Partners Colby Balkenbush and Marjan Hajimirzaee Prevail in a Breach of Contract Trial Against a Los Angeles General Contractor, Obtaining a Judgment of Over $650,000 on Behalf of Their Client.

United States District Court for the Central District of California rules in favor of WWHGD Client in breach of contract trial and awards $664,545 in lost profit damages.

Commercial Breach of Contract

$664,545 in damages awarded to WWHGD client.

In May 2021, Arc City, a general contractor, signed a contract to purchase approximately $2.4 million in lumber from building materials supplier BFS Group for use on a luxury apartment project in Los Angeles.  At the time, the market price of lumber was near an all-time high. Shortly after the contract was signed, the price of lumber fell dramatically.  Arc City then refused to purchase the lumber from BFS Group and instead purchased the lumber for significantly less from a different lumber supplier.  However, BFS Group had already purchased the lumber at the prior high market price and was then forced to sell the lumber to other customers at a significant loss.  BFS Group sued Arc City for breach of contract and sought to recover its lost profits. 

At trial, Arc City argued that, even though one of its principals had signed the $2.4 million contract, the contract was not enforceable as it listed a framing subcontractor as the customer rather than Arc City.  The Court rejected this technical argument after BFS presented persuasive evidence that Arc City had intended to contract with BFS despite the framer being listed as the customer.

Prior to the trial, Arc City's only offer of settlement was $50,000.  After a two-day trial, the Court found that Arc City had breached the contract and that BFS was entitled to recover its lost profits of $664,545, which was the full amount of damages sought by BFS.