Lane Construction sues I-4 Ultimate partner Skanska for $132M

Dive Brief:

Lane Construction has filed a lawsuit against Skanska USA Civil Southeast, its joint venture design-build partner on the $2.3 billion I-4 Ultimate project in Orlando, Florida, accusing Skanska of putting an affiliate company's interests before its obligations to the JV. Lane is demanding $132 million plus costs and attorneys' fees.
Lane, Skanska and Granite Construction formed the Skanska-Granite-Lane JV to perform design-build work on the I-4 highway improvement project, in which Skanska's corporate affiliate, Skanska Infrastructure Development, has a 50% stake. Lane's complaint, filed in the U.S. District Court in Orlando, claims Skanska, as managing partner of the SGL JV, acted with gross negligence and breached its fiduciary duty by failing to take advantage of an exit option available to the JV as it racked up cost overruns and damages in the hundreds of millions of dollars. According to the lawsuit, the responsibility for losses is apportioned to each JV member — 40% to Skanska and 30% each to Lane and Granite.
In addition to the financial damages of more than $132 million that Lane claims it has suffered due to Skanska's alleged breach and conflict of interest, Lane is also asking the court to declare that Lane is no longer required to make capital contributions or other payments to SGL or Skanska.

Dive Insight:

The lawsuit alleges that SGL’s exit would have had "substantial adverse and potentially long-term financial repercussions" for the project and, as a consequence, to Skanska Infrastructure Development.

"Skanska SE refused to trigger SGL’s right to exit the project because Skanska SE’s judgment was impaired by a conflict of interest," it states.

Nevertheless, a Lane representative told Construction Dive that the lawsuit does not mean the end of the JV. According to the firm, work on the project continues, and the contractor is maintaining a full staff on the I-4 project.

"We're committed to finishing the work," the representative said. "As far as us expecting some sort of impact to the schedule because of this suit, we don't expect that."

As to whether a settlement is in the offing, Lane's spokesperson said, "Lane is always open to reasonable discussions and will continue to provide input in the best interests of the construction JV and the project."

Skanska also weighed in on the lawsuit.

"While it is not Skanska’s policy to comment on pending litigation," a Skanska spokesperson said, "the company will say at this time that it refutes the allegations contained in the subject complaint. With respect to the ongoing project, Skanska and SGL Constructors remain fully committed to successfully completing the I-4 Ultimate project as currently planned."

Meanwhile, Erin Kuhlman, vice president of marketing and communications at Granite, told Construction Dive, “Granite is not a party to the lawsuit and has no comment on this pending litigation.”

The lawsuit sheds some light on a $100 million drilled shaft claim that I-4 Mobility Partners submitted to the Florida DOT in 2018. The construction costs of that claim were $48 million, according to the lawsuit, but I4MP tacked on its own cost claims of more than $50 million. Lane alleges that there were also other claims that the JV and I4MP submitted to the state.

Skanska led those negotiations, according to the lawsuit, and agreed to a sum of $125 million, "significantly less than what Skanska SE had previously represented to Lane and Granite."