Weitz Co. v. MH WASHINGTON
631 F.3d 510 | Court of Appeals for the Eighth Circuit | 2011
What This Case Means for Subcontractors
Weitz Co., a subcontractor, sued MH Washington and its parent company MacKenzie House for breach of contract. The court found both companies jointly liable because MacKenzie House exercised complete control over MH Washington's operations and decisions. The jury determined Weitz performed substantially on the contract despite disputes over payment and change orders. This case matters because it shows that parent companies can be held responsible for their subsidiaries' contract breaches when they actively control them.
Key Takeaways
- •Document all communications showing who actually makes decisions on a project—parent companies can be liable if they control subsidiary operations
- •Substantial performance may still entitle you to payment even if the work isn't 100% perfect; keep detailed records of what you completed
- •Lien waivers and retention disputes are enforceable, but only if the underlying contract was properly performed—don't sign away rights prematurely
Control must have been used by the defendant to commit fraud or wrong.
Frequently Asked Question
Can a parent company be sued if its subsidiary breaches my subcontract?
Yes, if the parent company exercises actual control over the subsidiary's operations and decisions. Courts will hold both entities jointly liable. Make sure to document who is making project decisions and managing the work to establish control if a dispute arises.
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