A.F. Hayward Co., Inc. v. Clark & Sullivan Builders, Inc., et al.

Acting as defense counsel, Patrick Markham successfully settled a breach of contract surrounding a construction project after the second week of trial for $37,500. 

The case involved the construction of the Gallo Arts Center located in downtown Modesto (the Project).  The Project is a state of the art two-theater performance center including a 1,200-seat main theater.  Defendant and Cross Complainant Clark & Sullivan Builders, Inc. (Clark & Sullivan) was the general contractor, following a public bid and contract award by the County of Stanislaus (the County) in March of 2004.   In April of 2004, the Project was delayed due to unforeseen underground conditions.  Primarily due to this Project delay, a lawsuit was filed by Clark & Sullivan Builders and three of its subcontractors against the County.   W.F. Hayward separately filed an action against Clark & Sullivan for breach of contract.

Plaintiff and Cross Defendant W.F. Hayward (Hayward) was the successful bidder for the drywall, lathe, plaster and interior metal framing scope of work regarding the Project.   Although Hayward received a letter of intent to enter a subcontract in March of 2004, a series of events caused Hayward not to execute its lump sum $1.6 million subcontract until February of 2005.  Hayward mobilized to the Project in May of 2005.

After Hayward completed its work on the Project, it submitted claims seeking additional compensation for breach of contract based on a delayed Project start.   Hayward contended it was to begin work in April of 2004 based on a preliminary schedule.    Based on this contention, Hayward claimed it incurred damages for delay.  Clark & Sullivan rejected the claims.

In addition to the front end delays, Hayward claimed Clark & Sullivan’s project management caused inefficiencies.  The alleged damage due to inefficiencies was an additional labor cost claim of $505,804.77.   Damages were calculated relying heavily on a total or modified total cost claim.   Finally, Hayward sought alleged unpaid retention of 218,017.76 plus rejected change orders of $32,626.42.  Hayward sought statutory penalties of 2% per month on the alleged unpaid retention, plus statutory and contractual attorney and expert fees and court costs.  The original damage claim was in excess of $1.7 million.

This case was settled favorably to Clark & Sullivan based on the outcome of the pre-trial motions.     It appeared that Defendant’s evidentiary motions would be granted in whole or in part.  Clark & Sullivan offered settlement to W. F. Hayward in the amount of $37,500 and a waiver of costs and fees if accepted before the ruling on the motions.  Before the court’s ruling, Hayward accepted the demand, and the case settled.