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Case Study: Construction Delay Arbitration

Case Study: Construction Delay Arbitration
Hendershot Cowart P.C.

Construction schedule delay claims are a leading cause of disputes in the construction industry. Defending against or pursuing such claims often involve complex analysis of the contractual obligations, the causes of the delay, and the types of damages available. In this case, our client was sued by the general contractor for breach of contract that caused a delay in the project’s timeline.

Background

Our client, a precast concrete manufacturer, was subcontracted by a general contractor, overseeing the reconstruction of a highway overpass, to manufacture and deliver mechanically stabilized earth (MSE) retaining walls. Over the course of the construction, the project fell behind schedule for various reasons including weather issues and a 90-day delay initiating the project. Our client delivered the contracted MSE walls before the materials were needed at the job site, but after the deadline imposed by the project schedule.

The general contractor subsequently sued for breach of contract stating our client “failed to deliver to work in a timely fashion and caused a delay.” The general contractor sought more than $650,000 in damages across five different categories, including labor disruption, extended home office overhead, increased rental equipment costs, plus attorney’s fees and expert fees.

The subcontractor retained Trey Hendershot and Ian McNeill of Hendershot Cowart P.C., to represent them in the suit.

Strategy

Mr. Hendershot and Mr. McNeill teamed up with an expert adept at construction schedule analysis to help formulate a defense strategy. The expert was able to identify relevant documents that would be needed to refute the delay allegations, which were then requested in written discovery. The plaintiff, however, withheld documents—including the project’s daily progress reports.

Mr. McNeill filed and won a motion to compel the plaintiff’s attorneys to produce all of the requested documents and a motion for continuance to request additional time for expert review. Once in receipt of the missing documents, our expert was able to identify numerous flaws in the plaintiff’s methodologies for calculating damages.

Results

Mr. Hendershot and Mr. McNeill successfully argued in mediation that there were multiple activities that affected the project’s timeline and that our client’s delay did not impact the actual progress of construction. As a result, the two parties settled the claim, as well as another pending claim, for less than a third of our client’s total exposure. Mr. McNeill also successfully negotiated for extended payment terms of the settlement amount.

Retaining a legal team experienced in construction delay claims early on was crucial for the success of this case. The construction law attorneys at Hendershot Cowart P.C. have a clear understanding of the critical elements of a breach of contract claim and regularly represent both defendants and plaintiffs in construction litigation.

If you wish to discuss a potential construction delay claim or any construction legal matter, call (713) 909-7323 or contact us online to speak with an attorney.

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