Performance Abatement v. Lansing Bd. of Water

• Decision Date: 06 August 2001
• Docket Number: No. 5-98-CV-70.,5-98-CV-70.
• Citation: 168 F.Supp.2d 720
• Parties: PERFORMANCE ABATEMENT SERVICES, INC., Plaintiff/Counter-Defendant, v. LANSING BOARD OF WATER AND LIGHT, an administrative agency of the City of Lansing and International Fidelity Insurance Company, Defendants/Cross-Defendants, and SCS Group, L.C., Defendant/Cross-Plaintiff/Cross-Defendant/Counter-Plaintiff, and Lansing Board of Water and Light and International Fidelity Insurance Company, Cross-Defendants/Cross-Plaintiffs.
• Court: U.S. District Court — Western District of Michigan

168 F.Supp.2d 720

PERFORMANCE ABATEMENT SERVICES, INC., Plaintiff/Counter-Defendant, v. LANSING BOARD OF WATER AND LIGHT, an administrative agency of the City of Lansing and International Fidelity Insurance Company, Defendants/Cross-Defendants and SCS Group, L.C., Defendant/Cross-Plaintiff/Cross-Defendant/Counter-Plaintiff and Lansing Board of Water and Light and International Fidelity Insurance Company, Cross-Defendants/Cross-Plaintiffs.

No. 5-98-CV-70.

United States District Court, W.D. Michigan, Southern Division.

August 6, 2001.

COPYRIGHT MATERIAL OMITTED

Jeffrey W. Bracken, Loomis, Ewert, Parsley, Davis, Lansing, MI, Ronald J. Garber, Shapiro, Fussell, Wedge, Smotherman & Martin, LLP, Atlanta, GA, for Performance Abatement Services, Inc.

Kenneth T. Brooks, Foster, Swift, Collins & Smith, PC, Lansing, MI, Anthony S. Kogut, Wilingham & Cote, PC, East Lansing, MI, Mary Dwyer, Lansing Board of Water and Light, Lansing, MI, Kevin T. McGraw, McGraw & Associates, East Lansing, MI, for Lansing Board of Water and Light.

Michael K. Lowman, Barbara G. Werther, Arent, Fox, Kintner, Plotkin, Washington, DC, Thomas H. Keating Jenkins & Keating, Grosse Pointe Farms, MI, David C. Gregory, Kelley Cawthorne, Lansing, MI, for SCS Group LC.

Philip G. Alber, Omar J. Harb, Alber Crafton, PLLC, Troy, MI, for Intern. Fidelity Ins. Co.

William E. Hartgering, JAMS, Chicago, IL, for VFM.

OPINION

ENSLEN, District Judge.

This matter is before the Court on Defendants SCS Group, L.C.'s (hereafter "SCS") and Lansing Board of Water and Light's (hereafter "BWL") Motion to Dismiss Certain Claims without Prejudice, SCS's Motion for Partial Summary Judgment against Plaintiff Performance Abatement Services, Inc. (hereafter "PAS"), BWL's Motion for Partial Summary Judgment against PAS, PAS's Motion for Partial Summary Judgment against BWL, and PAS's Motion for Partial Summary Judgment as to SCS's counter-claims.

Each of these Motions has been opposed and briefed in accordance with the Local Civil Rules. Upon review of these Motions, and in light of the Court's familiarity with the issues garnered from past hearings in this matter and the extensive length of the current briefing, the Court determines that oral argument would not assist in nor expedite the resolution of these Motions. Accordingly, all requests for oral arguments as to these Motions are denied consistent with Local Civil Rule 7.2(d).

I. PROCEDURAL HISTORY

This suit was filed by PAS on May 21, 1998 against Defendants SCS and BWL. Thereafter, SCS counter-claimed against PAS and cross-claimed against BWL; BWL then cross-claimed against SCS.

On December 4, 1998, the Magistrate Judge assigned this matter approved PAS's request to amend its Complaint. An Amended Complaint was thereafter filed which included claims against a bonding company — International Fidelity Insurance Company (hereafter "Fidelity"). The amendment of the Complaint also resulted in the later amendment to cross-claims and counter-claims which had been previously filed.

On December 7, 1998, this Court decided BWL's Motion to Dismiss, which resulted in an Order dismissing several of PAS's claims against BWL and some of SCS's cross-claims against BWL. The December 7, 1998 Order was clarified by Order of January 7, 1999.

By Order of April 3, 2000, the Magistrate Judge assigned this matter again allowed amendment to the pleadings. As such, PAS was allowed to file a Second Amended Complaint; Fidelity was allowed to assert amended cross-claims as well as third-party claims against Third-Party Defendants Robert Greenlees, Jerome Williams, Elizabeth Williams, and William Wysocki; BWL was allowed to amend its cross and counter-claims; and SCS was allowed to amend its counter-claims and to file a third-party claim against St. Paul Fire and Marine Insurance Company (hereafter "St. Paul"). These series of amendments resulted in the Third Case Management Order, dated June 8, 2000, which substantially rescheduled the discovery and scheduling deadlines in the case. The Third Case Management Order was later amended in part by two Orders granting Stipulations to amend. (See Dkt. Nos. 198 and 213.)

Facilitative mediation was conducted in this matter in December 2000. The mediation did not result in a complete settlement between the parties, but did result in a partial settlement agreement between SCS, BWL, Fidelity and a second bond company (Deerfield Insurance Company) entered into on January 24, 2001. This settlement agreement resulted in PAS bringing a Motion for Preliminary Injunction, Temporary Restraining Order and Constructive Trust, which asked the Court to take control of the settlement monies at issue. This Motion was heard on March 1, 2001. It was denied by Opinion and Order of March 6, 2001. The Third Case Management Order was then amended for a third time by Order of March 16, 2001.

As part of the previous motion practice, the Court discussed in its previous decisions the effect of the partial settlement. The Court previously concluded that those settlements were helpful in advancing this litigation. The Court also concluded that those settlements do not directly yield a conclusion that PAS is entitled to payment by SCS for unpaid work — since the payments were made for a variety of purposes including the responsibility of SCS to defend and indemnify BWL from further suit by PAS. The papers filed in connection with the instant Motions do not alter those conclusions.

These instant Motions were filed by the parties between May 1, 2001 and May 11, 2001. The Motions have now been fully briefed, after the parties received additional time for briefing.

Pursuant to a Stipulation of the parties, the Court ordered on July 9, 2001 that BWL's counter-claims against PAS be dismissed without prejudice.

II. FACTUAL BACKGROUND

A. Bid History and Expert Opinions

This tangled story involves the aspiring hopes of the City of Lansing's Board of Water and Light to remodel the Ottawa Station Development Project, a former power plant, by removal of various boilers, by abatement of asbestos and other dangerous substances, and by remodeling of portions of the plant. BWL informed potential bidders of the Project in 1995 and 1997 and conducted public walk-through meetings with potential bidders who wished to view the plant. As part of the bid process, BWL designed its "Specification," which informed bidders of the "nature and scope" of the work. The Specification did so in part by attaching very general construction drawings and by attaching asbestos laboratory test results (i.e., samples were taken randomly from insulation throughout the plant and tested to determine if the insulation contained asbestos). The Specification, however, further indicated that BWL had not conducted a field survey for asbestos, that asbestos was located in most of the plant, and that bidders were responsible to survey asbestos themselves.

BWL's Specification was designed by Michael Ring. Michael Ring testified at deposition that he conducted the 1995 prebid walk-through with bidders and at the time informed bidders (as stated in the Specification) that further drawings of equipment and insulation were available for review at BWL's offices. (Ring Dep. at 65-66; Ring Affidavit of July 18, 2001, at ¶ 3.) His testimony contradicts the testimony of Edward Champagne (PAS's bidder) who has testified that he explicitly asked Ring for insulation plans and was told by Ring that no such plans existed. (Champagne Dep. at 38-93; Champagne Affidavit in Opposition to SCS ¶ 23; Champagne Affidavit in Opposition to BWL ¶ 12.) PAS has also pointed out that Ring's statement that he disclosed to all bidders that additional drawings were available for review at BWL's offices is questionable in that no additional bidders reviewed the drawings "on file" during the bidding process. (See Ring Dep. at 66.)

There were, nevertheless, many such plans and drawings to review in BWL's offices and the plant. The parties' several experts have examined the many plans and have asserted many and diverse opinions concerning the plans and conduct of the employees of the parties in the bidding process. The following statements are a brief summary of those many opinions: Richard Jenkins, one of PAS's experts, has opined that of the thousands of drawings which did exist, there were some 36 drawings depicting insulation which, had they been disclosed in the listed drawings, would have disclosed to PAS most, if not all, of the asbestos which PAS claims was "hidden" from it. (See Jenkins' Affidavit ¶ 22 and attached papers.) One of SCS's experts, George Robinson, has opined that most, if not all, of the asbestos for which PAS seeks additional compensation was indicated to PAS in drawings available at BWL's plant and offices and would have been obvious from a visual inspection of the plant given the nature of the equipment. (See George Robinson Decl. ¶ 5i and Robinson Report at 28.) Edward Champagne has also opined that the additional asbestos was not disclosed in the listed drawings, was not apparent from his visual inspection, and would not have been apparent to a reasonable bidder from a visual inspection. (See Affidavit of Edward Champagne in Opposition to BWL ¶¶ 22-26.) James Werner, another of PAS's experts, has opined that the disclosures by BWL/SCS were inadequate to disclose "hidden asbestos" and were inadequate disclosures in light of BWL's duties under health and safety regulations. (See Werner Affidavit and Report.) Michael Tillotson, an expert for BWL, has opined that BWL sufficiently complied with occupational health and safety regulations for the disclosure of asbestos at the work site by the disclosures made by BWL. (See Tillotson Decl. ¶ 5.)

B. Contract, Specification and General Requirements

BWL awarded the contract to SCS in the fall of 1997 (which award assumed BWL's use of PAS as the asbestos subcontractor). Article I of the Contract stated that SCS would...