The recent decision in Lane Constr. Corp. v. Skanska USA Civ. Se., Inc., 174 F.4th 1 (11th Cir. 2026), is a reminder of how the failure to properly allocate project risks can lead to dire outcomes for contractors. In this case, a joint venture comprising three contractors executed a highway construction contract, whereby the parties agreed that if they failed to complete the construction project in time, they would owe liquidated damages and if they abandoned the project, they would face uncapped liability. Following the execution of the contract, the joint venture faced several project delays caused by unforeseeable events, thus placing financial pressure on a joint venturer that ultimately chose to breach its joint venture agreement. Here, the Eleventh Circuit held that the joint venturer’s breach was inexcusable because the contractors had expressly agreed they would be held liable for damages, even if their performance was hindered by misallocated risks.
Case Background
In 2013, the Florida Department of Transportation (“FDOT”) solicited bids for the expansion of Florida’s Interstate 4 highway (the “I-4 Ultimate Project”). Specifically, the I-4 Ultimate Project required contractors to double the width of a twenty-one-mile stretch of a highway spanning seventy-two bridges and fifteen interchanges between Tampa and Daytona Beach, Florida. The project was also structured as a public-private partnership, with I-4 Mobility Partners OpCo LLC (“I4MP”) financing the project and assuming legal responsibility for its completion. In return, I4MP would receive milestone payments from FDOT and a forty-year exclusive agreement to maintain the highway, valued around $75 million annually. The relationship between FDOT and I4MP was governed by a Concession Agreement.
Three contractors – Skanska USA Civil Southeast, Inc. (“Skanska”), Granite Construction Company (“Granite”), and The Lane Construction Company (“Lane”) – formed a joint venture (“SGL”) to complete the I-4 Ultimate Project. Following its formation and before the execution of its joint venture agreement (“JVA”), each joint venturer was informed that Skanska and I4MP shared a common parent company, thus giving rise to a potential conflict of interest. Nevertheless, the parties agreed to work together and executed the JVA wherein Skanska was named SGL’s managing party. The agreement also established an “Executive Committee” comprised of one representative from each party. Pursuant to the JVA, most decisions required unanimous consent from the Executive Committee, but certain time-sensitive matters could be addressed unilaterally by Skanska.
After it was selected to construct the I-4 Ultimate Project, SGL and I4MP executed a Design Build Agreement (the “DBA”), under which SGL was obligated to complete the project in six years for $2.3 billion. The way the DBA was structured, allowing for liquidated damages in the event of delay and uncapped liability in the event SGL abandoned the project, meant that SGL bore the brunt of the financial risk even though I4MP was legally responsible for ensuring the project’s completion.
SGL Considers Terminating the Project
Construction of the I-4 Ultimate Project began in 2015. From the beginning, SGL experienced severe project delays caused by a labor shortage, inflation, Hurricanes Irma and Matthew, and a construction error involving a sinkhole that cost the company millions of dollars. During this period, the parties’ relationship also worsened because Lane’s parent company was acquired by WeBuild S.p.A. Inc. – a company that exercised aggressive tactics during phases of construction. These unexpected challenges derailed SGL’s profit projections, leading to a projected loss of $108 million by 2018. While the DBA provided SGL some chance for relief in the face of unforeseen expenses such as these, the agreement required SGL to first complete a multi-step process to obtain relief in which the last stage was for I4MP, acting on behalf of SGL, to submit a Relief Event claim to FDOT for additional funds. Since SGL had already undergone this same process in May 2018 for the sinkhole issue and had sought $48 million and an extension of 245 days to complete the project, SGL members worried they would not recover a significant profit after completion of the project. As such, SGL sought advice from its outside counsel about the potential termination of the I-4 Ultimate Project
Ultimately, SGL was advised that it had no termination rights under the DBA as the contract expressly provided that “in no event may [SGL] terminate” the DBA due to delay-causing Relief Events. Additionally, SGL was warned that although I4MP had the option to terminate the Concession Agreement – to which SGL was not a party – for extended project delays, “the decision to terminate the DBA or require SGL to continue to fully perform pursuant to the DBA’s terms and conditions rest[ed] solely with FDOT.” Even further, each time that SGL was given advice, its counsel forewarned that a Termination Request, even if passed along to FDOT, would not “actually terminate the DBA in any way.” Rather, if SGL pursued a path towards termination, I4MP could challenge the request on multiple grounds, thus causing profound consequences for SGL.
Lane refused to accept the advice given by SGL’s counsel. Instead, Lane, favoring the idea of cutting its ties to the project and hiring its own outside counsel, proposed that SGL force I4MP to terminate the Concession Agreement so that if FDOT elected to continue the DBA, I4MP would assume SGL’s construction obligations. According to Lane, the termination of the project was the best option because it would allow each contractor to recover potentially some of their losses. However, Skanska and Granite viewed Lane’s proposal with skepticism for several reasons, including the fact that the suggested plan would require SGL to destroy its relationship with I4MP. In the end, the other SGL members chose not to pursue termination.
SGL Rejects Termination and Co-Venturer Stops Cooperating with Joint Venture
In 2019, SGL continued to suffer millions in monthly losses as a result of the I-4 Ultimate Project. During this period, Lane pursued aggressive tactics in an effort to sway SGL toward termination. However, these tactics were met by Skanska’s firm refusal of the termination option. Indeed, rather than terminate the project and provide some relief to its co-venturers, Skanska initiated settlement negotiations with FDOT whereby SGL waived its right to request termination, meaning the I-4 Ultimate Project would go forward. Ultimately, a final deal with FDOT was executed on April 10, 2020, with Skanska and Granite voting in favor and Lane objecting the terms of the settlement. Unable to act unanimously, Skanska exercised its unilateral authority under the JVA and executed the deal on behalf of SGL.
District Court Proceedings
In January 2021, Lane filed suit in the U.S. District Court for the Middle District of Florida, alleging Skanska breached its fiduciary duties of loyalty and care by “refusing to consider pursing and then failing to exercise” the Termination Request in order to benefit its sole interest and the interests of I4MP. Lane also asserted a gross negligence claim against Skanska and sought a declaration from the Court that as a consequence of Skanska’s alleged actions, Lane was not obligated to make capital contributions to SGL for completion of the I-4 Ultimate Project. Lane then also notified Skanska that it would no longer make any further capital contributions to SGL beginning in January 2021. By August 2021, Lane’s unpaid proportionate share of capital contributions accrued $60 million, thus requiring the other co-venturers to make up the difference to keep the I-Ultimate Project afloat. In response, Granite joined the lawsuit and both Skanska and Granite countersued Lane for breach of contract and indemnity.
Following nearly two and a half years of discovery and pretrial procedure, the District Court granted Skanska and Granite summary judgment on their counterclaims, finding that “‘Lane’s refusal to pay the capital calls materially breached the JVA’ even if Skanska breached its fiduciary duty because the ‘contract and fiduciary duty claims are different animals.’” Lane’s fiduciary duty and gross negligence claims proceeded to trial and at the conclusion of a ten-day bench trial, the Court entered judgment against Lane, ordering it to pay the co-venturers $49 million plus pre-judgment interest and attorneys’ fees. Lane then appealed.
Appellate Proceedings
On appeal, the Eleventh Circuit upheld the District Court. Even though this deal presented multiple financial difficulties for SGL, and even though Skanska seemed to have been conflicted and might have had different interests from Lane and Granite, under the parties’ agreements Lane had no right to terminate or abandon the I-4 Ultimate Project. In the end, Lane was held in material breach of its obligations on the project and was ordered to pay Skanska and Granite millions.
Key Takeaway
The Lane Construction Corp. decision suggests that contractors must carefully negotiate contracts, ensuring careful risk allocation and specific assignment of responsibility. Like Lane, a contractor’s nonperformance will not be excused merely because the agreement has become unexpectedly unprofitable, more expensive, or risky to complete. Rather, contractors are still obligated to perform their contractual obligations, even if finishing the job results in an economic loss.
