The Story

    Carnell Construction Corporation (Carnell), is a small minority firm owned since 1991, located in Martinsville / Henry County, Virginia. Despite the economic climate of this area, the firm, a licensed Class A Contractor, prequalified prime contractor, prospered and provided its employees with competitive salaries and with health and life insurance benefits. The firm was the only Afro-American owned contractor that consistently bidded on transportation projects as a prime contractor on a regular basis in Virginia. The firm saved the taxpayers in excess of $2,500,000.00 on Virginia Department of Transportation projects alone. This savings was a result of Carnell successfully completing over 100 construction projects as the lowest, responsible, and responsive bidder.

    In April 2008, Carnell was the low bidder on two projects located in Danville, Virginia: the Tobacco Warehouse District Parking Lot Project owned by the City of Danville, and the Blaine Square Project owned by the Danville Redevelopment and Housing Authority and Blaine Square, LLC, a limited liability corporation formed as an extension of the Danville Redevelopment and Housing Authority and a Madison Avenue capital company located in New York City. The Tobacco Warehouse District Parking Lot project was featured in the July 31, 2009 front page article in the Danville Register & Bee newspaper as being a model example of urban revitalization. The Blaine Square project, which included both sitework and building construction, was in disarray and was plagued by numerous plan revisions, zoning problems, and budgetary challenges. These problems were blamed on Carnell by the housing authority although Carnell's contract was for the sitework only. Both projects were constructed by Carnell during the same time frame.

    The project engineering firm and the other prime contractor working on the Blaine Square project, the building contractor, were granted contract time extensions and allowed to complete their work. Carnell was not granted contract time extensions consummate with the additional work it was required to perform and was required to leave the project on June 4, 2009, without the opportunity to complete neither its work nor being paid for the substantial amount of extra work that it had performed. After Carnell was removed from the project, the unlicensed building contractor and its unlicensed subcontractor were hired to complete the work and were paid more than double the unit price amount that Carnell was required to perform the work. Carnell was not paid hundreds of thousands of dollars for the extra work that it had performed. In November 2009, Carnell gave its notice to file a lawsuit. In December 2009, six months after not allowing Carnell to complete its work on the project, the owners declared Carnell in default of its contract and made a claim to Carnell's bonding company. In February, 2010, Carnell filed a lawsuit for racial discrimination and breach of contract in the United States District Court - Western Division.

    In the first of the three trials in this matter, February 7, 2011- February 17, 2011, the jury found in favor of Carnell on its claim of racial discrimination and awarded a verdict of $3,168,341.14 to Carnell. The court later reversed the jury verdict citing the Court's error in allowing Carnell to talk about its damages due to its loss of construction bonding capacity and an allegation that representatives of Carnell gave false testimony about Carnell's bonding capabilities. This allegation was based upon an affidavit presented after the trial by the defense attorneys that was incomplete. Although the Court agreed that sufficient evidence was presented for a jury to find in favor of Carnell in its racial discrimination claim, the Court ordered a new trial on all claims. Without explanation, the trial judge removed himself from the case and the Chief Judge of the Western District took over the case. Subsequent documents presented to the Court showed the affidavit presented to the Court after the trial by the defense attorneys gave an incomplete overview of Carnell's bonding requirements and bonding capacity.

    Based upon the testimony given during the first trial by a defense witness, a claim that Carnell was retaliated against after it made its claim of racial discrimination was added to the claims of the case. At the second trial, February 13, 2012 -February 27, 2012, the jury was unable to return a unanimous verdict on all claims. The Court declared a mistrial.

    In the third trial, July 30, 2012 - August 15, 2012, the jury found in favor of Carnell on its claims that the defendants breached the contract by failing to pay for the extra work and for the defendants removing Carnell from the project on June 4, 2009 without just cause. The jury verdict resulted in the award to Carnell of $975,490.11.

    On January 8, 2013, 146 days after the jury verdict from the third trial, the Court, again, changed the jury verdict. The Court affirmed the jury finding of "Breach of Contract without Just Cause", but reduced the monetary award by 78%.

    Carnell filed its brief with the 4th Circuit Court of Appeals on June 18, 2013. On March 6, 2014, citing an “abuse of judicial discretion”, a three judge panel of the 4th Circuit Court of Appeals ordered a new trial for Carnell’s claims of racial discrimination against the Danville Redevelopment and Housing Authority. The new trial will be the fourth time the case will be tried in the federal District Court. Conducting four trials for the same case in a federal District Court is a rarity.

    Almost six years have passed since the project was bidded and the work started. Carnell has been to trial three times and has never lost. To date, Carnell has not been allowed to present all of its damages to a jury since the first trial nor has it been paid for the additional work that it was forced to perform. The retainage has not been released. Carnell is seeking the opportunity to present its case and all of its damages to a jury in hopes of resurrecting its business, paying off the substantial debts, liens, and judgments it has incurred as a result of the actions taken against it, and to again be a viable firm providing much needed jobs in this economically depressed area.

updated March 29, 2014 5:57 PM