County Schools Off Hook For Contractor Legal Fees

SNOW HILL - A visiting
Worcester County Circuit Court judge last week denied Beka Industries' effort
to collect over $72,000 in legal fees and expenses from the Worcester County
Board of Education after a failed attempt by the latter to counter-sue the
private contractor.

The Board of Education
claimed another minor victory of sorts last week in its ongoing legal battle
with Beka Industries when visiting Circuit Court Judge Sidney S. Campen denied
the contractor's bid to seek over $72,000 in legal fees and other expenses from
the county school board, citing the often evoked doctrine of sovereign immunity
for state and local government entities. The school board was the plaintiff in
counter-suit filed against Beka in July 2008, and while the judge agreed the
suit was filed without substantial justification in violation of a Maryland
rule, he did not agree to award Beka the $72,000 plus it was seeking in legal
fees and other costs associated with the litigation of the case.

The complex legal saga
began back in 2004 when the Board of Education hired Beka to do site work
during the construction of the new Ocean City Elementary School (OCES). In
August 2005, the school board allegedly became unsatisfied with the pace of
Beka's work and replaced the company with another contractor to finish certain
components within the scope of the roughly $1.8 million contract.

In October 2007, Beka
filed a breach of contract lawsuit against the school board seeking repayment
of the entire amount it estimated it was due for the work completed on OCES. In
October 2008, visiting Worcester County Circuit Court Judge Robert Karwacki
awarded Beka $1.1 million in the case, which the school board quickly appealed.

In February, the Court
of Special Appeals reversed the lower court's decision, essentially agreeing
with several of the pillars of the school board's appeal, and remanded the case
back to Circuit Court.

Meanwhile, in July 2008,
the school board filed a counter-suit against Beka alleging because the company
failed to or refused to do the work on OCES, it was forced to hire another
contractor to complete the tasks spelled out in the contract to the tune of
just over $530,000.

In October, the Circuit
Court ruled favorably on Beka's motion to dismiss the case. However, perhaps
buoyed by the victory in Beka I handed down by the Court of Special Appeals in
February, the school board renewed its efforts on Beka II with a motion for
reconsideration filed in March.

After a hearing on
certain aspects of Beka II on March 15, Judge Campen last week issued his
opinion upholding the private contractor's motion to dismiss the case, but
ruled against Beka in its bid to recoup the estimated $72,000 in legal fees and
other costs.

'Based on the record,
this court finds that the conduct of the board in maintaining Beka II was
without substantial justification under Maryland rule,' the opinion reads.
'However, the assessment of the costs, expenses and attorney fees against the
board is entirely another matter.'

Beka was requesting
attorney's fees and costs in an amount over $40,000. In addition, Beka was also
requesting an extra $32,000-plus in 'in house' expenses.

'This court does not
view the requested attorney's fees and costs, in excess of $72,000, to be
reasonable,' the opinion reads. 'Although the plaintiff, Worcester County Board
of Education, maintained this lawsuit against Beka Industries, Inc. without
substantial justification, this court, in the exercise of its discretion, will
not require the plaintiff to pay costs, expenses or attorney's fees to the
defendant.'