Contract dispute leads to frustration for Kuroshio restaurant owner and protesting contractor
Protestors holding signs alleging $35,000 in unpaid wages have been standing outside the recently opened Kuroshio restaurant in downtown Ann Arbor every evening since Saturday, March 16.
Restaurant owner Kenneth Wang said the picketers were not his employees, and that the dispute was between him and his general contractor who also was outside.
Ben Freed | AnnArbor.com
Wang said his contract with Benjamin Sun, who signed on behalf of Crystal Corporation, included a hefty per-day penalty for any time that Sun went over on the job. After the penalty is assessed, Sun actually owes him money, not the other way around, he said.
“He’s trying to make this into an employer versus employee thing, but that’s not what it is,” Wang said.
“This is a dispute between two companies, anyone who says their wages were not paid they weren’t paid by him, not me.”
Sun said it was up to the restaurant to honor the contract and pay him and his employees for the work that they completed. He hopes his protest will convince Wang to hand over the money so that the dispute does not have to be solved by the courts.
“The restaurant is done now, and he has decided he doesn’t want to pay,” he said. “It’s not right. We are going to do this now and then if he does not pay we will sue. We don’t want to have to do that which is why we are trying this first.”
Both parties agree that the project was supposed to be completed by September 30, but the restaurant did not receive its certificate of occupancy until the end of December 2012. However, Sun contests that an error in the plans that did not account for an overhaul of the heating ventilation and air conditioning (HVAC) system was the cause of most of the delay.
According to a copy of the contract between the parties obtained by AnnArbor.com, Sun was responsible for notifying Wang in writing of any circumstance that would delay the construction past the agreed upon date. Sun said that he did not write an official notice to Wang alerting him of the change in date but was under the impression that the delay was understood.
“He did not tell me that he was not going to pay until after the job was done,” Sun said.
“I am a contractor, I work with my hands and cannot put everything down on paper. If he was unhappy with the work he should have fired me, not let me finish and then not paid me the remainder of the money.”
According to the contract, “all claims or disputes arising out of this Contract or its breach shall be decided by arbitration in accordance with the construction industry arbitration rules.”
Harvey Berman, an attorney with Bodman PLC who specializes in construction, contracts, and real estate law, said it is not uncommon for there to be disputes involving the contracts that are drawn up between owners and builders.
“If you have a contract that requires something to be in writing the court or arbitrator can rule that there was an oral modification but there’s a higher standard of proof there,” he said. “You have to have ‘clear and convincing evidence’ in that case.”
Berman said that if the case did go to arbitration, it would likely take six months to a year to complete the process.
General manager Alan Wang, Kenneth’s son, said the problems with the contractor made it difficult for the restaurant to know when they would be opening and caused them to hire their head chef too early.
“He was just unreliable,” Kennenth Wang said. “I kept pushing him and he would give me a date for things and then never finish them on time. One window he told me would take two weeks to put in, it took six.”
Two other men routinely join Sun at his protest, which he said will continue at least for “a few weeks.”
The owners of Kuroshio have placed a sign in their window attempting explaining their view of the situation to passers-by.
Ben Freed covers business for AnnArbor.com. You can sign up here to receive Business Review updates every week. Reach out to Ben at 734-623-2528 or email him at firstname.lastname@example.org. Follow him on twitter @BFreedinA2