Construction Company Sues Owner Over Unpaid Work

Rockville, Md.-based Grunley Construction Company has filed a lawsuit in the District of Columbia Superior Court against an owner that failed to pay for renovations to its building. Grunley claims that it’s due an unpaid balance of at least $837,552, excluding interest, for its work at 1401 New York Ave. NW in Washington, D.C.

In early 2007, Grunley inked a $9.16 million contract with the Dutch real estate company Wereldhave Management USA, Inc. for the exterior renovation project. During construction on the 12-story building, however, the owner “issued or caused changes to the work” that bumped up the price of the contract to about $9.4 million, according to the lawsuit.

The 30,000-square-foot renovation of the 1980s-era office building involved the reconstruction of the entire facade and the modernization of the lobby and retail space located on the first level. The project was completed while the building was occupied. However, tenants were able to work undisturbed from March 2007 to March 2008, thanks to a lightweight skin of aluminum and limestone placed over the existing facade. Additional adjustments included stone column cladding, new sidewalk paving, arcade ceiling finishes, and new exterior lighting. But, Grunley claims that it did additional work and encountered unanticipated conditions, defective construction documents, and other disruptions and delays during the project, which made its work cost more.

As of Jan. 15, Wereldhave paid Grunley $8.56 million, leaving at least $837,552 still due, according to the lawsuit. The contractor seeks to charge interest at the prime rate plus 1 percent on the unpaid bill. Under the contract, the owner was required to make timely payments for work completed--which included change order work. Last May, the project was given a runner-up prize in the “rehab/reuse” category for the Washington Business Journal’s Best Real Estate Deals of 2008.