SMJ General Construction, Inc., v. Jet Commercial Construction, LLC

In early 2016 Jet Commercial Construction, LLC (Jet), an Oklahoma corporation, entered into a contract with Kona Grill, Inc., for the construction of a restaurant in Honolulu, Hawaii. In May, Jet entered into a subcontract with SMJ General Construction, Inc. (SMJ), an Alaska corporation, “to supply the materials and labor for the construction of the building and other improvements.” When disputes arose, the parties engaged in mediation as their subcontract required, reaching a settlement agreement by which they each “absolutely release[d] the other of and from any and all claims, demands and obligations of any kind arising from [the subcontract].” The settlement agreement, unlike the subcontract, contained no dispute resolution provision. Two weeks after settlement the subcontractor filed suit against the contractor in Alaska superior court, seeking damages and an order setting aside the settlement agreement on grounds that the contractor had concealed facts that made it difficult for the subcontractor to obtain releases essential to the settlement. The contractor moved to dismiss, arguing that the subcontractor’s claims were subject to the subcontract’s dispute resolution provision. The superior court granted the contractor’s motion and awarded it attorney’s fees. The subcontractor appealed. The Alaska Supreme Court concluded the case should not have been dismissed because the parties, by the express language of their settlement agreement, released each other from “any and all” obligation to engage in dispute resolution as required by the subcontract. The matter was remanded for further proceedings. View "SMJ General Construction, Inc., v. Jet Commercial Construction, LLC" on Justia Law