In the world of construction, surely the lawsuit qualifies as one of the industry's never-changing constants. A reminder of this came earlier this month, when one of the Southeast's most well-known recent legal battles, Tampa Bay Water v. HDR Engineering, came to an official conclusion—just days after Miami Dade College filed suit against Ajax Building Corp. over issues related to a parking garage that collapsed last year.
On Oct. 21, Tampa Bay Water’s board of directors took their last official action related to the utility's lawsuit against HDR over cracking at a reservoir in Lithia, Fla., voting reluctantly, but unanimously, to go ahead and pay HDR’s legal fees and costs, estimated at about $21 million, as required by contract.
A press statement from Tampa Bay Water quoted the chairman of the utility's board, Susan Latvala: “While the outcome has fallen well short of our expectations and was not favorable for the agency, we firmly believe that trying to recoup the public’s investment through legal action was the right decision. We fought hard for what is right, and now we have to do what is in the best interest of the agency and the community to bring this chapter to a close.”
That decision to fight it out in court ended up proving costly, however. By rejecting a $30-million, mediator-approved settlement offer in 2011—after mistakenly announcing that it had approved the deal—Tampa Bay Water gambled that it would win at court, where it asked for an award that, if granted, would've equaled more than $140 million, according to estimates. The nearly month-long federal jury trial instead delivered a swift verdict in favor of HDR, along with a big legal bill for the utility. Adding up TBW's own reported legal expenses of nearly $12 million, HDR's $21-million tab, along with the $30 million the utility could've taken, and the result is a swing of roughly $63 million. (Then there's the $129-million price tag for the reservoir rebuild, which is currently under way.)
ENR opined on the verdict with this conclusion: "There's every reason to believe that the utility's board and Tampa Bay Water's legal team at all times sought the best for ratepayers. But unless ratepayers are empaneled on a jury, they don't get to vote on what caused reservoir cracks, how much and how extensive the repairs should be, and who is to blame and should pay. Even experts found it tough to determine exactly what caused the cracks. In retrospect, passing up the $30-million deal was an unwarranted gamble. One lesson of Tampa Bay Water v. HDR is never to gamble millions on a jury trial because all you may do is spend funds that boost the 'gross domestic legal product.'"
That sage advice is surely going unheeded, however. Case in point: On Oct. 8, Miami Dade College (MDC) filed suit for damages from general contractor Ajax Building Corp., its insurer and several subcontractors involved with the $22.5-million parking garage that collapsed while under construction last October, killing four workers.
MDC's suit states that “none of the defendants has undertaken to correct or complete the project or to compensate MDC.” Juan Mendieta, a spokesman for the college, adds that the school is seeking a “comprehensive solution” for the project, which has remained in limbo since the Oct. 10, 2012, incident.
Ajax countered with this statement from company president William Byrne: “We were recently notified by Miami Dade College that it has, unfortunately, chosen to take legal action against Ajax and other parties."
Adding that the firm is "extremely disappointed," Byrne went on to state that "Ajax has provided a reasonable and safe solution to rebuild the garage that was consistent with the builder's risk insurer's expert report."
And so the legal battle begins—again.
