Broad Museum Sues Subcontractor for $20M

LOS ANGELES (CN) - A German subcontractor, hired to complete a steel veil structure for the downtown art museum The Broad Collection, delayed the project by months at a cost of $19.8 million, its owner and general contractor claim in court.

The Broad Collection and Matt Construction sued Seele Inc. and affiliates in Superior Court, alleging breach of contract, specific performance, fraud in the inducement and other counts.

Billionaire philanthropist Eli Broad's art museum on South Grand Avenue in downtown Los Angeles will exhibit nearly 2,000 works. Originally slated for a 2014 opening, the owners of the $140 million, three-story building, designed by Diller Scofidio & Renfrowill, now plan to unveil the museum next year.

The owner and contractor claims that Seele is at least partly responsible for that delay.

In late 2011, the plaintiffs say, they agreed to pay Seele $29.3 million to design the 120,000-square-foot building's honeycomb exterior and glass curtain wall.

Seele boasted that it would deliver work of "extraordinary quality" using "'world renowned'" German engineering techniques, according to the complaint.

"Seele represented that, if hired, Seele would deliver a product that was not 'mere Tiffany' but 'Cartier' quality," the lawsuit states.

But Broad claims that Seele misrepresented the level of its expertise.

"Seele did not possess the necessary skill, experience, resources, commitment or ability to perform the work at The Broad museum," 30-page complaint states. "Seele had never before designed, fabricated and constructed work comparable to that required of it on the project."

Seele refused to start work on the museum's steel veil, citing the flawed functionality of a 3D surface model, the complaint states. Broad Collection, however, says Seele is to blame for delays.

Broad claims, among other things, that Seele failed to submit designs for the project on time and designed mock-ups that were "unsightly and wholly unacceptable for use on the project."

"Seele's acts and omissions during performance of the work have caused a substantial delay to completion of the project which, as of the date of this complaint, is at least 15 months. Those same acts and omissions have caused substantial damages to Broad and Matt which, as of the date of this complaint, are at least $19.8 million," the lawsuit states.

In addition to Seele Inc., named as defendants are Seele GMBH, Seele Group GMBH & Co., KG, and construction bond sureties Fidelity and Deposit Company of Maryland, and Zurich American Insurance.

Broad seeks $19.8 million in damages for breach of contract, specific performance, fraud in the inducement, fraud and deceit, unfair competition, breach of contract, third party beneficiary, and enforcement of performance bond.

The plaintiffs are represented by Robert Thum with Pillsbury Winthrop Shaw Pittman.

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