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Millions at stake in contractor suits against Pasadena hospital

The legal problems are piling up around an unfinished construction project meant to expand Huntington Hospital in Pasadena. Responding to claims filed by subcontractor Graycon, Tower General Contractors is suing the hospital for $5.5 million. Tower and its subcontractors were fired by the hospital, but the latest lawsuit claims the delays in construction were due to project plans being "fundamentally defective."

The latest lawsuit also alleges that the hospital willfully failed to act on recommendations from Tower to fix health hazards such as black mold in the emergency center and radiation risks in the nurses' lounge. Tower claims it was told to "ignore the problem" in both instances.

Also marring the situation is the fact that Huntington's former construction director was given a three-year prison sentence last year for his role in a kickback fraud linked to the current project. Another man was also sentenced for playing a part in the scheme, and two other individuals will face sentencing in April.

According to Tower, fundamental defects in the project plans caused change orders numbering in the hundreds that bumped up the cost of one phase of construction from $24 million to $40 million. After that, claims Tower, hospital management tried to lay the blame on the contractor.

For its part, Graycon, which is pursuing $2.3 million, says that both Huntington and Tower are to blame for the snafus. In addition to Graycon, nine other subcontractors are suing Tower and Huntington.

An unfinished or delayed construction project can be blight on all parties involved. Business reputations are at risk, as are large amounts of money. If readers in Los Angeles would like to know more about preventing the problems discussed here, there is information on our Encino contractor dispute page.

Source: Pasadena Star-News, "Pasadena's Huntington Hospital sued by fired contractors over emergency center expansion," Brenda Gazzar, Feb. 28, 2013

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