Greater Latrobe agrees to pay contractor $831K to settle elementary construction claims

Greater Latrobe School District will pay Nello Construction $831,000 to settle the general contractor’s claim for money it says the district still owes for construction of Latrobe Elementary School.

Both the school board and the Greater Latrobe School Authority, which owns the building, approved the settlement.

The agreement ended a dispute with Nello over where to place blame for delays that pushed back the day when students began classes at the $24.8 million facility from August 3, 2018, to Dec. 4 that year.

Nello attorney Dean Falavolito confirmed the settlement, which includes dropping Kurt Thomas, the district’s director of operations and planning, as a defendant in a related suit filed by the contractor. But, according to Falavolito, the company intends to press on with that action in Westmoreland County court, seeking the remaining money it says it is owed for the project from other involved parties, interest and attorney fees. That could total at least $800,000.

Project architect Axis Architecture and the project site manager, Foreman Program and Construction Managers, also were named as defendants in Nello’s suit.

Nakles said the district had withheld the final payment of about $1.26 million to Nello under its nearly $16 million contract because of the school’s completion about four months behind schedule and “other contractual issues we felt weren’t fulfilled.”

After three meetings, the parties agreed to the settlement rather than proceed with arbitration, Nakles said.

“We feel it’s fair to Nello and to the school district,” he said, adding that Greater Latrobe officials are “very pleased to have this case settled.”

Nakles said the district assigned any arbitration claims it may have against Axis and Foreman in the dispute to Nello.

“Nello will prosecute those claims in the name of the school district, with the school district receiving 15% of any settlement proceeds,” Falavolito said. Nakles estimated that share could potentially reduce the district’s cost for the settlement with Nello to about $775,000.

The settlement also brings to an end a dispute between the district and Nello over project-related information Nello sought through a Right-to-Know request that the district partially contested.

In its suit, Nello originally claimed that Thomas and representatives of Axis and Foreman planned to “‘hang’ their scheduling, supervision and design failures on Nello.” The suit blamed the defendants with delaying work on aspects of the project including connecting phone and sewer lines.

In turn, Pittsburgh attorney W. Alan Torrance Jr., who was hired as the district’s legal counsel for construction, charged that Nello didn’t follow the project schedule and “caused the delay of the structure, the roofing, the HVAC equipment and other material installation required to provide an environment for sound construction.”

According to correspondence included as exhibits in the suit, Falavolito claimed Nello’s work on flooring was delayed because HVAC units weren’t running as they should have been, to allow the building’s floors to dry.