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ORDERED in the Southern District of Florida on November 15, 2024.

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Laurel M. Isicoff, Judge

United States Bankruptcy Court

IN THE UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

IN RE: Case No. 23-12217-BKC-LMI

EDGEWATER CONSTRUCTION Chapter 11

GROUP, INC. Subchapter V

Debtor.

ORDER ON DAMAGES

THIS MATTER came before the Court on May 21 and 22, 2024 for trial (the

“Trial”) on (1) the damages phase of the Order on Debtor’s Emergency Motion for

an Order Enforcing the Automatic Stay; Setting Further Hearing on Request for

Sanctions for Intentional and Willful Violation of the Automatic Stay; and Setting

Further Hearing on Request for Turnover (the “Stay Violation Order”) (ECF #242);

and (2) Reorganized Debtor’s Objection to Balfour’s Proof of Claim 27-3 (the “Claim

Objection”) (ECF #516). The Court has considered the Stay Violation Order, the

Claim Objection, the response to the Claim Objection, the parties’ arguments,

and the evidence presented at Trial in rendering the following ruling.1

PROCEDURAL AND FACTUAL BACKGROUND

In October of 2021 BALFOUR BEATTY CONSTRUCTION, LLC (“Balfour,”

“Balfour Beatty,” or “Contractor”) and EDGEWATER CONSTRUCTION GROUP,

INC. (“Edgewater” or “Debtor” or “Reorganized Debtor” or “Subcontractor”)

executed a Long Form Subcontract under which Edgewater was to perform

stucco services on what has been called the RD East Las Olas Project (the “RD

Project”). In January of 2022 Balfour Beatty and Edgewater entered into an

almost identical Long Form Subcontract to perform stucco services on what has

been called the 2000 Biscayne Project (the “2000 Project”).2

At some point after Edgewater executed the Contracts, Edgewater began

to experience financial difficulties at the many projects in which it was

performing stucco subcontracting work, including the Projects. On March 20,

2023, Edgewater’s field crew assigned to the RD Project stopped working and left

the jobsite altogether based on Edgewater’s failure to pay their wages. On March

21, 2023, Balfour Beatty emailed Edgewater as follows:

Edgewater's field crew assigned to RD Las Olas stopped working and

left the jobsite today. As a result of this action, this email is a delay

1 The findings of fact and conclusions of law set forth herein constitute the Court’s findings of

fact and conclusions of law pursuant to Rule 7052 of the Federal Rules of Bankruptcy Procedure

(“Fed. R. Bankr. P.”). To the extent any of the following findings of fact are determined to be

conclusions of law, they are adopted, and shall be construed and deemed, as conclusions of law.

To the extent any of the following conclusions of law are determined to be findings of fact, they

are adopted, and shall be construed and deemed, as findings of fact.

2 The two contracts will be referred to collectively as the “Contracts” and the two projects will be

referred to collectively as the “Projects”.

notice because production on site cannot stop. Edgewater's

decision to pull out all their personnel from the site without

notice will delay the completion date of the project. Cost and

schedule impact may result due to this decision which may also

affect other trades.

Your written explanation and correction plan must be

submitted via e-mail to all copied in this email by COB today.

We ask that you take appropriate measures to address this issue

promptly.

On March 22, 2023, Balfour Beatty sent a second email to Edgewater

demanding that the situation be corrected. Edgewater did not respond to either

email. However, on March 22, 2023, Edgewater filed for protection under

Subchapter V of Chapter 11 of the Bankruptcy Code (the “Petition Date”). At the

time Edgewater filed bankruptcy, the RD Project was well underway, but the only

work Edgewater had done on the 2000 Project was the preparation of mockups

of different stucco applications for the owner’s review.

What happened after that, leading up to the entry of the Stay Violation

Order, is detailed in that order. There is no need for the Court to repeat those

findings in this order.

The Stay Violation Order held that Balfour Beatty had willfully violated the

automatic stay by issuing the Default Letters3 and by wrongfully retaining

Edgewater’s scaffolding and stucco materials left at the Projects (collectively the

“Stay Violations”). The Stay Violation Order directed the parties to confer

regarding establishing trial procedures to adjudicate Edgewater’s request for

damages arising from the Stay Violations, which requests included (1) loss of

3 All terms not defined herein shall have the meaning set forth in the Stay Violation Order.

profits; (2) the inability to monetize its scaffolding as a result of Balfour Beatty’s

wrongful retention; (3) the additional cost of Edgewater retaining personnel on

the belief it would continue to work under the Contracts; (4) the inability to

contain and resolve claims against the estate due to Balfour Beatty’s unilateral

decision to pay certain suppliers and subcontractors; (5) legal fees and costs; (6)

lost opportunity costs related to the distractions of Edgewater’s personnel

dealing with the Stay Violations; and (7) punitive damages.4

In addition to the damages phase of the Stay Violation Order, by

agreement, the parties agreed to try the Claim Objection, as well as Edgewater’s

request for turnover of unpaid draw requests, which draw requests will be

described in more detail later in this opinion. The parties also tried by consent

the issue of damages arising from the disappearance of at least half of the

scaffolding that had been delivered to the Projects from the time the bankruptcy

case was filed to the time the remaining scaffolding was sold by Edgewater to the

subcontractor who replaced it on the Projects – James J. Brooks, Inc. d/b/a

Advanced Stucco (“Advanced”), which relate, not only to the wrongful retention

of the scaffolding, but, as more detailed below, also to the appropriateness and

amount of the punitive damages.

4 Prior to Trial the Court granted Balfour Beatty’s Motion for Partial Summary Judgment (ECF

#311) holding that Edgewater was not entitled to lost profits as a matter of law. See Oral Ruling

on Motion for Partial Summary Judgment (ECF #544); Order Granting Balfour Beatty Construction,

LLC's Motion for Partial Summary Judgment (ECF #622). Edgewater did not put on any proof at

Trial regarding retention cost of personnel or lost opportunity costs. The issues relating to

Balfour Beatty’s unilateral payment to subcontractors and suppliers was addressed by the Court

in its Memorandum Opinion on Order Denying Application for Administrative Claim (ECF #519).

FINDINGS OF FACT AND CONCLUSIONS OF LAW

A. Actual Damages for the Stay Violations

As the Court noted in the Stay Violation Order “[i]f a party willfully violates

the automatic stay a debtor who is injured by the willful violation is entitled to

recover his or her actual damages including costs and attorneys' fees, and if

appropriate, may also recover punitive damages.” In re Lyubarsky, 615 B.R. 924,

929 (Bankr. S.D. Fla. 2020). The actual damages for which evidence was

presented at Trial by Edgewater are for the use of the scaffolding while it was

being wrongfully retained by Balfour Beatty, the replacement value of the

scaffolding that disappeared from the Projects, the value of the stucco material

wrongfully retained, and attorneys’ fees incurred in connection with the Stay

Violations.5 “[T]he debtor has the burden of proving damages from an automatic

stay violation by a preponderance of the evidence.” In re Horne, 876 F.3d 1076,

1083 (11th Cir. 2017).

1. Scaffolding and Stucco

Edgewater’s Emergency Motion for an Order (I) Enforcing the Automatic

Stay, (II) Awarding Sanctions for Intentional and Willful Violation of the Automatic

Stay (III) Requiring Turnover of Property of the Estate and Matured Debts (ECF

5 By separate motion Edgewater asks this Court to sanction Balfour Beatty as a vexatious litigant

by requiring Balfour Beatty to pay almost all professional fees incurred in the main bankruptcy

case. See Reorganized Debtor’s Motion for Attorneys’ Fees and Costs as a Sanction (ECF #569)

(the “Fee Motion”) and includes this request and additional fees unrelated to the Stay Violations

in the Reorganized Debtor’s Supplemental Motion for Attorneys’ Fees and Costs as a Sanction

(ECF #658) (the “Supplemental Fee Motion”) (the portions of the Fee Motion and Supplemental

Fee Motion unrelated to the Stay Violations are collectively referred to as the “Additional Fee

Requests”). The Court will address the Additional Fee Requests in a separate order. This order

will only address those fees directly related to the Stay Violations, including, without limitation,

fees associated with the Trial on damages.

#52) (the “Stay Violation Motion”) was filed on April 5, 2023. The Stay Violation

Motion alleged that Balfour Beatty was wrongfully retaining Edgewater’s

scaffolding and some stucco material. The trial on the Stay Violation Motion was

conducted on June 26, 2023. The Stay Violation Order was entered on August

2, 2023, holding that Balfour Beatty was wrongfully retaining Edgewater’s

scaffolding and stucco material in violation of the automatic stay.

Balfour Beatty never returned the scaffolding or the stucco material to

Edgewater, not even after the Stay Violation Order was entered. Indeed, it was

not until late November 2023 that Balfour Beatty even invited Edgewater to pick

up some, but not all, of its scaffolding. Ultimately, Edgewater sold the scaffolding

located at the Projects to Advanced but based on unrebutted testimony of both

Michael Vazquez and Ulysses Vazquez, the scaffolding that was at the Projects

at the time of the sale to Advanced was 50% to 60% less than the scaffolding

that Edgewater delivered to the respective Projects.

At the time the Stay Violation Order was entered, Edgewater was seeking

the value of the loss of use of the scaffolding up to that point. Since Balfour

Beatty never turned over the scaffolding or the stucco material, Edgewater is

seeking the value of the use of the scaffolding from the Petition Date through the

date of sale to Advanced, based on what it asserts would be the rental value of

the scaffolding, and then seeking the replacement value of the scaffolding that

disappeared, as well as the stucco material that was, apparently, used by

Advanced.

Balfour Beatty counters that (1) it was never obligated to turn over the

scaffolding or stucco material since the Stay Violation Order did not explicitly

order it to do so; (2) the Contracts include in the price the use of the scaffolding

and the cost of material (the stucco), and therefore Balfour Beatty did not have

to pay for the stucco or for scaffolding that it used until it wasn’t needed

anymore; (3) even if Edgewater were entitled to be paid for the use of the

scaffolding, Edgewater has not met its burden of proof regarding the rental value

of the scaffolding; and (4) Edgewater is not entitled to the replacement value of

the wrongfully retained scaffolding since Edgewater was eventually paid by

Advanced for the scaffolding.6

Balfour Beatty’s argument is not only wrong, but, as the Court will address

in the punitive damages section of this opinion, is sanctionable. The Court

previously found in the Stay Violation Order that the scaffolding and stucco were

wrongfully retained. At no time during the trial on the Stay Violation Motion did

Balfour Beatty argue the Contracts entitled it to retain the scaffolding. At no

time after the Court entered the Stay Violation Order did Balfour Beatty come to

the Court and seek reconsideration of the Court’s finding that Balfour Beatty’s

retention of the scaffolding was wrongful. Thus, even if there were an argument

that Balfour Beatty was entitled to retain the scaffolding, that argument was

never raised at any time before this Court until the damages phase of this

dispute. Indeed, as the Court found in the Stay Violation Order, Balfour Beatty

6 As to this last point Balfour Beatty appears to believe it is entitled to some kind of positive

recognition since its retention of the scaffolding “made it easier” for Edgewater to sell the

scaffolding to Advanced.

actually misrepresented several times what had happened to the scaffolding

prior to the time of the trial on the Stay Violation Motion. And it came out at

this Trial, that at the time of the Stay Violation Motion trial, Balfour Beatty knew

that Advanced was using Edgewater scaffolding to perform its work on the RD

Project. Apparently, Balfour Beatty believes that there should be no consequence

for its not-so-clever attempt to disregard this Court’s order finding the scaffolding

was wrongfully retained. The Court holds otherwise. The Debtor is entitled to

actual damages relating to the wrongful retention of the scaffolding and the

stucco.7

Edgewater argues that the appropriate measure of damages for the

wrongful retention of the scaffolding is the rental value of the scaffolding. In

support of this argument the Debtor presented the testimony of Michael Vazquez,

who is the person at Edgewater in charge of all things scaffolding. Michael

testified that he has three certifications with respect to scaffolding and that he

personally deployed the scaffolding at Edgewater’s various projects.

Michael testified that he personally supervised Edgewater’s renting of

scaffolding to third parties approximately five times. Based on this experience,

Michael testified that he would charge approximately $22,000.00-$25,000.00

per month to a third party to rent scaffolding in the amount and nature that

Edgewater deployed (under his direct supervision) to the RD Project and

$10,000.00-$12,000.00 per month to a third party to rent the scaffolding

7 The Court will address the appropriate punitive damages for this flagrant disregard of the Stay

Violation Order later in this opinion.

deployed at the 2000 Project. Ulysses Vazquez, one of the principals of

Edgewater, testified that he had previously rented scaffolding to third parties “all

the time,” and that he would charge a third party $20,000.00-$25,000.00 per

month to rent the scaffolding at the RD Project. Edgewater argues that the

wrongful retention deprived it of the ability to rent or use the scaffolding

elsewhere.

Ulysses also testified that the value of the unreturned stucco materials is

approximately $15,552.00 consisting of 36 pallets with 48 bags per pallet at a

cost of $9.00 per bag. That testimony was not disputed, except that Balfour

Beatty argues the cost of the stucco was included in the Contracts.

Balfour Beatty did not provide any evidence that contradicted the

testimony regarding the rental value of the scaffolding. However, Balfour Beatty

argues that the Vazquezes were not qualified to present the testimony regarding

the rental value of the scaffolding, that Michael’s testimony was based solely on

a document that the Court refused to admit into evidence,8 and therefore

Edgewater did not meet its burden of proof as to the amount of damages.

Moreover, Balfour Beatty argues, that because the Contracts gave it the right to

retain the scaffolding, and that because the use of the scaffolding is included in

8 Balfour Beatty objected to the Vazquezes testimony at Trial arguing that the Vazquezes proffers

violate Fed. R. Civ. P. 26(a)(2) and Fed. R. Civ. P. 37 because they were not disclosed as experts,

whether retained or non-retained, and must be stricken. Balfour Beatty also argues that because

Michael’s testimony as to the rental value was based solely on figures set forth in an excluded

exhibit, Michael’s testimony was inadmissible hearsay. However, as the Court ruled at Trial, an

owner of property may testify as to its value without being qualified as an expert. And, because

Michael testified that his valuation came from his personal experience renting the scaffolding, it

is not hearsay. See Taxinet Corp. v. Leon, 114 F.4th 1212, 1225 (11th Cir. 2024). This “opinion”

testimony is admitted not due to expertise but due to the witness’ particularized knowledge by

virtue of the Vazquezes position in the business. See id. at 1225-26.

the Contract prices for the Projects, Edgewater cannot seek damages based on

Balfour Beatty’s use of the scaffolding.

The Court finds that the unrebutted testimony of Michael and Ulysses as

to the rental value of the scaffolding is admissible under Federal Rule of Evidence

701, is not based on inadmissible hearsay, and that their testimony was truthful.

However, the Court agrees with Balfour Beatty that the use of the scaffolding

was included in the pricing of the Contracts, and therefore a separate “use fee”

would not be recoverable under the Contracts. Moreover, Edgewater did not

present any evidence that Edgewater had intended to, would have, or could have

rented or used the wrongfully retained scaffolding had it been returned. Thus,

the rental value of the scaffolding is not an element of the actual damages

associated with Balfour Beatty’s wrongful retention of the scaffolding. It is,

however, an appropriate element of the measure of damages associated with the

Claim Objection, which the Court will address more fully later in this opinion.

The Court will now turn to Edgewater’s claim for the replacement value of

the scaffolding. Edgewater seeks $287,500.00 less the $40,000.00 obtained by

Edgewater from Advanced for the purchase of the scaffolding, for a total damage

claim relating to the scaffolding of $247,500.00 which, Michael and Ulysses

testified, is the combined replacement value of the scaffolding that was deployed

at the Projects. Balfour Beatty counters that Edgewater is not entitled to

replacement value and that the true measure of the market value of the

scaffolding was what Advanced paid Edgewater for the scaffolding. Finally,

Balfour Beatty makes the incredible argument that because the scaffolding

served as collateral for a loan to the Small Business Administration (the “SBA”),

Edgewater did not hold any equity in the scaffolding.9 Therefore, Balfour Beatty

argues, for all of these reasons, Edgewater is not entitled to any damages relating

to the value of the scaffolding.

The Court agrees with Balfour Beatty that damages associated with the

loss of the scaffolding is the value of the scaffolding at the time it was wrongfully

retained, which the Court finds begins on March 30, 2023, the date Edgewater

first demanded return of tools, equipment, and material. Edgewater

characterized the wrongful retention of the scaffolding as civil theft in an

adversary proceeding (later dismissed) (the “Civil Theft Adversary”)10 filed against

Balfour Beatty after repeated demands for the scaffolding, or payment for its use,

were rebuffed. Thus, the theory of damages arises in tort. Tort law is clear that

“damages for conversion are limited to the reasonable value of the property when

converted and are not to be based on the replacement value.” Rosenthal as Tr. of

Barry Rosenthal Revocable Tr. UAD 11-17-2009 v. Equus Prop. Homeowners HOA,

Inc., 369 So. 3d 719, 723 (Fla. 4th DCA 2023) (internal citations omitted); Small

Bus. Admin. v. Echevarria, 864 F. Supp. 1254, 1267 (S.D. Fla. 1994) (“Under

Florida law, damages for conversion are limited to the reasonable value of the

property when converted.”).

9 If this were a valid argument, then no plaintiff would ever be entitled to damages for the loss of

any asset subject of a lien. This ignores the very obvious issue that the asset, but for the loss,

would be available to satisfy an obligation secured by the asset, the absence of which could

create liability for the obligor.

10 Adv. No. 24-1006-LMI.

There is some evidence regarding the value of the scaffolding at the time

of the demand for its return. One possible value would be the value placed on

the scaffolding as reflected in the Civil Theft Adversary - $19,035.87 for the

scaffolding at the 2000 Project and $93,605.25 for the scaffolding at the RD

Project,11 which would mean, at most, Edgewater is entitled to actual damages

for the loss of the scaffolding in the amount of $112,641.12, less the $40,000.00

for the scaffolding that was purchased by Advanced, for a total of $72,641.12.

However, Michael testified the scaffolding had been purchased “several years

ago” and did not testify that the value was the same on the Petition Date.

Edgewater’s bankruptcy schedules, which were filed on April 14, 2023 (ECF #98)

listed the value of its scaffolding in two lines of Schedules A – (2015 $39,702.00)

and (2015 $40,782.00), that is, a total of approximately $80,000.00.12

Balfour Beatty argues that Edgewater received full payment for the

scaffolding, and that the $40,000.00 that Advanced paid for the scaffolding is an

accurate reflection of its fair market value. While the Court agrees that the

$40,000.00 paid by Advanced for the scaffolding is the best evidence of what was

the value of the scaffolding when it was wrongfully retained13, Balfour Beatty’s

argument completely ignores the testimony of Michael and Ulysses that the

scaffolding purchased by Advanced was only 40% to 50% of the scaffolding that

11 The Court finds that Michael Vazquez adequately explained an issue regarding whether the

RD Project valuation included scaffolding at a different project, and that the $93,605.25 only

relates to the scaffolding at the RD Project. In any event, the discrepancy is not relevant in light

of the Court’s ruling.

12 The Debtor amended its schedules twice but never changed the valuation of its assets.

13 In opening argument, Edgewater’s counsel referred to the $40,000.00 as a “fire sale” but in

light of Edgewater’s own valuation in its schedules of the scaffolding, the price of $40,000.00 for

half the scaffolding is not a “fire sale.”

Edgewater deployed to the Projects. Michael testified that he personally

supervised the deployment of the scaffolding at both Projects. Balfour Beatty

argues that this testimony was “self-serving,” but yet, provides no convincing

evidence to counter Michael’s first-hand knowledge of what he delivered. The

Court finds that Michael’s testimony as to what was delivered was truthful.

Thus, even if the amount Advanced paid for the scaffolding was its fair market

value, that would mean that the value of the scaffolding at the time it was

wrongfully retained was at least $80,000.00. In the absence of other evidence

as to value, the Court finds that the value of the scaffolding deployed at both

Projects at the time of wrongful retention was $80,000.00, and therefore, after

deducting the amount Advanced paid, Edgewater is entitled to actual damages

for the loss of the scaffolding in the amount of $40,000.00.

As with the scaffolding, the Court agrees with Balfour Beatty that the cost

of the stucco was included in the Contracts. However, since Advanced used the

stucco at the RD Project, as addressed more fully below, Balfour Beatty’s

rejection damage claim will be discounted by the amount of $15,552.00 in

connection with the stucco usage.

2. Default Letters

Edgewater also seeks actual damages for the sending of the Default

Letters, which the Court also held was a violation of the automatic stay.

However, the Court finds that Edgewater has failed to demonstrate that

Edgewater incurred any actual damages arising from the sending of the Default

Letters, other than undifferentiated damages associated with the attorneys’ fees

incurred in dealing with the Stay Violations, which damages the Court turns to

next.

3. Attorneys’ Fees and Costs

Edgewater seeks all the attorneys’ fees and costs associated with the Stay

Violations, the Stay Violation Motion, the Stay Violation Order, including those

incurred with respect to the damages phase of the Stay Violation Order.14 The

attorney fee requests relating to the Stay Violations are set forth in Reorganized

Debtor’s Motion for Attorneys’ Fees and Costs as a Sanction (ECF #569) (the “Fee

Motion”) and in Reorganized Debtor’s Supplemental Motion for Attorneys’ Fees

and Costs as a Sanction (ECF #658) (the “Supplemental Fee Motion”) (collectively

the “Fee Requests”).

The Fee Motion seeks fees and costs totaling $458,736.15, for the period

from March 28, 2023, to May 2, 2024.15 This number includes Edgewater’s

expert witness costs in the amount of $32,197.25 for the fees of Berkowitz

Pollack Brant Advisors & CPAs, retained as experts in connection with

Edgewater’s claim for lost profits. The Supplemental Fee Motion seeks fees and

costs totaling $113,287.19, for the period of May 3, 2024 to May 22, 2024, and

additionally seeks $57,500.00 for estimated fees and costs associated with

reviewing the Trial transcripts and preparing the Proposed Findings of Fact and

Conclusions of Law.

14 As already noted, on theories tangent to, but separate from, the Stay Violations, Edgewater

requests that Balfour Beatty pay virtually all attorneys’ fees associated with the main bankruptcy

case, which request will be dealt with by separate order.

15 This amount includes the “Additional Fee Requests” referred to in supra notes 5 and 14.

Edgewater has not differentiated the amount of attorneys’ fees solely

associated with the Stay Violations, leaving it to the Court to figure out what is

the amount sought. Balfour Beatty has calculated the fees unrelated to the Stay

Violations at $189,637.00. Balfour Beatty argues that Edgewater is only entitled

to $20,000.00 in attorneys’ fees and costs, based on a series of arguments, some

of which are well-founded and others that are not.

The Court has previously addressed the framework for considering actual

damages relating to a stay violation in Lyubarksky:

The Eleventh Circuit has held that the actual damages recoverable

by a debtor who suffered damages from a creditor’s stay violation

under section 362(k) include those attorney’s fees incurred not only

in stopping the violation, but also attorney’s fees and costs incurred

in prosecuting a damages action and defending the damages on

appeal. Mantiply v. Horne (In re Horne), 876 F.3d 1076, 1081 (11th

Cir. 2017)(“This explicit, specific, and broad language permits the

recovery of attorney’s fees incurred in stopping the stay violation,

prosecuting a damages action, and defending those judgments on

appeal.”). An award of attorney’s fees may be awarded as

actual damages even if a debtor has not suffered other actual

damages for the stay violation. Parker v. Credit Central South,

Inc., 634 Fed.Appx. 770 (11th Cir. 2015).

615 B.R. at 934 (emphasis added).

Generally, in determining the reasonableness of fees and costs for

assessing actual damages, if valuing the services of an estate professional, the

Court will first apply the criteria set forth in 11 U.S.C. §330.16 However, when

16 Section 330 directs the Court to:

consider the nature, the extent, and the value of such services, taking into

account all relevant factors, including –

(A) the time spent on such services;

(B) the rates charged for such services;

(C) whether the services were necessary to the administration of, or beneficial at

the time at which the service was rendered toward the completion of, a case under

this title;

that criteria is not applicable, the Court will use the criteria set forth in Johnson

v. Georgia Highway Exp., 488 F.2d 714 (5th Cir. 1974) as reaffirmed in Norman

v. Housing Authority of the City of Montgomery, 836 F.2d 1292 (11th Cir. 1988).17

The criteria are virtually the same. Once those fees are calculated based on the

criteria, the Court may then consider the overall fees in light of the results

achieved. See Norman, 836 F.2d at 1302.

Balfour Beatty argues that Edgewater did not provide any expert testimony

to support its claim for fees. However, as this Court has stated on numerous

occasions, including in this case, this Court practiced bankruptcy law for over

20 years before taking the bench, and has served on the bench almost 19 years.

Expert testimony is only necessary when needed to assist the trier of fact. This

Court does not need an expert in bankruptcy fees to assist this Court in

determining the reasonableness of attorneys’ fees and costs incurred in

connection with bankruptcy representation.

(D) whether the services were performed within a reasonable amount of time

commensurate with the complexity, importance, and nature of the problem, issue,

or task addressed;

(E) with respect to a professional person, whether the person is board certified or

otherwise has demonstrated skill and experience in the bankruptcy field; and

(F) whether the compensation is reasonable based on the customary

compensation charged by comparably skilled practitioners in cases other than

cases under this title.

11 U.S.C. §330(a)(3).

17 Those factors are (i) the time and labor involved; (ii) the novelty and difficulty of the questions;

(iii) the skill requisite to perform the legal service properly; (iv) the preclusion of other employment

by the attorney due to acceptance of the case; (v) the customary fee; (vi) whether the fee is fixed

or contingent.; (vii) time limitations imposed by the client or the circumstances; (viii) the amount

involved and the results obtained; (ix) the experience, reputation, and ability of the attorneys; (x)

the “undesirability” of the case; (xi) the nature and length of the professional relationship with

the client; and (xii) awards in similar cases.

Balfour Beatty also argues that the rates charged by Edgewater’s

professionals are too high and that the hours spent on particular tasks were

either duplicative or excessive. Edgewater counters that the reasonableness of

the time spent on particular tasks, whether there was duplication, and the

reasonableness of the rates charged by Edgewater’s professionals, has already

been determined by this Court, when it entered its Order Approving Second and

Final Application of Jacqueline Calderin and Agentis PLLC for Allowance of

Compensation and Reimbursement of Expenses as Counsel for the Debtor (ECF

#494) (the “Fee Order”) entered on December 27, 2023. That Fee Order was not

appealed and is final. Edgewater is correct that those fees and costs addressed

in the Fee Order have already been determined by the Court to be reasonable as

to the rates and the hours spent, up to the entry of the Fee Order. Thus, the

Court overrules Balfour Beatty’s objections to the reasonableness of the rates

charged or the hours spent with respect to those fees and costs. As to those

fees and costs incurred after the Fee Order was entered, the Court has reviewed

the hours spent with respect to those fees not otherwise eliminated or reduced

in this order and finds that those fees are reasonable. As the Court previously

ruled, the charged rates are reasonable.

However, even with respect to those hours included in the Fee Order, the

Court is reviewing fees relating to a damages claim for the Stay Violations, and

while the Court has found the hours and rates of Agentis are reasonable for the

work performed and appropriate to be paid by the estate, the Court agrees with

Balfour Beatty that the award of fees relating to damages for a stay violation

should only include those fees directly associated with the violation and the

damages that Edgewater incurred because of those violations. Moreover, while

the Court agrees that to some extent fees and costs incurred on a theory

ultimately unsuccessful are still otherwise compensable, that applies generally

to fee applications and not necessarily to assessment of damages. Nonetheless,

the extent to which it is appropriate to include fees and costs related to an

ultimately unsuccessful claim lies in the court’s discretion. That determination

rests, in part, on the nature of a particular theory, the reason the court finds

that the theory is unsuccessful, as well as whether, and to what extent, that

theory has some nexus to ultimate recovery.

Taking all those factors into account, the Court holds that the damages

related to professional fees and costs should not include fees and costs directly

associated with the unsuccessful “lost profits” damages claim, which the Court

previously struck.18 Consequently, the fees associated with any work done by

Berkowitz Pollack Brant Advisors & CPAs and fees associated with work by

Agentis directly associated with the lost profits claim will not be included in the

damages award.

However, the Court finds it is appropriate to include in the attorneys’ fee

damages, with one exception,19 fees associated with the scaffolding rental

calculations, charges associated with the sale of the scaffolding to Advanced, as

18 See supra note 4.

19 The Court finds that most of the fees associated with Jonathan Loaiza should not be included

in the attorneys’ fee damages calculation. The witness was not timely disclosed as an expert;

even Mr. Loaiza did not know he was intended as a testifying expert.

well as all costs associated with the Civil Theft Adversary. Indeed, but for Balfour

Beatty’s continued wrongful retention of the scaffolding, the Civil Theft Adversary

would not have been filed.

In its objection and response to the Fee Motion (ECF #621) (the “Initial

Objection”) Balfour Beatty argues that $189,637.00 of the fees requested are

unrelated to the Stay Violations. Having reviewed the Fee Motion in detail, the

Court finds that $144,042.10 of the requested fees are unrelated to the Stay

Violations, but that $45,493.90 of the fees highlighted by Balfour Beatty are

appropriately included.

In the Initial Objection, Balfour Beatty argues that in the Fee Motion,

Edgewater seeks fees totaling $65,140.43 relating to the lost profits claim. After

review, the Court finds that $37,494.57 of the requested fees are attributable to

the lost profits, but that the balance of the highlighted fees, $27,645.86, are

appropriately included in the damages.

The balance of the challenges in the Initial Objection are overruled for

the reasons outlined above. Accordingly, the Court finds that the $458,736.15

claimed in the Fee Motion should be reduced by $213,733.92, leaving a total of

damages in the Fee Motion of $245,002.20.

Balfour Beatty addresses in detail its objection to the Supplemental Fee

Motion based on a variety of reasons all outlined in its response to the

Supplemental Fee Motion (ECF #660) (the “Supplemental Objection”). Having

reviewed those objections, the Court agrees that most of the fees associated with

the attempted testimony of Jonathan Loaiza should not be included but finds

the total reduction in the Supplemental Fee Motion should only be $8,568.50.

The Court overrules the balance of the objections raised in the

Supplemental Objection except with respect to the Berkowitz fees, already

addressed and discounted from the Fee Motion, and the estimated fees of

$57,500.00 which the Court will address next.

Edgewater estimated its fees for review of the Trial transcripts and

preparation of the Proposed Findings of Fact and Conclusions of Law in the

amount of $57,500.00. However, Edgewater has never filed an itemized

statement setting forth the actual fees and costs. To estimate the fees the Court

will use a blended rate of $515.00 an hour (Mr. Charbonneau and Mr. Corp) with

an estimated time spent of 50 hours, for a total of $25,750.00. In arriving at this

number, the Court has considered the factors delineated above, and finds that

both the rate and hours allowed are appropriate. If, however, the actual time

spent was less, the Court directs counsel to immediately notify the Court and

opposing counsel. Accordingly, the Court holds that the $170,787.19 requested

in the Supplemental Fee Motion is reduced by $40,318.50, leaving a balance of

$130,468.70.

Based on the Court’s detailed review of the Fee Requests, and

consideration of the objections, the Court finds that the total attorneys’ fee

damage award to which Edgewater is entitled with respect to the Stay Violations

is $375,470.90.

B. Punitive Damages for the Stay Violations

As this Court outlined in Lyubarsky:

Punitive sanctions are appropriate when a party acts with “reckless

or callous disregard for the law or rights of others.” Parker v. Credit

Central South, Inc., 634 Fed.Appx. at 773 (internal citations omitted).

“The imposition of punitive damages for a violation of the automatic

stay is appropriate when the violator acts in an egregious intentional

manner... where a violator’s acts are egregious, malicious or

accompanied by bad faith.” In re Roche, 361 B.R. 615, 624 (Bankr.

N.D. Ga. 2005).

“Courts in the Eleventh Circuit have used five factors in determining

whether an award of punitive damages is proper: “(1) the nature of

the [defendant]’s conduct; (2) the nature and extent of the harm to

the plaintiff; (3) the [defendant]’s ability to pay20; (4) the motives of

the defendant; and (5) any provocation by the debtor.” In re Harrison,

599 B.R. 173, 182 (Bankr. N.D. Fla. 2019); In re Roche, 361 B.R. at

624.

615 B.R. at 937-38.

No one factor is dispositive, and whether to award punitive damages, and

the amount to be awarded, rest within the Court’s discretion. See Lyubarsky,

615 B.R. at 938. In this case there is absolutely no question that punitive

damages are not just appropriate, but also necessary. The Court has already

outlined in the Stay Violation Order the various claims, all false, made by Balfour

Beatty about the scaffolding, including that it had been “returned” to a mystery

owner. Those misrepresentations, themselves, would have been enough to

warrant some kind of punitive damages. The Court has also previously found

that Balfour Beatty knew about Edgewater’s bankruptcy, but nonetheless,

determined to carry on without any regard to the requirements of the Bankruptcy

Code, or respect for the automatic stay. And yet, despite the very specific ruling

of this Court in the Stay Violation Order, and notwithstanding numerous

20 Balfour Beatty does not dispute it has the financial wherewithal to pay punitive damages.

attempts by Edgewater to retrieve its scaffolding,21 Balfour Beatty refused to

return the scaffolding, asserting that this Court did not order it to do so. That a

party who violated the automatic stay by wrongfully retaining an asset and lying

about it, somehow tries to justify extending its wrongful retention because the

Court did not specifically direct it to return the wrongfully retained asset, is just

breathtaking in its audacity.

Balfour Beatty claims that Edgewater never asked that its scaffolding be

returned until November of 2023. This argument is contradicted by every

witness, and all evidence, except for Balfour Beatty’s witnesses. The Court finds

that Edgewater’s witnesses are believable with respect to their testimony on this

point. Moreover, the documentary evidence, including the filing of the Civil Theft

Adversary, belies this point. Finally, even if Edgewater had not requested the

return of the scaffolding, the Court’s Stay Violation Order should have prompted

Balfour Beatty to immediately contact Edgewater or its counsel to arrange the

return of the scaffolding or come to some other accommodation. Based on

Balfour Beatty’s egregious conduct and flagrant disregard of this Court’s Stay

Violation Order, the Court finds that it is appropriate to multiply the actual

damages relating to wrongful retention of the scaffolding by a multiplier of ten,

representing the ten months – from April of 2023 to January of 2024 – that the

scaffolding was wrongfully retained. Therefore, with respect to this portion of

the punitive damages, Edgewater is awarded $400,000.00.

21 Apparently, the stucco material had already been used by Advanced and could not be returned.

The Court will now turn to the punitive damages that should be assessed

with respect to the attorney fee award. Balfour Beatty argues that, with respect

to the punitive damages, the multiplier should be one. The Court agrees this is

the appropriate multiplier with respect to the attorney fee award. Therefore, the

punitive damages award in connection with the attorneys’ fees is $375,470.90.

In sum, the Court finds and holds that the actual damages awarded to

Edgewater for the Stay Violations is $415,470.90 and the punitive damages

awarded to Edgewater for the Stay Violations is $775,470.90, bringing the total

damages for the Stay Violations to $1,190,941.80.

C. The Claim Objection

Balfour Beatty initially filed a proof of claim on June 16, 2023, Claim #27-

1 (the “Initial Claim”) seeking an administrative claim for an unspecified amount

of damages based on the Debtor’s post-petition filings of claims of lien, through

an improperly appended “Motion to Allow Postpetition Claim for Damages

Against the Debtor With The Priority of an Administrative Claim.”22 The Initial

Claim was both untimely23, insofar as it purported to be a valid proof of claim

arising from a pre-petition obligation, which it was not, and procedurally

improper.24 Notwithstanding, on November 22, 2023, Balfour Beatty then filed

an “amended” claim, Claim #27-2, in the amount of $1,771,032.92 which did

22 Balfour Beatty has incorporated (or claims to have incorporated) motions in each proof of

claim. This is not procedurally proper; a motion attached to a proof of claim is not considered

filed.

23 The Claims Bar Date for non-governmental entities was May 31, 2023.

24 Balfour Beatty’s request for a post-petition administrative claim was denied in this Court’s

Order Denying Application for Administrative Claim (ECF #462) and subsequent Memorandum

Opinion on Order Denying Application for Administrative Claim (ECF #519).

not amend the Initial Claim. This claim sought damages for post-petition claims

of lien filed by Edgewater against the Projects, and for rejection damages, as well

as a request for setoff of any obligations owed by Balfour Beatty to Edgewater.

Although Edgewater objected to this Claim #27-2, before the Court addressed

that claim objection, Balfour Beatty filed Claim #27-3, which is the operative

claim to which the Claim Objection has been asserted.

Claim #27-3 was filed as an amendment to Claim #27-2 seeking the same

damages as those included in Claim #27-2 - damages totaling $1,771,032.92 as

rejection damages, and unspecified “damages from the Debtor’s filing of Claims

of Lien.” The detail for calculating the $1,771,032.92 indicates the claim amount

is solely for rejection damages. There is no amount included for damages arising

from the filing of the claims of liens, other than a reference to the previously filed

motion seeking post-petition damages relating to claims of lien filed by

Edgewater post-petition,25 which was one of the scheduled issues to be resolved

at the Trial, and a general statement that “the amount of damages remains to be

adjudicated.”26

Edgewater objects to Claim #27-3 on the grounds that Balfour Beatty

should not be entitled to rejection damages because the claim is untimely, it is

Balfour Beatty’s fault that Edgewater had to reject the Contracts, and in any

event, Balfour Beatty should not have a right to setoff the rejection damages from

25 Balfour Beatty Construction’s Amended Motion to Allow Post-Petition Claim for Damages Against

the Debtor with the Priority of an Administrative Claim (ECF #353).

26 Balfour Beatty did not put on any evidence regarding these damages at the Trial. Balfour

Beatty is therefore not entitled to any claim relating to the filed claim of lien.

any claim that Edgewater asserts against Balfour Beatty. Edgewater did not

object to the actual calculation details included in Claim #27-3.

Balfour Beatty’s claim for rejection damages is only untimely if rejection

occurred before confirmation of the Debtor’s plan, which plan specifically

provides:

Except for executory contracts and unexpired leases that have been

assumed, and if applicable assigned, before the effective date or

under section Article 6.2 of this Plan, or that are the subject of a

pending motion to assume, and if applicable assign, the Debtor will

be conclusively deemed to have rejected all unterminated or

unexpired executory contracts and leases as of the effective date. A

proof of a claim arising from the rejection of an unterminated or

unexpired executory contract or lease under this section must be

filed no later than 30 days after the date of the order confirming this

Plan.

See Second Supplement to Amended Plan of Reorganization (ECF #455) (the

“Plan”) (emphasis in the original).

Both Balfour Beatty and Edgewater have been inconsistent regarding

when and whether the Contracts were terminated or rejected. Balfour Beatty

argues that Edgewater rejected the Contracts when Edgewater filed the

Emergency Motion for Entry of an Order Authorizing the Debtor to Pay Critical

Vendor Claims in the Ordinary Course of Business (ECF #14) (the “Critical Vendor

Motion”). Balfour Beatty is wrong. There is a process by which a debtor may

seek to reject or assume executory contracts both of which require court

authority, and, until Edgewater filed its Plan, it did not seek court authority to

reject the Contracts.27 Thus, the Court finds that the Contracts were not rejected

until the Court entered the Order Confirming the Debtor’s Subchapter V Plan for

Reorganization (ECF #499) (the “Confirmation Order”) on January 5, 2024.

Edgewater argues that Balfour Beatty terminated the Contracts pre-

petition. There is absolutely no evidence to support any such argument. In fact,

the evidence is very clear that, not only were the Contracts not terminated pre-

petition, but one of the Stay Violations that got Balfour Beatty in hot water was

sending the Default Letters which, under the Contracts, were conditions

precedent to any termination. Edgewater also argues the Contracts were

terminated by Balfour Beatty post-petition because it would not agree to let

Edgewater come back to the Projects, and, instead, retained Advanced to finish

the stucco work on the RD Project, and do the stucco work on the 2000 Project.

This is also the reason Edgewater argues that Balfour Beatty essentially forced

Edgewater to reject, rather than assume, the Contracts.

The Court finds that the Contracts were not terminated post-petition

either. The evidence is clear, and Edgewater’s principals acknowledged, that

Edgewater could not come back and finish the Projects unless Balfour Beatty

would agree to modify the Contracts such that Edgewater’s subcontractors and

vendors would be paid by joint check. However, as Balfour Beatty correctly

argued, it was under no obligation whatsoever to agree to modify the Contracts.

27 Balfour Beatty points out that Edgewater did not even schedule the Contracts as executory

contracts until the third amendment to the schedules filed on June 19, 2023 (ECF #176), which

is true. The Court continues to wonder why Edgewater’s counsel did not include the Contracts

as executory contracts on the schedules until almost three months after the case had been filed.

Nonetheless, the Contracts were executory on the Petition Date and therefore were subject to

assumption or rejection.

See In re Beverage Canners Intern. Corp., 255 B.R. 89, 95 (Bankr. S.D. Fla. 2000)

(“[S]imply because a debtor determines that it wishes to maintain the benefits of

a contract and not the concurrent obligations does not mean that a debtor can,

under Code § 365, accept the benefits and reject the burdens. It is black letter

law that an executory contract must be either assumed in its entirety, cum onere,

or completely rejected.”). Substituting Advanced to complete the stucco work

did not terminate the Contracts either. Article 5, Section B of the Contracts allow

Balfour Beatty to retain a substitute subcontractor to finish the stucco work

when there is a failure to cure a default, without terminating the Contract.28 The

Contracts do not provide that the Contracts are terminated if a substitute comes

in to finish the Projects, nor did Edgewater identify any law or case that holds

otherwise.

Because the Contracts were not terminated either pre-petition or post-

petition, and because the Contracts were not rejected until the Confirmation

Order was entered, the rejection claim was timely filed.

Edgewater’s argument that Balfour Beatty forced the rejection and is

therefore not entitled to rejection damages is not well-founded. As the Court

already held, the law is clear – neither non-bankruptcy law nor bankruptcy law

28 Article 5, Section B of the Contracts states that if Edgewater failed to cure a default, Balfour

Beatty had the option to, but was not required to, (1) terminate the Contracts for default, (2)

“make demand on Subcontractor’s surety to perform the Subcontract,” (3) “allow Subcontractor

to continue to perform in whole or in part, but collect all damages arising as a result of the

default,” (4) enter on the premises and take possession of all materials and equipment for the

purposes of continuing or correcting the Work; (5) “supply additional materials or labor at

Subcontractor’s cost,” (6) “employ other firms or persons at Subcontractor’s cost to complete or

correct all or any part of the Work,” or (7) “accept the conditions arising from the default but

collect from Subcontractor the difference in value between the condition as required by this

Subcontract and the accepted condition.”

requires a non-debtor party to an executory contract, such as the Contracts, to

modify any of the provisions of the contract. Balfour Beatty was not under any

legal obligation to proceed under modified terms.

Due to Balfour Beatty’s use of the scaffolding and stucco at the RD Project,

the Court finds it appropriate to reduce the amount of Balfour Beatty’s rejection

claim by the value of the stucco and the use value of the scaffolding.29 Guy Reese

testified that Advanced started working on the RD Project at the beginning of

May and that, because Advanced was using the scaffolding that Edgewater had

already installed, it did not include the cost of the scaffolding in its contract price

with Balfour Beatty. Therefore, Advanced and Balfour Beatty both received the

benefit of the use of Edgewater’s scaffolding. Advanced purchased the scaffolding

on or around January 29, 2024. Thus, Advanced used the scaffolding for nine

months before Advanced purchased it. Using the lower monthly rental value of

$22,000.00, the Court finds it is appropriate to reduce Balfour Beatty’s rejection

damages claim by $198,000.00. Because Advanced also used the stucco, the

rejection claim is further reduced by $15,552.00.

D. Setoff

Although not appropriately included in a proof of claim, Balfour Beatty

asserts it is entitled to setoff any money it owes Edgewater against the amount

of money Edgewater owes to it. Under the Bankruptcy Code, “a creditor [may]

offset a mutual debt owing by such creditor to the debtor . . . against a claim of

29 The scaffolding and stucco were only used on the RD Project, according to the testimony of

Guy Reese, principal of Advanced.

such creditor against the debtor.” 11 U.S.C. §553. “Three elements must be

present for the right of setoff to arise pursuant to the plain and unambiguous

language of Section 553(a): (i) the parties must have mutual debts owing to each

other; (ii) the debts arose prepetition; and (iii) the setoff cannot fall within the

three exceptions of Sections 553(a)(1), (2), or (3).” In re McKay, 420 B.R. 871, 877

(Bankr. M.D. Fla. 2009). “Although section 553 expressly preserves certain

prepetition rights of setoff, it says nothing about setoff rights that are wholly

postpetition in nature. Although this silence has created some confusion, the

general rule is that . . . a postpetition claim may be offset against a postpetition

debt so long as the claim and debt constitute valid, mutual obligations.” 5 Collier

on Bankruptcy ¶553.03 (16th ed. 2024). See In re SunCruz Casinos LLC, 342 B.R.

370, 379 (Bankr. S.D. Fla. 2006) (“both transactions giving rise to the setoff must

either have occurred pre-petition or both must have occurred post-petition.”).

Balfour Beatty may not seek to setoff its rejection damages claim from the

sanctions that it is obligated to pay to Edgewater on account of the Stay

Violations. First, entitlement to setoff requires mutuality, and here there is no

mutuality between what Edgewater owes to Balfour Beatty on account of Balfour

Beatty’s rejection damages and the damages being awarded to Edgewater for the

Stay Violations. See In re Harrison, 599 B.R. 173, 189 (Bankr. N.D. Fla. 2019)

(holding creditor not entitled to setoff damages awarded for its bad conduct

against the amount the debtor owed creditor pursuant to a final judgment for

lack of mutuality). Second, even if there was mutuality, equitable principles

preclude setoff. It would not be appropriate to allow Balfour Beatty to reduce

the sanctions imposed due to its wrongful conduct by unsecured general pre-

petition bankruptcy claims. See id.; In re Banderas, 236 B.R. 841, 848 (Bankr.

M.D. Fla. 1999) (“If an entity who violates the automatic stay could escape

sanctions with impunity by claiming the right of setoff against his prepetition

claim, the entity would in effect render the remedy provided for by § 362(h) of

the Bankruptcy Code worthless. This is so because the entity who is charged

with violating the automatic stay is inevitably a creditor who is holding a

prepetition claim. If such creditor is permitted to offset the sanctions against the

prepetition claim, the Debtor whose rights have been violated will be left without

remedy.”); In re Acequia, Inc., 34 F.3d 800, 817 (9th Cir. 1994).

The Court holds that Balfour Beatty is not entitled to set off the sanctions

awarded hereunder from its rejection claim. However, because rejection damages

are considered pre-petition claims notwithstanding that they arise due to a post-

petition event. See 11 U.S.C. §502(g), Balfour Beatty may setoff the amounts it

owes Edgewater for the Unpaid Draws (defined hereinafter).

E. Turnover of Unpaid Draws

The final issue litigated at the Trial is whether and to what extent, by

turnover or otherwise, Balfour Beatty is obligated to pay Edgewater the unpaid

draws from Draw 4 (January 2023), Draw 5 (February 2023), and Draw 6 (March

2023) totaling $114,318.32, relating to work performed at the RD Project, and

Draw 1 (March 2023) in the amount of $51,964.20, relating to work performed

at the 2000 Project (collectively the “Unpaid Draws”). In the Stay Violation

Motion, Edgewater demanded that Balfour Beatty turnover the Unpaid Draws

pursuant to 11 U.S.C. §542(b); Balfour Beatty countered that it was not obligated

to pay the Unpaid Draws when demanded, first, because when initially

requested, Balfour Beatty had not yet been paid by the owners of the Projects,30

and then, because Edgewater had not paid certain subcontractors and suppliers

within seven days after Edgewater received payment from Balfour Beatty on

Draw 3 (December 2022), a condition precedent to payment of draws.

Section 542(b) of the Bankruptcy Code provides in pertinent part: “an

entity that owes a debt that is property of the estate and that is matured, payable

on demand, or payable on order, shall pay such debt to, or on the order of, the

trustee, except to the extent that such debt may be offset under section 553 of

this title against a claim against the debtor.” 11 U.S.C. §542(b). “The turnover

provision of Bankruptcy Code applies only to tangible property and money due

to debtor without dispute which are fully matured and payable on demand.” In

re Fontainebleau Las Vegas Holdings, LLC, 417 B.R. 651, 666 (S.D. Fla. 2009)

(emphasis in original) (citing In re Charter Co., 913 F.2d 1575, 1579 (11th Cir.

1990)). “Turnover proceedings are not to be used to liquidate disputed contract

claims. Clearly, Congress envisioned the turnover provision of § 542 of the

Code, to apply to tangible property and money due to the debtor without dispute

which are fully matured and payable on demand.” Charter Co., 913 F.2d at 1579

(internal citations omitted).

30 The Contracts each have a pay-when-paid provision, meaning Balfour Beatty was not obligated

to pay Edgewater for any particular draw request until the owner paid Balfour Beatty for that

particular draw request.

Edgewater argues that the amount of the Unpaid Draws relating to the RD

Project (Draws 4-6) were not in dispute because Balfour Beatty did not reject the

requests and because Balfour Beatty was paid by the RD Project owner.

Edgewater acknowledges that Balfour Beatty rejected the 2000 Project draw

request (Draw 1) and that the owner of the 2000 Project never paid Balfour Beatty

for the 2000 Project draw request. 31

There does not seem to be any dispute that Balfour Beatty approved Draw

4 and Draw 5 and Balfour Beatty acknowledged that it was paid by the RD

Project owner for Draw 4 and Draw 5. Balfour Beatty argues that if it was paid

by the RD Project owner for Draw 6, it believes it may have been a partial

payment. Nonetheless, Balfour Beatty argues that it was entitled to withhold all

the Unpaid Draws from Edgewater pursuant to the terms of the Contracts due

to Edgewater’s failure to pay certain subcontractors, and therefore, that

Edgewater’s entitlement to the Unpaid Draws was in dispute.

The Court agrees that the Unpaid Draws were not properly the subject of

a turnover demand, because, on the Petition Date, the obligations were disputed.

Nonetheless, the full amounts32 of the three RD Project Draw Requests (Draws

4-6), totaling $114,318.32, are now due and owing.33 Because Balfour Beatty

was never paid by the 2000 Project owner for the 2000 Project Draw Request

(Draw 1), Balfour Beatty does not owe Edgewater for that draw request.

31 Balfour Beatty testified, without contradiction, that it was never paid for the retainage related

to those draw requests.

32 Less the unpaid retainage.

33 Balfour Beatty’s speculation that it “may not have been paid in full for Draw number 6” is not

sufficient to reduce the obligation to Edgewater.

Because the amounts due to Edgewater for the Unpaid Draws arise from

a pre-petition debt, Balfour Beatty may setoff those amounts from the amounts

it is owed by Edgewater on account of its rejection claim.

CONCLUSION

For the reasons set forth herein, the Court ORDERS as follows:

1. With respect to the damages owed by Balfour Beatty to Edgewater

for the Stay Violations, Balfour Beatty must pay Edgewater $1,190,941.80

calculated as follows:

a. Actual damages for the scaffolding $40,000.00.

b. Actual damages for attorneys’ fees $375,470.90.

c. Punitive damages relating to the scaffolding $400,000.00.

d. Punitive damages for attorneys’ fees $375,470.90.

2. Balfour Beatty is entitled to a rejection claim in the amount of

$1,557,480.92 calculated as follows:

a. $1,771,032.92 amount of claim filed minus $198,000.00 for the

use of scaffolding minus $15,552.00 for the use of stucco.

3. Balfour Beatty is indebted to Edgewater for the Unpaid Draws in the

amount of $114,318.32.

4. Balfour Beatty may apply the $114,318.32 to its allowed rejection

damages claim, leaving an allowed total unsecured claim of $1,443,162.60.

# # #

Copy to:

Robert P. Charbonneau, Esq.

Kenneth G.M. Mather, Esq.

Attorney Charbonneau is directed to serve a copy of this Order on interested

parties who do not receive service by CM/ECF, and file a proof of such service

within two (2) business days from entry of the Order.