Multinational Group Sued by Contractor for Breach
Lawsuit Alleges Routine Failure to Pay the Result of an Attempt to Lower Payment
A recent lawsuit initiated in federal court claims the subsidiary of a multibillion-dollar company used fraudulent methods to lower its payments on construction work in the popular tourist coastal town of Myrtle Beach. Consensus Construction and Consulting Inc. filed a complaint in federal circuit court in December alleging BEI Beach LLC breached its contract, committed fraud and violated the South Carolina Unfair Trade Practices Act.
The dispute stems from the contracting company's work on the VA Clinic in The Market Common, a large Myrtle Beach restaurant and retail space. The Market Common, owned by BEI (a subsidiary of the Leucadia National Corporation) underwent foreclosure in 2010. Leucadia then created BEI to repurchase the property after foreclosure at a fraction of its original price.
JP Morgan Chase foreclosed on the property after Leucadia failed to pay regular mortgage payments on its $100 million dollar loan. Consensus Construction was hired when The Market Common went into receivership. BEI took over the contract two months later, when Leucadia repurchased the complex at the popular tourist destination spot.
According to The Sun News, when Consensus Construction's owner, John O'Brien requested payment from BEI, the company told O'Brien that "BEI routinely refused to pay its contractors amounts due and owing in order to force them to accept a lesser amount than is actually due."
BEI also made substantial changes to the original contract but offered no maximum payment increases.
Finally, the complaint filed in circuit court alleges BEI encouraged Consensus Construction's subcontractors to file mechanic's liens, which would allow BEI to pay the subcontractors directly by shorting Consensus Construction of its general contracting fees.
This sort of construction contract dispute is all too common in today's market, especially with the commercial real estate market stagnant. If your company has not been paid or met with unfair trade practices, contact an experienced construction law attorney to explore your options.