Wewahitchka participates in mediation for fire station litigation

Nearly two years after the City of Wewahitchka terminated their contract with Winterfell Construction for the building of the city’s new fire starting, city officials believe they are nearing the end of what has been a complex, multi-faceted legal battle between the city, the contractor and the project’s bonding company.

Wewahitchka Mayor Philip Gaskin informed the public at the city’s Aug. 31 meeting that he, City Manager Michael Gotrman and City Attorney Michelle Jordan had participated in mediation with the two other parties.

“I think it, personally, is excellent news, but I don’t want to disclose too much yet because we have not signed the agreement,” Gaskin said. 

Should this mediation result in a successful global settlement agreement, it would be the end of what has been a complicated legal battle.

Previous attempts at mediation were derailed in January after it was discovered that Winterfell had not been informed and would not be participating. Shortly afterward, Bay County Commissioner Tommy Hamm, who owns Winterfell, filed for chapter 11 business and personal bankruptcy.

U.S. statute automatically halts most civil lawsuits when an involved party files for bankruptcy. 

This statute applied to several pending lawsuits regarding Wewahitchka’s fire station, which had already been drawn out for about a year.

Starting with the termination of Winterfell as the project’s contractor in January, 2022, the fire station project has become embedded in a complex web of lawsuits involving the city, the contractor and the company acting as the surety over the project, the Fair American Insurance and Reinsurance Company. 

In April of 2022, Winterfell sued the city for breach of contract in Bay County court. Wewahitchka counter-sued, citing concerns with the quality of the fire station’s construction.

In late October, FAIRCO filed a lawsuit against Winterfell in the United States District Court North Florida Division seeking to have the contractor pay the collateral due in the sum of $460,000. 

On Nov.11, Wewahitchka sent a formal notice of default to FAIRCO, claiming that all conditions to trigger FAIRCO’s action on the bond had been met by the city at that time.

FAIRCO then filed a federal lawsuit seeking a declaratory judgment in its dispute with the city before Winterfell ultimately filed for bankruptcy.

Delays caused by these legal complications have led the city to seek extensions for the grant funding they have been awarded for the fire station’s construction through the Federal Emergency management Agency. 

“We will keep you apprised of any developments relating to the mediation and let you know when and if the settlement is signed,” Gaskin said, closing discussion of the matter.