North Allegheny School District must pay $521,000 to the prime contractor who worked on the renovation of Hosack Elementary School.

The district owes the money to James Construction, of Carnegie, for damages resulting from being forced to speed up work on the project, for legal fees and for unpaid invoices. In ruling against the school district, Allegheny County Common Pleas Judge Timothy P. O'Reilly found that "North Allegheny acted in an arbitrary and capricious manner demonstrating bad faith" in its dealings with the firm.

School district solicitor Al Maiello said his firm has filed post-trial motions. Mr. Maiello said he believed Judge O'Reilly made critical errors in his ruling. He promised an appeal if the judge allows his original decision to stand.

The judge rejected North Allegheny's attempts to include its architect, Foreman Architects Engineers, and a consultant to Foreman, Chambers Design Associates, in any finding of liability. A former construction manager, D&L Inc., has filed for bankruptcy court protection and is protected from any North Allegheny claims of shared responsibility, according to the judge's memorandum.

In 1998, the school district announced a $39 million, five-building renovation and expansion project at McKnight, Franklin, Ingomar, Peebles and Hosack schools. "The over-riding consideration for North Allegheny in this extensive project was that not a single day of school would be missed by students, faculty and staff," Judge O'Reilly wrote in his 33-page memorandum and verdict.

Elements of the project had to follow a tight work schedule, yet the district did not retain a "true general contractor" to coordinate the work, the judge wrote.

James Construction was awarded a $2.6 million contract for the Hosack project in August 1998. By January 1999, the renovations were about 2¹/₂ months behind schedule. The judge cited changes in the size and location of a storm-water detention pond and delays in receiving county approval for an erosion and sedimentation plan. The project was further set back after the district mistakenly constructed a fence in the work area and later decided to retain underground utility lines. Keeping the lines underground required reconfiguration of the storm water pond. In addition, James employees had to dig by hand to locate the duct through which the lines ran, the judge wrote.

When a representative of D&L, the original project manager, warned the district that the completion date for the Hosack project would have to be extended, North Allegheny dismissed the firm. The district's new project manager, Thomas & Williamson, said project extensions were "non-negotiable."

The project was completed on time, but Judge O'Reilly found that goal was met only because James Construction was able to speed up and compress its work, incurring extra costs and working under difficult conditions.

While the judge rejected most of North Allegheny's contention that it was forced to hire another firm to complete work that James Construction did not finish, he did agree to subtract about $34,000 in items from the contractor's total claim of unpaid invoices.

The largest amounts in Judge O'Reilly's $521,000 award to James Construction are $215,000 for "speed up" damages, $153,000 for legal fees and expenses, and $105,000 for unpaid invoices.

The case was filed in March 2000, with a nonjury trial held in November 2004. The court proceedings produced 2,200 pages of transcript, 200 exhibits and 15 post-trial submissions.