A breach-of-contract suit that spent about six years in the Utah court system will apparently cost the city around $65,000 to settle.
And the City Council is now wondering how it is going to come up with the money.The case had its beginning in 1981 when the Manti City Council awarded John Call Engineering a contract for the engineering work on the city's new sewer system.
After Call Engineering had completed the preliminary phase of the project, the city informed the company that it would not use its services for the remainder of the project and hired another engineering firm to design the system and supervise construction.
Call Engineering subsequently filed suit, claiming that its contract covered the entire project. In an April 2, 1984, decision, 6th District Judge Don B. Tibbs ruled in favor of the city.
Call then appealed that decision to the Utah Supreme Court, and in 1987 that court reversed the District Court decision, ruled that the city had breached the contract and remanded the case back to the District Court to determine the amount due Call Engineering because of profits lost to the firm through the breach of contract.
A 6th District jury in January 1989 awarded Call Engineering $13,400. Claiming that the award was inadequate, Call then appealed the ruling to the Utah Court of Appeals.
The Court of Appeals last week vacated the 6th District jury's $13,400 judgment and required the court to enter judgment in Call Engineering's favor in the amount of $56,377.60 plus interest.
That means the city will now owe Call Engineering something like $65,000 after Tibbs determines the amount of interest.
"It's a major financial problem which we must address immediately," Mayor Kent Larsen said. "It will be a tremendous strain on our already meager budget."
The problem will be a major item on the council's July 18 meeting. "We're thinking about raising the property tax, increasing fees, obtaining a loan, things like that," a councilman said.