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Subcontractor did not fulfill contract and is found not liable



By Laura Mallory

A general contractor hired a subcontractor to build all of the cabinetry for a movie theater. The parties agreed the subcontractor would complete the entire project by the scheduled opening of the movie theater and that time was of the essence. The cabinetry were not done by the scheduled opening date, so the original scheduled opening date was pushed back four months. The cabinetry were still not done by the delayed opening date. The theater opened without the cabinetry work completed.

A dispute arose between the general contractor and the subcontractor. Specifically, the general contractor asserted there were 15 items regarding the cabinetry that were incomplete and made it clear he would not pay the balance of the contract until all of the items were resolved. The subcontractor insisted on getting paid for the work completed. The general contractor and subcontractor were unable to come to a resolution. The general contractor then filed a lawsuit for breach of contract for failing to complete the cabinetry on time. The subcontractor filed a counterclaim for the balance due under the contract.

The remaining 15 items
The issue was the remaining 15 items that the general contractor alleged the subcontractor failed to fix. One of those items was a “toe kick” on the cabinetry, which would allow a person to stand next to the cabinet without hitting his or her toes on the cabinetry. The general contractor testified that the “toe kick” is standard in the industry but the subcontractor disputed this claim.

The trial court held the theater did not open on time for a variety of reasons that delayed the opening. The general contractor and subcontractor both contributed to the delayed opening. The court, however, noted the subcontractor had little involvement in his part in the delay of the opening. Moreover, the court found the subcontractor substantially complied with the contract and did not materially breach the contract. With respect to the outstanding remaining 15 items, the court held that while the issues regarding these items remained, the problems can be repaired or fixed in a short time frame and at a relatively low cost. As a result, a ruling was entered in favor of the subcontractor. The subcontractor was awarded the balance due under the contract less the estimated costs to repair the remaining 15 items. 

While the general contractor and subcontractor did not disagree before the start of the project that time was of the essence and the cabinetry work was not completed by the original opening date, the ultimate deadline and whether there was a breach was never addressed by the trial court. The general contractor appealed and the matter was remanded back to the trial court due to an insufficient records, lack of factual findings and legal conclusions. Nonetheless, the matter was still resolved in the subcontractor’s favor.




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