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Michels, Elm Grove face off in court

Sean Ryan
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It is up to a Waukesha County Circuit Court jury to settle a tunneling project dispute between Michels Corp. and the village of Elm Grove.

The case stems from a 2006-07 project in which the village awarded a $4.7 million contract to Michels, Brownsville, to bore an 875-foot-long, nine-foot-diameter tunnel.

Michels stopped boring from April 2006 until January 2007 because of soil complications, sending the project over budget and delaying completion until September 2007.

The village and Michels have filed lawsuits against each other over who should pay the extra construction and engineering costs and whether Michels should pay damages for missing the August 2006 contractual deadline to finish the tunnel.

Attorneys for both sides made their closing arguments in court Wednesday morning.
As of press time, the jury was deliberating.

David DeAngelis, Elm Grove village manager, and David Stegeman, vice president of business administration for Michels, declined to comment on the case.

The company and the village agree that the problems occurred on the project because Michels encountered underground boulders when the boring began.

Michels stopped boring, injected grout into the ground to prevent cave-ins and built a support structure below railroad tracks under which the tunnel passes.

Kevin Lyons, the attorney representing Elm Grove, said soil tests performed by village engineers revealed the possibility of boulders, and Michels should have been prepared to encounter numerous boulders.

“Michels drew inferences from what they saw,” he said, “and they made mistakes.”

Michels’ attorney Jon Christiansen argued the village should pay the extra costs. The village’s soil tests and bidding documents were inaccurate, he said, and did not indicate the prevalence of underground boulders in the project area.

The extra work needed because of the soil problems increased project costs by more than $1.3 million, Christiansen said. He argued the village should pay for that, and it should also pay Michels $162,700 for the delay in the project because the company could not use its boring machine elsewhere.

Even with those added costs, he said, Michels’ price is lower than the only other viable bid the village received, which was a $7.2 million offer from Super Excavators Inc., Menomonee Falls.

“The village got its tunnel,” Christiansen said. “They will get it for less than they would have had to pay Super Excavators. We have carried this cost until now.”

Lyons said the village does not owe Michels money, and countered that the contractor owes Elm Grove. The village is demanding $419,500 in damages because the project was not finished by the contractual deadline and $272,300 for extra engineering costs.

The village is also seeking $52,900 for ongoing cleaning and maintenance costs because the tunnel was built incorrectly, Lyons said. The grout Michels injected into the ground, he said, hardened and caused the tunnel boring machine to veer off course. That created a sag in the tunnel where dirt and water can collect, and Michels should pay the village’s costs for cleaning the tunnel for the next 50 years, Lyons said.

“I told you, I think they bid it bad,” Lyons said to the jury on Wednesday. “I also told you, I think they did it bad.”

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