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Sub-Contractor Delay Change Order Claim Resolution

VERTEX Team Receives Favorable Outcome on Contractor Delay and Change Order Claim Trial

August 22, 2019

Finch, Thornton & Baird is a San Diego-based law firm that has focused on construction claims and disputes for over 30 years. Recently, the firm was called upon to help resolve a case involving delay and disputed change orders concerning a private luxury mid-rise condominium project in San Diego’s Banker’s Hill neighborhood. Their client was the structural concrete subcontractor to the general contractor.

After work was completed on the project, the general contractor refused to pay the subcontractor for extra work and the earned contract balance. They issued numerous disputed change orders and claimed that delays to the structural concrete work delayed the project, resulting in losses to the general contractor greater than any amount due to subcontractor. The law firm perfected mechanic’s lien and stop payment notice claims to secure the subcontractor’s claim, both of which were bonded by the general contractor. The subcontractor sued the general contractor and its surety for recovery.

VERTEX’s Ted Bumgardner has had the opportunity to work with the firm a number of times over the years. In this case, he worked with Managing Partner Randy Finch, as well as Partner Andrea Petray, to assist with the review and analysis of the value of the subcontractor’s work to establish the reasonable value of its lien claim. He also reviewed and opined as to the propriety of numerous extra work change orders that were submitted by the subcontractor and the validity of the contractor’s deductive change orders.

The case eventually went to trial, with Bumgardner testifying about general contractor administration and standards of care for processing change orders and complying with subcontract terms, including the importance of proper notice. The subcontractor was seeking $400,000 in principal recovery and to defeat back charges in excess of that amount.

The result was a resounding success. In a 12-0 verdict, the jury sided with the subcontractor, awarding them the full amount they asked for in their claim. The general contractor received nothing.

“The case was full of complicated, highly technical information, so it was critical to tee everything up to a jury so they could make an informed decision,” said Bumgardner. “It appears we were successful in doing just that, as the jury ruled 100 percent in our favor with their verdict.”

“It was a pleasure working with Ted again,” said Finch. “His explanation of complex construction concepts to the jury helped us achieve the result for our client. “

“This was my first time seeing Ted testifying at trial, and I was very impressed with his presentation,” said Petray. “You could tell that he was highly credible with the jury. His testimony was delivered with confidence and a smile, even during an adversarial cross-examination from the defense counsel. We were very pleased to be able to achieve this favorable outcome for our client and to get them all of the monies they were owed.”

After pre-judgment interest, attorneys’ fees, and expert fees, the final judgment was just over $1.15 million in favor of the subcontractor and that entire amount was collected from the general contractor and its surety.

To learn more about VERTEX’s Construction Forensic Consulting and Expert Witness Services, or to speak with a Construction Expert, call 888.298.5162 or submit an inquiry.

Learn more about this project and other expert solutions offered by VERTEX here.

This article was originally published by Xpera Group which is now part of The Vertex Companies, Inc.

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