'Cost plus' agreement leads construction company to litigation

By John Suayan, Galveston Bureau | Oct 10, 2011

GALVESTON - E.T. Morse Construction Inc. seeks to recover approximately $40,000 from a Galveston couple, recent court documents say

In a lawsuit filed Sept. 30 in Galveston County District Court, the plaintiff alleges Claude and Raffaela Davidson violated a "cost plus" agreement between the two parties by tendering only $45,292 of the $87.137 reportedly owed for post-Hurricane Ike residential repairs.

The original petition states Claude Davidson contacted and hired the plaintiff to perform work on a residence located in the 30 block of West Dansby Drive following the Category Two storm's landfall.

The complainant had previously performed minor construction work on the defendants' property on Galveston's West End on a "cost plus" basis, and the work and payment basis had appeared to be mutually satisfactory, the suit states.

E.T. Morse agreed to work only on a "cost plus" basis - which passes on the cost of labor and materials to the customer -- since it had no prior knowledge of the interior condition of the defendants' home, of the materials used in the construction or of any remodeling or upgrades the Davidsons might want done at the same time.

Shortly afterwards, the parties entered into a written contract as to allow Bank of America to allocate funding for the project to the defendants.

Meanwhile, the work continued with the respondents supposedly making two progress payments to E.T. Morse in the amounts of $21,666 and $21,667 as well as an additional payment for specific extra items in the amount of $1,958.

A final invoice in the disputed amount was later presented to the Davidsons.

The complainant asserts Claude Davidson presented its president with a previously prepared check for $21,666, which bore the notations "Final payment/last draft,' and represented that the amount was all the defendants would pay for the work.

The Davidsons failed and refused to pay the subject amount, the suit says.

Tramonte, Tramonte & Bastien is representing E.T. Morse.

Galveston County 10th District Court Judge David Garner is presiding over the case.

Case No. 11-cv-1555

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