The contractor hired to build three wind farms in Converse and Carbon counties recently won a total judgment of $1.4 million against a dirt subcontractor for construction delays and costs, according to court documents.
A federal jury awarded Tetra Tech EC Inc. $1,495,539 against Jerry Herling Construction Inc. for breaching its contract by failing to pay its vendors, according to its verdict after a two-week trial in October.
Some of those vendors are Wyoming businesses, according to bankruptcy court records.
Tetra Tech, of Pasadena, Calif., also won an $85,000 judgment against Jerry Herling Construction of Banning, Calif., for negligent misrepresentation by failing to inform Tetra Tech that vendors were not being paid and incorrectly telling Tetra Tech how much was owed.
However, the jury found Tetra Tech had unjustly enriched itself and awarded Jerry Herling Construction $153,226 for work it performed for Tetra Tech that was outside the scope of the subcontracts.
U.S. District Court Magistrate Scott Skavdahl approved the verdict and ordered Tetra Tech to recover $1,427,313 from Jerry Herling Construction plus interest, according to his judgment issued Oct. 31.
Cameron Walker, attorney for Jerry Herling Construction, did not return calls for comment.
Buck Beltzer, attorney for Tetra Tech, said he was unable to contact the company for a comment.
The case began after PacifiCorp chose Tetra Tech EC in early 2008 to build the Glenrock and Rolling Hills wind farms in Converse County, and the Seven Mile Hill wind farm in Carbon County, according to court documents.
In February and March 2008, Tetra Tech entered into contracts with Jerry Herling Construction to perform the dirt work at the sites and authorized it to hire subcontractors.
By that summer, Tetra Tech told Jerry Herling Construction its work didn't comply with specifications in the contracts and its work was behind schedule.
In August 2008, Jerry Herling Construction had cash flow problems and asked Tetra Tech to directly pay its vendors and subcontractors.
After Tetra Tech paid hundreds of thousands of dollars to some of those vendors and subcontractors, it learned that Herling owed more than it represented, according to court records.
On Sept. 13, Jerry Herling Construction removed its equipment from the project sites, and Tetra Tech terminated the subcontract agreements three days later.
Later that month, Tetra Tech sued for these and other reasons.
Jerry Herling Construction responded Tetra Tech misrepresented itself when the two companies entered into the subcontracts; the amount of dirt that needed moving was far more than Tetra Tech stated; the project sites weren't ready; and Jerry Herling Construction had to build roads to access the sites, which caused losses and incurred additional expenses.
Jerry Herling Construction also asserted Tetra Tech required it to do work not contemplated in the subcontracts and conspired to take over its business by putting it in extreme financial distress, according to court documents.
In April 2010, Jerry Herling Construction filed for Chapter 11 bankruptcy, which allows companies to operate as they restructure their business operations and arrange at least partial payment to creditors.
The company's creditors include Wyoming companies such as Anderson Signs & Supply of Mills, the Virginian Hotel in Medicine Bow, Bulldog Welding of Glenrock, Geotech Industrial Supply of Mills, and R&R Rest Stops of Casper, according to bankruptcy court documents.
Wyoming Machinery Co. of Mills is listed as one of the largest creditors, with Herling owing it nearly $1.7 million. Herling also stated it owed Homax Oil Sales of Casper nearly $585,000, Golden West Industries of Wright nearly $69,000, and Reiter Machine & Fabrication of Glenrock nearly $36,000.
Last week, the bankruptcy court allowed Jerry Herling Construction to change its bankruptcy filing to Chapter 7, or liquidation of its assets.