This case involved a dispute over the construction of a boutique hotel located in Westwood, Los Angeles, California (“Project”). MVJ’s general contractor client (“Client”) was retained by the hotel owner (“Owner”) to serve as the general contractor in connection with the construction of the hotel. Client thereafter retained various subcontractors to perform the actual construction work at the hotel. Client settled with all subcontractors prior to or at the commencement of trial, except for the mechanical subcontractor .
Client, through separate counsel, brought claims against the Owner alleging that the Owner breached the parties’ contract by delaying the Project and failing to pay for work performed, including extra work, which totaled $5,069,887.16. In response, the Owner brought claims against Client alleging that Client breached the parties’ contract by failing to complete the Project on time, free from defects, and in accordance with the terms of the parties’ contract. The Owner sought to recover the sum of $12,876,579 from Client. Prior to trial, Client stipulated that the Owner was entitled to approximately $1.6 million for monies Owner paid to repair defective work performed by Client’s mechanical subcontractor. Client denied responsibility for the remaining damages alleged by the Owner.
After a three-and-a-half-month trial, the jury needed only one-and-a-half days of deliberation to return a unanimous verdict in favor of Client. Specifically, the jury awarded Client the full $5 million it sought from the Owner, and on Owner’s cross-complaint, the jury only awarded Owner the approximately $1.6 million in damages that Client had already agreed to pay. The jury denied Owner the balance of the approximately $12.9 million it sought from Client for alleged delay and defect damages, resulting in a net recovery by Client against Owner in the sum $3,387,602. Client also recovered from the mechanical subcontractor the approximately $1.6 million on Client’s indemnity cross-complaint.
Following extensive briefing on entitlement to prejudgment interest, fees and costs, the court found Client to be the prevailing party and thus awarded Client an additional $1,699,943 in prejudgment interest, and $6,438,466.23 in fees and costs, for a total award of $11,526,011.39 to be paid by Owner. In addition, Client secured a judgment against the mechanical subcontractor in the principal sum of $2,206,284.88 plus prejudgment interest of $430,092, for a total of $2,636,376.88.
Prior to trial, the parties participated in over 7 unsuccessful mediations before mediator Ross Hart. At the commencement of trial, Trial Judge Eric Taylor ordered the parties to multiple settlement conferences before Judge Tanaka in Department B of the Torrance Superior Court, who was successful in settling out the remaining subcontractor cross-defendants. At the last settlement conference, Owner was offered approximately $4.5 million dollars to settle this case, which it rejected and decided to move forward with trial. This decision clearly did not end well for Owner as instead of pocketing $4.5 million, Owner wound up owing Client over $11.5 million, a swing of over $15 million.