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letter to the editor
Hale reply to Danco


Having spent three-and-a-half days in trial on behalf of the town of Farragut over the Danco matter, and substantially more time over the months leading thereto, it is important that I respond to Danco’s letter to the editor of June 30.

In cases such as the Danco matter that do not settle, the parties always have a lot to say. It is not possible in the space allowed to comprehensively respond to Danco, but you can be assured that all angles of the issues were played out before Judge [Wheeler] Rosenbaum.

Because of Danco’s failure to comply with its contract obligations, the Town set off against what it owed Danco under the contract a total of $85,582.60. For reasons that remain unclear, the suit against the Town sought $96,879.60. The setoff amount included two parts. First, the actual costs incurred to correct deficiencies in the soccer fields (approximately $55,000) and second, the estimated cost to bring the site around the fields into compliance with the contract (approximately $30,000). Because the latter part of the work was not done when the contract was concluded, in order to calculate its setoff the Town obtained a third party estimate to do the work. Although it could have contracted with the third party to do the latter work, in order to minimize the cost and benefit Danco, the Town had its public works personnel perform the work at a cost of approximately $18,000, $12,000 less than the estimate. Of course, the difference is largely the overhead and profit.


What Danco failed to explain is that Town witnesses explained the actual lower cost during discovery depositions, and that I made it known to Danco’s legal counsel that I understood that the Town would likely have to pay Danco the $12,000 amount. I, for reasons of professional ethics, could only speak with the Danco attorney, and on more than one occasion suggested that we attempt to negotiate a resolution. I was told that Danco would take no less than a payment of $75,000, and that if the Town was unwilling to pay that amount there was no reason to discuss settlement. With its only options being to pay $75,000 or go to trial, the Town concluded it should go to trial based on the strength of its case.

As the case turned out, after considering all of the evidence, the circuit judge agreed with the Town on both major areas in dispute — the soccer fields and the areas around them. Danco, having rejected any discussion of a realistic settlement, and being put to a three-and-a-half day trial with the related expense and staff time required, at trial the Town sought to recover not only its $18,000 for direct labor and materials, but also an amount to compensate it for supervisory and administrative overhead. The court opted to limit the Town’s right of setoff to its out-of-pocket direct costs, and in addition refused to uphold the setoff for two small items. Thus, instead of paying the $75,000, the Town ended up owing an amount of roughly what it anticipated the court would require it to pay, and that it had always been willing to pay.

Danco’s letter leaves the impression that it was not given the opportunity to correct its deficiencies. In fact, Danco was given that opportunity, complete with instructions on what to do, yet it and its subcontractors continued to insist on doing the project in their own way, rather than according to the contract specs.

Finally, the Danco contention that the soccer field was far superior to the one ultimately installed is contrary to the testimony of experts in sports field construction and the findings and conclusions of the Judge. Moreover, Danco’s opinion on the quality of the field it installed comes from a contractor which, in its 30-year history, has never had a project which included Bermuda grass sports fields. Danco’s subcontractor, which has such experience, was not called to testify. Be thankful that your children are not playing soccer on the lumpy, uneven, and improperly graded fields that Danco originally provided, and that the Town was able to attain the benefits of its bargain with Danco.

Thomas M. Hale

Town Attorney

Town of Farragut

 

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