DISCLAIMER

06-0867R


RESOLUTION APPROVING SETTLEMENT OF CLAIM BY STACK BROS. MECHANICAL CONTRACTORS, INC., AND AGAINST CITY OF DULUTH IN THE AMOUNT OF $28,109.50.

BY COUNCILOR STOVER:

     RESOLVED, that the proper city officials are authorized to settle the claim by Stack Bros. Mechanical Contractors, Inc., and against city of Duluth, in the amount of $28,109.50, and execute all documents required to implement such settlement, arising out of an action filed in the St. Louis County District Court and entitled Stack Bros. Mechanical Contractors, Inc. v City of Duluth, Court File No. 69DU-CV-06-1685, funds payable from City Project No. 03-0559-19553, subject to the following terms and conditions:

     (a)  Except as expressly provided in the settlement agreement as provided below, Stack Bros. Mechanical Contractors, Inc., waives any claim for additional compensation on City Project No. 03-0559-19553 and shall execute a dismissal of its claims against the City of Duluth; said dismissal shall be with prejudice;

     (b)  City of Duluth shall execute a dismissal of it counter-claim for liquidated damages against Stack Bros. Mechanical Contractors, Inc.; said dismissal shall be with prejudice;

     (c)  City of Duluth shall release the contract retainage on City Project No. 03-0559-19553; said amount is $18,415.75;

     (d)  On City Project No. 03-0559-10553, city of Duluth shall pay the remaining balance of Change Order No. 3 in the amount of $3,800; said funds to be paid from the project fund, Fund 540, Steam District No. 1;

     (e)  On City Project No. 03-0559-10553, city of Duluth shall process and pay Change Order No. 10 for costs associated with use of rock reamer in the amount of $5,893.75; said funds to be paid from the project fund, Fund 540, Steam District No. 1;

     (f)  Each party shall be responsible for its own costs, disbursements and attorney fees.


STATEMENT OF PURPOSE:  This resolution approves the settlement of a claim that involves a construction dispute between the city of Duluth and Stack Bros. Mechanical Contractors, Inc. The project at issue was a Duluth Steam District cooling project. The specific dispute involved additional excavation expense incurred as a result of encountering subsurface rock conditions. Stack Bros. claimed that the condition was old demolition debris and building foundations and constituted a changed condition justifying additional compensation. The City claimed that the condition was not demolition debris but rock conditions which could have been reasonably anticipated and that the additional costs were a result of the drilling contractor’s failure to have available the proper equipment. Because of the subsurface condition the contractor required additional time to complete the project. As a result of this additional time the city incurred additional engineering fees. The city imposed liquidated damages of $14,106.25 and did not release contract retainage. Stack Bros. then commenced this action seeking damages in the amount of $74,611.15. The city counter-claimed for its liquidated damages in the amount of $20,000. This settlement resolves all claims for additional compensation and the city’s claim for liquidated damages and authorizes the release of contract retainage.