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After the Board of County Commissioners of Collier County, FL filed a lawsuit on March 17, 2021 over the delayed completion of an airport terminal on Marco Island, contractor West Construction Inc. has submitted a motion to put the litigation on hold — alleging that the county has made no attempt to “mediate this matter in good faith,” as per the two parties’ contract.

Collier County’s lawsuit, filed against both West Construction and Pennsylvania’s Philadelphia Indemnity Insurance Company, seeks $1.2 million — on top of related costs and fees related to the Marco Island Executive Airport New Terminal Project after the project’s “substantial completion” was allegedly delayed by over a year and a half. 

According to the filing, “Despite being responsible for planning, organization, supervision, management, control and coordination of work performed on the project, [West Construction] continually failed to satisfy these responsibilities in breach of the agreement.”

West Construction received notice on April 30, 2018 that they could begin construction, with a substantial completion date of 320 calendar days following this notice, making the project’s target completion date March 16, 2019. Substantial completion is a step in the completion process that is often considered to be when the project’s owner can use the property for its intended purpose.

Despite the 320-day target, Collier County’s lawsuit alleges that substantial completion was not actually reached until January 22, 2021. The new terminal was opened for public use on March 8, 2021.

Collier County Growth Management Department Head Thaddeus Cohen declined to comment on West Construction’s performance, focusing instead on the project’s alleged delays.

“Clearly this has taken longer than what the contract documents have for completion,” Cohen noted. “I’m not in a position to discuss […] our position as to the contractor’s performance. That will be adjudicated on a later date.”

In a March 19, 2021 email to the Marco Eagle, West Construction vice president Matthew West also declined to go into detail about the dispute. 

“We are currently in discussions with the county and at this time have no other comment,” West stated.

The lawsuit alleges a number of other contract violations, including failing to provide necessary safety precautions, failing to maintain the project’s necessary permits, and failing to comply with “all applicable codes, laws, ordinances, rules, and/ or regulations.”

In response, West Construction’s April 12, 2021 motion notes that its contract with Collier County “contains a two-pronged pre-litigation dispute resolution process” which requires the two parties to negotiate with a mediator if resolution cannot come from a preliminary negotiation. The motion alleges that, despite this term of the contract, Collier County made no effort to request such negotiations.

Learn more: Guide to Alternative Dispute Resolution (ADR) in Construction

County lawsuit adds to West Construction’s financial woes

Collier County is not the only party in dispute with West Construction. In addition to Collier County’s litigation, West Construction also faces an earlier, as yet unresolved lawsuit from Miami-based contractor Miguel Lopez Jr., Inc. over the Marco Island Airport Terminal project — suggesting a longer-term pattern of financial difficulties. 

Following Collier County’s agreement with West Construction, Lopez was added to the Marco Island Airport Terminal project as a subcontractor on June 19, 2019. However, after beginning work, Lopez claims they were forced to demobilize due to West Construction’s nonpayment. 

According to the August 26, 2020 lawsuit, Lopez is claiming damages totalling $214,626.02 for their work, as well as applicable interest, costs, and attorneys’ fees.

Near the same time of these two pieces of litigation, West Construction received two loans from the Small Business Administration’s Paycheck Protection Program, both secured through First Horizon Bank. The program provides loans designed for small businesses to maintain their payroll and workforce.

West Construction’s first loan — approved on February 26, 2021 for $2 million — was intended to cover payroll for 121 positions. A subsequent loan for $2,336,752, approved on April 7, earmarked just over $2 million in payroll for 123 positions, indicating at least a small level of growth.

Companies that receive loans through the Paycheck Protection Program may have them forgiven if certain criteria are met, including the retention of employees during the loan’s period. 

To qualify for this in both an organization’s first and second loans, employee and compensation levels must be maintained, all loan funds must be spent on payroll and other eligible costs, and at least 60% of the funds must be spent specifically on payroll.

West Construction currently faces a total of $1,414,626.02 in damages stemming from Collier County and Lopez’s litigation. As of this writing, West Construction’s motion to initiate negotiation with county officials has yet to be granted.