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Legal Fees Mounting on Canalside Lawsuit; Taxpayers Getting Crushed

By Tony Farina

Roseanne DiPizio claims the ECHDC tried to strong-arm them financially, in order to get rid of them.

Well, it seems that our story last week about the stonewalling by state agencies in responding to FOIL requests about the state taxpayer money being paid to the Phillips Lytle law firm to defend a wrongful termination suit brought by the Dipizio Construction Company against Erie Canal Harbor Development Corporation, has touched a nerve.

After nearly three months of getting no information, Empire State Development and its subsidiary, ECDHC, have completed what they describe as “their diligent search for documents,” and have responded to Ch. 4 news and to me personally about what they are paying to the law firm to defend Sam Hoyt, regional director of Empire State, and Thomas Dee and Mark Smith, the project managers on the replica canal project that Dipizio was working on before the company was terminated last May.

According to a response to one of my FOILS that I made in October, Empire State said in a communication dated Dec. 19 that “through the date of your FOIL request (listed as Oct. 30), legal bills by ECHDC to the Phillips Lytle LP law firm that are responsive thereto total $349,684,47.”

Now that obviously doesn’t include any of the legal fees billed or paid since that Oct. 30 date, and there has been plenty of legal work conducted between the parties since that time. Included is the decision last month by State Supreme Court Justice Timothy Walker in favor of Dipizio on two key issues connected to the wrongful termination action launched by the construction company.

The court’s decision was in favor of Dipizio’s claims that delays and increased costs were caused by ECHDC when it came to the disposal of non-hazardous contaminants and the use of less-expensive granite that was permissible under the contract.

Nonetheless, Phillips Lytle’s battery of lawyers has indicated the firm may appeal on behalf of the state, meaning the meter is still running on the legal bills being borne by state taxpayers and paid to Buffalo’s second biggest law firm which now resides quite comfortably on the harbor footprint in the old Donovan building.

Despite efforts by attorneys for Dipizio to try and settle the matter and move on, the state is insisting on continuing the costly legal fight that could run for years, all on the back of taxpayers and that includes a defamation suit.

I have repeatedly disclosed that I am a part-time consultant for the Cheektowaga construction company that has a 37-year unblemished record when it comes to finishing projects it started. The current legal fight began when the firm was terminated by ECHDC--without a vote by its board which had approved the contract to begin with-- for causing delays in the canal project, which the company claims were the state’s fault and they were just looking for a scapegoat.

In fact, Dipizio has countered successfully so far that major delays and increased costs in the $20 million project were caused by government bungling and off-the-mark interpretations of the contract.

The case is far from settled, the legal costs on both sides are mounting, and taxpayers are paying the freight for the state in a case that is very much up in the air. In other words, far from a slam dunk.

The state stonewalled for months on what it was paying in legal fees until my story last week in the Lackawanna Front Page, the South Buffalo News, and the Niagara Falls Reporter, and now we know that costs are clearly approaching a half-million dollars paid to the Phillips Lytle law firm and counting.

It looks like the state has given the law firm a blank check to defend the local bureaucracy in a bid to save face on what appears to have been an unwarranted termination of a respectable local business that is not willing to take the blame for the state’s bungling.

Stay tuned!



Niagara Falls Reporter - Publisher Frank Parlato Jr. www.niagarafallsreporter.com

Dec 31, 2013