The City Council this week agreed to pay $145,000 to settle a breach of contract lawsuit filed by the insurer of a construction company hired to repair slopes in Glendale that were severely damaged by a mudslide in 2005.
Hartford Fire Insurance Co. filed the lawsuit Nov. 1, claiming the contractor was underpaid for excavation work that turned out to be much more intensive than what was advertised by the city.
In its lawsuit, Hartford Fire originally asked for $450,000 in damages — nearly as much as the city agreed to pay the contractor, Remedial Civil Constructors Inc., in 2009.
When Remedial Civil Constructors began construction, it found more work than originally described in the work contract, according to the lawsuit filed in Central District Court of California. There was more soil to excavate and a deeper retaining wall to fix, work that cost more than the $425,000 Glendale agreed to pay in the October 2009 contract, according to court records filed by the company.
Glendale withheld $154,000 from the company for not finishing the work on time in 2011, but as part of the settlement, the city will be handing over the funds.
City Atty. Mike Garcia said the city decided to settle the case to avoid the cost of litigation.
Michael Timpane, Hartford Fire's lawyer, also said his client chose to settle in order to avoid the cost of going to trial.
“We've settled with Glendale amicably,” he said in an interview. “This is just a very standard case that got settled so [both parties] don't have to spend money on lawyers.”
This isn't the first time city officials have been faced with a legal fight as a result of the mudslide. The city paid out nearly $15.4 million to cover damage claims and legal fees incurred by residents displaced by the disaster several years ago and who later filed lawsuits.
Glendale has also recouped $1.1 million from its insurer, $200,000 from an engineering consultant, and $98,500 from a Pasadena law firm that worked on mudslide matters.
The city also garnered $700,000 last year after auctioning off five damaged parcels of land it acquired through settlements with residents affected by the mudslide.