University of Iowa releases remainder of $21.5 payment to Modern Piping

IOWA CITY, Iowa (KCRG) - The University of Iowa released the final portion of a $21.5 million payment to Modern Piping awarded in a lawsuit over the construction of the University of Iowa Children's Hospital, but that may not be the end of a bitter public dispute.

A judge lifted the stay on collecting the remaining $12.7 million Tuesday, which would have allowed Modern Piping to request the Johnson County Sheriff's Office seize assets to settle the legal debt. Instead, the University of Iowa released the money it had placed in an escrow account last month as a show of faith it would pay the debt.

However, the University of Iowa initially refused to release $13.5 million of the award, placing it in an escrow account instead, insisting Modern Piping has not fulfilled its contract by not giving the University the final "as-built" documents, which detail the location of pipes behind walls in the hospital.

"The University of Iowa looks forward to Heery’s review and approval of Modern Piping’s final construction records, as required by the contract," the UI said in a statement Wednesday.

Cedar Rapids-based Modern Piping says it already submitted those documents, showing documents dating back to 2017 it says shows University agents signed off on as-builts. But the University says those documents were renderings and not the final documentation of what was installed.

The back and forth started when Cedar Rapids-based Modern Piping sued the University of Iowa, saying it refused to pay after design changes during construction drove up its costs. An arbitrator agreed and awarded Modern Piping $21.5 million and an appeals court upheld the judgement.

That touched off a back-and-forth of accusations that included Modern Piping accusing the University of trying to derive it out of business and threatening to seize the University's famed Jackson Pollock "Mural" to pay off the debt. University of Iowa President Bruce Herrald publicly accused Modern Piping of extortion and later apologized for contributing to what he called the public "war of words".

Editor's Note: updated to reflect the UI's final payment Wednesday was $12.7 million, not the full $13.5 it originally placed in escrow as it had already released a portion of that to Modern on Monday.