Gray•Duffy negotiates early settlement without litigation; obtains net result of $200,000 in favor of contractor client.

December 2017

Overview​

Michael Eisenbaum of Gray•Duffy’s Encino, California office successfully negotiated the settlement of a construction defect and delay claim presented against the client who was claiming non-payment for construction work performed and completed. The net result was a $200,000 payment to the contractor.

Discussion

Our client was the general contractor involved with the construction of two upscale residences in Beverly Hills, CA. At the conclusion of the projects, the owners, who were inter-related companies/partnerships, refused to make the final payments, totaling roughly $400,000. Our client filed a mechanic’s lien on the property where the majority of costs were still owed. The owners responded by making numerous construction defect and delay claims, which they asserted were well in excess of the amount claimed by our client. They also claimed that they had paid a number of our client’s subcontractor’s directly, which would reduce the amount owed. After some investigation and exchange of information and documents, it appeared that the owners had paid a number of subs, but some of those payments were for extra work outside the scope of our client’s contracts. In the end, the accounting revealed our client was still owed over $200,000, and in order to compromise and get full releases of the defect claims, we negotiated a payment to our client of $200,000, with mutual releases on all sides.

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.