Collar City agrees to settle claim

Demolition firm took legal action against Troy

TROY, N.Y. » The City Council opted to pay a demolition contractor $120,467 more than was initially agreed upon to settle a legal dispute brought against the city.

“The Spring Avenue Bridge needed to be demolished,” said Corporation Council James Caruso at Finance Committee meeting Thursday. “We had a contractor to do it. During the course of the demolition of the bridge, they claimed there was an additional amount of asbestos they didn’t know about. They brought an action against the city of Troy.”

He said the action was vigorously defended by attorney Richard Morrissey acting on behalf of the city.

“Mr. Morrissey has worked feverishly on what I believe to be, and what I think the (City Council) will agree to be, an extremely reasonable and good settlement on behalf of the city of Troy,” said Caruso.

He asked that the Finance Committee enter an executive session to discuss the matter, despite most of the situation being laid out in a memo available to board members and the public. Caruso said he and the committee would need to discuss things that would put the city at a disad- vantage were it to be talked about in open session.

The committee did enter executive session. During the regular City Council meeting, the council voted to accept corporation council’s recommendation.

According to the memo, in 2014 the city entered into a contract with Apollo Dismantling Services, LLC, to demolish the Spring Avenue Bridge for $282,900. At some point, both parties agreed more money, $14,000, would be needed, raising the total cost to $296,900.

The City has only paid Apollo $124,700. The work was completed in August 2014. Apollo filed a lawsuit one year later, accusing the city of breaching the contract by not giving proper notice of “the asbestos condition of the entire bridge surface,” and “by requiring material changes in the manner and method of demolition without issuing a change order for “additional work allegedly required and performed, including such items as additional time, materials, air monitoring, safety requirements, and other handling and disposal expenses necessitated by the additional asbestos.”

Apollo wanted $745,339 in damages.

“Discovery and informal mediation have concluded. Settlement appears advisable as a practical business decision,” reads the memo. “Our own project engineers testified in depositions that Apollo performed work for which it had not been paid and that it was entitled to some undecided amount of additional compensation for extra work.”

The dispute centers around documentation and the correct method of calculating the value of the work Apollo says it’s owed for.

“If the case goes to trial, a finding of liability for some amount of the damages claimed seems extremely likely, plus almost four years of interest on that amount compounding at 9 percent per year,” reads the memo.

Under the proposed settlement, the case would be dismissed and the revised amount would be $417,367, or $120,467 more than what was initially agreed.

“The City shall receive credit for the prior payment, and upon

approval of the Change Order by the state Department of Transportation, shall pay an additional $292,667 in full satisfaction of the contract and all of Plaintiff’s claims,” reads the memo.

Each party will pay for its own attorney fees.

The city can still seek reimbursement from the state Department of Transportation for between 85 percent and 95 percent of the project cost.

“The reimbursement for the Settlement/Change Order ranges from $234,133.60 at 80 percent to $278,033.65 at 95 percent,” reads the memo. “The Comptroller will of course seek the greatest reimbursement possible.”

The memo states that the recommendation to settle is a financial one at heart, given that taking the matter to trial could be quite a bit more expensive.

Council President Carmella Mantello said the council would like more notice from the city administration regarding large settlements such as these.