(978) 979-1223


Silver Lake Legal

Construction, Insurance & Business Attorney Boston

Fired Owner’s Rep Sues Construction Manager

The lesson of the case – cost is cost.

     A recent Maryland case is interesting because an owner’s rep tried to sue a CM for giving a way low preliminary GMP.  Due to the contract language – that argument didn’t work. The CM sued for the changes the owner’s rep refused to authorize.

     Key to the analysis is that the owner’s rep held the CM contract.

Parties and Contract
Owner building a church hired SRP as its owner’s rep.  The Owner’s rep picked a CM – JE Dunn and the Owner’s rep and CM signed a preliminary GMP for $31M – final GMP was to be when plans were fully developed. At 55% done, costs neared the GMP amount. Final GMP never got signed.

Contracts Terminated, Contact Entered
When the owner learned of the overruns, it fired the owner’s rep who terminated the contract with the CM. The owner then directly contracted with the CM who finished the work but then sued to recover $3M.

Claims and Counterclaims
The CM sued the owner’s rep (and the owner) for change order work it performed but which the owner’s rep refused to authorize or pay.

The owner’s rep sued the CM alleging it circumvented the owner’s rep to deal directly with the Owner. The court said that since it was not prohibited in the owner’s rep/owner contract -it was OK.
Second, the owner’s rep tried to argue – the CM negligently represented it could do the work for the GMP and failed to investigate or reveal the real costs. The court rejected this and said the preliminary GMP was never set as a finalized GMP after all the plans were done.

Owner’s Rep Loses
The owner’s rep lost both its counterclaims – the GMP left room for upward modifications.

Get A Consult

Charles W. Cobb

Attorney at Law


320 Nevada Street Ste 301,

Newton MA 02460




(978) 979-1223

Silver Lake Legal Privacy Policy

This site was created using WordPress and uses Google Analytics to understand how posts are being received.

• This site has Google Analytics Advertising Features implemented involving Google Analytics cookies.

• Some of the ads you receive on pages across the internet are customized based on predictions about your interests generated from your visits over time and across different web-sites. This type of ad customization — sometimes called “interest-based” or “online behavioral” advertising — is enabled through various technologies, including browser cookies as well as other non-cookie technologies.

• Sliver Lake Legal has no policy or intent to use first and third party cookies together.

• Visitors can opt-out of the Google Analytics Advertising Features, including through Ads Settings, Ad Settings for mobile apps, or any other available means (for example, the NAI’s consumer opt-out).

• Users should also visit Google Analytics’ currently available opt-outs for the web.