Unpaid construction bills linger around Merriam Ikea store

Nearly 18 months after the Merriam Ikea store opened, millions of dollars in unpaid construction bills finally are finding some resolution. But not all of them.

Two lawsuits over those bills have been brewing since January. They involve Ikea, Kansas City-based J.E. Dunn Construction Co., which was the lead contractor on the $70.3 million project, and two out-of-state steel companies.

All four ended up in court over unresolved bills that top $2.7 million when combined. Now, three of those companies apparently have resolved their differences and are working to dismiss the claims.

The agreement leaves one company out, Midwest Steel Inc., based in Detroit. It sits at the end of a chain of disputed claims.

Atop the chain is Ikea. The Swedish retailer hired J.E. Dunn to build the 359,000-square-foot blue and yellow big box in Merriam. The store also is noted for the solar panels on the roof and underground geothermal heating and cooling system.

Dunn, next in the chain, has claimed in a court filing that Ikea still owes it $250,000. Dunn hadn’t sued Ikea but brought up its claim in answering one of the lawsuits.

Behind Dunn stands Phoenix-based Schuff Steel Co. It filed suit in Johnson County District Court saying Dunn still owed it more than $1.14 million but had refused to pay.

Dunn had hired Schuff as a subcontractor to do more than $6.8 million of work on the construction project, according to the Schuff lawsuit. It said Dunn also turned to Schuff for additional work and that this generated the bill that Dunn has not paid.

Those disputes may be over, according to Dunn, Schuff and Ikea. All three have acknowledged that their claims have been resolved “in principle,” according to Ikea’s attorney Danne Webb. All three said they’re working on dismissing the claims in the court cases.

Left out of that agreement is Midwest Steel.

It turned to U.S. District Court in Kansas City, Kan., to sue over $1.32 million that it said Schuff Steel owes it but has not paid.

In similar fashion to the Schuff-Dunn dispute, Midwest Steel said it was hired by Schuff for $2.32 million in labor, materials and additional work through change orders on the project.

Midwest Steel’s lawsuit went further. It said it had to do an additional $1.16 million of work because of Schuff’s failure “to meet its obligations” under the subcontract with Dunn. The unpaid bill covers this additional work and part of the larger amount.

Alan Broad, Midwest Steel’s corporate counsel, said Midwest’s claims need to be handled as well.

“We’re looking to try to get this matter resolved, and to do so we need Ikea to become involved,” Broad said.

Ikea has not yet filed an answer in Midwest’s lawsuit or the Schuff lawsuit.

Dunn’s project executive Paul Neidlein acknowledged that Midwest stands outside of the agreement that the other companies have reached.

“J.E. Dunn believes that the claims by Midwest Steel, a subcontractor to Schuff, have no merit with respect to J.E. Dunn, and J.E. Dunn will continue to seek dismissal of Midwest Steel’s claims. Likewise, Ikea and Schuff have denied Midwest Steel’s claims in response to the lawsuit,” Neidlein said in an emailed statement.

Schuff and Midwest Steel filed their lawsuits on Jan. 26, sixteen months after the Ikea store opened. Each lawsuit names Ikea as a defendant.

This story was originally published March 16, 2016 at 11:57 AM with the headline "Unpaid construction bills linger around Merriam Ikea store."