Originally posted 2020-01-17 11:09:52.
I have discussed the need to always respond to a lawsuit on multiple occasions here at Construction Law Musings. However, I keep reading cases where the defendant fails to appear either by pleading or in person. Such action is never a good idea as demonstrated once again in the case of Balfour Beatty Infrastructure, Inc. v. Precision Constr. & Mgmt. Group, LLC, a case out of the Eastern District of Virginia.
The basic facts are not a surprise and are taken from the magistrates report that was adopted by the District Court. Balfour Beatty and Precision entered into a subcontract for some electrical work at a project located in Loudoun County. The subcontract included an attorney fees provision and provided for liquidated damages for late performance and the typical damages for default. The project began in July of 2016 with substantial completion July 5, 2018. Precision failed to supply sufficient manpower and sent a letter to Precision stating the same. After an agreement between the parties regarding supplementation by Balfour Beatty and to the accompanying back charge, Balfour Beatty informed Precision by letter that it would be liable for any liquidated damages. The Owner began assessing liquidated damages and Balfour Beatty subsequently terminated the subcontract and discovered defective work by Precision.
Balfour Beatty sued and after the expiration of the response deadline moved for default judgment. The magistrate judge found, without any defense from Precision, that Precision materially breached the contract for numerous reasons, converted any equipment that Precision retrieved from the job site post default, and awarded attorney fees. The total damages exceeded a million dollars. The District Court adopted these findings in whole.
Were all of these findings accurate? Did Precision possibly have defenses? Would there have been an opportunity for settlement or mediation? We’ll never find out because Precision didn’t take the time to respond. By failing to respond, Precision removed all flexibility and waived any defenses it may have had, thus precluding any possibility to mitigate the outcome.
As always, I reccommend that you read the case (linked above) for yourself. I also reccomend that should you be served with a lawsuit relating to your construction project that you always respond and do so with the assistance of an experienced construction attorney.
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