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8/13/2013
City settles suit; will pay $825k

By ANDREW SHEELER

Daily News Staff Writer

The City of Ketchikan has agreed to pay Juneau-based Miller Construction Company $825,000 in a settlement of a 2012 lawsuit against the city.

Ketchikan Superior Court Judge William Carey accepted the agreement on July 10, according to court documents obtained by the Ketchikan Daily News. As part of the agreement, Carey barred Miller from making further claims in that case and dismissed the city’s counterclaims. He also decreed that both parties would pay their own legal fees.

The agreement ended a year-long lawsuit between the construction firm and the city over the city’s alleged failure to pay termination costs related to the Jackson and Monroe streets reconstruction project.

The City of Ketchikan put that contract out to bid on April 27, 2011, and accepted Miller Construction as the lowest bidder on May 17 of that year. Miller agreed to do the job for approximately $4.8 million and, according to the city’s counterclaim, promised to have the work done by Oct. 1, 2012.

The city’s rebuttal stated that "Miller’s performance was so poor" that by Oct. 24, 2011, the firm allegedly only had finished 20 percent of the project. The city also said the work did not meet city expectations. On April 16, 2012, the city terminated the contract and re-bid it, "at considerable expense," it said.

When the city did not pay Miller Construction the more than $956,000 the firm said it had incurred in termination costs, the firm sued the city for breach of contract and unjust enrichment.

The July 10 ruling awarded Miller Construction most of what it had asked for.

"I wasn’t satisfied, but it was prudent to make the settlement," Miller Construction President Terry Miller said Monday. "It wasn’t like it was lucrative for us."

Miller said that when the city pulled his company off the project, it caused financial difficulties for the firm, which had planned its budget around the $4-million contract and suddenly was short.

"It made a really tough 2012 for us," he said.

Though Miller said he felt the company was entitled to greater compensation, he said he recognized the uphill battle the company would face in a Ketchikan court with a jury that’s "all taxpayers."

City Mayor Lew Williams III said "nobody won" in the settlement, but that it would save both parties money by avoiding a costly court trial.

City Manager Karl Amylon referred all questions to Robert Blasco, the Juneau-based attorney who represented the city in the case. Blasco could not be reached for comment by deadline.