Millers Creek Special Tax District hires new attorney to pursue litigation
In July, the Millers Creek Special Tax District board hired a new attorney to confront litigation in a contract dispute with the company it hired to dredge Millers Creek.
In March, DredgIt, a Texas-based dredging company cited the unknown nature of COVID-19 and walked off its job of removing sediment from Millers Creek. Unwilling to discuss the matter with the Millers Creek board, DredgIt subsequently hired a Jacksonville-based attorney to sue the Millers Creek Special Tax District board for standby fees and half of the demobilization cost of removing its dewatering equipment from a lot on the shore of the creek. The furious Millers Creek board decided to countersue for attorney fees as well as the cost of finishing the project, at least $336,000, the contracted cost to finish the job, which was only 40% complete when DredgIt decided to walk off the job site.
In one of four emergency board meetings held between June 15 and July 20, the Millers Creek board hired H. Keith Thomerson of Chartwell Law to handle the upcoming lawsuit against DredgIt. Thomerson, a litigation specialist, will represent the board not only in the lawsuit that was filed against the board by DredgIt, but also in its counter claim against the company.
The board still intends to retain the services of Wayne Flowers, an attorney with Lewis, Longman & Walker, P.A. for all matters not involved in the litigation.
When it signed the contract with DredgIt in September 2019, the board had purchased a performance bond from Suretec Insurance Company at a cost of $12,000. The bond was meant to ensure DredgIt would perform its work to completion and would pay any subcontractors it had hired to work on the creek.
Millers Creek President John Rowland said Flowers had heard back from Suretec in July regarding its claim. Suretec’s lawyer said it would wait until the lawsuit with DredgIt was decided in court before deciding whether it would settle the board’s claim. Thomerson will represent the board in any further communications with Suretec, Rowland said.
“They are making a stand in saying they don’t know who is at fault,” said Rowland. “They are trying to get out of paying us. They are saying they don’t know if they [DredgIt] had a valid reason [for defaulting on the contract.] Although we don’t see what the reason could be for the company that didn’t finish the project and then is suing us, we have a problem with it, that’s why we hired an attorney that specializes in dealing with bonding companies.”
By hiring Thomerson and still retaining Flowers, Rowland said the board was in the process of finding out “a more aggressive way” to go about fighting the litigation.
Since its regularly scheduled board meeting June 15 at Mudville Grille, Lance Young of Brance Diversified Inc. has done a survey of the creek to determine a benchmark of how much sediment had been removed by DredgIt. Although it has not yet done the work, Brance Diversified intends to do another survey to determine how much of the soil left to be dredged contains benzo(a)pyrene and would have to be removed to the Trail Ridge disposal site. DredgIt had specified that only 2,000 cubic yards of soil of the total 30,000 cubic yards in the entire project would be trucked to Trail Ridge.
The Millers Creek board is considering contracting with Brance Diversified to complete the project, which was left unfinished by DredgIt. It was hoping its policy with Suretec would cover the cost of the remaining work. Brance Diversified, Inc. was one of four companies that had originally bid on the work.
“We are trying to find out what the bonding company will come up with. Are they going to completely deny our claim and then we will have to adjust to that?” said Rowland. “If they deny our claim and we have to go ahead and pay for the dredge ourselves, we may hire Brance Diversified to finish what we can afford to pay for using what is left of our budget and then we will continue forward with the litigation,” he said. “The more we delay the project, the more it is going to cost us because, in the meantime, we are losing ground of what we have already dredged.”
In early March, DredgIt President Jared Mark had contacted former Millers Creek Board President Michelle Wright via phone and email saying he was suspending their job due to the unknown nature of COVID-19. Later DredgIt’s lawyer in Texas communicated that the company wished to be released from its contract. Soon after, Jacksonville attorney E. Lanny Russell of Smith, Hulsey & Busey contacted the board on DredgIt’s behalf, proposing if the board agreed to terminate the contract at no fault of DredgIt, it would drop “standby fees” of $250 an hour but still demand that Millers Creek residents pay half of the demobilization fee – $37,500 – to remove its equipment from the site.
The angry board decided to dispute the claim. In a letter written to DredgIt’s lawyer by Flowers, the board stated it had done nothing to prevent DredgIt from completing the job and countersued to have the dredging company pay all attorney’s fees for the tax district as well as $336,000, the cost of having another company finish the job. They also demanded liquidated damages due to a clause in the contract that states for every day DredgIt is late past the contract date of January 31, DredgIt would pay $450 a day as a penalty.
By Marcia Hodgson
Resident Community News
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