Court Affirms Dismissal of Subcontractor’s Wrongful Termination Counterclaim and Clarifies Scope of Upcoming Trial on Damages

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Back in April we examined the court’s decision in Boldt v. Black & Veatch, which dismissed a subcontractor’s counterclaim for wrongful termination on a 60-turbine wind farm project. As you may recall, the subcontractor hired to erect the turbines alleged that it was wrongfully terminated for delays that were not its fault but were the fault of the contractor and the wind turbine manufacturer. The court rejected that excuse because the subcontractor had not availed itself of its contractual remedies to obtain schedule relief for delays that were not its fault.

Since our last post, the subcontractor filed a motion asking the court to reconsider its prior ruling. That motion was denied in a decision released earlier this month that proved to be a double whammy for the subcontractor. In addition to reaffirming its dismissal of the subcontractor’s wrongful termination, the court held that the upcoming trial on the contractor’s corresponding claim for breach of contract will be a damages-only trial since liability has effectively already been decided. Here is what the court said about that:

Ultimately, this case is about whether BVCI had cause to terminate Boldt from the Project for cause. It is undisputed that shortly after Boldt began its work on the Project, it fell behind the Construction Schedule. Nor does Boldt dispute that it failed to timely perform critical tasks that were entirely within its control. In this case, Boldt has tried to shift blame for the delays to both BVCI and the Project’s turbine vendor. However, in granting summary judgment in favor of BVCI as to Boldt’s breach of contract claim, the Court determined that the Subcontract set forth certain procedures for Boldt to follow during the course of its work to demonstrate delays outside of its control and to protect itself from liability for such delays. Boldt has failed to show that it followed those procedures. Consequently, BVCI had good reason to conclude that Boldt was in default of its Subcontract obligations. And when Boldt proved unable to get its work back on track, BVCI had the right to terminate Boldt for cause. Stated succinctly, BVCI properly terminated Boldt for cause and there is no jury issue regarding Boldt’s claim for wrongful termination.

Although BVCI did not move for summary judgment as to its own counterclaim, the Court’s ruling on the motions for summary judgment has all but decided Boldt’s liability. All that remains for trial is a determination of BVCI’s damages. One category of damages that BVCI seeks is damages for delayed Project completion. Boldt contends that it should be able to raise the issue of whether it was truly responsible for the Project’s delay at least as to those damages. However, the Court will not allow a trial on damages to turn into a liability trial regarding who was truly responsible for the delays to the Construction Schedule. The Subcontract provides that Boldt “shall not be responsible or liable” for delays in completing its work insofar as the delays were caused by an Owner and/or Purchaser-Caused Delay or a Turbine Vendor-Caused Delay.  Because Boldt did not take the steps necessary to establish either delay and failed to fulfill its own obligations under the Subcontract, Boldt will be fully responsible to BVCI for any damages resulting from its termination for cause.

The trial on the contractor’s breach of contract damages is set to begin October 30.