Contractor wasn't Unfair Where It was Unaware of SUB's Obligations

Tuesday, January 08, 2019 9:33 am
 
January 2019 - Volume 41 Number 1
 

Breach of Contract --- Tortious Interference --- Unfair Competition

JDS Constr., LLC v. Jacobsen Constr. Co., 2018 U.S. Dist. Lexis 205696 (December 5, 2018)

A subcontractor failed to hold a general contractor liable for delays and unfair practices because it was unable to prove the contractor had any knowledge of the project relationships it supposedly interfered with.

Jacobsen Construction Company, Inc. (Jacobsen) was the general contractor on a construction project for the Culinary Institute of the Pacific at Kapiolani Community College in Honolulu, Hawaii. Jacobsen hired JDS Construction, LLC (JDS) as a subcontractor for the project. According to the records, the project was completed in April 2017.

A year after completion, in March 2018, JDS filed breach of contract and quantum meruit claims against Jacobsen. JDS alleged that Jacobsen breached the parties’ subcontract by “unreasonably withholding payments to JDS despite JDS’s completion of all required work on the Project.” JDS also claimed that, during the project, it received multiple notices of delays in the work schedule and, because of the untimely manner of the notices, was unable to forestall expenses and cancel the materials and equipment already ordered; JDS contended that Jacobsen should pay for the expenses incurred.

After the original case was removed to federal court in April 2018, Jacobsen filed a third-party complaint against JDS CEO James D. Arthur, alleging that Arthur executed the subcontract as both CEO and “a personal Guarantor” and represented that both he and JDS were “properly licensed as contractors in the State of Hawaii to perform the work provided for under the Contract.” Jacobsen argued that JDS [..]

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