Case Study: No Damages for Restaurant Owner Despite Construction Delays

 

Issue:

An Italian restaurant owner in Portland learned his landlord would be tearing down the building. The landlord offered a new space across the street and the restaurant owner hired a contractor to design his restaurant. He submitted construction plans to the City of Portland (City), which were approved. However, the City issued a stop-work order when it learned that they were building a mezzanine, which was not in the original plans. The restaurant owner had to start over and hired a general contractor to re-engineer the plans.

More than a year passed until the restaurant owner had the final plan approved by the City. At that point, U.S. Citizenship and Immigration Services (USCIS) revoked his work visa. He had to return to Italy since he did not have an operational business and was unemployed.

The restaurant owner (plaintiff) sued the landlord and general contractor (defendants). He claimed that if they hadn’t caused delays in the project, he could have opened his restaurant and made profits. 

Assignment:

The attorney representing the defendants called us to determine what profits the plaintiff could have expected to make had it not been for the construction delays and had he opened the restaurant at various potential dates.

We performed extensive restaurant industry research and developed key assumptions using different timelines and restaurant opening dates. We concluded that the plaintiff’s restaurant would not have been profitable in the first few months after opening. 

Resolution:

This case went to a jury trial where Serena Morones testified to present our findings. The jury agreed with our opinion and found no damages for the plaintiff.

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Have questions about this type of damage analysis? Reach out to Kevin Marold who conducted and prepared the analysis for this case.
Email: [email protected]