Ritz-Carlton Cayman developer sued by general contractor

Wednesday, February 11, 2004

GEORGE TOWN, Cayman Islands: Fluor Daniel Caribbean Inc, the general contractor for the Ritz-Carlton project in Grand Cayman, recently filed a civil lawsuit against the project's developer, Humphreys (Cayman) Ltd in the United States District Court for the Southern District of New York.

According to the complaint filed on 29 January, a copy of which has been obtained by Caribbean Net News, Fluor Daniel claims unspecified damages against Humphreys (Cayman) Ltd., aka Cesar Hotelco (Cayman) Ltd. for breach of contract, and requests the Court to order the parties to fast track arbitration in respect of certain other limited issues in dispute.

In a separate report by KYC News, Fluor Daniel has apparently become the latest in a long line of business partners to sue the Ritz-Carlton's developer.

"The owner of the project, Humphreys Cayman, Ltd, failed to provide contractual modifications for substantial changed work under the contract and demanded work where complete design was lacking, which resulted in extra costs," Fluor told KYC News in a recent statement.

"In accordance with the terms of the Construction Agreement, Fluor has requested mediation and arbitration to resolve the differences concerning change orders between the parties. Fluor has also initiated a lawsuit in Federal Court, Southern District of New York, seeking damages for the various alleged material breaches. 

"These actions were taken to compel mediation and arbitration on the issue of change orders and to protect the interests of both Fluor and its subcontractors. Fluor continues to fully perform its commitments, despite the owner's alleged material breaches of the Construction Agreement." 

The current legal action initiated by Fluor Daniel comes at a time of prevalent rumours that the construction company is about to pull off the job. Some reliable sources close to the scene have reported to Cayman Net News that Fluor might leave the Ritz site within the next two weeks.

The complaint by the project's general contractor reportedly follows previous lawsuits brought by its architect, Wimberly Allison Tong & Goo Inc, and an interior designer, HBA International Inc, trading as Hirsch Bender Associates. 

KYC News reports that in all, at least ten different lawsuits have been filed in the United States and the Cayman Islands against Humphreys (Cayman), its controller, Canadian national Michael Ryan, and/or other companies he controls. Plaintiffs have included condo buyers and a loan arranger. 

In an unrelated press release last week, Michael Ryan, described therein as owner and developer of the Ritz-Carlton, announced that the buildings will be turned over to the Ritz-Carlton Hotel Company beginning in early October and a Grand Opening Gala on 18 December 2004. However, Cayman Net News reported last month, some industry experts say that the completion date will likely not occur until mid-summer, or even towards the end of 2005.

"That's just Ryan's style," said Gilles Langlois, of K Coast Construction, "Ryan will say everything is fine in the face of adversity. He always does things that way."

Mr. Langlois is one of several local contractors who think that the Ritz will not be completed until far past their latest projection date. "The way things are going, we'd be lucky to see a completion date in 2005. If they don't get their act together, we're going to have to wait until 2006."

The original completion date of the project was to be the fourth quarter 2003 and it is not known to what extent, if at all, the latest lawsuit will further delay this. 

Ritz media contact Melissa Perkins said the lawsuit would not delay the scheduled completion of the project. "Not at all," she said, "It will have no effect on our opening date. The development team is in negotiations right now to reach a construction resolution. We're going through arbitration and negotiation, but it will not affect the construction or completion date."

However, when asked hypothetically how the project would be affected if Fluor did decide to pull out, Mr Langlois said: "If Fluor pulls out, there's going to be real trouble. Do you know how long it takes to ramp up? By ramp up, I mean hire the men, plan the construction and start the work. Do you think they started right back up again after we pulled out? No way."

A company Mr Langlois has ownership in, TCC Drywall (Cayman), pulled off the job on 21 November due to "monetary irregularities" according to Mr Langlois.

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