Perini Corp. v. Massachusetts Department of Transportation

• Decision Date: 03 June 2014
• Docket Number: 09-1214,12-3778,Civil Action 09-0795,12-2469,13-0079,11-1593,09-1080,09-2940,11-2863,12-1113
• Parties: PERINI CORPORATION, KIEWIT CONSTRUCTION CO., INC., JAY CASHMAN, INC. d/b/a PERINI-KIEWUT-CASHMAN JOINT VENTURE v. MASSACHUSETTS DEPARTMENT OF TRANSPORTATION
• Court: Massachusetts Superior Court

PERINI CORPORATION, KIEWIT CONSTRUCTION CO., INC., JAY CASHMAN, INC. d/b/a PERINI-KIEWUT-CASHMAN JOINT VENTURE
v.
MASSACHUSETTS DEPARTMENT OF TRANSPORTATION

Civil Action Nos. 09-0795, 09-1080, 09-1214, 09-2940, 11-1593, 11-2863, 12-1113, 12-2469, 12-3778, 13-0079

Superior Court of Massachusetts, Suffolk

June 3, 2014

MEMORANDUM AND ORDER ON PLAINTIFFS' MOTION FOR JUDGMENT ON THE PLEADINGS

Thomas P. Billings, Justice of the Superior Court.

INTRODUCTION

The short version is this. Plaintiff Perini-Kiewit-Cashman Joint Venture (" PKC") is an enterprise in which three large construction firms combined to act as general contractor on one of three major prime contracts awarded in 1995 for the Central Artery Tunnel Project, or " Big Dig." As the project proceeded there were changes in the scope of work, resulting in Change Proposals (" CPs").

The 1995 contract had constituted a three-member Dispute Resolution Board (" DRB")^[1] to make an advisory recommendation on each CP, with final decisionmaking authority residing in the Project Director. By the end of 1998, however, there was a serious backlog of unaddressed CPs. To address it, the parties reached a new agreement in 1999. Under the 1999 agreement, the DRB would serve as a binding arbitration panel to adjudicate an agreed list of " claims by the Parties related to events which occurred prior to January 1, 1999."

These ten consolidated cases ^[2] arise out of disagreements over whether certain claims were arbitrable; i.e., were properly submitted to and acted on by the DRBs in their role as binding arbitrator. The DRBs ruled these claims arbitrable, but two successive Project Managers ^[3] -- each, an engineer employed by MassDOT ^[4] and appointed to this position pursuant to a specific grant of authority set forth in a CA/T Project Management Agreement dated July 1, 1997 and amendments thereto - ruled that they, not the DRB, were charged with determining arbitrability. They therefore treated the DRBs' awards as advisory recommendations, accepting some and rejecting others. In each rejection, the Project Director's contrary decision invariably favored the owner over the contractor, sometimes in the millions of dollars.

Last year, the issue finally reached the Appeals Court, which held that the Project Director decides arbitrability, subject to review by this Court pursuant to the arbitrary-or-capricious (etc.) standard of G.L. c. 30, § 39J.^[5] Massachusetts Hwy. Dept. v. Perini Corp. , 83 Mass.App.Ct. 96, 981 N.E.2d 721 (2013). PKC's Motion for Judgment on the Pleadings seeks a ruling that the DRB was empowered to arbitrate each of the claims in issue, and an order vacating the Project Managers' decisions to the contrary and remanding the awards in question to the DRBs to eliminate any arbitrability determinations (i.e., to take arbitrability as a given) and reissue the awards on the merits. MassDOT, on the other hand, asserts that the Project Manager correctly determined that the claims were non-arbitrable, and seeks a ruling that his determinations should stand.

Because the Project Director's arbitrability decisions challenged here were premised on errors of law and on factual findings that were unsupported by substantial evidence, PKC's Motion for Judgment on the Pleadings is ALLOWED in its entirety.

A NOTE ON PROCEDURE, THE RECORD, AND CITATION FORMAT

Following the procedure set forth in a Scheduling Order entered by the Court (Kaplan, J.; SUCV2008-05300, Paper #77), PKC seeks resolution of the dispute by way of a Motion for Judgment on the Pleadings, much as in an administrative appeal under Chapter 30A of the General Laws.^[6] See Superior Court Standing Order 1-96(4). With its Motion, PKC filed a nearly 11, 000-page record on disc. Each of the pages was labeled using the following format: R.00001, et seq. Both PKC and MassDOT have cited copiously from this record in their submissions, and MassDOT submitted an additional 1500 pages or so, numbered " MASS00001, " et seq., on which it has also relied.

Unfortunately, a large part of MassDOT's submission (and much smaller portions of PKC's) consisted of materials recycled from PowerPoint presentations made in the DRB proceedings. In these, the referenced primary source documents were often obscured, in whole or substantial part, by overlays containing excerpts, summaries, and argument, displayed in such a manner that the document underneath could not be read.

On March 7, 2014 I entered an order requiring that MassDOT re-do its record submission to correct this, and update the hyperlinks in its proposed findings of facts. MassDOT complied with the request, and submitted a table cross-referencing the original record citations to the new files.

I have disregarded, for present purposes, both sides' PowerPoint slides, except where they include a primary-source document with sufficient completeness to read and evaluate the quoted portions fairly and in context (or, in a very limited number of instances, where offered simply to make the point that a particular issue was presented to a DRB). The following is a key to citation formats.

Citation Form	Source
R.00001 (PKC submission)	Some appear on: CD-ROM titled " Hyperlinked and Word Versions of PKC's Proposed Findings of Fact and Rulings of Law, SUCV2009-0795, et al."
Others appear on: CD-ROM titled " MassDOT's Request for Findings of Fact and Rulings of Law With Respect to PKC's Motion for Judgment on the Pleadings on the Issue of Arbitrability" (also includes some " R.00001" documents).
MASS00001 (MassDOT original submission)	On: CD-ROM titled " MassDOT's Request for Findings of
Fact and Rulings of Law With Respect to PKC's Motion for Judgment on the Pleadings on the Issue of Arbitrability" (also includes some " R.00001" documents).
Also on: Flash drive titled " Non Business Data, " folder titled MassDOT FOF-ROL, creation date 4/11/14 (also includes some " R.00001" documents).
And on: Flash drive titled " Lexar"
MASS00001 01.001 (MassDOT supplemental submission)	Flash drive titled " MassDot" (has two folders, " Record 1" with original exhibits and " Record2" with cleaned-up copies). Each has a file titled " Index" with cross-references between original and " clean" files.

FINDINGS OF FACT

A. What Is In Issue.

1. These consolidated cases arise out of PKC's work as a general contractor on the Central Artery/Tunnel Project (the " Big Dig" or the " Project") under Public Construction Contract No. C11A1 (the " C11A1 Contract") with Massachusetts Highway Department (the " CA/T" or " MassDOT"). R.05113.

2. Pursuant to Subsection 7.16(G)(10) of the C11A1 Contract, PKC has timely appealed nine decisions of the authorized representative of MassDOT's Project Director by filing civil actions in this Court. R.06152-06160; see SUCV09-0795, 09-1080, 09-1214, 09-2940, 11-1593, 11-2863, 12-1113, 12-3778 and 13-0079; R.06110-R.06234; R.06235-R.06256; R.06257-R.06297; R.06298-R.06369; R.06473-06643; R.06644-R.06767; R.06981-R.07005; R.07333-R.07350; R.07231-R.07243.

3. As depicted in the chart below, each of the nine Project Director decisions corresponds to an earlier decision by a three-member disputes review board (" DRB") appointed by the parties to hear disputes and issue findings and recommendations in addition to binding arbitration awards on claims:

#	DRB Determination	Project Director Decision Appealed by PKC
1	DRB3's " Determination Regarding PKC's Mainline Impact Claim for the Period Subsequent to May 1, 1999" dated October 24, 2008 (" DRB3's Mainline Decision"). R.05112-R.05215.	November 28, 2008 " Chief Engineer's Decision" concerning DRB3's Mainline Decision (" Mainline PDD"). R.06110-R.06234. Civil Action No. 2009-0795 is PKC's appeal of the Mainline PDD.
2	DRB3's " Determination Regarding Which Claims in the Time Portion of the Omnibus Claim are Subject to the Parties' Binding Agreement" dated November 14, 2008 (" DRB3's Binding/NonBhiding Decision"). R.05274-R.05305.	December 17, 2008 " Chief Engineer's Decision" concerning DRB3's Binding/NonBinding Decision (" Binding/NonBinding PDD"). R.06235-R.06256. Civil Action No. 2009-1080 is PKC's appeal of the Binding/NonBinding PDD.
3	DRB3's " Determination Regarding PKC's Time Impact Claim for the Period May 1, 1999 Through December 31, 2001 (The 76Bs Period)" dated November 14, 2008 (" DRB3's Time II Decision"). R.05216-R.05273.	January 6, 2009 " Chief Engineer's Decision" concerning DRB3's Time II Decision " (Time II PDD"). R.06257- R.06297. Civil Action No. 2009-1214 is PKC's appeal of the Time II PDD.
4	DRB3's " Determination Regarding PKC's Time Impact Claim for the Period January 1, 2002 Through January 23, 2004" dated March 20, 2009 (" DRB3's Time III Decision"). R.05312-R.05336.	April 22, 2009 " Chief Engineer's Decision" concerning DRB3's Time III Decision (" Time III PDD"). R.06298- R.06369. Civil Action No. 2009-2940 is PKC's appeal of the Time III PDD.
5	DRB4's " Determination Regarding PKC's MBTA Impact Claim" dated September 3, 2010 (" DRB4's MBTA Decision"). R.05356-R.05595.	January 28, 2011 " Engineer's Decision" concerning DRB4's MBTA Decision (" MBTA PDD"). R.06473- R.06643. Civil Action No. 2011-1593 is PKC's appeal of the Mainline PDD.
6	DRB4's " Determination Regarding PKC's Site Restoration Claim" dated January 15, 2011 (" DRB4's Site Restoration Decision"). R.05596-R.05741.	May 13, 2011 " Engineer's Decision" concerning DRB4's Site Restoration Decision (" Site Restoration PDD"). R.06644- R.06767. Civil Action No. 2011-2863 is PKC's appeal of the Site Restoration PDD.
7	DRB4's " Determination Regarding PKC's Traffic Impact...