Westport Town attorney William Dale said the town has made a “very modest settlement offer” regarding a lawsuit filed against the town in Lincoln County Superior Court June 1.
Los Angeles, Cal.-based bonding company, American Contractors Indemnity Company, filed suit against the town seeking to recover more than $250,000 paid to various subcontractors and suppliers on behalf of Bath based contractor, Bill Whorf Inc.
According to Dale, $250,000 of improvements made to the town’s public boat launch, created an opportunity for the bonding company to file a lawsuit against the town.
According to the suit, on Dec. 9, 2009 Westport Island hired BWI, of Fosters Point Road in Bath, to be general contractor for construction the public boat launch. ACIC issued performance and payment bonds on behalf of BWI on December 21, 2009.
The terms of the bonds stated that ACIC would be required to pay BWI’s subcontractors and suppliers in the event that BWI failed to make payments; the terms stipulated Westport Island would pay to ACIC all contract funds for BWI’s work on the project for deposit into an escrow account. ACIC would then issue funds to BWI’s subcontractors and suppliers.
Westport Island also promised, according to ACIC, to pay all contract proceeds directly to ACIC and not to BWI. Westport Island denies these claims, Dale said.
ACIC’s complaint is that Westport Island gave the checks to BWI, instead of mailing them directly to the bonding company.
According to Dale, someone from BWI came to the Westport Island town office and convinced a town representative BWI would take the checks to Wiscasset and mail them to the bonding company. However, BWI did not mail the four checks totaling $256,129.50 to ACIC, but deposited them into its own account.
Dale said the checks were made out to both BWI and to the bonding company, and as such should have been signed by both payees in order for it to be deposited. As such, he said BWI’s bank fell short of its duty.
According to the complaint filed by ACIC, some of BWI’s subcontractors did not get paid and ACIC was required to pay them.
Also outlined in the complaint is the issue of ACIC having bonded a $550,000 water district project in East Boothbay Harbor for which BWI was also the contractor. Before the Boothbay job was done, BWI went bankrupt, and ACIC paid “$535,633.97 to various subcontractors and suppliers on the Boothbay and Westport Projects.”
According to Dale, the Westport Island boat launch project was completely paid for except for perhaps $1000. ACIC is trying to get money it lost on the Boothbay project from the unrelated Westport Island project, Dale said.
Dale cited another issue: only one selectman, George Richardson Jr., signed the Letter of Directive of Payment Agreement. More than one selectman is required to sign such a letter, because “one selectman does not have the authority of a three person board,” said Dale.
