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Liberty Construction Company, LLC v. Peter H. Curry

Tenn. Ct. App.October 21, 2020No. M2019-00951-COA-R3-CV
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Case Details

Judge(s)
Judge Andy D. Bennett
Status — whether other courts must follow this ruling
Published
Procedural Posture — the stage the case had reached
appeal from trial verdict; mixed reversal and affirmance on appeal

Related Laws

No specific laws identified for this ruling.

Outcome

Construction company partially won on cost-plus contract claims but lost on stipulated sum contract. Appellate court reversed certain rulings regarding supplier payment credits, prejudgment interest start date, and notice-to-cure requirements.

Excerpt

This is an action by a construction company to recover on a written stipulated sum contract and an oral cost-plus contract for the construction of a commercial building. The construction company sought to recover for additional work performed that was not included in the scope of the stipulated sum contract and the remaining balance of the cost-plus contract. The building owners contended that the construction company was not entitled to additional payment under the written agreement and counterclaimed for payments the owners made directly to suppliers for work included in the scope of the stipulated sum contract, and for reimbursement of funds expended to correct a defect caused by the construction company. The trial court held that neither the construction company nor the owners were entitled to recover under the stipulated sum contract that the owners were not entitled to reimbursement because they failed to establish that the construction company caused the defect or, in the alternative, failed to provide a reasonable opportunity to cure and that the construction company was entitled to judgment for work performed in connection with the cost-plus agreement. We reverse the court's determination that the owners were not entitled to a credit for certain payments made directly to suppliers, that prejudgment interest commenced on November 10, 2014, when the notice of completion was filed, and that the owners did not provide the construction company with notice and an opportunity to cure. We affirm the trial court's holding in all other respects.

What This Ruling Means

**What Happened** Liberty Construction Company sued building owners to recover money for construction work on a commercial building. The company claimed they were owed payment under two different contracts: a written contract for a fixed amount and a separate oral agreement for cost-plus work (where the customer pays for materials plus labor costs). Liberty said they performed extra work beyond the original contract scope and weren't paid the full amount owed. The building owners argued they didn't owe additional money under the written agreement. **What the Court Decided** The court gave Liberty Construction a mixed victory. The company won some of their claims related to the cost-plus contract but lost on the fixed-price contract claims. On appeal, the higher court made several changes to the original ruling, including decisions about supplier payment credits, when interest payments should begin, and requirements for giving notice before claiming contract violations. **Why This Matters for Workers** This case shows the importance of having clear, written contracts that specify payment terms and project scope. When contracts are unclear or partly verbal, disputes often arise about what work is covered and how much should be paid. Workers should ensure their employers have solid contracts with clients, as payment disputes can affect job security and timely wage payments.

This summary was generated to explain the ruling in plain English and is not legal advice.

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