Pullman Hospital, Lydig settle suit for $5.5 million

Pullman Regional Hospital and Lydig Construction, the general contractor for the 2004 construction of the hospital in Pullman, reached a $5.5 million settlement agreement of a 2009 suit involving alleged faults in the 2004 hospital construction project. Described as “an arms-length resolution,” the lawsuit was settled through mediation last Nov. 15.

A copy of the settlement agreement was provided to the Gazette as the result of a public records request made April 6 to the Pullman Hospital District by Colfax Attorney Gary Libey on behalf of the Gazette.

A response to the request was sent by Robert Rembert, a member of the Pullman law firm which represented the hospital district.

The settlement calls for the contractor to pay the hospital $3,650,000 for alleged flooring faults and $1,850,000 for alleged soffit/air intrusion, exterior stucco and fireproofing issues.

The agreement calls for a mutual release of any and all causes by each side in the suit, but does not release claims and causes each side might have against other parties. In Lydig’s case, that could include claims the contractor could have against subcontractors, suppliers and insurers.

The agreement notes the settlement is intended to end the suit and avoid the expense and risks of litigation without being construed or characterized as an acknowledgment or admission of liability or fault by either party. The parties also agreed not to disparage each other.

The agreement called for the suit to be dismissed upon payment of the $5.5 million by Lydig to the hospital in care of Scott Adams, chief executive officer.

Signing the agreement for Lydig Construction was Larry Swartz, company president.

The agreement also called for the hospital district to petition the court for an order of dismissal after receiving the settlement sum. The dismissal was ordered April 7 after Pullman Attorney David Savage, who represented the hospital district, filed the petition to dismiss with the court.

The suit was dismissed without award of attorney fees or costs to either party. Attorney fees and costs for the hospital totaled $411,529, according to Rembert’s response.

Libey also had requested the amount of the district’s attorney fees.

Indication of the Nov. 15 settlement surfaced in mid March when Seattle attorneys representing Lydig asked the court to submit terms of the settlement under seal. Lydig was seeking an order of reasonableness on the settlement terms as part of the process for potentially filing claims with insurers.

Their petition cited court precedent which allowed the settlement amount of a suit to be used to determine the amount of loss submitted by the company in a claim.

The Gazette, represented by Libey, filed an objection to the request to file the results of the settlement in court under seal. The objection noted the hospital district is a public entity.

Before asking the court to dismiss the suit, Savage filed a response that said the Nov. 15 settlement included a confidentiality provision but also recognized the hospital district was a public entity that could be subject to a public disclosure request. Savage’s response said the hospital district did not support Lydig’s move to keep the settlement sealed and pointed out the settlement agreement called for the hospital district to notify Lydig of any public disclosure request. That would leave the contractor’s attorneys the option of seeking an injunction to block disclosure.

The response to Libey’s public disclosure request was mailed April 18 and relayed to the Gazette last Wednesday.