2006-05-04 / Front Page

Arbitration board awards $47K to Siegmund

By Dotti Farrington

An arbitration panel has awarded $47,105 to Siegmund and Associates of Providence toward claims and costs in lawsuits brought by that firm and by the town of Jamestown over the town's termination of Siegmund's contract to supervise $7.24 million in sewer projects.

The cost of the arbitration to the town totals $162,373 to date, not including the amount the town must pay to the Siegmund firm. The figures do not include calculations for differences in costs to hire a firm to take over the sewer projects that the town removed from Siegmund's supervision. Some of that work remains unfinished.

Town Administrator Bruce Keiser said Monday that the award did not represent a loss, but a "draw" because it was based on a technicality and not on an evaluation of the town's claims about the quality of the engineering firm's workmanship. Keiser said the Town Council has been advised by the town solicitor that it can appeal the decision to the Superior Court, but the council has not yet decided whether or not to do so. Keiser said he was

preparing a report as a public statement to be released as soon as he completed it.

Claim validity

Lazlo Siegmund, formerly of Jamestown, a principal in the firm, said Monday that he felt vindicated by the arbitration award. He called the town action a "bogus claim" and the decision was that not one of the town's claims was valid.

Siegmund said the arbitration resulted because former Town Administrator Maryanne Crawford "developed a dislike for the way I was running things."

At that time, Crawford said, "We decided to part company" but declined to specify the reason. Town Solicitor J. William W. Harsch, the principal town solicitor in the case, said the problems involved professional differences, but the town later claimed more than $1 million in damages that it did not publicly specify.

This week Siegmund said it was his understanding that the arbitration decision was final. He said he plans to deliver a letter about the matter to the Town Council at its May 8 meeting.

The award by three members of the Construction Arbitration Tribunal of the American Arbitration Association was dated April 6. Siegmund sent a copy of the decision to the council and to the Jamestown Press with a letter dated April 20.

Siegmund's letter stated, "In view of the fact that you have apparently chosen not to make public the results of the arbitration, I hereby submit a copy of the decision as a service to the taxpayers of the town of Jamestown."

Appeal options

The panel consisted of Richard A. Volkin, David Harrison, and Peter Lawson Kennedy. According to their decision, "This award is in full settlement of all claims and counterclaims submitted to this arbitration. All claims not expressly granted herein are hereby denied." The award did not include a statement about the arbitrators findings, opinions or reasons that led to the award, leading town officials to believe the decision was made on the basis of jurisdiction and not on merit.

Keiser said the town had terminated the Siegmund contract before it sought arbitration and that may have been a basis for relinquishing any claims on merits. Keiser also said Monday that the town solicitor was researching if and when public access to the arbitration files would be allowed.

Siegmund sought $50,000 for unpaid services plus costs. The award provided nothing for unpaid invoices or lost profit, $5,062 for work outside the scope of the contract, including overtime and extra work by subcontractors, $30,000 toward attorney fees, and $12,043 toward the $48,155 in arbitration fees.

Siegmund noted that the total award of $47,105 to him was almost identical to the $50,000 he asked for three years ago to settle his firm's differences with the town.

The town decided in early 2004 to sue Siegmund and Associates for $1.1 million in damages. The town claimed the unspecified damages resulted because the firm did not adequately supervise the $7.24 million in up grades to the municipal sewer system under an August 2001 contract between the town and Siegmund.

As of Monday, he costs to the town totaled $162,373, including $44,695 for the town solicitor, $30,549 to Vollmer Associates, engineering consultants, and $57,552 to C & E Engineering Partners as expert witnesses for the town, and $35,577 to the American Arbitration Association. The $47,105 due to Siegmund has not yet been paid. A few other smaller but relevant bills are also expected.

After the town terminated Siegmund's contract to supervise the town sewer department jobs, the town hired Vollmer Associates of Boston for a maximum of $263,800 to take over supervision of the incompleted work. Vollmer had been runnerup in the original bid for the sewer contract. Siegmund and Vollmer also vied for the town highway barn project at Taylor Point, with the design work going to Vollmer, but the highway barn project was later rejected by voters. Siegmund had done volunteer work on town highway barn studies and had challenged Vollmer's cost estimates only a few weeks before the town announced that Siegmund's contract for supervising the sewer projects had been terminated.

At that time, town officials said the two jobs, and issues involved in each, were completely separate from each other. Town officials also said then that they could not divulge the specifics about the engineering contracts because lawyers for the town, Siegmund, and Vollmer were all in negotiations. Siegmund tried to discuss the situation publicly at Town Council meetings, but he was blocked by the town solicitor because of the pending arbitration.

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