County, School Board Claim Victory In OCES Case

BERLIN — The ongoing legal battle between the Worcester County Board of Education and a private contractor hired to complete certain elements of the long-since completed Ocean City Elementary School is heading back to Circuit Court.

The Maryland Court of Appeals this week rendered an opinion in Worcester County Board of Education vs. Beka Industries, Inc., agreeing in part on some elements of the case, while disagreeing on other salient issues. Essentially, the state’s highest court ruled there were reversible errors made at both the Circuit Court and the Court of Special Appeals level and remanded the case back to the Worcester County Circuit Court where it began in 2007.

The complex legal saga actually began back in 2004 when the Board of Education hired Beka to do site work during the construction of the new OCES. In August 2005, the school board became unsatisfied with the pace of Beka’s work and replaced the company with another contractor to finish certain components within the scope of the roughly $1.8 million contract.

In October 2007, Beka filed a breach of contract lawsuit against the school board seeking repayment of the entire amount it estimated it was due for the work completed on OCES. In October 2008, visiting Worcester County Circuit Court Judge Robert Karwacki awarded Beka $1.1 million in the case, which the school board quickly appealed.

In February 2010, the Court of Special Appeals reversed the lower court’s decision, essentially agreeing with several of the pillars of the school board’s appeal and remanded the case back to Circuit Court. However, Beka attorney David Gilliss petitioned the Court of Appeals to review the case and the state’s highest court in June agreed to listen to the arguments from both sides.

The case has many complex features, the most important of which is the interpretation of the often-evoked doctrine of sovereign immunity, which protects governmental agencies from lawsuits and big settlements in civil cases.

The Court of Appeals remanded the case back to the Circuit Court level for a new trial because it believes the “school board was precluded from presenting evidence on its recoupment claim and Beka may have been awarded impermissible delay damages under the contract.”

Local officials were claiming victory this week after the Court of Appeals issued its opinion. The County Commissioners were pleased with the opinion because the high court’s ruling on the sovereign immunity issue essentially gets the county off the hook for the $1.1 million original award that has been held by the court.

“This is great news for the county and the Board of Education because it now has to go back to the Circuit Court, which will determine if there are any damages,” said County Attorney Sonny Bloxom. “If it all washes out, any judgment in the case will now be paid by the state. As soon as it was remanded back to the Circuit Court for a new trial, the $1.1 million held by the court for many months will be released back to the county.”

While school board officials are satisfied with the high court’s sovereign immunity waiver opinion, they are more pleased they will get a chance to present arguments in favor of its recoupment claims and against Beka’s claims for delay damages.

“We’re pleased to get the opportunity to argue the case again at the Circuit Court level,” said attorney Jim Almand. “From our standpoint, the Board of Education firmly believes Beka did not earn the judgment awarded the first time around and no less than 10 appellate judges have since ruled the Circuit Court judge committed certain reversible errors.”

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