Elm Grove wins lawsuit against contractor Michels

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Waukesha - The Village of Elm Grove has won its breach-of-contract lawsuit against a construction contractor that was hired to fix a recurring flooding problem.

In the suit, the village alleged that Michels Pipeline Construction Inc. of New Berlin walked off the job and created a nine-month delay in a $4.6 million tunneling project in downtown Elm Grove.

The project, which began in March 2006, called for installing an underground tunnel through downtown to divert floodwater.

A Waukesha County Circuit Court jury on Wednesday found in Elm Grove's favor after a seven-day jury trial and said the village should be awarded $317,216.71, including damages for the delay and additional engineering fees.

The civil suit, filed in 2008, sought unspecified damages from Michels Pipeline and its parent company, Michels Corp.

Michels denied that its crews mishandled the job and walked off the job. It argued that tunneling work was halted temporarily because of poor soil conditions that created a risk of tunnel collapse.

Michels also argued that it encountered soil conditions that Elm Grove did not reference in bidding documents, among them numerous boulders, some as large as 6 feet by 3 feet. Elm Grove's documents indicated only "possible" or "occasional" boulders, Michels contended.

"The residents of Elm Grove and our business community were forced to endure a long period of unnecessary disruption and inconvenience during the project and in addition to a claim for millions of dollars in extra charges. This verdict recognizes those facts and verifies the village's position on our contract on this work," said Village President Neil Palmer in a statement Thursday.

Michels contended that the extra labor, equipment and materials it needed for the tunnel project because of the poor soil conditions it encountered cost it at least $2.8 million more.

Michels, through spokesman Thad Nation, said it was disappointed in the verdict but respects the jury's decision.

"Our case was based on our good-faith belief that our crews had encountered differing site conditions than those that were represented in the contract. These types of situations are very difficult, but they come up in construction," Nation said.

The flooding problem was linked to the deaths in August 1998 of two boys, ages 14 and 10, who slipped and fell into a flood-swollen culvert near Watertown Plank and Sunny Slope roads.