December 30, 2013 at 1:08 p.m.
Settlement reached in contractor property damage case
Thorsens get half the amount invested to rebuild Hair Design
Settlement reached in contractor property damage case
Judge Patrick O'Melia recently dismissed the lawsuit the Thorsens brought against A-1 Excavating and its subcontractors after the parties reached a settlement agreement. The Thorsens will receive about $200,000 - a little more than half of the total amount they invested into rebuilding their business, Hair Design, after the building foundation collapsed while work was being performed on a nearby lift station as part of the city's Barnes Street project in the summer of 2010.
"It's amazing what businesses have to come into compliance with, yet we can have a building destroyed and there's no recourse for it to come out fair," Tim Thorsen said.
The Thorsens' business sustained damage stemming from a collapsing building foundation just after Labor Day weekend of 2010. The culprit for the collapsing foundation was dewatering that had occurred during A-1 Excavating's construction of a nearby lift station.
It was not fixable, and the Thorsens immediately began work on constructing a new building. In January 2011 the move to the new Hair Design was complete. A few weeks later the old building was demolished. Since then the Thorsens have been struggling to recoup their $400,000 investment.
An initial claim made through their private insurance provider was denied. Thorsen said the provider described the situation as "an act of God" and used the earth movement clause to deny the claim. The Thorsens also weren't satisfied with the amount being offered from A-1 Excavating's insurance company and, in December 2011, they filed a civil lawsuit in Oneida County Circuit Court against A-1 and its subcontractors.
In recent months those contractors were arguing for an outright dismissal of the suit, claiming governmental immunity on the grounds they were working on a city project being performed according to city-approved specifications.
In October, O'Melia denied that claim though he didn't rule in favor of the Thorsens. While there has been no dispute that dewatering problems at the site of the lift station led to Hair Design's foundation collapsing, it has been less clear who is responsible. A-1 and its subcontractors have blamed the design from Town & Country, the city's engineers. Town & Country has said it wasn't the design of the project that was at fault but rather A-1's execution of that design.
"At this stage in the litigation, it is not clear what the injurious conduct is in this case - is it the actual design of the lift station project, the defendants' 'means and methods' of implementing the design, the defendants' negligent workmanship causing the damage to the plaintiffs' property, or perhaps some combination thereof," O'Melia wrote in his October decision. "The outcome of this case depends on what the alleged injurious conduct is."
When O'Melia made his ruling, Thorsen said a settlement agreement was already in the works.
"We were advised by the mediator and our own attorney to cut our losses," he explained. "It was going to cost a lot of money to get it to a jury trial and even then there would be no guarantees. So we were advised to accept what we didn't feel was reasonable or fair, but it would do one thing and that was get it over with."
"It was eye-opening how the system doesn't work in this type of situation," he added. "You can have all the insurances, yet still lose significantly on the financial end. Nothing in the system allows you to be protected. It's just interesting. You wouldn't think it would be that way. It's a bit counterintuitive."
The settlement officially brings to an end the many problems that arose out of the city's Phillip and Barnes street projects three years ago. Most of the damage occurred to properties around the Phillip Street area when Rhinelander was hit with heavy rain in late June 2010. A-1 Excavating's temporary bypass pump failed and the result was sewage backup in many businesses and residences. Community Development Block Grant emergency assistance funds combined with claims through A-1's insurance resolved most of those cases short of litigation.
The Thorsens' business was the only building damaged as a result of work on the Barnes Street project.
"It's a rare situation but for whatever reason we had an opportunity to go through it and learned a lot through the process," Thorsen said. "The best thing I can say is it's over and done with. We can put it behind us and move on."
Kyle Rogers may be reached at [email protected].
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