Judge denies contractor request to be paid attorneys’ fees, costs

Superior Court Associate Judge David A. Wiseman has denied the request for attorneys’ fees and costs filed by Guerrero Brothers Inc., the contractor in the contentious Tinian High School construction project.

In an order issued Wednesday, Wiseman ruled that GBI cannot establish itself as the prevailing party in the lawsuit.

“Simply having established that the Public School System was liable for breaching the agreement is not sufficient,” the judge said.

Wiseman recently ruled in another legal issue that the Commonwealth Development Authority is not entitled to $804,049 in damages in connection with the lawsuit.

In light of that recent order, the judge said, GBI’s argument that CDA’s monetary jury award equates to GBI being the prevailing party “is no longer valid.”

“Additionally, although not consequential, GBI did not have to plead attorney’s fees as an element of damages and their total request for fees was unreasonable,” he said.

Wiseman said GBI had no pending claims against PSS and GBI was no longer a party to the suit.

According to court records, in 2001, Century Insurance Co. Ltd. sued PSS for alleged breach of contract involving the Tinian High School construction project. The insurance company also named as co-defendant GBI, which was awarded $3.8 million for the project. CIC alleged that PSS refused to pay the company that had assumed the completion of the school project.

PSS then filed a counter-claim against CIC, CDA, and GBI.

During the first phase of the jury trial in August 2008, GBI was found liable to pay CIC $170,960 in damages.

In the second phase of the jury trial, GBI and CDA claimed they suffered damage as a result of the breach of the 2001 settlement agreement between PSS and CIC.

The jury concluded that CIC did not breach its contract to provide interim payments to GBI and did not delay providing performance and payment bonds to GBI. The jury also found that CDA was entitled to $804,049 in damages from PSS as a result of PSS’ breach of the GBI-PSS agreement.

PSS renewed its motion for judgment as a matter of law to overturn the jury’s decision to award CDA damages. Wiseman granted PSS’ motion.

In the second phase of the trial, GBI sought partial summary judgment on the issue of whether PSS breached its contractual duty to interplead remaining Phase 1 Funds in the amount of $804,049.73.

In the second phase of the trial the remaining parties were PSS and CDA. GBI then requested attorneys’ fees and costs pursuant to their settlement agreement with PSS.

Paragraph 10 of the PSS-GBI settlement agreement reads: “In the event that any party breaches this Agreement and an action is brought to enforce said Agreement, the prevailing party shall be entitled to an award of…reasonable attorney’s fees and costs.”

GBI contended that because PSS was held liable for breaching the agreement when this court granted summary judgment in favor of GBI, GBI is the prevailing party as required by the language of paragraph 10.

GBI also argued that if establishing PSS’ liability is not sufficient to define GBI as the prevailing party, the jury award to CDA establishes GBI as the prevailing party.

In light of the court’s recent order that set aside the jury verdict which awarded CDA $804,049.73, GBI revised their arguments during the hearing on the motion.

GBI pointed out that because CDA is no longer entitled to a monetary judgment, GBI is in fact now injured and the summary judgment granted in favor of PSS that found GBI was not harmed no longer stand.

Wiseman disagreed.

“GBI’s amended argument, while creative, is inconsequential to the determination of whether or not GBI is the prevailing party,” Wiseman said.

The judge said GBI asserts no further reasons why they should be designated the prevailing party.

Wiseman said GBI is not the prevailing party and it would be unreasonable to award them attorneys’ fees pursuant to the settlement agreement.

He said there is nothing to support GBI’s claim that PSS should pay the costs they incurred in their continued, voluntary involvement in the trial between PSS and CDA.