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Jury Returns $1.4 Million Verdict in Favor of CSPG&F Client

March 9, 2007

Following a two week trial in the Philadelphia Court of Common Pleas, a jury of eight took just one and one-half hours to deliberate and find in favor of our client Foulkeways at Gwynedd and against the general contractor, Ernst & Ernst Building Contractors. Edward Seglias was lead trial counsel and was assisted by Shawn Farrell and Jack Graham.

The case involves the construction of eleven residential buildings on the campus-like setting of Foulkeways, an assisted living facility located in Lower Gwynedd Township, Montgomery County. The project originally was expected to take about fourteen months to complete, however, after several months of construction it became clear to Foulkeways that Ernst & Ernst would not complete the project on time. In fact, Ernst & Ernst were predicting that the project would take at least five more months to complete with no assurance when the project could be completed.

Not surprisingly, this situation was unacceptable to Foulkeways. As a result, it engaged another construction management firm to complete five of the eleven buildings. Ernst & Ernst claimed that Foulkeways effectively terminated the contract by not allowing it to finish approximately 50% of the work. It sued Foulkeways for breach of contract, among other things, and sought to recover $1.8 million dollars in alleged direct damages.

At trial, Ernst & Ernst argued that bad weather and Foulkeways’ failure to procure sewer approvals from Lower Gwynedd Township in a timely manner impacted its ability to install infrastructure work in a manner and sequence originally contemplated by its schedule. Foulkeways disputed these arguments on the grounds that weather and the delayed sewer approvals had little, if any, impact on the building construction and therefore were immaterial to the overall progress of the work.

Ernst & Ernst offered several witnesses in support of its position, including expert testimony that Ernst & Ernst suffered approximately $1.9 million dollars in damages due to the wrongful termination. Foulkeways offered its own witnesses and expert testimony, which established that the slow progress of the work was caused by Ernst & Ernst’s inability to deliver sufficient labor and resources to the project. Mark Cippolini, P.E., Foulkeway’s expert, further testified that the sewer approval had virtually no impact on the progress of the work and that the delays were solely caused by Ernst & Ernst’s mismanagement of the project.

Foulkeways sought $1.8 million dollars as the cost to complete, an amount over and above the remaining contract balance. The jury awarded $1.4 million to Foulkeways and directed a verdict against Ernst & Ernst on all of its claims. Currently, post-trial motions are pending in which Foulkeways seeks to recover pre-judgment interest and attorneys fees under the Contract and Subcontract Payment Act as the substantially prevailing party.