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Governor, Attorney General Announce Final $4.6 Million Settlement For Defective I-84 Storm Drains

June 4, 2009

Attorney General Richard Blumenthal and Gov. M. Jodi Rell today announced that construction and inspection companies, their employees and a bonding company have agreed to a final $4.6 million settlement for defective storm drains on Interstate-84.

The agreement increases to $22.1 million the amount that Blumenthal has recovered for the defective work, which is slightly more than the taxpayers' loss. Blumenthal reached the settlement on behalf of Rell and the state Department of Transportation (DOT). All the repair work is complete and the costs known, according to DOT.

Under today's agreement, the state received $2.26 million from L.G. DeFelice, Inc., the defunct primary contractor, FDR Construction, which built the guardrails, inspector Maguire Group and employees of all three firms. Blumenthal sued the companies and employees in April 2007, which today's settlement resolves.

The remaining $2.35 million of today's settlement was owed by the state to DeFelice, Maguire and XL Specialty Insurance Company, DeFelice's bonding company. Under the agreement, the state keeps the money.

Approximately $17.5 million was previously paid in March 2007 by United States Fidelity & Guaranty, DeFelice's bonding company, as a result of negotiations involving Blumenthal's office and DOT.

Rell said, "From the beginning, I said that Connecticut taxpayers would not be stuck with the bill for repairing the shoddy work by these contractors -- and they have not. My concerns were -- first -- the safety of motorists, then ensuring that the work was redone properly and the interests of taxpayers were protected. The repairs were completed last year, funded by an earlier settlement payment in this case, and now the responsible companies have been fully held to account. I very much appreciate the efforts by the attorney general and his staff.

"In the last several years we have begun a dramatic transformation of the DOT," the governor added. "It is one of the most important agencies in state government and its work has a profound effect on our economy and quality of life. DOT is moving in a new direction and confronting our state's transportation challenges with new vision and vigor."

Blumenthal said, "This settlement completely compensates taxpayers, refunding every penny for shoddy and substandard I-84 drains. DeFelice's pervasive failure was unconscionable, Maguire's seal of approval inexplicable. The contractors duped taxpayers, receiving millions for defective drains, faulty guardrails and a flawed inspection -- threatening roadway integrity and driver safety. Repairs required almost 300 defective drains and catch basins to be replaced and major areas of roadway to be repaved and reconstructed.

"This case provides even more evidence for a False Claims Act that would enable triple damages and other penalties against corrupt contractors. Using existing legal remedies, the message to crooked contractors is: We will make you pay back every penny you take illegally from taxpayers. My office will fight to aggressively hold accountable contractors who do defective work," Blumenthal added.

The defective work cost the state $21.98 million, meaning Blumenthal recouped about $30,000 more than taxpayers lost.

In early 2006, after extensive defects in the project's drainage system were discovered by DOT personnel, DeFelice walked off the job and later went out of business. The contract with the Maguire Group, Inc., of New Britain, hired by DOT to inspect the project and ensure contract compliance, was subsequently terminated.

The defective drains were along a three-mile stretch of I-84 between Waterbury and Cheshire.

The state repaired the drains starting in 2007. The work was completed at the end of November 2008.

Assistant Attorneys General Nancy E. Arnold, Eileen Meskill and Peter Huntsman negotiated the settlement announced today.

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