King Cnty. v. Vinci Constr. Grands Projets

• Decision Date: 09 November 2015
• Docket Number: No. 70432–0–I.,70432–0–I.
• Citation: 364 P.3d 784,191 Wash.App. 142
• Parties: KING COUNTY, Respondent/Cross Appellant, v. VINCI CONSTRUCTION GRANDS PROJETS/Parsons RCI/Frontier–Kemper, JV, a Washington join venture; and Travelers Casualty and Surety Company of America, a Connecticut corporation, Appellants/Cross Respondents, and Liberty Mutual Insurance Company, a Massachusetts corporation; Federal Insurance Company, an Indiana corporation; Fidelity and Deposit Company of Maryland, a Maryland corporation; and Zurich American Insurance Company, a New York corporation, Appellants/Cross Respondents.
• Court: Washington Court of Appeals

191 Wash.App. 142

364 P.3d 784

KING COUNTY, Respondent/Cross Appellant,

v.VINCI CONSTRUCTION GRANDS PROJETS/Parsons RCI/Frontier–Kemper, JV, a Washington join venture; and Travelers Casualty and Surety Company of America, a Connecticut corporation, Appellants/Cross Respondents,andLiberty Mutual Insurance Company, a Massachusetts corporation; Federal Insurance Company, an Indiana corporation; Fidelity and Deposit Company of Maryland, a Maryland corporation; and Zurich American Insurance Company, a New York corporation, Appellants/Cross Respondents.

No. 70432–0–I.

Court of Appeals of Washington, Division 1.

Nov. 9, 2015.

Thomas R. Krider, Peter Noel Ralston, Oles Morrison Rinker & Baker LLP, Catherine Wright Smith, Howard Mark Goodfriend, Smith Goodfriend PS, Seattle, WA, Frederic D. Cohen, Mitchell C. Tilner, Horvitz & Levy LLP, Encino, CA, for Appellants/Cross–Respondents.

Karl Francis Oles, David R. Goodnight, Hunter Olds Ferguson, Stoel Rives LLP, Mary Devuono Englund, Office of the Prosecuting Attorney, Leonard J. Feldman, Peterson Wampold Rosato Luna Knopp, Seattle, WA, for Respondents/Cross–Appellant.

TRICKEY, J.

¶ 1 The Brightwater project was King County's first major expansion of its wastewater treatment system since the 1960s.¹ It was intended to add capacity to county wastewater systems to deal with the increasing sewage from the growing region.² The new treatment system was to serve Snohomish County and King County residences and businesses.³

¶ 2 In 2006, King County hired a joint venture of three firms—Vinci Construction Grands Projets, Parsons RCI, and Frontier–Kemper, JV (collectively, VPFK)⁴ —to construct portions of the tunneling work for the project for a fixed price and within a specified time frame. VPFK obtained a bond for the over $200 million project from five surety companies (collectively, the Sureties), which are the appellants/cross-respondents on appeal.

¶ 3 VPFK encountered many difficulties during the construction of the tunnels, and the project was significantly delayed as a result. When VPFK failed to meet its contractual deadlines, King County retained another contractor to complete one of the tunnels.

¶ 4 King County then sued VPFK and the Sureties for default. The trial court ruled in favor of King County on three summary judgment motions, dismissing two of VPFK's claims concerning differing site conditions and defective specifications.

¶ 5 Following a three month trial, the jury found VPFK and the Sureties jointly and severally liable for King County's single claim of default, awarding King County $155,831,471.00 in damages. The jury also awarded VPFK $26,252,949.00 in damages for some of the many claims VPFK submitted to the jury. The trial court awarded King County attorney fees and costs.

¶ 6 VPFK and the Sureties appeal. VPFK asserts numerous challenges to the summary judgment rulings, the jury instructions, and the trial court's ruling excluding evidence. The Sureties appeal the trial court's award of attorney fees. King County cross-appeals, asserting that the trial court erred by denying its motion for judgment as a matter of law.

¶ 7 We affirm the trial court's summary judgment, evidentiary, and jury instruction rulings challenged by VPFK. We also affirm the trial court's denial of King County's motion for judgment as a matter of law. Finally, we affirm the award of attorney fees to King County, and award attorney fees to King County on appeal.

FACTS

I. The Brightwater Project's Conveyance System

¶ 8 The Brightwater project was comprised of two major components: (1) a new treatment plant and (2) a conveyance system composed of pipelines and pumps that would carry raw sewage to the treatment plant and, in turn, carry clean effluent from the plant to Puget Sound.⁵ The conveyance system called for the construction of 13 miles of pipelines in underground tunnels, the excavation of which was divided into three contracts: tunnel segment BT–1 (East Contract); tunnel segments BT–2 and BT–3 (Central Contract); and tunnel segment BT–4 (West Contract).⁶

II. The Contract Documents

¶ 9 King County (County) and its consultants began designing the Brightwater contract and the subcontracting documents in 2002.⁷ They conducted site investigations, soil analysis, and drafted the specifications and the bid documents.⁸ The County provided the bidders for the Central Contract with numerous bid documents (Contract Documents). These documents included the contract (Contract) itself and its "General Terms and Conditions" and "General Requirements" for performance of the Central Contract work, as well as two geotechnical reports to assist in preparing the bids—the Geotechnical Data Report (GDR) and the Geotechnical Baseline Report (GBR).⁹ j. The Contract

i. Selection of Slurry Tunnel Boring Machine

¶ 10 According to the County's February 2004 "Predesign Report," the new tunnel would be situated below the "groundwater table."¹⁰ External pressures below the groundwater table meant that the soil surrounding the future tunnel would be saturated with water.¹¹ These conditions required the use of a boring machine that could apply constant pressure to prevent the face of the tunnel from collapsing.¹² However, a limited number of tunnel boring machines were well suited for such conditions.¹³ The Predesign Report advised the County to use an earth pressure balance machine (EPBM) or a slurry tunnel boring machine (STBM).¹⁴

¶ 11 The County selected an STBM over an EPBM because the BT–3 tunnel was anticipated to experience high pressures, and at the time, STBMs had the ability to operate in higher pressures than EPBMs.¹⁵ The County incorporated the STBM specification into the Contract.¹⁶

ii. Differing Site Conditions Clause

¶ 12 The Contract contained a "Differing Site Conditions" clause, which allowed VPFK to request an equitable adjustment in contract time or price if it encountered site conditions different than those indicated in the Contract Documents.

1717FN;B01818

iii. Interventions and Pressurized Conditions

¶ 13 The Contract also included provisions about interventions.¹⁹ During an intervention, the contractor stops the tunneling and conducts an inspection or repair on the cutterhead (the front of the boring machine that contains the large soil-cutting tools).²⁰ The contractor needs to have a reasonable understanding of the ground conditions in order to choose the proper slurry and pressure specifications. The correct slurry and pressure levels enable the STBM to support the tunnel face during excavations and interventions.²¹ Thus, the Contract specified the percentages of the tunnel alignment²² in which the contractor could expect to encounter varying levels of pressure for purposes of "[S]TBM Stoppages":

1. The required face support to perform Maintenance, and Boulder Stops will vary. For baseline purposes assume the following:

a. Thirty percent will be at locations where Required Face Support is equal to atmospheric pressure.

b. Twenty percent will be at locations where Required Face Support will be less than 50 [pounds per square inch (psi) ], but greater than atmospheric pressure.c. Fifty percent will be at locations where Required Face Support will be greater than 50 psi, and not more than 75 psi.^{[23 ]}

The Contract did not indicate what the pressure would be at any particular location in the tunnel.²⁴

b. The Geotechnical Data Report (GDR) & the Geotechnical Baseline Report (GBR)

¶ 14 The GDR contained raw data about the geotechnical conditions along the BT–2 and BT–3 tunnel alignments. The GDR included data on soil samples extracted from boreholes drilled approximately 300 to 400 feet apart along the tunnel alignments.²⁵ The GDR indicated the location of the boreholes and presented the results of tests performed on the soil samples.²⁶

¶ 15 The GBR interpreted the raw data from the GDR.²⁷ Among other things, the GBR identified four general types of soils or tunnel soil groups (TSGs)²⁸ that contractors could expect to encounter, either individually or in combination, during excavation of the BT–2 and BT–3 tunnel alignments, totaling 12 types of soil conditions.²⁹ The GBR also showed the location of the boreholes and depicted the TSGs present at different depths within the boreholes.³⁰ The GBR provided baseline estimates of the expected percentages of TSGs or TSG combinations along the BT–2 and BT–3 tunnel alignments.³¹

III. VPFK's Bid for the Central Contract

¶ 16 The County submitted the Contract Documents for the Central Contract to the bidders on January 19, 2006.³²

¶ 17 VPFK submitted a bid for the Central Contract. To develop its tender for the Central Contract, VPFK reviewed and analyzed the Contract Documents, including the specifications and plans, and information about the boreholes, soil profiles, and water tables.³³ VPFK also retained several consultants to assist it in preparing its bid. VPFK hired geotechnical consultant Joseph Guertin³⁴ of GZA GeoEnvironmental, Inc. (GZA) to "[p]rovide professional opinions about the technical accuracy of the GBR."³⁵ VPFK also hired geotechnical expert Jean Launay to prepare a report about the expected tunnel conditions.³⁶

¶ 18 Relying on the information set forth in the GBR, Guertin prepared a report that included color-coded charts identifying the dominant soils in the tunnel.³⁷ Like Guertin's report, Launay's report identified the dominant soils along sections of the tunnel, at intervals of approximately 30 feet.³⁸ To estimate the soil conditions along the 30–foot intervals, Launay applied a method called "interpolating," which he later described as an "assumption" in which one "consider[s] that in between two bore hole[s] there is a continuity of the material in between the two bore holes."³⁹

¶ 19 In June 2006, the County awarded the Central Contract to VPFK, which had submitted the lowest bid of $209,756,058.00.⁴⁰ In August 2006, the County issued VPFK a Notice to Proceed.⁴¹ The Contract Documents provided that VPFK had 1,540 days after issuance of the Notice to...