Balfour Beatty Rail, Inc. v. Kan. City S. Ry. Co.

• Decision Date: 25 March 2016
• Docket Number: Civil Action No. 3:10–CV–1629–L
• Citation: 173 F.Supp.3d 363
• Parties: Balfour Beatty Rail, Inc., Plaintiff, v. The Kansas City Southern Railway Company, Defendant.
• Court: U.S. District Court — Northern District of Texas

173 F.Supp.3d 363

Balfour Beatty Rail, Inc., Plaintiff,

v.The Kansas City Southern Railway Company, Defendant.

Civil Action No. 3:10–CV–1629–L

United States District Court, N.D. Texas, Dallas Division.

Signed March 25, 2016

Jeffrey A. Ford, Anthony D. Whitley, Ford, Nassen, & Baldwin P.C., Timothy D. Matheny, Peckar & Abramson, P.C., Dallas, TX, for Plaintiff.

Paul O. Wickes, Wickes Law PLLC, Plano, TX, James Lanter, James Lanter, P.C., Mansfield, TX, for Defendant.

MEMORANDUM OPINION AND ORDER

Sam A. Lindsay, United States District Judge

The court makes the following findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure following a bench trial on the following claims by Plaintiff Balfour Beatty Rail Inc. (“Plaintiff” or “BBRI”) and Defendant The Kansas City Southern Railway Company (“Defendant” or “KCSR”) that remained after summary judgment and were tried to the court: (1) BBRI's contract claim for cumulative impact or prolongation delay damages (“Prolongation Delay Claim”); (2) BBRI's claims based on Change Orders 4 and 36 through 50 (contract and quantum meruit); (3) BBRI's claim under the Texas Prompt Payment Act; (4) KCSR's breach of contract counterclaim to recover for ballast material¹ allegedly wasted by BBRI; and (5) KCSR's breach of contract counterclaim to recover the cost of retaining additional contractors Kanza and Holland to perform tamping, regulating, and de-stressing² to supplement and assist BBRI in completing its scope of work. A number of affirmative defenses asserted by the parties also remain. Following a bench trial, and for the reasons that follow, the court finds and concludes that BBRI is entitled to recover, subject KCSR's request for a setoff, $34,820.35 plus prejudgment interest for Change Orders 45, 46, 47, and 50; that KCSR is entitled to recover $2,353,299.40 plus prejudgment interest on its counterclaim against BBRI for wasted ballast,³ and the court will enter judgment in favor of KCSR on that claim in accordance with this memorandum opinion after offsetting the amount awarded to BBRI. Except for attorney's fees, all other relief not expressly granted herein is denied , and the parties' remaining claims that survived summary judgment are dismissed with prejudice except to the extent set forth in this opinion. The court also denies as moot Defendant's Motion for Partial Judgment as a Matter of Law (Doc. 91).

I. Procedural Background

BBRI originally filed this action against KCSR on July 19, 2010, in the 191st Judicial District Court, Dallas County, Texas, asserting state law claims for breach of contract, quantum meruit/unjust enrichment,⁴ and failure to promptly pay under the Texas Prompt Payment Act (“TPPA”) related to construction delays and work performed by it on sixty-four miles of railway track line that runs from Rosenberg, Texas, to Victoria, Texas.

On August 20, 2010, KCSR removed the action to federal court on the basis of diversity jurisdiction, and asserted defenses and counterclaims under the parties' contract for: (1) ballast material allegedly wasted by BBRI during construction; (2) trackage rights fees incurred by KCSR in using another third party's tracks as a result of BBRI's failure to timely complete the railroad construction work or project (“Project”) within the time specified by the parties' contract; (3) costs for work done by other contractors hired by KCSR to supplement and assist BBRI with tamping, regulating, and de-stressing after BBRI fell behind schedule; and (4) costs incurred for remedial or repair work done by other contractors to correct deficiencies in BBRI's punch list work and other postconstruction work. Both parties also seek attorney's fees, prejudgment and postjudgment interest, and costs of suit.

On September 16, 2011, both parties moved for summary judgment. KCSR moved for partial summary judgment on BBRI's contract and quantum meruit claims based on delays, ballast, and fill material. BBRI moved for partial summary judgment on all of KCSR's counterclaims except for KCSR's claim for wasted ballast. On July 31, 2012, the court granted in part and denied in part the parties' summary judgment motions. The court granted KCSR's summary judgment motion with respect to BBRI's contract and quantum meruit claims based on BBRI's allegation that it performed additional ballast and fill material work at crossings due to differing site conditions. The court also granted the motion with respect to BBRI's quantum meruit claim based on prolongation delays but denied KCSR's request to dismiss BBRI's contract claim based on prolongation delays.⁵

The court also granted BBRI's summary judgment motion with respect to KCSR's claim to recover costs for trackage rights fees and corrective or remedial work performed by other contractors and dismissed with prejudice these claims. In its July 31, 2012 opinion, the court indicated that the following claims remained after summary judgment: (1) BBRI's contract claim for prolongation delay damages; and (2) KCSR's counterclaims under the parties' contract based on (1) wasted ballast; and (2) the cost of retaining additional contractors Kanza and Holland to perform tamping, regulating, and de-stressing to assist BBRI in completing its scope of work. Also remaining after summary judgment were BBRI's claims for quantum meruit and breach of contract based on Change Orders 4 and 36 through 50, as well as BBRI's claim for alleged violations of the Texas Prompt Payment Act (“TPPA”), which were not at issue in KCSR's summary judgment motion or addressed in the court's prior opinion.

A nine-day bench trial of the parties' remaining claims was conducted from April 2, 2013, to April 11, 2013. The court heard testimony during the trial from the following witnesses: Patrick Castle (“Castle”), Jose Garcia (“Garcia”), Steve Whitfield (“Whitfield”), Bradford Bright (“Bright”), Colin Kendrick (“Kendrick”), Mark Snailham (“Snailham”), Lee Peek (“Peek”), David Brookings (“Brookings”), Lynn Carnes (“Carnes”), and Bryan Byrd (“Byrd”). Joint Exhibit Nos. 1 through 375, to which there were no objections, were preadmitted at the beginning of the trial. All other evidence was preadmitted subject to objections and the parties' agreement to withdraw exhibits during or at the end of the trial.⁶ In addition, the court admitted, as exhibits, transcribed and videotaped deposition testimony designated by the parties for witnesses who did not testify in person during the trial. These exhibits included Plaintiff's Exhibits 538 through 554 and Defendant's Exhibits 624 through 634, which consist of deposition designations by the parties for the following witnesses who performed worked on the Project for BBRI or KCSR: Miguel Cruz (“Cruz”); John Gable (“Gable”); Bryan Brown (“Brown”); Corby Cline (“Cline”); John Dunsworth (“Dunsworth”); Roosevelt Altez (“Altez”); Humberto Garcia; Harry Stillwagon (“Stillwagon”); and Rigoberto Gordillo. The deposition testimony of Mike Russell (Defendant's Exhibit 635) was not admitted, as Plaintiff's objection to this exhibit was sustained.

Plaintiff's Exhibits 536 and 537, which are Primavera native schedule files, were admitted for demonstrative purposes subject to the parties' agreement that KCSR's expert Byrd would be allowed to examine and opine regarding them, although he may not have previously rendered an opinion on them before trial. Plaintiff's Exhibits 536 and 537 are the files from which Joint Exhibit 230, an as-planned Primavera schedule, was printed. Joint Exhibit 230, however, does not contain all of the information included in the native Primavera files. Defendant's Exhibits 610 and 612 through 616 were admitted for demonstrative purposes subject to Plaintiff's objection that they exceed Byrd's prior expert report and deposition testimony and went beyond Plaintiff's Exhibits 536 and 537, which, according to Defendant, were not produced prior to trial or included in Plaintiff's exhibit list. The court overrules Plaintiff's objections in this regard. Plaintiff did not show to the court's satisfaction that these files were produced prior to trial. Regardless of whether the software files were capable of being physically Bates-stamped, Plaintiff could have given the files Bates numbers and notified Defendant when producing the files that certain Bates numbers corresponded to the Primavera files produced in native format. Plaintiff could have also given the files exhibit numbers and included them in its pretrial exhibit list as it did with Pl.'s Ex. 484, a native formatted Punch List. Proceeding in this manner would have prevented the confusion and dispute that ensued at trial regarding Plaintiff's Exhibits 536 and 537, the new rebuttal exhibits created by Defendant in response to these exhibits, and the use of the new exhibits at trial by the parties' expert witnesses. The court also admitted for all purposes Defendant's Exhibits 609 and 611, subject to Plaintiff's objections regarding inconsistent dates. The court overrules the objections to these exhibits because, as explained during the trial, such objections go to the weight of the evidence, not its admissibility.

On April 26, 2013, after the trial in this case concluded, the parties filed a joint list of Exhibits Withdrawn by Both Parties (Doc. 77). On the same day, BBRI objected in writing (Doc. 79) on hearsay grounds to a large number of joint exhibits that were preadmitted and exhibits that were offered by BBRI and KCSR and preadmitted before the trial subject to objections. Alternatively, BBRI requested that the court strike these exhibits, which KCSR would not agree to withdraw.

In response, KCSR contends that BBRI waived any objections to these exhibits by failing to timely object during the trial or by the March 18, 2013 deadline for making written pretrial objections to evidence. For support, KCSR cites Federal Rule of Evidence 103(a)(1)(A) for the proposition that a party may only claim error in the...