The insurance company holding the bond on the downtown fire station and Dorothy Visser Senior Center notified the city it planned to sue for breach of contract.
Fidelity and Deposit Company of Maryland filed a claim against San Clemente June 26, saying it sought the balance of the contract funds the company believes it is owed.
The original contractor, Gamut Construction, entered into a nearly $4.3 million agreement to build the facility but within about a year “voluntarily terminated” the contract. The city made a claim for completion of the work and Fidelity made good by finding a contractor, according to the legal documents.
The documents say when Tutor Perini took over work, city-caused delays increased project costs, among other claims.
City attorney Jeff Oderman said the city is in settlement discussions with Fidelity, and the amount currently disputed is $491,000.
The claim is open for 45 days or until the city acts upon it, Oderman said. He said he’s hopeful that by the time a lawsuit could formally be filed, the case would be resolved.