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Claim Check

Supreme Court Asked to Review Contractor's Treatment by State

By Van Smith | Posted 4/3/2002

Ever Since the mid-90s, Arundel Engineering Corp., a small SouthEast Baltimore-based construction company, has been accusing the State of Maryland of mistreating it during a 1994 subway-renovation project--a dispute in which, the company alleges, stage governmental agencies colluded to deny the firm a fair hearing on its claims. Now Arundel Engineering is asking the U.S. Supreme Court to hear its argument.

In a Feb. 5 petition to the Supreme Court, Arundel Engineering Corp. outlines a Catch-22 the company says it was bound in by the state. Arundel Engineering alleges abuse and coercion by the state Mass Transit Administration (MTA) when the company was renovating the Rogers Avenue Metro Station in Northwest Baltimore, and further asserts that MTA and the Maryland State Board of Contract Appeals worked together to deny Arundel due process--specifically, preventing the company from making claims about the alleged misconduct under state contract law. Now that Maryland's appellate courts have upheld the contract board's decisions, Arundel is turning to the highest court in the land, hoping for relief.

The company's last-ditch effort to have its allegations heard is a long shot; the Supreme Court receives about 8,000 such petitions each term and accepts only about 100, according to its press office. Still, Henry Eigles, Arundel's counsel, is optimistic because the state Attorney General's office is not opposing the petition. "The state is in effect in agreement that this should decide the case," he says.

Not exactly, says assistant attorney general Julia Paschal Davis, who is handling the Arundel case for the state. She says her office did not file a response because it wasn't worth the time and public expense for a case the state believes the High Court will reject on jurisdictional grounds. "To have the taxpayers pay the printing costs and cover the expenditure of other state resources was not warranted," she says, "since our reading of the case is that it raises questions of state law only, and not a federal question."

Eigles maintains there is a federal, constitutional issue--the alleged denial of Arundel's rights under the 14th Amendment, which says no state shall "deprive any person of life, liberty, or property, without due process of law." The company's allegations--which have not yet been ruled true or false in any court--describe a damned-if-you-do, damned-if-you-don't scenario that effectively kept it from taking advantage of legal avenues for relief under a problematic contract.

According to Arundel, state employees overseeing the Rogers Avenue work continually ordered costly changes to the job but refused to put the changes in writing, and told the company it could not seek reimbursement for those increases until all of the work was completed. When Arundel did file such claims, the company alleges, MTA retaliated by repeatedly ordering the firm to rip out work already completed to specifications.

"The abuse was really onerous," Eigles says, "and the MTA was not paying for the changes, so my client had to finance that job while it was going on." Those expenses, he claims, slowed Arundel's growth and "forced a minority subcontractor [that worked on the project] out of business."

The end result was the alleged Catch-22, Eigles says: Arundel was prevented by MTA from filing timely claims for relief with the contract appeals board, which denied the eventual claims because they were not filed in a timely fashion. Eigles says that constituted a legal error.

"Although the claims were filed a couple of years after the job was completed, final payment on the job had not been made--and this allowed us the time to file timely claims" under existing contract law, he says.

The contract appeals board's chairperson, Randolph Rosencrantz, says he is not allowed to discuss the case because it remains in the courts. But assistant attorney general Davis disputes Arundel's claim that its time to complain to the board had not run out. "Even if the acts [of coercion and abuse] occurred they do not excuse the requirement for timely filing of claims," Davis says.

Regardless of the outcome, Eigles says, Arundel's had enough of state contracts. "Oh, no," he says when asked if the company continues to seek state work. "Nooo. They're going to stay as far away from the state as they can."

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