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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

JOHNSON ROOFING INC v. PACIFIC TECH CONSTRUCTION INC et al

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Case Number: 
5:13-cv-01220 Search Pacer
ACE Group party(s): 
Opposing Party: 
Johnson Roofing Inc
Court Type: 
Federal
US District Court: 
Western District of Oklahoma
Date Filed: 
Nov 15 2013

CLAIMS
43. Johnson incorporates herein the allegations contained in paragraphs 1-44.
a. Bond Claim against Federal

44. Although demand has been made upon Federal, Pacific Tech and its surety
Westchester, no amounts claimed herein, or any interest thereon, have been paid to
Johnson by any Defendant.
45. Johnson provided timely notice of non-payment to Federal, in accordance
with the Miller Act and has otherwise complied with all rules and requirements of the
Miller Act for perfecting a right of action under the bond.
46. All conditions precedent to the making of this Miller Act claim against the
Federal Bond have occurred, been performed or waived. Therefore, Federal is liable to
Johnson for the value of the work performed and material provided, but for which it has
not been paid, in an amount totaling at least $400,117.14.
b. Bond Claim against Westchester
47. Johnson provided timely notice of non-payment to Westchester in
accordance with the terms of the Subcontractor's Bond and has otherwise complied with
all rules requirements to perfecting a claim against the Subcontractor's Bond.
48. All conditions precedent to the making of this claim against the
Subcontractor's Bond have occurred, been performed or waived. Therefore, Westchester
is liable to Johnson for the value of the work performed and material provided, but for
which it has not yet paid, in an amount totaling at least $400,117.14
c. Breach of Contract Claims against Pacific Tech
49. Pacific Tech breached its Subcontract with Johnson when it failed and
refused to timely pay Johnson for work performed and materials provided. Such breach

has resulted in damages to Johnson in an amount of at least $400,117.14, for which
amount Johnson now sues.
50. In addition to the above damages, the subcontract included a payment
incentive for Johnson to conserve and properly manage construction materials. During
performance, Johnson was diligent in the management and use of construction materials
and substantial savings in materials yields was being realized by Johnson's crews. Based
upon its actual usage, as of the date Pacific Tech wrongfully terminated the Subcontract,
Johnson was entitled to receive $86,036.04 under the Material Incentive clause. Johnson
has demanded that Pacific Tech pay the amounts owed under the Subcontract's Material
Incentive cause but Pacific Tech has refused. This refusal to pay constitutes a breach of
subcontract resulting in damages to Johnson in an amount of at least $86,036.04, for
which amount Johnson now sues.
51. During the course of construction Pacific Tech demanded that Johnson
provide additional workforce in order to perform multiple elements of work
simultaneously, instead of the systematic method being utilized by Johnson. Johnson
complied with Pacific Tech's request by increasing manpower on the Project.
52. Thereafter, Pacific Tech encountered a number issues with their own noncompliant
work unrelated to Johnson. In order to correct their own non-compliance,
Pacific Tech forced Johnson to idle its forces for approximately fifteen days. Forcing
Johnson into a standby condition without payment constituted a breach of contract that
resulted in damages to Johnson which Johnson has demanded from Pacific Tech. Pacific

Tech has refused resulting in damages to in an amount of at least $41,698.90 for which
Johnson now sues.
53. On numerous occasions during October through November 2012, Pacific
Tech negatively impacted Johnson's productivity. These events included diverting
needed roofing materials from Johnson's crews to Pacific Tech's crews, limiting the
mobility and effectiveness of Johnson's Project Manager by requiring him to have an
escort while on site, stocking insufficient materials onsite that restricted Johnson's daily
production, failing to provide operated equipment to stock the roof with Johnson's
construction materials, and forcing Johnson to stock construction materials during off
hours.
54. The impacts caused by Pacific Tech to Johnson's productivity resulted in
damages to Johnson totaling in excess of $23,910.09. Johnson has demanded that Pacific
Tech compensate Johnson these damages but it has refused. Pacific Tech's actions that
negatively impacted Johnson's productivity constitute a breach of contract resulting in
damages for which Johnson now sues.
55. During October 2013, Pacific Tech provided Johnson with revised
completion deadlines which it identified as being absolute. In addition, Pacific Tech
continued to direct that Johnson increase its progress in order to meet the revised
completion deadlines.
56. At the time Pacific Tech provided Johnson with revised completion
deadlines and directed that Johnson increase its output, Johnson notified Pacific Tech in
writing that its demands constituted a compensable acceleration of work and a change to

the Subcontract. Johnson accelerated its work and incurred acceleration costs totaling
$31,677.00. Johnson has demanded payment from Pacific Tech for these acceleration
costs but Pacific Tech has refused. Pacific Tech's failure to pay Johnson for this change
constitutes a breach of Subcontract resulting in damages to Johnson totaling at least
$31,677.00 for which amount Johnson now sues.
57. Under Oklahoma law, each and every contract carries an implied covenant
to by the parties to act toward each other in good faith and not do anything to injure the
other party's right to the fruits of the contract.
58. Pacific Tech's exercised the subcontract's termination for convenience
clause in bad faith, maliciously and/or in retaliation, and wrongfully injured Johnson's
right to the fruits of the subcontract. Pacific Tech's bad faith termination of the
subcontract for convenience constituted a breach of subcontract under Oklahoma law.
59. Subcontractors terminated for convenience in bad faith or in retaliation on
federal construction project are entitled to recover full common-law damages for breach
of contract. At the time Pacific Tech wrongfully terminated Johnson "for convenience"
the value of the work performed totaled $698,608.38. Of this amount, Johnson invoiced
Pacific Tech $428,633.38 of which Pacific Tech paid $298,491.24 leaving an unpaid
balance totaling $400,117.14 for work performed.
60. When Pacific Tech wrongfully terminated Johnson "for convenience" the
unperformed portion of Johnson's subcontract totaled $571,803.70. At the time Johnson
entered into the subcontract, it anticipated earning a profit totaling forty-two (42%)

percent. Therefore, Johnson's damages for lost profits on work it was prevented from
completing totaled $240,157.55, for which amount it now sues.
61. All conditions precedent to recovery by Johnson on all its breach of
contract claims against Pacific Tech have occurred, been performed or waived by Pacific
Tech.

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.

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