No one wants a construction contract dispute to lead to a lawsuit, but it happens. Take the case of Patriot Contracting LLC, the company from Texas that recently filed a lawsuit in the Louisiana federal court for breach of contract against Star Insurance Co. and The Architectural Studio (James Dodds, AIA Corp).
Star took on a state contract to fix problems at New Group Camp, Bayou Segnette State Park in Westweogo, La. In 2013, the State of Louisiana rejected the work, saying it did not meet the specifications of the contract. Patriot was hired in 2014 and completed the $2.54 million job according to specifications. Now, Patriot claims they were never paid for their part of the work and seeks $75,000 in damages, as well as litigation costs and interest.
Patriot’s lawsuit represents a small percentage of the total cost of the job. The legal fees and interest in a long and drawn out lawsuit could easily eclipse the amount sought. However, when a contract dispute arises, many parties dig in their heels and refuse to resolve things quickly.
What to Do When Construction Disputes Require a Lawsuit
Here at Smiley Law Group, we want you to understand all of your options during a construction contract dispute. As with any contract dispute, we start by looking at the original document to determine which obligations, if any, have been breached and by whom.
We then determine whether there is a way to cure the breach without going to court. This critical step can save you thousands of dollars, and it is well worth considering alternative dispute resolution such as mediation or arbitration at the start of any litigation. In many cases, pursuing the contract dispute can be out of proportion to the money at stake. Some construction contracts require mediation before filing for a lawsuit or arbitration.
For example, in the case cited above, Patriot only seeks $75,000 in damages plus attorney’s fees and interest on a $2.54 million job. At this point, only a complaint has been filed, but once the litigants begin the discovery phase of litigation the costs are likely to skyrocket. When faced with a case like this at Smiley Law we consider all of your options with you so the right decision can be made. Most construction companies do not have a large legal budget, if any. The key is making a smart business decision to maximize outcome. Think of this as the famous cliché “a bird in the hand is worth two in the bush.”
Construction contract disputes entail legal deadlines and nuances that require informed decision-making. Even the most straightforward contracts can be interpreted differently depending on the circumstances. You need an attorney with experience in construction contract disputes to pursue your claim successfully. Here at Smiley Law Group, we’ve resolved hundreds of disputes between contractors, subcontractors, material suppliers, equipment lessors, architects, developers and property owners, using both alternative dispute resolution and traditional litigation. If you have a construction contract dispute, contact one of our attorneys for a free consultation today.