The Thomas Jefferson School of Law’s $90 million, state-of-the-art new building in downtown San Diego opened to much fanfare in 2011. Administrators proudly showed off classrooms wired with the latest technology, outdoor terraces, easy access to courthouses and law firms and eco-friendly features.
But the sleek, eight-story glass building with an underground parking garage has become a legal headache, spawning lawsuits over alleged construction flaws and unpaid debts.
Most recently, Thomas Jefferson was dragged into federal court on Wednesday by a New York law firm it hired to investigate construction problems and help the school develop a plan to fix defects and recoup some of those costs.
The law firm, LePatner & Associates, claims that the school owes nearly $1.3 million for investigative work that helped Thomas Jefferson resolve a $4 million breach-of-contract suit brought by the builder. The firm’s work also provided fodder for a lawsuit the school brought last month against the project’s architect seeking more than $5 million, according to LePatner’s complaint.
Court filings show that the law school found problems with deflection in the concrete floors of seven on the building’s eight stories—meaning that the floors slope or move more than the design allowed for.
The school claimed a long list of additional defects, including cracks in stairways and landings, deficient fire-stopping in horizontal exit walls, problems with the emergency power design and improperly installed electrical panels.
Thomas Jefferson dean Thomas Guernsey, who assumed the school’s top administrative position in July, said that none of the identified construction defects poses a safety risk—in fact, he said, the building recently passed its second annual fire inspection. Overall, “the law school is proud of its new building and it’s committed to providing a safe learning environment for students,” he said.
Guernsey declined to comment on the pending lawsuits beyond saying that he looks forward to a “timely resolution of all the claims.” The school will defend itself against “false accusations,” he added.
Construction lawsuits aren’t the only problem. Earlier this month, Thomas Jefferson administrators announced that they had laid of 12 staff members and eliminated 14 classes in a bid to cut $4.4 million from the budget—this after the school missed its goal of enrolling 350 new students this year by 100.
In June 2012, Standard & Poor’s downgraded the school’s bond rating due in part to the $133 million in debt Thomas Jefferson assumed in moving to its new campus. Guernsey recently told the San Diego Union-Tribune that the budget cuts would help the school make its debt payments on time.
The legal wrangling over the building began in 2011, shortly after construction wrapped up. The school tapped Florida-based Lend Lease Construction Inc. in 2008 build the facility, at an initial construction cost of $68.25 million. (Interestingly the excavation crew found both tusks of an Ice-Age mammoth and the skeleton of the ancestor of the gray whale that is more than 500,000 years old.)
But the law school and its architects continued to tinker with the plans well into the building process, which necessitated a series of change orders adjusting the overall cost, according to the breach lawsuit that Lend Lease brought against Thomas Jefferson in December 2011 in San Diego County, Calif., Superior Court.
In July 2010, the law school began to make monthly payments to Lend Lease that were less than the construction company had sought under its contract, according to its complaint. Thomas Jefferson also withheld retention fees from Lend Lease and a number of subcontractors, the builder claimed.
Lend Lease continued to push the law school for the money it believed it was entitled to and requested a final payment in October 2011. The school responded with a letter the following month identifying “several million dollars in corrective work that must be addressed.”
“In view of this communication, it became clear that [the law school] has no intention of fulfilling its contractual obligation to pay Lend Lease its final payment,” the builder wrote, seeking more than $3.9 million.
Meanwhile, the law school had hired LePatner and its affiliated construction-consulting firm Proactive Integrity Associates in April 2011 to examine the project’s records and identify any construction problems, according to LePatner’s suit against Thomas Jefferson, filed this week in U.S. District Court for the Southern District of California. The suit also names former law dean Rudy Hasl as a defendant.
Part of LePatner’s job was to help the school reach a settlement with Lend Lease, devise a plan to recover damages from the architect, and coordinate correction of the construction errors. Principal Barry LePatner presented a comprehensive plan to the law school’s board in March of 2012, which the board approved, according to the complaint.
Hasl then used LePatner’s plan to negotiate a settlement with Lend Lease, “which resolved its claims at a significant discount, resulting in additional savings to [the law school].” LePatner also negotiated settlements and lien releases with subcontractors, resulting in more savings to the law school, according to the complaint.
However, the law school stopped paying LePatner’s invoices after August 2012 and informed the firm the following December that it would receive no further payments, the firm alleges.
“Notwithstanding the repeated assurances of payment and their knowing entry into agreements to pay for plaintiffs’ services, and despite acknowledging and utilizing the valuable work product generated by plaintiffs for defendants’ benefit, defendant [Thomas Jefferson Law School] suddenly took the position that plaintiffs were not actually entitled to payment because they were not licensed to practice law in California, and because they were not licensed general contractors in California,” the complaint reads. “Defendants also manufactured bogus allegations of malpractice, which had never before been articulated.”
Moreover, Thomas Jefferson dropped LePatner from representing it in the mediation to recover funds from the project’s architect, instead hiring San Diego-based Epsten Grinnell & Howell. LePatner claims that its work product was the basis of a suit Epsten Grinnell filed on July 29 in California state court on behalf of Thomas Jefferson, seeking more than $5 million in damages from the architects. Thomas Jefferson and its current attorneys are using mediation briefs and other reports that LePatner generated but has not been paid for, the suit claims.
LePatner claims breach of contract, intentional misrepresentation and negligent misrepresentation, seeking $1.28 million for services and out-of-pocket costs.
Meanwhile, Thomas Jefferson claims that it was the victim of negligence on the part of architecture firm Carrier Johnson and several engineering and consulting firms involved in the design of the building. The school’s lawsuit lists 23 alleged construction defects, but focuses closely on the conditions of the floors.
The defendants “breached their duties by negligently planning, designing, constructing, testing, inspecting, analyzing and/or advising [the law school] regarding the levelness of the floors for the Project such that the floors are no longer fit for the use and purpose for which they were intended and represented,” the complaint reads. There are also problems with the buildings smoke control and fire protection systems, it claims.
Carrier Johnson did not respond to calls for comment on the suit.