Mequon-based construction co. sues Chicago builder for contract breach

Listen to this article

A Mequon-based marine construction company is suing an Illinois contractor for more than $350,000 after a contract between the two fell apart during a Lake Michigan shoreline project near Chicago.

In April 2010, the Public Building Commission of Chicago contracted with the joint venture of Edward E. Gillen Marine LLC and F.H. Paschen, S.N. Nielsen & Associates LLC, Chicago, to build the 2,700-foot-long 31st Street Breakwater as part of a comprehensive overhaul of the harbor, which is used by recreational boaters.

Gillen and general contractor Paschen jointly submitted the low bid of $30,316,650 for the project, which began in July 2010 and is in its final stage, said Mimi Simon, the commission’s public information officer.

“All boats are expected in time for the start of the boating season,” Simon said, “which is late spring and early summer.”

But the business relationship between Gillen and Paschen soured in December when the general contractor allegedly breached its financial agreement with Gillen to provide advance payments to keep the project on schedule.

The April 12 lawsuit filed by Gillen in Milwaukee County seeks $358,058 in payment and alleges Paschen owes another $4.9 million to other subcontractors employed on the breakwater project.

Paschen attorney Doug Reimer declined to comment on the pending litigation.

Gillen attorney Scott Halloin, of Halloin & Murdock SC, Milwaukee, did not immediately return telephone calls, nor did Gary Jackson, Gillen’s engineering/estimating manager, and Joe Sirvinskis, Gillen’s vice president engineering/estimating.

Gillen’s subcontractor role on the project included supply, transport and supervised installation of stone used to build the embankments of the breakwater, according to the complaint. Gillen also mined and harvested rubble from a worksite in Pembine and took the material to the breakwater project site.

When Gillen subcontractor ISP Minerals Inc., Blue Ridge Summit, Pa., failed to meet its stone production commitment to complete a section of the breakwater, Gillen was forced to increase its workload and costs to keep the project on schedule, according to the complaint.

As a result, Gillen needed a loan to continue meeting financial obligations to employees and subcontractors, so the company entered into an advance payment agreement with Paschen on Oct. 26, according to the complaint.

But Gillen alleges in the lawsuit that, beginning in December, Paschen discontinued its advances and on or about Jan. 5 terminated its contractual relationship with Gillen and removed employees from the Chicago worksite.

In addition to withholding payment, according to the complaint, Paschen improperly seized marine equipment and materials, including four boats and multiple barges. Gillen had leased the majority of the equipment, according to the complaint.

Simon said Thursday that she was unaware of the lawsuit, of which the commission is not a party to, and that the breakwater project didn’t encounter any construction delays.