Fresno contractor Stephen Davis is requesting that Fresno Unified School District cooperate and assist him in his lawsuit against Harris Construction.
Kevin Carlin, the attorney representing Davis, sent a letter to the Fresno Unified Board of Education on Tuesday laying out his argument for why FUSD – which is a defendant alongside Harris Construction – should cooperate.
The backstory: In 2011, Harris Construction was pre-qualified under the old lease-leaseback system for projects, which led to FUSD and Harris Construction agreeing to a $37.6 million construction contract for Gaston Middle School.
- Harris Construction completed the school in two years and charged the district a $1.1 million fee for the project. That is the total profit that Harris Construction walked away from the project with, while the rest of the money went to subcontractors.
- Davis, another contractor who has done over $182 million in work for the district, filed a lawsuit against Harris Construction and FUSD in November 2012 arguing that the district was using lease-leaseback illegally to avoid competitive bids. Davis filed the lawsuit as a taxpayer and not in his position as a contractor.
- The lawsuit was dismissed in court in September 2013 but was later reversed by the Fifth District Court of Appeal.
- Following years of other legal battles and appeals in court, the trial is scheduled to begin on March 18.
Davis’ argument: In the letter, Carlin claims that Harris Construction owes Fresno Unified $62.9 million – $36 million in principal and nearly $27 million in interest since 2012.
- That money would be paid in disgorgement, something Harris Construction previously told The Sun would only apply to the $1.1 million in profit, per state law.
- Carlin addresses the board about a board meeting that took place on Aug. 9, 2023, where he says the board memers “are under the misunderstanding that Davis is suing to get money from the District.”
- Carlin disagrees with Harris Construction’s assessment and claims in the letter that 100 percent disgorgement is required by two court cases – Thomson v. Call and Carson Redevelopment Agency v. Padilla – and by Education Code 17406.
- “To fulfill your obligation as trustees over the public funds of the District, the Board of Education must direct the District to cooperate with and assist Davis in the remainder of this litigation and specifically at the upcoming Trial seeking to recover from Harris the $36,051,375 in District funds that was paid to Harris under contracts that were not legal,” the letter reads.
The other side: Tuesday, Harris Construction issued the following statement in response to Carlin’s letter:
- “We are very proud of the school we built for Fresno Unified – Gaston Middle School – a $42 million treasure for the community of Southwest Fresno. The new school was delivered on-time and under-budget in November of 2014 – almost 10 years ago – and we believe it was and remains a source of pride to the District, especially to our Fresno community. Fresno Unified received an incredible value and has always maintained that it, and the community, made a good investment and has never wanted or requested repayment of any kind from Harris Construction, let alone the cost of construction that Harris paid out to our local construction workers, local trade-contractors and vendors. Such an idea is absolutely unjust.
- “Fresno Unified began their lease-leaseback facility construction program in 2011, issuing a total of 25 lease-leaseback agreements to 11 different general contractors (Harris Construction being one of them), with 6 of those contractors receiving preconstruction agreements. The Gaston Middle School agreement (#13 of 25) was not unique and was identical to those 24 other agreements. What is at issue now is a “legal” argument – Did those 25 LLB agreements comply with the CA Education Code? This question has nothing to do with Harris Construction. Fresno Unified and their lawyers wrote all 25 agreements.
- “All of us at Harris Construction would like to see this litigation resolved, but we had little to do with why we are here now. We believe Fresno Unified and their lawyers could have avoided this dispute early on, even before construction started. Fresno Unified is, and always has been, very proud of Gaston Middle School – and they should be. We at Harris Construction are proud of the work we do every day – building schools throughout our Valley and employing and supporting hundreds of trade-partners, their employees, and families – all while also supporting our local community.”
Read the letter:
