NCDOT battles defamation lawsuit over still unfinished passenger ferry

While the NC Ferry Division will again rent a passenger ferry for Ocracoke this summer, it is battling a defamation lawsuit brought by the company still building a custom passenger ferry.

Last May, US Workboats (formerly known as Armstrong Marine Inc.) in Hubert, near Swansboro, sued the NC Ferry Division over breach of contract, claiming the bid package “lacked sufficient information to allow Plaintiff and other potential bidders to know that the vessel as designed and specified by Defendant NCDOT was fundamentally flawed.”

In the lawsuit, two actions charged breach of contract.

A third action claimed that one to five NCDOT employees, listed at John Does, “disseminated false information to the public and to others about the Ferry project and the quality of workmanship thereon,” the lawsuit says.

According to a Sept. 26 story in the Raleigh News & Observer, Superior Court Judge Vinston M. Rozier Jr., in a hearing on the state’s motion to dismiss the lawsuit, dismissed the breach of contract claim—”not because he had determined US Workboats was wrong but he agreed with the state that the company failed to follow a grievance process spelled out in its contract, which requires it to seek additional payments and other adjustments after the project is finished.”

Rozier did allow US Workboats to pursue its defamation claims.

In the lawsuit, US Workboats alleges that “on-going publication of false statements about the Ferry project, and about Plaintiff and Plaintiff’s workmanship and expertise” has caused them economic damage.

The suit does not name the “John Does.”

Also in the Sept. 26 News & Observer story, Steven Gibbons, an attorney for US Workboats, said in a court hearing that the company plans to sue them as individuals, but doesn’t yet know who they are.

Jamie Kritzer, NCDOT assistant director of communications, said in an email sent Tuesday that he could not comment on the details of the lawsuit but that the “Ocracoke Express” is still being built.

“The N.C. Department of Transportation continues to work with the boat builder to complete the vessel, but this is a complicated process and the boat is not complete,” he said.

Luther D. Starling Jr., an attorney out of Smithfield, Johnston County, for US Workboats, when contacted, would only comment that “whatever is remaining (of the lawsuit) is what we’re pursuing. “We’re proceeding according to litigation.”

He said no new court date has been set.

The $4.15 million ferry was expected to begin service between Hatteras and Ocracoke in the spring of 2018. After construction delays, NCDOT set a new due date of Aug. 6, 2018. Since then, NCDOT has been assessing liquidated damages of $1,000 per day for the boat builder’s failure to deliver the vessel on time. That cost comes to more than $550,000 so far and rises each day, according to the News & Observer.

When the boat was still not ready last spring, the state rented another catamaran, at a cost of about $1 million, to carry passengers between the two islands from late May until Labor Day. Ridership on the substitute “Ocracoke Express” last year exceeded expectations.

Kritzer said NCDOT will again rent the same passenger ferry as last year for service this season between Hatteras and Ocracoke for the peak season of late May to Labor Day.

After massive shoaling in the Hatteras Inlet in 2013 forced the Ferry Division to take a longer route out into the Pamlico Sound between Hatteras and Ocracoke, the division pursued the idea of a passenger ferry as an addition to the car ferries.

That longer route takes about one hour and reduced the number of runs each day by up to 30%. The passenger ferry also takes about an hour from the Hatteras terminal and docks in Silver Lake Harbor in Ocracoke.

Information from the Raleigh News & Observer story by Richard Stradling was used by permission.