ArentFox Schiff’s Construction Group Wins $2.5M Judgment for Holton-Arms Contract Lawsuit

Holton-Arms, an independent college-prep school for girls and young women, has been awarded $2.5 million in damages from construction company HSU Contracting, LLC after the court upheld Holton-Arms’ termination for cause of HSU’s construction contract and claims for damages.

The case was tried in person in Montgomery County Circuit Court in Maryland between February 28 and March 18, 2022. Following the trial, Judge Steven Salant awarded Holton-Arms virtually everything that was sought in its breach of contract counterclaim and denied HSU’s multi-million-dollar breach of contract claims.

The ArentFox Schiff team representing Holton-Arms included Partners James (Jay) Hulme and Mark Bloom, Associates Stavros Karageorgiou and Laurel LaMontagne, and legal assistants Jack Hitt and Samantha Kessler.

ArentFox Schiff was well-acquainted with the project. In June 2018, Holton-Arms and HSU entered into a construction contract (negotiated by ArentFox Schiff Partner Andrew Ross) for capital improvements to Holton-Arms’ existing school building that included a renovation of the lower school and replacement of the central plant and HVAC in the middle and upper schools. The construction project had set interim completion dates in August of 2018, before the 2018-2019 school year began. At trial, Holton-Arms proved that HSU began defaulting shortly after the project commenced.

The litigation concerned many of the types of claims (e.g., delays, liquidated damages, remedial costs, and termination) experienced on construction projects, as well as a battle of experts. The court found that HSU caused substantial delays to the project, which forced Holton-Arms to displace students at the beginning of the 2018-2019 school year; failed to comply with its critical path method (CPM) scheduling requirements; performed substandard and non-conforming work that needed to be repaired; and failed to timely inform the Holton-Arms design team of installation and coordination issues. The court also noted that HSU refused to accept responsibility for its deficiencies and sought to blame Holton-Arms for its defaults. As a result, Holton-Arms terminated the construction contract.

Notably, in ruling for Holton-Arms, Judge Salant found the witnesses from Holton-Arms, including its experts, and the ArentFox Schiff team, to be highly credible and well prepared.

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