Friday, August 3, 2012

McKinstry claims victory from ruling

School District says energy contractor is not telling the whole story

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By TERRY SMITH
Express Staff Writer

McKinstry Essention is claiming victory from a court ruling on Monday when Judge Robert Elgee dismissed a racketeering allegation against the company, but the Blaine County School District claims that its energy savings contractor isn't telling the media and the public the whole story.

In a press release issued Wednesday, McKinstry characterized a now-dismissed racketeering allegation by the district as "groundless" and "inflammatory." But in a statement issued Thursday to the Idaho Mountain Express, the School District pointed out that a fraud claim by the district was allowed to remain in litigation.

Following oral arguments in Blaine County 5th District Court on Monday afternoon, Elgee ruled that the district had provided sufficient information in its court filings to allow the fraud claim to continue. The judge ruled, however, that the district did not provide enough information to let the racketeering allegation remain. Elgee further ruled that a lesser allegation against McKinstry of violation of the Idaho Consumer Protection Act could also remain.

Seattle-based McKinstry is currently suing the School District for what it claims is about $7 million in unpaid balance owed. Contracted by the district in 2010 for energy savings work and other improvements at eight Blaine County schools and facilities, McKinstry claims that it performed work worth 25.8 million. The district claims that it only authorized work of $18.6 million and in a counterclaim is seeking damages of at least that amount.

Monday's court hearing was held to consider McKinstry's motion to have the three district claims dismissed. There are other claims made by the district against McKinstry, including breach of contract, that were not addressed in the motion.

The McKinstry press release, issued by Heidi de Laubenfels, the company's director of communications and external relations, states that Elgee "took the unusual step of dismissing as baseless the district's contention that McKinstry engaged in racketeering, an allegation that McKinstry has vigorously rejected as reckless and false."

"The judge also made it clear that the district must prove its additional claims of alleged misconduct with specificity, in court," de Laubenfels wrote. "McKinstry remains confident that the legal process will confirm that its approach on the project has been both professional and appropriate, and that all the remaining contentions will be similarly dismissed."

Paul Zasada, Inland Northwest regional director for McKinstry, is quoted in the release as saying: "McKinstry is pleased that Judge Elgee recognized the importance of dismissing this baseless claim. It is unfortunate that the district resorted to this kind of misguided tactic.

"McKinstry's focus has consistently been on quality outcomes and developing a safe learning environment for kids. We have not let this dispute change McKinstry's commitment to the community or slow our work in any way that might impact students and staff in the schools."

The School District criticized McKinstry's statements in its own statement issued by district Communications Director Heather Crocker.

"McKinstry's press release, apparently sent to multiple media outlets throughout Idaho, fails to mention that the Blaine County School District's claims based on fraud, the consumer protection act, fiduciary relationship and other claims remain standing," Crocker stated. "This is a very early stage in the lawsuit and the district looks forward to proving its allegations regarding intentional misrepresentations by McKinstry in court.

"It's unfortunate that McKinstry has chosen to fight this case in the press by issuing a one-sided press release. This is the very conduct of which McKinstry initially accused the district. It makes one wonder if McKinstry has hired a public relations firm.

"In the meantime, we are focused on the beginning of the school year and our mission to become a world-class, student focused community of teaching and learning."

Terry Smith: tsmith@mtexpress.com

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