Construction Contractor Dispute
Area of Law: Construction Litigation
State Filed: California
Settlement: Successful at Trial
This case involved a multiple-unit residential fixer-upper project where our client, Mr. M, agreed to put up the money and the contractor agreed to do the construction work. The contractor did not contribute any of his own money to the project and all construction materials and labor were paid for by Mr. M. The agreement was that when the job was completed, the two would sell the renovated property and split the profits.
The contractor estimated the job would take six months and cost around $115,000. The project ended up taking about 18 months and cost about $162,000. This money was paid directly to the contractor by Mr. M. By the time the job was done, there was no equity in the house for the two “partners” to split. In fact, had they sold the property at the time it was completed, Mr. M and the contractor would have had to pay tens of thousands of dollars just to close escrow.
Since the two could not sell the property because there was no equity to split, Mr. M offered to pay the contractor, $52,000 more to settle the matter, but this was not acceptable to the unlicensed contractor. The contractor then sued Mr. M for breach of contract, declaratory relief, fraud, breach of fiduciary duty, and breach of good faith and fair dealing alleging they were partners or joint venturers and that Barry had breached his fiduciary duty to the contractor. The contractor sought over $550,000 as his share of the property which was valued at $325,000 and because he wanted to be paid for his construction services. The contractor also sought punitive damages against Mr. M.