Litigation partners Morris Kletzkin, Thomas Murphy and Lindsay Thompson won a significant recovery in the Superior Court for the District of Columbia on behalf of the developer of a $58 million luxury hotel property in the Adams Morgan neighborhood of Washington, D.C. who had been sued by the general contractor tasked with building the hotel.
The trial victory for the hotel’s owner against one of the country’s largest general contractors brought an end to years of litigation. “The result of the trial was a total victory for our client,” said Thomas Murphy, Esq. “Though the general contractor had sued the owner for more than $17 million, the Court found that the general contractor was not entitled to anything on its claims. In fact, the Court awarded the owner $1.5 million in damages on its counterclaims and ordered the general contractor to immediately release the $17 million mechanic’s lien it had wrongly placed on the property.”
As background, more than 18 months after the hotel was required to be completed, the general contractor abandoned the project, leaving defective and incomplete heating, cooling and plumbing systems in its wake. The general contractor then sued the owner for more than $17 million and leveled a litany of false claims regarding the owner’s efforts on the project. Further, in what appeared to be an effort to bully the owner into capitulation, the general contractor placed a grossly inflated $17 million mechanic’s lien against the property. Compounding matters, the owner was also sued by numerous subcontractors that the general contractor had refused to pay.
During the litigation, Friedlander Misler asserted counterclaims on behalf of the owner for:
- Breach of contract for the general contractor’s delay in achieving substantial completion of the project;
- Forcing the owner to perform work that was within the general contractor’s scope; and
- Filing a frivolous and inflated mechanic’s lien against the project.
The three years of litigation and a weeks long trial involved more than a dozen parties, more than a million documents, numerous experts and more than two dozen depositions. All the while, the general contractor maintained its position that it was owed millions of dollars.
At trial, Friedlander Misler repeatedly proved that:
- The general contractors’ witnesses were unreliable;
- The general contractor failed to abide by the terms of the contract it had signed;
- The general contractor breached the contract by failing to properly complete numerous aspects of the project, which required the owner to spend millions of dollars to engage others to complete the project and deliver a fully functioning hotel; and
- The opinion of the general contractor’s expert witness should be disregarded and the Court should adopt the owner’s expert’s opinion which stated that the general contractor was liable for more than $2 million in liquidated damages for delaying the project.
Ultimately, the Court held that the contractor substantially delayed the project and failed to properly complete numerous aspects of the hotel. This included, most notably, a finding that the general contractor failed to deliver a fully commissioned heating and cooling system, or a reliable, functioning plumbing system. The owner was awarded $1.5 million in damages on its counterclaims and the general contractor immediately released its $17 million mechanic’s lien.