On behalf of Kadish & Associates Law Group posted in Construction Litigation on Friday, October 30, 2015.
Arizona readers may be aware that Kroger is the country’s largest supermarket chain with numerous locations in 31 states throughout the Midwest and the South. What those same readers may not know is that Kroger is also the owner of a large number of subsidiaries, including manufacturing facilities, such as bakeries and dairies. Construction at one of the company’s dairies led to the company becoming involved in construction litigation.
The construction company was hired to serve as general contractor for the expansion of one of Kroger’s dairies on the East Coast. As part of the project, a new office, cooler warehouse and maintenance facility were to be built. A maximum amount of $18,210,047 was allotted for the general contractor’s services based, at least in part, on an engineering report commissioned for the area where the new facilities were being built.
That report indicated that the soils on the Pennsylvania site could be used for backfill for the construction of the retaining wall. When workers began this portion of the project, it was discovered that this was not the case. As a result, the general contractor incurred an additional $1 million in expenses to correct the problem and complete the retaining wall. That amount in additional compensation was requested from Kroger, and the company denied payment.
Therefore, the construction litigation alleges that Kroger breached its contract with the general contractor by refusing payment for its services. Any construction company in Arizona knows that similar problems often arise during construction, and, if the problems can be corrected, the projects will often cost more than originally quoted. When a company fails to pay for services such as this, it may constitute a breach of contract, and litigation may be the construction company’s only recourse.
Source: pennrecord.com, “Kinsley Construction sues Kroger over alleged breach of contract for facility construction”, Gene Johnson, Oct. 14, 2015