Jury sides with contractor in dispute with Lake County over broadband project

By Adelle Whitefoot

After five days of testimony and evidence, a jury on Friday ruled in favor of Rohl Networks LP, awarding the company more than $2.075 million in its lawsuit against Lake County regarding work done on the county’s broadband network, Lake Connections.

Rohl, of Jupiter, Fla., was the main contractor during the construction of the broadband network, Lake Connections, from 2012 to 2015. Among other aspects of the lawsuit, Rohl claimed the county failed to pay what it owed for the work it performed and didn’t obtain contracts, permits and agreements in a timely manner necessary to allow the company to perform its work.

The jury on Friday found that under the three contracts — Phase 1, Phase 2A and Phase 2B — the county owed Rohl more than $25 million. Jurors also found that under those same three contracts, the county has so far paid Rohl more than $22.8 million.

The jury did not award Rohl any money for labor or materials supplied outside the scope of the contracts, and did not award the county any liquidated damages due to the delay of the project. The jury of eight did find that Rohl owed Lake County $223,961 for back charges and/or owner-furnished (OFM) materials not installed in the project or returned to Lake County.

“This last week was a study about why government entities shouldn’t get involved in private enterprises,” Rohl attorney Gregory Spalj said during closing arguments.

Reached Friday night, Lake County Board chair Rich Sve told the News-Chronicle that the county was not ready to make a comment about the verdict at that time.In November 2016, Judge Michael Cuzzo granted the county’s application to release property affected by a mechanic’s lien filed by Rohl on the condition that the county deposit a bond totaling more than $3 million with the county court administrator, to be used toward any possible verdict or judgment in the case.

County witnesses, evidence not enough

Lake County attorneys called five witnesses over the five days: Compass Consultants Inc. project manager Janell Gibble, Lake County Administrator Matt Huddleston, Lake Communications Inc. (LCI) CFO Bob Thompson, Compass engineer service manager Mike Sandau and MP Nexlevel project manager Coby Hanson.

Gibble testified how invoices for installed units were created and approved.

“As units were being installed, we had tabulated sheets saying what had been installed and everyone would sign off on the agreed footage,” Gibble said, referring to sections of the new broadband network.

According to Gibble, these tabulations were done daily and signed daily and would be used to create invoices. The invoices would be created by Rohl, then sent to Compass for approval, and then to Thompson and Jeff Roiland of LCI for approval before the invoices would be sent to the Lake County Board of Commissioners for approval to be paid.

Compass was the hired engineer on the project.

Huddleston claimed Rohl caused delays

Huddleston testified Wednesday, Nov. 1 and Thursday, Nov. 2 on why the county decided to get into the broadband project and how the project progressed. Huddleston said that in early 2013 when Rohl started the Phase 2A project, he had concerns about Rohl not doing work in a sequential order and focusing only on high-quantity units. Rohl disputed this and claimed work was not done sequentially because of make-ready work and permit delays caused by the county.

In 2014 the county fell behind on payments to Rohl and Department of Agriculture’s Rural Utility Service (RUS) funding was halted — and because of that, Rohl stopped all work on the project in October 2014. Huddleston said Rohl was behind on its work and had been ramping down since August 2014.

Huddleston repeatedly testified that he believed Rohl was responsible for delays in the project, but admitted that the county had made some mistakes.

“I think that this was a really large project for the county. We certainly had our problems, some we couldn’t foresee and other we should have,” Huddleston said. “I also know that Rohl was not perfect in their construction.”

During cross-examination by Spalj, Lake Connections project updates in 2014 were brought up. Spalj showed multiple instances where the project updates put out by Lake Connections told residents about project delays ranging from weather to pole issues to permit issues. Spalj asked Huddleston why, if Rohl was the one delaying the project, that it wasn’t mentioned in the updates. Huddleston responded by saying the county was still trying to work with Rohl and didn’t want to start a public fight with the contractor.

Thompson testifies Rohl was overpaid

Thompson testified Thursday, Nov. 4 on what he believed Rohl owed the county. LCI was in charge of overseeing the entire project from start to finish. Thompson was the last approver for invoices before they were sent to the County Board for approval for payment.

Thompson testified that Rohl was overpaid $63,446 for in-contract items for the three combined contracts — the county overpaid some, and underpaid others.

Thompson said the county overpaid Rohl by more than $853,000 for the Phase 2B contract alone — but he said Rohl didn’t have to send a check for that amount because he was certain that the county owed Rohl close to that for the Phase 2A contract, and he thought that it would balance out.

Thompson said he believed that the county did owe Rohl a “fair market price” for leftover materials that weren’t installed once the 2B contract was closed out. Even though there was a set price in the contract for certain materials, Thompson testified that Rohl only deserved the “fair market price.”

Sandau: ‘There was always something they could do’

Sandau also took the stand on Thursday, Nov. 4, and testified to Compass’ role in the project. Sandau said Compass was in charge of getting right-of-way permits only, and the county was tasked with securing the pole permits and agreements as well as the private property easements.

“I would say that a majority of the permits weren’t acquired in time for the bidding for Phases 2A and 2B,” he said.

Sandau testified that if a contractor wanted to bid they had to have a representative at the preconstruction meetings, and it was noted then that not all of the permits had been obtained.

All three contracts did include a stipulation that Lake County would obtain all of the permits necessary and complete all of the make-ready work on poles before construction began. Sandau testified about what new permits were needed when an engineering design change was made to Phase 1 and Phase 2A. The change switched the majority of work being aerial, or on poles, to the majority of work being underground.

“Even with the design changes that happened, I feel there was always something they could do,” Sandau said.

According to Sandau, the change occurred over winter months, when work wasn’t being done; that permits were getting put in place rather quickly; and that most of the permits were in place by the spring.

Sandau said he did work with Rohl and Lake County to “scrub” the Phase 2A closeout line by line. He testified that Rohl spent more than a week in his office to make sure everything in the closeout documents for the contract was accurate, and answered any questions and went over any discrepancies that Lake County had as well.

According to Sandau, Compass was finishing up the closeout documents when it was informed of the lawsuit.

Contractor hired to finish project takes stand

Lake County’s last witness, Hanson, was called to the stand Friday morning. Hanson works for MP Nexlevel, the contractor hired to finish drops to homes as well as to take over Phase 2B where Rohl left off. Hanson testified to what his company had to do once it took over the Phase 2B portion in 2015.

“The work that Rohl hadn’t started yet was a blank slate,” Hanson said. “A lot of the work left over that had been started was difficult work.”

Hanson said this work included rock borings that needed special equipment, splicing of fiber at connection points and laying fiber in conduit that had already been laid but needed repairs.

Hanson testified that sometimes work may be skipped by subcontractors on a project because it was either too difficult or there were other areas that could be completed faster and earn them more money.

Hanson testified that unlike Rohl, MP Nexlevel was not limited to a certain number of crews and wasn’t required to have a Compass inspector noting and watching all the work the crews did.