Insurance Company Sues Contractor Behind Botched I-84 project in Conn.

The insurance company that guaranteed a contractor’s work on the apparently botched widening of Interstate 84 in the Waterbury area is suing, claiming company officials siphoned off millions of dollars for personal use and other projects.

In a lawsuit filed in U.S. District Court last week, U.S. Fidelity & Guarantee accused officials from North Haven contractor L.G. DeFelice Inc. of transferring money to other family-controlled interests and even buying luxury cars with company resources.

“That’s just not true,” Raymond Garcia, attorney for DeFelice, said Monday. “L.G. DeFelice undertook its financial transactions with full compliance of law and advised the surety of the transactions. That’s how they knew about them.”

U.S. Fidelity & Guarantee says it bonded DeFelice projects, including a $54 million widening of I-84 in Cheshire and Waterbury, with the understanding that it would be reimbursed by the contractor for any claims.

Last month, the state Department of Transportation estimated it would cost around $27 million to tear up and repair defective drains along the 3.5-mile section of the highway between I-691 in Cheshire and Exit 25-A in Waterbury.

Many of the drains lead nowhere, some are clogged with debris and others were apparently connected with substandard, cracked and leaking pipes. The state fired both DeFelice and the company hired to inspect the work last fall.

DeFelice, the construction company that walked away from the job and left its insurer to argue over the cost of repairs, owes the Connecticut State Police $1.2 million for construction-related traffic safety services.

U.S. Fidelity & Guarantee and the state have not yet agreed on the company’s portion of repair costs. In its suit, the insurer claims to have set aside $27 million. A company spokesman declined comment.