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$2.8 million subcontractor lawsuit going to trial in May

A trial is scheduled for May in a federal lawsuit between a subcontractor and Walsh Construction Co. II over work on a hospital expansion project in Lake Geneva.

The lawsuit stems from a $45 million expansion of Mercy Walworth Hospital and Medical Center in Lake Geneva. The project was completed in October 2011. Chicago-based Walsh Construction was the general contractor and had contracted with Windsor-based North American Mechanical to install fuel-oil, heating-and-cooling, mechanical-piping, plumbing and medical-gas systems for more than $3.9 million, according to court documents.

According to North American’s complaint, work on the project started on June 11, 2010. North American’s complaint, which was filed in 2012, alleges the company was not paid for more than $1 million worth of change orders that kept the subcontractor on the site for 479 days longer than expected.

North American is also demanding an additional $1.8 million for what it alleges to be mismanagement that increase the time and resources expended on the hospital expansion project.

Walsh, according to the complaint, insisted that North American perform the planned plumbing and heating-and-cooling work out of sequence even though company officials had been told by North American that the work could not be done efficiently or performed at all because of incomplete work from other subcontractors. North American alleged it had told Walsh that doing the work would also result in additional expenses.

North American’s part of the project, according to court documents, was supposed to last from May 3, 2010 to Nov. 7, 2011, but it took the subcontractor longer, partly because there was restricted access to the work area.

Moreover, North American alleges that Walsh denied its requests for time extensions, causing North American to incur more costs.

Walsh responded by contending that it did not breach its subcontract with North. According to Walsh’s pretrial report, which was filed Monday, the change orders North American alleged to have executed were never approved by the project owner.

Also, Walsh argues that North American signed paperwork that waived Walsh’s liability for most of the changed work and that North American’s claims regarding delays on the job site were not made within the seven days required by the contract it had entered into with Walsh. In some cases, according to Walsh, North American made claims of delay years after the alleged delay first occurred.

Walsh also contends that, because of language in the subcontract, it is not liable for the $1.8 million resulting from the alleged project mismanagement. Even if it were liable, the company contends, the claim stems from “unreliable and unadmissable” expert opinions.

The trial in the case is to start May 11 and is scheduled to last five days, according to court records.

About Erika Strebel, [email protected]

Erika Strebel is the law beat reporter for the Wisconsin Law Journal and a law school student at UW-Madison. She can be reached at 414-225-1825.

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