The clash in Colorado Custom Rock Corp. v. G&C Fab-Con, LLC, reveals how blurred expectations and unfinished paperwork can turn routine government projects into courtroom battles.
In a dispute over unpaid work on a federal construction project, the U.S. Third Circuit Court of Appeals affirmed the district court’s rulings denying motions made before, during, and after trial filed by contractor G&C Fab-Con LLC and its surety, Everest Reinsurance Company. Subcontractor Colorado Custom Rock Corp. (CCR) alleged G&C owed them damages for unpaid invoices resulting from masonry work performed on structures for the Department of Veterans Affairs national cemetery project. CCR brought breach of contract claims and a claim under the Miller Act, which provides a statutory remedy for unpaid subcontractors on federal projects.
G&C Fab-Con moved for summary judgment on multiple grounds, including that CCR had failed to satisfy all contractual requirements for payment, that CCR did not substantially complete its work, and that alleged defects in CCR’s performance barred recovery. However, the court found genuine disputes of material fact as to whether CCR’s termination was justified, whether its work was properly completed, and whether CCR met its obligations under the contract. The judge emphasized that resolving those issues would require credibility determinations and factual findings that must be left to a jury. At trial, the jury ultimately found for CCR, awarding over $500,000 in damages. The jury also found that G&C succeeded on its breach-of-contract counterclaim against CCR, but awarded only nominal damages.
This case highlights the importance of clearly defined expectations in government construction contracts.
The dispute centered on whether CCR fulfilled its contractual obligations and whether G&C Fab-Con’s termination was justified. Because the parties disagreed over whether CCR substantially performed, whether any performance defects existed, and whether CCR was owed final payment, the court concluded that these core issues of breach of contract and compliance could only be resolved at trial. For contractors and subcontractors alike, the case underscores the value of maintaining clear records regarding the scope of work, progress, and communications, especially when payment disputes arise under complex government contracts.
This post is for informational purposes only and does not constitute legal advice. If you have questions about your specific situation, you should contact a lawyer for assistance. Nothing herein is intended to create any attorney-client relationship between you and DLM LAW.
