2006-05-11 / Letters to the Editor

Attorney comments

This letter is in response to Mr. Keiser's comments in the Press that the decision of the arbitrators in the case of Siegmund vs. the town of Jamestown was based on a technicality, and not on an evaluation of the town's claims about the quality of Siegmund's workmanship.

I represented Mr. Siegmund in settlement negotiations with the town occurring prior to the commencement of arbitration. Siegmund and the town agreed to sever the relationship, and to further discuss and resolve the amount due Siegmund for unpaid invoices and related items. I was within approximately $10,000 of settling this case when the town decided, based upon the advice of the engineering firm that was awarded new contracts to complete Siegmund's work, that Siegmund's work was defective. Readers will undoubtedly draw their own conclusions as to whether the town should have accepted such a self-serving opinion. Siegmund then commenced arbitration to enforce collection of amounts due under its contract and sought $50,000. The town decided that it would be financially prudent to hire a new engineer and to simply attempt to collect these new costs from Siegmund in arbitration, so the town counterclaimed for $1,566,428. The filing fee paid to the American Arbitration Association to file such a counterclaim, $10,000, if paid to Siegmund instead, would have resulted in settlement of this case when added to amounts already offered.

Now to get to the technicalities. I don't know how Mr. Keiser knows that this case was decided on technicalities, as the decision of the arbitrators is silent as to their reasoning.

However, I can tell you that the correspondence, testimony, and representations of attorneys on both sides reflected that the contract had been mutually terminated. This created a legal problem for the town. The law at times is laced with common sense. And the common sense principal of law at play can be stated as follows: a party who agrees to terminate a contract cannot then sue the other party for breach. To give a specific example,

the town brought several delay claims against Siegmund, including a delay claim for failing to finish the treatment plant design. There was no question that at the time Siegmund and the town mutually agreed to terminate the contract, that the treatment plant design was not completed. The Arbitration Panel undoubtedly had a problem reconciling how Siegmund could be held liable for not completing the treatment plant design when Siegmund and the town mutually agreed to terminate the contract. Is this what Mr. Keiser meant by a technicality?

The town also presented a claim in the amount of $430,440 for additional debt service due to a loss of a zero interest loan. This particular claim had problems. First, the town presented no evidence that the town was no longer eligible for the loan. Second, our own investigation revealed that the loan program was not terminated or defaulted. Is this what Mr. Keiser meant by a technicality?

I will give a final example. The town sought compensation for a new Infiltration and Inflow study. The engineering firm that volunteered that Siegmund's I&I study was defective proposed to do a new one for $325,000. I don't know how that determination was made when the engineer testified that he never reviewed the video performed as part of the I&I study. The testimony was that Siegmund had created a video of the entire sewage collection system, the video revealed cracks and breaks in the sewer pipes, repair and replacement work was prioritized, and the work was done. Is it a technicality for the Arbitration Panel to find that a new I&I study was unnecessary?

I could give you many more examples of what I call nonsense and Mr. Keiser calls technicalities.

Suffice it to say this was not, again to quote Mr. Keiser, a draw. Siegmund had a simple claim to collect sums arising out of a mutual termination of the contract. His case could have been presented and decided in two hours before a single arbitrator. The town chose to throw gasoline on a lighted match by assaulting Siegmund's competence and by subjecting him to seven or eight days of repetitious and irrelevant testimony. Due to the amount of the counterclaim, the case was heard by three arbitrators at a combined hourly rate of approximately $750. And the arbitrators did not have to articulate their disenchantment. They expressed it by awarding Siegmund legal fees. As anyone with any familiarity with the court system knows, attorney's fees are awarded against a party only for bringing the most frivolous of claims. As a result of the town's reckless behavior, the town must now pay out approximately $200,000. So much for technicalities.

Mark E. Liberati,

Jamestown

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