The Grand Forks City Council intends to discuss pending litigation against the city at its meeting Tuesday, Feb. 16.
Rice Lake Contracting Corp., a Crow Wing County-based contractor, filed a lawsuit against Grand Forks-based Construction Engineers - US, alleging that the Grand Forks company failed to pay Rice Wing Contracting about $1,065,994 for work done on the Grand Forks Regional Water Treatment Plant.
Late last month, Construction Engineers - US filed a counterclaim against Grand Forks. While Construction Engineers is the construction manager at risk of the project, it alleges that because it is hired and reimbursed by City Hall, the city is not yet legally off the hook.
Attorneys representing the three parties did not respond to interview requests on Monday, Dec. 15.
According to court documents, Rice Lake entered into a subcontractor agreement with Construction Engineers in December 2018 to provide labor, materials and services associated with installing concrete at the site. During the project, Construction Engineers asked Rice Lake to perform additional services on a time-and-materials basis, court documents state.
The lawsuit claims that Construction Engineers has not paid Rice Lake for the work that was completed. Rice Lake also alleges that it incurred "significant" damage remedying problems with the project that Rice Lake did not control and for which it was not at fault. Among other things, Rice Lake alleges that the design for the cast-in-place concrete tanks was defective and insufficient for the project.
It is suing Construction Engineers for breach of contract, breach of the implied warranty of design adequacy, violation of North Dakota Century Code and unjust enrichment. Damages of $75,000 have been requested.
According to the complaint, Grand Forks has reimbursed Construction Engineers for some or all of the work Rice Lake has done. But on Jan. 22, Construction Engineers filed a counterclaim against Grand Forks. Construction Engineers is asking a judge that, if she finds liability for Rice Lake's damages, Grand Forks be ordered to pay some or all of the judgement.
Construction Engineers claims that, as it is contracted and reimbursed by the city, its liability to Rice Lake would "at most be passive, indirect and secondary whereas the city’s liability would be active, direct and primary."
The counterclaim also notes that the project was designed by Advanced Engineering and Environmental Services Inc., and that the contract with the city states it can't be held responsible for the adequacy of the design.
The city of Grand Forks was summoned to court on Jan. 22 and has until March 23 to respond to the complaint. A scheduling conference has been set in the case for April 6.