CITY MUST PAY $1.4 MILLION.

Byline: JIM SKEEN Staff Writer

LANCASTER - The city will pay $1.4 million to a contractor fired in 1999 in a dispute over construction of the interpretative center at the Prime Desert Woodland Preserve.

The city also owes the contractor attorney fees that could range from $200,000 to more than $700,000, but the amount has not been settled.

At their meeting Tuesday night, the City Council is expected to approve a payout to M.A. Butters & Associates, which won court rulings on its lawsuit claiming it was wrongfully fired.

The payout includes $700,000 for breach of contract, another $376,000 in additional expenses from the termination and over $312,0000 in interest on the judgment.

Still to be determined is the amount for attorneys' fees. Butters is claiming approximately $732,480. The city states an award of approximately $200,000 would be reasonable, according to a staff report by City Attorney David McEwen.

A court hearing on the attorney fees issue is scheduled for Friday. Butters' attorney declined comment last week, citing the pending hearing.

Lancaster awarded a $1.8 million contract to Butters in November 1998 to build the interpretation center, some of the trail network, and a parking lot. City officials said Butters was terminated because work was behind schedule and it showed no promise of getting the project on track.

City officials say the work was about 55 percent to 60 percent complete when Butters was declared in default of the contract.

Butters said he was owed $700,000 at the time he was terminated. His lawsuit alleged the city's termination hurt his company's overhead and had a tremendous financial impact on his business in terms of his ability to bond other work.

A point of contention was the construction process using straw bales. The 5,060-square-foot center is one of the largest - perhaps even the largest - building of its type in the state.

The contractor said city officials did not adequately spell out how to build a straw-bale building and, in particular, how to apply plaster to the bales. City officials said the company was given proper instructions.

In June 2003, a Superior Court judge ruled in favor of Butters and awarded the firm $1.9 million. The judge, however, denied Butters' motion for attorney fees.

Both the city and Butters filed appeals - the city contesting the judgment and Butters over the denial of attorney fees.

The appeals court reversed the trial court's award of $750,000 of lost profits, finding that in the construction industry determining future profits is too uncertain, McEwen said.

The appeals court also reversed the denial of attorneys' fees.

james.skeen(at)dailynews

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