Less than a week before a scheduled case meeting at which Taisei Construction Company planned to seek a trial date in its lawsuit filed against Palo Alto Unified, the school district announced it will pay a $570,000 settlement to the construction firm that built two new Palo Alto High School facilities.
Board President Melissa Baten Caswell announced the settlement at a special board meeting Wednesday after meeting in closed session to discuss the litigation. Taisei, who was contracted by the district in 2011 to build the Paly Media Arts Center and a two-story math and social studies building, had accused the district of employing a range of "bad-faith tactics" that delayed the buildings' openings by nearly a year.
Taisei initially sued Palo Alto Unified for $3.7 million to compensate for additional costs and expenses incurred as the district "substantially changed and increased the scope of the work to be performed" throughout construction, according to the lawsuit.
Taisei also sued construction manager Gilbane Building Company and architecture firm Deems Lewis McKinley (DLM) for negligence and "tortuous interferences with contract relations."
The settlement includes both of them, with DLM and Gilbane also making payments, according to a district release. The settlement also includes an agreement that Taisei will indemnify the district against all potential claims brought by subcontractors and also that Taisei will remain responsible for warranty claims and latent defect claims, the district said in a statement.
"These buildings opened this past fall and are exceptional additions to the Palo Alto High School Campus," Superintendent Max McGee said in the statement. "This settlement puts an end to the legal process and attorney fees. Even after paying the settlement amount, this project came in under budget and the remaining amount can be put to further improvements on the campus."
After more than a year of litigation under its belt, the district had in October spent more than $300,00 in legal fees on this case. In the first eight months of this year, law firm Dannis Woliver Kelley (DWK) billed the district $229,827.
Taisei Operations Risk Manager Jaysen Van told the Weekly in late October that he intended to instruct company attorneys to again push for a trial date at the upcoming Dec. 23 case meeting. Van did not immediately return requests for comment.