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Superior School District files suit against construction company

The district seeks to be reimbursed for costs caused by a fire that delayed Cooper Elementary School's opening by a year.

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Superior firefighters come down from the roof at Cooper Elementary School in Superior on April 9, 2018 after a section of fire reignited late that morning. The school district has filed a lawsuit against a construction company for costs incurred when work on the building was delayed because of the fire.
Jed Carlson / File / Superior Telegram
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SUPERIOR — The Superior School District filed a civil suit in Douglas County Court Monday, Aug. 8 against the contractor that oversaw construction of the new Cooper Elementary School.

The district is seeking $247,534 in damages from Minneapolis-based Kraus-Anderson Construction Company and subcontractor Prostar Surfaces Inc. of Milwaukee for costs incurred from an April 2018 fire that delayed the building’s opening by a year.

The original fire started in the school’s gymnasium storage area and burned through a natural gas line, according to Superior Fire Department inspectors. That fire went out, but gas flowing from the boiler room reached the heat from the original fire, causing an explosion. The process was repeated multiple times. After officials shut off gas to the building and firefighters knocked the fire down, they returned nine hours later when the fire rekindled in the roof.

The fire was caused by improper storage of rags containing petroleum-based materials that were heaped together for an extended time and spontaneously combusted, according to the complaint. The information is based on a report by the fire investigation firm FirePi that was released Sept. 20, 2019. The gymnasium floor of the building was being finished and sealed by ProStar Surfaces at the time of the fire. The complaint states that the subcontractor’s employees left the stained rags in a heap, and that Kraus Anderson as overall contractor was responsible for the subcontractor's actions.

Of the more than $15 million in damages incurred from the fire, ACE American Insurance Company paid all but $247,534, according to the complaint. A landscaping subcontractor claimed the $247,534 was owed for delay costs because the project was sidelined for a year. When the insurance company denied the claim and the district objected to paying it, Kraus-Anderson threatened on Aug. 7, 2019 to issue a stop work order and cease all work on the building.

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“The result of the Stop Work Order, had it taken effect, would have been catastrophic to the school district, its students and damaging to the public trust,” the complaint stated.

The district brought the issue to project architect LHB to determine the propriety of the stop work order versus the district’s objection to paying the delay costs. With only one meeting scheduled before the stop work order would take effect, however, the Superior School Board voted Aug. 12, 2019 to pay Kraus-Anderson the $247,534 earthwork costs out of the district's fund balance “under extreme protest.”

“The district does not feel it should be responsible for this delay cost when it was not the party responsible for the delay,” District Administrator Amy Starzecki said at the meeting. “However, our ultimate responsibility is to our students, families and community, and we are committed to having a building ready for kids when school starts.”

After reviewing the fire investigation report, LHB issued a decision in June 2020 agreeing that, based on the evidence presented, the fire was caused by the storage of cloths and cleaning products by one of Kraus-Anderson’s subcontractors.

The contractor would be responsible for the delay costs, LHB found, but the district had already agreed to pay for the additional site work. LHB also found it did not have the expertise to legally determine whether authorizing the payment overrode the contract change order.

The school district is seeking to be reimbursed from Kraus-Anderson for the $247,534 in delay costs it paid, as well as attorney’s fees and costs and any further relief the court may deem fit. Kraus-Anderson and Prostar Surfaces have 20 days to respond to the suit.

Maria Lockwood covers news in Douglas County, Wisconsin, for the Superior Telegram.
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