Fire district settles lawsuit

BY christian hill | THE OLYMPIAN • Published September 15, 2007

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The role change of the fire district from a co-defendant to a plaintiff "put us in a position of having to fight a battle over the contract that one of the parties in the contract wasn't interested in enforcing," said Kenneth Yalowitz, the attorney representing the architect.

It also exposed the TCF Architecture to possibly having to pay a multimillion-dollar judgment well above what its insurance could cover, he added.

Penner added there was a "very good prospect that the case was going up on appeal and continue for a significant period of time."

A surety bond was used to finish the project after Scott Wall Construction ran out of money for the project because of the extra costs. Contractors must secure a surety bond, usually from an insurance company, for the value of the project to ensure its completion.

With no bonding capacity, the company has been unable to work on anything but small construction projects since, said Scott Wall, its president.

"I'm pleased to be in a position to start moving forward with this company again," he said of the settlement. "... We took a huge hit, and we're carrying on."

Thomas Cook had continued to seek more than $100,000 in unpaid work from the fire district after it signed the pass-through agreement, but that claim was dismissed with the settlement.

The lawsuit stems from construction of three fire stations, a headquarters on Franz Street and stations on Mullen Road and Willamette Drive; expansion of a station on Steilacoom Road; and a new vehicle-repair shop. The district paid for the project using a portion of the $11.8 million in bond proceeds that voters approved in 2002.

The buildings opened in July 2005.

In the original lawsuit, Scott Wall Construction sought $6.9 million in damages for the extra cost and time it took to finish the project, and recovery of a $355,925 retainer used as an initial "good faith" payment.

In March, the fire district filed an amended complaint to reflect its new role as plaintiff in the lawsuit, seeking damages "in an amount to be proven at trial, but known to exceed the claims made by Scott Wall Construction."

Christian Hill covers the city of Lacey and military for The Olympian. He can be reached at 360-754-5427 or chill@theolympian.com.

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