City says it never entered into contract it’s being sued over

In a response to a lawsuit over a contract dispute, the city says it never entered into a contract with Pepperdine Corporation to renovate the old Phoenix Bank building.

“As a matter of law, no contract was created between plaintiff and defendant,” the response says. “The facts as alleged by the plaintiff do not demonstrate that a contract was created.”

Pepperdine filed the lawsuit after it says the city wrongfully terminated its contract to do the work on the East Washington Street building, which the city intends to become a gallery and administrative offices for the Suffolk African American History Museum.

Pepperdine is demanding $175,000 for breach of contract and negligence.

Pepperdine was the low bidder out of six who submitted bids for the project, so the city entered into a contract with them on March 23, according to the lawsuit filed last month.

But then Pepperdine discovered “numerous errors, omissions and inconsistencies in various documents” related to the project, according to the lawsuit. As an example, the lawsuit states, one document listed the owner of the property as Hampton University rather than the city of Suffolk.

The company sought direction from the city and was asked to provide a list of the errors, according to the lawsuit. It complied on May 11.

After a series of emails to try to correct the problem, Pepperdine delivered a signed contract form to the city on Sept. 7, along with a list of the changes that still needed to be made.

But then, on Sept. 21, the city notified Pepperdine it was terminating the contract, according to the lawsuit.

“The city of Suffolk owed Pepperdine Corporation a duty to prepare valid contract documents and to administer the contract award process in a reasonable and legal manner,” the suit reads. “Pepperdine Corporation incurred considerable expense at the request of the city of Suffolk to correct the erroneous and inconsistent contract documents issued by the city of Suffolk so that corrected contract documents could be prepared for the project.”