July 16, 2011

Court Reviews a Recission of Contract Case Against Builders of a Home

HOSIE JOHNSON ET AL. v. NICK DATTILO ET AL. (Tenn. Ct. App. July 15, 2011)

The purchasers of a lot and newly constructed residence filed this action against the builders, seeking damages and rescission of the construction and sale agreement. The plaintiffs allege the defendants breached the agreement by failing to construct the home in accordance with "good building practices," and breached the implied warranty of workmanship. They also allege that statements made by the foreman during construction, concerning the condition of the property, amount to a violation of the Tennessee Consumer Protection Act, Tenn. Code Ann. section 47-18-104(b)(7), as well as common law negligent and fraudulent misrepresentation. The trial court granted the defendant's motion for a directed verdict on all claims. Finding plaintiffs failed to provide evidence of key elements in each of their claims, we affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/johnsonh_071511.pdf

July 14, 2011

Earl K. Messer: Insurance coverage for construction defects

Contractor liability insurance coverage in construction defect cases is a matter that is hotly litigated. On the one hand, coverage often exists when a defect causes harm to a third party’s property. On the other hand, if the only harm is to the insured contractor’s defective work itself, there is usually no coverage. In between lies controversy. A key area of dispute is where defective work on one part of a construction project causes harm to another part of the same project, a common occurrence. Courts are split on whether coverage exists under such circumstances, although the trend appears to be in favor of coverage.

Read the full story here: http://www.expertwitnessinconstruction.com/httpdocs/news-Construction_Defect_Insurance_Coverage.php

June 29, 2011

TN Supreme Court Reviews Whether a Construction-Related Injury was Negligence Subject to the Governmental Tort Liability Act

DALTON REB HUGHES ET AL. v. THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY, TENNESSEE ET AL. (Tenn. May 24, 2011)

After being injured when he jumped out of the path of a front-end loader owned by a governmental entity and operated by its employee, the plaintiff filed suit, claiming that the employee either was negligent in his operation of the equipment or had acted intentionally and that the governmental entity was liable under the Governmental Tort Liability Act. The trial court entered judgment for the plaintiff against the governmental entity and the Court of Appeals affirmed.

The governmental entity sought permission to appeal, arguing first that the employee had acted outside the scope of his employment and, secondly, that he had committed an assault against the plaintiff, either of which would preclude liability under the Act. Although we hold that the employee's conduct fell within the scope of his employment, his operation of the equipment constituted the intentional tort of assault rather than negligence. The governmental entity cannot, therefore, be held liable under the Act absent proof of its negligent supervision. The judgment of the Court of Appeals is reversed as to the governmental entity, and the cause is remanded to the trial court for entry of judgment against the employee.

Opinion available at:
http://www.tba2.org/tba_files/TSC/2011/hughesd_052411.pdf

June 25, 2011

An ICE Storm of Immigration Audits is Coming

An ICE Storm of Immigration Audits is Coming
Dana Olsen
Corporate Counsel
June 22, 2011

For the second time this year, auditors at the U.S. Immigration and Customs Enforcement branch of the Department of Homeland Security are cracking down on employers to ensure compliance with workplace eligibility laws. Ian MacDonald, an immigration attorney at Littler Mendelson, says the audits are not going to stop anytime soon.

The government announced last week its intention to audit the hiring records of 1,000 employers of all sizes across the country. ICE says the selection of targeted employers is random, but MacDonald says certain industries are particularly prone to the audits. In February, the agency made a similar announcement and investigated 1,000 employers. Adding in whistleblower tips, the latest action brings the number of I-9 audits for fiscal year 2011 up to 2,300.

See complete article:
http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202498023756

June 15, 2011

Court Reviews a Dismissed Cased Involving a Dispute Arising from the Construction of Two Houses

TERRY LAKE AND LINDA OUSLEY V. LOUIS HAYNES, BARBARA HAYNES AND RUNNING BEAR CONSTRUCTION (Tenn. Ct. App. June 9, 2011)

This is a construction case. The plaintiffs hired the defendant construction company to build two residential houses. Disputes arose during construction over completion of the work and the plaintiffs did not make some payments to the construction company. After the plaintiffs terminated the contract, they sued the defendant construction company. The construction company filed a counter-complaint. After a trial, the trial court dismissed the plaintiffs' complaint and the defendants' counter-complaint. However, the trial court failed to issue written findings of fact and conclusions of law as required under Rule 52.01 of the Tennessee Rules of Civil Procedure. We vacate the trial court's judgment and remand the cause to the trial court for written findings of fact and conclusions of law.

Opinion available at:

http://www.tba2.org/tba_files/TCA/2011/laket_060911.pdf

May 19, 2011

Court Reviews Whether a Contractor Violated the TN Consumer Protection Act by Hiding Unsuitable Soil

SPRING CRESS REALTY, LLC v. LARRY E. BROWN DBA S&B ASSOCIATES ET AL. (Tenn. Ct. App. May 16, 2011)

This is an action by an owner/developer of real property, Spring Cress Realty, LLC, against its excavation contractor, Larry E. Brown dba S&B Associates. The primary factual allegation is that the excavator intentionally hid approximately 40,000 cubic yards of unsuitable soil in an "engineered fill." The complaint included a claim that Brown violated the Tennessee Consumer Protection Act ("the TCPA"), Tenn. Code Ann. section 47-18-101 et seq.(2001). After a bench trial, the court awarded Spring Cress a judgment against Brown for compensatory damages of $551,295, trebled under the TCPA to $1,653,885. Brown appeals raising issues as to the preponderance of the evidence and the statute of limitations applicable to the TCPA claim. We affirm.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2011/springcress_051611.pdf

May 18, 2011

Court Reviews Whether A Builder Constructed a House in Accordance with "Good Building Practices"

ROGER WILKES, ET AL. v. SHAW ENTERPRISES, LLC (Tenn. Ct. App. May 5, 2011)

This is an appeal of the trial court's determination on remand that the Appellee did not breach the parties' contract when it constructed the Appellant's house without through-wall flashing and weep holes, as required by the applicable building code. The parties' contract provided that the builder would construct the house in accordance with "good building practices." The trial court concluded the builder constructed the house in accordance with good building practices even though it was not in strict conformance with the building code. We affirm this holding. The Appellants also appeal the trial court's failure to award them their attorneys' fees and costs incurred in their first appeal. We remand this matter to the trial court with directions that it award to Appellants reasonable attorneys' fees and costs incurred in their first appeal, as determined by the trial court.

Opinion available here:
http://www.tba2.org/tba_files/TCA/2011/wilkesr_050511.pdf

March 25, 2011

Court Reviews the Dismissal and Abatement of a Counterclaim in a Case Involving the Demolition and Construction of a Residential Garage

DAVID BATES D/B/A DAVID BATES CONSTRUCTION CO. v. CAROLINE BENEDETTI (Tenn. Ct. App. March 22, 2011)

David Bates d/b/a David Bates Construction Co. ("Plaintiff") sued Caroline Benedetti ("Defendant") for breach of a construction contract involving demolition of an existing residential garage and construction of a new one. Defendant answered the complaint and filed a counterclaim.

After a bench trial, the Trial Court entered its order finding and holding, inter alia,
(1) that Plaintiff had not proven damages,
(2) that Defendant had failed to comply with Tenn. Code Ann. section 66-36-103 with regard to her counterclaim and, therefore, pursuant to the statute her counterclaim should be abated, and
(3) that Defendant also had failed to give notice and an opportunity to cure pursuant to the common law and that her counterclaim should be dismissed for that reason as well.

Defendant appeals the abatement and dismissal of her counterclaim. We find that Tenn. Code Ann. section 66-36-103 does not apply to the case at hand, but that the Trial Court correctly dismissed Defendant's counterclaim. We, therefore, affirm the Trial Court's order.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/batesd_032211.pdf

March 14, 2011

Court Reviews whether Defendant Violated the Consumer Protection Act in a Cases Involving the Construction of a Home

ROBERT SHROUT, et al., v. HALL CONSTRUCTION, et al. (Tenn. Ct. App. March 14, 2011)

This case arose over the construction of a home for plaintiffs. Plaintiffs sued the construction company and a bank and several individuals. The Trial Court resolved the issues as to defendants, except Mark Rodriguez, prior to trial. The plaintiffs' case against Rodriguez was tried by the Trial Court who directed a verdict at the end of plaintiffs' proof. Plaintiffs appealed to this Court.

Plaintiffs insisted that material evidence established a violation of the Consumer Protection Act by defendant, and the directed verdict should be reversed. Upon review of the evidentiary record, we conclude that the Trial Judge properly directed a verdict in favor of the defendant, and we affirm the Trial Court's Judgment.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/shroutr_031411.pdf

Court Reviews a Contractor's Claim for Lien Enforcement Against Homeowners

WISE CONSTRUCTION, LLC, ET AL. v. THOMAS BOYD, ET AL (Tenn. Ct. App. March 14, 2011)

This appeal involves a home construction dispute between an LLC contractor and the homeowners. The contractor entered into a written contract with the homeowners for the construction of a 6000 square foot home. Upon the relationship between the parties becoming strained, the homeowners claim the contractor told them to find another builder. The contractor contends it was fired from the project. The instant action was commenced by the contractor to enforce a lien. The trial court found in favor of the contractor. The homeowners appeal. We affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/wiseconstruction_031411.pdf

SWINEY dissenting
http://www.tba2.org/tba_files/TCA/2011/wiseconstruction_DIS_031411.pdf

February 28, 2011

Court Reviews the Award of Damages in a Case about the Construction of a Defective Dentist Office

CHARLES PESCE v. EAST TENNESSEE CONSTRUCTION SERVICES, INC. (Tenn. Ct. App. February 28, 2011)

Charles Pesce ("the Owner") is a practicing dentist. He contracted with East Tennessee Construction Services, Inc. ("the Builder") to build him a new office for his practice on a lot owned by him. The Builder constructed the building, but with numerous undisputed defects.

The Owner filed this action which culminated in a bench trial that lasted several days. Based upon diminution in value, the trial court awarded the Owner $282,000 in damages. The trial court expressly found that the cost to repair the structure was an unacceptable measure of damages because it "is disproportionate . . . to the difference in the value of the structure actually constructed and the one contracted for." The court awarded the Owner discretionary costs of over $10,000.

The Owner appeals challenging the measure of damages as well as the amount awarded under the diminution in value measure. The Owner also challenges the trial court's failure to order the Builder to reimburse him for fees charged by one of the Owner's experts in connection with his discovery deposition taken by the Builder. The Builder challenges the award of discretionary costs and argues that the damages awarded are excessive. We reverse in part and affirm the remaining judgment as modified.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/pescec_022811.pdf

SWINEY concurring
http://www.tba2.org/tba_files/TCA/2011/pescec_CON_022811.pdf

Court Reviews Whether a City Council Acted Illegally in Approving a Planned Development and a Street Closure

NATHAN E. STEPPACH, JR. v. WILLIAM H. THOMAS, JR., ET AL. (Tenn. Ct. App. February 28, 2011)

This is the second appeal of this case, which arises from the grant of a writ of certiorari by the Shelby County Chancery Court. Upon review of the Memphis City Council's record, the trial court found that the Appellee City had not acted arbitrarily, capriciously, or illegally in either approving a planned development, or in approving the companion street closure.

The trial court granted partial summary judgment in favor of the City, thereby affirming the City Council's action in approving the planned development. The issue of the companion street closure proceeded to hearing, with the trial court ultimately affirming the City Council's decision. Appellant appeals, arguing that the City Council's decision was made in violation of the Memphis City Charter and ordinances, and that the decision was the product of corruption within the City Council. Discerning no error, we affirm the action of the trial court and remand for further proceedings.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/steppachn_022811.pdf

February 27, 2011

Court Reviews a Case Involving a Non-Performing Construction Company, a Developer, and Homeowners

DANIEL CAVANAUGH, et al., v. AVALON GOLF PROPERTIES, LLC. (Tenn. Ct. App. February 24, 2011)

Plaintiffs purchased a residential lot from defendant developer, but the purchase contract required plaintiffs to use defendant construction company to build their home. Before the home was completed, defendant construction company defaulted on paying materialmen and suppliers and abandoned the project.

Plaintiffs brought this action alleging that developer knew, or should have know, that the construction company was incapable of performing the required construction services, and that the developer owed plaintiff a fiduciary duty to provide a contractor who could perform the work in a good, workmanlike manner. They further alleged a breach of contract, in violation of the Tennessee Consumer Protection Act.

A default judgment was entered against the construction company, and the developer filed a Motion for Summary Judgment which the Trial Court ultimately granted against plaintiffs. Plaintiffs appealed and we affirm the Judgment of the Trial Court.

Opinion available here:
http://www.tba2.org/tba_files/TCA/2011/cavanaugh_022411.pdf

February 25, 2011

Court Reviews the Allocation of Responsibility Between Developers in a Case Involving Construction of a Road

THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY v. BARRY CONSTRUCTION COMPANY, INC., ET AL. (Tenn. Ct. App. February 25, 2011)

This matter is before the court for a second time. The Metropolitan Government of Nashville and Davidson County initiated suit to compel two developers to complete an unfinished portion of a road in a planned unit development or to recover damages equal to the cost of completing the road if it completed the road itself.

The trial court dismissed the action, finding that the amended complaint did not provide a legal basis for requiring either developer to complete the road. On appeal this Court vacated the trial court's order and remanded the case for the court to consider the appropriate allocation of responsibility for construction of the road between the two developers.

While the appeal was pending, the Metropolitan Government acquired the land and subsequently completed the unfinished portion of the road. On remand, the trial court assessed costs of constructing the road to the developers equally, but assessed the land-acquisition costs entirely to one developer. The Metropolitan Government appeals. Finding no error in the trial court's allocation of responsibility, we affirm.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/barryconstruction_022511.pdf

February 20, 2011

Court Reviews Negligent and Fraudulent Misrepresentation in a Case Involving the Failure to Disclose Defects in a Home

EDMOND CATO ET AL. v. D. L. BATTS ET AL. (Tenn. Ct. App. February 18, 2011)

Purchasers of home filed this action against the sellers for negligent misrepresentation and fraudulent misrepresentation for the failure to disclose defects in the home. The trial court found for the purchasers on their claim of negligent misrepresentation but denied their claim of fraudulent misrepresentation and their request for rescission. Purchasers appealed contending the trial court erred by not finding fraudulent misrepresentation and partially denying their motion to alter or amend the judgment in which they sought to introduce new evidence. We affirm the ruling of the trial court in all respects.

Opinion may be found at:
http://www.tba2.org/tba_files/TCA/2011/catoe_021811.pdf