News From Terre Haute, Indiana

October 2, 2013

Sanitary Board votes on lawsuit settlement

Arthur Foulkes
The Tribune-Star

TERRE HAUTE — A final settlement appeared imminent Tuesday in a long-standing legal dispute between the City of Terre Haute Sanitary District and Atlas Excavating, a West Lafayette contractor.

The Sanitary Board of Commissioners voted to approve a $500,000 settlement with Atlas, which the company was expected to accept, said Terry Modesitt, attorney for the sanitary commission.

The settlement avoids a costly and lengthy trial, Modesitt said. The dispute came down to a disagreement over whether Atlas encountered a “material change of conditions” when it was drilling a sewer pathway under a railroad bed. It’s hard to know how a judge would have ruled, he said, adding that the settlement, while costing the district a half million dollars, avoids a potentially larger loss.

“The sanitary board did not do anything wrong,” Modesitt said, adding that a trial would have involved costly expert testimony and could have lasted two weeks.

The $500,000 will come out of the sanitary district’s budget, Modesitt said. The district is funded mostly by property taxes but also by user fees from the Wastewater Treatment Plant.

Tina Dillon, owner of Atlas, could not be reached for comment Tuesday.

The legal dispute started four years ago when Atlas was performing a large sewer project south of the city for the sanitary district. Atlas workers were boring a sewer line under a railroad track when they struck a compressed pocket of sand and water that locked up their equipment, which was lost in the incident, Dillon told the Tribune-Star in a previous interview.

Atlas believed the city failed to do testing that would have signaled the potential trouble in advance. Atlas also claimed the Sanitary District canceled the company’s contract without proper notice.

Earlier this year, Vigo County Superior Court Judge Chris Newton suggested a settlement figure, which Dillon said she reluctantly agreed to accept. That figure was $500,000 – the amount the sanitary commission voted to accept, Modesitt said, adding he urged the commissioners to accept the settlement.

The commissioners, who are appointed by the mayor, discussed the case in closed executive session with Modesitt in mid-September.

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