Jackson School District pays $4 million in long-running lawsuit

Jackson School District recently paid more than $4 million as part of a long-running lawsuit, according to an email sent to the district’s employees.

The payment came after the state Supreme Court denied an appellate court application in the case.

The lawsuit stems from 2008 construction of the Events Center at the district’s high school and concerns water/weather damage to the center’s “cementitious roof deck.”

Though the case names Penzel Construction as a litigant, the company’s involvement in the case is on behalf of Total Electric Inc., the subcontractor for the construction project for which Penzel served as general contractor. The judgment against the school district in the case included actual damages of $800,000. In the intervening years, the case was appealed by the school district and has bounced from court to court, with various issues in question and fees and interest piling up, leading to the recent payment amount of just more than $4 million.

The latest court action in the case came Dec. 21, when the high court denied the appellate application and affirmed the district’s obligation to pay the principal sum, penalties, interest and reasonable attorney fees.

An email from superintendent Scott Smith, sent to faculty and staff Dec. 27, updated the situation: “The Jackson R-2 School District has been involved in an ongoing lawsuit since 2009 over work which began in 2006 on the high school construction project addition of the Event Center, Commons area. In 2009, the general contractor on the project, Penzel Construction Co. Inc. filed a claim on behalf of one of its electrical subcontractors, Total Electric Inc. ... On Wednesday, Dec. 22, 2021, the Missouri Supreme Court denied hearing the case, which resulted in a judgment of approximately $4 million the District must pay to the plaintiff ... The construction project involved in the lawsuit took place prior to the last two administrations and prior four boards of education. The current administration team and board of education have been working diligently to make plans to pay this judgment and move forward to continue to serve our students and teachers with the same excellence as we always have in Jackson. While the financial impact is notable and significant, we want to assure you that we are doing everything we can to ensure that this judgment does not impact learning, or salaries of teachers and staff.”

In a telephone interview Wednesday, Smith said the payment could end the suit.

“At this point, we are hopeful that that does end it, but I guess that’s to be determined,” he said.

Smith said the funds for the payment came from the district’s reserve, which totals about $15 million

“We had to dip into our reserves to pay this,” he explained, noting he does not expect any operational changes to flow from the outlay.

Danny Miller, chief operating officer of Total Electric, said by telephone Wednesday questions of interest on the original judgment remain, which could result in the case returning to Judge Benjamin Lewis’s courtroom unless the factions can agree on a settlement to that issue.