Title
Consider a memorandum/resolution approving a settlement in the case of McLean Construction, Inc. v. the City of Killeen.
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DATE: September 17, 2024
TO: Kent Cagle, City Manager
FROM: Holli Clements, City Attorney
SUBJECT: Resolution Approving Settlement in the case of McLean Construction, Inc. v. the City of Killeen
BACKGROUND AND FINDINGS:
The City contracted with McLean Construction, Inc. ("McLean") for work to be performed related to the Stagecoach Rd. Reconstruction project and Trimmier Road Project, which included the extension of Lowe's Blvd.
Evidence of pavement distress and potholes were observed less than six months from the beginning of construction on both Stagecoach and Lowe's Blvd. The City directed McLean to make substantial repairs and withheld final payment for defective work when the repair work was not completed.
McLean sued the City in February 2018 for nonpayment in the amount of $748,480 on the Stagecoach project and $76,884 on the Trimmier/Lowe's project. The City filed counterclaims for breach of contract, breach of warranty, and negligence and brought in McLean's subcontractors and insurance company. The City contends that the base material that was used for the projects did not meet the requirements of the contract and caused the early failures, which McLean disputes.
Prior to embarking on additional costly discovery in this case, the parties entered into settlement negotiations to minimize litigation costs and to determine if settlement was an option. Parties have reached an agreement in principle which resolves and releases all claims against the City and which provides the City financial recovery to assist with remediation of the roads.
While the case is defensible from the City's perspective, City staff and outside counsel believe that, because of the uncertainties of trial, that this is a reasonable settlement to accept in this case.
THE ALTERNATIVES CONSIDERED:
N/A
Which alternative is recommend...
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