SBI sues Rockpoint and insurers for unpaid construction work in Livermore

SBI Builders has sued a property owner and its insurance companies for more than $5 million in unpaid construction work at a 222-unit apartment development in Livermore.

The San Jose-based contractor filed a lawsuit against Rockpoint, based in Boston, along with construction bonding surety companies Liberty Mutual Insurance and Ohio Casualty Insurance for allegedly failing to pay for work at the Legacy at Livermore complex at 1934 First Street, the San Francisco Business Times reported.

The lawsuit comes after the construction firm filed a mechanic’s lien against the three companies in December for $9 million.

Two weeks after SBI issued the lien, Ohio Casualty issued a bond on the lien — a tactic meant to avoid foreclosure of a property by offering the bond for release instead of the property itself.

SBI is seeking foreclosure of the mechanic’s lien release bond, as well as payments for damages and legal fees.

Rockpoint, Liberty Mutual and Ohio Casualty could not be reached for comment by the Business Times.

SBI signed a contract with Liberty Mutual in 2022 to take over construction of the project after its original contractor, Katerra, filed for bankruptcy.

The construction company alleges it found major issues with the work done by the previous contractor that caused SBI to issue $14 million in change orders at the construction site, according to the complaint, forcing the company to request a project extension.

Liberty Mutual then broke the project timeline into phases, instead of a single completion date, which significantly increased costs, the lawsuit said.

Liberty then allegedly refused to grant any additional change orders. Some 17 months into construction, the insurer directed SBI to hire a scheduling consultant, flagged several other issues and refused to pay SBI.

“A host of other issues were raised by Liberty and nothing SBI could do would appease Liberty,” the lawsuit states. “Liberty eventually refused to approve any other change orders, directed SBI to keep working on the project (including the changed work) and make claims for the changed work.”

Since the mechanic’s lien was filed, SBI said some payments were made, but Liberty and the other defendants still owe them more than $5 million. Several other unidentified contractors also filed mechanic’s liens against Liberty Mutual and Rockpoint, which have since been released, according to property records. 

MCH Electric Inc. and Sequoia Civil both filed mechanic’s liens against Rockpoint this year in April and May, respectively, which appear to have not yet been released, according to the Business Times.

Construction on Legacy at Livermore is complete and it began leasing in November, according to the Pleasanton Weekly.

— Dana Bartholomew

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