Settlement Reached in Fontaine (VA) Fire Station Lawsuit

The city of Charlottesville has signed a settlement agreement with the construction company that built the Fontaine Avenue fire station.

Maryland-based Costello Construction filed a $1.6 million suit against the city last August for construction delays it says were caused by “defects, errors, omissions, inconsistencies and conflicts” in the city’s plan for the $14 million facility. Costello alleged in court documents that the project’s completion date was delayed by 223 days due to various factors for which the city was culpable, including defects in the project’s specifications and the failure of the city to provide direction when the construction company made requests for more information on the project.

The city already has paid more than $800,000 in change orders for the project, which was completed in early 2014.

Court documents show that the company and members of the city met in federal court Monday to reach a settlement. The city, which holds $505,079 in retainage — a portion of the cost for contracted work withheld until substantial completion — has been ordered to pay Costello $461,447 out of it to pay off subcontractors used during construction.

In turn, Costello will be given seven days to pay those subcontractors and return an affidavit to the city regarding the satisfaction of those payments.

Once the city receives that affidavit, it will then pay Costello an additional $682,243 to complete the settlement, according to court documents. The city’s chief financial officer could not be reached for comment Wednesday.

Under the conditions of the settlement, which a councilor said was discussed and approved Monday during a closed session of the council, the fulfillment of these terms will officially end the dispute, with each party remaining responsible for its own legal fees, and neither party acknowledging any wrongdoing or liability in the course of the project.

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