SETTLEMENT:

Claimant retained $20,700 for roofing repairs and $1,500 for pick-up work. Claimant agreed to pay respondent $12,905 retained on account of the performance bond premium and $3,500 retained for pick-up work.

CASE/NUMBER:

Case I.D. Confidential.

COURT/DATE:

American Arbitration Association / August 24, 1998.

MEDIATOR:

Deborah Rothman / American Arbitration Association.

ATTORNEYS:

Plaintiff - Gary N. Schwartz (Standard, Blender & Schwartz, Woodland Hills).
Defendant - Micheal J. Schwartz (Rapkin, Gitlin & Moser, Tarzana).

FACTS & CONTENTIONS:

Claimant, a townhome owner's association, and respondent, a construction contractor, had entered into an agreement for certain repairs resulting from the Northridge earthquake. When the work was substantially complete, claimant retained a portion of the contract amount. Claimant contended that respondent had overcharged it, charging a strait 2 percent of the contract price instead of passing on the actual cost of the performance bond; that respondent's subcontractors damaged the new roof on a number of the units; and that respondent failed to complete certain pick-up work. The respondent contended that in a fixed-price, as opposed to cost plus, construction contract, it had the right to charge a percentage of the contract price for the performance bond, and that such a practice yields a price reasonably close to the actual cost of the bond; that there was no evidence that respondent's subcontractors had been the ones who had damages the roof tiles; and that it had sent workers on four different occasions to complete the pick-up work, so that any work not completed was no longer its responsibility. The plaintiff brought this action against the defendant based on a breach of contract theory of recovery.

MEDIATION:

The matter was mediated before Deborah Rothman of the American Arbitration Association on August 24, 1998. Had the matter not settled, it was scheduled for AAA arbitration.

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