Opinion ID: 77396
Heading Depth: 2
Heading Rank: 2

Heading: MCC's Charges to Community Bank and Patterson

Text: 10 Between January 1, 1998 and July 15, 2000, MCC billed Community Bank and received from Community Bank a total of $3,122,977 for work done on six Community Bank construction projects. This amount represented 93% of MCC's revenue over the period. Of this more than $3 million MCC invoiced to Community Bank, MCC's invoices attributed $484,750 to MCC's work on the so-called Guntersville project, the construction of a new Community Bank branch in Guntersville, Alabama. 11 Despite the nearly half-a-million dollars in charges MCC invoiced to Community Bank for the Guntersville project, MCC's records show that MCC incurred only $30,026.25 in labor costs at the Guntersville project during the same time period. As Dewey Hamaker testified at trial, MCC billed on a cost plus basis, and thus direct labor costs should have provided an accurate benchmark for MCC's invoicing. 1 By this measure, however, MCC invoiced Community Bank for more than 1600% of the labor costs MCC actually incurred at the Guntersville site. Although MCC's extremely high mark-up was most notable in the Guntersville account, MCC also billed Community Bank for between 325% to 845% of the labor costs MCC incurred at five other Community Bank construction projects between 1998 and 2000. 12 In addition, MCC's records show that MCC incurred no labor costs at all on the Guntersville project between February 9, 2000 and June 20, 2000. Despite this, between those dates MCC invoiced Community Bank for, and received payment from Community Bank of, $178,500 for work purportedly done at Guntersville. 13 In stark contrast to MCC's charges to Community Bank, over the two-and-a-half years from January 1, 1998, to July 15, 2000, MCC received only $10,000 from Patterson for work MCC performed at Heritage Valley Farms. 2 MCC received this small amount despite the fact that, according to MCC's Quickbooks records for that period, MCC employees worked over 61,000 hours at Heritage Valley Farms, incurring a total labor cost of $691,359.58. Thus, during the same time frame in which MCC billed Community Bank over 1600% of the labor costs at the Guntersville project, MCC received from Patterson less than 1.5% of the labor costs at his Heritage Valley Farms. 14 At the end of every year, Alabama construction firms must submit to the State of Alabama a response to a contractor's questionnaire listing ongoing major construction projects. Linda Hamaker prepared MCC's contractor's questionnaire and submitted it to the state on MCC's behalf on December 31, 1999. MCC's 1999 completed questionnaire listed four Community Bank projects as its only major jobs in progress, including Guntersville. MCC did not include any listing for Heritage Valley Farms or any other work for Patterson.