Target sues developer for $1 million

By Audrey Holsclaw | Sep 9, 2008

MORGANTOWN -- Target has filed a federal lawsuit seeking $1 million after its site development agreement fell apart along with the property along the back of its building.

On July 11, 2003, to the delight of students and Morgantown residents alike, Target entered into a site development agreement with Mountaineer Property Co. in which Mountaineer Property Co. agreed to perform all site development work necessary to erect a Target store as part of a shopping center, now known as University Town Center.

Before agreeing to the site development, Target required Mountaineer Property Co. to submit a geotechnical plan, which had to be reviewed and approved by Target, specifying exactly how the earthwork preparation would be done.

The site agreement also stipulated that Mountaineer Property Co. would correct any defects at its own expense or reimburse Target for correction and pay for all of Target's litigation expenses if need be.

On Feb. 6, 2003, Mountaineer Property Co. submitted a soils report to Target, which basically required that, as it would be built on reclaimed and unreclaimed mine land and coal refuse, engineering fill would be needed.

The northeast corner of the building was especially in need of such fill because it was where Target planned on building a truck dock, and the dock would need to be elevated.

The soils report stipulated that a road would run along the back of the building so that Target could access the back of the building for repairs and maintenance. It also had allowances for erosion and water seepage as the building is essentially built on the edge of a small cliff with an incredibly steep slope. Target included in the agreement that upon completion of the site work, Mountaineer Property Co. would provide a written certification from qualified and licensed professionals confirming that the site work had been completed in accordance with, and only with, the soils report.

According to the suit, sometime after entering into the site development agreement, Mountaineer Property Co. obtained different recommendation and a different report, known as the PSI report, from a different geotechnical engineer that Target had never reviewed, authorized, or approved. At that point, Mountaineer Property Co. decided to perform the site work according to the PSI report.

Unfortunately, the work was not done in compliance with either report.

Filed on Aug. 26, 2008, the suit states that the work was done with poor fill and not with reasonable care.

On May 20, 2004, Mountaineer Property Co. delivered the written certification. According to the suit, it stated specifically, "All earthwork preparation for the Target building pad was completed in compliance" with the PSI report.

Now the steep slope behind Target is sloughing, pulling the pad and the northeast corner of the store with it.

Filed by David Barnette of the Charleston firm of Jackson Kelly and Wendy Wildung of the Minneapolis firm of Faegre & Benson, the suit states that as of mid-2007, the movement of the northeast corner was at least one inch and in places more than five inches. Walls have cracked, the floor slab settled and separated, the roof was damaged, and the truck dock separated, creating multiple health and safety hazards. Unfortunately, because the road on the back of the building is sliding of the hillside, Target is not able to gain access to the back of the building to make any of the needed repairs.

Target alleges that after it discovered the sinking and sloughing it contacted Mountaineer Property Co. to request correction of the defects, as laid out in agreement, but Mountaineer Property Co. refused. Target finally hired its own contractors to make the repairs, and at that point, it discovered that Mountaineer Property Co. had outright lied about the quality of the work done previously.

Filed in the federal court because of the amount in controversy, the suit states that Target expects its out-of-pocket costs to be approximately $1 million, including payments to outside contractors, employee time spent moving merchandise, and fixture replacement. Target also believes that it will likely need to perform more repairs in the future.

Target believes Mountaineer Property Co. breached its contract and was negligent when it failed to use the soils report, breached its warranties when it refused to make repairs, and negligently misrepresented itself when it delivered the false certification. Target is seeking pre- and post-judgment interest, costs, disbursements and litigation fees.

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