Slippery Rock contractor says battle over money costly

Everyone involved in the $25 million Slippery Rock Quadrangle student housing project is making money except the construction company and subcontractors who built it, a company executive said Wednesday on the opening day of a federal jury trial.

Martik Brothers Inc. of Finleyville accuses Kiebler Slippery Rock LLC of never paying for the construction of the 632-bed, 15-building development adjacent to Slippery Rock University in Butler County.

Martik Brothers won an arbitration award against Kiebler Slippery Rock in 2008, but Huntington National Bank of Columbus, Ohio, intervened to keep the contractor from seizing Kiebler's accounts to cover the award. Martik is suing the bank for $2.1 million.

Frank Martik said the 2-year-old fight to collect the money has tied up the company's performance bond on the project and, consequently, reduced its bonding capacity so that instead of bidding on projects worth up to $25 million, it has been limited to those worth $1.5 million or less.

"It's cost us the opportunities (to bid) for several projects," he said.

The contractor owes about $800,000 to subcontractors, and the money will come out of the $3.5 million performance bond if the company can't collect what it's still owed, Martik said.

Martik Brothers claims the bank owes it the money because bank officials who controlled payments on the project's construction failed to warn the contractor that Kiebler was running out of money, according to the lawsuit. Charles Zepp, an attorney for Huntington National, said the bank never had a contract with Martik Brothers and had no obligation to warn the company.

Martik said a June 7, 2007, site visit by Paul Kiebler, the owner, and bank officials would have been a good time to tell him and his four brothers that the project was running out of money.

Through a separate company, Kiebler has rented out the rooms at the quadrangle, is collecting rent and paying off the mortgage he owes to Huntington National, Martik said.

The bank denies it was obliged to tell Martik Brothers about the looming shortfall even though it refused several payments to the company that were authorized by Kiebler.

If the bank had warned the company, Martik Brothers could have halted work on the three unfinished buildings and wrapped up the project so that everyone would have been paid, Martik said. That would have reduced the rent that Kiebler is collecting, he said.