The firm defended a prime contractor and its surety from a lawsuit brought by one of its key multi-scope subcontractors, on a project for the construction of a new classroom building. During the project, the prime contractor withheld certain payments from the subcontractor due to the subcontractor’s failure to satisfy conditions precedent to payment and other performance related issues. At the conclusion of the project, the subcontractor filed suit for the subcontract balance. In addition, the subcontractor asserted a lost profit and goodwill damages claim of approximately $9,000,000.00, and sought punitive damages.
As a result of its investigation, the firm discovered the subcontractor had made misrepresentations to the Contractors State License Board (“CSLB”) during the project about the number of workers on its payroll and its workers’ compensation insurance. As a result, the subcontractor’s license was invalid and all of its claims were barred as a matter of law. At trial, after several years of high stakes litigation, the court found the subcontractor had indeed misrepresented facts to the CSLB, invalidating its license, and providing the prime contractor with a complete defense to the subcontractor’s claims. The subcontractor’s claims were dismissed in their entirety, and the prime contractor received a seven figure judgment, representing 100 percent of the attorneys’ fees incurred in the litigation and over 97 percent of the costs.
Counsel: Jason R. Thornton, Daniel P. Scholz, and Scott M. Bennett