After winning two jury verdicts in its favor, Fluor Enterprises Inc., Aliso Viejo, Calif., has settled a construction project dispute with Solutia Inc., St. Louis, for $20 million. The settlement amount slightly exceeded Fluor's recovery expectations and will not materially affect the contractor's financial outlook for the current quarter or for the year, Fluor officials say. A judgment has been entered in U.S. Federal District Court.

The settlement resolves a two-year-old claim by Fluor against Solutia for financial responsibility for changes in the design and construction of an acrylonitrile plant in Alvin, Texas, known as the Chocolate Bayou plant. A Houston jury last month handed down two alternative verdicts in the case that were based on two mutually exclusive theories, say Solutia officials. The verdict on the theory of breach of contract was for $4.85 million; the verdict on the theory of quantum meruit was for $34.505 million. Quantum meruit is a legal theory typically applicable to situations without a contract, the officials note. "The judge asked us to come to an agreement on a settlement," says Beth Rusert, Solutia spokeswoman.

Fluor's contract, originally $230 million, was for design and construction of a new plant to produce acrylonitrile and hydrogen cyanide. Construction began in January 1999 and was mechanically complete in September 2000. "The dispute was for change that occurred subsequent to design freeze and some for construction," says Paul Bruno, Fluor vice president and general counsel. As the winning party in the case, Fluor was allowed to choose which of the two verdicts to use as a basis for settlement, he adds. With the settlement and change orders, the final project value was $260 million.