Arguments Heard in School Board Appeal

BERLIN- The state’s Court of Special Appeals on Wednesday heard testimony from both sides in the appeal filed by the Worcester County Board of Education last year in an effort to reverse a $1.1 million judgment awarded to a private contractor replaced mid-way through the construction of the Ocean City Elementary School over three years ago with both sides coming out confident in their arguments.

Last October, the Worcester County School Board filed a notice of appeal with the state’s Court of Special Appeals, seeking to overturn Judge Robert Karwacki’s decision to award $1.1 million to Beka Industries after a four-day trial earlier in the month. On Wednesday, a three-judge panel heard from both sides in the appeal and is now mulling an opinion in the case.

The county school board is evoking the often-used common law statute of sovereign immunity from civil lawsuits for governments and their agencies as the basis for the appeal. Sovereign immunity has successfully been argued in other local cases recently including the lawsuit filed by a Vermont teen against the town of Ocean City for an escalator accident in the Convention Center, and more recently, by the Worcester County Commissioners in a defamation suit filed by a local man over an errant press release issued by the Sheriff’s Office.

However, attorney David Gilliss, who represents Beka, said after Wednesday’s appeal hearings sovereign immunity should not apply to the county school board in his client’s case. Gilliss said the facts of the case presented first at trial and again during the appeal on Wednesday should past muster with the appeals court.

“The appeal went well, although it is never possible to truly know where the judges are going,” he said. “I believe Beka will prevail. Its claims had true merit, the evidence at trial confirmed that merit and a very skilled, knowledgeable and respected trial judge rendered a verdict in Beka’s favor after four days of trial.”

Gilliss said the arguments on which the school board’s appeal is based do not hold water and remains hopeful the appeals court will see it that way.

“The Board’s argument is now the following: ‘as a school board, there is sovereign immunity, and even though you built a school for us, we do not need to pay you’,” said Gilliss. “I think the appellate court will see that for what it is, cynical and wrong.”

For his part, School Board attorney James Almand said yesterday he was confident the Court of Special Appeals would overturn the ruling at the Circuit Court level.

“I thought is went real well,” he said. “The judges asked a lot of good questions, particularly about sovereign immunity and the trial court judge’s failure to issue a reasoned opinion. The trial court judge failed to give a reason for his opinion, or how he reached the settlement figure, and the appeals court judges were very interested in those aspects. I am very confident we will prevail.”

The Worcester County Board of Education in 2004 hired Beka Industries to complete various components of the site work for the new elementary school. In August 2005, the school board allegedly became dissatisfied with the pace of the work being done by Beka and replaced the company with another contractor to finish certain components within the scope of the $1.8 million contract.

Beka Industries filed a breach of contract lawsuit against the Worcester County Board of Education, seeking repayment for the entire amount it estimated it was due for its work on OCES. Because of a complicated string of contested change orders within the scope of the project, Beka Industries was seeking around $1.3 million in the lawsuit. Last Oct. 9, Karwacki awarded Beka Industries $1.1 million after a protracted four-day trial in Circuit Court.