A Mount Vernon contractor claims that a joint venture that built a new repair shop at Metro-North Railroad’s Croton-Harmon maintenance yard bid out the drywall contract with inadequate specifications.
Level 5 Construction Inc., a state certified minority business enterprise run by Christopher Black, is demanding $3.1 million from Skanska USA Civil Northeast Inc. and E.C.C.O. III Enterprises, in a complaint filed Nov. 9 in Westchester Supreme Court.
The Skanska – E.C.C.O. joint venture, according to the complaint, “fraudulently induced Level 5 to underbid by over $2 million.”
Skanska USA, of Queens, does not comment on active or pending litigation, spokesperson Maritza E. Ferreira said in an email. E.C.C.O. III, Yonkers, did not reply to a request for comment.
In 2020, the joint venture signed a $4.7 million drywall subcontract with Level 5. The specs, according to the complaint, called for 18-gauge, 25-pound metal studs on which to hang the gypsum board walls.
Months later, as Level 5 was submitting information for approval by the joint venture, the project architect allegedly disclosed that the job required 18-gauge, 75-pound studs.
Level 5 estimated that the heavier studs would cost up to an additional $2 million. Installation would require twice as many laborers and more time, increasing labor costs by about $1.7 million.
The joint venture refused to accept Level 5’s estimates, according to the complaint, but approved two change orders totaling $389,071.
Later, the joint venture allegedly advised Level 5 that it would issue a $600,000 change order and repeatedly assured full compensation once the economic impact was determined.
Instead, the complaint states, the joint venture paid for materials and a portion of the labor costs but deducted the amounts from Level 5’s contract balances.
When Black complained in February 2022, a joint venture official allegedly implied that Black was too stupid to handle the project, “even though Level 5 and its affiliates had successfully completed over 15 Skanska projects, without incident, for over 20 years, totaling a contract value of over $40 million.”
This past May, when the work was 95% done, the joint venture notified Level 5 that the contract had expired. What was really meant, according to the complaint, is that the joint venture would not pay more because Level 5’s contract balance was depleted.
Level 5 claims it lost $2,343,828 on the project. It also claims that by honoring its commitments it had exhausted its working capital, had to withdraw from another project, and lost about $780,000.
Level 5 is accusing Skanska, E.C.C.O. III and the joint venture of breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment and fraudulent inducement. It is also seeking compensation from the insurance companies that provided performance bonds for the project.
Level 5 is represented by Manhattan attorney Jill Levi.
