State Supreme Court reverses Red Bay lawsuit
MONTGOMERY — A lawsuit filed against the Water Works and Gas Board of Red Bay involving the failure to pay a contractor will be sent back to the Franklin County Circuit Court.
On Dec. 5, the Alabama Supreme Court announced its decision to reverse and remandthelawsuitbrought by Pinpoint Locating Inc., which accused the board of breach of contract, sending the case back to Franklin County to be retried.
Previously, the circuit court ruled a summary judgement against the company in favor of the board.
In 2021, the board obtained a $4.4 million loan for a project aimed at replacing and extending gas lines throughout the city. The project was to be completed in three separate phases.
The board contracted with Magnolia River Services Inc. to design and manage the project. Pinpoint was the lone company to advertise bids for each phase of the project, according to the suit, and was awarded the construction contract.
The company began working on the project in September 2021, but promptly stopped all construction in October 2022 after the board allegedly stopped making payments.
At the time, the board had paid more then $2.8 million but still owed $811,300.52 for work being performed by Pinpoint.
In turn, the board’s attorney, Danny McDowell, claimed the city did not have to pay because advertisement for the bids — in accordance with state law — was not followed by Magnolia.
However, Magnolia claimed it was not required to follow the advertising rules, as per its contract with the board.
At the time Pinpoint stopped construction, the company claimed it had laid approximately 26 miles of new gas lines throughout the city.
The board also claimed the Alabama Department of Transportation added approximately $1 million in requirements for the project, which Pinpoint claims the board did not have the funds to cover.
“Pinpoint claims the board did not have enough money left in its budget to complete the project and, therefore, used the defective advertising as an excuse for ceasing payment under the contracts,” the suit reads.
A state law requires bids for public works of a certain dollar amount be advertised in at least three newspapers of state circulation.
The board argued since it advertised through the Red Bay News, which it claimed was not a statewide circulated outlet, it did not comply with state law and therefore was not required to fulfill the rest of the contract.
However, in its argument, Pinpoint allegedly offered “evidence” suggesting the Red Bay News has subscribers throughout the state of Alabama, which it claimed complied with the law and required the payments in the original contract to be made.
Ultimately, the Alabama Supreme Court ruled the Water Works and Gas Board did not “substantially complied” with the state’s advertising laws.
“Pinpoint has submitted substantial evidence creating a genuine issue of material fact as to whether the board substantially complied with the advertising requirements,” the suit reads. “In this case, it is undisputed that the board did not strictly comply with the advertisement requirements.”
The Franklin County Times reached out to city officials for comment but were referred to the board attorney. However, those requests to Mcdowell were not returned by time of publication.
