PARIS — A retired judge has settled a dispute between Oxford County and Oxford Aviation, requiring the county to release payments to the company and the company to immediately begin repair work.
John D. McElwee, who acted as an arbitrator, said the county must pay Oxford Aviation $122,200 of the $150,000 it has withheld from the aircraft refurbishing and painting company. The remaining $27,800 represents a bid estimate by Hahnel Brothers Co. of Lewiston for roof repair work at the Oxford County Regional Airport in Oxford where the company rents space.
McElwee said that estimate may have increased since Hahnel Brothers made it, and that the county and Oxford Aviation should negotiate an amended proposal, if that is the case. The county must pay for the roof repair up to $27,800. Oxford Aviation, which accepted the proposal in May but did not authorize Hahnel Brothers to begin the work, must “immediately deliver acceptance of the roofing contract to Hahnel Bros. and communicate to it that it is imperative that the work start at the earliest possible time.”
Oxford Aviation is the fixed-base operator at the airport, which is owned by the county. The company sued the county in August 2008, charging that the county breached its lease agreement with the company. In that suit, Oxford Aviation said the county failed to meet its maintenance requirements by failing to adequately repair a roof leak which subsequently led to mold issues in the building.
The suit was settled in January, with the county transferring maintenance responsibilities to the company and agreeing to waive the company’s $21,600 annual rent. In addition, the county agreed to pay $250,000 in four installments to go toward the needed repairs.
The county commissioners agreed to withhold the $100,000 payment set for March after determining that Oxford Aviation had not provided assurances that repairs were taking place. Oxford Aviation disputed the claim, and temporarily laid off 17 workers due to the unanticipated nonpayment. The company also filed new charges of breach of settlement agreement and interference with the company’s business relations.
McElwee determined that Oxford Aviation told the county that roof repair work would begin soon after the settlement, but that attorney F. Lee Bailey, an adviser to the company, told county administrator Scott Cole in February that company President Jim Horowitz “did not intend to use any significant part of the cash settlement for professional (i.e. specialist contractor) roof repairs and/or replacement as discussed at mediation.”
McElwee that while the settlement was unclear about the expectations of both parties in regards to what the county’s payments would be used for, he felt that a “very large part” of the $250,000 settlement would be used to remedy past damages. He said that while the county had a legitimate basis to seek assurances about roof repair work, it “overreacted” and breached the settlement by withholding the $100,000 March payment and $50,000 June payment.
McElwee said it would be “unreasonably speculative” to conclude that the county was justified in withholding payments for mold remediation work. He said mold remediation estimates should not be done until after there have been significant roof repairs to address the root problem of the water leak.
McElwee offered nonbinding suggestions to avoid further litigation between the parties. He concludes that any costs exceeding $28,700 for roof repairs should be shared between the county and company, and that while there is no evidence of a loss of business on Oxford Aviation’s part, the county may wish to make its final $50,000 payment before its due date on Sept. 1.
McElwee also said that while it is possible that Oxford Aviation interpreted the lack of guidelines in the settlement “as allowing it to undertake certain maintenance and repairs in a different manner than discussed at mediation, I saw absolutely no evidence of fraud in the settlement negotiations or inducement for specific provisions of the settlement agreement.”
Cole said Wednesday that the county has made the $122,200 payment. He said the county did not intend to avoid payment, but rather ensure that the funds were going to repair work rather than other company expenditures. He said the county will work with Oxford Aviation to iron out any changes to the lease agreement, which runs through 2027. One possibility would be a recurring facility inspection by the county to determine any maintenance requirements.
“We want Oxford Aviation to thrive,” Cole said. “It’s in everyone’s interests to have the company succeed. The only disappointment was that the county’s money seemed not to be going to the building.”
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