Crandall v. Babich

Michael Crandall (plaintiff), Fluvio Babich (defendant), and Giunta orally agreed to an arrangement for the purpose of building modular homes for profit, which the parties agreed to split equally. Babich, through his company, Summit Builders, Inc. (Summit) (defendant), agreed to handle the administrative and financial aspects. Giunta agreed to handle most of the painting, some of the carpentry, and some other construction-related tasks. Crandall agreed to serve as a project manager for each job. The parties built the first five houses without problems. However, the relationship soured when the parties performed a project for Norma Bradley. The parties agreed to build a model modular home on Bradley’s property at cost with the expectation that Bradley would allow the parties to rent the home at a favorable rate for three years. According to Babich and Giunta, Crandall charged undesired management fees to Bradley. After the parties had built the home, Bradley refused to allow the parties to rent the home as expected. The project for Bradley, along with alleged workmanship problems and a purported conflict of interest caused by Crandall working for a competing firm, prompted Babich and Giunta to terminate the arrangement. At that time, Babich and Giunta had substantially completed two additional projects that Crandall had not materially contributed to. Thereafter, Crandall sued Babich and Summit for damages and alleged that he had not been paid his share of the profits from the arrangement or certain expenses.