Sunday, March 9, 2014
A legal dispute between one of the area’s two natural gas pipeline companies and its general contractor landed back in federal court this week as the companies continue to blame each other for delays that meant area schools, businesses and city buildings did not get service when promised.
FILLING IN: A contractor installs a distribution line recently across Second Street in Hallowell for Summit Natural Gas of Maine.
Staff file photo by Andy Molloy
Summit Natural Gas of Maine says it followed the letter of the contract and other documents in its dealings with Schmid Pipeline Construction, Inc., with regard to the natural gas pipeline project in central Maine and should not be held liable for damages Schmid seeks in a federal lawsuit.
Among other things, the dispute concerns a Nov. 1 deadline that was not met by Summit, which had promised that natural gas would be flowing in schools, businesses, and city buildings in Augusta, Gardiner and Madison. Summit has extended the pipeline to many of those customers since then, including Augusta City Center and Laura E. Richards School in Gardiner.
Madison residents should be able to hook up by the end of April, although the company has yet to give a timeline to connect Madison Paper, one of the town’s largest employers.
Summit, represented by attorneys A. Robert Ruesch and John P. Giffune, of Verrill Dana, denied numerous contract violations alleged in the lawsuit Schmid filed last December in U.S. District Court in Maine.
Schmid, a Mayville, Wis.-based corporation, wants more than $72 million from Summit, which is based in Littleton, Colo.
“The terms of the contract speak for themselves,” Summit’s attorneys wrote.
They asked the judge to dismiss the lawsuit and enter a ruling in favor of Summit.
Summit also filed a counterclaim saying Schmid had failed to meet incremental deadlines for the 68 miles of pipe it was hired to install.
“The project was on a fast track for final completion by November 1, 2013. This was reflected in the contract’s final completion deadline and in the liquidated damages provisions in the event Schmid failed to meet the required deadline,” Summit said in its counterclaim.
Summit says Schmid overbilled for work and submitted erroneous invoices, among other deficiencies.
“In breach of the contract, Schmid walked off the project and demobilized on November 20, 2013,” Summit says in its counterclaim. “As of that date Schmid had been paid approximately $68 million by Summit per the terms of the contract.”
At the time, Schmid was working on the pipeline project in Norridgewock and Randolph.
Summit also says it paid almost $30 million to subcontractors that Schmid failed to pay.
The two firms had been at odds publicly at the end of the construction season, and resulting delays in the pipeline installation have a number of customers in central Maine waiting for natural gas to arrive.
Schmid and two other construction firms, CCB Inc., of Westbrook, and Tetra Tech, of Pasadena, Calif., were hired last spring to begin the pipeline installation for Summit.
Summit faced competition for customers from Maine Natural Gas, which had a head start in installing its lines in the Kennebec Valley.
At the time the contract was awarded, Summit’s website said it “has made a commitment to invest $350 million dollars and create more than 400 jobs by building a natural gas pipeline to serve 15,000 homes and businesses in the Kennebec Valley within five years.”
Schmid’s lawsuit, filed by attorney John A. Hobson and Joseph G. Talbot, of the Portland law firm of Perkins Thompson, says Schmid was hired by Summit “to construct and install approximately 68 miles of 10-inch, 8-inch and 6-inch steel pipe in Somerset and Kennebec counties. Schmid was to provide a capital outlay of no more than $10 million at any point.”
Schmid was to provide all labor, materials, and services except for the pipes which Summit was to supply. Summit, in turn, was to make weekly payments to Schmid.
The lawsuit says Schmid “quickly determined that the scope of the work ... was significantly greater than originally estimated and budgeted for,” including numerous points where the pipeline needed to be installed deeper than originally contemplated.
The lawsuit says Schmid was forced to increase the number of workers, working hours, materials and equipment, but that Summit “failed to increase payments” to Schmid in response.
The case has been assigned to U.S. District Court Judge George Z. Singal and referred to Magistrate Judge John Nivison, who issued a scheduling order setting a July deadline for discovery and a December date for trial.Betty Adams — 621-5631 firstname.lastname@example.org Twitter: @betadams