CNMI Port Authority Sues Over Airport Deficiencies

admin's picture

Boeing allegedly breached contract for safety violations

By Alexie Villegas Zotomayor

SAIPAN, CNMI (Marianas Variety, April 9, 2013) – The Northern Marianas’ Commonwealth Ports Authority (CPA) has filed a complaint against Boeing Service Company for breach of contract relating to its Saipan International Airport West Addition project.

Through its counsel Attorney Matthew T. Gregory, CPA sued the defendants — The Boeing Company and Boeing Service Company — yesterday in federal court.

CPA alleges that Boeing breached its contract with the ports authority by failing to design, engineer, and construct the Saipan International Airport facilities to meet applicable CNMI Building Safety Code requirements, including seismic stress requirements and typhoon wind force requirements, and other expected design standards.

The plaintiff also alleges that Boeing failed to conform to its professional duty to exercise due care in its design, engineering and construction services.

CPA is seeking damages in excess of $1 million to be proven at trial.

It is also asking for costs, interest and attorney’s fees.

CPA is seeking a jury trial.

Following the Sept. 11, 2011 attacks, CPA sought to upgrade its Saipan International Airport facility by adding additional terminal space and other security improvements to be known as "West Addition."

CPA entered into a contract with Boeing on Feb. 12, 2004 for the design and construction of a project involving improvements of the Saipan International Airport West Addition.

Based on the contract, Boeing designed the airport facility and provided construction for the project, utilizing its design and engineering subcontractor Leo A. Daly Company.

Leo A. Daly Company was the designer of the Commonwealth Healthcare Center’s (CHC) dialysis center and the West Tinian International Airport project.

According to CPA, it was notified by the Leo A. Daly Company on Oct. 3, 2011 that structural problems "likely existed" in the design and engineering of the Saipan International Airport facility.

As it sought remedy, CPA relayed its concerns about the alleged design and engineering flaws to Boeing.

CPA acknowledged that Boeing promptly responded, investigated and addressed CPA’s concerns "constructively and in good faith" with the goal of remedying the defects.

Boeing’s investigation revealed that the design, engineering and construction of the airport facility did not comply with typhoon or earthquake protection standards applicable to Saipan or with the CNMI Building Safety Code.

CPA noted that among Boeing’s responsibilities included designing, engineering and constructing the facility to meet proper building codes, proper seismic zone requirements, and to withstand typhoon wind forces.

CPA says the structural flaws will require major structural reengineering and retrofitting of the West Addition.

Texas-based Boeing Service Company is a subsidiary of the Boeing Company headquartered in Chicago, Illinois.

CPA is currently engaged in good faith negotiations with the defendants which have yet to conclude.

In a related matter, CPA earlier asked the court for an order to compel former Leo A. Daly Company designer James Walfish (1) to produce materials as requested in the subpoena duces tecum served upon him; (2) to ask the Leo A. Daly Company to produce documents and testimony regarding the Saipan International Airport, which LAD agreed on or before March 6, 2013 to produce and has already begun producing; (3) documents and testimony regarding the now-settled Commonwealth Health Center lawsuit, which LAD has not agreed to produce and which are protected from disclosure to CPA by the terms of the confidential settlement agreement and general release, signed on June 29, 2010 that resolved the CHC lawsuit.

For the designer of the CHC dialysis center, Saipan International Airport West Addition and West Tinian International Airport, it has no objection to producing documents from its former employee James B. Walfish or documents relating to the Saipan International Airport; however, it objects to producing documents and testimony relating to the now-settled CHC lawsuit.

It asked the court to deny this portion of the CPA’s motion to compel relating to the settled Commonwealth Healthcare Center’s lawsuit, the settlement agreement of which requires interpretation and authority rests with settlement judge Alex R. Munson.

For the Leo A. Daly Company, the settlement agreement between the Leo A. Daly Company and CHC "constituted a complete and mutual release of all claims and demands among the CNMI, LAD [Leo A. Daly Co.], and their related entities, including CPA, arising from events that were at issue in the CHC lawsuit.

The Leo A. Daly Company, Boeing’s subcontractor for the Saipan International Airport West Addition project, is defending itself against CPA over allegations of breach of contract, violations of the Building Safety Code and Commonwealth Consumer Protection Act, professional malpractice, negligence and fraud.

Court records show that Walfish was alleged as the designer of the three projects; however, it was pointed out by Walfish’s lawyer that he was not involved in the Saipan airport project yet he will testify as to any knowledge he may have about it.

It was also stated that Walfish left the Leo A. Daly Company "on bad terms" on or about July 2003.

Court records also show that the Leo A. Daly Company, which opposed the subpoena duces tecum for Walfish, has retracted a previous claim that Walfish designed the Saipan International Airport West Addition facility.

Rate this article: 
No votes yet

Add new comment