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AP&F Secures Arbitration Win for General Contractor

When Flint Arrow Construction entered into a contract to do a HUD Remodel for homeowner Wendy Lee, the parties worked hard to create a remodel plan that fit the homeowner’s limited budget and the requirements of the HUD program. But when the homeowner decided she wanted more than the budget permitted, her evolving demands led her to terminate the contractor without cause, and she refused to authorize payment for work performed.

After attempts to resolve the matter by negotiation failed, Arnold, Placek & Foerster secured the contractor’s claim with a valid lien on the property, and then conducted an arbitration through AAA.  The homeowner counterclaimed and asserted damages in the amount of $75,000. During arbitration, it was revealed that the homeowner’s draw manager had falsified an inspector’s report that the homeowner offered as the basis for withholding payments. The homeowner’s expert witness also conceded on cross-examination that the problems noted in the report could have been a result of the homeowner failing to seal the building and protect the partial construction from weather after terminating the original contractor.

Following a hearing, the arbitrator ordered that the homeowner take nothing on her counterclaims and that the contractor was entitled to recover the full amount of his claim, less a single budget item for scaffolding that was not witnessed in use prior to termination.

Flint Arrow was represented by R. Scott Placek and Matt Foerster. The homeowner was represented by Jeff Kelly and Kieran Buck of the Kelly Legal Group.

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