Baton Rouge-based Capitol Construction is suing BREC and New Orleans-based Perez APC over a string of purported cost overruns, delays and payment disputes tied to the construction of a recreation center and pool at Howell Community Park.
The lawsuit, filed with the 19th Judicial District Court, was initially filed by Capitol Construction against Perez on April 20, 2023. An amended petition filed Aug. 26 added BREC as a defendant. At the heart of the case is a web of alleged bad faith dealings, design errors and miscommunication.
Perez has not responded to multiple requests for comment. BREC and Capitol Construction declined to comment on the ongoing litigation.
According to the lawsuit, BREC contracted Perez to perform certain administration and design services for the project on May 8, 2017. Capitol Construction—whose most notable projects include The Chimes’ Highland Road restaurant, LSU’s Alpha Phi sorority house and the Pointe Coupee Parish Courthouse—signed on as the project’s prime contractor on Sept. 21, 2020.
Perez initially provided Capitol Construction with faulty designs and incomplete plans, the lawsuit says. Errors included conflicting sewer and pond designs, incorrect pond elevations and sizes and incorrect topographical data.
Capitol Construction claims that those faulty designs delayed the start of the building pad to April 1, 2021. Weeks after the contractor began the building pad, Perez issued a new set of designs that further delayed the pad work and affected concrete, metal studs, rebar and other necessary materials by altering their required shapes and sizes, documents show.
In August 2021, Perez issued yet another set of designs seemingly intended to reflect the myriad changes that had been made since the project was bid. Capitol Construction contends that this ”conformed” set of designs was also incomplete.
Capitol Construction alleges that BREC, eager to take advantage of the contractor’s low bid, concealed known issues with the aforementioned topographical data so Capitol Construction would sign a contract and begin work on the project.
Capitol Construction claims to have submitted multiple change order requests during the course of construction to account for work outside the original scope of that contract. Many of these requests related to delays, material price escalations and the reworking of faulty designs. BREC and Perez improperly rejected several of these requests, according to the lawsuit.
Capitol Construction further contends that Perez had an inherent conflict of interest because admitting to design errors could have resulted in BREC filing claims against its professional liability insurance. This, Capitol Construction says, meant that Perez was reluctant to approve any changes that could have increased its own liability.
Capitol Construction claims this behavior violated industry standards and Perez’s contractual obligation to remain neutral in disputes between the project owner (BREC) and the contractor (Capitol Construction).
The lawsuit takes a more serious turn with Capitol Construction’s allegations of bad faith and fraud against BREC. Capitol Construction contends that BREC used construction change directives—or CCDs—to force the contractor to perform additional work without intending to pay for that work.
A CCD is a written order instructing a contractor to make changes to a project while leaving room for later cost negotiations. BREC’s internal policy forbids the park system from paying for such work without board approval—a policy that Capitol Construction alleges was concealed.
Capitol Construction claims that BREC and Perez executed CCDs to authorize hundreds of thousands of dollars in additional work with no intention of paying for that work, thereby forcing the contractor to cover the costs upfront while awaiting a resolution that never came.
After months of delays, BREC accepted the project as substantially complete as of April 30. In total, seven counts have been brought against BREC and/or Perez:
- Bad faith breach of contract (against BREC)
- Breach of contract (against BREC)
- Fraud (against BREC)
- Prompt pay interest and fees (against BREC)
- Conflict of interest and lack of neutrality (against Perez)
- Negligence (against Perez)
- Detrimental reliance (against BREC and Perez)
Capitol Construction is seeking full reimbursement for all costs incurred as well as “other just, legal, general and equitable relief.”
The amended petition comes just weeks before a Nov. 5 ballot that will allow voters to decide whether to renew two millages that keep BREC afloat. One millage, which is up for renewal every 10 years, is 6.2 mills for capital improvements. The other, which is up for renewal every 20 years, is 3.523 mills for the Imagine Your Parks tax.
The two millages equate to about 65% of BREC’s budget. Read more here.
