Closed Session ColtecCounty of Monroe
The Florida Keys
Robert B. Shillinger, County Attorney**
Pedro J. Mercado, Assistant County Attorney **
Cynthia L. Hall, Assistant County Attorney **
Christine Limbert-Barrows, Assistant County Attorney **
Derek V. Howard, Assistant County Attorney**
Steven T. Williams, Assistant County Attorney**
Peter H. Morris, Assistant County Attorney
Patricia Eables, Assistant County Attorney
Chris Ambrosio, Assistant County Attorney
** Board Certified in City, County & Local Govt. Law
May 25, 2017
Kevin Madok, Clerk of the Circuit Court
Sixteenth Judicial Circuit, State of Florida
Monroe County Courthouse
500 Whitehead Street
Key West, FL 33040
In Re: Coltec Engineering
Dear Mr. Madok:
BOARD OF COUNTY COMMISSIONERS
Mayor George Neugent, District 2
Mayor Pro Tern David Rice, District 4
Danny L. Kolhage, District 1
Heather Carruthers, District 3
Sylvia J. Murphy, District 5
Office of the County Attorney
I I I l 12`h Street, Suite 408
Key West, FL 33040
(305) 292-3470 — Phone
(305) 292-3516 — Fax
Please find enclosed herewith the transcript of the November 20, 2002 closed attorney/client
session of the Monroe County Board of County Commissioners regarding the above -
referenced matter. Under F.S. 286.011(8), the transcript may be part of the public record
because the litigation has concluded.
Thank you for your assistance with this matter. Please contact me should you have any
questions.
Sincerely,
R ert B. S411inger
Monroe County Attorney
Enclosure
Y
MONROE COUNTY BOARD OF COUNTY COMMISSIONERS
CLOSED SESSION
COLTEC ENGINEERING
APPEARANCES:
DIXIE SPEHAR, MAYOR
MURRAY NELSON, COMMISSINER
GEORGE NEUGENT, COMMISSIONER
DAVID RICE, COMMISSIONER
JAMES ROBERTS, COUNTY ADMINISTRATOR
JAMES HENDRICK, ESQ., COUNTY ATTORNEY
IRA LIBANOFF, ESQ., SPECIAL COUNTY ATTORNEY
Key Largo Library
101485 Overseas Highway
Key Largo, FL
Wednesday, November 20, 2002
6:25 p.m. - 6:45 p.m.
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MAYOR SPEHAR: We are now in session. This is
a closed session. And do you -- who is staff?
MR. HENDRICK: I think we have to acknowledge
first of all who is present. And for the record there
is Mayor Spehar, Commissioner Rice, Commissioner
Neugent and Commissioner Nelson, special counsel for
the county in this case is Ira Libanoff; James
Hendrick, county attorney; and James Roberts, county
administrator and of course the court reporter.
This is called to discuss the case of Coltec
Engineering versus Monroe County. Ira has been doing
an excellent job for us in our construction
litigation. I think we can wrap up fairly quickly. I
will tell you that right now we are involved in so
much construction litigation that it is running our
budget extremely fast. So I would hope that you give
special consideration to this proposed settlement
which I believe is supported by staff.
MR. LIBANOFF: First of all, let me tell you it
is nice to meet all of you. I have had the pleasure
as well as the privilege of representing the county
for a little over three years now. I appreciate the
time that staff gives to us and I'm happy to be here.
This particular case, just real briefly, there
was a separate contract that was awarded by the county
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to Coltec Engineering to construct a chiller plant in
connection with the courthouse renovations and there
was a dispute right at the end. Coltec was claiming
that they were owed, their lawsuit was filed for
$160,000. But that did not -- essentially there was
almost, like a cross payment. Right at the time they
filed the lawsuit there was a $72,000 payment that was
made, of release of retainage which at that time the
total amount county recognized being owed was
approximately $100,000. It left a balance of, to be
exact, $28,260 at this time. But Coltec was claiming
extras of $56,549.17, which would make their total
claim just under $85,000.
The staff's position is that the claim, the
extras are now not warranted, they are not entitled.
First of all they are not in the form of written
change orders which the board would have to approve.
Some of the work I think was done. We analyzed it and
they did do some extra work. The big issue at the end
with respect to the withholding of the 28,000 for
retainage was that the contract included a requirement
for Coltec to require maintenance for a one year
period of time. And Coltec did not do that. The
county had to engage York International to provide
some maintenance work on the chillers that Coltec
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provided at a cost of approximately $9600. Under the
contract the county was entitled to triple the amount
of its expenditure as a hold back until all issues
were resolved. That's why $28,260 was held back. The
amount that would be available or approved for payment
right now after the reduction of the payment to York
International would be $18,840. Of the extras the
county staff has agreed to $12,971. So the amount
that staff says going into the lawsuit would be owed
would be $31,811. The difference is approximately
$56,000. Plus they have a claim for costs, interests
and attorneys fees.
The attorney for Coltec, we have had settlement
discussions of course, and they have come back and
said they would accept $57,500 which if you do the
math is exactly halfway between their amount that they
are claiming and the amount that the staff indicates
as being owed. We have analyzed the case. I think
that we would have a good argument to go forward.
However as you all probably know from litigation,
nothing is a certainty. Therefore given that they are
willing to compromise what is exactly 50 percent and
the fact that by virtue of the bill you approved a
little while ago with respect to my firm's fees in the
Lodge Construction matter, attorney fees mount up
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pretty quickly.
It is our recommendation the case be settled
for that amount which is $56,500. I'm happy to answer
any questions.
MAYOR SPEHAR: Is there any discussion? Would
you like to make a motion?
MR. HENDRICK: This is a cautionary tale that
when you get in construction projects, this is one of
those nasty little things you never really budget for.
We have had a run of unfortunate circumstances with
people coming down here and not realizing they are in
the Keys and they are in a different world and
inevitably having construction disputes and demands
for extras. A lot of my budget this year - I say my
budget, the county attorney litigation budget - has
gone to this litigation, not just Coltec, but Ravell
and Lodge Construction. So it's something that we
always have to bear in mind when we look at these
projects. But I would recommend that you take
counsel's advice.
Ira's firm does practically nothing but
construction litigation. We have litigated against
each other some years ago. I have quite a bit of
respect for his firm and I think you should take his
recommendation.
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COMMISSIONER NEUGENT: Jim, what, and it's kind
of late in the day, maybe I'm not using the right
words, what didn't we do right to document, to protect
ourselves in arriving at this point?
MR. HENDRICK: I think part of the problem, and
Ira can probably explicate on this more, we have, as
most contracts do, change order provisions. Some of
the personnel we have had in the past have been a
little bit loose. They say go ahead with the work and
then the work gets done but never gets documented
properly. Ira why don't you give us --
MR. LIBANOFF: It's not just Monroe County. I
will tell you that happens in most public contracting
situations where you have project management type
people that know that something is not included in the
plans or specifications, they say yes okay, they give
a verbal go ahead. They may even initial something
directing the contractor to perform extra work.
The law from the Supreme Court basically says
that's not sufficient. If you don't have a signed
written change order approved by the county commission
or board or whatever it might be, you have nothing in
essence. However there is also a lot of case law out
there that gives contractors the right to claim for --
quote unquote -- equitable adjustment, where you don't
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necessarily need a signed written change order to get
paid for doing extra work. If something were required
as a result of the code requirement or some public
entity that has inspection responsibilities or
something that is clear from the plans and
specifications it is not included, you had to do it in
order to move on to the next part of the work that
wasn't approved. All of these are situations that are
addressed in the cases that say even if you don't have
the signed change order you can still get paid for
this work.
So I don't know if it's a question of not doing
something right. We struggle with this all the time.
But the practicality of the situation is if all of the
contractors waited for each change order item to come
before you to do the work that's addressed by them,
none of your projects would ever get done in any type
of timely fashion. So there's a little bit of give
and take that goes on in the field of construction.
When you know that you have an architect and/or an
engineer and the staff and everyone supporting it and
they tell you "Don't worry the commission will
ultimately approve it," the work gets done.
This particular case, some of this extra work
came to the county staff and it was specifically
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rejected as not being extra work of the contract.
That's why I think Coltec, we are coming here saying
we'll waive interests and attorneys fees but we want
every bit of our $86,000. My recommendation would be
to you, I think we got tremendous defenses to many of
their claims, but since they are prepared to
compromise and the number I gave you also does not
include any interest, costs or attorney fees, their
actual claim at this point, I spoke to the attorney
this morning, is in excess of $100,000 at this point
if they were to prevail on everything.
COMMISSIONER NEUGENT: However, if we had let's
say -- and obviously they think they provided
something outside of the limits of the contract that
they should be reimbursed for.
MR. LIBANOFF: Yes.
COMMISSIONER NEUGENT: Jim, don't we have an
engineer or someone who can say where you can make a
judgment decision, it's just like Ira said we just
approved a check for $46,000, and evaluate what legal
fees are going to cost and what services they may have
provided that might have been in a gray area, whether
it was in the contract or not, to try to keep us out
of these situations?
MR. HENDRICK: Let me be very blunt. Our
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architect on this project isn't there. This is a Jose
project. He's transitioned himself out of the county.
He still comes before you and gives you regular
reports. I don't want to put Ira on the spot, but I
think the services we were getting from our architect
were not what we would expect. When he had Stephanie
on his staff things got done. When she came over to
the county and he was essentially trying to make due
with whatever skeletal staff he has there, things fell
through the cracks. I may be being unkind to him in
this case but --
MR. LIBANOFF: I think you're being very kind
but that's my view. The whole reason there is a
separate contract for this work and that it wasn't
included in the original contract is because the plans
and specifications for this work were not completed at
the time that you let the contract to Ravell
Construction to do this work to begin with. And
that's part of the issue we are dealing with in the
Ravell litigation. If you recall, there was
interruption in their work while this work was
ongoing.
COMMISSIONER NELSON: I think really we are
beating a dead horse. It has been my experience on
the issues, you go before a judge, he usually tries to
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weigh the baby. He takes what is owed or not owed the
claimant and the defendant, splits it in the middle
and that's what the judgment is. So for us to, if we
have a situation where we don't have an architect who
is going to respond for us in a manner that is not
going to run up additional attorney fees, gentlemen I
just don't see why --
COMMISSIONER NEUGENT: I agree Murray. But my
point being is that if we could, if Jim is correct in
saying that these cases are escalating and growing in
number, then it would almost, in my mind, warrant
someone that would have some oversight into, before we
get into litigation, what should we pay these folks.
MAYOR SPEHAR: May I ask this. Were we not
also part of the error here, in fact that it was not
in the architect's drawings and the original request
for proposal but then we kind of let it slide and did
not address it until later, so we have been a part of
this.
MR. HENDRICK: I don't think it can be said
that the county is without fault here. Bear in mind
we had some unusual circumstances with construction
management. We had Bill Bible. I'm not sure if he's
in or out of custody right now. Bill had his
difficulties. Then we had another gentleman who came
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along, who had marital and other problems and left us.
Now we have Stephanie. I have to say I think she is
very diligent and doing a good job. She is very
attentive to the details. She reminds me of Karen
Cabanas in a way. She's a tiger. She really goes
after -- COMMISSIONER NEUGENT: I
sat in some of the meetings in Marathon and I think
staff does an excellent job and very conscientious
about dotting their is and crossing their is and
making sure that -- I've seen them drag Bert Bender
across the rail.
COMMISSIONER NELSON: Motion to accept the
settlement.
COMMISSIONER NEUGENT: Second.
MAYOR SPEHAR: Motion by Commissioner Nelson.
Second by Commissioner Neugent. Is there any
discussion? Do we need to do a roll for the record?
MR. HENDRICK: No. I think we have a unanimous
vote here.
MAYOR SPEHAR: Unanimous vote.
MR. ROBERTS: Raise one issue now that we have
decided. This architect will be completing the
Judicial Center and also the renovation to the current
court building, the annex. Staff is very concerned
that given the kind of service we are getting he
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continue with that. I think we need to have some
discussions, we have had some Jim previously about
whether he should continue on as the architect. I
guess there are a number of complications but it is
something we need to talk about.
MAYOR SPEHAR: Can we do it with the contract
he has now, because I asked that before. Could we
stop --
MR. HENDRICK: I think we probably have to --
at this point we are exceeding the scope of our closed
session if we did go into that subject.
MAYOR SPEHAR: Then item B.
MR. HENDRICK: Thank you Ira.
MR. LIBANOFF: May I inquire from a timing
standpoint, because I'm sure plaintiff's counsel will
be calling first thing tomorrow morning to find out
the results when they can expect the settlement
payment.
MR. HENDRICK: The check is in the mail.
MR. LIBANOFF: 30 days?
MR. HENDRICK: 30 days by all means.
MR. ROBERTS: The vote will take place in
public the third week in December and --
MR. LIBANOFF: Some time after that.
(Proceedings concluded)
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CERTIFICATE
I, KATHLEEN A. FEGERS, Registered Professional
Reporter, do hereby certify that I was authorized to and did
stenographically report the foregoing proceedings and that
the transcript is a true record.
Dated this 30th day of November, 2002.
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