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Madison County jurors find for Contegra in fraud case; Plaintiff awarded $50,000 in suit over construction of Fairview Heights forensics lab

By Heather Isringhausen Gvillo | Mar 15, 2016

Madison County jurors found for plaintiff Contegra Construction Company LLC in a fraud case concerning the construction of the Metro East Forensics Laboratory on March 10 after an eight-day trial in Circuit Judge Barbara Crowder’s court.

After deliberating for over three hours, the jury reached its verdict against defendant Robert Sutphen at 4:40 p.m. and awarded Contegra $50,000 in compensatory damages and no punitive damages.

The trial began on Feb. 29.

Contegra was represented in the case by Nicholas Garzia and Christopher Baucom of Armstrong Teasdale in St. Louis and Alan Napp of Schrempf, Kelly, Napp & Darr in Alton.

Sutphen was represented by Edward Moor of the Moor Law Office in Chicago.

The two-count complaint alleges separate claims of fraudulent misrepresentation for false applications for payment and an altered stored material log.

Contegra Construction Company LLC filed the lawsuit against Sutphen on Jan. 17, 2013.

The plaintiff claims Sutphen misrepresented the amount of work his company was performing on steel fabrication for the project, which caused Contegra to overpay.

Contegra also claims Sutphen altered the stored material log, which prevented the plaintiff from retrieving all of the steel it paid for after Sutphen’s employer, Advance Iron Works, or AIW, filed for bankruptcy.

Sutphen denies the allegations.

In its complaint, Contegra explains that it was the general contractor on the Metro East Forensics Lap public works project for the State of Illinois by the Capital Development Board, or CDB, which is a three-story steel-framed structure. The facility is intended to house a crime laboratory for the Illinois State Police.

Contegra and AIW entered into a contract requiring AIW to fabricate and deliver structured steel. Contegra says the contract was executed by Sutphen, as vice president of AIW, who was the sole representative of AIW during negotiations with the plaintiff.

According to the contract, Contegra was to pay $1,283,490, which was later increased to $1,369,735.

Contegra agreed to pre-pay AIW for raw steel. And AIW was required to complete a stored material log, present the materials for inspection and certification by the architect, request the architect to also execute a stored material log and acknowledge transfer of title of the materials referenced in the log to the State of Illinois.

Sutphen allegedly executed a stored material log for the pay period of Jan. 21, 2012, through Feb. 23, 2012, but omitted the Transfer of Title Provision.

Contegra claims it unknowingly submitted the altered stored material log to the CDB.

As of late October 2012, AIW had fabricated only 257 tons of structured steel, which has a value of $536,490.

But Contegra paid $793,500, overpaying AIW by $257,009.

As a result, Contegra rejected AIW’s applications for further payment until AIW fabricated and made sufficient steel ready for delivery with the percentage AIW had already been paid.

Contegra alleges Sutphen refused to allow the plaintiff to review the fabrication shop drawings to verify the total steel tonnage used by the defendant to calculate payment applications.

“In the application for progress payments, defendant manipulated the percentage of the structural steel value for which it was entitled to payment by both inflating the amount of fabricated steel and grossly underestimating the total structural steel tonnages for the project.

“Simultaneously, defendant overstated the tonnage of fabricated structural steel in payment applications by including stairs, metal decking and other miscellaneous non-structural steel,” the suit states.

Contegra alleges Sutphen refused to adjust his calculation of payment applications to reflect a proper total structural steel tonnage for the project and refused to deliver critical steel pieces for the job.

Further, AIW allegedly refused to deliver fabricated steel required for the project until Contegra agreed to pay AIW’s applications for payment in full, including the amounts in dispute.

As a result of the dispute, the project’s construction was halted in November 2012.

Then on Nov. 20, 2012, AIW filed a voluntary petition under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Illinois.

At the time, AIW had approximately 95 tons of unfabricated steel at its facility. But because the Transfer of Title Provision was not included in the altered stored material log, the remaining steel cannot be transferred to the CDB and may not be integrated into the project.

Madison County Circuit Court case number 13-L-82

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Illinois State PoliceArmstrong Teasdale