Honig, Jaffe and Antar Win Summary Judgment In Multi-Million Dollar Construction Arbitration

In a hotly contested construction arbitration against former hedge fund billionaire Phillip Falcone, Jeremy Honig, Ed Jaffe and Mark Antar won summary judgment dismissal of Falcone’s counterclaim against their client, clearing a significant hurdle towards their client’s recovery on a multi-million-dollar claim.

The firm’s client, a New York City general contractor, had entered into a $43 million contract for the renovation of Falcone’s six-floor Manhattan townhouse, including installation of a new sub-basement with a swimming pool.  After almost four years of work on the project, Falcone terminated the contractor “for convenience” pursuant to a specific clause in the contract.  It was only after the contractor commenced an arbitration to recover its damages under the contract that Falcone asserted counterclaims alleging that the contractor’s work was defective. The Rivkin team moved to dismiss Falcone’s counterclaim arguing that, on the basis of well-settled law, where a construction contract is terminated “for convenience,” the owner cannot counterclaim for damages for alleged defective work.  In a lengthy and detailed Opinion and Order, the three-member arbitration panel agreed with Rivkin’s position and completely rejected Falcone’s argument that the termination “for convenience” had been converted into a termination “for cause.”

Having disposed of Falcone’s counterclaim, the only remaining issue at arbitration is how much the contractor is entitled to recover from Falcone under the contract as a result of the termination for convenience.  A link to the Opinion and Order is attached here.