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Feb 15, 2012 5:13 PMPublication: The East Hampton Press

In East Hampton, Sandpebble Suit Takes An Acrimonious Turn In Public

Feb 22, 2012 9:06 AM

The lawsuit between the East Hampton School District and Sandpebble Builders took a public turn this week, with both the school district and the construction company issuing statements in which they threatened to take the matter to trial rather than settling to save on lawyers’ fees.

The construction company, which is owned by Victor Canseco, sued the school district for $3.75 million in 2006, claiming that it was illegally terminated when the district hired another construction manager as it embarked upon an $80 million, three-school construction project.

The school district fired the first shot this week: a declaration on Friday morning that Sandpebble had offered to settle for $2.9 million back in December 2010, but had backed away from that offer as recently as February 6 of this year.

“The community has legitimately inquired of the status of the pending Sandpebble Builders’ litigation,” said a statement from the district, which maintains that a “contractual relationship no longer existed prior to the commencement of the recently completed construction project.”

Signed by the district’s general counsel, Kevin A. Seaman, the statement said that the East Hampton School Board had sought for a great many months to generate settlement negotiations, but that Sandpebble’s attorneys had said in February that they would not entertain any settlement that was not “in excess of $2.9 million” despite having expressed a willingness to settle for $2.9 million a number of months ago.

“Therefore, unfortunately, the district will have no choice other than to continue to expend legal fees through the ‘discovery’ process leading to what will ultimately be a trial on the merits of the legal contentions of both the district and Sandpebble,” the statement said.

The attorney for Sandpebble Builders, Stephen Angel, said on Friday afternoon that he was “shocked” by the statement from the school district. “I don’t know what they’re talking about,” he said.

Mr. Angel said Mr. Canseco made a formal offer of settlement in December 2010 in which he had reduced his claim, and that the district “never responded.” According to Mr. Angel, “This stuff about exhausting settlement negotiations is a myth.”

Also on Friday, Mr. Canseco issued a statement of his own accusing the School Board of “irresponsibility” and “misrepresentation. ”His statement indicated that the case will have to be tried in the face of recent statements by the School Board.

“This is a situation where elected officials will say or do anything to divert attention from the budget reconciliation issues which they face as well as distance themselves from responsibility for what happened,” Mr. Canseco’s statement asserted. “They will even misrepresent a confidential settlement offer.”

At last count, the East Hampton School District has spent more than $2.3 million on the lawsuit and countersuits. Last spring it replaced the law firm of Morgan Lewis Bocklus, which was charging around $600 per hour, with Pinks, Arbeit and Nemeth of Hauppauge, which then-Superintendent Raymond Gualtieri said at the time would be paid $375 per hour.

The district’s attorneys in the lawsuit have maintained that Sandpebble, which was originally hired to oversee a much smaller, $18 million construction project, did not perform any construction work for the district. “If you look at the facts, not a single brick was put 
into place,” Jonathan Lipshie said in an interview in January. “It’s a tough case to prove when you’re suing as a construction manager and there ain’t no construction.”

The statement from Mr. Seaman went on to say that “The Board of Education remains extremely disappointed that it is not able to generate a settlement that would be based upon a fair and reasonable consideration of Sandpebble’s claimed loss of the opportunity to represent the district in the subject construction project as against the capacity of the district to absorb a payment that is not crippling to the district’s budget and its programs, much less a prospective tax rate increase that would be able to be absorbed by its taxpayers.”

Mr. Angel said in December that if there were a trial, it would probably not start for six to 12 months. It would be held in Suffolk County Supreme Court, probably in Riverhead.

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Sounds like professional law firm is needed. Lots of folks taking East Hampton to the cleaners. No problem- the tax payers are all to willing to foot the bill.
By realistic (415), westhampton on Feb 15, 12 8:06 PM
Sounds like the contractors case has merit. But why settle in the beginning of the case then attorneys miss out on 2.4 million in fees. How about a malpractice suit for the counsel that advised the school the contract with contractor was void. You wonder where your school taxes really go.
By chief1 (2450), southampton on Feb 15, 12 11:05 PM
Should have settled. They have spent more tax payer money on legal feed than it would have cost to settle and we still may lose. What a mess!
By razza5350 (1895), East Hampton on Feb 15, 12 11:07 PM
I would love to hear how much Sandpebble was willing to settle for in the first year. 1m? 1.5m?

And Jackie Lowey - was she missquoted? she can't be that dumb can she?

First the japan quote and then the bleeding to death remark.

You were bled to death by lawyers and the incompetent school board that was there before you. Plain and simple. the contractor had a contract and the district tried to break it.
By C Law (316), Water Mill on Feb 16, 12 6:53 AM
They broke a contract and the question is why. A friend of the board or administrative group had a friend of a friend to do the work? Why would they not talk to Sand Pebble? Playing politics with our money, and the best part is we might be paying his legal bills.
By chief1 (2450), southampton on Feb 16, 12 8:49 AM
the contractor is claiming damages way beyond the scope of actual losses. plain and simple he is trying to bleed the school and taxpayers into submission. it's a shame that a local contractor has so little concern for the taxpayers and children in his community. the judge should force a settlement. it's done all of the time.

Kudos to Lowey for saying what others haven't and standing up for us.
By harbor (336), East Hampton on Feb 16, 12 9:08 AM
My understanding is the contractor was willing to settle when this mess began but the prior school board said no. Now he's into it for over a million in legal fees. The big winners here are the lawyers and the big losers are us the taxpayers. FYI from what I hear Sand pebble will most likely winning vindicating him and costing us all even more money
By razza5350 (1895), East Hampton on Feb 17, 12 10:04 AM
my guess Sandpebble's lawyers are working on contingency and maybe that's why there's no settlement. what are the odds that a jury inevitably consisting of some parents with school age children is going to award a large verdict against a school district absent overwhelming evidence.. which there isn't here. I'd be rushing to settle this if I were Sandpebble.
By harbor (336), East Hampton on Feb 17, 12 2:30 PM
are you privy to the evidence in this case? If you are please share.

From what I have read, it seems to be an open and shut case. The contractor had an executed contract and the district backed out, opting not to include the contractor in the bigger project.

From where I stand, it looks like the district will be out 3m in legal fees and then 3.7 mil in damages.

A total horrid mess that no one will be made accountable for.
By C Law (316), Water Mill on Feb 18, 12 6:08 PM
the school and sandpebble should request immediate judicial mediation and stop wasting everyone's money.
By harbor (336), East Hampton on Feb 17, 12 4:58 PM
It's funny how you say there is no evidence. What is a signed contract? A jury looks at the facts and a signed contract is the best evdence you need in a contract dispute. Stop being so mad at the contractor and be mad at the law firm that bilked over 2 million dollars. The board members make me laugh acting like they wouldn't have done the same thing. School boards are made up of local idiots sometimes doctors, and lawyers who believe they understand education, and business. That's not the case ...more
By chief1 (2450), southampton on Feb 17, 12 7:31 PM
I say make the Public Officials - yes even School Board members "personally responsible" for their actions. Much of the irresponsible behavior would be averted and release the tax payers from their inexperienced actions.
By realistic (415), westhampton on Feb 17, 12 7:50 PM
Officials are elected by us to represent us. Could you imagine if you could sue every elected representative who did wrong? The wronged party would never get paid and we would have no one serving the community. Granted the prior school board made a huge mistake in not settling and we the tax payers made a bigger mistake in electing them. On a different note it sounds to me that sand pebble really played hardball with us. Would you consider hiring them after they sued us. I wouldn't.
By razza5350 (1895), East Hampton on Feb 18, 12 7:24 AM
Hardball? Does a contract mean anything anymore. If you think breaking contracts are ok you shouldn't hire anyone it's called being dishonest.
By chief1 (2450), southampton on Feb 18, 12 7:57 PM
Contracts are broken all the time. Whats unique about this situation is Sandpebble is suing the taxpayers of East Hampton Town for services he NEVER did but was contracted to do. unfortunately I believe he will most likely win the case due to incompetence by the school board. You will have the prior school board AND sand pebble to thank when you see you increase in taxes
By razza5350 (1895), East Hampton on Feb 19, 12 2:00 PM
If Sandpebble really wants to settle rather than inflict pain on taxpayers by prolonging the case it should invite the school district to meet in the judge's chambers for settlement talks. But you know that won't happen.
By harbor (336), East Hampton on Feb 19, 12 9:13 PM
Almost 3 million in legal bills who inflicted pain on the school district? Lawyers. Whose decision to break the contract. School board knuckleheads. I'm sure they had legal counsel when they broke the contract. Sue for malpractice.
By chief1 (2450), southampton on Feb 20, 12 11:28 PM
Know the difference between a dead snake and a dead lawyer on the road?

There are skid marks in front of the snake.

Fiddle Fiddle Fiddle.
By Nero (251), Sag Harbor on Feb 21, 12 4:52 PM
for the best interest of the community these two parties should sit down with an arbitrator and be done with it. Enough is enough. It should have been done at the start but lets not talk about that.
By razza5350 (1895), East Hampton on Feb 22, 12 6:45 AM
Love it!!! Keep spending that taxpayer money!!! Most of it comes from people who hardly use their homes anyway and then get trashed by the locals. This stuff is so yummy!!! Go BUILDER!!!! Fight these jerks and make them spend, spend, spend and yet your deserved settlement!!!
By MsRainbow (19), Southampton on Feb 27, 12 11:39 AM
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