Articles Posted in Construction Law

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The Supreme Court reversed the district court’s denial of the motion to dismiss the lawsuit brought by several property developers (Developers) alleging that the City of West Jordan violated statutory provisions that regulate how a municipality may spend impact fees collected from developers. The court held (1) Developers had standing to challenge the constitutionality of the impact fees they were assessed; (2) Developers failed to state a takings claim for which relief can be granted because Developers’ allegations that West Jordan either failed to spend impact fees within six years or spent the fees on impermissible expenditures were inadequate to support a constitutional takings claim; and (3) Developers did not have standing to bring a claim in equity. View "Alpine Homes, Inc. v. City of West Jordan" on Justia Law

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This case concerning a general contractor’s attempt to recover on a mechanic’s lien involved two phases. In the first phase, Jordan Construction, Inc. prevailed on its counterclaims against Scott Bell. In the second phase, Federal National Mortgage Association (FNMA) was brought into the action as a third-party defendant. FNMA subsequently succeeded in a series of motions before the district court. FNMA then stipulated to the payment of $126,956.92, the amount of the original mechanic’s lien. The Supreme Court affirmed, holding that the district court (1) did not err in concluding that FNMA is not bound by the earlier judgment rendered against Bell under either the recording of the lis pendens or the doctrine of res judicata; (2) did not err in ruling that Jordan Construction’s amended notice of lien was untimely; (3) did not err in ruling that, under the 2008 Utah Code, Jordan Construction was not entitled to recover prejudgment interest on its mechanic’s lien claim; and (4) properly awarded FNMA attorney fees under the mechanic’s lien statute. View "Jordan Construction, Inc. v. Federal National Mortgage Ass’n" on Justia Law

Posted in: Construction Law

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At issue in this case was the effect of a subordination agreement between fewer than all of the creditors who hold an interest in the same collateral. Appellant VCS, Inc. provided labor and materials to improve real property located in a planned unit development. The developer, Acord Meadows, secured funding for the project from America West Bank and Utah Funding Commercial. The loans were secured with trust deeds to the development properties, and the lenders entered into subordination agreements among themselves that altered the priority arrangement of their trust deeds. Because VCS was never paid for its work, it filed a mechanic’s lien covering several lots of the development, four of which were sold through a foreclosure sale after Acord defaulted on its loans from Utah Funding. VCS claimed it was entitled to payment of its mechanic’s lien because its lien had priority over Utah Funding’s liens. The district court ruled that VCS’s mechanic’s lien was extinguished by the foreclosure of Utah Funding’s liens. The Supreme Court affirmed after adopting the partial subordination approach to the issue in this case, holding that under the partial subordination approach, VCS’s mechanic’s lien was extinguished once Utah Funding’s lien was foreclosed upon. View "VCS Inc. v. Countrywide Home Loans, Inc." on Justia Law

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Lane Myers Construction agreed to build two separate homes for Dick and Kym Kyker. The Kykers obtained a construction loan through National City Bank. The bank periodically paid Lane Myers on draw request forms that indicated that Lane Myers had no lien on the property. Because the Kykers failed to repay Lane Myers as promised, Lane Myers recorded a mechanic’s lien against the property. Lane Myers then filed suit seeking to enforce its lien. The district court granted summary judgment for the Kykers and National City, concluding that the draw requests substantially complied with the Utah Mechanics’ Lien Act in effectively waiving Lane Myers’ right to file a mechanic’s lien. The court of appeals reversed, concluding that the forms were not in substantial compliance with the Act because they failed to incorporate the four essential elements of the statutory “form” necessary to waive and release lien rights. The Supreme Court reversed and remanded, holding (1) the Act requires only a waiver and release signed by the lien claimant, and the “form” set forth in the Act is merely a safe harbor; and (2) genuine issues of material fact precluded summary judgment in this case. View "Lane Myers Constr., LLC v. Nat’l City Bank" on Justia Law

Posted in: Construction Law

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The Utah Occupational Safety and Health Division (UOSH) cited and fined Hughes General Contractors, which oversaw a construction project involving over 100 subcontractors, for a subcontractor’s violation on the project. In determining that Hughes was responsible for safety conditions for the subcontractor’s employees, the UOSH invoked the multi-employer worksite doctrine, which makes a general contractor responsible for the occupational safety of all workers on a worksite, including those who are not the contractor’s employees. Both an administrative law judge and the Labor Commission’s Appeals Board upheld the citation and the multi-employer worksite doctrine, which federal OSHA regulations have adopted and federal courts have upheld. The Supreme Court reversed the citation and penalty, holding (1) the multi-employer worksite doctrine is incompatible with the governing Utah statute, Utah Code 34A-6-201(1; (2) the responsibility for ensuring occupational safety under the governing statute is limited to an employer’s responsibility to its employees; and (3) because Hughes was not an employer of the workers in question in this case, Hughes was improperly cited and sanctioned. View "Hughes Gen. Contractors, Inc. v. Utah Labor Comm’n" on Justia Law

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In July 2006, Appellee Staker & Parson Companies (Staker) worked as a contractor for the Utah Department of Transportation on an interstate construction project. Appellant Kent Turner sustained serious injuries in a car accident near the work site. He filed suit for negligence against Staker in July 2010, nearly four years after the accident. The district court granted Staker's motion to dismiss, holding that Turner's suit was time-barred under Utah Code 78B-2-225(3)(b)'s two-year statute of limitations. On appeal, Turner argued that his claim qualified for a four-year statute of limitations under Utah Code 78B-2-225(8). The Supreme Court reversed, holding that Turner's complaint alleged sufficient facts to survive dismissal under section 78B-2-225(8). Remanded. View "Turner v. Staker" on Justia Law

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David and Kristine Anderson purchased an undeveloped lot of land from Country Living Development. After constructing a home on the lot, the Andersons' home developed structural problems resulting from excessive settling caused by unstable soil beneath their home's foundation. The Andersons filed suit against Matthew Kriser, an employee and shareholder of Country Living, for fraudulent nondisclosure. The district court granted summary judgment in favor of Kriser. The court of appeals affirmed. The Supreme Court affirmed, holding (1) the court of appeals correctly concluded that a plaintiff must demonstrate that a defendant had actual knowledge of undisclosed information to satisfy the elements of a claim for fraudulent disclosure; (2) because the Andersons failed to set forth any evidence demonstrating that Kriser actually knew of the soil conditions below their home, summary judgment was proper; and (3) the court of appeals erred in relying on the Court's holding in Smith v. Frandsen to reach its conclusion that the law imposed no duty on Kriser to disclose information to the Andersons simply because he did not construct their home. View "Anderson v. Kriser" on Justia Law

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Ivory Homes purchased various concrete products from a company that, when it delivered the products, provided an invoice that charged a single sales price without indicating separate delivery charges. Ivory Homes then discovered if it structured its transactions with the company differently and bargained for separate and independent delivery charges, the charges would not be taxable. Subsequently, Ivory Homes filed a refund request with the Utah Taxpayer Services Division for sales tax it paid for several years on expenses associated with the concrete products. The Division denied the refund. The Utah State Tax Commission also denied the refund request. The Supreme Court affirmed the Tax Commission's decision that it did not erroneously receive any tax and that Ivory Homes was not entitled to a tax refund where (1) under a substantial evidence standard of review, the Commission correctly made findings of fact that the parties did not intend delivery charges in their original transactions; and (2) alternatively, a plain language interpretation of the Refund Statute requires that the Tax Commission commit some error in its receipt of taxes before a taxpayer is entitled to a refund. View "Ivory Homes, Ltd. v. Utah Tax Comm'n " on Justia Law

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The Utah Department of Transportation (UDOT) contracted with Meadow Valley Contractors (MVC) for a highway construction project. MVC subcontracted the paving work to Southwest Asphalt Paving. After UDOT refused to allow Southwest to use ribbon paving and assessed MVC a thickness-laying penalty, MVC filed a compliant against UDOT, alleging that (1) it incurred costs not contemplated by the contract as a result of UDOT's prohibition on ribbon paving, and (2) the thickness penalty assessed by UDOT was unwarranted. UDOT denied MVC claims. Southwest then filed a complaint in district court in MVC's name against UDOT alleging breach of contract. The trial court (1) concluded that UDOT breached its contract with MVC by refusing to allow ribbon paving on the construction project, and (2) denied MVC's claim that UDOT had erroneously imposed a paving-thickness penalty. On appeal, the Supreme Court reversed in part and affirmed in part, holding (1) UDOT did did not breach its contract with MVC when it forbade MVC and Southwest from using ribbon paving, and (2) there was sufficient evidence to support the trial court's conclusion that UDOT's interpretation of the contract regarding paving thickness was more reasonable than MVC's interpretation. View "Meadow Valley v. UDOT" on Justia Law

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Appellees Mark and Marilyn Hesse purchased an undeveloped subdivision of land owned by Canberra Development Company (CDC) in February 2004. Appellees constructed their home on the lot. After moving into their new home, Appellees noticed several structural problems including the presence of large cracks in the floor. Appellees later learned that these problems were caused by unstable soil beneath the foundation of their home. Subsequently, Appellees discovered that CDC had failed to inform them of soil analysis assessment reports which had been ordered seven years prior to the selling of their lot. These test reports indicated the presence of expansive and collapsible soils most notably in the Appelleesâ back yard. Appellees filed suit against CDC seeking compensatory and punitive damages for fraudulent nondisclosure and misrepresentation. After a jury trial, Appellees were awarded over $3 million in economic damages including pain and suffering. No punitive damages were awarded. After the trial, CDC filed several post-verdict motions including a motion for judgment notwithstanding the verdict. The District Court ultimately denied these motions. The Supreme Court held that the jury had sufficient evidence to conclude CDC was liable to Appellees for fraudulent nondisclosure and misrepresentation. The Supreme Court found later, however, that the district court had erred in denying CDCâs motion for a new trial to assess damages. As a result, the Supreme Court reduced Appelleesâ economic damages award.