ROCKINGHAM -- The town is seeking damages from the architectural firm hired for the renovation of the Rockingham Free Public Library and claims the firm breached its contract by failing to ensure general contractor Baybutt Construction Corp. had mandatory bonds.

Rockingham Town Attorney Stephen Ankuda sent a pre-mediation demand to Sheerr McCrystal Palson (SMP) Architecture, claiming damages in regards to a July 2011 contract in which the firm agreed to provide its services for the repair, rehabilitation and renovation of the library. He said Thursday he has already been in talks with Thomas F. Heilmann, the attorney of the New Hampshire-based firm.

The letter demands $535,000 in damages.

Ankuda said part of the town's standard American Institute of Architects contract with SMP stated the firm was obligated to make sure Baybutt had all necessary bonds. According to his letter, the firm's contractual breaches have damaged the contract.

Ankuda told the Reformer he spoke with Heilmann on Wednesday and the two "had a fairly good discussion about dealing with it." He said they talked about alternatives to the mandatory mediation and arbitration required by the contract. Mediation is an intervention by a neutral third party to reach a peaceful settlement while arbitration leaves the dispute up to a decision by the third party.

In his letter, Ankuda states the firm acted negligently and breached its contractual obligations by not making sure Baybutt had proper performance and payment bonds, which act as insurance policies of sorts. Baybutt had been hired as the general contractor of the $2.9 million renovation (which wound up costing $3,042,245.15) but the project soon hit a snag and got delayed when subcontractors refused to continue their jobs and insisted Baybutt had not paid them for the work already done. Rockingham town officials terminated a contract with Baybutt when the corporation's financial woes were realized. Owner Frederick L. Baybutt filed for personal bankruptcy a year ago.

Eric Palson, a partner with the firm, had no comment for the Reformer and said Heilmann was handling the matter. Heilmann said he has thoroughly examined the case and will continue discussions with Ankuda.

"The way we see it, under series of contracts Rockingham entered into with SMP and with Baybutt, the responsibility to secure the bonds was exclusively that of Baybutt," he said. It was first thought Baybutt had all the necessary bonds.

Heilmann said his clients understand Rockingham was put into an unfortunate situation, and they worked diligently with Engelberth Construction Inc., the company awarded the work of finishing the renovation, to minimize problems caused by Baybutt's default.

"I think the town would acknowledge that and, actually, I would be surprised if they didn't," he said.

Ankuda states the town paid the subcontractors $462,804.88 to resolve their claims, which resulted in the workers suffering a loss of $208,128.88. The town was also forced to cut back on the quality and extent of the original plans for the renovation and went without features such as custom mill work, woodstone doors and ceramic floor and wall tiles.

Domenic Poli can be reached at dpoli@reformer.com, or 802-254-2311, ext. 277. You can follow him on Twitter @dpoli_reformer.