RETAILERS AND OTHERS WHO CLAIM LOSSES TAKE LEGAL ACTION BEFORE TWO-YEAR CUTOFF
Sinkhole lawsuits land with anniversary
More companies alleging financial damages after the 2016 downtown sinkhole have filed lawsuits in the days leading up to the second anniversary of the debacle on Rideau Street.
It’s a move that protects their legal rights as they pursue compensation.
Forever 21, a major clothing retailer in the Rideau Centre, is seeking $250,000 for lost profits because it had to evacuate on June 8, 2016, and was “unable to reopen for a period of time.”
In a separate lawsuit, Indigo is claiming $100,000 in damages because of lost revenue after the sinkhole opened in front of the Chapters store. According to the lawsuit, the bookstore stopped all operations until June 11, 2016, and operated at a “reduced capacity” between June 11 and June 30, 2016.
Ottawa Rental and Supply and Fernandino Hair Salon are plaintiffs in another lawsuit, claiming $150,000.
The rental company had rented a boom lift to Verval Construction in May 2016. The machine had been parked at Rideau Street and Sussex Drive when the gaping sinkhole opened in the road. The lift ended up in the hole and couldn’t be saved, the lawsuit says.
The Fernandino salon in the Rideau Centre had to evacuate. The water supply was off and the salon couldn’t operate for 12 days, the lawsuit says.
The two-year anniversary of the sinkhole is an important date from a legal perspective. The Ontario Limitations Act generally doesn’t allow claims after the second anniversary of the day on which damage is alleged to have happened.
Three lawsuits were filed just days ahead of the June 8 anniversary. Filing lawsuits protects the plaintiffs’ legal rights if the claims require full-blown trials.
According to the city, it was notified of potential legal claims but has been served with two so far: the Forever 21 claim, and another $3-million claim from Viking Rideau Corp., Cadillac Fairview Corp. and ONTREA Inc.
The city declined further comment Tuesday because these are court matters now.
The Rideau Transit Group, which is also named as a defendant in the lawsuits, also declined to comment.
Several of RTG’s subcontractors are named as co-defendants in the Indigo, Ottawa Rental and Supply and Fernandino lawsuits.
A study commissioned by the city has determined LRT tunnelling work contributed to the sinkhole.
The city crafted the $2.1-billion LRT contract so that the builder assumed the risk of construction. In the city’s view, the contract is a fixed-price deal and any cost overruns are the responsibility of the builder.
Businesses around Rideau Street in the area of the mall were marooned because traffic was completely cut off by the sinkhole. Rideau Street didn’t fully open to buses and pedestrians until Dec. 15, 2016.
The city reported in early 2017 that it received 32 claims for compensation directly from businesses and property owners affected by the sinkhole. The city sent those claims, in addition to its own $2.2-million sinkhole-related claim, to a project insurer.
The sinkhole has been cited as the main reason for the delay in completing the LRT project. RTG was originally scheduled to deliver the transit system to the city on May 24, 2018, but they have since pushed the deadline to Nov. 2.
The city and RTG are at odds over who will pay for the delay, including the extra costs tied to the sinkhole.
There was no update Tuesday on the negotiations between the city and RTG. The city’s head of transportation, John Manconi, said those talks continue.
Councillors have learned the bus detours cost $1.9 million each month. The projected ridership increase at mid-year would have brought in $1.83 million in extra revenue.
Who pays to settle the legal claims could also become part of the negotiations.