Syracuse, NY -- A federal jury this week ordered the city of Syracuse to pay $7.31 million to a contractor who alleged it was underpaid for repair work performed on an underground city parking garage 11 years ago. The verdict, if it withstands an appeal, would be one of the largest, if not the largest, ever against the city, Syracuse...
Syracuse, NY -- A federal jury this week ordered the city of Syracuse to pay $7.31 million to a contractor who alleged it was underpaid for repair work performed on an underground city parking garage 11 years ago.
The verdict, if it withstands an appeal, would be one of the largest, if not the largest, ever against the city, Syracuse officials said Friday.
After a two-week trial, the eight-person jury in U.S. District Court in Syracuse found in favor of Illinois-based American Underground Engineering Inc., which accused the city of changing the scope of the work needed to repair the concrete and reinforcing steel in the MONY Plaza garage under Harrison Street and then refusing to pay the extra costs.
The jury determined that the company spent $10.76 million on the job and was entitled to a 15 percent profit, or $1.61 million, for a total of $12.37 million. It subtracted the $5.07 million the city paid American Underground and ordered the city to pay the company the balance owed, $7.31 million.
City Corporation Counsel Juanita Perez Williams said the city will appeal. “This really caught us by surprise,” she said. “It was our position that they walked off the job.”
The MONY insurance company gave the 630-car garage to the city in 1996 after an above-ground garage at the same plaza partially collapsed and the company demolished the rest of it.
The city contracted with American Underground in April 1998 to remove deteriorated concrete and corroded reinforcing steel in the garage for $5.83 million.
In August 1999, the administration of then-Mayor Roy Bernardi terminated its contract with American Underground, alleging the company had walked off the job a month earlier without having completed the repair work. The city later hired another contractor to complete the job, at a cost of more than $2 million.
In January 2000, the city sued American Underground for $2 million, saying it had breached its contract.
American Underground filed a counterclaim alleging that it could not finish the job because the city had changed the repair work and refused to pay for the extra cost. It said the city required more concrete to be removed than was originally specified. It also alleged that the city had given it inaccurate specifications and drawings.
The city denied the company’s claims. It said the company failed to comply with the contract’s specifications, making it difficult for American Underground to perform the repairs satisfactorily. In some cases, the city authorized the company to remove broken concrete in a manner different than was called for in the contract, but it never agreed to pay more for the work, the city said.
The administration of Mayor Matt Driscoll dropped the city’s claim against the company in April of last year, but American Underground continued to pursue its claims against the city.
Perez Williams, who became corporation counsel under Mayor Stephanie Miner in January, said the Driscoll administration apparently dropped the city’s claim because it expected to reach a settlement. No settlement was ever reached, however, and the company’s claims against the city were the only ones to go to the jury, she said.
Perez Williams said she became concerned when she learned that the city had dropped its claim without a settlement. “It’s a decision this administration would not have made,” she said.
If the verdict holds up on appeal, the city will have to borrow to pay the $7.31 million judgment, she said.
Joseph Camardo Jr. and Kevin Cox of the Camardo Law Firm in Auburn represented American Underground.
Contact Rick Moriarty at rmoriarty@syracuse.com or (315) 470-3148.