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Jan 3, 2017 1:10 PMPublication: The East Hampton Press

East Hampton School District Denied New Trial In Sandpebble Lawsuit

The East Hampton School District office. JON WINKLER
Jan 3, 2017 1:38 PM

A State Supreme Court justice has denied the East Hampton School District a new trial in its legal battle with Sandpebble Builders, to which it owes nearly $1.5 million and counting.

After a jury found in favor of the Southampton construction firm on May 26, 2016, awarding Sandpebble $755,767 in damages, the school district filed a motion to set aside the verdict and initiate a new trial. After the court denied that motion on November 28, the school district then requested that the interest rate on the damages awarded to Sandpebble be less than the 9 percent stated in the court decision.

On December 14, Justice Jerry Garguilo ruled that the district, in fact, will have to pay the 9-percent interest on the damages beginning on September 19, 2006—when the district severed its relationship with Sandpebble on a three-school-building renovation project—and ending when the court verdict was reached in May. The interest for that period of time totals $659,120.

The court combined that with the original $755,767 award, adding another $70,474 in interest accrued from May 26 to December 14 of this year, as well as $1,155 in costs and disbursements of Sandpebble taxed by the court clerk. This added up to a current total of $1,486,516.

Sandpebble was hired to perform work for the district from 2001 to 2005. By 2006, Sandpebble claimed that the district had wrongfully terminated their contract and then entered into a new contract with a different firm for a large, three-school renovation project. The school district claimed that Sandpebble had abandoned its contract, but the jury ended up unanimously agreeing that the school district had breached its contract.

Sandpebble was originally seeking a sum of $3.7 million in damages, with interest. The district additionally has spent nearly $2.8 million in legal fees on the lawsuit.

In a recent interview, East Hampton Superintendent Richard Burns said that the district has no further plans to fight the lawsuit.

“We’re accepting the jury’s decision, which was significantly less,” Mr. Burns said, comparing it to the original $3.7 million Sandpebble was seeking. “We’re honoring the jury’s decision and we’re moving forward.”

Mr. Burns went on to say that the district officials are waiting for a final date as to when the running interest period will end, which will then provide a final amount that the district will pay. Mr. Burns said that the court has yet to confirm when the final date will be, explaining that negotiations on that matter are still going on.

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Funny...The lawyer for East Hampton School says “We’re accepting the jury’s decision, which was significantly less.”
So, Sandpebble was originally seeking $3.7mil. The verdict was for $1.5mil, but when you add on the $2.8mil in legal fees, this debacle cost the school $4.3mil on what was a originally a $3.7mil claim. Of course the lawyer is happy, he ended with with almost twice as much as Sandpebble got, and the school (i.e. taxpayers) are in the hole for $600k MORE ...more
By TheWaterMillian (33), Water Mill on Jan 3, 17 5:42 PM
1 member liked this comment
1+2+3= 6 School lawyer can add. School board missed that class...
By knitter (1253), Southampton on Jan 3, 17 5:57 PM
Next up: the $6 million bus depot that will cost $12 million
By fire11 (276), east hampton on Jan 3, 17 6:38 PM
It's so lucky the citizens of Hampton Bays rejected the Sandpebble development of a new library -- no doubt it would have been a similar fiasco. 9% interest plus legal fees. What a disastrous outcome.
By dfree (502), hampton bays on Jan 3, 17 7:09 PM
Disastrous outcome? The stupid East Hampton board refused to follow their agreement. They should sue whatever law firm that advised them they could pull the plug. Sandpebble is highly capable to do a library or school. Unfortunately these lame school boards of frustrated housewives think they know all.
By chief1 (2452), southampton on Jan 3, 17 8:45 PM
From what I understand there was a change in the scope of work in EH. Clearly, the courts did not award Sandpebble the full contract amount since he did not do the work. BTW, I went to the HB Library presentations conducted by Sandpebble. It was clear to me that he was leading the group for a new library where none was/is needed (and thankfully voted down).
By HB Proud (869), Hampton Bays on Jan 3, 17 9:40 PM
Obviously you're wrong about the East Hampton case based on the verdict.
By chief1 (2452), southampton on Jan 4, 17 12:59 AM
Chief1 - I don't believe I am wrong. Sandpebble only received a portion of what he sued for and then a ridiculous interest rate. The reports said the School Board changed the scope of work and Sandpebble did not execute the terms of the contract, but sued for for breach of contract for what I believe was the full amount. He was not out of pocket for any work. Just not cool where I come from. Glad the HB Library did go forward with the expansion with or without Sandpebble.
By HB Proud (869), Hampton Bays on Jan 4, 17 9:40 AM
Interesting how the majority of comments here are from ill-informed people who live outside of the school district. Reserve your outrage for a judge who decided that the district should pay 9% interest on the award when current interest rates are not even 1%. Also, the current school board had nothing to do with original contract dispute. My understanding from reports is that Sandpebble refused to engage in meaningful settlement negotiations along the way. Sandpebble should be embarrassed for taking ...more
By harbor (336), East Hampton on Jan 4, 17 8:20 AM
The whole thing is disgraceful. Millions of dollars for education being spent on frivolous lawsuits and over-paid/over-staffed administrations. There really needs to be some kind of controls over school boards and the way our monies are spent on education. And no, I don't have a solution :(
By foodwhiner (127), Southampton on Jan 4, 17 10:25 AM
Sandpebble filed the lawsuit...not the school district. Feel free to call them to complain.
By harbor (336), East Hampton on Jan 4, 17 10:58 AM
Seems EHSD breached the contract-so they invited it. Did they think Sandpebble was just gonna say 'oh ok go ahead get another contractor'? Should've thought about the $3M consequences. Inept-costly-poor decision making.
By foodwhiner (127), Southampton on Jan 5, 17 8:48 AM
The State government has controlled school budgets with the caps -- health care costs for teachers and administrators eat up any increase in budget -- so the only way local politically connected contractors can make extra money is through special construction budgets like libraries and fancy new sports facilities. That's going to cause local judges to throw cash at these contractors since the uncontested judge ships and appointed judges reward party stalwarts whose coffers are filled by cash rich ...more
By dfree (502), hampton bays on Jan 4, 17 11:24 AM
1 member liked this comment
Harbor you are ignorant. The contract was signed by the school board period!!! The interest rate is 9 % by law so what's your point. Voters are the problem they elect their buddies not the most qualified.
By chief1 (2452), southampton on Jan 4, 17 8:27 PM
That's actually a good point. Folks who have trouble balancing a check book are put in charge of $30 million annual budgets. It's no wonder they sign contracts they don't understand for projects no one really scrutinizes. Time for fiscal responsibility.
By dfree (502), hampton bays on Jan 5, 17 5:27 PM
1 member liked this comment
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