Hanson Bridgett Trial Team Secures Another Major Arbitration Victory

August 29, 2024 (San Francisco, CA) – The trial attorneys at Hanson Bridgett LLP have secured a major victory in a significant win for contractor client, Smith-Hyder, Inc. The complex dispute was against the owner and representative of a synagogue (Owner) in Palo Alto, CA over its $20 million construction and development. Following a two-week evidentiary arbitration hearing, Hanson Bridgett obtained a complete defense of the Owner's $4.9 million delay and defect claim, and went on to achieve a $5.2 million award for Smith-Hyder for non-payment, attorneys’ fees, and costs. This was a total win for Smith-Hyder, Inc.

In her award, the arbitrator stated: “In this case, the evidence persuasively established that [the Owner] wrongfully terminated Smith-Hyder. Instead of negotiating a fair price for the work, they added to the project, failed to pay Smith-Hyder for its work, failed to negotiate reasonable additional costs and time, and then sent a termination letter wrongfully asserting that Smith-Hyder was responsible for delays and cost overruns justifying its termination. This was a breach for which Smith-Hyder is entitled to recover its damages.”

Partner Andrew Giacomini explained that Smith-Hyder took on the challenging and innovative project based on its care for the community.

“Smith-Hyder wanted to build something meaningful based on the trusting relationship with the project's owner,” he explained. “Our client accommodated numerous design and work requests that fundamentally altered the cost, timing, and scope of the project. Ultimately, our client was not treated fairly – the owner concealed changes made to the plans, failed to negotiate reasonable additional costs and time, and then egregiously, wrongfully terminated them, falsely asserting that Smith-Hyder was responsible for delays and cost overruns.”

The arbitration award secured is a complete vindication of Smith-Hyder as a company, the conduct of its principals, and the quality of its work. The arbitrator awarded the entire amount of Smith Hyder’s claim along with interest and attorney's fees.

The Hanson Bridgett team included partners Andrew Giacomini and Brian Schnarr, and associate Tom Li.

Background on the Case

Hanson Bridgett client Smith-Hyder, Inc. was retained by the Owner to construct a $20 million synagogue in Palo Alto, CA, after the company had successfully completed separate projects for the Owner's representative. The Owner made numerous changes to the design during the construction phase, including significant changes to the subterranean reinforced structure and podium and the addition of a state-of-the-art electronic security system, all of which resulted in more than $5 million in cost overruns and significant project delays.

While negotiating a change order for the extra work, and after the City of Palo Alto issued a certificate of occupancy, the Owner wrongfully terminated Smith-Hyder, citing project delays, and sued the company and its owners for fraud. The evidence showed this heavy-handedness was to cover up for millions in design changes which had exhausted the Owner's budget. Several millions of dollars in contractual sums were withheld on top of millions of dollars in extras. Smith-Hyder claimed more than $3 million in losses.

About Hanson Bridgett LLP

Hanson Bridgett LLP is a full-service AmLaw 200 law firm with more than 200 attorneys across California. Creating a diverse workforce by fostering an atmosphere of belonging and intentional support has been a priority at Hanson Bridgett since its founding in 1958. We are dedicated to creating an environment that provides opportunities for people with varied backgrounds, both for attorneys and administrative professionals. As the first law firm recognized as a certified B Corp, we are committed to the communities where our employees live and work and consider it part of our professional obligation to serve justice by encouraging and supporting pro bono and social impact work.

For media inquiries contact:

Patrick L. Clos
Communications Manager
Hanson Bridgett LLP
415-995-5098
pclos@hansonbridgett.com