Loss of Bonding Capacity as Basis for Injunction

By: Nicole H. King, Esquire nhk@muslaw.com

A recent ruling by the Pennsylvania Superior Court suggests that a subcontractor’s loss of bonding capacity could support an award of injunctive relief. In Greenmoor, Inc. v. Burchick Construction Company, Inc., decided on September 11, 2006, Greenmoor sought an injunction reinstating it to the renovation of the Moore Federal Building. Greenmoor had executed five contracts with the general, Burchick, to perform asbestos removal, but was fired after the conclusion of the first contract. In attempting to prove that it had suffered irreparable harm, one of the six elements of an injunction, Greenmoor offered evidence that after its termination, it could no longer obtain appropriate bonding for its future projects and Greenmoor actually prevailed in the trial court. Though the Superior Court ultimately denied Greenmoor’s claim and reversed the trial court, it did so because on this issue, Burchick offered contrary evidence that bonding was available to Greenmoor from a national provider. Accordingly, under this decision, a terminated contractor may be able to seek injunctive relief if it can prove that its termination was wrongful and its bonding capacity was irreparably damaged by the termination.

For more information on this case or other construction law issues, contact Nicole H. King at nhk@muslaw.com or call 412-456-2559.