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Lawsuit costs city $3.57M

FOR THE RECORD: This story about a $3.57 million jury verdict against the city of Albuquerque in a condemnation and breach of contract case incorrectly reported that the city offered to settle the case for $10 million. The settlement offer was made by Horne Stewart LLC, which prevailed in the lawsuit.

Copyright © 2013 Albuquerque Journal

A jury on Friday found that Bernalillo County and the city of Albuquerque willfully breached a land deal contract signed in 1997.

The cost to taxpayers: $3.57 million.

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The contract involved obtaining land for an extension of University Boulevard, from Rio Bravo Boulevard to the northern boundary of Mesa del Sol.

The county was the original signer of the contract with Horne Stewart LLC, a family-owned business that has owned 540 acres in the area since the 1950s. The project was then assigned to the city in 2004.

The lawsuit was filed originally as a condemnation action, but Horne Stewart counter-sued for breach of contract.

The jury awarded $227,000 to Horne Stewart for the condemnation of land – the legal process used to acquire the property – and $3.3 million for damages resulting from breach of contract and breach of the duty of good faith and fair dealing.

Felicia Weingartner, who represents Horne Stewart and its principal, Gregory Horne, said the company donated land in exchange for the road construction and that specific plans were laid out in the contract.

“He gave them 22 acres of his land to build the extension of University,” she said. “They detailed how it would be built, but they did not build the road he contracted for. It was mainly the elevation that was a problem.”

Instead of a community roadway built at grade, the extension was constructed with a bridge and elevation that reaches as high as 40 feet, she said. That affected Horne Stewart’s ability to develop adjacent land.

“The property is unique in that it’s situated close to Kirtland Air Force Base, the airport, and the highway, and it has rail on it,” Weingartner said. “It’s an ideal location” where her client plans to develop commercial and light industrial projects.

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“They didn’t put in an intersection at Los Picaros and University, which is part of what the contract provided,” she said.

She said evidence at the trial, conducted over the past two weeks before 2nd Judicial District Judge Clay Campbell, showed the cost of compensating for the breach of contract was $13.5 million.

City witnesses told the jury that the city intends to spend about $11 million on more work on the project, Weingartner said, and the jury awarded damages for the remainder.

“The jury obviously expects the city to do what its employees swore under oath that it will do in the immediate future. No more delays, no more breaches, no more defaults,” she said in a statement.

The family is gratified by the verdict, she said, and is “counting on the city to do what its witnesses promised. If it does, the jury’s verdict will be sufficient to correct much of the harm caused by the past inexcusable actions of city officials.”

City Attorney David Tourek said the city’s claims review board will make recommendations on an appeal.

He also said the jury verdict is less than the city had offered to settle the case – $10 million – but more than the $500,000 verdict it had hoped for.

The original plans for the road were submitted by Horne Stewart, and city officials’ review found them incomplete and unsafe, Tourek said.

“We don’t understand the basis for the jury determination that the city breached the contract,” he said.

“Their engineer was the one who created the original design for the road. … We completed (the design) and made sure it was safe. They disagreed with our design,” Tourek said.

“We respect the jury’s decision. We would have been a lot happier if it (the verdict) was less than a million,” he said, but he added that the plaintiffs wanted $25 million from the city throughout.

The city is indemnifying the county on the project, he said.

“Our testimony was that we wanted it to be safe, and we didn’t want people going down a hill to train tracks,” Tourek said.

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