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KMD construction wins arbitration

SALISBURY — A local construction firm has been awarded nearly $1 million in its wrongful termination claim against Haywood County.
A board appointed by the American Arbitration Association sided with KMD Construction of Salisbury in its claim that Haywood officials were wrong in firing the company in 2008 from a project to renovate the county’s historic courthouse.
The board ordered Haywood County to pay KMD $713,057.06 for the balance of the contract and lost profits, among other costs.
Asheville architectural firm Pearce, Brinkley, Cease and Lee, which designed the project for Haywood County, was ordered to pay $234,425.41 to KMD. Most of that award is based on the arbitration board’s finding that the architectural firm “was professionally negligent in its performance of architectural services in connection with the project, damaging KMD.”
KMD had sought a total of $2.8 million in compensation in a lawsuit filed three years ago, according to an announcement about the settlement on the Haywood County website.
KMD won the contract and started on the $6.7 million renovation in February 2007, with work scheduled to be completed by May 18, 2008. But, on the advice of the lead architect, Haywood officials fired KMD on May 5, 2008, as the project lagged behind schedule.
KMD blamed the architectural firm for causing the delays by not resolving two dozen open design issues. That failure “literally brought the progress of the renovation project to a halt,” a KMD press release said.
The Salisbury company further argued that Haywood commissioners never heard about those issues from county staff or their paid consultants and never gave KMD a chance to respond to the charges against the firm.
The arbitration board found the firing of KMD was “wrongful and without just cause.”
KMD owner Kyle Davis said in the press release that while he was pleased with the monetary award, clearing his company’s name was more important.
“We have spent the last 10 years building our business and relationships with our many clients,” Davis said. “Most in our industry would have been forced out of business by a situation such as this. … Our name and reputation have been restored, and we can now move forward for future successes.”
Haywood County and Pearce, Brinkley, Cease and Lee have until Sept. 6 to pay the awards to KMD. After that date, they must begin adding interest to the amounts awarded.
After the county terminated the contract, a bonding company took over the project and retained KMD to complete the work.

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