Introduction

Actress Sofia Vergara was recently named in a lawsuit by Conquest Construction Management Inc., her former contractor, for breach of contract after she and her business partner Luis Balaguer allegedly failed to pay the contractor $1.7 million for home renovations.

The Facts

Defendants Sofia Vergara and Luis Balaguer purchased a $26 million dollar Beverly Hills mansion through their Casa Bellagio Trust in June 2020.[1] The pair entered into a contract with Conquest Construction Management Inc., which does business as Reside Custom Houses, for home renovations on April 22, 2022 with the work to completed by December 16, 2022.[2] Reside Custom Houses agreed and began work on April 25, 2022.[3]

Reside Custom Houses claims it substantially finished the home renovations by the agreed-upon December 16, 2022 end date.[4] However, the plaintiff claims defendants asked for significant additional work and changes beyond the scope of the contract.[5] Specifically, plaintiff alleges, “…clay plaster to be installed in three powder rooms, ‘his’ office, the dining room walls, the cabana bathroom, the guest house living room and other rooms.”[6] The plaster was to be “sourced from a small, rural town in the United Kingdom.”[7] Moreover, defendants requested additional clay plaster to the “primary suite, his and her primary bathrooms, and primary suite sitting area.”[8] However, unlike the plaster above, this plaster would be sourced locally “to cut down on the lead time.”[9] In sum, these changes meant Reside could not complete the home renovation in the agreed-upon time.[10]

Plaintiff’s lawsuit says that in response, Defendant Vergara told Reside Custom Houses owner Steve Ferqueron and his independent contractor that she would personally “…ensure that RCH was paid in full for all of its work on the property, including additional work requested by the owner and Vergara.”[11] According to the lawsuit, however, Vergara and defendants did not follow through on their promises to pay.[12]

During the renovation period, Reside Custom Houses received no complaints about the quality of work nor any disputes about charges.[13] But that all changed in October 2023. According to the Complaint, “…in October 2023, the owner and Vergara hired counsel to bully RCH (and others) with meritless allegations of wrongdoing and threats of litigation” and “…conjured up unfounded and untrue accusations with respect to the subcontractors and vendors utilized for the project, and alleged billings that violated the terms of the agreement.”[14] In response, Reside Custom Houses stated that defendant’s complaints were “…nothing more than a ploy by the owner and Vergara to avoid paying RCH the amounts owed to RCH for completing the project.”[15] Furthermore, the property was issued a certificate of occupancy on February 10, 2023, and Vergara purportedly moved into the home the following month.[16]

The Complaint also goes into detail about defendant Vergara’s alleged antics during the project.[17] Specifically, plaintiff asserts defendant Vergara “…would routinely engage in aggressive outbursts and would humiliate, ridicule, harass and seek to intimidate RCH’s employees, representatives, and subcontractors among others.”[18] It is further alleged defendant Vergara’s “outbursts became so frequent and severe” that it became tough for Reside Custom Houses to persuade its workers and subcontractors to remain on the job.[19]

Reside Custom Houses seeks relief against the defendants which includes $1.7 million with interest, or a penalty of 2% per month on the amount owed until paid, along with compensatory and punitive damages, attorney fees, and a declaration of the rights and duties of the parties.[20]

Takeaways

While still pending, this case presents an excellent primer on key considerations related to scope of work changes and breach of contract claims in California. Critically, any changes to the scope of work should ideally be documented in writing and signed by all parties involved.^[21] This helps to avoid misunderstanding and provides a clear record of the modifications. It is also crucial for parties to communicate effectively regarding any proposed changes to the scope of work. Providing timely notice and obtaining consent from the other party can help prevent disputes like the one here.[22]

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Sources

[1] Conquest Construction Management Inc., d.b.a. Reside Custom Homes v. Sofia Vergara, et al. (Los Angeles Co. Super. Ct.)

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Id.

[11] Id.

[12] Id.

[13] Id.

[14] Id.

[15] Id.

[16] Id.

[17] Id.

[18] Id.

[19] Id.

[20] Id.

[21] Cal. Bus. & Prof. Code § 7031.

[22] Id.