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Story - Education

Jan 27, 2009 7:18 PMPublication: The East Hampton Press

Contractor accuses East Hampton School District of fraud

Jan 27, 2009 7:18 PM

The East Hampton School District has spent $1.2 million in legal costs since December 2006 in a battle against what Raymond Gualtieri, the district superintendant, states are “frivolous claims brought by a district resident,” according to a statement issued on Monday.

The district resident is Victor Canseco, of Sandpebble Builders Inc., a construction management company with which the district contracted in April 2002 to oversee a renovation and expansion project estimated then to cost $18 million.

Mr. Canseco, through a lawsuit now pending in State Supreme Court, has contended for years that, under the terms of the contract, his firm should have overseen the $80 million expansion into which the initial project has evolved and collected fees on that basis. The district instead is using another firm after having failed to negotiate a new contract with him.

Mr. Canseco argues that the 2002 contract remains in full force and effect.

On December 2, 2008, he launched a new front in his legal battle, filing a notice of claim for damages totaling $3,730,050, accusing the district of defrauding him because—by the district’s own admission—the 2002 contract was never legal because it was never approved by the full board.

Deborah Mansir, the former board president, signed Sandpebble’s contract in 2002. But in May 2005, the board’s attorney sent a letter to Steven Angel, Sandpebble’s attorney, saying that the board had never authorized her to sign it. The board said there was no record in the minutes that the board ever had voted on the Sandpebble contract, as required.

The district did pay Sandpebble more than $200,000 under provisions of the 2002 contract for pre-construction work.

In response to a motion for a summary judgment, the district submitted affidavits in State Supreme Court on November 20, 2008, in which Ms. Mansir swore that, to the best of her recollection, the board never authorized her to sign the contract.

Sandpebble’s attorney this week called the district’s position “absurd.”

“In their desire to avoid the consequences of the contract they signed,” said Mr. Angel in a phone interview, “the school district is claiming that the contract was never authorized. It’s pretty absurd that a president would sign a contract if it was not authorized. But if the court buys it, then we claim that she misrepresented herself and defrauded Sandpebble.”

In a press release issued Monday, the school district accused Mr. Canseco of wasting taxpayers’ money, a total so far of $1.2 million in legal fees, by seeking millions of dollars for work his company never performed.

“The whole affair reeks of naked opportunism on Mr. Canseco’s part, which unfortunately costs his friends and neighbors real dollars,” said Sandra Vorpahl, president of the School Board. “It is a shame that this money has to be spent, but the district has to defend itself or put its community at risk of damages that are much greater.”

Although Mr. Gualtieri was not the superintendant when the contract was signed with Sandpebble in 2002, he said in an interview that Ms. Mansir told him she had received a folder of papers to sign that she believed had been approved by the board. In general, the board president signs papers presented to him or her and trusts that the superintendant has done all the research, Mr. Gualtieri said. The superintendent at the time was Jan Furman.

After Mr. Gualtieri became superintendant in 2003, he said he read through all the minutes and discovered that he couldn’t find record of a motion to approve the Sandpebble contract around the time when Ms. Mansir signed it, in April 2002.

“It’s a tiny technicality that there wasn’t a motion to back up her signature,” Mr. Gualtieri said. “The technicality of not having the motion would not have stopped him from being paid if he had done work on the $18 million project. But he hadn’t. And we wouldn’t do a motion to approve the contract retroactively because the project was dead in the water.”

Mr. Gualtieri said that the project that Sandpebble was hired for, which Sandpebble estimated would cost around $18 million, was a different type of project than what Mr. Gaultieri brought to the board, a much broader project expected to cost $80 million.

“My expansion project was a completely new project that was never considered before,” Mr. Gaultieri said. He said in the hiring process, the board asked him about his ideas on how to get a referendum passed for a renovation and expansion project because of the failure of a public referendum in 2001. That vote called for buying farmland across the street from the high school, in order to move athletic fields to a new site and make room for a high school expansion.

Once Mr. Gaultieri was hired, he said he met with the Ladies Village Improvement Society, the Rotary Club, the Kiwanis Club and many other organizations who felt that an $18 million project was just “the first trip to the well of many trips to the well,” he said.

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Looks like East Hampton might want to set aside some reserves in its upcoming budget.
By Doug Penny (64), Lexington, Virginia on Jan 28, 09 10:20 AM
My name is Victor Balchunas. I am a local resident year round in the Hamptons. My partner (Mr. David Peele) and I are mason contractors out here and have been for 25 years. We recently joined forces with East End Cement and Stone to enable us to bid on commercial projects, since the residential market has come to a crashing halt. In particular we have submitted bids for the masonry portions for the East and South Hampton High School projects. We have tried to encourage other local contractors ...more
By Vbalchunas (11), Southampton on Jan 29, 09 6:50 AM
It sounds like the School Board and School Admin need to get their act together, quite frankly. Signing contracts that aren't approved? Going forward with projects that haven't been fully defined?

to be fair, it seems like the new superintendant inherited a bit of a mess but his actions seem to have exacerbated the situation.

By C Law (354), Water Mill on Jan 29, 09 10:55 AM