Articles Posted in Construction Law

by
In 2012, the South Dakota Department of Revenue (Department) commenced an audit of Taxpayer’s excise tax and sales tax licenses for tax period 2009 through 2012. At issue in this case was whether Taxpayer’s construction management at-risk services provided to public and non-profit entities were subject to a contractor’s excise tax under S.D. Codified Laws 10-46A-1. Taxpayer did not remit excise tax on the gross receipts it received from its construction management at-risk services provided to public and non-profit entities. As a result of the audit, the Department issued Taxpayer a certificate of assessment for $43,020, which included excise tax and interest. The circuit court reversed the Department’s certificate of assessment, ruling that Taxpayer’s services were not subject to a contractor’s excise tax under section 10-46A-1. The Supreme Court reversed, holding that Taxpayer’s act of entering into a contract with a public entity to guarantee a satisfactorily completed public improvement project by a specific date for a specific cost was subject to excise tax under section 10-46A-1. View "Puetz Corp. v. S.D. Dep’t of Revenue" on Justia Law

by
In spring of 2000, Plaintiffs hired Meyer Modernizing Company to install siding, soffits, and gutters on the home they were constructing. Plaintiffs moved into the home by late 2000. No later than 2002, Plaintiffs noticed water infiltration around window and door openings when it rained. Plaintiffs did not bring suit regarding their water infiltration claim until 2010. In 2013, Plaintiffs amended their complaint to include the assertion that Meyer concealed the absence of installed flashing. Under the applicable statute of limitations, Plaintiffs were permitted to file their cause of action within six years of its accrual. The circuit court granted Meyer’s motion for summary judgment. Plaintiffs appealed, arguing that there were genuine disputes of material fact as to the beginning of the six-year limitations period, and Plaintiffs offered no reason why the period of limitation should be tolled. View "Gades v. Meyer Modernizing Co." on Justia Law

by
In 2002, East Side Lutheran Church contracted with NEXT, Inc. for construction of a new addition to its church and renovation to its existing structure. After the project was completed in 2003, East Side experienced a variety of problems throughout the structure. East Side filed suit against NEXT in July 2010. Defendants moved for summary judgment on the basis that East Side filed suit outside of the applicable six-year statute of limitations. The circuit court granted summary judgment to Defendants on the statute of limitations issue and on the issue of equitable estoppel. On appeal, the parties agreed that any claims that accrued before July 2004 were barred. At issue before the Supreme Court was whether there were any genuine issues of material fact as to whether any or all of East Side’s claims accrued before July 2004. The Supreme Court (1) reversed the circuit court’s ruling that barred East Side’s claims of design error and construction error, holding that a genuine issue of material fact existed to determine when those claims accrued; and (2) affirmed the circuit court’s grant of summary judgment on the equitable estoppel claim. Remanded. View "East Side Lutheran Church of Sioux Falls v. Next, Inc. " on Justia Law

Posted in: Construction Law

by
Border States Paving Company, Inc. was the prime contractor on a South Dakota Department of Transportation road construction project. Weatherton Contracting Company, Inc. entered into a subcontract with Border States to supply crushed aggregate for the project. Stern Oil Company sold Weatherton fuel and petroleum products necessary for Weatherton to perform its subcontract, but Weatherton failed to pay Stern Oil for the products. Stern Oil Company brought suit against Border States and its surety, Liberty Mutual Insurance Company, pleading causes of action against Border States for unjust enrichment and breach of an alleged third-party beneficiary payment agreement to pay the bill and against Liberty Mutual for payment on the bond. The circuit court granted summary judgment against Stern Oil on all claims. The Supreme court affirmed, holding that the circuit court did not err in granting summary judgment against Stern Oil on its claims. View "Stern Oil Co. v. Border States Paving, Inc." on Justia Law

by
This case involved a dispute between two construction companies, Plaintiff and Defendant. Defendant contracted with Plaintiff to build grain storage facilities at two locations. After beginning construction, Plaintiff stopped work for Defendant's alleged failure to make progress payments. Plaintiff then filed two lawsuits against Defendant seeking to foreclose liens on the property and asserting, ultimately, claims for breach of contract. Defendant counterclaimed for breach of contract, negligence, and other claims. The trial court dismissed the mechanic's liens claims, granted Defendant's motions for default judgment on the counterclaims, and granted Defendant's motions for summary judgment in both cases. The Supreme Court reversed the grant of the default judgments and summary judgments, holding that the trial court (1) abused its discretion in granting the motions for default judgment against Plaintiff on Defendant's counterclaims and in failing to grant Plaintiff's motions for enlargement of time; and (2) erred in granting the motions for summary judgment to Defendant on Plaintiff's claims of breach of contract. Remanded. View "Donald Bucklin Constr. v. McCormick Constr. Co." on Justia Law

by
Plaintiffs entered into a contract with DJ Construction (DJ) to build a home on their property. Construction was halted two years later after Plaintiffs discovered significant water damage in the home. Plaintiffs sued DJ, seeking to recover for the damage to their home and DJ's failure to complete the house. Auto-Owners Insurance Company, DJ's insurer, denied DJ's requests for defense and indemnity against Plaintiffs' claims, determining coverage was not provided for under the terms of the policy. Plaintiffs subsequently entered into a stipulated judgment and settlement agreement with DJ in which DJ confessed judgment and assigned its rights and claims against Owners to Plaintiffs. Plaintiffs then filed suit against Owners based on Owners' failure to defend and indemnify DJ. The circuit court granted summary judgment in favor of Owners, determining there was no coverage under the policy because multiple policy exclusions applied. The Supreme Court affirmed, holding that the circuit court did not err in granting summary judgment in favor of Owners on Plaintiffs' breach of contract and bad faith claims based upon its determination that multiple policy exclusions applied. View "Swenson v. Owners Ins. Co." on Justia Law

by
Homeowners obtained a default judgment against an LLC. Although the LLC's manager (Manager) was listed as an individual defendant, the default was only against the LLC. A partial satisfaction of the judgment was later entered. Afterwards, the trial court issued an order stating that any other claims against Manager were dismissed with prejudice. Later, LLC unsuccessfully challenged the amount of the partial satisfaction of judgment. Thereafter, Manager, individually and on behalf of the LLC, filed a notice of appeal appealing four separate orders made in the case. Homeowners moved to dismiss, arguing that the appeal was untimely, Manager was not an attorney and could not represent the LLC, and Manager was not an aggrieved party. The Supreme Court dismissed the appeal, holding (1) the appeal of three of the orders was untimely; (2) a non-licensed attorney is not permitted to appear pro se to represent an LLC; and (3) because all of the claims against Manager were dismissed, he was not an aggrieved party and could not appeal the remaining order, the partial satisfaction of judgment order. View "Smith v. Rustic Home Builders, LLC" on Justia Law

by
Border States Paving was awarded the prime contract by the state DOT for a road project. Border States entered into a subcontract with Morris, Inc. for aggregates and work on the project. During work on the project, the DOT orally informed Morris that certain materials passed the soundness test. However, the materials actually failed. Ultimately, the paving was not completed by the seasonal deadline. When the project was completed the next year, the DOT paid Border States in full. Border States withheld several thousand dollars from Morris for costs associated with the project because it believed Morris defaulted in its contractual obligations under the subcontract. Morris brought suit against the DOT, alleging that the DOT breached its express and implied contractual obligations owed to Morris and that the DOT breached its implied contractual obligation of good faith and fair dealing. The circuit court ruled in favor of Morris and awarded Morris damages. The Supreme Court reversed, holding that there was insufficient evidence that the DOT's erroneous pass report proximately damaged Morris where there was no evidence in the record that this error alone caused the project to not get completed by the deadline. View "Morris, Inc. v. State ex rel. Dep't of Transp." on Justia Law