears sought a declaration that the pipeline lien was invalid, alleged Arrow had breached the master service contract, and requested an award of damages. In December 2014, the state district court agreed with 3 Bears' argument that it lacked subject matter jurisdiction over the lawsuit. The court concluded "exercising jurisdiction over this action under the circumstances presented here would infringe upon Tribal sovereignty." The court further concluded, "at the very least, Arrow and Tesla, as a matter of comity, should be required to exhaust their tribal court remedies before this Court exercises jurisdiction." The court dismissed the action "without prejudice to allow any of the parties to re-open the case without payment of another filing fee should it become necessary for purposes of enforcing the Tribal Court action or for any other reason." After review of the matter, the North Dakota Supreme Court reversed and remanded, concluding the district court had jurisdiction over this lawsuit. View "Arrow Midstream Holdings, LLC v. 3 Bears Construction, LLC" on Justia Law

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Zachary Johnson and Margie Johnson contracted with Buskohl Construction Inc. as a general contractor to oversee the construction of their new house. John Buskohl was the sole shareholder, officer, and director of Buskohl Construction Inc. Due to a deteriorating relationship with the Johnsons, Buskohl walked off the job before construction was complete, leaving various "odds-and-ends" unfinished on the house. The Johnsons repaired some of the alleged deficiencies themselves and solicited bids from various contractors to fix the remaining issues. The Johnsons sued Buskohl alleging Buskohl negligently constructed the house, breached the contract, and breached the warranty to construct the house in a workmanlike manner. The jury returned a verdict in favor of the Johnsons. Buskohl moved for a new trial under N.D.R.Civ.P. 59(b), arguing irregularities in the proceedings prevented him from receiving a fair trial. The district court denied the motion. On appeal, Buskohl argued the district court abused its discretion by denying a new trial because the district court erred by: (1) failing to provide a special verdict form that categorically itemized damages; (2) allowing hearsay into evidence; (3) excluding Buskohl's expert from testifying; and (4) denying Buskohl's motion for mistrial based on improper closing argument. After review, the Supreme Court concluded the district court erred in admitting hearsay evidence that did not fall within an exclusion or exception. Accordingly, the Court reversed the district court's judgment and remanded for a new trial, because the district court's error affected Buskohl's substantial right to a fair trial. View "Johnson v. Buskohl Construction, Inc." on Justia Law

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Lori Ihli appealed a district court judgment dismissing her claims against Anthony Lazzaretto, d/b/a Lazzaretto Construction ("Lazzaretto"). In June 2011, Ihli's Minot home flooded. Ihli contacted Lazzaretto for an estimate to repair the home, and in February 2012, she accepted Lazzaretto's bid proposal. Lazzaretto began working on Ihli's home; however, a dispute arose between the parties regarding the quality of the work, and Lazzaretto ceased working on the home. In November 2012, Ihli applied for federal disaster relief funding to repair or replace her house through the City of Minot Disaster Recovery Homeowner Rehabilitation and Reconstruction Program. Ihli sought estimates from two construction companies, Real Builders, Inc. and Wright Brothers, to "repair" and complete the project. Ihli then sued Lazzaretto, alleging he damaged her property by performing remodeling work in a negligent manner. After commencing the suit against Lazzaretto, she learned she was eligible for the disaster relief funding in "late August 2013." In Ihli's deposition, Ihli stated that program administrators inspected the house and recommended the house be torn down and replaced, instead of being repaired. After Ihli commenced the suit against Lazzaretto and learned of her eligibility for disaster relief funding and after Ihli's counsel granted Lazzaretto's counsel an extension to file Lazzaretto's answer to Ihli's complaint, Ihli allowed the house to be demolished. Before the house was demolished, Ihli's attorney had advised Ihli to take photos or video of the property before the house was torn down. Ihli never informed Lazzaretto of the plan to demolish the house. After the house was demolished, Lazzaretto served its answer. In June 2014, Lazaretto moved for sanctions, requesting the case be dismissed due to Ihli's spoliation of evidence. Ihli then moved to amend her complaint, seeking to add a claim for breach of contract. After a hearing on both motions, the district court denied Ihli's motion to amend the complaint, granted Lazzaretto's motion for sanctions, and dismissed Ihli's claims. On appeal, Ihli argued the district court erred in dismissing her case as a sanction for spoliation of evidence because the sanction was overly severe and an abuse of discretion. Ihli also argued the district court erred in denying her motion to amend the complaint because Lazzaretto was on notice of the proposed breach of contract claim and would not have been prejudiced. Under the facts of this case, the Supreme Court concluded the district court did not abuse its discretion in imposing the sanction of dismissal and denying Ihli's motion to amend. View "Ihli v. Lazzaretto" on Justia Law

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Tharaldson Ethanol Plant I, LLC and Tharaldson Financial Group, Inc. appealed a judgment and amended judgment ordering Tharaldson Financial to pay VEI Global, Inc., $1,150,000 plus interest, and an order granting certification under N.D.R.Civ.P. 54(b). VEI provided design and construction management services for an ethanol plant owned and operated by Tharaldson Ethanol. In 2009, Tharaldson Ethanol and VEI reached a settlement on disputed fees, agreeing Tharaldson Ethanol would pay VEI $1,350,000 for all work VEI performed through February 28, 2009. The agreement also provided Tharaldson Financial would enter into a $1,350,000 promissory note payable to VEI, and a copy of the note was attached and incorporated into the agreement. Tharaldson Ethanol and Tharaldson Financial sued VEI, claiming VEI negligently designed and constructed the ethanol plant. The complaint sought damages for breach of warranty, breach of contract, and negligence claims; and sought a declaratory judgment that Tharaldson Ethanol and Tharaldson Financial did not owe VEI anything under the settlement agreement or promissory note because of damages VEI caused by its breaches of contract and warranty and other wrongful acts. VEI answered and counterclaimed, including a breach of contract claim against Tharaldson Financial for failing to make payments on the promissory note. The district court ultimately granted VEI's motion for partial summary judgment, finding there were no genuine issues of material fact and VEI was entitled to judgment as a matter of law, and ordered VEI was entitled to judgment against Tharaldson Financial in the amount of $1,150,000, with interest. The Supreme Court dismissed Tharaldson Ethanol and Tharaldson Financial's appeal, holding that "[c]ertification under N.D.R.Civ.P. 54(b) must be reserved for 'the unusual case in which the costs and risks of multiplying the number of proceedings and of overcrowding the appellate docket are outbalanced by pressing needs of the litigants for an early and separate judgment as to some claims or parties.'" The Court concluded this case did not present "out-of-the-ordinary circumstances" or the "infrequent harsh case" warranting its immediate review. Consequently, the Court did not reach the merits of Tharaldson Ethanol and Tharaldson Financial's appeal. View "Tharaldson Ethanol Plant I, LLC v. VEI Global, Inc." on Justia Law