The McDonnel Group says it's owed more than $3 million for French Quarter project

By Tomas Kassahun | Jul 14, 2018

A construction company filed a complaint on June 28, saying it’s entitled to more than $3 million for a recent project.

According to the complaint, The McDonnel Group LLC contracted with the French Quarter Residence Project on Oct. 14, 2015, to provide construction services.

In a news release on Nov. 11, 2015, The McDonnel Group (TMG) announced that it was selected to provide construction to French Quarter Apartments (FQA) Limited Partnership “courtesy of AIG GRE Affordable Housing for the historic renovation of the former Maison Blanche Department Store Annex Building.”

The plan was for the five-story building, located at 939 Iberville St. in New Orleans, to be transformed into 87 market-rate residential units. 

A construction company filed a complaint on June 28, saying it’s entitled to more than $3 million for a recent project.

FQA also contracted separately with John C. Williams Architects LLC to serve as the project architect, then contracted with DFC Group Inc. to serve as FQA’s designated owner’s representative on the project, according to the complaint. The contract between TMG and FQA is a “standard form of agreement between owner and contractor where the basis of payment is the cost of the work plus a fee with a guaranteed maximum price,” the complaint stated.

TMG said the contract’s initial guaranteed maximum price was $32,095,000 subject to additions and deductions by change order as the contract provides. 

“To date, including all approved change orders, the current contract guaranteed maximum price is $35,322,395,” the complaint stated.

TMG and FQA also entered into various contract modifications, according to the complaint.

The modifications stated in the complaint were: extension of the bonus completion date; confirmation that if FQA later extended the deadline for substantial completion, that would also extend the bonus completion date to the same date; requirement for TMG to pay all electricity costs of the project as a cost of the work until the business opening date and entitlement for reimbursement of all electricity costs. 

According to the complaint, TMG achieved substantial completion of the project before Aug. 11, 2017. 

However, FQA refused to certify substantial completion in order to avoid paying TMG the completion bonus fee and utility reimbursement under the contract, the complaint stated.

“FQA owes TMG the principal sum of $1,913,196 for the contract work and the completion bonus fee,” the counsel for the McDonnel Group, LLC wrote. According to the complaint, TMG met all the requirements for the utility reimbursement under the third modification and submitted request for change for the utility reimbursement. 

“However, FQA and Williams refused to and/or failed to execute a change order for the utility reimbursement and FQA refuses to pay TMG the $93,367 FQA owes TMG for the utility reimbursement,” the complaint stated.

The complaint added that FQA and Williams directed TMG to perform additional work outside the scope of the contract and TMG performed that additional work. FQA owes TMG $1,085,194 for that extra work, according to the complaint.

“Throughout the project, FQA and its representative, DFC, interfered with Williams’ independent review and analysis of TMG’s requests for change orders and applications for payment, contrary to the contract,” the complaint stated.  

The McDonnel Group, LLC, asked for judgment to be given in its favor and against FQA for the principal amount of $3,065,257, plus interest, costs and attorneys’ fees, as well as other general or equitable relief that the court deems appropriate.   

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