Allegations persist, following DiPizio contract termination
Thursday March 13, 2014 | By:Steve Dlugosz | News
HAMBURG — The July contract termination of DiPizio Construction Company from a $20 million job at the Buffalo Waterfront has led to allegations of improper actions on the part of Erie Canal Harbor Development Corporation, claimed misdoings that included sex discrimination.
Hamburg resident and representative of DiPizio Construction Rosanne DiPizio said that a pair of recent legal victories for the business in the courtroom regarding the matter – which has several other pending layers in the related quagmire – substantiate her business’s complaint, and could go a long way toward eventually restoring the name of the longtime Western New York business, as well as taxpayer dollars spent.
DiPizio Construction, founded 37 years ago by Bernard DiPizio, was terminated from a project involving work at the former Memorial Auditorium site on July 22.
DiPizio Construction had originally been selected as the lowest bidder in January 2012, with state officials’ promising that the site would be ready for public use, with ice skating and other amenities, by Thanksgiving of 2012. However, Rosanne DiPizio contended that delays from the state thwarted immediate project work for three months and pushed back the hoped-for project conclusion date.
When the proverbial dust had cleared, four months of work remained on the docket, which had involved hundreds of workers. During the abbreviated contract, DiPizio had completed excavation work; the representative said that the company had meticulously delivered 900 truckloads of concrete.
According to DiPizio, the concrete passed all performance tests; she said that this is symbolic of jobs completed during the nearly four decades of the company’s existence, and she noted past successful projects conducted with the Buffalo Water and & Sewer Authority, Niagara Frontier Transportation Authority, Erie County Department of Public Works, state department of transportation and other city of Buffalo administrative entities.
She added that DiPizio Construction has consistently maintained positive working order by seeking input and being cognizant of residential surroundings, while never being previously terminated.
The Hamburg-based company claimed that delays in the replica canal project were caused by the ECHDC and then blamed on DiPizio, to cover up the corporation’s own failings in the administration of the contract and to avoid taking the public heat and risk angering the NYS governor for a project that was promised to be ready by Thanksgiving 2012.
Following court proceedings, State Supreme Court Justice Timothy Walker ruled findings in November that indicated support of DiPizio’s claim that project delays were caused by the ECHDC.
The court determined that the ECHDC’s refusal to allow DiPizio to dispose of the non-hazardous contaminated soils at a department of environmental conservation site was unreasonable. Meeting the ECHDC’s demand was said to have cost DiPizio $1.5 million above its low-bid offer, which had been recommended in a letter by the project manager that included use of a DEC-approved site. The dispute on soil disposal was reported to have caused delay in the work.
The judge also ruled that DiPizio should have been allowed to utilize a less expensive granite supplier for the project, under his interpretation of the project specifications, despite ECHDC’s having denied multiple requests by DiPizio to do so. The granite from the supplier that DiPizio desired had exceeded the specifications in the contract.
A second ruling by Walker blocked a possible $4 million-plus settlement between ECHDC and Travelers Insurance (the project bond holder), which DiPizio contended would have compromised its monetary claim against ECHDC.
Approximately $368,000 in taxpayer-funded dollars had been paid to Phillips Lytle LLP, the law firm representing ECHDC, through October. DiPizio said that ongoing litigation would have pushed that legal tab over $500,000 by now, an amount that the company representative said is unjustly heaped upon taxpayers.
DiPizio said that she finds it amazing that taxpayers have to continue paying legal bills. “The governor should make [the involved parties] pay for their own attorneys, not the taxpayers,” she said. “This is not gonna go away.” She contended that the contract terminators destroyed her father’s business reputation. “I won’t be blamed for someone else’s mistake. [The ongoing litigation] has cast a complete cloud over DiPizio’s head. It’s very difficult for us to move forward and to get bonds.”
She said that, although more than 40 change orders were given to her company, during the project, making continuous work flow difficult, the aforementioned court rulings reported that no quality issues existed in her company’s project work.
ECHDC Board Member Sam Hoyt and ECHDC President Thomas Dee had each testified that no such quality issues existed, but later changed their accounts.
Saying that the ECHDC Board of Directors did not formally vote on her company’s contract termination, DiPizio questioned why Kenneth Adams, who serves as president and CEO of Empire State Development and commissioner of the NYS Department of Economic Development, has not progressively sought legitimate answers to the accused misdoings of ECHDC members. ECHDC has seven voting members and two ex-officio non-voting members.
Further court litigation could be announced in the coming weeks, according to DiPizio.
“It appears to be their game plan, to make sure, with taxpayer dollars, to not let it be known what they’ve done,” said the DiPizio vice president, who said that, moving forward, court matters could be in the millions of dollars, coming out of taxpayers’ wallets. “If we go out of business, the lawsuit won’t stop,” she said. “Time is against us. But will I give up? Never. We didn’t deserve this. The judge’s decision proves they are incompetent.”
DiPizio filed a sex discrimination suit against Dee and ECHDC Director of Construction Mark Smith with the state attorney general’s office, with the premise being that she had eliminated other considerations as to why the pair and others had behaved in the manner they did toward her company. She added that previous entities with whom DiPizio had worked had never let such an issue obstruct the ability to complete a project.
The defamation case filed by DiPizio has returned a court ruling to deny a motion by Hoyt, Dee and Smith – being sued as individuals – to dismiss the defamation cause of action, with DiPizio’s sufficiently pleading malice in paragraphs 32 and 39 of the complaint. DiPizio questioned why taxpayers must pay for the legal defenses of the trio, if they are defending themselves from an individual standpoint.
An email returned to The Sun from the Office of Empire State Development WNY read, “The matter is under litigation and therefore we are unable to comment at this time.”
DiPizio said that her company has never been one to take a “look-at-me” approach, but added that the project involving the former Aud site involved matters that have to be revealed.
“We don’t like to create a problem, but what’s happening here is so unjust it [must be addressed],” she said. We expect another decision from the court, and it could be a game-changer.”
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