Subcontractors Sue For Lack of Payment

Flooring contractor Michael Butler expected the job he landed at the hotel that anchors National Harbor to catapult his company forward.

But since he finished the work in March, Butler alleges in court papers, $140,000 of his bills have gone unpaid -- without explanation. Butler said he has had to lay off his three employees, has fallen several weeks behind on some bills and for the first time in his 32 years in business has had to hire a lawyer to collect payment.

Disputes over payment are not uncommon on large projects, and Gaylord National Resort and Convention Center says it is attempting to resolve issues that have delayed payments that contractors allege total $80 million. But the disputes are unfamiliar -- and unwelcome -- to some of the small contractors who were supposed to benefit from National Harbor, the 300-acre development under construction in Oxon Hill.

"All of my vendors were paid for all of the materials, all of my employees were paid, but then I didn't get paid," Butler said of his experience as a subcontractor on the hotel project. "I don't know how to explain what that does to a small business like mine. It's devastating."

He is among 21 contractors to file court papers seeking payment for work at Gaylord, the largest nongaming hotel and convention center on the East Coast. The contractors include the company that built the resort's signature 18-story glass atrium and another that constructed its Bellagio-style fountain.

The largest of the 21 lawsuits against Gaylord was filed by the project's construction manager, Perini/Tompkins Joint Venture. The construction manager claims that it and its subcontractors are due $80 million, much of it for work that was agreed upon but not covered in its original contract. The subcontractors are seeking payments of as little as $30,000 in one case and as much as $9.6 million in another.

Gaylord says it is working to resolve its dispute with the construction manager, which would in turn settle the lawsuits filed by smaller companies such as Butler's.

"We're in the process of working through the closeout procedure for the project and reconciling the billing statements with the general contractor," said Carter Todd, general counsel for Gaylord.

At least two of the subcontractors dropped their lawsuits after being paid, but almost all of the claims are waiting to be heard in Prince George's County Circuit Court. Eight of the 21 lawsuits have been filed since Sept. 15.

Construction law attorneys said the lawsuits filed against Gaylord are not unusual, given the scale of the project. The $870 million hotel opened in April; the $4 billion National Harbor development is not expected to be complete for another decade.

"Only large projects that get into major disputes have this kind of litigation filed," said Judah Lifschitz, who has taught construction law at American University Washington College of Law.

Butler's company, New England Wood Floors of Gambrills, was contracted for $250,000 to install, sand and stain the floors in the resort's opulent Old Hickory Steakhouse and its Italian buffet restaurant.