The company building a new $10 million sewage treatment plant for the Cortez Sanitation District is suing the district and the engineering firm that designed the project for nearly $2 million more.
The third amended complaint of the lawsuit was filed in district court April 21, and the case is set for trial next summer unless a settlement is reached.
RMCI of Colorado Inc. is alleging breach of contract by the district, charging that it refused to approve necessary change orders regarding the design and construction of the aereation basins and other aspects of the project.
According to court documents, RMCI had asked the district board to pay for additional expense the company says it incurred to correct problems created by soil conditions that allegedly were not described accurately in the soil study. The company also asked the board to extend the completion date by 160 days, but the board refused both requests, based on the engineer’s recommendation.
The engineering company, Denver-based Richard Arber Associates, Inc., is also being sued for alleged negligence and misrepresentation, according to the complaint, and for trying to intimidate RMCI into withdrawing its request for the change orders.
“The engineer had duties to the contractor to not misrepresent the conditions to be encountered,” states the complaint, which accuses Arber of “failing and refusing to disclose known concealed subsurface (soil) conditions.”
In answer to this charge, Aber contends that RMCI “knew the soil conditions that would be encountered in the excavation of the aeration basins.”
The complaint also alleges that offensive behavior by Arber’s inspector toward RMCI employees created a “hostile work environment.”
Those “áctivities included but were not limited to making sexually suggestive comments and gestures to RMCI employees,” the complaint alleges. The inspector, who was not named in the complaint, is also accused of “inappropriate conduct such as singing war chants and doing rain dances directed at RMCI’s Native American employees.”
The lawsuit also alleges that the engineer threatened to “get” the contractor unless it withdrew its request for the change orders. It claims the engineer also threatened to withhold approval and recommendations for payment and to increase the level of scrutiny by inspectors.
In its answer to the complaint, Arber flatly denied these allegations.
Although construction of the new treatment plant, located on South Broadway adjacent to the current facility, is proceeding, it is way behind schedule. The plant is not expected to be up and running until next April, according to Bob Diederich, president of the district board. The original projected completion date was March of this year.
Diederich said he could not comment on the litigation itself.
The attorney representing the district, Mark Gruskin in Denver, said the district “is vigorously contesting the claims asserted by RMCI.”
He declined to go into specifics, however, and would not comment on the possibility of a countersuit.
“My concern to keep the litigation issues in court and let the (court) papers speak for themselves,” Gruskin said. The matter is at a very early stage, he added, and no discovery (release of evidence to both sides) has occurred yet.
“The project is still ongoing, so we anticipate there will be additional claims and counterclaims,” he said.
Gruskin said the cause of the project’s construction delay “is a matter that is in dispute in litigation.”
The attorney for the plaintiff, Daniel Gregory in Durango, did not return a phone call from the Free Press.
RMCI alleges that construction plans for the aeration basin – a 16,000-square-foot pond that helps purify waste water by exposing it to air and sunlight – didn’t accurately describe the soil conditions underneath, and required a compaction that was impossible to attain in the “loose, wet, soft unstable soil.” The basin’s poor design then resulted in a failure of its sloped walls that cost more than $1 million to repair, the company claims in the complaint.
RMCI alleges the geotechnical report did not provide soil properties and physical properties in the aereation basins to the required depth of excavation.
Construction began in January 2003. According to the complaint, the next month, RMCI discovered the unexpected soil conditions and asked for written directions on how to proceed. The engineer did not give a written response, the company alleges.
In March 2003, RMCI experienced severe slope failure during excavation of the aereation basins, the complaint states. It had to perform emergency work to make sure the existing sewage facility remained secure and operational, the company maintains.
“As a result of differing site conditions encountered at the bottom of the aeration basins, and lack of any prompt, written decision by the engineer, a slope failure of the side wall of the aeration basins occured, resulting in the contractor having to perform certain emergency work,” RMCI states in its complaint.
They flattened the angle of the slope but it failed anyway, according to court documents.
RMCI also charges that Richard Arber Associates was negligent in creating contract documents that required unattainable compaction of the excavation basins to 95 percent, and that the angle of the side walls that was insufficient given the soil conditions.
One allegation of misrepresentation regards RMCI’s assertion that the engineer claimed standard compacting equipment could be used to firm up the soil under the basins rather than expensive specialized equipment.
The construction contract was entered into in November 2002 and work was to be completed in 480 days, or by March of this year, according to the contract. After that time, the company is liable for a $1,000-a-day penalty under the contract.
In its answer to the complaint, the sanitation district denies there were differing site conditions and inadequate design.
“We believe that the district has followed its contractual responsibilities,” Gruskin maintained.
“The board for the district is very respectful of their obligations to their constituents and they’re trying to act with the best interests of the district in mind.”
Other unexpected expenses the company is trying to recoup include nearly a half-million dollars for changing the location a building and some equipment because it wasn’t possible to build it where the plan specified, and for several smaller items that so far add up to more than $100,000.
The new treatment plant was approved by district voters in May 2000 because the old plant was nearing capacity. However, Diederich said the aging facility will be able to handle the delay.
“Oh, yeah, it’s still putting along,” Diederich said. “There’s no problem there.”