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Redfield, contractor in dispute over sewer work

  • Article by: DIRK LAMMERS
  • Associated Press
  • January 10, 2014 - 2:25 PM

SIOUX FALLS, S.D. — The South Dakota city of Redfield and a contractor are engaged in a legal battle over work done on a $757,000 storm and sanitary sewer project.

The Spink County community of about 2,400 residents entered a contract with Willmar, Minn.-based Quam Construction Co. in September 2012 for construction of the Shar-Winn Estates project.

Tom Vollbrecht, an attorney representing Quam, said the subsurface conditions of the site made it impossible to do the work.

"The way the engineer designed the project to be performed, it can't be performed," Vollbrecht said Friday.

Attorneys for the city, which sits about 40 miles south of Aberdeen, said it specifically disclosed to Quam that dewatering would be required. The city said the company never inspected the subsurface conditions at the site prior to its bid to determine what work was needed.

City attorney Paul Gillette did not immediately return a message seeking comment Friday afternoon.

Vollbrecht said if the company knew of the conditions upfront, it would not have bid the project.

Quam and the city of Redfield met last year for mediation that included two full-day sessions in Sioux Falls, but the two parties could not reach an agreement. Quam then asked U.S. District Judge Charles Kornmann to force arbitration. Kornmann denied that request, and this week the company appealed his decision to the 8th U.S. Circuit Court of Appeals.

The Redfield City Council rejected a settlement offer by Quam at an August meeting and declared the company in material breach of its contract with the city.

Earlier this month, the city also filed a federal suit against Liberty Mutual Insurance Co., which issued a performance bond for the project, asking that the insurer perform and complete the work under the contract.

Redfield's attorney said the city incurred dewatering costs of about $70,000, and Liberty Mutual is liable for any additional cost in completing the project under the performance guarantee.

Rich Angevine, a Liberty Mutual spokesman, said the company does not comment on matters in litigation.

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