Com. v. Amec Civil, LLC

• Decision Date: 16 June 2009
• Docket Number: Record No. 2061-08-2.,Record No. 1961-08-2.
• Citation: Com. v. Amec Civil, LLC, 677 S.E.2d 633, 54 Va. App. 240 (Va. App. 2009)
• Court: Virginia Court of Appeals
• Parties: COMMONWEALTH of Virginia and Commonwealth of Virginia, Department of Transportation v. AMEC CIVIL, LLC. Amec Civil, LLC v. Commonwealth of Virginia and Commonwealth of Virginia, Department of Transportation.

677 S.E.2d 633

54 Va. App. 240

COMMONWEALTH of Virginia and Commonwealth of Virginia, Department of Transportation v. AMEC CIVIL, LLC.

Amec Civil, LLC v. Commonwealth of Virginia and Commonwealth of Virginia, Department of Transportation.

Record No. 2061-08-2.

Record No. 1961-08-2.

Court of Appeals of Virginia, Richmond.

June 16, 2009.

Richard Tyler McGrath, Senior Assistant Attorney General (Robert F. McDonnell, Attorney General; Maureen Riley Matsen, Deputy Attorney General; Randall H. Wintory, Assistant Attorney General; William R. Mauck, Jr., Richmond; Stephen G. Test, Virginia Beach; Matthew S. Sheldon; Williams Mullen, on briefs), for the Commonwealth of Virginia and the Commonwealth of Virginia, Department of Transportation.

Gregory S. Martin (Brian P. Heald; Roger C. Brown; J. William Watson, Jr.; Moye, O'Brien, O'Rourke, Pickert & Martin, LLP; Watson & Morrison, P.C., Halifax, on briefs), for AMEC Civil, LLC.

Present: KELSEY and HALEY, JJ., and BUMGARDNER, S.J.

KELSEY, Judge.

Pursuant to Code § 33.1-387, AMEC Civil, LLC filed suit against the Virginia Department of Transportation (VDOT) for cost overruns on a government contract.¹ In response, VDOT argued AMEC failed to provide timely "written notice of its intention to file such claim" when the problems arose during the management of the contract — a statutory requirement under Code § 33.1-386(A). VDOT also challenged several of AMEC's claims as unrecoverable under the contract and some aspects of AMEC's claimed damages as unavailable as a matter of law.

The circuit court rejected all of VDOT's arguments and awarded AMEC a general verdict of $21,181,941, the entire amount AMEC sought at the time of trial. AMEC requested, but the court disallowed, an award of prejudgment interest. The parties' cross-appeals bring each of these issues to us for review. We reverse in part, affirm in part, and remand for further proceedings consistent with this opinion.

I.

In 2000, VDOT awarded AMEC a contract for the construction of the Route 58 Clarksville Bypass in Mecklenburg County. The contract price, approximately $72.5 million, included widening four miles of roadway, constructing interchanges and overpasses, and building four new bridges, the largest spanning the John H. Kerr Reservoir. The contract called for completion of the project in November 2003. The contract's actual completion occurred in 2005. During the five-year project, AMEC encountered difficulties meeting deadlines and completing tasks within its original cost estimates.

After the completion of the project, AMEC requested an additional $24 million in cost overruns. Though bundled as a single administrative claim, AMEC's request for damages included over a dozen specific allegations arising out of various aspects of the five-year project. When VDOT rejected AMEC's administrative claim, AMEC filed suit in the circuit court. In its amended complaint, AMEC alleged damages caused by:

• "differing site conditions" involving the drilled shaft work on the Kerr Reservoir bridge, Amended Complaint ¶¶ 36-63,

• high lake water levels in the Kerr Reservoir, id. ¶¶ 64-71,

• Work Orders 4, 6, 7, 12, and 16 authorizing deadline extensions, id. ¶¶ 72-80,²

• work performed during two "winter periods," id. ¶¶ 81-89,

• "differing site conditions" involving "boulders at the B640 bridge," id. ¶¶ 90-95,

• work site interference from "overhead power lines" at bridge B641, id. ¶¶ 96-104,

• problems with the "drilled shaft concrete mix design," id. ¶¶ 105-16 • replacing the pier 17 foundation cap on the Kerr Reservoir bridge, id. ¶¶ 117-22,

• a pier cap plan error involving pier 23 on the Kerr Reservoir bridge, id. ¶¶ 123-27,

• shaft layout problems with pier 18 on the Kerr Reservoir bridge, id. ¶¶ 128-33,

• repair to a pier 2 column on bridge B643, id. ¶¶ 134-36, and

• acceleration efforts, id. ¶¶ 144-50.

Seeking damages for each of these claims, AMEC relied on Code § 33.1-387. Under the statute, a government contractor may institute a "civil action" claiming damages "under the contract" so long as (i) the civil action seeks only "costs and expenses" caused by VDOT, and (ii) the contractor submits its claim to VDOT "within the time and as set out" in Code § 33.1-386, which "shall be a condition precedent" to filing suit. Only administrative claims submitted to VDOT, and denied by it, can be asserted in the civil action. See Commonwealth v. Yeatts, Inc., 233 Va. 17, 20, 353 S.E.2d 717, 719 (1987) (noting the statute authorizes a civil action "for any portion of the claim" denied by VDOT).³

In its responsive pleadings, VDOT asserted that AMEC failed "to satisfy legal and contractual conditions precedent to the initiation of legal action" and failed to "exhaust administrative remedies." Prior to trial, VDOT filed a "Motion for Leave to File Pleas in Bar." The pleas in bar contended that many of AMEC's claims violated Code § 33.1-386(A), which authorizes the assertion of an administrative claim "provided that written notice of the contractor's intention to file such claim shall have been given to the Department at the time of the occurrence or beginning of the work upon which the claim and subsequent action is based." VDOT proffered that AMEC never provided timely, written notice of its intention to file many of the claims asserted in the civil action.⁴

AMEC resisted the motion for leave on several grounds, including the assertion that the pleas in bar would involve a "full blown evidentiary hearing, based on a year's worth of voluminous discovery, which will properly occur at trial anyway." AMEC Brief in Response to VDOT's Motion for Leave to File Pleas in Bar at 6. For this reason, AMEC argued, "a full and fair determination of whether notice was provided is best suited for trial." Id. at 8.

On December 13, 2007, the circuit court held a hearing on VDOT's motion for leave. Without addressing the merits of the underlying pleas, the court held the motion for "leave to file pleas in bar will be denied." On January 23, 2008, the court entered a written order denying VDOT's motion for leave to file the pleas in bar.⁵ About a month later, the parties received a letter opinion from the circuit court addressing the merits of the pleas in bar which the court earlier held could not be filed. The letter began with a reference to "oral argument" on "July 10, 2007" and ended with this conclusion: "Accordingly, the court finds that AMEC's actual notice was sufficient enough to satisfy the statutory and written notice provisions a[t] issue." AMEC Civil, LLC v. Commonwealth, 74 Va. Cir. 492, 507 (2008).

With respect to the statutory written notice requirement, the circuit court held that "AMEC did not provide VDOT with written notice of its claims as required by Va.Code Ann § 33.1-386." Id. at 500; see also id. at 504 ("although AMEC did not fully comply with the written notice requirement of Va. Code Ann. § 33.1-386"); id. at 506 (noting "AMEC's failure to abide by the statute's written notice provision"). AMEC's failure to provide written notice did not matter, the court reasoned, because VDOT had "actual notice." Id. at 506. Actual notice, whether written or not, satisfied the court's "liberal construction" of the statute. Id. at 499.⁶

VDOT filed a motion for reconsideration pointing out that no hearing had been held on "July 10, 2007" as the court's letter opinion stated.⁷ More important, VDOT argued, the letter opinion "contained findings of fact and conclusions of law on issues on which no evidence has been taken" and concluded with a judicial ruling on pleas in bar "which the Court did not allow VDOT to file." A few days later, the trial court entered an order denying without comment VDOT's motion to reconsider.

At trial, VDOT repeated its assertion that the lack of written notice barred many of AMEC's claims. When VDOT raised the point during its motion to strike, the circuit court held the issue had already been decided pretrial. "The motion on actual notice as a substitute for written notice has already been ruled on," the court continued, "I don't need to hear another thing about it."

After trial, the court issued a short letter stating it would enter a "general verdict" in favor of AMEC for $21,181,941, the entire amount of AMEC's request at trial. See Letter Opinion at 1 (July 1, 2008). The court refused AMEC's request for prejudgment interest. Reaffirming its pretrial ruling on VDOT's unfiled pleas in bar, the court stated that every "factual assumption" made in its pretrial ruling turned out to be true. Id. at 2. The court did not identify any specific exhibits or witnesses supporting this conclusion. The court instead referred generally to "memoranda addressing the issues" and "minutes" of meetings. Id. These unspecified documents, the court held, provided whatever "written notice" AMEC was required to give during the period of contract performance. Id.

II.

The cross-appeals in this case raise an array of issues, with the resolution of some mooting the need to resolve others. We believe the dispute on appeal can be clustered into four principal subjects:

A. TIMELY, WRITTEN NOTICE OF AMEC'S INTENTION TO FILE CLAIMS PURSUANT TO CODE § 33.1-386(A).

B. VDOT'S CONTRACTUAL CHALLENGE TO SEVERAL OF AMEC'S CLAIMS.

C. VDOT'S CHALLENGE TO THE TRIAL COURT'S DAMAGE AWARD.

D. AMEC'S REQUEST FOR PREJUDGMENT INTEREST.

Our holdings on the issues we address render it unnecessary to offer advisory opinions on the issues we do not address. "In this case, as in all others, we seek to decide cases `on the best and narrowest ground available' from the record." Kirby v. Commonwealth, 50 Va.App. 691, 698 n. 2, 653 S.E.2d 600, 603 n. 2 (2007) (citations omitted).

A. TIMELY, WRITTEN NOTICE OF AMEC'S INTENTION TO FILE CLAIMS PURSUANT TO CODE § 33.1-386(A)

Under Code § 33.1-387, a government contractor may file a civil action against the Commonwealth for any claim "under the contract" that has been...