Southeast : School District Ordered to Pay Firm

A Superior Court jury Friday ordered the Long Beach Unified School District to pay $2.5 million to a construction firm for withholding payments on a maintenance yard project completed in 1991.

The district had charged La Habra-based Rainey Construction Co. $350,000 in late fees for running a year behind schedule on the $3.5 million West Long Beach project.

An attorney for Rainey said the contractor went out of business as a result of the fines, which he said violated the job’s contract.

Warehouses and offices were built later than planned because of errors in the district’s design and missing building permits, he added.

School officials plan to appeal the ruling next year, district spokesman Dick Van Der Laan said. He questioned whether the construction company had ever intended to complete the job on time.

“The problem was the delay,” Van Der Laan said. The district lost money because construction of a school had to be put off as a result of the maintenance yard holdup, he said.

Early on, the construction firm wanted to forego the job altogether, Rainey’s attorney said.

A computer accounting error had caused the company to bid excessively low for the project, but the district would not let the contractor withdraw the offer, he said.