City Will Appeal Arbitration Ruling

The Oxnard City Council has decided to appeal to a state appellate court a ruling that requires the city to pay a local construction firm $1.95 million for violating a contract with the company.

In closed session Tuesday, the council decided to appeal an arbitration ruling that said Oxnard breached a contract in December, 1988, when it fired B & Sons Construction Inc. of Oxnard.

The arbitration ruling was upheld July 14 by Los Angeles County Superior Court Judge Ronald M. Sohigian, who said the arbitration was “supported by substantial evidence and was not based on an error of law.”

Alan Holmberg, an attorney representing the city of Oxnard in the contract dispute, had asked Sohigian to dismiss the arbitration ruling because he believes that the city should not have to pay for anticipated profits lost by the construction company because of damage to the company’s reputation.

Holmberg said Wednesday that the appeal would most likely be made to the state appellate court in Los Angeles and would be heard by a board of appellate judges. He said he is not sure when the hearing will take place.

The dispute began in 1988 when the city hired B & Sons to build about three miles of storm drain for water runoff in the 1,600-acre Northeast Industrial Assessment District in northeast Oxnard.

Before the project could begin, the company discovered that the ground water and soil were contaminated by petroleum and refused to work in the contaminated area without taking high-cost safety precautions, such as training personnel. That is when the city fired the company and later hired another firm to complete the job.

The arbitrator hired to help settle the case ruled that city officials knew in advance of the contamination.

Lanny McKay, contract administrator for B & Sons, could not be reached for comment on Wednesday but he has criticized the city in the past for “wasting taxpayers’ money” to delay paying what it owes the firm.

City Atty. Gary Gillig said the city has the right to appeal the matter, adding that attorney fees for the appeal will be paid by property owners in the assessment district. Gillig said he has met with the property owners.