Bronxville School District Reaches $3 Million Settlement in Construction Litigation Case

The Bronxville School District announced on Thursday that it had reached a $3 million settlement to resolve multiple lawsuits related to a $31 million high school renovation project that was delayed because of ongoing issues with contractors.

The district announced the settlement at Thursday night’s Board of Education meeting. Former Board of Education President John Priesing, who had been involved in resolving the matter even after his tenure on the board ended in 2008, gave an overview of the settlement and the issues that led to the litigation.

In 1999, voters in the district approved a $22.3 million bond referendum for the project, which involved renovations to the Pondfield Road entrance rotunda and a three-story addition to the high school, a new cafeteria, gymnasium, music rooms and science lab.

The project began construction in 2000, with Clover Construction as the initial general contractor. However, the district sued Clover for $400,000 for defective work and failure to complete the project according to schedule. In March 2001, another general contractor, N. Picco and Sons, took over the project, but in May 2003, Picco defaulted on the project. In August 2003, Liberty Mutual, the underwriter for Picco, signed an agreement with the school district to take over the Picco contract and finish construction.

Issues with the project became increasingly complicated after Picco defaulted and mold began to grow on the construction site. The district then sued another third party for mold remediation costs. 

Picco also filed suit against the district for approximately $9 million, claiming breach of contract. The school counterclaimed against Picco for failure to perform services. Liberty Mutual joined to support Picco in its case against the district. Liberty also joined other contractors as defendants in the district’s lawsuit for mold remediation costs. Liberty's primary intention was to recover money for these costs and the balance of the Picco contract.

The district also had to contend with delayed claims made by sub-contractors who were involved with the project. It ended up paying $1.9 million of the $6 million in delayed claims the contractors demanded. The project, which was supposed to be completed in 2001, was ultimately completed in 2004. By that time, its costs had escalated to $31.2 million, after voters in the district approved three bond referendums to fund the renovations.

The settlement announced on Thursday resolves all issues and litigation related to the construction project. The district will pay $3 million to Liberty Mutual, which includes the $1.23 million balance left on the Picco contract and about $1.8 million in outstanding change orders related to the project. Picco will not receive any money.

The district also will receive $675,000 from various third parties, which will help offset the payment to Liberty Mutual, Priesing said.

Priesing said the district will not have to raise any new money from taxpayers to fund the settlement because it had set aside money in an insurance reserve to pay for the litigation.

“This is very positive for the school. It frees up the school to consider its long-term plans. It eliminates the uncertainty about what the settlement might cost the school district. And of course, it completes the journey to build a magnificent addition that we now have,” he said. 

Richard Dresdale, a former school board vice president who worked alongside Priesing, said the district appreciated the community’s patience in resolving the litigation.

“We vigorously defended the school district’s position and the community’s position, and we felt very strongly—not only John and myself, but the other school board members—that the district needed to pursue and defend itself in this legal action.”

“I think that we would not be here tonight with a successful settlement if we didn’t take that action.”

Bronxville School Board President James Hudson said he was “pleased to bring this litigation to a close” and that the community and the district could now “breathe a collective sigh of relief.”