LAM Group Pursues Lawsuit Over Hotel Stucco Failure
The developer seeks $2.8 million in damages for stucco repairs in a 2022 lawsuit involving multiple construction contractors.
Updated on Oct. 23, 2026 in Construction
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In a 2022 breach-of-contract lawsuit, the LAM Group is seeking $2.8 million to cover the costs of replacing failing stucco cladding at a Manhattan hotel. The case, which involves multiple defendants including Rinaldi Group and Bayport Construction, remains ongoing as legal proceedings continue.
Why it matters
The lawsuit highlights the high cost of construction defects and the challenges of assigning liability among multiple project stakeholders. Poor workmanship and fastener failure were identified as primary causes for the issues necessitating the expensive facade replacement.
The developer is pursuing $2.8 million in damages to replace stucco cladding. Legal maneuvering has persisted for 5 years as discovery and mediation attempts continue.
The players
LAM Group
This real estate development firm initiated the legal action to recover costs associated with hotel construction defects.
Rinaldi Group
This construction firm is a defendant in the lawsuit and has filed its own cross-complaint against other members of the project team.
Bayport Construction
This company is a co-defendant that recently secured a default judgment against another firm involved in the project.
Robert R. Reed
He is the presiding judge in the New York state court overseeing the breach-of-contract litigation.
Dryvit
This organization is a manufacturer of stucco products that has publicly attributed the site failures to poor workmanship.
The details
A consultant report linked the stucco failure to poor workmanship and degraded fasteners. Defendants have struggled to complete necessary depositions, citing persistent staff turnover as a cause for procedural delays.
Timeline
LAM Group filed the breach-of-contract lawsuit in 2022.
The court ordered mandatory mediation for the parties in July 2025.
Defendants reported significant deposition delays to Judge Reed in February 2026.
Judge Robert R. Reed awarded a default judgment to Bayport Construction in March 2026.
The deadline for expert disclosure is set for November 30, 2026.
Market Landscape
The dispute follows the precedents set by New York state construction defect liability standards regarding the assignment of fault among subcontractors and project architects. This litigation underscores a broader trend of increased legal friction as project teams navigate complex liability chains in urban development.
Local developers and residents may see stricter oversight or higher insurance requirements as legal costs for major construction disputes mount. Future building projects in the area could face longer timelines if contractors prioritize rigorous documentation to avoid similar liability claims.
The takeaway
Large-scale construction disputes often face multi-year delays as multiple parties argue over responsibility for workmanship. Project stakeholders are increasingly relying on detailed expert reports to resolve liability before cases reach a trial verdict.
What happens next
The court has set a deadline for expert disclosure on November 30, 2026, with the trial expected to commence in 2027.
Further reading
For more on industry oversight and litigation, explore New York City Construction.
Source note: This article includes information reported by Engineering News-Record (ENR) magazine.
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