WIUM Tristates Public Radio

Keokuk Settles Construction Lawsuit

Sep 8, 2015

An out-of-court settlement between Keokuk and a former construction firm will resolve a construction dispute dating back several years. Mayor Tom Marion said paying John W. Sammons Construction $90,000 could prevent a larger payout down the road.

"Sometimes discretion is the better part of valor," said Marion. "You don't really want to go to court because it could go either way. So [the city] came up $40,000 and [the company] came down $50,000 so we think we got a pretty good settlement."

The city agreed in 2012 to pay the company nearly $600,000 to install about 30 manholes throughout town. But the project was not finished in time, leading the city council to consider terminating the contract in the summer of 2013.

Marion said that would have allowed the city to try to recoup the money needed to complete the work.

But the city council chose not to terminate the contract, in part because the owner of the company addressed aldermen and requested an extension. The additional time came and went, but the city council continued to honor the contract, choosing to instead impose about $40,000 in late fees and hold back about $13,000 in payments, according to Marion.

"We still owed them about $53,000 and we admitted that and knew that and offered to pay that," said Marion. There were also issues surrounding some of the material used as part of the project.

The company felt it was owed much more money so it sued the city, prompting the city to counter-sue.

Marion said in the end, there were some questions about how the contract was written, so a settlement seemed the best option.

"You bring the human element and you just don't know how the judge is going to rule," said Marion.

City Attorney Douglas Dorando said once the payment is made and the final paperwork completed, the lawsuit and the counter-suit will be dropped. City employees will finish any work that remains regarding the manholes.