Wade Clark Mulcahy LLP

<p style="text-align: justify;">In <em><a href="https://www.wcmlaw.com/wp-content/uploads/2022/09/Hartford-Underwriters-Insurance-Company-v.-Arch-Concept-Construction-Inc.-et-al..pdf">Hartford Underwriters Insurance Company v. Arch-Concept Construction, Inc., et al.</a>,</em> plaintiff Hartford Underwriters Insurance Company (“Hartford”) provided workers compensation insurance to Arch-Concept Construction, Inc. (“Arch-Concept”). Hartford sued Arch-Concept over unpaid premiums. The parties settled under the terms that Arch-Concept was required to pay $275,000 over twelve quarterly installments. In the event the settlement agreement was breached, a consent judgment in favor of Hartford against Arch-Concept for $425,000, less any payments made under the agreement, would be entered.</p>
<p style="text-align: justify;">After Arch-Concept failed to timely remit payments, Hartford sued Arch-Concept seeking their consent judgment less the amount in payments previously remitted. Arch-Concept argued they were unable to make the remaining payments due to the COVID-19 pandemic and the shut-down of their business. A trial judge found in favor of Hartford, reasoning that Arch-Concept failed to prove that the doctrine of impossibility failed to excuse their non-performance of the settlement agreement. The Appellate court affirmed, stating that “the doctrine of impossibility is not applicable where the difficulty is ‘the personal inability of the promisor to perform.’” Additionally, “a party cannot render a contract performance legally impossible by its own actions.” Arch-Concept failed to provide any support of their inability to remit installments as promised and its principle never certified he was personally unable to make payment for any reason.</p>
<p style="text-align: justify;">Although the COVID-19 pandemic can certainly be argued as “an intervening event that was not within the original contemplation of the contracting parties,” or frankly any party for that matter, this case demonstrates a business cannot excuse their default by asserting the doctrine of impossibility without providing sufficient documentation. The Court did not provide examples of documentation that would suffice as support, but we surmise bank account statements could be a start.</p>
Thanks to Gina Rodriguez for her contribution to this article.  Should you have any questions, contact <a href="mailto:mcare@wcmlaw.com">Matthew Care</a>.