In this case, Holloway Consulting served as the construction damages expert on behalf of the general contractor. The construction was for a custom home in Basalt, Colorado. The dispute involved costs incurred and billed by the GC over and above the owner’s original budget.
Damages Expert Findings
The GC’s costs were an inevitable and necessary result of the owner’s decisions, control over the timing and design of the home, and selection of finishes and features. The GC billed $1,315,832, as compared to a proposed budget of $790,481. The owner’s design changes and first-time costs were primary causes of the $525,351 in cost growth.
The owner was in continuous contact with the GC regarding the scope, progress and cost of the project. Owner should not have been surprised by any cost developments. The owner was aware that his decisions to enhance the scope of the home would cause costs to exceed budget.
Consistent with the parties’ course of dealing, the owner did not obtain three bids from the subcontractors he selected and directed for interior and exterior work. As of March/April, the home still could have been built for between $800,000 and $900,000.
If the owner had been concerned about meeting the budget, he could have and should have selected finishes that met the GC’s initial budgets. Instead, the owner chose to ignore those estimates and unilaterally selected components that he wanted, regardless of price.
The decisions made by the owner do not exhibit any discernable concern for controlling the overall cost of the home. The owner did not write to the GC and express any concern about the cost of the home until after substantial completion.
Court’s Decision
The court ruled in favor of the GC, and awarded the damages sought.