Fluor goes for new trial

Michael Ryan of Humphrey’s
Cayman Ltd

Monday,  September 19, 2005

Fluor Corporation announced on Thursday15 September, that its wholly-owned subsidiary, Fluor Daniel Caribbean, Inc., the former general contractor for the Ritz-Carlton Grand Cayman development, has elected for a new trial in its action against the Ritz-Carlton developer, Humphreys (Cayman) Ltd, for damages for alleged breach of contract.

Just six days previously, on 9 September, Judge Denny Chin, of the US District Court in the Southern District of New York, had granted Fluor’s application to overturn the jury verdict in the first trial because he believed that “the jury’s verdict was seriously wrong and that it would be a miscarriage of justice to permit the verdict to stand.”

In what was considered by many to be a surprise verdict, on 23 June a ten person jury had awarded damages of $28.8 million to Humphreys Cayman, following the trial of the action between Fluor and Humphreys.

The dispute started when Fluor claimed it stopped doing work that was outside the original project when Humphreys could not demonstrate that it had the funding to pay for the extra work.

However, Fluor appealed the verdict, claiming that the jury simply got it wrong and requested the Court to undo a miscarriage of justice. Added to the argument was the alleged perjury by James Miller, Humphreys’ damages expert.

In overturning the verdict, Judge Chin said: “My recommendation would be the parties walk away zero-zero, no appeals. That’s my recommendation.” He added that Fluor had seven days to decide whether it would walk away or have the case retried. 

In the event, Fluor has elected to go for a new trial of the action which, according to Judge Chin, he will hear in late October or early November.

This latest development means that controversy will continue to surround the Ritz-Carlton Grand Cayman project, which first started when the government of the day permitted the development over long-established areas of mangrove, in the face of vigorous opposition from the National Trust and others.

The Fluor action is, furthermore, not the first lawsuit the Ritz-Carlton Grand Cayman developer has had to defend. 

An action against project developer Michael Ryan over alleged unpaid compensation was brought in the 11th Judicial Circuit Court in Miami-Dade Country in Florida by Richard Friend, who claimed he was Senior Vice President of the Ritz-Carlton Grand Cayman development firm from 1998 to 2000.

According to court documents filed in the United States, the then Leader of Government Business, and Leader of the United Democratic Party, (UDP) McKeeva Bush, is alleged to have received more than US$345,000 in payments from the Ritz-Carlton developer.

In the court filings, it is alleged that the payments to Mr Bush took place during a 13-month period between June 1999 and July 2000. 

Mr Bush, whose real estate companies, Windsor Development and Cambridge Real Estate, are reportedly receiving a 2 percent override commission on all sales of Ritz-Carlton condominiums, regardless of who sells them, was also a member of Cabinet when the Ritz-Carlton developer was granted a $4.46 million waiver of duty, along with a deferral of another $17.84 million in the immediate aftermath of Hurricane Ivan.

At least one other action has been brought in the Grand Court against the Ritz-Carlton developer by condominium purchasers, dissatisfied with the delays in completion of the project.

More recently, it is understood that the Auditor General will be undertaking an investigation into alleged irregularities that took place at the Port Authority during the tenure of its previous Chairman, McKeeva Bush, including the development of a marina by the Ritz-Carlton developer on property belonging to the Port Authority.

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