Morrison Knudsen terminated subcontractor Ground Improvement Techniques for alleged default. A jury found the termination was wrongful and awarded GIT $5.6 million in damages. On appeal, the court affirmed that the termination was wrongful but remanded the case for recalculation of damages. The court also ruled that a supersedeas bond (a bond posted during appeal) remains enforceable and the surety's liability is capped at the bond's stated amount. This matters to subcontractors because it shows courts will enforce wrongful termination claims and that appeal bonds have real limits.
Document everything about your performance and the contractor's reasons for termination—a jury may find termination wrongful even if the contractor claims default
Understand that supersedeas bonds used during appeals have a maximum liability cap; the surety won't pay more than the bond's face amount regardless of actual damages
If terminated, pursue your appeal aggressively; failing to prosecute an appeal weakens your position and may result in bond enforcement against you