NEW ORLEANS – A $4 million-plus lawsuit brought by Minnesota construction company Community Facility Partners (CFP) against the Orleans Judicial District Court Building Commission (JBC) and Parish Civil District Court Judge Christopher Bruno shines a bit of light on just how complicated, not to mention opaque and politicized, the process of carrying out civic building projects can be.
JBC on Oct. 19, 2015 notified CFP that the contract it had been awarded to build a new district courthouse had been canceled. That amounted to a legal breach of contract, the company asserts in a 26-page lawsuit filed in U.S. District Court for the Eastern District of Louisiana. That's when things get complicated, and murky.
CFP asserts Bruno sabotaged CFP's contract with the JBC, leaving the company in the hole for the $400,000 it paid to secure an alternative building site, as well as $953,000 in project-related bills JBC has not paid.
For starters, CFP says it put down $400,000 to secure a site on Canal Street near Claiborne Avenue after an architectural assessment of the initial site proposed by Mayor Mitch Landrieu – the Charity Hospital building abandoned since Hurricane Katrina struck – estimated it would be exorbitantly expensive (some $400 million) to renovate.
CFP expected to net around $4 million by completing the $112 million project. It has shelled out nearly $1 million as of filing the lawsuit, the company says.
Orleans has become much more careful and rigorous in writing and awarding civic construction projects since a litany of issues – from overbilling to conflicts of interest and fraud – were brought to light as the parish worked to recover from Hurricane Katrina in 2005, McBride & Russell attorney Peter Russell told the Louisiana Record.
"Orleans, St. Tammany and other river parishes bought their fair share of bad contracts (in the wake of Katrina). They were 'fleeced' by out-of-state contractors who overbilled, billed for fraudulent expenses or failed to deliver on schedule, or at all. Three or four years, and millions of dollars later, they're much more careful," Russell said.
CFP was informed that Bruno would handle all communications for Landrieu regarding the company's professional services agreement (PSA) with the JBC.
According to the lawsuit, JBC executive committee member Judge Kern A. Reese told CFP that Bruno was attempting to sabotage the contract by disparaging the construction company's efforts and encouraging JBC board members to oppose his and other board members' efforts to have the new courthouse built.
Moreover, Bruno allegedly neglected his responsibilities by failing to attend any JBC meetings regarding the construction project, CFP asserts. "The loss caused by Judge Bruno's actions is substantial both to the JBC and to the company,¨ according to the lawsuit. ¨It, in effect, is a breach of the public trust. The litigants and the users of the courthouse had the right to expect that the JBC would construct a new courthouse that would satisfy their needs."
"If the allegations are true, Judge Bruno could be in serious trouble. Acting in such a manner would likely result in the judiciary taking some form of professional disciplinary action," Russell commented.
A variety of means are used to grant authority to manage and administer PSAs, he pointed out. "Typically, you have a contract in writing that serves as a mandate. It looks like CFP is alleging Bruno did not have such a mandate, which may be grounds for professional misconduct."
That said, it's not clear whether CFP's breach of contract claims are valid, he added. "The contract could have stipulations that set out exactly how it is to be executed. That might include it being executable in phases given specific milestones are met."
Bruno's attorney, Dane Ciolino, told a reporter the lawsuit would be dismissed. In addition, he said, Bruno intends to seek legal redress for CFP filing a frivolous lawsuit. Ciolino declined to say anything further when contacted by the Louisiana Record, stating that he was prohibited from doing so as litigation is in process.
Reese, who CFP claims did not have the authority to direct contract funds, is named as a defendant in the lawsuit.
CFP says it's mystified as to why the contract was suddenly canceled, the company's attorney, Richard Goins, told a reporter. "Whatever's going on there we can only speculate," he was quoted as saying. "My client is simply interested in getting paid for the work he performed."