Articles Posted in Construction Law

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Certified Construction, Inc. (CCI) submitted a bid proposal on a public works project by the County of Hawaii. The County disqualified CCI’s bid on the basis that the project required a C-44 license. CCI filed a bid protest with the County, arguing that nothing in the bid solicitation strictly required a C-44 license. The Office of Administrative Hearings dismissed the protest as untimely, concluding that CCI’s protest was a challenge to the contents of the bid solicitation rather than to the disqualification of its bid proposal. The circuit court disagreed and remanded the case for further proceedings. On remand, the hearings officer determined that CCI failed to demonstrate entitlement to relief. The circuit court affirmed. CCI appealed from the circuit court’s second order, and the County appealed from the circuit court’s first order. The Intermediate Court of Appeals (ICA) concluded that CCI’s protest was untimely and that the OAH lacked jurisdiction to consider CCI’s protest. The Supreme Court vacated the ICA’s judgment on appeal, holding that the ICA erred in concluding that CCI’s bid protest challenged the contents of the County’s bid solicitation because the protest, in fact, challenged the County’s disqualification of CCI’s bid proposal. View "Certified Construction, Inc. v. Crawford" on Justia Law

Posted in: Construction Law

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Plaintiffs brought a wrongful death action against Kamehameha Investment Corporation (KIC), the developer of a hillside area, and Sato and Associates, Inc. and Daniel Miyasato (collectively, Sato), the civil engineer. KIC tendered defense against Plaintiffs’ claims to Sato pursuant to a hold harmless clause in a project consultant agreement between Sato and KIC. KIC filed a cross-claim against Sato, alleging that Sato had agreed to defend and indemnify KIC against Plaintiffs’ claims. The trial court granted KIC’s motion for partial summary judgment against Sato. Relying on Pancakes of Hawaii, Inc. v. Pomare Properties Corp., the Intermediate Court of Appeals (ICA) affirmed, concluding that Sato had a contractual duty to defend KIC in the wrongful death action. The Supreme Court vacated the ICA’s judgment, holding (1) Haw. Rev. Stat. 431:10-222 renders invalid any provision in a construction contract requiring the promisor to defend “the promisee against liability for bodily injury to persons or damage to property caused by or resulting from the sole negligence of willful misconduct of the promisee, the promisee’s agent or employees, or indemnitee”; (2) Pancakes does not apply to defense provisions in construction contracts; and (3) the scope of a promisor’s duty to defend imposed by a construction contract is determined at the end of litigation. Remanded. View "Arthur v. State, Dep’t of Hawaiian Home Lands" on Justia Law

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This case arose from a dispute over the adequacy of concrete work Nordic PCL Construction, Inc. performed on a condominium construction project as a subcontractor to LPIHGC, LLC. The parties proceeded to arbitration. An arbitrator selected by the parties issued an arbitration award in favor of LPIHGC. LPIHGC moved to confirm, and Nordic moved to vacate, the arbitration award. The circuit court denied the motion to vacate and granted the motion to confirm. The Intermediate Court of Appeals (ICA) vacated the arbitration award on the grounds that the arbitrator failed to disclose various relationships with the law firms of LPIHGC’s attorneys. The Supreme Court vacated the ICA’s judgment on appeal and the circuit court’s final judgment, thereby vacating the associated orders granting LPIHGC’s motion to confirm the arbitration award and denying Nordic’s motion to vacate the arbitration award, holding that because the factual and/or legal bases upon which the circuit court denied the motion to vacate were unascertainable, the Supreme Court was unable to appropriately review the circuit court’s ruling. Remanded for an evidentiary hearing and entry of findings of fact and conclusions of law on Nordic’s motion to vacate. View "In re Arbitration of Nordic PCL Constr., Inc. v. LIPHGC, LLC" on Justia Law

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Plaintiffs, individually and on behalf of all persons similarly situated, filed a first amended class action complaint alleging that Gentry Homes, Ltd. constructed Plaintiffs’ home without adequate high wind protection. Gentry filed a motion to compel arbitration pursuant to a provision in the Home Builder’s Limited Warranty (HBLW) between Gentry and Plaintiffs. The circuit court ordered Plaintiffs to arbitrate their claims against Gentry but severed and struck an arbitrator-selection provision for potential conflict of interest. The intermediate court of appeals concluded that the circuit court should have enforced the HBLW’s arbitrator-selection provision. The Supreme Court vacated the ICA’s judgment and affirmed the circuit court orders, holding (1) the ICA erred in required a party challenging an arbitrator-selection provision to show evidence of “actual bias”; and (2) in resolving a challenge to an arbitrator-selection provision, the “fundamental fairness” standard should be applied, and under this standard, the arbitrator-selection provision was fundamentally unfair. View "Nishimura v. Gentry Homes, Ltd." on Justia Law

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VP & PK purchased an insurance policy from Lexington Insurance Company for work on a construction site. Kila Kila, one of VP & PK’s subcontractors, purchased an insurance policy from Nautilus Insurance Company. Both policies contained an “other insurance” provision and included duties to defend and indemnify. When VP & PK and Kila Kila were sued for damages resulting from the construction, Nautilus funded the defense of both Kila Kila and VP & PK. Lexington satisfied the judgment against VP & PK but did not contribute to the defense costs. Nautilus filed a complaint seeking (1) a declaration that Lexington owed VP & PK a duty to defend, which it breached; and (2) equitable contribution from Lexington for defense costs. The U.S. district court granted summary judgment for Lexington, holding that Lexington’s policy was in excess to Nautilus’s policy, and therefore, Lexington’s duty to defend was not triggered. The Hawaii Supreme Court accepted certified questions from the court of appeals and held, inter alia, that (1) an “other insurance” clause purporting to release an otherwise primary insurer of the duty to defend if the insurer becomes excess as to liability is enforceable, but only as between two or more insurers seeking to allocate or recover defense costs; and (2) an otherwise primary insurer who becomes an excess insurer by operation of an “other insurance” clause has a duty to defend as soon as a claim is tendered to it and there is the mere possibility that coverage of that claim exists under its policy. View "Nautilus Ins. Co. v. Lexington Ins. Co." on Justia Law

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Plaintiff brought this suit against the City and County of Honolulu and the State, challenging the approval of a rail project and arguing that state law required that an archaeological inventory survey be completed prior to any approval or commencement of the project. The circuit court granted summary judgment in favor of the City and State on all of Plaintiff's claims. The Supreme Court vacated the circuit court's judgment on Plaintiff's claims that challenged the rail project under Haw. Rev. Stat. 6E and remanded. Plaintiff subsequently requested that the Supreme Court award $255,158 in attorney's fees and $2,510 in costs against the City and State for work performed in the trial court. The Supreme Court (1) granted Plaintiff's request for appellate attorney's fees and costs against the City in the amount of $41,192 in attorney's fees and $343 in costs; (2) and denied Plaintiff's request for trial level fees and costs without prejudice, as Plaintiff's request for fees and costs attributable to work performed at the trial level was more properly within the trial court's discretion. View "Kaleikini v. Yoshioka" on Justia Law

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The State contracted with a general contractor (Contractor) to complete the renovation of an elementary school. The project required extensive glazing work, specifically, the fabrication and installation of jalousie windows. Contractor held a C-5 specialty license in cabinet, millwork, and carpentry remodeling and repairs, but it did not hold a specialty glazing license. The Department of Commerce and Consumer Affairs' (DCCA) Contractors License Board (Board) determined that Contractor could complete the jalousie window work pursuant to its C-5 license. Specifically, the Board determined that the jalousie window work qualified as "incidental and supplemental" to the remodeling and repair work authorized under Contractor's C-5 license. The circuit court and intermediate court of appeals affirmed. The Supreme Court vacated the judgments of the lower courts, holding that because the Board did not consider the cost and extent of the jalousie window work when determining if that work qualified as "incidental and supplemental" to the project, the Board's interpretation of the "incidental and supplemental" exception was contrary to law and to the primary purpose of the legislation regarding contractor licensing. Remanded. View "Dist. Council 50 of Int'l Union of Painters & Allied Trades v. Lopez" on Justia Law