Judge dismisses portion of contractor’s lawsuit

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A Germantown fire protection subcontractor has lost its breach of contract claim against a Franklin senior housing owner.

Freedom Fire Protection LLC still has an $89,133.70 construction lien against Sacred Heart at Monastery Lake Inc., and Milwaukee County Circuit Judge Daniel Noonan ruled Monday the companies should settle that dispute in mediation.

Freedom Fire sued Sacred Heart in 2012 claiming the property owner owed Freedom for lost profits and other costs after the general contractor left the senior housing development project in 2011.

The general contractor, Franklin-based Mark E. Carstensen Construction Inc., hired Freedom in 2010 to install fire protection.

“About halfway through the construction project,” according to court documents, “Carstensen walked off the job, and its owners subsequently filed for bankruptcy.”

Freedom then left the project, according to court documents, and sued Sacred Heart and Carstensen. Freedom alleged Sacred Heart owed the subcontractor for lost profits for the second phase of the project, even though the company did not do that work, according to court documents, and for change orders during the first phase.

Joseph Abruzzo, an attorney with Milwaukee-based Lichtsinn & Haensel SC who represents Sacred Heart, said Noonan granted a request to dismiss Freedom’s breach of contract claim.

“I think everyone pretty much agreed,” he said, “there was no contract between the parties.”

Freedom’s contract, according to court documents, was with Carstensen.

Neither a Freedom representative nor the company’s attorney responded to requests for comment before deadline Tuesday afternoon. Carstensen did not respond to the lawsuit.

Devon Baumbach, an attorney with Madison-based Melli Law SC who is not involved in the lawsuit, said most subcontractors do not have contracts directly with project owners. So common legal avenues for subcontractors after a general contractor leaves a project, he said, include filing liens, suing a project owner for unjust enrichment if the general contractor was never paid or suing the general contractor if the owner paid but the money did not trickle down.

But the best protection for subcontractors, Baumbach said, is to preserve lien rights and have good relationships with general contractors.

“Know who you’re doing business with,” he said.

Freedom filed the lien against Sacred Heart in 2011. Noonan did not rule on whether Freedom could foreclose on that lien, and the two parties have been ordered to mediation before a Dec. 19 hearing.

Abruzzo said Sacred Heart denies the legitimacy of the lien and has countered with an allegation against Freedom for damaging the property’s title.

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