It’s been nearly nine years since Bob Cummins Construction filed suit against Bradford Sanitary Authority over an unpaid bill.
Since then, there have been two jury trials in McKean County Court, numerous appeals and $3.5 million in attorneys’ fees for the BSA — that, as of now, have been paid by local ratepayers.
The lawsuit was filed in 2016. The dispute comes from a rehabilitation project at the wastewater treatment plant. From 2014-15, Cummins Construction was the general contractor for a portion of the rehab project. In December 2015, authority engineer Gannett Fleming certified the project to be substantially complete, with the exception of a few outstanding items.
Cummins said they did the work and were owed payment; Sanitary Authority said they withheld payment because the work wasn’t done according to the contract.
The local contractor, which has been in business nearly 50 years and employs local people, says this suit seems like a vendetta; they did their jobs and want to be paid. The BSA, the provider of wastewater services to more than 18,000 local residents, says the contractor didn’t follow the contract and should take responsibility for alleged defects.
ISSUES
The biggest alleged issue was with the sequential batch reactor (SBR) installed by Cummins — one by the second manufacturer, Ashbrook, that was named in the contract specifications — and the Ultraviolet building, where wastewater is treated by exposing it to ultraviolet light. The BSA said the system wasn’t working correctly, with a possibility of moving too much treated water — effluent — to the UV building during the “decant” phase, where water is separated from sludge. Separated water is called decant water.
To date in 2024, there is no documentation that such excessive decants have taken place, according to Don Cummins, senior project manager for Cummins Construction. He said both they and Ashbrook offered a free solution to this problem in the form of a plate; it has not been taken by the BSA, which allegedly wants a check valve.
It’s important to note, said Nick Cummins, project manager at Cummins, that the state Department of Environmental Protection (DEP) has been “happy with the effluent quality,” with reports on its website indicating such.
In 2015, BSA withheld final payment to Cummins and denied some change orders because they believed the company had not followed the contract’s provisions.
Don Cummins said there was $260,000 of the unpaid contract balance, plus about $464,000 in unpaid change orders for a total of $724,000 outstanding. There were 120 change orders on the project, most of which were made by BSA’s engineer, Gannett Fleming.
“Some were upgrades after the work started, which is not uncommon, and some were needed because of the unknown circumstances that occur on most large rehabilitation projects, which almost always happens,” Cummins said. “This is not uncommon either because as you dig and demolish portions for new construction, things are uncovered that need addressed including obstructions to new work.”
From the BSA’s standpoint, Cummins holds the fault here.
“Cummins started this lawsuit in 2016 because it refused to accept responsibility for clear defects in the sequencing batch reactors (SBRs), which was new technology central to BSA’s ability to provide effective wastewater treatment for its approximately 6,000 customer connections,” said Steve Disney, executive director of the BSA. It didn’t perform as required, the BSA said, “Cummins, however, denied responsibility from 2016 through the second trial in 2024, even though the Commonwealth Court specifically found in 2020 after the first trial that Cummins was solely responsible for the SBR defects.”
Referring to the solution offered by Cummins and Ashbrook, Disney said the jury rejected it. And, he said, it would interfere with the performance of the SBR and possibly cause the plant to be derated by the DEP.
FIRST TRIAL
The first trial was held in 2019 before Judge Christopher Hauser. Cummins won 12 out of 16 claims for a judgment of $488,243.24. The BSA won one out of 21 claims for $4,945.
Hauser’s decision was reversed by the Commonwealth Court and remanded to McKean County Court, where a second trial was eventually scheduled.
Cummins explained the Commonwealth Court ruled the construction company was responsible for the alleged effluent problem with the SBR “because we chose the second-named supplier.”
The appeals court ruled that the SBR specifications were not a design spec, but a performance spec. “Therefore it is up to the contractor to supply the system that meets the needs.”
In other words, Cummins said, this is a change from the traditional way things are done. With this decision, “It is up to the contractor to use his own ingenuity to make the system work properly.”
However, Cummins said, they are not designers, they are builders. They didn’t design the systems, they installed what the BSA wanted.
MORE LITIGATION
In January 2024, before the second trial, the BSA filed suit against engineers Gannett Fleming, but didn’t act on the suit. When questioned later by Hauser about the lack of progress on the suit, BSA’s attorney John Gisleson allegedly said during a status conference that BSA had filed suit against the engineers in case they lost the suit against Cummins.
A second jury trial was held in February 2024, again before Hauser. The verdict was 12 of 14 claims for $398,568.94 in favor of Cummins, and 2 of 13 claims for $636,188 in favor of BSA based on the issue with the SBR and Ultraviolet building.
“The jury awarded BSA the necessary money to properly correct the defects that Cummins and its contractor Ashbrook created,” Disney said. Regarding the potential repair to the SBR, he added, “BSA also does not consider Cummins to be a responsible and trustworthy contractor based on the jury’s award and the Court’s findings that Cummins failed to comply with the parties’ contract in multiple ways. Throughout the project, Cummins misinterpreted the contract in ways that benefitted Cummins and sought extra compensation at ratepayer expense that Cummins had no right to receive. BSA therefore does not agree to Cummins performing any further work at BSA’s plant. BSA will have another contractor perform the work after Cummins pays what it owes under the verdict.”
For the trial, BSA hired an expert to design a “conceptual solution” to the issue. The concept was a “pinch valve” with a price tag of $695,000, but with no design drawing and no bid from a contractor, Don Cummins explained.
In 2019, BSA’s engineer designed and bid out the repair they wanted; the low bidder was for $20,000. However, the successful bidder was stopped from doing the repair — the one that would solve the problem at the base of the lawsuit, Cummins alleged.
Again, the BSA said it would have another contractor perform a repair after Cummins pays what it owes under the verdict.
CURRENT
The latest argument in the case is over attorneys’ fees — the Sanitary Authority wants the judge to order Cummins to pay the $3.4 million in fees they’ve incurred throughout the course of the case. This was filed as a 689-page motion for post-trial relief, including exhibits.
“Cummins needs to pay BSA’s fees as bound by the contract,” Disney told The Era.
This was always part of the contract, the BSA argued. However, Cummins disagreed, alleging the contract would allow the authority to recover fees only if a third party were to sue, not in the case of the contractor filing suit, their motion stated.
From Disney’s standpoint: “Cummins’ refusal to follow the contract and its litigation actions caused those fees. BSA did not start the lawsuit and has always wanted the dispute to be resolved. Cummins, however, has repeatedly obstructed those efforts. BSA sought to resolve the dispute years ago through motions filed with the court, but Cummins opposed those efforts and demanded money it had no right to receive while leaving BSA with a defective SBR and a project that still has not closed out due to the SBR deficiencies.”
He added that PENNVEST is still holding money payable to BSA because of the SBR defects caused by Cummins.
According to the motion opposing the awarding of fees, Cummins disagreed with the BSA on several points, the first of which was that the request came in Sept. 10 when the deadline for such a request to be made was March 25, as was set by Hauser. Anything not filed by the deadline is considered waived.
Cummins’ attorneys also argued that the fees for the authority’s attorneys, Morgan Lewis & Bockius of Pittsburgh, were “grossly excessive” at $3.4 million — $910 an hour for a partner, $575 an hour for a senior attorney and $305 an hour for a paralegal.
The total was five times the amount of Cummins’ attorney, Eckert Seamans Cherin & Mellott of Pittsburgh. The billing rates were also more than three times that of McKean County attorney Bob Saunders, who also assisted with the case, at $250 an hour.
According to the motion, the Pennsylvania Supreme Court must consider the “reasonableness of a party’s requested attorneys’ fees” rather than the billed rate.
Senior Judge John Foradora denied the Sanitary Authority’s request for fees on one basis — missing the March deadline by 5 1/2 months. Because the request for fees was not raised in a timely fashion, Foradora didn’t consider the remaining arguments.
The BSA filed a notice of appeal to Foradora’s decision, which is currently underway.
“If Cummins reimburses those fees to BSA, the litigation ends, at least from BSA’s perspective,” Disney said. “The contract requires Cummins to pay BSA’s fees, and BSA believes it has good grounds to recover them in the current appeal. BSA will seek those fees from Cummins if successful, which should conclude the litigation.
“BSA explained its interpretation of the contract from the very beginning of the lawsuit, and that interpretation was upheld by both the Commonwealth Court and the trial court following the second trial,” Disney said. “The lawsuit unfortunately continued far longer than it should have because Cummins refused to comply with the contract and opposed the trial court interpreting the contract.”
The case in chief remains on appeal as well.
