New Bid Launched to Track State’s Costs to Defend Canalside Suit

In an effort to keep track of the mounting legal fees taxpayers are paying to Buffalo’s second biggest law firm to defend a wrongful termination suit filed against the state by the Dipizio Construction Co. in the replica canal project, we have filed another Freedom of Information (FOIL) request with the ultra-secretive Erie Canal Harbor Development Corporation (ECHDC), the state agency created to spearhead Buffalo’s waterfront redevelopment.

It was ECHDC led by Sam Hoyt (regional president, Empire State Development) that terminated Dipizio from the $20 million replica canal project in May of 2013 in a messy breakup that had the firm crying foul, claiming–among other things– that it was blamed for construction delays in the project that were actually the fault of the state.

If our latest request for information on the legal costs of defending the suit follows the same track as our previous request, it could be several months before the state comes up with a number.

It took nearly three months back in the fall of 2013 for ECHDC to respond to our FOIL request for an accounting, and when a response finally came in December, it pegged the legal fees to Phillips Lytle at $349,684.47 and counting.  That was two years ago.  In the meantime, the suit has continued with Dipizio winning several rounds locally and a trial now scheduled in May in State Supreme Court.

Hoyt, in a recent deposition, appeared to confirm that the state’s legal budget for Phillips Lytle now totals $1.7 million, and the costs are likely to easily exceed that number with legal motions, the upcoming trial, and possibly a role for the firm in the RICO suit filed by Dipizio.  In short, while ice skating at the much-hyped Canalside rink is often hit-and-miss, there’s no uncertainty about the legal tab the state is running up in defending the termination of the company awarded that replica canal project and dismissed under what many see as foggy circumstances.

Dipizio, a company that boasted a strong 37-year record in local development, insisted from the time of termination that delays and increased costs with the project were caused by government bungling and off-the-mark interpretations of the contract.

In contrast to the state’s blank checkbook (taxpayer money) to cover the huge legal costs, Dipizio has had to pay its own legal fees and has suffered severe damage to its reputation as a result of the sudden termination.  Efforts to reach a settlement on the lawsuit have been unsuccessful and Roseanne Dipizo has vowed to fight on to defend the company her father started 37 years ago.

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