Fort Lauderdale hotel developer sues Tutor Perini, seeking nearly $12M for alleged delays, defects

Tutor Perini allegedly failed to pay subcontractors, improperly billed for disputed change orders and filed a “willfully exaggerated” construction lien, according to suit

Mar.March 16, 2020 09:45 AM
Howard Wurzak’s development firm is suing over delays and defects at the double branded Dalmar and Element hotel

Howard Wurzak’s development firm is suing over delays and defects at the double branded Dalmar and Element hotel

The developer of a dual-branded hotel in Fort Lauderdale is suing Tutor Perini Building Corp. for more than $12 million in damages related to alleged construction defects and delays.

The lawsuit, recently filed in Broward County Circuit Court, accuses Tutor Perini of failing to pay subcontractors and not fixing defective work that resulted in damages to the project, which consists of the 209-room Tribute hotel, The Dalmar; and a 114-room Element hotel.

The plaintiff, 299 N Federal Master, an affiliate of Philadelphia-based Wurzak Hotel Group headed by Howard Wurzak, also accuses Tutor Perini of filing a “willfully exaggerated” construction lien against the property, at 299 North Federal Highway in Fort Lauderdale. “Ownership is looking forward to resolving these issues through the legal process,” said Michael Kurzman, the lawyer representing the Wurzak affiliate.

Tutor Perini representatives could not immediately be reached for comment. The construction firm previously sued 299 N Federal Master for allegedly not paying more than $7 million in construction-related services. Wurzak’s complaint is a counterclaim against Tutor Perini’s lawsuit.

Tutor Perini and the Wurzak entity entered into a contract on Jan. 16, 2016, and the construction firm was supposed to have achieved substantial completion of the project within 554 days of commencement, court documents state. Tutor Perini was subject to liquidated damages of $12,000 for each day the project was delayed, per the contract.

According to 299 N Federal Master’s lawsuit, Tutor Perini did not achieve substantial completion “until well beyond the date required by the agreement and well beyond the later date promised by [Tutor Perini CEO] Ron Tutor.”

Tutor Perini then allegedly refused to allow the developer and its representatives to inspect the project site on July 27, 2018, after the construction firm failed to meet another promised deadline. Subcontractors and materials suppliers also reduced their workforces on the project as a result of Tutor Perini failing to pay them in a timely manner, the lawsuit claims.

The slowdown and workforce reductions ended up delaying substantial completion of the Element portion of the property, guestrooms on four floors of the Tribute portion and a restaurant space, according to the suit. By Dec. 18, 2018, the developer had identified a punch list containing over 180 deficiencies on the sixth floor alone, where the hotel lobby is located, the Wurzak entity alleged.

“A prime example of Tutor Perini’s defective construction comes in the form of water intrusion incidents, which have plagued the hotel throughout construction, continuing after
substantial completion and continuing as of the date of this counterclaim,” the lawsuit states.

In addition, nearly 20 subcontractors and materials providers filed construction liens totalling roughly $7 million because Tutor Perini allegedly failed to pay them. Tutor Perini also filed a lien claiming it was owed $2.7 million. The company later filed a sworn affidavit claiming it was owed $7.8 million as of December.

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