Unity
Legal fees paid to the law firm representing the school district will significantly reduce that figure.
The suit, which originally sought $2.7 million in damages from Vaughn Associates, owned by Scott Vaughn, was filed in U.S. District Court two years ago after voters approved spending up to $75,000 in legal fees at the March 2015 annual school meeting. Vaughn countersued, alleging breach of covenant of good faith, unjust enrichment and breach of contract, and demanded $800,000 that he claims he was still owed from the project.
Vaughn offered to build the K-8 Unity Elementary School for $4 million in 2010 after state officials said the former school was in violation of safety and fire codes. Voters had rejected two earlier bond proposals to replace the school.
When the new school finally opened in September 2014, its cost had ballooned to around $9 million and was two years behind schedule.
Vaughn was replaced as construction manager early in 2014 and resigned as the project’s architect a couple of months later. Trumbull-Nelson of Hanover finished the school.
The district said in a news release on Tuesday that the mediation settlement was reached on March 3 and approved by the School Board about two weeks later. However, some additional changes delayed the announcement of the settlement.
“Under the terms of the settlement, neither side admitted any wrongdoing,” the release said. “(Vaughn Associates Incorporated) will pay $425,000 to the District in settlement of the District’s claims against them. After receiving that payment, which will come from VAI’s insurance company, the District, in turn, will pay (from this amount) $100,000 to VAI in settlement of VAI’s counterclaims against it, retaining $325,000 less whatever the district has to pay in legal fees. The attorneys for the District have also agreed to discount the District’s outstanding legal bills by $25,000.”
SAU 6 Business Manager Mike O’Neill said in an email on Tuesday that legal fees spent on the suit will total about $246,000, which includes $150,000 that the school district’s attorneys, Drummond Woodsum, has yet to bill. The $325,000 minus the $150,000 will leave the district with $175,000.
O’Neill said after the district exhausted the $75,000 approved by voters, the law firm agreed to take the case on a contingency basis.
The district said in its news release that the settlement presented the best option for the town because any settlement was limited to Vaughn’s $1 million insurance policy, minus legal fees.
“As such, after the case was tried and all potential appeals were exhausted, even if the District won on all counts, there would be little to nothing left of the insurance funds in order to satisfy any judgment the District might obtain,” the district said. “It was also conceivable that the District could incur another $100,000 or more in litigation costs if the case went to trial or even be found liable to (Vaughn Associates) on its counterclaims against the District.”
The saga began in the summer of 2010, when voters approved a $4.7 million bond for a new school and money for emergency repairs that allowed the existing school to remain open through June 2013. Unity students attended school in Claremont during the 2013-14 school year.
The original complaint against Vaughn alleged professional negligence, breach of contract, negligent misrepresentation and violation of the Consumer Protection Act. The district could be entitled to three times the total of damages under the Consumer Protection Act, plus attorney fees, attorney Matt Upton told voters at the March 2015 school meeting.
In January, U.S. District Court Judge Steven McAuliffe dismissed the Consumer Protection Act claim, which limited any settlement to the value of Vaughn’s $1 million insurance policy, less attorney fees.
Resident Joe Warner, who has watched the project from the very beginning, said from his viewpoint, he is pleased the town can finally put all this behind it, but he understands many people may not feel that way.
“I think there are people in Unity who have believed from the beginning the town was going to recover much more than this and they will be disappointed,” Warner said on Tuesday.
Warner also said he was not among those who believed Vaughn was fully responsible for the cost overruns and delays.
“Scott Vaughn came to Unity to volunteer his services at a time when the town had a very clear need and he proceeded in good faith to design the school building the School Board asked him to build,” Warner said. “It is only appropriate not to assign blame (in the settlement) because he did his best under difficult circumstances.”
Vaughn, who had ties to the town, now lives in Massachusetts. He could not be reached for comment.
Patrick O’Grady can be reached at pogclmt@gmail.com.
