Nebraska company blames contractor for defects in airport terminal project

Leo A. Daly Company, a Nebraska corporation that designed and constructed the defective terminal project at the Francisco C. Ada International Airport, asserts that it is not legally obligated to defend or indemnify the project’s main contractor.

LAD, through counsel Patrick J. Kirby, said any injuries or damage allegedly sustained by contractor Boeing Co. and Boeing Service Co. in the project were caused solely by the conduct of third persons, entities, or parties.

LAD is not responsible for that conduct, said Kirby in LAD’s answer to Boeing’s lawsuit against LAD.

Kirby said any injuries or damages allegedly sustained by Boeing were caused solely by Boeing’s own negligence and/or breaches of contract or inactions.

The lawyer also asserted, among other things, that Boeing is barred from pursuing its lawsuit as it has failed to exhaust all administrative remedies.

Boeing Service Co. is a wholly owned subsidiary of the Boeing Co., a Delaware corporation that is reportedly the world’s largest aerospace company and a leading manufacturer of commercial jetliners and defense, space, and security systems.

Boeing worked closely with the federal government to implement upgraded security systems following the terrorist attacks of Sept. 11, 2001.

The Commonwealth Ports Authority contracted Boeing to procure the design and ultimate construction of the terminal addition project. Boeing entered into subcontracts with LAD under which LAD was responsible for both the design and construction management of the project.

In its amended complaint, Boeing Co. and Boeing Service Co. are suing LAD for breach of contract, express contractual indemnity, implied contractual indemnity, professional malpractice, negligence, violation of CNMI Consumer Protection Act, violations of Building Code, bad faith, and contributions.

Boeing asked the U.S. District Court for the NMI to hold LAD liable to pay them over $5 million in damages, and reimburse them of all costs and attorneys’ fees.

Boeing counsel Sean Frink stated that Boeing had no choice but to file the lawsuit because LAD refused to fix the structure, to settle the parties’ dispute, or to reimburse Boeing for the damages caused by LAD’s errors.

Frink said as a result of LAD’s negligent and deficient design, CPA issued a demand to Boeing, asking Boeing to tear down and rebuild the project and pay CPA millions of dollars in damages and attorneys’ fees.

Frink said Boeing attempted to involve LAD in the negotiations, to solicit input into the most efficient way to repair the facility and resolve the disputes at once.

Last August, U.S. District Court for the NMI designated Judge J. Michael Seabright dismissed CPA’s lawsuit against Boeing after the parties reached a settlement that has been approved by the Superior Court.

Seabright, however, ruled that Boeing’s lawsuit against LAD, which is also pending before the federal court, will continue.

In its lawsuit, CPA asked the court to order the defendants to pay in excess of $1 million for damages, courts costs, and attorney’s fees.