Mount sued by construction company over 2015 renovation debacle

Lawyers for Mount St. Joseph, Gretzky Construction and Intact Insurance were scheduled in Miramichi last week to move 2 lawsuits forward.

While the location for the 240 bed nursing home is set to be announced on Monday at noon in Chatham Head, lawyers are just getting warmed up in the lawsuit battle between an insurer, a construction company, and Mount St. Joseph Nursing Home.

Lawyers for the Mount, Gretzky Construction and Intact Insurance Company were scheduled in Miramichi last week to move their respective lawsuits (and defences) along by requesting particulars leading up to discovery.

In April 2015 Gretzky Construction was removed as the contractor of the $8.2 million renovation to the nursing home.  At the time the construction company told the press it was a scapegoat for the asbestos issues that transpired during the renovations, and the Dept. of Social Development was quoted as saying there was unsatisfactory improvement in the performance of the construction company and they were dismissed.

In July 2015 Gretzky Construction filed a Notice of Action against Mount St. Josephs.  In their statement of claim they blame the Mount and seek compensation for the 8 week delay in the commencement of the renovations, as well as saying that the termination of their contract was unenforceable due to the Mount, DTI and the Consultant’s (Gogen Architecture) failure to use a dispute resolution process that formed part of the contract with Gretzky.  The claims says DTI and the consultant (who was to be impartial) acted in bad faith and exhibited bias and hostility toward the construction company.

At the time the contract was revoked, Gretzky says it was owed $762,795.40.  They also point the finger at the Mount as the third party responsible for any losses incurred by the insurance company that held the bond for the construction project.

In the Mount’s Statement of Defence dated August 2015, they say that changes made prior to the scheduled start of the renovations were done so in a strict manner in accordance with the contract’s Change Order process.  The Statement of Defence says delays were due to Gretzky’s demonstrated “complete and absolute lack of understanding of the change process”.  

The Mount also contends it had no knowledge that a notice of default had been sent to the construction company in January 2015, and did not authorize the delivery of the alleged notice. The Mount says the company abandoned the construction site on its own volition.  The defence claim also says any proposals filed in response to the default notice were non-compliant with governing sections of the construction contract because they did not provide satisfactory response or schedule for completing corrections.

The Mount also alleges Gretzky failed to provide competent supervision of the work as required, and failed to meet and maintain the schedule as required.

The Mount also denies suggestions that the dispute resolution process was not followed, but rather says Gretzky failed to follow the dispute resolution guidelines by attempting to prematurely appoint an arbitrator that the Mount deemed as unwarranted.

Intact Insurance Company was the bondholder for the contract, and the notice of default to Gretzky triggered the insurer to pay up.  The Notice of Action filed by Intact says it investigated the notice of default given to Gretzky and agreed the company was indeed in default of its obligations, and a new general contractor was hired.  Intact then requested $500,000 from Gretzky as well as unencumbered collateral in a sufficient  amount to indemnify Intact for any future loss incurred in fulfilling its bond obligations.

Gretzky’s response was to to file a third party claim and point the finger at the Mount.  The Mount’s response to the third party claim was the same as above, saying Gretzky did not understand the change process and abandoned the job by its own volition.

The information above was obtained from the Court of Queen’s Bench Trial Division, and MO))) will update the cases as the matters progress.