Justia U.S. 7th Circuit Court of Appeals Opinion SummariesArticles Posted in Construction Law
Lett v. City of Chicago
Lett worked as an investigator for Chicago’s Civilian Office of Police Accountability. In 2016, Lett was investigating police involvement in a particular civilian shooting. The Chief Administrator, Fairley, directed Lett to include in the report a finding that police officers had planted a gun on the shooting victim. Lett refused because he did not believe that the evidence supported that finding. Lett raised his concerns with Fairley’s deputy, who spoke with Fairley. Soon after, Lett was removed from his investigative team, then removed from investigative work, and ultimately assigned to janitorial duties. Fairley opened an internal investigation that concluded that Lett had violated the office’s confidentiality policy. Fairley ordered that Lett be fired. Lett initiated a grievance through his union. The arbitrator ordered the office to reinstate Lett with back pay and to expunge his record. Fairley immediately placed Lett on administrative leave with pay. Lett was assigned on paper to the Police Department’s FOIA office but was not allowed to return to work. Lett sued under 42 U.S.C. 1983, alleging First Amendment retaliation for his refusal to write a false report and Monell liability for the city and Fairley in her official capacity. The Seventh Circuit affirmed the dismissal of the claims. Lett spoke pursuant to his official duties and not as a private citizen when he refused to alter the report; the First Amendment does not apply. View "Lett v. City of Chicago" on Justia Law
Washington v. Marion County Prosecutor
Washington was driving a vehicle he owned when an Indianapolis police officer pulled him over in September 2016. Washington was arrested and charged with dealing in marijuana, resisting law enforcement, and obstruction of justice. The officer had Washington’s vehicle towed and held for forfeiture under Indiana Code 34- 24-1-1(a)(1) and 2(a)(1). In November 2016, Washington demanded the return of his vehicle per I.C. 34-24-1-3. He filed a federal class-action complaint, claiming such seizures violate the due process clause. In February 2017, the Prosecutor’s Office released the vehicle to Washington. The district court certified a class and granted Washington summary judgment, declaring I.C. 34-24-1-1(a)(1) (read in conjunction with other provisions of the chapter) unconstitutional in allowing for seizure and retention of vehicles without an opportunity for an individual to challenge pre-forfeiture deprivation. While an appeal was pending, Indiana amended the statute, arguably increasing the available process by providing for a probable cause affidavit, a motion for provisional release, and a shortened window for the Prosecutor to file a forfeiture complaint. The Seventh Circuit remanded for consideration of the constitutionality of the amended statute, expressing no opinion regarding the constitutionality of the old or new versions of the statute, regarding mootness, or regarding the class. View "Washington v. Marion County Prosecutor" on Justia Law
ProLite Building Supply, LLC v. Ply Gem Windows
Prolite Building Supply bought Ply Gem windows, which it resold to Wisconsin builders. Some homeowners were not satisfied with the windows, which admitted air even when closed. Contractors stopped buying from Prolite, which stopped paying Ply Gem. Prolite and homeowners sued. Ply Gem removed the action to federal court and counter-claimed against Prolite for unpaid bills. Additional parties intervened. The Seventh Circuit affirmed summary judgment in favor of Prolite. The court vacated the judgment on the homeowners’ claims for remand to state court. The service agreement between Prolite and Ply Gem requires Prolite to repair the Ply Gem windows in exchange for a discount and needed parts. There was no breach of that agreement. The homeowners’ claims can be resolved under supplemental jurisdiction only if they “are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy,” 28 U.S.C. 1367(a). The language of the window warranties received by the homeowners and the service agreement did not overlap. Prolite complained that Ply Gem did not do enough to ensure that its customers (the builders) remained willing to purchase Ply Gem windows. The homeowners just wanted to stop drafts and moisture. The nature of the work done differed. View "ProLite Building Supply, LLC v. Ply Gem Windows" on Justia Law
United States v. Ballard
Ballard obtained a $280,000 loan from SBH to construct the Stone Fence residence, then requested another $90,000 to finish the property. There was insufficient equity to cover that amount; SBH lent him $20,000. Ballard obtained construction loans on properties in Bradley. Grant was the SBH loan officer for all three properties. Ballard submitted required Sworn Contractor’s Statements and Owner’s Payment Authorizations to the Kankakee County Title Company (KCTC), identifying the material and labor costs supposedly associated with his work on the Bradley properties. Ballard obtained $188,000 for the Bradley properties, where no work was performed. Ballard used the funds to complete Stone Fence. An SBH employee discovered Ballard’s scheme. Ballard was charged with three counts of bank fraud, 18 U.S.C. 1344. At trial, Ballard admitted that he had misdirected funds; he argued a “good faith” defense that Grant and his supervisors knew and authorized Ballard’s acts and pressured him to complete Stone Fence. Ballard also claimed he did not read or sign the loan documents, implying that someone forged his signature. After Ballard was convicted, his attorney obtained a previously undisclosed audio recording of Grant, made during a prior, unrelated criminal investigation. The Seventh Circuit affirmed the district court in granting a new trial, finding the recording material. View "United States v. Ballard" on Justia Law
Laborers’ Pension Fund v. W.R. Weis Company, Inc.
Weis, a stonework firm, was required by a collective-bargaining agreement (CBA) to contribute to the Laborers’ Pension Fund for each hour worked by Union members. Weis complied for many years, then began using more skilled marble setters and finishers on its jobs, gradually stopped hiring Union members, ceased paying into the Fund, and terminated its CBA with the Union. The Fund, a multiemployer pension plan governed by ERISA and the Multiemployer Pension Plan Amendment Act, served notice that Weis owed more than $600,000 in withdrawal liability. Weis paid but challenged the assessment in arbitration, invoking 29 U.S.C. 1383(b): An employer in the building and construction industry is subject to withdrawal liability only if, after its contribution obligation ceases, it continues to perform work in the jurisdiction of the CBA of the type for which contributions were previously required. The Fund argued that the arbitrator misread the phrase “previously required” to mean “previously collected by the plan.” A district judge confirmed the award but denied Weis attorney’s fees. The Seventh Circuit affirmed. The Fund waived its statutory-interpretation argument by failing to raise it in arbitration and did not meaningfully challenge the arbitrator’s factual determinations. The judge did not abuse his discretion in denying Weis’s motion for attorney’s fees. View "Laborers' Pension Fund v. W.R. Weis Company, Inc." on Justia Law
Westfield Insurance Co. v. National Decorating Service, Inc.
A newly-constructed multi‐story condominium building suffered water damage, allegedly caused by the painting subcontractor, National, failing to apply an adequate coat of sealant to the exterior. In Illinois state court, the condominium association sued the general contractor, developer, and subcontractors. The defendants tendered the defense to Westfield, National’s insurer, Westfield filed a federal action seeking a declaration that it owed no duty to defend in the underlying action. The district court determined that the complaint triggered Westfield’s duty to defend. The Seventh Circuit affirmed the grant of summary judgment, rejecting an argument that failure to apply an adequate amount of paint cannot be considered an “accident” that would constitute a covered “occurrence” under the policy. Westfield also argued that because the damage is to the building itself, which was a new construction and not an existing structure, the association has not demonstrated that there was property damage that is subject to its policy. The policy defines “occurrence” to include the “continuous or repeated exposure to substantially the same harmful conditions,” so the allegation that National acted negligently was sufficient under Illinois law to constitute an “occurrence.” National’s actions allegedly damaged parts of the building that were outside of the scope of its work, so the complaint alleges potentially covered property damage sufficient to invoke the duty to defend. View "Westfield Insurance Co. v. National Decorating Service, Inc." on Justia Law
Haley v. Kolbe & Kolbe Millwork Co.,
Plaintiffs filed a putative class action against Kolbe & Kolbe Millwork, alleging that Kolbe sold them defective windows that leak and rot. Plaintiffs brought common-law and statutory claims for breach of express and implied warranties, negligent design and manufacturing of the windows, negligent or fraudulent misrepresentations as to the condition of the windows, and unjust enrichment. The district court granted partial summary judgment in Kolbe’s favor on a number of claims, excluded plaintiffs’ experts, denied class certification, and found that plaintiffs’ individual claims could not survive without expert support. The Seventh Circuit affirmed. Plaintiffs forfeited their arguments with respect to their experts’ qualifications under “Daubert.” Individual plaintiffs failed to establish that Kolbe’s alleged misrepresentation somehow caused them loss, given that their builders only used Kolbe windows. Though internal emails, service-request forms, and photos of rotting or leaking windows may suggest problems with Kolbe windows, that evidence did not link the problems to an underlying design defect, as opposed to other, external factors such as construction flaws or climate issues. View "Haley v. Kolbe & Kolbe Millwork Co.," on Justia Law
Allied Property & Casualty Insurance Co. v. Metro North Condominium Association
A subcontractor, CSC, installed the windows defectively at Metro's Chicago condominium. The building sustained significant water damage following a 2006 storm. The unit owners incurred personal-property damage. In 2009 Metro sued the developer, which was insolvent; in 2013 it added a claim against CSC for breach of the implied warranty of habitability. Metro and CSC reached a settlement. Metro dismissed its state court lawsuit; CSC assigned to Metro CSC’s rights to up to $700,000 of insurance coverage from Allied, arising out of the claims asserted against CSC in the lawsuit. The only pending claim against CSC in that lawsuit was for breach of the implied warranty of habitability. The settlement specified that it was not intended to compensate for the cost of repairing or replacing CSC’s defectively installed windows, but rather for the resultant damage to the remaining parts of the condominium and to the unit owners’ personal property. Allied obtained a declaratory judgment that it was not liable under CSC’s standard commercial general liability policy. The Seventh Circuit affirmed. The measure of damages for a breach of the implied warranty of habitability is the cost of repairing the “defective conditions,” here the defectively installed windows. Illinois courts have concluded that CGL policies like Allied’s do not cover the cost of repairing the insured’s defectively completed work; the Allied policy specifically excludes the cost of repairing CSC’s defective work. View "Allied Property & Casualty Insurance Co. v. Metro North Condominium Association" on Justia Law
Midwest Fence Corp. v. United States Department of Transportation
Midwest Fence, which provides guardrails, challenged federal and state programs that offer advantages in highway construction contracting to disadvantaged business enterprises (DBEs). For purposes of federally-funded highway construction, DBEs are small businesses that are owned and managed by “individuals who are both socially and economically disadvantaged,” 49 C.F.R. 26.5, primarily racial minorities and women, who have historically faced significant obstacles in the construction industry due to discrimination. States that accept federal highway funding must establish DBE participation goals for federally funded highway projects and must attempt to reach those goals through processes tailored to actual market conditions. Midwest, which is not a DBE, alleged that the DBE programs violated its equal protection rights. The Seventh Circuit affirmed summary judgment in favor of the government-defendants. While DBE programs permit contracting decisions to be made with reference to racial classifications and are subject to strict scrutiny, they serve a compelling government interest and are narrowly tailored to further that interest. Remedying the effects of past or present discrimination can be a compelling governmental interest. The program provides states with ample discretion to tailor their DBE programs to the realities of their own markets and requires the use of race- and gender-neutral measures before turning to race- and gender-conscious ones. View "Midwest Fence Corp. v. United States Department of Transportation" on Justia Law
Lend Lease (US) Construction, Inc. v. Administrative Employer Services, Inc.
In 2014, Lend Lease, the construction manager of the Chicago River Point Tower Project, hired Cives as a subcontractor. Cives hired Midwest Steel. Midwest had, years before, hired AES to supply Midwest with additional workers, who were co‐employed by Midwest and AES. Lend Lease entered into a “contractor-controlled insurance program” with Starr Liability with a $500,000 deductible. All subcontractors were to join in the policy. AES had, several years earlier, obtained workers’ compensation for its workers from TIC, so that injured AES‐Midwest workers could obtain workers’ compensation from either Starr (or Lend Lease under the deductible) or TIC. Four ironworkers, jointly employed by Midwest and AES and performing work for Midwest were injured on the job and sought workers’ compensation. The claims exceeded $500,000, so Lend Lease had to pay its full deductible. Starr paid the remaining claims. Lend Lease filed suit against TIC, AES’s insurer, and AES, seeking reimbursement of the $500,000. The district court dismissed. The Seventh Circuit affirmed. Lend Lease made a deal with Starr and is bound by it. The court rejected an argument that AES has been unjustly enriched; AES was not obligated to purchase an insurance policy that would cover Lend Lease's deductible. View "Lend Lease (US) Construction, Inc. v. Administrative Employer Services, Inc." on Justia Law