City has an upcoming court battle with a sewer contractor
F & V Construction Management, Inc., a contractor hired to work on the Onaway sewer project in July 2003, has filed a lawsuit in 53rd Circuit Court, which has been answered by a counter-claim by the city.
In the lawsuit, filed February 16 at the Presque Isle County clerk’s office, F & V alleges a breach of contract by the city. They say the city has not paid the final amounts owed, a retainage, or for extra work performed on the project, which required the installation of sewer laterals and restoration work for property owners.
In the city’s counter-claim, attorney Thomas M. Keranen of Bloomfield Hills, who was hired in anticipation of the F & V lawsuit being filed, called the allegations baseless and untrue.
F & V IS asking for damages in the amount of $324,133 from the city, together with an award for the loss of productivity, efficiency, and profit. F & V also is seeking its costs to litigate the case.
The city claims that, as of March 1, F & V has failed to complete the work required in the contract. A punch list of incomplete, or improper work, was provided to the company, but the job was not finished, while the company claims the project is done.
The counter claim from the city states “The city has suffered damages, including, but not limited to, delays in the completion of the project, resulting in higher costs to the city for the administration of the work…(and a) “possible partial loss of its grant to pay the project, because of F & V’s failure to complete the project on time…”
The city is seeking $25,000, along with costs and interest for attorney fees.
THE CONTRACT called for construction of 37,000 feet of sanitary sewer laterals in the city, along with related work. The initial estimate was $885,340.
F & V lawsuit claims there were extra costs in the amount of $198,224, “for which Onaway is responsible.”
Attorney Steve Hilger of Grand Rapids, who is representing F & V in the case, said the city failed to uphold terms of the contract by not providing timely inspections or accurate information.
F & V says there were mismarked connections, changes in the layout that were not marked on the original plan, and there was unanticipated rock which needed to be excavated.
“The city of Onaway provided many inaccurate boring logs,” the lawsuit states. “Almost all of the borings showed that the project would be construction in sand, gravel or clay in depths of 10 feet, without groundwater.
“F & V found that nearly half of the village had bedrock shallower than five feet. Excavation of bedrock was not anticipated and contributed to a major loss of productivity.”
HILGER STATES that this “contributed to a substantial loss of productivity and loss of efficiency on this project, greatly increasing the overhead and other costs to F & V.”
Keranen said F & V didn’t provide written notices of differing site conditions to the city as required under the terms of the contract.
The city also denies allegations that boring information was inaccurate.
“The geotechnical information clearly indicated the presence of underground water and rock, including cobbles,” the counter-claim states.
In regard to the restoration work, which resulted in many complaints from city residents, city officials were expecting the restoration of property owners to “be at, or better” than when the company installed the latera
Hilger said, when city crews went to make lateral connections to homes, it was city crews that damaged areas where grass seed had been planted.
KERANEN SAID the city has another matter to be concerned with, that is addressed in the counter claim, as the city is “aware of multiple claims by F & V job creditors, who allege they have not been timely paid for work performed on the project.”