Confidential
Settlement – $338,000Judge
Court
L.A. Superior San Fernando
Attorneys
Plaintiff
Kenneth S. Grossbart
(Abdulaziz Grossbart & Rudman)
Defendant
Facts
Plaintiff, an electrical subcontractor, entered into a contract with defendant general contractor. The contract began
as a not to exceed contract, but exceeded the limit of $190,000. The plaintiff had billings of $836,309 by the
time the construction project was completed.
The plaintiff was not paid $241,919, and recorded a mechanicÆs lien and served a
bonded stop notice on the defendant Bank. Defendant surety company had issued a payment
and performance bond and a claim was made against the payment portion of the bond.
Settlement Discussions
Defendant surety paid the plaintiff $338,000, which included costs and penalties, interest and attorney fees. This was done after it had already paid $43,000 to plaintiffÆs material suppliers. After defendant general contractor learned of the settlement between the plaintiff and defendant surety, it agreed to dismiss its cross-complaint against the plaintiff.
Other Information
The case was filed in December 1998 and settled in February 2000. PlaintiffÆs complaint sought the sum of $241,919. During the course of litigation and before the settlement was reached between defendant surety and the plaintiff, defendant surety had settled with two of plaintiffÆs material suppliers for about $43,000. This reduced plaintiffÆs demand to about $199,000. Defendant insurance paid $338,000 to settle the case. Earlier, defendant surety had filed an unsuccessful demurrer to the amended complaint alleging a breach of covenant of good faith and fair dealing. As part of the settlement, defendant insurance paid 2 percent penalty damages, pursuant to Business and Professions Code Section 7108.5.
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