City To Pay $135,000 To End Fountain Square Contractors' Lawsuits

EVANSTON, IL — Lawyers for Evanston, a general contractor and its subcontractor agreed on a $135,000 settlement to resolve lawsuits over delays in the renovation of Fountain Square. The Evanston City Council Monday approved an agreement granting separate payments to Gilberts-based Copenhaver Construction and Montgomery-based mechanical subcontractor R.J. O'Neil.

The Fountain Square renovation project was originally due to be completed in December 2017. Aldermen granted multiple extensions as construction was delayed through much of last year. Testing of the fountain began in September 2018, and a formal dedication of the zero-depth fountain took place last month.

Under the terms of the contract, the city withheld more than $230,000 of the $5.9 million it had agreed to pay Copenhaver — much it if through the assessment of "liquidated damages" at a rate of $1,425 for every day the project remained incomplete past the agreed deadline.

Kealan O'Neil, president of R.J. O'Neil, first sent a claim to the city and Copenhaver on Sept. 7, 2018, claiming his company was owed more than $117,000 for its work on the pipework, valves and fittings for the fountain, as well as drinking fountains and water meters.

O'Neil, which has not responded to a request for comment, later filed a lawsuit in Cook County court in December. It claimed it had "completed all of the work required of it under the terms of its subcontract with [Copenhaver] in a good and workmanlike manner" — despite its failure to test the water pressure of the underground pipes before filling in the site, which required a third-party sealing company to be called in to fix its errors.

Copenhaver filed a counter-suit against Evanston, claiming the clause in the contract it signed allowing the city to recoup damages at the $1,425-a-day rate was unenforceable. It blamed the city for failing to get a permit from the Metropolitan Water Reclamation District until September 2017 — five months after work was supposed to begin — and later refusing to extend the project's deadline for completion beyond June 1, 2018, leaving O'Neil only one month to complete the project.

"Once [R.J. O'Neil] was able to begin construction, [it] failed to properly and within the bounds of ordinary commercial general care to install and seal the piping, joints, and valves within the Infrastructure of the Project," Copenhaver alleged. "Additionally, [O'Neil] failed to undertake within the bounds of ordinary commercial general care proper pressure testing of the piping, joints, and valves within Infrastructure in order to determine if the same had been properly installed and sealed."

According to Copenhaver's claim and comments from city staff at the time, R.J. O'Neil failed to do any pressure testing of the fountain's piping, valves or joints until after the the site had been filled with concrete and granite.

"After the Project was backfilled, it became apparent that [R.J. O'Neil] had not properly installed and sealed the piping, valves, and joints of the Infrastructure and had not properly pressure tested the portion of the Infrastructure that it worked on," according to Copenhaver. It said O'Neil's "defective performance" was the sole reason for the project's completion being delayed more than five months past the extended deadline.

Copenhaver further argued that the part of the contract allowing for "liquidated damages" for missing its completion deadline is an "unenforceable penalty clause" because it awards the same amount of damage regardless of the reason the deadline was missed. The amount of money sought by Evanston "bears no relation to any formula that could be considered reasonable," it said. Attorneys for the city denied this argument.

The contractor's counter-claim further pointed out the per-day damage provision contained an internal contradiction. In case of default, it said the contractor agreed to pay the city "the sum of (one thousand dollars) $1,425.00/per day." According to Copenhaver, since state law says words prevail over numbers in contracts containing such contradictions and since the written part doesn't even include "per day," the city would be unable to enforce any damages in excess of $1,000.

The settlement approved at the City Council's June 24 meeting includes a $70,000 payment to Copenhaver construction and a $65,000 payment to R.J. O'Neil. According to Deputy City Attorney Victoria Benson, the payment to the general contractor will be deducted from the $230,000 in liquidated damages, while the smaller payment to the subcontractor will come from funds already budgeted to the Fountain Square project construction fund.

Earlier: Pricetag Keeps Dropping On Evanston's Fountain Square Project