Constr. Drilling, Inc. v. Eng'rs Constr., Inc.

• Decision Date: 29 May 2020
• Docket Number: Nos. 2019-096 & 2019-205,s. 2019-096 & 2019-205
• Citation: 236 A.3d 193
• Court: Vermont Supreme Court
• Parties: CONSTRUCTION DRILLING, INC. v. ENGINEERS CONSTRUCTION, INC.

236 A.3d 193

CONSTRUCTION DRILLING, INC.

v.ENGINEERS CONSTRUCTION, INC.

Nos. 2019-096 & 2019-205

Supreme Court of Vermont.

December Term, 2019

May 29, 2020

Reargument Denied June 18, 2020

Erin Miller Heins of Langrock Sperry & Wool, LLP, Burlington, for Plaintiff-Appellant/ Cross-Appellee.

Darren R. Misenko of Misenko Construction Law, Waterbury Center, and William Alexander Fead of Fead Construction Law, PLC, Burlington, for Defendant-Appellee/Cross-Appellant.

PRESENT: Reiber, C.J., Robinson, Eaton and Carroll, JJ., and Morris, Supr. J. (Ret.), Specially Assigned

EATON, J.

¶ 1. Subcontractor Construction Drilling, Inc. (CDI) appeals from the trial court's judgment on the merits in its breach-of-contract claim against Engineers Construction, Inc. (ECI). CDI contends that the trial court erred in: (1) holding that the terms of the parties' subcontract required CDI to request a change order before it billed ECI for "drilling in obstructions" in excess of CDI's bid price; (2) denying CDI's motions to reopen the evidence and for a new trial; and (3) awarding ECI $234,320 in attorney's fees under the Prompt Payment Act. ECI cross-appeals, arguing that the trial court improperly allowed CDI's owner to offer opinion testimony absent a finding of reliability under Vermont Rule of Evidence 702 and maintaining that his testimony could not have met this standard in any event. Therefore, should this Court reverse the trial court's denial of CDI's breach-of-contract claim, ECI asserts that the matter must be remanded for a new trial without such testimony. We affirm, and therefore do not reach the issue raised in ECI's cross-appeal.

¶ 2. Following a five-day bench trial, the court made the following factual findings by a preponderance of the evidence. ECI obtained the contract for a railroad-bridge reconstruction project planned by the town of Hartford. The contract called for twenty-eight underground structural supports, known as "micropiles," to be installed in locations designated by the town's engineering firm. ECI entered a subcontract with CDI pursuant to which CDI—which had expertise in this area, having previously installed between 100 and 200 micropiles—was to complete that portion of the work.

¶ 3. Micropiles are drilled using hollow metal tubes, known as "casings," which attach one atop the other. The bottommost casing is fitted with a drill bit. As the bit spins into the ground, the drill rig forces liquid down the center of the casings. This liquid pushes underground material up the space surrounding the casings and out of the borehole. When the drill reaches design depth, grout and rebar are installed through the center of the casings. Some of the casings are removed, while others are left underground in order to strengthen the piles. Finally, a concrete slab is placed atop the piles to distribute the load—in this case, the weight of the trains crossing the bridge.

¶ 4. The subcontract between the parties set a flat price for CDI's work, but included a clause providing that, if CDI was "drilling in obstructions" which necessitated CDI spending more than four hours to complete drilling the hole, the price would be adjusted by payment of $920.00 per rig hour and the cost of drill bits. A separate provision stated that CDI could request a change order adding or deducting costs "when changes in the work are encountered or expected." The subcontract also incorporated by reference the specifications, schedule, and general conditions in ECI's contract with the town. As trains were to continue running during construction, the project involved "[a] lot of planning and work with the railroad ... to minimize conflicts."

¶ 5. CDI began drilling the first pile, designated as NC-8, on August 28, 2013. The following day, the NC-8 borehole reached design depth. The driller then temporarily stopped work on NC-8 in order to assist a colleague installing grout in a different pile. When the driller returned to work on NC-8, the drill became stuck. For weeks, CDI endeavored without success to free the casing. It used various means to do so, including drilling a narrower "side hole" in hopes of loosening the stuck casing.

¶ 6. However, at no point did CDI advise ECI that it considered the underlying issue to be "drilling through obstructions," a circumstance which would trigger the added-cost provision of the subcontract. As a result, while ECI was aware that the casing was stuck, its general superintendent did not believe that CDI's attempts to free the equipment would result in additional costs to ECI. Had the superintendent known that CDI would seek to bill ECI for its efforts pursuant to the added-cost provision, he would have issued a "stop work" order. Rather than struggling to finish NC-8, it would have been possible to drill a new pile; this would have cost approximately $9600.

¶ 7. Nineteen days later, the casing was finally removed when a jack was brought to the site to apply 150,000 pounds of pressure. ECI only learned of CDI's belief that efforts to free the casing constituted "drilling in obstructions" when CDI subsequently billed ECI for $120,000 in additional charges for its efforts to free the casing. ECI denied the claim, and CDI sued for breach of the subcontract on this basis.¹

¶ 8. At trial, the parties presented differing theories as to the cause of the stuck casing. ECI argued that CDI left NC-8 without drill liquid circulating through it for too long, causing the hole to collapse around the casing and create "side friction" which prevented its removal, and that this circumstance did not represent "drilling in obstructions" within the meaning of the subcontract. CDI contended that the polymer used in the drilling liquid would have kept the hole from collapsing regardless of whether the liquid was being run through it while the drill rig was shut down. It argued that either the teeth of the drill bit had become stuck in a boulder, or, after drilling stopped, boulders shifted underground, trapping the bit and casing, both circumstances which constituted "drilling in obstructions."

¶ 9. In its subsequent ruling on the merits, the trial court found that the more likely cause of the stuck casing was a boulder or boulders shifting into the space around the casing after drilling had finished, as CDI had argued. Therefore, it concluded, CDI's efforts to free its equipment constituted "drilling in obstructions" within the meaning of the added-items clause. However, the court held that ECI's failure to pay these added costs was not a breach of the subcontract because such obstruction drilling was a change in the work, and CDI was therefore required to request a change order in the manner specified by the subcontract before billing for the added work. Finally, the court held that ECI was the "substantially prevailing party" under Vermont's Prompt Pay Act, a conclusion which entitled the contractor to recovery of its "reasonable attorney's fees" and expenses. 9 V.S.A. § 4007(c).

¶ 10. After the court issued its ruling on the merits, but before judgment was entered, CDI filed a motion to reopen the evidence. It sought to offer the testimony of CDI's project foreman, whom they were previously unable to locate. CDI proffered that the foreman would testify to "conversations that he had on-site with ECI employees, including statements to those employees that the work being done was ECI's responsibility and [ECI] would be billed," and indicated that the foreman could provide an evidentiary foundation for his records related to the project. CDI's owner averred that he lost contact with the foreman after the foreman was involved in a car accident on his way home from the Hartford project site, and detailed subsequent fruitless efforts to contact him, including: numerous telephone calls and detailed voicemails explaining the need for his testimony; inquiries made of his friends; and driving to his last known address, where CDI's owner knocked on multiple entry doors, called the foreman's phone again to see if it would ring inside the house, peered through the windows in search of evidence that the foreman lived there, and ultimately taped a note to the door.

¶ 11. The trial court denied the motion, finding that the owner's affidavit did not reflect that the foreman's whereabouts could not have been discerned prior to trial through the exercise of due diligence. Further, it held that CDI failed to show that the newly-discovered evidence was likely to change the outcome of the case; indeed, the court had concluded in its merits ruling that CDI was required to submit a request for a change order "through formal channels, not informal notice to someone on the job site." Following entry of judgment, CDI moved for a new trial on identical grounds, or, in the alternative, requested that the court reconsider its ruling on the motion to reopen the evidence. Although CDI proffered additional affidavits in connection with this second motion, the court denied it on the same bases. Finally, the court ordered CDI to pay ECI a total of $234,320 in attorney's fees, plus costs, pursuant to the Prompt Pay Act. This appeal followed.

I. CDI's Breach-of-Contract Claim

¶ 12. The trial court's factual findings will be upheld unless they are clearly erroneous. Sweet v. St. Pierre, 2018 VT 122, ¶ 10, 209 Vt. 1, 201 A.3d 978. However, the question of whether a contract is ambiguous is a legal one, subject to de novo review. John A. Russell Corp. v. Bohlig, 170 Vt. 12, 16, 739 A.2d 1212, 1216 (1999) ; see also In re Affidavit of Probable Cause, 2019 VT 43, ¶ 3, 210 Vt. ––––, 215 A.3d 694 (describing de novo review as "nondeferential and plenary"). "If the court concludes the writing is unambiguous, it must declare the interpretation as a matter of law"; if it reaches the opposite conclusion, interpretation of the ambiguous contract becomes a question of fact. John A. Russell Corp., 170 Vt. at 16, 739 A.2d at 1216.

¶ 13. Here, the trial court drew no explicit legal...