Spokane Journal of Business

Contractor wins decision in Idaho arbitration case

$1 million payout ruling awaits court confirmation in Kellogg condo dispute

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Native American Services Corp., a Kellogg, Idaho-based construction management and general contractor company, has won a more than $1 million arbitration decision in a dispute over work performed at a 21-unit condominium building called Alpine Village Resort, also in Kellogg.

A hearing to confirm the arbitrator's award is scheduled for July 9 before Shoshone County District Court Judge Fred Gibler. A district court lawsuit filed in November 2008 by Alpine Village Resort LLC and other parties alleged that the construction company breached a contract for the project, among other claims. However, the parties were required by the contract to enter arbitration proceedings first.

Construction arbitrator Richard Alexander recently found that Native American Services is entitled to a net award of nearly $485,000 in unpaid contract amounts and other expected income related to the project for work completed in 2008. Alexander also awarded the general contractor about $590,000 for attorney fees, arbitration expenses, and other costs as the prevailing party in the proceedings.

The arbitrator denied Alpine Village Resort group's request for more than $6 million in damages.

Numerous project changes and other delays caused construction of the condo building to extend several months beyond the initial estimated time frame. However, the arbitrator found that the construction company fulfilled its responsibilities under the contract despite interruptions mostly out of the contractor's control, says Ryan Yahne, an attorney with Spokane-based Winston & Cashatt Lawyers PS, in a press release issued by the law firm. Winston & Cashatt represented Native American Services.

The press release contends that causes of the construction delay included the use of a draftsman instead of an architect to prepare the initial plans, and difficulty coordinating with design consultants hired separately by Alpine. Other factors reportedly included code and permitting requirements, availability of materials, and an interruption when stairs had to be reinstalled.

The press release says that Alpine received a certificate of occupancy in September 2008, but condo sales were slow, and Global Credit Union, which provided construction financing for the project, eventually foreclosed.

Alpine had stopped making payments to the construction company in April 2008, and then subsequent disagreements arose. Alpine later filed suit, alleging breach of contract, negligence, breach of fiduciary duty, and misrepresentation. Once the matter was in arbitration, the construction company filed a counterclaim alleging breach of contract against Alpine for the unpaid contract amounts and other expected income.

The arbitration process also sought to determine when the two parties established the final cost estimate for the project, and Alexander found that date to be April 2008.

The arbitrator also found that Alpine was entitled to about $150,000 for remediation costs for the stairs, which is offset by an award to Native American Services of just more than $633,400 for its counterclaim, resulting in the net award to the general contractor for nearly $485,000.

Treva Lind
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