Woonsocket
Menard, city facing lawsuit
01:00 AM EST on Thursday, November 9, 2006
PROVIDENCE— A negligence liability insurance carrier has sued Woonsocket and Mayor Susan D. Menard saying it should not have to cover expenses related to the Promac Inc. lawsuit, in which the city’s School Department was found to have wrongfully terminated a construction company five years ago.
The new suit is the latest chapter in the long and often complicated legal battle stemming from the botched school construction project.
In a complaint filed in Superior Court Providence, National Union Fire Insurance Company, of Pittsburgh, argues that it bears no responsibility for negligence claims that Promac filed against the city, because it was not Woonsocket’s insurance carrier at the time of the alleged incidents.
Woonsocket’s policy states that the company is not required to cover any wrongful conduct that occurred before the company served as the city’s carrier, the complaint argues.
National Union says it took over as the carrier on July 22, 2003, two years after the Promac legal battle began.
But City Solicitor Christopher Lambert says that while animosity over the project may have begun simmering as soon as construction stopped in 2001, there was no formal litigation until 2003, after the city took out a policy from National Union, meaning the insurance company should cover Woonsocket.
Lambert also rejects National Union’s claim that the city knew about the Promac litigation before it took out the policy.
“As soon as the city received any type of notice regarding a lawsuit, it was forwarded to the insurance company,” Lambert said.
The citys solicitor went on to say that this latest legal tousle began when Woonsocket filed a claim with the National Union, requesting “defense and indemnification” related to the Promac suit. Lambert said the company refused and the two sides had been arguing ever since.
“Basically, they beat us to the punch,” in filing a petition for declaratory judgment in Superior Court, he said.
Mayor Susan D. Menard yesterday refused to comment on the case, saying she knew little about it, despite the fact that her name is listed on the suit “individually and in her official capacity as the mayor of Woonsocket.” She referred a reporter to Lambert, who spoke briefly about the complaint, but said he is not representing the city in this suit. Woonsocket has instead hired a Boston insurance lawyer to handle the matter, Lambert said.
In September 2001, the Woonsocket School Committee voted to dismiss Promac because of ongoing delays in the construction of the Gov. Aram J. Pothier Elementary School on Robinson Street. Promac blamed the setbacks on the district’s own indecision.
Promac’s surety company, U.S. Fidelity & Guaranty Trust, was called in to pay for the completion of the project and the school opened a year behind scheduled. In June 2003 (a month before the city took out the National Union policy), Promac and the School Department began mediation sessions, which later lead to arbitration as Promac sought to recoup its unpaid fees and the more than $2 million it would need to repay USF&G for the finished work.
In 2005, a harshly worded court decision declared that the Woonsocket School Department committed a “major material breach” of contract when it fired Promac. Earlier this fall, Arbitrators awarded Promac more than $3 million in fees stemming from what they called a “knowingly wrongful” termination.
That litigation continues to this day as lawyers for the School Department argue over what they are required to pay.
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