Wis. contractor sues over Maine project

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What was supposed to be a simple equation — do more work, make more money — has equaled a lawsuit for Schmid Pipeline Construction Inc.

In 2013, Mayville-based Schmid was the prime contractor for a 68-mile segment of a natural gas pipeline project in Maine. Littleton, Colo.-based Summit Natural Gas of Maine Inc. owns the project.

Through its time-and-materials contract, according to the complaint, Schmid agreed to an outlay cap of $10 million throughout the project.

But as construction started, according to court documents, Schmid officials realized the project was more intricate than Summit had indicated. Estimated project costs swelled. The deadline was pushed back more than a month. Schmid bought more materials and brought on more workers.

But Summit’s compensation to Schmid did not keep pace with the increased costs, according to the complaint, despite numerous requests for additional payment.

Schmid walked off the site in mid-November and, about a month later, sued.

Summit has until Feb. 21 to respond to the lawsuit, which was filed Dec. 18 in Maine. Schmid’s complaint includes claims for, among other things, breach of contract and unjust enrichment.

When Summit responds, said Tim Johnston, executive vice president for the firm’s parent company, Summit Utilities Inc., the utility could include a counterclaim against Schmid for walking off the site.

Johnston said the money Schmid is suing for is the difference between the $69 million Summit paid the prime contractor and the roughly $140 million Schmid claims was the total cost of the project. Johnston then refused to comment further on the allegations in the complaint.

But he added that most of the pipeline was installed before Schmid abandoned the project, though some connections had not been made and the full system had not been tested. Twenty-five miles of the pipeline are operational, Johnston said, but there are multiple points, such as under the Kennebec River, where boring still must be done to connect segments of pipe installed through excavation. He said he does not know when that work will be finished.

Requests for comment from subcontractors K&K Excavation Inc., Turner, Maine; Ursa Major LLC, Wiscasset, Maine; Nomad Pipeline Services, Rockville, Minn.; Utility Services Authority LLC, Belleville, Mich.; and Maine Drilling and Blasting Inc., Gardiner, Maine, were not immediately returned.

Jim Steward, general manager of West Gardiner, Maine-based subcontractor McGee Construction LLC, refused to comment on the lawsuit and said he does not know whether McGee will file its own complaint in the dispute. He said his company was hired to install mains and house service lines.

Johnston said Summit is working on paying subcontractors about $38 million for their work.

He said Summit had not worked with Schmid before the project but hired the company after vetting it through the bidding process.

Requests for comment from Schmid were not immediately returned.

John Hobson, an attorney with Portland, Maine-based Perkins Thompson PA, who represents Schmid, said the project’s costs increased when the contractor realized the project would require more boring than anticipated. He said he is not sure how much money Summit has paid Schmid.

But it was not enough, Hobson said, to keep Schmid in Maine.

“We weren’t being paid,” he said, “and that’s fundamental to any contractual relationship.” Follow @bkevit