DiPizio Scores Major Court Victory Against ECHDC on Canalside Project

Photo Courtesy of Business First. DiPizio Construction Company has won two major legal decisions in its fight against theErie Canal Harbor Development Corporation over work on the replica canal project at the old Auditorium site.

In a kind of David vs. Goliath scenario, a Cheektowaga-based construction company has won two important rulings in its battle with the state-backed Erie County Harbor Development Corp. (ECHDC) over its claims that it was improperly terminated from a $20 million job on Buffalo's waterfront at the old Memorial Auditorium site.

DiPizio Construction Company has claimed that delays in the replica canal project were caused by ECHDC and then blamed on the construction company to cover up its own failings in the administration of the contract and to avoid taking the public heat and risk angering the governor for a project that was promised by state officials to be ready for public use, including ice skating, by Thanksgiving of 2012.

"State Supreme Court Justice Timothy Walker made two rulings last Friday (Nov. 1) that are at the heart of this case, and they support the contention of the DiPizio company that delays in this project were caused by ECHDC," said Tony Farina, a spokesperson for the DiPizio firm and a senior editor at this newspaper.

"In the first instance, the court determined that ECHDC's refusal to allow DiPizio to dispose of the non-hazardous contaminated soils at a DEC-approved site was unreasonable," said Farina.

"ECHDC had insisted DiPizio take the contaminated soil to a designated landfill, and the judge ruled the contract supported DiPizio's position and allowed for the disposal at a DEC-approved site. Meeting ECHDC's demand had cost DiPizio $1.5 million above its low-bid offer that had been recommended in a letter by the project manager and that included use of the DEC-approved site. The dispute on the disposal of that soil caused delay in the work."

The judge also ruled that DiPizio should have been allowed to substitute a less-expensive granite supplier for the project under his interpretation of the project specifications even though ECHDC had denied multiple requests by DiPizio to do just that. The granite from the supplier that DiPizio wanted to use exceeded the specifications in the contract.

"The granite issue caused major delays in this project," said Farina. "If not for the granite dispute, the canals would be done and people would be skating there right now."

In another important ruling last Friday, Judge Walker blocked a possible $4 million plus settlement agreement between ECHDC and Travelers Insurance (the project's bond holder) which DiPizio contends would have compromised its monetary claims against ECHDC.

DiPizio's lead attorney, Michael Ferdman, had argued in court papers that as part of the proposed settlement with Travelers, "ECHDC would make a multi-million dollar cash payment to Travelers and waive a liquidated damages claim (potentially exceeding $1.5 million) against DiPizio. This tends to indicate recognition of a reasonable likelihood of success on the merits as to DiPizio's claims." In other words, ECHDC may have recognized they were vulnerable and wanted to make the deal with Travelers to get out of harm's way.

Despite numerous FOIL requests, Empire State Development has so far not provided the amount of taxpayer dollars being spent to defend Tom Dee and Mark Smith of ECHDC, and Sam Hoyt, regional president of Empire State Development, in its fight against DiPizio.

The DiPizio Construction Company was started 37 years ago by Bernie DiPizio and in all that time it has completed every job it started, according to Roseanne DiPizio, vice president of the company who has been waging a courageous campaign to clear the company's name and defend her father's reputation.

The future of the legal battle is uncertain at this point, although according to Farina, DiPizio would hope that last Friday's court rulings would rekindle settlement talks outside of court.

"The 73-year-old owner of this company and the entire family would like nothing better than to get this behind them and move on," said Farina. "They took a bad rap on this and now they feel somewhat vindicated by the judge's ruling. It is their hope that the state will come to the table and get this matter settled so that everyone can move on. The public is certainly not being served by dragging this out at further cost to taxpayers."