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Home My WebLink AboutR-91-0334J-91-301 04/08/91 RESOLUTION NO. A RESOLUTION AUTHORIZING THE DIRECTOR OF FINANCE TO PAY TO PNM CORPORATION, WITHOUT THE ADMISSION OF LIABILITY, THE SUM OF $40,833.80 IN FULL AND COMPLETE SETTLEMENT OF ANY AND ALL CLAIMS AND DEMANDS AGAINST THE CITY OF MIAMI, IN CIRCUIT COURT CASE NO. 91- 5178-CA-21, UPON THE EXECUTION OF A RELEASE RELEASING THE CITY OF MIAMI FROM ANY AND ALL CLAIMS AND DEMANDS, SAID MONIES THEREFOR ALLOCATED FROM THE CITY OF MIAMI SELF- INSURANCE AND INSURANCE TRUST FUND. WHEREAS, PNM Corporation, through its attorney, filed a lawsuit against the City of Miami, in the Circuit Court of Dade County, Florida, Case No. 91-5178-CA-21, for breach of contract alleging delay damages, retainage and interest arising out of the construction of Phase I of the Bayfront Park Redevelopment Project No. B-3205-D; and WHEREAS, the above lawsuit has been investigated by the Tort Committee of the City Attorney's Office pursuant to Ordinance No. 8417, which creates the City of Miami's Insurance and Self - Insurance program, the Department of Public Works and the City Manager's Office, and said offices recommend that this lawsuit be settled for the sum of $40,833.80; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The Director of Finance is hereby authorized to pay PNM Corporation, without the admission of liability, the sum of $40,833.80 in full and complete settlement of any and all claims and demands against the City of Miami, in Circuit Court Case No. 91-5178-CA-21, upon the execution of a release, in a form acceptable to the City Attorney, releasing the City of Miami from all claims and demands, with monies therefor hereby allocated from the City of Miami Insurance and Self -Insurance Trust Fund. CITY CC OF 9 1991 91- 334 RFSQCUTM RG. PERM Section 2. This Resolution shall become effective immediately upon its adoption. PASSED AND ADOPTED this 9th day of May 1991. ATTES MA Y HIRAI u N- CITY CLERK SELF-INSUJMNCE : SUJAN CHHA SELF- S NC25AND INSUPLJZCE RUST FUND BUDGETARY REVIEW: MANOHAR S NA, DIRECTOR DEPARTMENT 0 UDGET PREPA D AND APPROVED B CHRISTOPHER F. KURTZ ASSISTANT CITY ATTORNEY APPROVED AS TO FORM. AND CO RECT S JO GE L. F RNANDEZ CITY ATTO EY CFK/bf/M2122 XAVIER L. SUAREZ, - 2 - 91--- 334 TO FROM CA=7 INTER-OFFICE MEMORANDUM Honorable Mayor and Members of the ity Commission J rge L. ernandez City Atto ney DATE April 8, 1991 FILE J-91-301 L-91-108 SUEtJECT PNM Corporation vs. City of Miami Case No. 91-5178 (21) REFERENCES Bayfront Park Phase I Request for Settlement ENCLOSURES Authority PNM Corporation was awarded the bid to construct Phase I of the Bayfront Park Redevelopment Project. The original contract was for $750,938.00. The project was scheduled to commence May 31, 1985 and be completed December 1, 1986. PNM alleges that, because of delays caused by the City, it was not able to complete this portion of the work until June of 1988. PNM Corporation has claimed in its lawsuit that due to the delays caused by numerous changes on the project, lack of sufficient information, site unavailability, unforeseen changes throughout the project, and delays to other phases of the work by the City, it incurred damages for additional overhead costs, lost profits, extra expenses for extended use and under-utilized equipment, and interest. The claim for extra expenses equals approximately $132,607.00 and the additional claim for delay damages is alleged to be in excess of $200,000.00. PNM would be entitled to interest (at the statutory rate of 12% per annum) on unpaid retainage from the completion date of the project and pre -judgment interest on any damages awarded by the Court. PNM has accepted in full and complete settlement, subject to City Commission approval, without an admission of liability by the City, the amount of Ninety-five Thousand Dollars ($95,000.00). $54,166.20 of this amount represents retainage which will be paid from the project funds already allocated; $40.833.80 represents damages and will be paid from the Self -Insurance Trust Fund which is the subject of the attached Resolution. This claim has been investigated by the Tort Committee (Tort Committee authorization attached) and approved by the Risk Management Division of the. Department of Personnel Management. Therefore, it is respectfully recommended by the City Attorney, the City Manager and the Director of the Department of O A-7-1 91 - 334 Li INTER -OFFICE MEMORANDUM Jorge L. Fernandez, City Attorney "_- 9 Members of the Tort Committee Christopher F. Kurtz _=-aE'4_ES Assistant City Attorney ENC,CSuPES March 5, 1991 .-L-91-105 PNM Corporation vs. City of Miami Case No. 91-5178 (21) Bayfront Park Phase I REQUEST FOR SETTLEXENT AUTHORITY In 1985, the City hired PNM Corporation to construct Phase I of the Bayfront Park Redevelopment Project, #B-3205-D. The scope of the work included demolition, clearing, root pruning, trimming, fertilizing, relocating existing trees, planting of new plant material and irrigation. The contract amount was $750,038.00. Work was to begin Ma 31, 1985 and be completed December 1, 1988 (550 calendar days. Throughout the course of the project, numerous plans were changed, difficulties arose with access to certain portions of the site and other delays in construction occurred which extended the time in which to complete the project. PNM has filed suit alleging that they completed Phase I in June, 1988 -- approximately 900 calendar days beyond the contract completion date. PNM claims that these delays were solely the fault of the City and not PNM. As a result, PNM is seeking damages for additional overhead, lost profits, expenses associated with the extended use of equipment and for under- utilized equipment and unforeseen interest expense. In addition, PNM is seeking payment for "extra work" for removal and relocation of numerous trees it claims were outside the project limits and outside the scope of their contract which they claim the City required them to remove despite their protests. Also claimed are various other "extra work" items for which payment is due. The total of this "extra work" equals $78,441.00 (PNM is also seeking interest at the statutory rate of 12% per annum). The amount claimed for delay is undetermined at this time but based upon past experience, it could range from as low as $10,000.00 up to $150,000.00 plus interest (also claimed is retainage in the amount of $54,166.20 which is part of the contract and will be paid from a different funding source). 3 91 - 334 �VAL�L/3T��ON s Based upon a review of the project files and discussions with members of the Public Works Department, there appears to be a legitimate basis for many of PNM's claims. The largest single _ item in dispute for the "extra work" claims is for removal and relocation of trees from outside the project limits. The amount - - claimed is $48,235.00. There is a conflict between the plans, which indicated a definite limit to the project area, and the written specifications which contained no such limitation. Other extra work claims are more difficult to determine based upon the lack of detail in the project files and the fact that all the major personnel who worked for the City on this project are no longer employed by the City. The delay claim has the potential for becoming the single largest damage claim. If PNM proves that they are entitled to 900 days of delay, the damages could be tremendous. On the other hand, if the City can prove that much of the delay is either "excusable" (which would only entitle PNM to additional contract time which would then negate any City claims for liquidated damages) or the fault of PNM, then the potential for a large damage award can be reduced significantly. However, the unavailability of key witnesses and the lack of detail in the project files makes this task extremely difficult and will necessitate the hiring of expert witnesses. A preliminary review of the project files reveals conduct on the part of the City which may subject it to a large verdict. This lawsuit was only recently filed. A motion to dismiss has been filed on legal grounds. To date, no discovery has been conducted and no costs have been expended in defense of the lawsuit. PNM has indicated it would accept the sum of $95,000.00 in total to settle the lawsuit ($54,168.20 representing retainage and $40,833.80 for the balance of their damages claim). The retainage of $54,168.20 has been due for almost three (3) years. Why this has not been paid is presently unknown, but Public Works has informed me that the work representing this figure i;s complete and the sum is due and owing. Prejudgment interest on this amount is a definite possiblity (however, the retainage will be paid from a different funding source, not the Self -Insurance Trust Fund, thus it is not part of this settlement memo at this time). The Department of Publio Works and the City Manager's Office have recommended to me that it would be in the best interest of the City to settle this lawsuit. Therefore, to avoid the high costs in defending a construction litigation case such as this and the usual risks associated with trial, I am requesting authority to settle the above lawsuit in the amount of - $40,833.80 to be paid from the Self -Insurance Trust Fund. t) 91- 334 A PR DISAPPROVED AJo a L. Fernandez Ci Attorney Qu nn ,/J,dnes , I I I Deputy City Attorney Settlement uthority of $40,833.80. ; L M. rtel A istant City Attorney WaSrren R. Bittner Assistant City Attorney L aul D. Weber PV Claims Supervisor CFK:bf:M575 Charles C. Mays Assistant City Attorney Julie O. Bru Assistant City Attorney S 91- 33