The Missouri Court of Appeals ruled in favor of the Jackson R-2 School District on Nov. 8, effectively ending a long-running lawsuit over electrical work during the construction of the Jackson High School’s event center.
The Eastern District of the Missouri Court of Appeals found that the school district did not have to pay compound interest, which Jackson R-2 School District Superintendent Scott Smith estimates would have cost the district an additional $5.6 million.
The lawsuit was filed by Penzel Construction Company, Inc. on behalf of the electrical subcontractor Total Electric, Inc. to cover additional costs that Total Electric incurred to finish the electrical work for the event center project in 2009.
Total Electric claimed that the electrical plans provided to them by the district included inadequate and defective specifications, which led to growing costs for the project.
A civil trial held in 2019 found that the school district acted in bad faith by withholding payment of the additional work from Total Electric, and ordered the district to pay the initial damages of $800,000, as well as prejudgment interest, prompt pay penalties and attorneys’ fees.
The school district paid Total Electric $4,585,763 in January, although the case then went back through the Missouri legal system to see if that payment was sufficient or if compound interest needed to be added.
Smith called the Missouri Court of Appeal’s decision a win for the district’s students.
“The Court of Appeals decision truly impacts the students of Jackson R-2,” Smith said. “The district is pleased with the decision and what it means for our students and their education.”
Smith noted that the litigation spanned more than a decade, including many different administration teams and different school boards.
“While there have been multiple efforts to negotiate a resolution to this case over the years, those efforts did not result in a reasonable resolution that made sense for the Jackson R-2 School District and its mission to educate children and support our community,” he said.
Smith said the district is hopeful to move beyond the lawsuit and will “continue forward in the best interest of the students we serve.”
Danny Miller, chief operating officer of Total Electric, said he has 15 days to decide whether to appeal the decision to the Missouri Supreme Court, who would then decide whether to hear the case.
“At some point you have to discuss what’s enough – what’s enough time, what’s enough money and what’s enough litigation,” Miller said. “That’s one of the things we are considering on whether we ask to go to the Missouri Supreme Court or not.”
Miller said he has not yet made a decision on whether to make the request.
“I wish it hadn’t taken 13 years,” Miller said. “I don’t think that’s fair to have this kind of process in place when you are simply a contractor trying to be paid for something you did.”
Miller said the impact of the district withholding payment for over a decade was deeply felt at Total Electric. “I didn’t get anything until this year and that was 14 years after we did the work,” he said. “We had to go from 60 plus men down to about six. We sold trucks, we sold a lot of stuff.”
Miller added that no one won with this lawsuit, with him not making up the money Total Electric lost and the school district having to pay legal fees and the over $4 million settlement earlier this year.
“I don’t even have half my money back that this has cost me,” Miller said. “Had I received compound interest, it would have probably been just over my costs.”