Parking ramp dispute
A Minot construction company is suing the developer and contractor on the downtown parking ramps to collect on more than $500,000 that it claims is owed for its work last year.
Keller Paving & Landscaping filed the breach of contract lawsuit in February against AMGI USA, Shaw-Lundquist, Cypress Development and its principal Steve Larson, Diversified Development and North American Specialty Insurance Co., which holds the contractor bonds on the parking ramps.
Dominic O’Dierno, spokesman for Diversified, said there is a dispute over the amount owed.
“We believe the amount they are claiming is not correct, and we are attempting to resolve the difference,” he said. “We intend to pay them.
He said the difference is in excess of $100,000 and that mediation is being sought.
Dustin Keller, superintendent at Keller Paving, said he is unaware of any mediation efforts. Diversified has continued to insist that it will pay, but any payment has always hinged on financing that never materializes, he said. Last week, Keller Paving was informed that there is a $30,000 to $60,000 difference between its claim and what the contractor believes is owed.
“They should have brought that up nine months ago and pay what you know you owe,” Keller said. “They should pay the invoices that are right.”
Keller Paving also is asking for interest, attorney fees and court costs. Keller said his company will not budge on any of those costs.
The history of Keller Paving’s involvement in the parking ramps goes back to the spring of 2014. Keller Paving was hired by AMGI, which was working for the prime contractor, Shaw-Lundquist, based in St. Paul, Minn.
The lawsuit notes that AMGI USA was a foreign-owned company that dissolved in May 2014. It had based its American operations in Henderson, Nev., which Cypress and Diversified also list as headquarters.
Cypress has worked with the city of Minot on development of the two parking structures at sites where it also plans to build apartment housing. Diversified, with similar owners as Cypress, was hired to coordinate the subcontracting, which led to bringing in AMGI.
Keller Paving agreed to subcontract to perform earthwork and install aggregates for the Renaissance parking structure for $464,581, according to the company’s complaint. The company states that $148,248 was paid, leaving $316,333 unpaid. It left the project on Sept. 4.
On the Central parking structure, Keller Paving listed the contract amount as $293,248, of which $89,419 was paid, leaving $203,829 unpaid. It left the project on Oct. 10.
The lawsuit asks for $520,162 to fulfill the contract and non-economic damages of a reasonable amount of at least $50,000, as well as attorney’s fees and costs. It also requests a jury trial.
Company owner Dean Keller and Dustin Keller said Keller Paving stayed on the jobs because of promises to pay. However, as time went on and other subcontractors also weren’t getting paid, Keller Paving declined to continue. The ramp projects stalled last year as a result of financing issues.
The Kellers said they believe at least some other subcontractors eventually were paid since some have returned to the job this year.
O’Dierno said there may be some small bills still outstanding, but Keller Paving is the only subcontractor with a large pending claim.
Dean Keller questioned the appropriateness of hiring new subcontractors this year without paying all the 2014 subcontractors.
Keller’s attorney, Reed Soderstrom of Minot, said they will be filing a motion for a judgment to collect from the bonds on the project and for a lien on the parking ramp properties. He said it may be difficult to establish the lien since the property is publicly owned.
“But I feel confident that in the end this is going to work out,” he said. “There’s a bond there, and in the end, I believe we can collect on the bond.”
The concrete barriers in place for the project this year are leased from Keller Paving, which was ready to pull them when it did not receive its lease payment when expected at the end of May. The lease payment did come on June 1.
Minot city manager Lee Staab said the city has paid every bill submitted to it by the contractor. The city is aware of the disagreement between Keller Paving and Shaw-Lundquist over the amount owed and understands that Cypress and Diversified are attempting to settle the matter, he said.
Meanwhile, construction continues.
“We have made significant progress on both the Central and Renaissance ramps,” Staab told the council Monday. The Central ramp had fallen three weeks behind but caught up a week with the good weather at the end of May. The overall project is on track for completion before the end of the year.
“The project is moving forward and progress is being made,” O’Dierno said. “It’s been a challenge, but we are working through it.”