Montgomery County spent at least $10 million on attorneys, expert witnesses and consultants to pursue the lawsuit it opted to settle for $25 million last month against the designer and builders of the Silver Spring Transit Center.
The tab is expected to grow as additional invoices are tallied, County Attorney Marc Hansen said.
The county agreed to settle during the trial, almost two years after it filed suit seeking $67 million in damages from designer Parsons Brinckerhoff, general contractor Foulger-Pratt and construction inspection firm Robert B. Balter.
County Executive Isiah Leggett (D)had pledged on several occasions to hold contractors accountable for all repair costs. But when pretrial rulings by Circuit Court Judge Michael Mason threw out the county’s allegations of fraud and its demand for punitive damages and court costs, settlement became a more attractive option. Negotiations between attorneys for the county and contractors went on behind the scenes for most of the three-week trial.
“Despite what I said earlier, I thought this was the most reasonable avenue,” Leggett said shortly after the settlement was announced. As part of the agreements, neither the county nor the contractors acknowledged any negligence or wrongdoing.
The three-story concrete transit hub on Colesville Road opened five years late and $50 million over budget in August 2015, because of what officials alleged were design and construction flaws.
According to records provided by the county to The Washington Post, the single biggest lawsuit expense was $6.5 million for outside legal counsel. The county retained Saul Ewing, a firm with experience in complex litigation arising from troubled public-works projects. Its attorneys billed on a sliding scale of hourly rates — discounted for public-sector clients, Hansen said — that ranged from $525 for partners to $200 for paralegals.
“We knew it was going to be very expensive,” said Leggett, who praised the county legal team but defended the outside help. “If we need special expertise, then I think we need to lawyer up to protect the county’s interests.”
Some of Leggett’s longtime critics called the litigation costs a sorry coda to the biggest public-works fiasco in county history.
“Here the pigeons are coming home to roost,” said Robin Ficker, a Republican who lost to Leggett in 2006 and will run for county executive again next year, when Leggett is retiring.
He speculated that the legal costs may have motivated Leggett to propose an 8.6 percent property tax increase last year. Leggett, who later reduced the proposal by half, wanted the additional revenue for schools. He called Ficker’s assertion “absurd.”
Former county executive Doug Duncan (D), who lost a comeback bid to Leggett in 2014, said “taxpayers got hosed” on the $25 million settlement after originally seeking $47 million for cost overruns and $20 million in damages.
“It all comes down to Ike Leggett saying the county is not going to pay a cent extra for this, knowing that wasn’t true,” Duncan said. “This whole thing was handled horribly from the beginning.”
Leggett scoffed at Duncan’s remarks. “I said I was going to try to get every penny back. What county executive wouldn’t say that?” he asked.
Given what was left of the county’s claim after Mason’s ruling, Leggett said, the most to be gained by staying in a trial was an additional $7 million to $8 million. There were also ongoing legal costs, and the chance that the county could win but be reversed on appeal, leaving taxpayers with nothing.
In a separate settlement, the county agreed to pay Foulger-Pratt $3 million for compensation the county withheld during the dispute over how to repair the building.
The three Democratic county lawmakers running for executive next year — Roger Berliner (Potomac-Bethesda) George Leventhal (At Large) and Marc Elrich (At Large) declined to question Leggett’s decision.
“No one on the County Council is in a position to second-guess either how much was spent or the settlement itself,” Berliner said. “It was a settlement [Leggett and the lawyers] recommended, and I have nothing else to go on.”
In addition to attorneys’ fees, the county spent at least $3.3 million on consultants and expert witnesses who were hired to persuade the jury — over strenuous opposition from defense attorneys — that substandard design, construction and inspection produced cracks and weaknesses in concrete and a lack of supporting steel.
County officials said the witnesses spent hundreds of hours reviewing the records generated by the project, which dates back to 2006. There were non-testifying consultants who helped attorneys sort through sometimes highly technical material. The fees include:
●$1.6 million to Grayhawk, a New Jersey-based construction management firm that analyzed scheduling delays and allocated damages among the contractors.
●$450,000 to John Fraczek, senior principal for Wiss Janney Elstner Associates, a Northbrook, Ill. engineering company. He testified that excessive cracking in concrete was because of a faulty design by Parsons Brinckerhoff.
●$239,000 to KCE Structural Engineers, the firm the county hired in 2012 to investigate problems with the Transit Center.
KCE also was paid $8.5 million for its initial report on those problems, which the county attorney said was considered a “pre-litigation expense,” not a legal cost.