Flipping partnership going to court on debate of renovation costs

[Jonathan A.]

I am a general contractor that partnered with 3 investors to flip a house. We all agreed to hire my company to do the renovation and agreed on a set budget and got a contract by my company. My company completed the renovation on budget. These 3 partners now are taking me to court claiming they got other estimates for the renovation and have receipts and spoke to my workers about costs and they believe the remodel cost $100k less then what the contract was set for. They would like me to provide all receipts and costs for the project. I should them the contract my company had and they said they want actual costs and not my contract. I am the managing partner and majority owner of the LLC we created and have an operating agreement that states I am the person who can make decisions on the renovation.

Do these partners have a case against me being that I hired my company to do the remodel and we all agreed to the cost of the remodel before we started?

[J Scott]

Without seeing the contract (and even with seeing the contract potentially) nobody here can tell you how a judge would rule.

More importantly, was there some explicit or implict agreement between you and the investors that you'd do the work as cost effectively as possible given that you had an equity stake in the deal?  In other words, did everyone know that you might be making money off both the equity stake *and* the contracting work?  

Personally, this is one of the reasons I would never do an equity partnership with a contractor.  But, if I ever did, I'd want some assurance that he wasn't "double dipping" without my knowledge -- in other words, not making money both as an equity partner and as a contractor.  That seems like a really bad deal for the other investors.