Wednesday, May 4, 2016

City of Holyoke, Mayor Morse Files Suit Against NASDI

The City of Holyoke has filed a complaint in Superior Court against NASDI for breach of contract, negligence, breach of warranty and seeks indemnification from NASDI for any claims against the City arising out of the breach of contract.

In December 2014, the Essex House located at 400 High Street collapsed causing damage to the surrounding properties. NASDI handled the demolition after offering the lowest bid. At the time of the collapse, NASDI signed a contract stating that it would be responsible for all damage to surrounding properties. The City is seeking $800,000 in damages from NASDI and planning on settling with the owners of 394 High Street for the amount of $270,025.

On March 20th, 2015, the City sent a demand letter to NASDI to put them on notice for the claims they were responsible for. There were relocation costs for 390 High Street and additional damage to 394 High Street that caused the City to incur additional costs because of the length of time that the demolition of the property took. These costs included $27,000 in hotel costs for the relocation of tenants and $35,000 for the relocation for MD Beauty Salon.

In May 2015, their insurer responded to the demand letter stating that NASDI was not responsible and that the claims of breach of contract were outside of the scope of the insurance policy.

In March 2016 NASDI sent a demand letter to the City demanding payment of the approximately $229,000 owed under the contract. The City responded again re-stating the claims of the original demand letter, and also indicating it was open to resolving this without resort to litigation.
Through discussions with NASDI, it was clear to the city that they were not going back down from their demand of payment. In order to best protect the interests of the City, it was therefore necessary to go ahead and file a complaint in Superior Court.

The city also anticipates serving NASDI with a demand letter pursuant to the Consumer Protection Law (MGL c. 93A), and amending the Complaint to include this count as well, which could subject NASDI to treble damages.

Mayor Morse believes it is the right decision to file a suit against NASDI. “The inability of NASDI to fulfill their duties as stated by the contract and the refusal to pay the amount owed under the contract are inexcusable. Taxpayers should not have to pay for this kind of irresponsibility. Therefore, it is pertinent to the interests of the citizens of Holyoke that we file a suit against NASDI.”

City Solicitor Kara Cuhna states, “While this will take some time to resolve, we hope that in the end the City will be fairly compensated for what we believe is NASDI's negligence in failing to perform as required by the contract. We hope that the Council will now approve the settlement agreement that is before them with the owners of 394 High Street, in order to allow the owners to find some closure in what has been a year ordeal.”

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