Opinion ID: 2357566
Heading Depth: 1
Heading Rank: 2

Heading: The Problematic Contract

Text: Congress enacted the Union Station Redevelopment Act of 1981 in order to restore and expand the historic Union Station. Allocating tasks, it gave the District of Columbia responsibility for completing the parking structure and developing railroad access facilities. . . . District of Columbia v. Kora & Williams Corp., 743 A.2d 682, 685 (D.C.1999). Congress authorized the District to spend $40 million for design and construction, and the District's Department of Public Works accepted the bid of the Kora and Williams Corporation (K & W) to perform the construction work for approximately $25 million. From the beginning, . . . the construction work was beset with problems stemming from design. Kora & Williams, 743 A.2d at 685. Additional problems developed during construction with the installation of the skylights and supporting structures, pile driving operations, AMTRAK's refusal to vacate certain offices, and denial of access to an active track spur that serviced the nearby United States Government Printing Office, all problems which affected the planned overall construction sequence known as the `critical path.' Id. As a result, it became impractical to complete the project by the deadlines set in the contract. Id. On June 19, 1987, the District terminated the contract, citing K & W's failure to make sufficient progress towards timely completion. Id. The District then made a claim against the performance bond issued by INA, which had served as K & W's surety. K & W asserted that the delays were not its fault, and the parties began litigation. Id. In November 1987, the District and INA executed a partial settlement agreement (the Repayment Agreement) under which INA agreed to pay the District $12,869,460. In exchange, the District released INA from its obligations under the performance bond. However, if it ultimately were determined that the termination of K & W was not justified, the District would repay the $12,869,460, plus interest, and would reimburse INA for all reasonable, necessary and properly documented costs, fees and expenses incurred by INA as a result of or in connection with the termination of [K & W] by the [District.] Both parties represent[ed] that they [were] fully authorized and empowered to enter into the agreement. On March 7, 1994, the Contract Appeals Board (CAB) concluded that the District's default termination decision was arbitrary and capricious and an abuse of discretion and should be converted into one for the convenience of the District. This court affirmed the CAB's decision. Kora & Williams, 743 A.2d at 698. Thereafter, INA demanded that the District honor its obligations by repaying the $12,869,460, plus interest, and reimbursing the costs, fees and expenses INA had incurred as a result of the District's improper termination of K & W. The District consented to judgment for $12,869,460, plus interest, but disputed that it owed INA $17,372,716.55 for costs, fees and expenses. [2] INA filed suit against the District, alleging a breach of the Repayment Agreement. In a thoughtful opinion issued in May 2005, the trial court granted summary judgment in favor of the District, concluding that the reimbursement agreement was void because it violated the ADA. This appeal followed.