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Mr. Garcia is the founding principal of the firm. He has enjoyed the distinction of being named a “super lawyer” in Connecticut and for New England since 2006 for Construction Litigation. For more about the selection process for Connecticut Super Lawyers please go to: http://www.superlawyers.com/about/selection_process.html.
He combines 10 years of hands-on construction industry experience (described below) with more than 32 years of legal experience litigating complex commercial construction and franchise disputes. Ray has tried 50 construction cases to conclusion before courts and juries. He has tried to conclusion over 30 franchise cases. He has conducted successful appeals before state and federal appellate courts. Some of the cases he has tried and subsequent appeals are described below. He has settled many cases in which individual clients have recovered in excess of $20,000,000.
The cases span a wide range of subjects from public works contract claims for additional compensation to claims based on the Connecticut Unfair Trade Practices including franchise and bad faith litigation, based on common law and statutory principles. The cases also involve working out defaulted contractors and negotiating resolution of claims under general indemnity agreements.
The trials have been conducted before arbitration panels, juries or to the court sitting without a jury.
Construction and Surety
• Hilltop Preserve Limited Partnership v. Continental Casualty Company, et all. (Verdict Feb. 8, 2012). Garcia & Milas obtained a jury verdict in favor of Hilltop which, with interest required by statute, will result in a judgment in excess of $2,400,000. The Court also allowed legal fees and the application for the fees and costs is still pending.
Hilltop developed housing in Walpole, MA. Hilltop hired Hodess Building Company to construct the project. Hodess posted a performance bond on the AIA 312 bond form issued by Continental Casualty Company, one of the CNA companies. Hodess defaulted on the construction contract. Hilltop forced the surety to pay for the completion of construction and assume Hodess’ warranty obligations. The Surety refused to correct certain conditions covered by the warranties. Hilltop corrected the defective work and sued the Surety under the performance bond. The jury in the Massachusetts District Court for the District of Dedham found in favor of Hilltop, awarded $2,000,000 and reduced that by $530,000 for betterments effected by Hilltop in the corrections. With interest, the judgment will be in excess of $2,400,000. During the trial, the court decided that under section 6.4 of the Performance Bond, Hilltop was entitled to recover attorney’s fees and costs. No other reported case has so held based on this form of Performance Bond. The application for the fees and cost is pending. The Surety was represented at trial by Hinshaw Culbertson.
• In the matter of the arbitration between William A. Berry & Son, Inc. and Yale University Case No. 110Y0059210 (award September 26, 2011) Garcia & Milas obtained an arbitration award in favor of Berry against Yale for $4,924,803.
Berry was the Construction Manager for the reconstruction of the Jonathan Edwards College at Yale, one of the oldest of the Yale residential dormitories. Berry finished the construction on time for Yale to use the Project when school opened in August 2008, despite the fact that the construction costs ran over budget by some 50% as a result of Yale’s directions and unforeseen conditions. Yale refused to pay Berry and several of the subcontractors for work performed. Before arbitration, Yale and Berry settled all the subcontractor claims, leaving only Berry’s claims for additional compensation. Yale’s form contract required the parties to engage in 10 day “chess clock” arbitration. Yale was represented by Robinson and Cole in subcontractor negotiations and at the arbitration by McElroy Deutsch, Mulvaney and Carpenter, LLP (Pepe & Hazard).
• In re the arbitration between White Oak Corporation and the State of Connecticut Department of Transportation (“ConnDOT”). Garcia & Milas recovered an award in favor of White Oak which together with interest is now in excess of $10,000,000.
White Oak constructed the northbound three lanes of I-95 over the Pequannock River in Bridgeport Connecticut. The State forced the surety to take the Project over after a series of disputes stalled construction. White Oak, together with its surety commenced arbitration against ConnDOT. White Oak obtained what is reported to be the largest award of money damages granted against ConnDOT arising from a construction project, now, with interest in excess of $10,000,000. The ConnDOT has appealed the award. ConnDOT was represented by Carmody and Torrance.
• Lindade Construction, Inc. v. Continental Casualty Company (Ashforth Properties, d/b/a AP Construction Co.), 47 Conn. L. Rprt 323 (Feb. 25, 2009) In a matter of first impression, Garcia & Milas obtained a decision of the Court that the “pay if paid clause” in the subcontract between AP and Lindade, its subcontractor, shifted the risk of the insolvency of the Owner of a construction project to the subcontractor. Since the Owner never paid AP, the general contractor, AP did not have an obligation to pay the subcontractor, and the surety could rely on the condition as well. Garcia & Milas lawyers drafted the Subcontract Clause and represented the AP.
• Ashforth Properties, Inc. (d/b/a AP Construction Co.) v. Bank of Scotland, et al., 2009 WL 4282822 (Sup. Ct., CT Nov. 2, 2009) In a matter of first impression, Garcia & Milas obtained a ruling from a court allowing AP, the general contractor, to assert mechanics lien rights superior to the bank holding the first mortgage on a failed construction project. The decision allowed AP to claim its lien for unpaid work was superior to the lien of the first mortgage held by the bank.
AP entered into a contract to construct Southport Green for a developer and at the loan closing signed subordination agreements recognizing the priority of the bank’s mortgage. During construction the Developer defaulted on the loan when the Project was about 60% complete. The banks allowed the Contractor to complete construction, controlled the funds and allowed the Developer to make representations about anticipated payments to induce AP to complete the work. AP asserted that as a result of the banks’ conduct the banks should be equitably estopped from maintaining priority over the subsequently arising mechanics liens filed by AP. In a decision resolving a motion to strike, the Connecticut Superior Court recognized that the contractor could assert the equitable claim to subordinate the lien of the bank’s mortgage. The court also acknowledged that the banks may have assumed the construction contract because they did not advise AP that the developer defaulted. As part of the loan documentation, the banks took a conditional assignment of the construction contract as part of the collateral. The assignment was triggered by the default. The banks were represented by Pullman & Comley.
• PSE Consulting, Inc. v. Frank Mercede and Sons, Inc., 267 Conn. 279, 838 A.2d 135 (2004) In a matter of first impression, Garcia & Milas obtained a jury verdict preventing a surety from recovering under the general agreement of indemnity against the indemnitors money the surety had paid to settle subcontractor claims.
CNA, Mercede’s payment bond provider, claimed that it was entitled to reimbursement for money it paid under the general agreement of indemnity to settle a claim asserted by PSE, the installer of structural steel on a Mercede Project for a bankrupt structural steel supplier. After settling a claim against PSE for making a fraudulent claim against CNA, Mercede successfully argued before a jury that the surety, CNA, was not entitled to reimbursement because the surety had acted in bad faith by acting in its own self interest in settling claims that arose because of the way it “processed’ PSE’s claims, breaching the obligation of good faith and fair dealing implied in every general indemnity agreement. The Connecticut Supreme Court affirmed the decision on appeal. CNA was represented by Gordon Muir and Foley. PSE was represented by Pepe & Hazard.
• L.G. DeFelice, Inc. v. Fireman’s Ins. Co., 41 F. Supp.2d 152, D.Conn., Sep 21 (1998) In a matter of first impression, Garcia & Milas obtained a jury verdict in which the jury decided that the Surety failed to provide a proper bid bond to DeFelice, a road builder, as a result of which ConnDOT refused to award DeFelice highway work worth over $50,000,000.
DeFelice was a road contractor who lost a bid because Fireman’s failed to provide a bid bond on the proper state form. In a trial to a jury in U.S. District Court for the District of Connecticut, which was bifurcated as to liability and damages, the jury found that the surety breached the implied contract to provide a bid bond that met the requirements of ConnDOT’s procurement regulation, and was liable in damages when ConnDOT rejected Defelice’s bid as non-conforming. The case was settled after the jury verdict on liability. The Chicago firm Grippo and Elden represented Fireman’s.
• Saturn Const. Co., Inc. v. Premier Roofing Co., Inc., 238 Conn. 293, 680 A. 2d 1274 (1996) In a matter of first impression, Garcia & Milas obtained an arbitration award in favor of Premier against Saturn for more than $490,000 plus interest and legal fees based on the Connecticut Unfair Trade Practices Act as well as the Connecticut version of the Little Miller Act.
Premier performed the roofing work on the Danbury Correctional Facility. After the work was completed and accepted, but before all the retainage was released, the State became aware that the roof was designed so that the steel deck would decompose over time because of moisture that caused the insulation, which was constructed as specified, to emit a chemical that corroded the deck. The State wrongfully withheld money from Saturn, the General Contractor, and Saturn refused to pay Premier. The arbitrators directed Saturn to pay Premier the balance of the contract amount due plus retainage and legal fees, despite the fact that the State was holding money from Saturn because of the potential problems with the roof. The Connecticut Supreme Court affirmed the arbitration panel award for damages, interest and legal fees based on the Connecticut Unfair Trade Practices Act. Saturn was represented by Pepe & Hazard.
• Forge Square Associates Ltd. Partnership v. Construction Services of Bristol, Inc. (“CSB”), 33 Conn. App. 669, 638 A.2d 606 (Conn. App., 1994) Garcia & Milas, representing both the general contractor and Seaboard Surety, obtained an arbitration award preventing the surety from having to pay the cost incurred by the Owner to complete a project which CSB refused to complete. The arbitrators also awarded CSB the unpaid account balance.
Forge wrongfully terminated CSB, the general contractor, from the reconstruction of the Forge Square apartment building in Connecticut. Forge asserted a claim for over $6,000,000 for damages. CSB requested payment of contract balances due. Forge sued CSB as well as its Surety, Seaboard Surety. In an arbitration that lasted over 55 days, the panel awarded CSB most of its contract balance and off set it with a small fraction of the damages Forge claimed leaving a net award in favor of CSB which became the basis of a mechanics lien foreclosure. The decision was affirmed on appeal by the Connecticut Supreme Court. Forge was represented by Pepe & Hazard.
Litigation under Connecticut Unfair Trade Practice Act (“CUTPA”)
• Larsen Chelsey Realty Co. v. Larsen, 232 Conn. 480, 656 A.2d 1009 (1995) Garcia & Milas obtained an order from the Connecticut Supreme Court directing that the trial court rehear claims under the Connecticut Unfair Trade Practices Act asserted by a real estate brokerage against its former president and the company that stole the former president away, together with most of the listings of the company.
H.Pearce took the listings of Larsen Chelsey Realty Co. when Pearce hired Craig Larsen, president of Larsen Chelsey Realty, away from Larsen Chelsey. In a trial before the Connecticut Superior Court, based on defective jury instructions, the jury found for Larsen Chelsey, but failed to award significant damages. The trial court, Judge Anthony DeMayo, directed a verdict for Pearce on the Connecticut Unfair Trade Practice (“CUTPA”) Count. On appeal, the Connecticut Supreme Court reversed and remanded the case to the trial court on the CUTPA issues. The case settled before retrial. Wiggin & Dana represented Pearce at Trial and on appeal.
Franchise Litigation
• Gerald Hadelman v. Frederick Deluca, Doctor’s Associates, Inc., 274 Conn. 442 (2005) Garcia & Milas obtained an award from an arbitration panel against the Franchisor of Subway Restaurants for $300,000 in punitive damages, legal fees and cost of arbitration (which in the aggregate would exceed $800,000) without any award of compensatory damages. The award was affirmed by the Connecticut Supreme Court. The case followed United States Supreme Court decision where the court struck down jury verdicts for large award of punitive damages where small compensatory damage awards were provided based on the Due Process Clause of the U.S. Constitution. The Court Supreme Court held Connecticut has no clearly defined policy against excessive punitive damage awards under the Connecticut Unfair Trade Practices Act (CUTPA) and arbitration does not constitute state action, in which case BMW of North America, Inc. v. Gore, 517 U.S. 559, 575–85, 116 S. Ct.1589, 134 L. Ed. 2d 809 (1996) does not apply. Wiggin and Dana represented Doctors at the arbitration and on appeal.
• Charts v. Nationwide Mutual Insurance Company, 397 F. Supp. 357 (D. Conn. 2005). In a matter of first impression Garcia & Milas obtained a jury verdict declaring that an insurance agent was the franchisee of the insurance company. The jury awarded Mr. Charts $2,300,000 in damages for wrongful termination of the agency agreement.
A jury found that Mr. Charts was a franchisee of Nationwide and that the agency agreement was wrongfully terminated without cause in violation of the terms of the Connecticut Franchise Act. The jury awarded $2,300,000 and the court awarded legal fees of $750,000. Subsequently, the verdict was vacated on appeal because Mr. Charts had previously filed for protection under Chapter 7 and the Circuit Court of Appeals for the Second Circuit held that the contract from which the claim arose was property of the estate, not Mr. Charts. At the time the Second Circuit decision was rendered, Mr. Charts was deceased and no further action was taken. At trial, Nationwide was represented by Bingham McCutchon. On appeal, Nationwide was represented by Kirkland and Ellis. The decision of the trial court was described by Nationwide as causing a potential tidal wave in the insurance industry.
• LaSalla v Doctors Associates, Inc., 278 Conn. 578 (2006) Garcia & Milas obtained an award from an arbitration panel for LaSalla for $1,704,445 based on the contract interpretation made by a prior arbitration award where no damages were awarded or requested.
LaSalla is a Subway Development Agent who contested the manner in which Doctors Associates, Inc., the Subway Franchisor, split royalties with LaSalla, one of the franchisor’s development agents. In 2002, LaSalla obtained an arbitration award which directed how a development agent’s royalties should be calculated, interpreting a “modifier” provision of the Development Agent Agreement. The award was confirmed. (June, 2002, Alander, J.) Thereafter Doctors continued to misapply the modifier, despite the direction of prior confirmed award. LaSalla brought a new arbitration seeking a declaration, among other relief, that Doctors had to apply the formula for the modifier set in the prior confirmed award. The arbitrators ruled that res judicata, or claim preclusion, did not prevent the second panel from awarding damages based on the decision of the first panel and entered an order directing Doctors to pay LaSalla $1,096,011 plus prejudgment interest of $608,434. The panel in the earlier case had not been asked to award damages. The second panel also issued a direction that the formula be correctly applied for the balance of the contract term, which then was potentially 26 more years. Wiggin and Dana represented Doctors in both of the arbitrations and the subsequent appeal.
Miscellaneous/Arbitration
• PaineWebber, Inc. v. American Arbitration Association, 217 Conn. 182, 585 A.2d 654 (1991) Obtained an order from the Connecticut Superior Court, which was affirmed on appeal, directing that PaineWebber arbitrate before a panel of AAA arbitrators a dispute with its customer over the way the customer’s stocks were handled. Paine Webber contended that the panel had to be chosen from the panel prescribed by Pain Webber. This was one of the first so called Amex Window cases.
Garcia & Milas successfully argued that the “AMEX Window” allowed customers of PaineWebber, Inc. to rely on a standard provision of the standard PaineWebber brokerage account agreement to use arbitration administered by the AAA which was set out in the American Stock Exchange Constitution, which was incorporated by reference into the PaineWebber standard agreement, to resolve trading disputes. It was one of the first cases in the country to force a broker to arbitrate before a panel of arbitrators selected by the AAA rather than the SRO panels assembled by the Stock Brokerage Industry. Robinson and Cole represented PaineWebber.
Results in cases listed here, as in all cases, depend on the facts and circumstances of each individual case.
Construction Experience
Ray work in construction business as a timekeeper, estimator and ultimately project manager supervising a variety of projects before entering law school in 1976. The projects included college dormitories, hospitals, health care facilities and scientific laboratories, with a present value of over $250 million.
Education
Ray attended John Marshall Law School in Chicago, Illinois. He was one of the most honored members of his class. He served as an editor of the John Marshall Journal of Practice and Procedure, the school’s law review, for two years. He was elected to the Gavel Society and other prestigious leadership organizations.
In 1979, returning from Chicago to Connecticut, he joined Pullman, Comley, Bradley and Reeves in Bridgeport, Connecticut as an associate. In 1981 he formed Garcia and Associates, P.C., forerunner of Garcia and Milas, P.C.
Involvement with Professional Associations
He is a member of the American Arbitration Association’s Connecticut Policy Board and on the National Panel of Arbitrators for large commercial cases. He also serves as an Arbitrator by appointment for the American Dispute Resolutions Center.
He is currently a member of the ABA Franchise Law Section, the ABA Litigation Section, the Construction Industry Forum, the ADR Committee and the Construction Litigation Committees of the ABA Litigation Section. He is a member of the Associated General Contractors of America’s National Surety and Bonding Committee. He is a past President and director of the Connecticut Building Congress and a member of its prestigious Industry Practice Committee.
Mr. Garcia has lectured and written extensively on many subjects. Please contact the firm for a list and copies of articles and seminar papers. Most recently he authored articles about the application of the Due Process Clause of the United States Constitution to arbitral awards of punitive damages, use of chess clock arbitrations and mediation ethics and tactics.
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