In January of 2011, 10 ACE Group Companies agreed to pay $70 million in settlement fees to the New York Workers’ Compensation Board after an investigation into whether certain insurance companies had been overcharging policyholders.
With Concrete Job Undone, Contractor Sues Westchester
On June 26th, 2009, The Whiting-Turner Contracting Co. won a contract to build a new convocation center at the California University of Pennsylvania, which is near Pittsburgh. Whiting-Turner said it then hired Ionadi Corp. to handle all labor, engineering and related construction costs dealing with cast-in-place concrete work at the facility.
Ionadi was required to provide performance and payment bonds, which it secured from Westchester. The insurer thus became obliged to remedy any default should Ionadi fail to properly complete its obligations. And the ACE Group unit also was liable for any payments Ionadi may not have made to its suppliers.
On October 17th, 2011, Whiting-Turner notified Ionadi and Westchester that the subcontractor was in default. Within two weeks, Whiting-Turner said it was notified by Westchester to supplement and complete Ionadi’s work on the project, and to track costs.
Whiting-Turner said it completed Ionadi’s portion of the work, including paying suppliers that had refused to delivery necessary materials due to previously unpaid bills.
In all, Whiting-Turner estimated that it spent $459,840 to complete Ionadi’s work. Further, the university deducted $49,000 from Whiting-Turner’s contract for deficient floors poured on the concourse level of the building.
Eventually, Whiting-Turner billed Westchester for the amount that it said was due it under the bond guarantees. The contractor said that the insurer asked it for additional documentation on the project in mid-2012, but so far Westchester has made no payment even though the documentation was provided.
In its suit filed in U.S. District Court in Maryland, Whiting-Turner accused Westchester of breach of both the performance and payment bonds. In addition to attorneys’ fees, Whiting-Turner asked the court to award it $288,067 for the cost of completing the work, as well as $246,005 to reimburse it for the costs incurred in paying Ionadi’s suppliers.
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