Litigation and Appeal – Creative Argument for General Contractor

When a cruise line operator went out of business owing our contractor client money, we came up with a creative approach to getting them paid.

Situation

A large public owner agreed to lease a port terminal to a cruise line operator. The lease required improvements to be made to the existing terminal facility. Our general contractor client worked with the cruise line operator in developing the specific scope of work and related schedule which were incorporated into the lease agreement. After construction commenced but before completion of the project, the cruise line operator went out of business leaving our client and its subcontractors unpaid. Frustrated by an unlikely recovery through the bankruptcy process, our client tasked us with finding a creative solution to avoid the loss. Even though our client was not in contractual privy with the public owner, we nevertheless sued it under the argument that the owner was liable because the applicable public procurement law required a payment bond to be posted for the project, the proper entity to post the bond was the cruise line operator in direct contract with the owner, and the owner allowed construction to proceed knowing a bond had not been posted thus exposing our client to non-payment. The public owner refused to negotiate but instead aggressively defended our claim.

Outcome

After targeted discovery on key issues, we successfully won our client’s entire claim on summary judgment at the trial court level. Mocking our trial court win as purely political, the public owner appealed. After written briefs and a full oral argument, we also won on appeal. Afterwards, the public owner was begrudgingly forced to pay our client.

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