Jackson school district lawsuit set for oral arguments before state appellate court

Oral arguments have been set for next month before the state's Eastern District Court of Appeals in a long-running lawsuit involving Jackson R-2 School District.

The suit, which stems from a 2006 construction project, involves Total Electric Co. of Farmington, Missouri, and focuses on previous judgments against the school district that have not been paid.

Court documents indicate the district will contend 32nd Judicial District Judge Benjamin Lewis erred earlier this year overruling the school district's motions focusing on interest calculations and contending that previous payments to Total Electric have satisfied the judgment.

Superintendent Scott Smith said in an emailed statement district officials are "hopeful for a positive outcome based on the plain language of the trial court's original judgment and the plain language of the statute at issue."

The litigation has bounced from the local court to the appellate court to the state Supreme Court and involves a state law targeting entities that fail to pay legal judgments in a timely manner.

Language in the state's Prompt Pay Act imposes harsh financial penalties for failure to pay such judgments. Among the penalties — interest on the judgment compounding over time instead of accruing simply and defendant(s) being liable for plaintiff(s) legal fees. The original judgment against the school district was for $800,000, but because of the interest on the judgment compounding since 2010, the district has paid about $5 million to Total Electric and is potentially still on the hook for nearly $6 million more in interest and penalties that are adding about $100,000 per month to the total. Those amounts are on top of the more than $2 million the district has spent on legal services from 2005 through early 2022.

Settlement rejected

Danny Miller, chief operations officer of Total Electric, said Tuesday he recently offered again to settle the suit. At the time of the offer, Miller contended the district owed him about $5.7 million. His offer would have reduced the amount by about $1.7 million, calling for an immediate payment of $2 million and another $2 million payment, with simple interest on that amount added to the lump sum, in 2023.

"We gave them 10 days, and we got no response," Miller said.

Smith contended Miller's settlement offers have not been suitable.

"There have been multiple efforts to negotiate a resolution to this case over the years. Unfortunately, those efforts did not result in a reasonable resolution that made sense for the Jackson R-2 School District and its mission to educate children and support our community," he wrote.

The settlement offer was the latest in a string of such proposals. One offer years ago called for a simple $1 million payment from the school district. District officials countered with an offer of $20,000.

The construction project spawned two lawsuits — one involving Penzel Construction of Jackson, general contractor for the project, and roofing issues, and the other involving Total Electric, the electrical contractor for the project, and having to do with changes made to the project's design during the construction phase. The portion of the suit involving the roof issues concluded years ago, with the school district paying about $1.2 million.