Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

While installing a natural-gas pipeline in Madison, Wisconsin, KS Energy was cited by the Occupational Safety and Health Administration for violating trench safety regulations that require companies to protect workers from dangerous cave-ins. After inspecting KS Energy’s trench, OSHA issued a citation alleging a repeat violation of 29 C.F.R. 1926.652(a)(1) for failing to provide an adequate protective system. An ALJ upheld the citations, finding that the soil in the trench was “Type B,” so the slope was too steep based on and KS improperly used the technique of “benching” to configure its trench. The OSHA Review Commission made the determination final. The Seventh Circuit denied review. The parties agree that if the soil in the excavation was properly classified as Type B, the trench was impermissibly steep. Substantial evidence supports the determination that the soil was classified as Type B. View "KS Energy Serv., LLC v. Solis" on Justia Law

Swanson hired ISF for steel fabrication work on an Indiana construction project. ISF hired Central to perform steel erection work. ISF and Central signed a subcontract in which Central agreed to procure insurance and to “defend, indemnify and hold harmless.” Central purchased insurance from Scottsdale: a $1 million commercial general liability policy and a $2 million umbrella insurance policy. ISF also carried $1 million in commercial general liability coverage from Amerisure and $7 million in umbrella coverage from National. Colip, a Central employee, was injured at work when he fell 30 feet through a hole in a building roof. Colip settled with ISF for $2.9 million, and the insurers paid according to an agreement that provided that Scottsdale would pay $1 million out of the CGL policy and $950,000 out of the Umbrella policy, while Amerisure would pay the remaining $950,000. Initially, National had no obligation to contribute. The agreement reserved the rights of the parties to seek reimbursement or contribution from each other. Amerisure sued Scottsdale and Central; Scottsdale filed counter- and cross-claims against Amerisure and National. The district court dismissed Central from the litigation and awarded Scottsdale $50,000 from Amerisure and the remaining $900,000 from National. The Seventh Circuit affirmed. View "Scottsdale Ins. Co. v. Nat'l Sur. Corp." on Justia Law

WR sought to develop a medical office building by executing a long-term ground lease to a developer, who would design, finance, construct, and own the facility, leasing space to WR. WR requested proposals, describing a 30-year ground lease for a 30,000 square foot medical facility. Citadel submitted a proposal. Negotiations followed. WR signed an “Authorization to Proceed” stating that WR “will only be responsible for architectural and engineering fees in the event [W R] does not execute its space leases and ground lease.” Citadel hired attorneys, architects, engineers; refined plans: conducted zoning review, and began securing financing. Negotiations failed. WR terminated the relationship, just as Citadel was preparing to commence construction. WR refused to pay expenses unless it received the plans; entered into contracts with Citadel’s architect and engineer; used their plans and built the facility. The district court rejected Citadel’s claims. The parties settled with respect to pre-construction costs and fees. The Seventh Circuit affirmed. Citadel failed to show that WR agreed to complete the arrangement. When the relationship ended, they had not agreed on essential lease terms. No language in the agreement required the parties to negotiate in good faith, nor did it establish a framework for the negotiation process. View "Citidal Grp. Ltd. v. Washington Reg'l Med. Ctr." on Justia Law

Walsh is a nationwide builder; superintendents have discretion over hiring and pay of hourly workers. Walsh has rules against racial discrimination but superintendents are generally in charge. Plaintiffs worked for Walsh in 2002 and earlier and claimed that superintendents practiced, or tolerated, racial discrimination. Plaintiffs submitted a statistics indicating that black workers were less likely to work overtime; contended that some superintendents used words such as “nigger” or failed to prevent journeymen from doing so; and claimed that derogatory graffiti appeared in toilets or break sheds. Walsh claims that these were the work of subcontractors’ employees and that sites had different superintendents whose practices differed. The district court certified hostile work environment and overtime classes for the 262 Walsh sites in the Chicago area. The Seventh Circuit reversed. The 12 named plaintiffs cannot represent either class, since none worked for Walsh after 2002, but the classes extend into the indefinite future. The overtime class defined members as persons who did not earn more “because of their race.” Using a future decision on the merits to specify the scope of the class makes it impossible to determine who is in the class until the case ends. Plaintiffs may choose to propose site- or superintendent-specific classes. View "Bolden v. Walsh Constr. Co." on Justia Law

Winforge claimed that defendants breached a hotel development agreement between the parties, causing delay and costs that caused Winforge to default on the separate construction loan agreement between the parties. Defendants cross-claimed that Winforge breached the development agreement. The district court ruled in favor of the defendants and found that the parties had never entered into a final, enforceable contract. The Seventh Circuit affirmed. Even a signed writing is not a contract if there is no mutual assent or “distinct intention common to both;” the parties continued to exchange new drafts of the Scope of Work even after they had signed the Agreement. To the extent that defendants incurred any obligations, their failure to perform was not a breach because that failure was due to Winforge’s deficient performance of Winforge’s duties. View "Winforge, Inc. v. Coachmen Indus., Inc." on Justia Law

Budrik sued Wegman for injuries sustained in an accident on a construction site managed by Wegman and was demanding almost presented a realistic possibility of a potential loss above the policy limit, $1 million), but failed to warn Wegman of this possibility. Wegman sued Admiral for failure to act in good faith, alleging that it would promptly have sought indemnity from its excess insurer, AIG (policy limit $10 million). Budrik filed suit four years before Wegman notified AIG, which denied coverage for failure to timely notify. Budrik obtained a judgment of slightly more than $2 million. The district court dismissed Wegman’s suit against Admiral, and, on remand, granted a stay, pending state court resolution of Wegman’s suit against AIG. The Seventh Circuit dismissed appeal of the stay. Although Wegman’s suit against Admiral in federal court and against AIG in state court, are related, they do not satisfy the conditions for abstention.; the district court is not finished with the case. The stay really is a stay, and not a dismissal. View "R.C. Wegman Constr. Co. v. Admiral Ins. Co." on Justia Law

In 2008, Sojka was working on the upper floors of the Chicago Trump Tower construction project, trying to repair a steel cable that held safety netting around the upper floors of the project when the wind knocked him back and a piece of metal struck his eye, causing severe injuries. Although Sojka was wearing safety glasses at the time, they apparently did not fit his face properly. He sued the construction manager, which moved for summary judgment on the ground that it did not owe Sojka any duty of care to provide a safe workplace, and that even if it did it had not breached such a duty because it had no knowledge that the safety glasses were inadequate to prevent the injury. Sojka failed to address this argument in his response and the court granted the motion. The Seventh Circuit reversed. Although the court was correct that Sojka conceded the eyewear point by failing to respond, it took too narrow a view of Sojka’s case. His response addressed several other ways in which defendant’s negligence allegedly caused his injuries. A dispute of material fact remains on those theories. View "Sojka v. Bovis Lend Lease, Inc." on Justia Law

Crown hired LMI to construct an office building. LMI subcontracted installation of windows and doors to Frontrunner. Frontrunner was required to maintain insurance that named LMI as an additional insured. Frontrunner purchased an occurrence-based commercial general liability policy from Consolidated that covered sums that insureds became legally obligated to pay because of property damage and requiring Consolidated to defend any suit seeking damages for covered property. Late in construction, Crown experienced water infiltration at numerous locations and other construction defects. Crown filed suit. LMI tendered defense to Consolidated, but Consolidated made no coverage decision for six months. Though LMI had not obtained a coverage decision, it settled with Crown. Although informed of all settlement talks, Consolidated participated in none and later denied coverage. The district court found in Consolidated’s favor. The Seventh Circuit affirmed. Under Illinois insurance law, Consolidated had no duty to defend because the underlying complaint failed to allege damage to any covered property. Where the underlying suit alleges damage to the construction project itself because of a construction defect, there is no coverage; where the complaint alleges that a construction defect damaged something other than the project, coverage exists.

The suit, against law enforcement officers and the county, claimed denial of equal protection in failure to respond to complaints about gang harassment. The district court, interpreting the pro se complaint as concerning inadequate police protection, dismissed. The Seventh Circuit panel interpreted as charging defendants with arbitrarily providing less police protection to than to other residents, a "class of one" discrimination claim, but concluded that the claim failed, absent an allegation of personal animosity. On hearing case en banc, the court split three ways, affirming the dismissal by tie vote. Four judges (with a concurring opinion) stated that a "class of one" plaintiff must establish intentional discrimination by state actors who knew or should have known that they had no justification, based on their public duties, for singling him out for unfavorable treatment. The opinion stated that class-of-one suits should not be permitted against police officers or police departments. The complaint did not allege personal motives. "Rightly or wrongly they thought him a paranoid pest obsessed with motorcycle gangs." Four dissenters indicated that plaintiff should be allowed to replead and that the standard, which does not require mindreading," is the rational-basis test.

BMD was a subcontractor for Industrial, a subcontractor for Walbridge, the general contractor for construction of a factory near Indianapolis. Fidelity was surety for Industrial’s obligations to BMD. The project proceeded for about a year before the manufacturer declared bankruptcy. Walbridge failed to pay Industrial, Industrial failed to pay BMD, and Fidelity refused to pay BMD, which sued Fidelity on the bond. Their subcontract conditioned Industrial's duty to pay on its own receipt of payment. The district court held that the pay-if-paid clause required Industrial to pay BMD only if Industrial received payment from Walbridge, rejecting an argument that it controlled only the timing of Industrial's obligation. The court held that pay-if-paid clauses are valid under public policy and that Fidelity could assert all defenses of its principal. The Sixth Circuit affirmed. The subcontract expressly provides that Industrial's receipt of payment is a condition precedent to its obligation; it could have stated that BMD assumed the risk of the owner’s insolvency, but additional language was not necessary. Pay-if-paid clauses are valid under Indiana law and, under surety law, Fidelity may assert all defenses of its principal. Industrial was never obligated to pay BMD; BMD may not recover on the bond.