Pac. Boring, Inc. v. Staheli Trenchless Consultants, Inc.

• Decision Date: 05 October 2015
• Docket Number: Case No. C14–187RSM.
• Citation: 138 F.Supp.3d 1156
• Parties: PACIFIC BORING, INCORPORATED, a California corporation, Plaintiff, v. STAHELI TRENCHLESS CONSULTANTS, INC., a Washington corporation, and Kimberlie Staheli Louch, P.E., Ph.D., individually, Defendants.
• Court: U.S. District Court — Western District of Washington

138 F.Supp.3d 1156

PACIFIC BORING, INCORPORATED, a California corporation, Plaintiff,

v.STAHELI TRENCHLESS CONSULTANTS, INC., a Washington corporation, and Kimberlie Staheli Louch, P.E., Ph.D., individually, Defendants.

Case No. C14–187RSM.

United States District Court, W.D. Washington, at Seattle.

Signed Oct. 5, 2015.

Bradley L. Powell, Meghan A. Douris, Samuel E. Baker, Jr., Oles Morrison Rinker & Baker LLP, Seattle, WA, for Plaintiff.

Carson R. Cooper, Stanton Phillip Beck, Jennifer McMillan Beyerlein, Lane Powell PC, Seattle, WA, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF'S REMAINING CLAIMS AND DENYING PLAINTIFF'S CROSS–MOTION FOR PARTIAL SUMMARY JUDGMENT

RICARDO S. MARTINEZ, District Judge.

I. INTRODUCTION

This matter comes before the Court on Defendants' Motion for Summary Judgment on Plaintiff's Remaining Claims, Dkt. # 24, and Plaintiff's Cross–Motion for Summary Judgment Denying Defendants' Collateral Estoppel Affirmative Defense, Dkt. # 33. Defendants Staheli Trenchless Consultants, Inc. ("STC") and Kimberlie Staheli, Ph.D. ("Dr. Staheli") argue that Plaintiff Pacific Boring, Inc. ("Pacific Boring")'s remaining claims relitigate issues previously settled by Judge Shaffer in King County Superior Court and are otherwise contrary to Washington law. Pacific Boring opposes Defendants' Motion, arguing that Defendants rely heavily on unsettled facts pulled from Judge Shaffer's nonbinding decisions. Pacific Boring also moves for summary judgment dismissal of Defendants' affirmative defense of collateral estoppel, arguing that the effect will be to "strike from the record ... essentially the entire factual foundation upon which defendants' [summary judgment] motion, and its several legal arguments, are premised." Id. at 2. Having reviewed the parties' briefing, and having determined that oral argument is not necessary, the Court agrees with Defendants, GRANTS their Motion and DENIES Plaintiff's Motion.

II. BACKGROUND

On or about April 19, 2010, Staheli Trenchless Consultants, Inc. ("STC") contracted with the Northshore Utility District ("the District")¹ to provide engineering and/or surveying consulting services related to the installation of a sewer bypass line at O.O. Denny Park in Kirkland, Washington. Dkt. # 1–1 at 2–4; Dkt. # 25 at 1.² Within the scope of its consulting services, STC reviewed and edited a report by Gray & Osborne, Inc., the engineer of record for the sewer bypass project. Dkt. # 25 at 1–2. Although the work was originally contracted as a microtunneling project, the District decided to terminate that contract and redesign the project as an auger bore project. Id. STC later contracted with Gray & Osborne to consult about auger bore specifications. Id.; Dkt. # 1–1 at 20.

The subsequent background facts were previously summarized in King County Superior Court:

In July of 2011, the District invited contractors to bid on a public works project to install 1,300, approximately, sewer lines near [O.O. Denny Park]. The bidding documents contained information on the site and required that the contractor use an auger boring machine to complete the job.

New West ... in consultation with it's (sic) subcontractor, Pacific Boring, bid for and won this job. The original specification (sic) designed by the District were for the contractor to use the auger bore method. And the specifications contained several baselines that told the contractor what kinds of conditions to prepare for.... And the specifications also require the contractor to dewater the work area as necessary to prevent uncontrolled flows of water and soil. The District included the geotechnical data report which we've all been calling the GDR created by Geotechnical Engineers, Inc., (sic) detailing findings from ten borings along the planned route.

...

In August of 2011, New West approached the District with a proposal to use an alternative design for the project. And what New West wanted to do was open shield pipe jacking instead of the auger bore design with a different alignment using two segments instead of three.

...

So the parties executed Change Order No. 1 ... in September of 2011.... The responsibility for design under the change order was put on New West.

...

In Late November of 2011, New West began to tunnel using the alternative method, but there were problems that prevented Pacific Boring from completing as planned.

On December 6th, workers found a big sink hole right above the alignment and New West put in its first notice of differing site condition indicating that the sink hole was caused by excessive cobbles.

...

On January 31, Pacific Boring removed its boring machine because it wasn't feasible to finish the section with that method. The District asked New West to continue with an auger bore. New West told Pacific Boring to do that, and Pacific Boring said that wasn't feasible. The parties executed Change Order No. 2 which let New West go forward with an open cut method and provided the framework for doing that and New West ended up finishing segment one by open trench method. Pacific Boring didn't do further work on segment one.

Before it started work on segment two, New West sought permission to complete the job using micro-tunneling—still another method—because of concerns that using auger boring or open shield hacking would result in the same problems seen in segment one. After some dispute, the parties executed Change Order No. 3 to allow micro tunneling, and the second one was finished on April 5th, 2012.

Dkt. # 26–3 at 44–47. These background facts appear to be undisputed between the parties.

In May of 2012, New West brought suit against the District and Pacific Boring for breach of contract before Judge Catherine Shaffer in King County Superior Court. Dkt. # 24 at 5; Dkt. # 37–4 at 43. Pacific Boring then brought its own suit against New West and the District for breach of contract, among other claims. Id. The two cases were consolidated. Id. A review of the submitted briefing, declarations, and orders from the state court case makes clear that it involved the same underlying nexus of events as this federal case, i.e., unexpected soil conditions at a sewer line project at O.O. Denny Park in Kirkland, Washington.

On September 6, 2013, Judge Shaffer reached several rulings on partial summary judgment. See Dkt. # 26–3. Relevant rulings are renumbered below:

1. "... pursuant to the flowdown provisions in the subcontract between New West and Pacific Boring, Pacific Boring agreed to assume all obligations and responsibilities which New West had assumed toward the District for Pacific Boring's work in its subcontract with New West;"

2. "... Pacific Boring agreed to the provisions in Change Order No. 1 ...;"

3. "... Pacific Boring assumed toward New West the obligations referenced in that order of the contract between New West and the District;"

4. "... any determinations made by the Court with regard to the existence of differing site conditions, or lack thereof, under the contract with the District are equally binding on both New West and Pacific Boring."

5. "Pacific Boring's differing site condition claims based on encountering Cobbles or Boulders or Groundwater (or any combination thereof) on the Project are hereby dismissed."

6. "New West's claims based on that [sic] it and/or its subcontractor Pacific Boring encountering Cobbles or Boulders of Groundwater (or any combination thereof) on the Project are hereby dismissed with Prejudice."

Dkt. # 26–3 at 2–9. Judge Shaffer also ruled "[t]o the extent this order requires interpretation, the transcript for the ruling on September 6, 2013 is incorporated by reference." Id. at 7. That transcript shows Judge Shaffer ruled:

7. "So the parties executed Change Order No. 1, the infamous and notorious Change Order No. 1 in September of 2011.... The responsibility for design under the change order was put on New West." Id. at 45.

8. "... the thing I look to first is the contract. And the baselines in the contract are both broad and clear. They require the contractor to be capable of extracting and ingesting any and all quantities of cobble actually encountered and limits the District's payment for boulders to those over 36 inches. It's crystal clear that groundwater is another disclosed situation in the sense of the parties being involved in working under the level of groundwater was disclosed even in the GDR [Geotechnical Data Report], and that's just not disputed here. So with regard to whether we have a DSC claim based on encountering [cobbles, boulders, or groundwater] the answer to that question is no." Id. at 47–48.

On December 13, 2013, Judge Shaffer reached several further rulings on partial summary judgment, including, inter alia:

5. The court dismissed with prejudice New West's claim against the District that dewatering along the alignment of the Project was outside the scope of the prime Contract;

10. The court dismissed with prejudice all claims (whether raised by New West or Pacific Boring) arising from Segment 2 of the Project;

11. The court dismissed with prejudice Pacific Boring and/or New West's claim for defective specifications, including but not limited to any claim for additional compensation on the basis that the Project could not have been constructed using the District's specified auger bore method.

Dkt. # 26–4 at 40–41. Judge Shaffer's oral ruling makes clear that the Court was dismissing Pacific Boring's differing site condition claim as to Segment 2 "for the simple reason that there was no timely notice under the contract of differing site conditions on Segment 2." Dkt. # 26–5 at 21.

Defendants assert that at some point after this "PBI brought claims against Staheli in King County Superior Court, the exact claims raised in the present lawsuit, and immediately requested the court consolidate the two lawsuits." Dkt. # 24 at 9.³

While the record does not confirm this assertion, it does show that Pacific Boring requested a continuance of the trial date in...