Better Roads Digital Magazine
Issue link: https://read.dmtmag.com/i/142598
The sureties paid $2 million to Fisk, but resisted paying executed a purchase order agreement, where Fisk agreed the balance of $710,922 because they believed there were to supply the generator for $2,644,005. Later, Fisk re"questions about the cost of the generator." They argued ceived change directives from Benetech that increased the that Fisk and Benetech might have colluded to negotiate price to $2,710,792. an artificially inflated price for the generator, with the exFisk's division vice president and general manager, pectation the cost would be borne by the sureties instead Norman Clyne, testified the approximate $2.7 million price represented the cost of the generator plus engineer- of Benetech. The sureties relied heavily on the fact that CDM obtained a quote to supply the generator for aping costs, interest, overhead, profit, and shared savings. proximately $2.3 million, which was roughly $400,000 Clyne further testified the shared savings were an inless than the approximately $2.7 million that Fisk charged centive for Fisk to purchase the generator for less than under its purchase order agreement with Benetech. the $2.3 million that was quoted by CDM through The sureties also argued that collusion could be inferred Stewart and Stevenson. Clyne testified that Fisk succeeded by the "fuzzy math" and circumstances surrounding the by purchasing the generator for $2,090,800.00 from transaction, in addition to an alleged lack of evidence that EMDI-Hunt LLC. Clyne testified that Benetech saved more than $200,000 Fisk ever attempted to collect the purchase price from Benetech. Finally, the sureties argued they were prejuon the price of the generator. In other words, if Fisk had diced because Fisk failed to reasonably give them notice purchased the generator from Stewart and Stevenson, it when it discovered Benetech would not pay. would have cost close to $2.9 million (versus approxiThe court found the sureties waived any affirmative mately $2.7 million from EMDI). Fisk invoiced Benetech for the generator. When Benetech failed to pay, Fisk made demand under the Miller Act against Fidelity and Deposit Company of Maryland and SINCE 1965 Zurich American Insurance Co. (the "sureties"), which had issued a Miller Act payment bond in favor of Benetech. Although Fisk recovered PB Is The Right Choice. $2 million on the payment bond, For over 45 years, PB has the sureties refused to pay the redesigned quality Asphalt maining $710,922 due under the Patchers that are durable and purchase order agreement. Fisk built for year-round use. filed suit against the sureties under Choose from truck mounted patchers to dump body slip-in, the Miller Act for the remaining hybrid and trailer models. balance. Available with a variety of features and capacities from 1.5 to 10 cubic yards. Fisk moved for summary judgWe make patching a whole lot easier. Call 800-350-8521 ment. Fisk argued it satisfied its obligations by supplying the generator to the project, and that because Benetech failed to pay after more than 90 days, it was entitled to rewww.pblcorp.com cover on the payment bond for the TRUCK MOUNTED PATCHERS • HOOK LIFT • DUMPBODY SLIP-IN • TRAILER MODELS full amount, including profit and PB Corporation I 5778 W Barstow Ave I Fresno, CA 93722-5024 I 800-350-8521 shared savings. WORLD CLASS PATCHERS Text INFO to 205-289-3789 or visit www.betterroads.com/info Better Roads July 2013 23 InCourt_BR0713.indd 23 6/27/13 1:50 PM