Smith and Tilley win construction law case for Commonwealth of Kentucky in dispute on payment to bonding company

Goldberg Simpson attorneys Stephen Smith and Sarah Tilley  successfully represented the Commonwealth of Kentucky’s Finance and Administration Cabinet in action against a bonding company in connection with the construction of the Kentucky International Convention Center in downtown Louisville.

The bonding company, in seeking $837,000 from the Commonwealth for payments it made to a structural steel contractor’s lien claimants pursuant to its obligations under the payment bond, argued that the Commonwealth improperly assessed liquidated damages against the contractor. Pursuant to the contract between the Commonwealth and the contractor, the Commonwealth was entitled to assess liquidated damages in the amount of $3,000 per day for the contractor’s delay in reaching substantial completion and final completion. The Commonwealth put forth evidence that the contractor’s 91-day delay in reaching substantial and 109-day delay in reaching final completion caused the Commonwealth to incur actual damages. Smith and Tilley argued that, because the liquidated damages were properly assessed by the Commonwealth, it was only required to release the $3,311.76 that had been earned and unpaid to the contractor.

After a three-day bench trial, the Franklin Circuit Court issued its findings of fact and conclusions of law finding that the Commonwealth properly assessed liquidated damages against the contractor and ruling that the Commonwealth was only required to pay $3,311.76 to the bonding company.