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HomeMy WebLinkAbout1994-01-24 94-79 RESOLVEDate 1-24-94Yv1 Item No. 94x9 Item/Subject. B=W' Ratifying of Agrean%mn[ of leleeae R8: I'e[f®mnae Bond 91; 309166 (Fire Station M. 5) Responoble Department: IOPI Commentary: usixg the recent of the City's Fire Siouan No. 5 p oject, a project connstor, tie Fblden cag , i _m® insolvent and defaulted on Its obligations to tan City of Forgot. the Ibldkn Coq ,s connect was a tually canplabsd by Dwenpovt Plud v 6 Heating, Inc. under a ca sletion ag ant betxcen Devenport and 9 Ccr ticut mclamsity Cagaany, .� bond suety for Ibe lUlden Covany. Ibarer, the City of Bangor incoaed arse $13,0001 in adiftional project and lssoject-related costs as a result of Tle Bolden C g 's default, as itenizal in the attactsei nam dates Janwary 5, 1994. Fbllw a naso of discussions with legal counsel for The Connecticut In amnity Csagavry, Conrecticut �ty has agreed W mimiurse tto City's additional costs on the project. The 'Age of Release" esm-utsl by the City Manager sets out the tesss of tie settlaramc ane releases Connecticut ndaaity fry fnrtimr liability for tue parel at default. you agrearent was rwfamrl by tlm legal DeLartrneR and was on 1-10-94, but has not yet te n deLiveted W Connecticut h &inoity. In that the agreemnt psmides for a 1008 � by the City of tBrapr, }les approval is rxangaglcd. p/���� �� Depmraasxmd Manager's Comm""; Ila O� �-1��� � �n ,V C:ry,Nancgn. Associated Infor mtiom Melo, Ietter Budget Approval: Ainvnne nve Legal Apprmal: Cry 0404 Introduced For Cma{ aydA "•ye First Rending Paye _ of _ [-]Referral 94-]9 Assigned to Councilor Sullivan CITY OF BANGOR January 24, 1994 (TITLE.) PwtbBt.. �tifying iaaartica of Atyearent of Felease BB: BmW BOC 309166 (Fite SFatigt W. 5) By W City C"wit of N City ofBa%wor: B LVBD, .the action of Frbmri A. Barratt, City % Jam', in eonearting on hehalf of the City of Bogor, an 'Agreement of Pelease PS: Perfonrexua Bocci = 309166', settling certain clailns arising wt of the City of Har pr's Fire statim M. 5 project, is hereby vatifieci; a copy of said agreerent being on file in the City Clerk's Office. The City Finance Director is hereby dixsctei to creiit prcc s frau the settlemtt to the appropriate capital atrl depaxtnenfal eccwnts as irdicatei in said agremce't IN CITY COUCTL January 24, 1994 Pae CI COONCLL 94-)9 RESOLVE purifying Faecution 01 Agreement of Release RE: Performance BOM BDC 309166 (Fire Station Wo.5) 94-99 i�1'.i IL T0: Dave Pellegrino, Purchasing Agent PH: Erik M. Stumpfel, City Solicitor DA: January 5r 1994 RE': Fixe station Na. 5 -Performance Bond issue w/Connecticut Indemnity Company Yn�erdry lhitorney for i received a phone call from Densis Cavanaugh, Connecticut attorney for Connecticut Indemnity Company. As you know, Connecticut Indemnity is the performance band surety for the Holden pr Company, which defaulted its subcontract on the above project. Dennis called to say that he had received authority from Connecticut Indemnity to settle the City of Bangor's claims arising out Of the Holden Company's default for a total of $13,018.75. This is the amount we were seeking, and will include reimbursement for the following items: Ames Corporation invoice 5121075 - Supplemental ASE services $ 2,290.30 Ames Corporation invoice 121095 - Supplemental AEE services - 241.15 Additional project representative costs (Gerald Nangawang) 10625.00 3-E Company Inc. subcontract change order request dated 5-12-93 955.00' Additional City staff costs Legal - $402.50 Purchasing - $156.40 558.90 City costs under replacement - - subcontract with Davenport Plumbing 5 Heating, Inc. $ 1,548.40 TOTAL $13,018.95 Dennis will be forwarding arelease for our signature and will end acheck upon receipt of the signed original. After this has been finalized, I will put an item on the Council's agenda ratifying the settlement. B.S.S. E pc: Sohn Quartararo, Finance Director Chief Foley, Bangor FireDepartment 94-09 HALLORAN & SAGE ATTORNEYS AT LAW Iada. LFrE. �v.� Ntlh PnuMUYNvpi �� �� �P�.l,i Iw 1.6meM �M Y F�Ni� �aeuAmwa ®M. X4eG N,RON0IJ9 we.w.a. 'la.w:i®w •,. a°1"Par'I'°°Mm<n. P. X �°i.vwm .r.w+ �rnaircamz kWC� ryMNyl. N+r� #v X.MYu wM �N.� � oumaM� ILLffiCC.� RdO.11ole C,trn�a dui P.� T W9 � P.YWe HL0.Mvtlw 1N 1. Xrpb.lr. le=Y6emu.lr. hmBTuav WNue. d. r. ,M!weme MM 6.0® AeW ACmW Writers Direct Dial No.. (203) 2974616 - January 5, 1994 VIA FEDERAL EXPRESS Enck Stumpfeld, Esq. JAN 0 7 1994 City Solicitor City of Bangor LGf;L 73 Harlow Street pEPAA'ieh�NY Bangor, ME 04401 Re: Principal: The Holden Company Obligee: City of Bangor, Maine Cartier: The Connecticut Indemnity Company Bond No.: BDC 309166 VMI No.: 1.025(4) Our File No.: 09255.0010 Dear Attorney Stumpfeld: Per our recent discussion, I enclose duplicate originals of the revised Tender Agreement by and between the City of Bangor and the Surely. Please instruct your client to sign each original before a Notary Public The documents also must be signed by two witnesses. Kindly overnight mall bath executed originals of the Agreement to the undersigned for execution by the Surety. A fully executed original of the Agreement will be returned to you. Finally, we have directed the Surety to Issue a check in the amount of 813,018.75 to the City of Bangor In accordance with Paragraph 3 of the Agreement.- This check represents the amount by which the Agreement with the Completion Contractor and the credits claimed by the City exceed The Holden Company contract balance. 94-09 HALLORAN x SAGA Aneuen A. ur ENck Stumpfeld, Esq. January 5, 1994 Page 2 Thank you for your continued courtesy and cooperation with respect to this matter. �Veerdry truly � yours, ✓� Dennis C. Cavanaugh DCC:ker Enclosures AGREEMENT OF RELEASE RE: PERFORMANCE BOND BDC 309166 KNOW ALL MEN BY THESE PRESENTS: THIS AGREEMENT (hereinafter referred to as the "Agreement"), is made and entered into by and between THE CONNECTICUT INDEMNITY COMPANY (hereinafter referred to as "Surety"), and CITY OF BANGOR (hereinafter referred to as "Obligee"), the day and year hereinafter set forth. WHEREAS, THE HOLDEN COMPANY (hereinafter referred to as "Principal"), as contractor, entered into a construction contract with Obligee, dated October 20, 1992 (the "Contract"), calling for the completion of certain mechanical construction work at the Bangor Fire Station #5, Bangor, Maine, The Ames Corporation Project No. 90122.04 (hereinafter referred to as the "Project"); and WHEREAS, as a condition precedent to commencing work under the Contract, Obligee, in accordance with the Contract, required THE HOLDEN COMPANY to post, - and THE CONNECTICUT INDEMNITY COMPANY as Surety did post, Surety's Performance and Payment Bonds No. BDC 309166 in the amount of Ninety-nine Thousand Fourteen and 001100 Dollars ($99,014.00); and WHEREAS, on or about March 12, 1993 the Principal notified the Surety that it was unable to complete performance of the Contract and otherwise voluntarily defaulted under the Contract; and WHEREAS, Obligee subsequently temlinated the Contract; and WHEREAS, Obligee has warranted to Surety that the Pnncipal is in default of the Contract and that Obligee has terminated Pnncipal's Contract; and WHEREAS, Obliges has heretofore made demand upon Surety to honor its obligations under the aforesaid performance bond; and WHEREAS, Obligee has represented to Surety that the original Contract amount was Ninety-nine Thousand Fourteen Dollars ($99,014.00); that the original Contract amount has not been revised by any deductive and additive change orders; that Obligee has paid Four Thousand Seven Hundred Ninety-nine and 70/100 Dollars ($4,799.70) to Contractor under the Contract, and that Ninety-four Thousand Two Hundred Fourteen and 30/100 Dollars ($94,214.30) in Contract funs, including retainage under the Contract, remain in the Contract, based upon estimated quantities of work remaining to be performed under the original Contract; and WHEREAS, Obligee asserts credits as follows: 1. In the amount of Two Thousand Eight Hundred Forty and 00/100 Dollars ($2,840.00), for the cost of an H.B. Smith Boiler which was paid directly by the Obligee; 2. In the amount of Two Thousand Five Hundred Thirty-one and 151100 Dollars ($2,531.15) for the cast of Supplemental Contract Administration by the Architect 3. In the amount of one Thousand Six Hundred Twenty-five and 00/100 Dollars ($1,625.00) for additional costs for owners project representative [two weeks at $812.50 per week[; 4. In the amount of Seven Hundred Fifty and 00/100 Dollars ($75000) for additional electrical expense — The 3-E Company, Inc. part of project Change. Order No. 1, 5. In the amount of Five Hundred Fifty-eight and 90/100 Dollars ($558.90) for additional City staff casts (City Purchasing Agent, City Attorney, etc.) leaving a balance available to complete the Project In the amount of Eighty-five Thousand Nine Hundred Nine and 25/100 Dollars ($85,909.25) ("the Contract Balance"); and WHEREAS, Obligee and Surety have revised the plans and specifications of the Contract to include all of the work remaining to be performed on the Project, including certain alternate additive and deductive Items, for the purpose of obtaining a comprehensive bid package for a completion contractor, all revisions having been Incorporated as of April 30, 1993; and WHEREAS, Surety and Obligee have arrived at an Agreement and a method to fully satisfy Obligee's demands and Surety's obligations, said Agreement being set forth below; NOW THEREFORE, for and in consideration of the mutual covenants, promises, releases, assignments, and payments recited herein, the parties hereto have agreed and do hereby agree as follows: 1. DAVENPORT PLUMBING & HEATING, INC. has entered into an agreement (the "Completion Agreement") with Obligee to fully perform all work remaining in the Contract in accordance with the Contract documents and to correct any defective work by Principal. The amount of the Completion Agreement shall be Ninety-eight Thousand Nine Hundred Twenty-eight and 00/100 Dollars ($98,928.00). 2. DAVENPORT PLUMBING & HEATING, INC. has, at its own cost, provided Obligee with payment and performance bonds executed by a corporate surety acceptable to Obligee, each in the penal sum of Ninety-six Thousand Nine Hundred Eighty-eight and 00/100 Dollars ($96,988.00), naming DAVENPORT PLUMBING & HEATING, INC. as Principal and the CITY OF BANGOR as the Obligee. In the event of any default by DAVENPORT PLUMBING & HEATING, INC. under the terms of the Completion Agreement, the Obligee agrees to make demand and look solely to DAVENPORT PLUMBING & HEATING, INC.'s performance and payment bond surety for performance of DAVENPORT PLUMBING & HEATING, INC .'s obligations, and the Obligee shall make no further demands and assert no further liability, other than as is expressly provided for herein, upon Surety for work performed by DAVENPORT PLUMBING & HEATING, INC. as of the commencement of the Completion Agreement. 1 3. In that the amount of the Completion Agreement as stated in Paragraph One (1) is more than the Contract Balance, Surely shall pay to Obligee, within sixty (60) days of the date of execution of this Agreement, the sum of Thirteen Thousand Eighteen and 75/100 Dollars ($13, 018.75), representing the difference between the Complefon Agreement and the Contract Balance. 4. Upon execution of this Agreement by Surety and the Obligee, the Obligee agrees that Surety shall have no responsibility or obligation for the completion, correction or warranty of the work performed or remaining to be performed under the Contract, including, but not limited to, alf approvals and inspections, punch list work, operating and maintenance materials and instruction of the systems and further agrees that Surety shall be and is hereby fully, finally, and completely released, discharged and exonerated of and from any and all claims, liabilities, demands, causes of action and/or obligations, whether in law or in equity, under Surety's Performance Bond No. BOC 309166. 5. Surety agrees that its Payment Bond No. BDC 309166 shall remain in full force and effect according to the terms contained therein and subject to such limitations and defenses as may exist at law or in equity. However, it is expressly agreed by and between Surety and Obligee that the scope and coverage of said payment bond shall be limited to and shall only apply to statutory claims for payment of subcontractors and suppliers of Principal for work performed and/or materials delivered prior to the date hereof, and that said payment bond shall not apply to or cover the Completing Contractor or any of its subcontractors and suppliers for any work performed and/or materials delivered after the date hereof. 6. To the extent of payments made by Surety hereunder, the Obligee hereby expressly subrogates Surety to, and assigns, conveys, sets over and transfers to Surely, any and all rights, claims, interests, causes of action; demands -and/or claims in bankruptcy which Obligee has, had or may ever be entitled to assert against THE HOLDEN COMPANY in connection with the Contract and expressly agrees that Surety may pursue such rights, claims, interests, causes of action, demands and/or claims in hankruptcy in Obligee's name or otherwise, and may prosecute and pursue such rights, claims, interests, causes of action, demands and/or claims in bankruptcy to the extent that Surety, in its sole discretion, deems advisable. 7. Obligee agrees that, by Surety entering into this Settlement Agreement and making the payments and promises herein, it is not the intention of Surety to waive, prejudice or in any way adversely affect any daim or defense that Principal or Obligee may have against each other. & This Agreement contains the entire agreement between the parties and superseded any and all prior agreements, arrangements and/or understandings between the parties. 9. It is understood and agreed that this Agreement shall be governed by, construed and enforced in accordance with, and subject to, the laws of the State of Maine. 10. The parties and their signatories hereto warrant that each has the power and authority to execute this Agreement. The parties hereto have voluntarily executed this Agreement based upon their independent investigation. The provisions of the Agreement shall be applied and interpreted in a manner consistent with each other so as to carry out the purposes and intent of the parties, but if for any reason any provision is unenforceable or invalid, each provision shall be deemed severed from this Agreement and the remaining previsions shall be carried out with the same force and effect as if the severed portion had net been a part of this Agreement. IN WITNESS WHEREOF, this Agreement has been executed, in duplicate anginals, on this 144" day ofd ,, 1994. Witnesses: THE CONNECTICUT INDEMNITY COMPANY �— I STATE OF CONNECTICUT) L�) as COUNTY OF HW;rfv " � ) This instrument was acknowledged before me on the "itsy day of , 1994 by of Surely. Notary Public in and for the State of Connecticut Printed Name: T:.�i.«� rm JITA - .. ,.. Yoraar.rc3r..:o - srzeuu:u:<n My commission expires: la13:11� p/o-t nt55: D l • •• STATE OF MAINE ) ) as: COUNTY OF PaU kpA<aT) This Instrument was acknowledged before me on the M Ply- day. of January, 1994 by A' dh.xnsT on behalf of the City of Bangor. 2u .'�'a_ [;HARD/ Notary Pubic in and for the / State of Maine Filmed Name TERRI LEE CCREy Notary pumc, E _u 0. maitre My Wmm. a:Solrra My commission expires: