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Buildings
Mold Fix Puts Expensive End To School District Legal Battle
(enr.construction.com - 7/07/03 issue)
By Richard
Korman
A long legal struggle between contractors
and a school district near Fresno, Calif., has come to a costly
end as an extensive mold abatement project begins this summer
at a 10-year-old high school complex. The work follows discovery
of the mold in 2000 and an $8.2-million settlement last fall
that roughly doubled the value of a defects claim against
the contractors, according to sources involved with the case.
The insurers for 13 contractors and suppliers subsequently
decided to settle.
The fighting started after the $30-million
Buchanan High School complex opened in 1993. The project's
general contractor, Lewis C. Nelson & Sons, Selma, filed
an acceleration claim against the Clovis Unified School District
in Merced County Superior Court in 1995. After a jury trial
in 1998, the court entered a $1.02-million judgment against
the district. Another $645,000 covered fees and costs.
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| BREATHE
DEEP District shut down high school complex for
a week two years ago. |
The school district had filed a counterclaim
for about $2 million against Nelson and its subcontractors
for defective work, mainly for water intrusion through the
walls and window frames of the multibuilding school complex.
Its buildings have plaster-covered tilt-up panels. At that
point, the contractors' insurers preferred not to settle,
says a source familiar with the case. The lead insurer, United
National In-surance Co., Bala Cynwyd, Pa., could not be reached
for comment.
But as the school district prepared
its defect claim in the discovery phase, some consultants
discovered mold in the walls. Alarmed district officials decided
to close the school for a week in September 2000, while scientists
conducted tests. The three types of mold found in the school
"pose potential health hazards" under some conditions,
the district reported. When no immediate danger was found
Buchanan's 2,640 students returned to classes.
At that point, the school district added
a new lawyer to the legal team, San Diego-based McGregor &
Garrie. It has extensive experience in building defect and
mold cases. In the spring, the school district filed an amended
complaint. The cost of any repairs was increasing quickly,
but could not be set in stone, sources say. Roger Oraze, the
school district's assistant superintendent for facility services,
says settlement terms prohibit the parties from commenting.
Meanwhile, the school district succeeded
in overturning the contractor's acceleration award, and its
petition to the California Supreme Court was turned down on
Sept. 26, 2001. Last November, insurers for the contractors
and the school district reached the terms of a settlement.
Insurers for Nelson and for Pierce Lathing Co., the plaster
subcontractor, were assigned $2.2 million and $2.3 million
of liability, respectively. Window and sheeting metal contractors
also ended up with million-dollar-plus liabilities under the
settlement.
Oraze says there had been no claims
of allergy by any students. During the abatement involving
various contractors, buildings will be encapsulated with plastic
sheeting, and stucco and plaster will be peeled away so any
mold can be removed. Work will continue until June 2004, forcing
students to use portable classrooms.
Sources familiar with the firms involved
consider the case "a real sad story for the contractors."
They suggest that water intrusion could have come from faulty
maintenance. "Mold became a rallying cry, and the insurers
became nervous," says one observer. "There's more
mold in the air outside than in the school."
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