Ascent Construction Solutions LLC of Pfafftown is suing D.H. Griffin Infrastructure LLC of Greensboro and the city of Greensboro after D.H. Griffin officials failed to hire Ascent Construction as a minority subcontractor on a sewer project in 2017 in Greensboro.
Ascent Construction alleges that it is a victim of constructive fraud, negligent misrepresentation and a breach of contract — third party beneficiary in its lawsuit against the defendants.
Constructive fraud is a situation where a person or entity such as a business gained an unfair advantage over another by deceitful or unfair methods. Negligent misrepresentation happens when someone makes a statement without regard to the true facts. A breach of contract — third party beneficiary arises when a contract for the benefit of a third party is breached by the non-performance of the promisor.
Ashlee Poplin of Charlotte, the attorney for Ascent Construction, filed the lawsuit on June 26 in Guilford Superior Court.
Ascent Construction wants a jury trial, a court judgment against the defendants for more than $25,000 and unspecified amount of punitive damages, according to the lawsuit.
Tonya Hasan of Pfafftown, the company's manager, couldn't be reached for comment.
Poplin declined to comment on her client's legal action.
"I believe the complaint speaks for itself," Poplin said.
The city of Greensboro should have taken action against D.H. Griffin, said Ghali Hasan, Tonya's husband, and Ascent's senior project manager.
"We were hurt that the city didn't stop this," Ghali Hasan said.
In court documents, attorneys for defendants deny Ascent Construction's allegations and want the court to dismiss the lawsuit.
Chuck Watts, Greensboro's city attorney, said that lawsuit is without merit.
Timothy Wyatt of Greensboro, one of D.H. Griffin's attorneys, declined to comment on the lawsuit.
"It's my client's policy not to discuss litigation," Wyatt said.
The dispute arose in September 2017 when Ascent Construction, a minority- and woman-owned business, submitted a proposal to D.H. Griffin officials for removing and replacing an asphalt road and driveway for the Stewart Mill and Rock Creek sewer-pipe improvement project in southeastern Greensboro.
The project began in February 2018 and was completed in April 2019, city officials say.
D.H. Griffin committed to using Ascent Construction as a minority subcontractor on the project, according to the lawsuit and a city document. D.H. Griffin officials also gave Ascent Construction a letter of intent to use Ascent Construction as a minority subcontractor, the lawsuit said.
The suit alleged that D.H. Griffin used the Ascent Construction's proposal and status as a minority- and woman-owned business in obtaining a contract with the city of Greensboro for the sewer project.
A city document dated Oct. 18, 2017, stated that D.H. Griffin proposed to meet its M/WBE commitment using the six minority- and women-owned businesses on the project, including Ascent Construction.
The city of Greensboro designed its Minority and Woman Business Enterprise program as a remedy to marketplace discrimination that limited the participation of minority-and women-owned businesses in city contracts, according to a city document.
On Nov. 14, 2017, the Greensboro City Council approved D.H. Griffin's bid for $11.43 million for the project and awarded the contract to D.H. Griffin, another city document shows. D.H. Griffin submitted the lowest bid for the project.
D.H. Griffin officials then failed to use Ascent Construction on the project, according to the lawsuit.
Greensboro city officials have refused to pay Ascent Construction after D.H. Griffin agreed to Ascent Construction's proposed estimates for the project and then never allowed Ascent Construction to perform work on the project, the lawsuit said.
D.H. Griffin officials were required to notify the city's M/WBE office if the company replaced a subcontractor, a city document said. D.H. Griffin didn't notify the city of Greensboro that it didn't use Ascent Construction on the project, Watts said.
The city will penalize D.H. Griffin for that, Watts said.
The suit alleges that agreements existed between Ascent Construction, D.H. Griffin and the city of Greensboro that Ascent Construction would be used to perform asphalt work on the project as a minority-and woman-owned business.
"After having obtained the contract with the city, D.H. Griffin dropped (the) plaintiff … and used someone else," the lawsuit said. "D.H. Griffin obtained the contract on the project with the city under false/fraudulent pretenses of using (the) plaintiff, a MWBE when in fact they did not use (the) plaintiff."
Ascent Construction didn't receive $155,000 that it proposed for the job, the lawsuit said.
"Plaintiff was deprived an opportunity to engage in the project for the city and participate in the MWBE program," according to the lawsuit.
Wyatt wrote in D.H. Griffin's motion to dismiss the lawsuit that Greensboro officials had no requirement for D.H. Griffin to award a subcontract to Ascent Construction. The motion described Ascent Construction as "a disappointed subcontract bidder."
Furthermore, under the U.S. Constitution and state law, the city's M/WBE plan "establishes no requirement for D.H. Griffin Infrastructure to award a subcontract to (the) plaintiff," according to the motion.
"There was no enforceable agreement, contract, subcontract or other transaction between DHGI and plaintiff that conferred any legal rights or enforceable expectations on the plaintiff," the motion said.
Ascent Construction also doesn't have any legal cause of action to pursue a claim for constructive fraud, negligent misrepresentation or breach of contract — third party beneficiary against D.H. Griffin, according to the motion.
Connor Crews, an assistant professor of public law and government at the UNC Institute of Government, said that Ascent Construction is facing an uphill battle to prevail in its legal action.
"It seems to me that they (Ascent Construction) are proceeding on a theory that the prime contractor was required" to hire Ascent Construction as a subcontractor, Crews said. "I don't know if there is a legal basis for saying that."