CLARKSBURG – A Taylor County housing agency will keep and recoup almost 40 percent of a nearly $500,000 contract it paid a Pennsylvania firm to refurbish one of its buildings.

U.S. District Judge Irene M. Keeley on Dec. 11 ordered the Grafton Housing Authority’s breach of contract suit against ARS dismissed after the sides reached a settlement through mediation earlier in May. The settlement included ARS dropping its counterclaim against GHA for disputed work on the Elizabeth Cather Towers on East Main Street.

The terms of the settlement were not disclosed in court records.

In response to a Freedom of Information Act submitted by the West Virginia Record, GHA disclosed ARS agreed to a repayment of $110,000 in two installments. The first $50,000 is due by June 16 and the remainder by Nov. 16.

Also, GHA was allowed to retain an additional $78,609 with the understanding it would be used to pay any outstanding business and occupation taxes.

Additionally, ARS was to return the Towers' laundry room balcony railing. With the exception of the U.S. Department of Housing and Urban Development, neither GHA’s board of directors nor its executive director, Ruth E. Gerkin, was to publically discuss the terms of the settlement or comment unfavorably about ARS’ work.

According to its complaint originally filed in Taylor Circuit Court on Feb. 1, 2012, GHA hired ARS, a West Miffin, Penn.-based construction company to make improvements to the Towers' balcony and façade.

Among the terms of the contract was for ARS to obtain a performance bond of $489,470, which it did though Old Republic Surety Company of Brookfield, Wis.

The contract, records show, was signed on Dec. 3, 2009.

In the suit, GHA alleged as of August 2010 ARS had failed to complete improvements as specified in the contract. The alleged deficiencies included the grinding down of nuts to give the appearance of full-thread engagement, failing to install the balcony railing system to specifications, and one for the laundry room, disabling the Towers' lightening arrestor system, damaging the windows and landscape, failing to paint stairwell entry doors and failing remove debris.

The poor workmanship, GHA alleged, almost caused the Towers to be shut down, and the tenants displaced after the city’s fire chief and municipal building inspector in consultation with the state Fire Marshal “deemed that work to be inherently dangerous to the residents of the facility.”

After its employees worked to erect barricades to restrict tenants from entering either theirs or balconies in common areas, GHA says the Towers was cleared to reopen.

However, at the time the suit was filed the tenants were unable to access their balconies.

The suit also included Old Republic as a co-defendant. It was transferred to U.S. District Court on March 6 on the grounds all the parties were from separate states and the value of the dispute between them exceeded $75,000.

Along with its answer on March 13, ARS filed a counterclaim against GHA. In it, ARS maintained while working on the project, GHA directed them to perform “additional work beyond the scope of the parties’ contract.”

No details were provided except ARS incurred “thousands of dollars in expenses for materials and labor in the performance of the additional work,” and GHA failed to pay them.

As part of the settlement, GHA agreed to dismiss all claims against Old Republic.

John C. Ashcom and Hunter B. Mullens with the Philippi law firm of Mullens and Mullens represented GHA and were paid $44,117 for their services. Vincent M. Roskovensky with the Wheeling law firm of Thorp, Reed and Armstrong represented ARS and Old Republic.

U.S. District Court for the Northern District of West Virginia case number 12-cv-39

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