SDB, Inc. V. City of Scottsdale, Maricopa County Superior Court Cause No
Item 6 CnVCMHClL REPORT Meeting Date; December 11, 2018 General Plan Element: Provide for the orderly administration of the affairs of the City General Plan Goal: Fiscal management
ACTION
Adopt Resolution No. 11337 Authorizing Full Participation By The City In The Matter Of SDB, Inc. V. City Of Scottsdale, Maricopa County Superior Court Cause No. CV2018-012328 Including The Filing Of Any Necessary Claims, Counterclaims, Cross-Claims, Third-Party Claims Or Otherwise, And Any Appeal Thereof. Consider adopting Resolution No. 11337 authorizing the filing of necessary claims, counterclaims, cross-claims, third-party claims or other actions in Maricopa County Superior Court Case No. CV2018-012328 filed by SDB, Inc. against the City.
Background.
This matter arises from the Shea Tunnel Access Shared Use Pathway Shea Blvd. to CAP Canal Project ("Project”) approved by this Council on June 21, 2016. The City originally retained URS (now AECOM) to provide professional engineering design services for the proposed path extension. Working with the City, AECOM provided engineered plans to extend the path from 124* & Shea to 124* & the CAP canal. This project included creating a connection to a previously constructed but unused tunnel beneath Shea Blvd. near 124* St. Based on the plans, the City solicited bids from contractors interested in completing the path construction as planned. SDB, Inc. was ultimately awarded the contract as the low bidder. Construction of the Project began around January, 2017. During the course of construction. City personnel observed issues related to the construction of a Gabion Wall by the contractor. Ultimately, the City declined to accept the Gabion wall as constructed because it does not meet the plans and specifications and also poses a safety hazard. SDB has filed a lawsuit against the City instead seeking damages. The City believes that it will need to hire a new contractor to remove the existing wall and properly construct a new one in its place. The City is in the process of obtaining new engineering specifications for that purpose.
17017048V1 City Council Report | Authorizing Settlement
ANALYSIS & ASSESSMENT
Recent Staff Action
Staff from the City Attorney's Office and Capital Projects Management have been working together on this matter for several months to assess the situation and attempt to gain compliance from SDB.
Policy Implications
Each litigation is unique. There are no known broader policy implications inherent in this decision.
Significant Issues to be Addressed
As a result of the issues with the Gabion Wall as constructed by SDB, collateral matters have arisen as well. The City will likely be forced to undergo additional costs beyond the anticipated contract price. This gives rise to a claim for damages for the City against SDB necessitating a counterclaim in the subject litigation. In addition, SDB provided a performance bond which was issued by Liberty Mutual Insurance Co. Finally, SDB has asserted allegations that the designs provided by ACCOM were defective.
Community Involvement
No community involvement is necessary on this item as this matter is in litigation.
RESOURCE IMPACTS______
Staffing, Workload Impact
The City Attorney's Office has sufficient staff to handle this matter.
Cost Recovery Options
None.
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Page 2 of 3 City Council Report | Authorizing Settlement
OPTIONS & STAFF RECOMMENDATION
Recommended Approach
Adopt Resolution No. 11337 authorizing the filing of necessary claims, counterclaims, cross claims, third-party claims or otherwise in Maricopa County Superior Court Cause No. CV2018- 012328.
RESPONSIBLE DEPARTMENT(S) City Attorney’s Office - Civil Division Risk Management
STAFF CONTACTS (S) Bruce Washburn, City Attorney, bwashburn(5)scottsdaleaz.gov
APPRpVED
Bruce Washburn, City Attorney Eric C. Anderson, Sr. Asst. City Attorney [480] 312-2405 bwashburn(5)scottsdaleaz.gov
ATTACHMENTS
1. Resolution No. 11337
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Page 3 of 3 RESOLUTION NO. 11337
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SCOTTSDALE, MARICOPA county, ARIZONA, AUTHORIZING FULL PARTICIPATION BY THE CITY IN THE MATTER OF SDB, INC. V. CITY OF SCOTTSDALE, MARICOPA COUNTY SUPERIOR COURT CAUSE NO. CV2018-012328 INCLUDING THE FILING OF ANY NECESSARY CLAIMS, COUNTERCLAIMS, CROSS-CLAIMS, THIRD-PARTY CLAIMS OR OTHERWISE AND ANY APPEAL THEREOF
WHEREAS, the City entered into a professional engineering design contract with AECOM’s predecessor for the design of the Shea Tunnel Access Shared Use Pathway Shea Blvd. to CAP Canal Project (“the Project”); and
WHEREAS; the City entered into a bid award contract with SDB, Inc. to construct the Project; and
WHEREAS, SDB commenced the construction of the Project but has failed to timely and properly complete portions thereof; and
WHEREAS, SDB has filed a legal action against the City in Maricopa County Superior Court, Cause No. CV2018-012328 seeking damages from the City;
WHEREAS, it is in the best interest of the City to defend the legal action and pursue all available rights and remedies from any appropriate party.
NOW, THEREFORE, LET IT BE RESOLVED, by the City Council of the City of Scottsdale, Maricopa County, Arizona, as follows;
Section 1. The City Attorney and the City Manager, or designees, are hereby authorized to take such acts as necessary for the City to fully participate in the prosecution and defense of Maricopa County Superior Court Cause No. CV2018-012328.
Section 2. The City Attorney and his respective staff are further authorized to file such claims, counterclaims, cross-claims, third-party claims or other similar such actions against SDB, Inc., Liberty Mutual Insurance Co., any other surety, and if necessary, AECOM or any other person or entity as they may deem necessary to pursue all legal remedies available to the City therein. This authorization shall further extend to any appeal in furtherance of the foregoing or any subsequent related legal action.
PASSED AND ADOPTED by the Council of the City of Scottsdale, Maricopa County, Arizona this 11'^ day of December, 2018.
ATTEST: CITY OF SCOTTSDALE, an Arizona Municipal Corporation
By;. By;______Carolyn dagger W. J, “Jim” Lane City Clerk Mayor
APPROVED FORM; OFFICE OR CITY ATTORNEY
By;, Bru 17017053V1 Attachment 1