A Magnified Local Example of Common Problems in Construction

William Reasoner, Will Reasoner, Dickinson Law Firm, Des Moines Iowa, Iowa Commercial Litigation Law, Iowa Real Estate and Land Use Law, Iowa Construction Law

Posted on 07/10/2018 at 08:00 AM by William Reasoner

The Cedar Rapids Gazette has published several articles critical of the University of Iowa’s handling of the construction of the new Stead Family Children’s Hospital. The hospital itself is impressive and life-changing; just take a look at ESPN’s segment on “The Wave” and its impact on children, fans, players, and coaches. No matter how much the new hospital means to the community and the children it serves, the University of Iowa is nevertheless receiving backlash over allegations of how it handled the planning and construction of the hospital.

The Cedar Rapids Gazette published an article in early July 2018 entitled “Tower of Troubles: Acclaimed UI Children’s Hospital Emerges from Blown Budgets and Deadlines.” The investigative article outlines the troubles the University and contractors have faced throughout the design and construction phases of the hospital, and it also details the criticisms the University is facing over change orders, budget overruns, and unpaid bills. Although we all know there are also two-sides to a coin, and this article seems to present only the contractors’ version of the story, the article cannot be faulted for its work on investigating and presenting issues for the public’s consideration.

The relations between the University and contractors who worked on the hospital have been reduced to bitter legal disputes, with allegations of bad conduct flying in both directions. The dispute between the University and a contractor was even submitted to arbitration, yet the $21.5 million award by the arbitration panel in favor the contractor is being challenged by the University. The University and the contractor are now exchanging barbs in court over the issue of whether the arbitration award was proper.

The disputes between the University and contractors are emblematic of disputes between property owners and contractors in nearly all construction projects. Some disputes may be larger, some may be over a substantially less amount of money, but nearly all constructions projects involve some issue of money versus quality of work. It is important for both property owners and contractors to anticipate what could go wrong in any project so they can plan for future disputes. As on display now, it is also important for property owners and contractors (as well as subcontractors) to be aware of the dispute resolution process included in the executed agreement. Are you required to litigate disputes in court? Have you agreed to submit all of your disputes to arbitration? What about arbitrating some disputes and leaving other kinds of disputes for court? It is vital to know and understand the differences and the pros and cons of the dispute resolution process, no matter the scale of your project.

Our construction law group at Dickinson Law can provide legal advice on how to structure the dispute resolution process before you agree to undertake a project. Our group also has years of experience in guiding litigation once a dispute over the quality of work, the amount of money due, or any other issue has already arisen between the parties. The best thing any party can do when involved in a construction project is to identify and understand all options and possibilities under the law to help steer the project to a successful finish. Our construction law group can help make this happen.

The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed. 

William Reasoner


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