[Success Case] Reversing the Subcontractor Dispute: Dismissing the Non-Existence of Debt Claim and Recovering Overpaid Costs

In construction disputes, the one who sues first isn't always the winner. Today, we share a dramatic success case where we defended a general contractor against a subcontractor's preemptive lawsuit and successfully recovered overpaid construction costs through a counterclaim.

Our client, a contractor who won a public park development project, subcontracted part of the work. During the final settlement, it was discovered that the subcontractor had performed less work than what they had already been paid for in progress payments.

When the client requested the return of the overpaid amount, the subcontractor took a preemptive legal strike by filing a 'Lawsuit for Confirmation of Non-existence of Debt.' Essentially, they wanted the court to confirm that they didn't owe any money back.

The biggest hurdle was that the construction was already complete. In most construction lawsuits, a court-appointed appraisal is used to determine work volume. However, on a finished site, an appraisal is often impossible or yields meaningless results.

Law Firm Hoam devised a strategy to prove the overpayment using objective, official data:

• Utilizing Public Settlement Data: Since this was a government-awarded project, we analyzed the official settlement data verified by the local municipality. This allowed us to precisely calculate the actual work performed by the subcontractor.
• Leveraging Direct Payment Systems: We meticulously reviewed records from the 'Subcontractor Direct Payment System' to objectively support the discrepancy between the payments made and the work completed.
• Counterclaiming for Unjust Enrichment: We didn't just play defense. Based on our calculations, we filed a counterclaim to demand the return of the overpaid funds as "unjust enrichment."

The court rejected the subcontractor's claim in its entirety. The judge ruled that the debt did exist and that the subcontractor's arguments were groundless.

Furthermore, the court accepted our client's counterclaim, ordering the subcontractor to return the overpaid amount to the client. The party that sued first ended up having to pay.

When a physical site appraisal is impossible, many give up on proving their case. However, Law Firm Hoam finds the breakthrough. By identifying authoritative data—such as municipality settlement records—we provide the court with clear, undeniable proof.

In subcontracting and settlement disputes, the winner is determined by who can collect and present the most strategic evidence. Law Firm Hoam handles your construction disputes with a focus on real-world recovery.

Law Firm Hoam | Specialized in Construction, Subcontracting & Unjust Enrichment Disputes