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Litigation Cases

Insurance Company Cases

Surety Cases


Roofing Contractor Default

A 35-year-old roofing company contracted with approximately 19 different school districts and universities throughout upper Pennsylvania and lower New York State. Of these projects, 14 were bonded with the various contractors and owners. LMACS was retained by the Surety company to determine the construction and financial status of each bonded project, and establish a mutually agreed scope of work for the completion of each.

LMACS then prepared separate bid packages for each project and solicited bids for the completion work from approved bidders in each area. These bids were received and evaluated by LMACS and a bidder was selected. Contracts were issued to the recommended bidders and the completion work proceeded at each site with LMACS monitoring progress and cost on many of the projects.

Site Work Contractor Default

This case involved a state penitentiary where the construction manager terminated the bonded earthwork contractor. LMACS was retained to investigate and determine if the termination of the $11 million earthwork contract was reasonable and appropriate. LMACS’s scope of work involved reviewing all contract plans, agreements, change orders, payment applications, erosion and sedimentation control issues and other appropriate documents furnished by our clients. LMACS interviewed key personnel involved in the case, reviewed project records, progress reports and change orders and reported the findings and conclusions to the surety company.

Prime Contractor Default

This case involved the construction of a $2 million addition to an existing government building. When the project was 40-50% complete, the prime contractor for architectural and structural work was held in default. The work was suspended due to poor masonry workmanship and for being 60-90 days behind schedule. LMACS was retained to investigate the contractors’ termination, and determine if it was a proper termination through a review of the project documents. Emergency repairs were required for the masonry work, and as a result, LMACS located a contractor to complete this work, which allowed other prime contracts to proceed in a timely manner with minimal loss of time.

Potential Contractor Default

This case involved a sanitary sewer project where the general contractor was experiencing cash flow management and accounts payable problems and was facing possible termination on the project. LMACS was retained to assist the contractor in setting up proper cost records and management decisions. LMACS also tracked progress and completion of the project for the bonding company. LMACS’s scope of work was to review contract plans, technical specifications, progress payments to sub-contractors, soil contamination claims and other documentation and advised the surety on the validity and magnitude of the potential claim. LMACS made site visits, attended meetings with the client and reported site activity weekly to the surety company. LMACS set up a cost control system for the project and developed procedures for determining the cost to complete the project with the contractor. LMACS also set up the re-letting of certain subcontract items of work to maintain the project schedule and avoid penalty charges.

Construction Defect

This case involves a parking garage at a shopping mall where the owner is suing the design/builder for improper design. Consequently, counterclaims have been filed against other parties involved in the construction. LMACS was retained by the surety to review project documents and damaged areas of construction for conformance to specified standards and the original design contract documents by the surety company. LMACS also evaluated the owner’s repair costs to remediate the construction defects, and prepared a report with conclusions for the surety company.

Maintenance Bond Claim

This case involved a claim on a maintenance bond for a public works project for infrastructure reconstruction. The township claimed the contractor was responsible for repairs to damaged elements of the construction project. LMACS’s task was to review file documents provided to the insurer regarding 40+ locations of damage, then meet with the Township and Contractor and review actual field conditions. LMACS’s analysis was used to determine the cause of the damage as an independent assessment of the work.

Subcontractor Default

This case involved an addition and renovation at a community college where the plumbing subcontractor vacated the project. LMACS was retained by the surety company to assist in obtaining replacement bids for the remainder of the plumbing package and to develop a completion cost budget utilizing detail quantities and unit prices applied by LMACS. This estimate was prepared to develop a scope of work, and was used to compare and analyze the bids received from other plumbing contractors, and to select and negotiate a final cost to complete the plumbing project.

Potential Subcontractor Default

A builder/developer on an historical renovation of an urban midrise hotel attempted to default a bonded minority WBE window subcontractor. LMACS was retained to review the background of the claimed default which included change orders, potential back charges and other unresolved cost issues to determine if the default was proper. After reviewing the records and conducting an onsite review with all parties, LMACS issued a formal report of recommendations to the insurance company, which settled the claim.

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