News From Terre Haute, Indiana

September 18, 2013

Sanitary Board facing ‘very expensive’ trial

Time running out to reach settlement with contractor

Arthur Foulkes
The Tribune-Star

TERRE HAUTE — Time is running out for Atlas Excavating and the Terre Haute Sanitary District to reach an out-of-court settlement to avoid a costly trial in a long-standing legal dispute.

The case started in 2009 after Atlas, a West Lafayette contractor, ran into serious problems near the end of a major Sanitary District sewer project around the Woodgate subdivision south of town. Atlas contends it lost expensive equipment and incurred other expenses as part of the incident.

The company is now seeking more than $1.6 million in damages from the city, which it believes failed to do testing that might have prevented the incident.

If the two sides don’t reach a settlement, the case is set to go to trial in January, said Terry Modesitt, attorney for the Sanitary District, which met in a closed, executive session meeting Tuesday morning in City Hall to discuss the case. Governing bodies may meet in closed sessions to discuss lawsuits or potential lawsuits, according to Indiana law.

A trial would be “very expensive,” Modesitt said just before the meeting of the five-person board of sanitary commissioners, who are appointed by the mayor.

Both sides in the case are weighing the risks of going to trial, Modesitt said.

Vigo County Superior Court Judge Chris Newton recently rejected a request from Atlas for a summary judgment in the case, Modesitt said.

Tina Dillon, owner of Atlas, said in a telephone interview Tuesday evening that no reason was given for rejecting the request for a summary judgment. But, she said, the judge suggested a figure for the city to pay Atlas, which the company has reluctantly accepted but the city has not. The case has cost Atlas $200,000 in legal fees so far, she said.

Four years ago, near the end of the sewer project, Atlas workers were boring a sewer line under CSX Railroad tracks when they struck a “compressed pocket” of sand and water that locked up their equipment, Dillon said. Atlas contends the city was required by CSX to take “bore” samples near the railroad tracks but failed to do so. Such samples might have shown the impending problem, she said.

Atlas also contends that Terre Haute directed Atlas to use a type of boring under the tracks that was inappropriate to the conditions. Atlas also claims the city canceled its contract with Atlas without giving proper notice.

“Every reason they’ve given not to pay us, we have proven wrong,” Dillon said.

City Attorney Chou-il Lee, who is representing the Sanitary District in the case as an attorney for the Indianapolis law firm of Taft, Stettinius & Hollister, said Atlas raised all of these same arguments when seeking a summary judgment and the judge rejected that request. That is all part of the court record, Lee said in a telephone interview Tuesday night.

Beyond that, Lee would not comment on anything that is not already part of the court record, he said, because this is a pending case.

Reporter Arthur Foulkes can be reached at 812-231-4232 or