M.R. Paving files contract lawsuit

NEW ULM – M.R. Paving & Excavating, Inc. filed a five-count lawsuit Dec. 31 against a St. James firm for damages and restitution in excess of $50,000.

According to the complaint, M.R. Paving alleges defendant Nicholas W. Romsdahl, Civil Ag Group, Inc., Civil Ag Group, LLC, d/b/a Civil Ag Group (CAG) signed a contractor/subcontractor agreement on or about April 16, 2012 for construction-related products and services within the City of Sleepy Eye in which Romsdahl signed on behalf of Civil Ag Group, an entity M.R. Paving later learned is not registered to do business in the State of Minnesota.

Complaint counts include breach of contract, warranties, implied covenant of good faith and fair dealing, unjust enrichment and joint liability, according to the complaint.

The first count alleges CAG, Inc. breached the agreement by among other things, failing to perform the contract work as agreed and within required timelines, and permitted liquidated damages to accrue for the project as a result of the defendants’ many failures and refusals to comply with the contractual terms and requirements, according to the complaint.

As a result, M.R. Paving was required to retain other subcontractors at its own expense to provide and complete work on the project, according to the complaint.

As a result, of the many agreement breaches, M.R. Paving has suffered, and continues to suffer damages in an amount to be proven at trial, according to the complaint.

The fifth-count accuses CAG, Inc. CAG, LLC and Romsdahl of commingling interests and assets in various business pursuits, including the fact that CAG, Inc. has been the contractor on construction projects, yet CAG, LLC has listed itself as the contractor on the bond for the same project, according to the complaint.

In addition, Romsdahl signed contracts that do not identify the contracting party as any specific business entity registered to do business in the State of Minnesota, but then later claims the contacting party was CAG, Inc., according to the complaint.

Additionally, Upon information and belief the two entities CAG, Inc. and CAG, LLC have similar and/or related shareholders or members, one of which is Romsdahl; the three defendants have not kept their responsibilities separate for construction projects; the three defendants are acting in a joint venture for construction projects and not maintaining proper business separation between their various business pursuits.

M.R. Paving legal counsel is Jared D. Peterson of Berens, Rodenberg & O’Connor, Chtd, New Ulm.

Contacted by The Journal, Romsdahl said his firm is dealing with the issue through legal channels and would not comment further.

The lawsuit stems from the City of Sleepy Eye’s 2012 Street & Utility Project in which the Sleepy Eye City Council approved a $25,000 contract penalty to M.R. Paving & Excavating at its Dec. 11, 2012 city council meeting.

In a letter to the city council dated Nov. 26, 2012, Matt Mathiowetz of M.R. Paving said he was aware some interim project completion dates were not met. He said some of the delays were caused by his firm’s original concrete contractor but that the substantial project completion date of Oct. 31, 2012 was met.

The letter added that due to some delays, M.R. Paving already incurred significant additional costs to complete the project by the substantial completion date, but none of the costs were passed on to the City of Sleepy Eye in any way, and they will not be.

Additionally, the letter stated M.R. Paving crews worked long hours including weekends to complete the project by Oct. 31 and did work that was additional to the original project scope.

(Fritz Busch can be e-mailed at fbusch@nujournal.com).

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