Woodward Middle School - Settlement of shoddy construction Lawsuit (Bainbridge Island, WA )

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03/16/2002

Woodward settlement: $3.5 million

By JOHN WALDO/ Staff Writer

With trial set to begin next week, the Bainbridge Island School District

reached a last-minute settlement Thursday with the final defendant in a

lawsuit over shoddy construction at Woodward Middle School.

The settlement, by which the district will receive about $3.5 million, will

be enough to repair the water-damaged building and pay for the costs of

litigation, school board member Bruce Weiland said Friday.

" This is a huge win for Bainbridge Island, " Weiland said. " We realized three

years ago that the building had some serious problems, and made the decision

to make those responsible pay. "

When the district filed suit in 1999, it estimated that repair costs could

reach $5.4 million. The settlement number is lower, Weiland said, because

some problems turned out not to be as severe as originally feared, and

because the economic slowdown has created a better climate for construction

work.

Repairs will begin this summer, district Superintendent Steve Rowley said

Friday.

" We hope to send the work out to bid in April, award the contract in May and

begin in early to mid-June, " Rowley said.

He said crews will begin doing exterior work even before school lets out for

the year, and hopes the job can be completed by the start of school in the

fall.

Repair work will involve removing and rebuilding exterior walls in the

school's classroom wing, and replacing windows.

The school was completed in 1994 at a cost of $10.7 million, but by 1997,

extensive mold growth was discovered in some walls. Investigation showed

that the school's outer " envelope " leaked badly, allowing moisture to

infiltrate between outer and inner walls.

One wing where air quality posed a health hazard was closed and rebuilt in

1998 at a cost of $1.1 million. Repairs on the rest of the building were

delayed until the district could recover costs from those responsible for

the faulty construction.

After repeated attempts at mediation failed, the district sued Northwest

Architectural Company, the project architect; Merit Construction Co., the

general contractor; and URS Consultants, the project manager. Merit, in

turn, sued several of its subcontractors.

The bulk of the settlement money - more than $2.5 million - will come from

Merit and the insurers for Dunham Glass, a now-defunct company that

installed the windows.

The exact breakdown of payments between them depends on certain final

accounting calculations, Weiland said, but those will not affect the

district's total recovery.

The architect will pay some $600,000, the project manager $330,000 and a

roofing company will pay just under $60,000, Weiland said.

The first settlement came in late 2001, when project manager URS agreed not

only to pay a portion of the damages but to serve as a witness for the

district at trial.

The architects settled in January, and Merit Construction settled last week.

The holdout was Safeco Insurance, the insurers for Dunham Glass, who settled

Thursday.

Rowley said the district is " confident " the money from the settlement will

pay for all costs of repair and all money spent to date on repairs and on

the case - and that there might be money left over.

" We might find sections that don't need to be rebuilt, " he said.

Because of the legal separation between capital funds and operating funds,

though, no surplus money could go towards any potential shortage in the

district's operating budget.

" If there are any excess dollars, it gives us more to put away into our

capital reserve account, which is getting pretty low, " Weiland said.

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