Newport Firm to Aid County in Airport Suits : Litigation: Claims totaling $40 million center primarily on fees a construction firm says it is owed for work at John Wayne Airport.

A Newport Beach law firm has been hired at rates of up to $270 per hour to help defend Orange County against lawsuits resulting from construction problems at John Wayne Airport.

The lawsuits, totaling about $40 million, represent the largest claims now pending against the county and primarily center on efforts by Taylor Woodrow Construction Ltd. to recover fees the company says it is owed from the construction of the airport’s northwest parking structure and terminal building.

The County Board of Supervisors voted unanimously on Tuesday to retain the firm of Sheppard, Mullin, Richter & Hampton to join its defense team. The additional attorneys were needed, officials said, when the county’s lead counsel in the cases was disqualified last October because of conflicts of interest.

The firm’s hiring is the latest action in the county’s protracted fight involving the much-delayed $310-million airport expansion project, which supervisors now say is destined to play out in court.

“We went a long time trying to negotiate a possible settlement, to get it done in a less costly way,” said Supervisor Thomas F. Riley, for whom the new terminal is named. “We’re at the drop-dead-point now.”

County officials Tuesday declined to provide an immediate accounting of how much the government has spent to defend the lawsuits. However, fee rates of up to $270 per hour approved for the new law firm were described as “very competitive.”

“The county is faced with very inflated claims,” said Richard Oviedo, the deputy county counsel assigned to the airport project. “The only way we can defend it is to investigate it very closely.”

The lawsuits seek $28 million in costs for the construction of the terminal building and $7 million in a breach-of-contract dispute related to the county’s firing of Taylor Woodrow during construction of the $25-million northwest parking garage.

At the time of the company’s dismissal in May, 1990, the parking garage was more than eight months behind schedule, according to the county. Taylor Woodrow was replaced on the project by Irvine-based McCarthy Brothers.

Also pending is a separate legal action filed by Sasco Electric, which seeks another $2.5 million under its contract to install communication systems for the terminal.

“When you look at the total picture, we’re talking about big numbers,” Assistant County Counsel Laurence M. Watson said of the claims. “This thing has taken a lot of time because it is so massive.”

The county’s disputes with Taylor Woodrow stem in large part from about 850 design changes that were ordered for the terminal, many of which were an attempt to save money.

The changes involved everything from revisions in carpet color to plastic lamination on corridor walls and the marble used at the base of the John Wayne statue which decorates the terminal lobby.

In the lawsuit seeking recovery of terminal construction costs, the contractor said the flurry of change orders contributed to the delay of the terminal project, completed about five months behind schedule.

Included in the same agreement to hire its new attorneys, the Board of Supervisors also decided to maintain the services of a second law firm, Ernest Brown & Co. The firm had served as co-counsel to Pettit & Martin before that company’s disqualification.

Legal Troubles at John Wayne Airport

May, 1990: Terminal builder, Taylor Woodrow Construction Ltd., is fired from $25-million parking structure project. The company files a lawsuit alleging breach of contract and seeks about $7 million in damages.

County hires McCarthy Brothers to complete parking garage. Taylor Woodrow seeks to invalidate the contract.

January, 1992: Taylor Woodrow files lawsuit seeking $28 million in fees it says county owes for terminal construction. County asserts the company was far behind schedule in completing the building.

December, 1992: Sasco Electric Co. seeks recovery of $2.5 million for installing electrical and communications systems for the terminal.

Source: Orange County counsel