Facts

Sarlan Builders Inc. sued Andrew Kirschner, Jeff Kirschner, Hannah Kirchner, Tar & Roses LLC, Robert Colman, the Robert Colman Trust, 602 Santa Monica Partners LP, and Philadelphia Indemnity Insurance Co. Defendants Andrew Kirschner and his Santa Monica restaurant, Tar & Roses, filed a cross-claims against Sarlan, Ben Lunsky, Marjorie Walsh Lunsky, and Sarah Lunsky.

PLAINTIFF'S CONTENTIONS:
Sarlan claimed that it entered into three separate oral contracts with Kirschner, Tar & Roses and the other defendants (other than Philadelphia Indemnity) to design and build the restaurant. It alleged that the oral contracts were based on a stipulated sum agreement for a fixed price of $386,880 and that there was a six-month estimate, but not a guarantee, to complete design and construction of the restaurant. Sarlan further argued that defendants were responsible for delays because of, among other things, extra work and changes to the work that were ordered by Kirschner and the other defendants. Sarlan claimed that defendants failed to pay the balance owed or the reasonable value of the work performed, including for extra work and change orders.

Plaintiff asserted claims for breach of contract, quantum meruit, common counts, fraud, negligent misrepresentation and for recovery against a mechanic's lien release bond relating to the design and construction of Tar & Roses, after Sarlan was terminated before completion. Sarlan sought a balance claimed due, including for extra and additional work performed.

DEFENDANTS' CONTENTIONS:
Defendants argued that there was a single oral contract between Sarlan, Ben Lunsky, Kirschner and Tar & Roses based on a cost plus contract, which included overhead and profit, with a ceiling of $386,880 and a guarantee that design and construction of the restaurant would be completed within six months, or on or before Aug. 15, 2012. Defendants argued that the termination of Sarlan and Lunsky was justified because of the delays, incomplete and defective work at the project. The restaurant did not fully open until March 2013 after Kirschner and Tar & Roses hired a replacement contractor. Defendants further contended that Sarlan was responsible for the costs of completing the work, curing defective work, lost profits and other damages.

CROSS-CLAIMANT'S

Result

After a bench trial, the court found that Tar & Roses was justified in terminating the agreement with plaintiff because plaintiff had failed to complete the project in six months. The court found that under a quantum meruit theory, plaintiff was entitled to $46,000, but further found that Tar & Roses was entitled to recover on a breach of contract basis against Sarlan for all damages amounting to $269,989. Therefore, the court entered judgment in favor of defendants on plaintiff's claims and entered judgment in favor of Andrew Kirschner and Tar & Roses on their cross-claim against Sarlan for $223,989.

Other Information

The court dismissed the various claims and cross-claims that were asserted against Andrew Kirschner, Robert Colman, the Robert Colman Trust and Philadelphia Indemnity, as well as the cross-claims against Ben Lunsky, Marjorie Walsh Lunsky and Sarah Lunsky. Tar & Roses' motion for attorney fees against Sarlan is scheduled for argument on Feb. 17, 2015. In addition, separate motions by Sarlan to tax costs claimed by Jeff and Hannah Kirschner, who were dismissed from the action a day before trial, and Andrew Kirschner and Tar & Roses are scheduled for argument on Feb. 17, 2015. Sarlan and the Lunskys filed a motion for a new trial on the issue of the award of lost profit damages in favor of Tar & Roses. The court denied the motion for a new trial. On Oct. 30, 2014, Sarlan filed a notice of appeal of the judgment.