Commonwealth & Dep't of Transp. v. AMEC Civil, LLC
| Decision Date | 22 May 2012 |
| Docket Number | Record No. 2134-11-2 |
| Court | Virginia Court of Appeals |
| Parties | COMMONWEALTH OF VIRGINIA AND DEPARTMENT OF TRANSPORTATION v. AMEC CIVIL, LLC |
Present: Judges Elder, Alston and Senior Judge Coleman
Argued at Richmond, Virginia
MAY 22, 2012
FROM THE CIRCUIT COURT OF MECKLENBURG COUNTY
Stephen G. Test (Sarah K. McConaughy; Richard Tyler McGrath, Senior Assistant Attorney General; Williams Mullen; Office of the Attorney General, on briefs), for appellants.
J. Tracy Walker, IV (Anne Marie Whittemore; Richard C. Beaulieu; Gregory S. Martin; McGuireWoods LLP; Gregory S. Martin & Associates, PA, on brief), for appellee.
This case involves a contract dispute between the Commonwealth and the Department of Transportation (hereinafter collectively VDOT) and AMEC Civil, LLC (hereinafter AMEC), over the construction of the Route 58 Clarksville Bypass in Mecklenburg County. The contract price was just under $72.5 million. When completion of the project was delayed by a year and seven months, AMEC submitted an administrative claim to VDOT for additional compensation of over $24 million. VDOT denied the claim.
AMEC challenged the denial in a civil suit as permitted by statute. The circuit court awarded AMEC approximately $21 million. Both parties appealed to this Court, which affirmed in part, reversed in part, and remanded. VDOT v. AMEC, 54 Va. App. 240, 677 S.E.2d 633(2009). Both parties then appealed to the Virginia Supreme Court, which also affirmed in part, reversed in part, and remanded to the circuit court "to recalculate damages awarded to AMEC." VDOT v. AMEC, 280 Va. 396, 403, 699 S.E.2d 499, 503 (2010). After the circuit court made a revised award of approximately $12 million, VDOT noted the instant appeal.
In this appeal, VDOT assigns error to numerous aspects of the circuit court's revised calculation of damages. VDOT contends the court should have applied judicial estoppel, see infra Part II.A., or law-of-the-case principles, see infra Part II.B., to hold on remand that AMEC was bound by the testimony of its sole damages expert, Theodore NeSmith, that its damages were as reflected in NeSmith's exhibits and that the court erred in relying on the testimony of AMEC's assistant project manager Bryon Breese and the document he prepared for purposes of the administrative claim. VDOT contends further that the circuit court erred in accepting and relying on opinion testimony from Breese over VDOT's objection, see infra Part II.C., and in accepting estimates of costs rather than actual costs as proof of damages on remand, see infra Part II.D. Next, it contends the circuit court erred in awarding forty days of damages for delays caused by an unexpected site condition, boulders, contending AMEC failed to prove its entitlement to more than eight days of damages. See infra Part II.E.1. Further, it contends the circuit court erroneously awarded damages to AMEC for requiring it to work through the winter of 2003 to 2004 when AMEC failed to provide prima facie evidence of the actual weather and the extent of its impact on critical activities for specific days and failed to keep daily records and provide an itemized list of equipment, labor, and materials as required by the contract. See infra Part II.E.2. Finally, it challenges the way in which the circuit court calculated various components of the damages award, including delay damages for the boulders, the first winter and high water periods, see infra Part II.E.1 to E.3., as well as some of the acceleration damages and extra work required due to an error in the plans, see infra Part II.E.4 to E.5. In an assignment ofcross-error, AMEC contends the circuit court erred in denying its claim for post-judgment interest. See infra Part II.F.
We hold the circuit court did not err in concluding it was free to use Breese's rather than NeSmith's data and calculations on remand. We hold further the court did not err in concluding AMEC was entitled to recover for the entire 121-day period of winter work for the 2003-2004 winter season. However, we hold the circuit court erred in awarding AMEC damages for forty days of delay due to boulders when the evidence established only eight days of delay. Finally, we hold the circuit court erred in interpreting the meaning of actual costs for purposes of proving damages and that this error requires the recalculation of several components of its damages award. As to AMEC's cross-assignment of error challenging the circuit court's refusal to award post-judgment interest, we hold AMEC waived that claim by failing to raise it in the first appeal. Thus, we affirm in part, reverse in part, and remand for a recalculation of damages consistent with this opinion.
VDOT awarded AMEC this approximately $72.5 million project in May 2000. The central element of the project was a bridge (bridge 616) spanning the John H. Kerr Reservoir (Kerr Lake), which required work to be performed from equipment floating on the lake. The project also included ten smaller bridges (including bridge 640) and about four miles of roadway. The time allotted for the project was forty-one months, with a projected completion date of November 1, 2003. However, the project was not substantially complete until June 2005, approximately nineteen months after the original completion date. Delays arose primarily from sustained elevated lake water levels and difficulties with the construction of concrete-filled drilled shafts that formed the foundation of bridge 616, which pushed construction into two additional winter periods. AMEC sought to recover for these delays.
In 2006, AMEC submitted an administrative claim to VDOT for $24,792,823.43. That claim was prepared mostly by Bryon Breese, AMEC's assistant project manager at the site. After VDOT denied the administrative claim, AMEC filed the instant contract action. At trial, AMEC introduced the administrative claim and offered testimony from Breese about its contents. VDOT objected to portions of Breese's testimony on the ground that the testimony involved opinion and AMEC had not identified Breese as an expert in advance of trial. The circuit court held that Breese, as the author of the document containing facts, was qualified to testify about those facts and that it "[did not] see this [as] an expert testimony issue."
Breese's testimony established that he served as assistant project manager from October 2002 through project completion in 2005. In addition to quality problems with structural steel work performed by subcontractor Mitsubishi, the project began to face elevated lake levels in early 2003, which had "a significant impact" on AMEC's ability to proceed with bridge 616. The project, which was scheduled to be completed by November 1, 2003, was not substantially completed until June 2005.
Breese's duties included managing the project's schedule and budget, including the purchasing of materials, and overseeing data entry into the software program for managing those items. He testified about AMEC's cost accounting system and software and how the data was gathered and input into the system.
Breese testified about the document he prepared to support AMEC's administrative claim (introduced into evidence as AMEC's exhibit 487), in which he calculated four general categories of damages: (1) delay damages, (2) acceleration, (3) loss of productivity, and (4) other remaining open items. As to the category over which the biggest dispute arose, delaydamages, Breese testified he used data from the period of December 2002 to November 20041 and calculated monthly totals for various categories of time-related job site overhead. Those categories included "management and staff salaries, time relate[d] office space, equipment, supplies and consumables[,] and service equipment." Using the total figures for each of those categories for that twenty-four-month period, which included 731 days, he calculated a daily rate for job site overhead and multiplied that daily rate by 586, the number of days of delay from November 1, 2003, to June 9, 2005. He then applied various credits due as a result of proceeds received from resolution of the problems caused by Mitsubishi, a subcontractor responsible for installing at least some of the structural steel on the project.
AMEC also offered the testimony of Theodore NeSmith, a certified public accountant and certified valuation analyst. NeSmith was the only person AMEC asked to qualify as a damages expert for construction cost accounting and construction damage calculations. NeSmith said he was tasked with reviewing AMEC's existing damages report, which had been prepared by Breese. In the course of doing so, he reviewed and performed "[e]xtensive testing" on AMEC's job cost data, which was recorded on time sheets and invoices and then entered into AMEC's software program. He found the job cost data to be reliable with regard to labor, materials, subcontracts, and leased equipment.
With regard to the job cost data for owned equipment, NeSmith "[found] some problems" with the records which resulted in their understating equipment use. He said such problems werenormal for the industry, and he opined that any deficiencies were not problematic because Blue Book rates for equipment, which estimated actual costs, rather than actual usage figures were going to be used. NeSmith testified he performed a "comparative analysis" of labor costs and equipment usage to confirm the expected "correlation of reasonableness between ultimate labor overage and ultimate equipment overage."
NeSmith testified that, overall, he was "extremely impressed" with the quality of Breese's report "recognizing that his background is primarily that of an engineer." He also said Breese did a very good job of not duplicating costs by providing credits in his calculations where there was overlap in the various categories.
NeSmith did make downward adjustments in...
To continue reading
Request your trial