Shire Corp., Inc. v. Rhode Island Department of Tranportation
| Decision Date | 02 March 2012 |
| Docket Number | C.A. PB 09-5686 |
| Parties | SHIRE CORPORATION, INC., v. THE RHODE ISLAND DEPARTMENT OF TRANPORTATION; MICHAEL LEWIS, in his capacity as Director of Transportation; GARY SASSE, in his capacity as Director of Administration; JEROME WILLIAMS, Individually; KAZEM FARHOUMAND, Individually, and in his capacity as Chief Engineer of the Rhode Island Department of Transportation; FRANK CORRAO, III, Individually, and in his capacity as Chief of Construction Management for the Rhode Island Department of Transportation; CHRISTOS XENOPHONTOS, Individually, and in his capacity as Chief of Contracts and Specifications for the Rhode Island Department of Transportation; LISA MARTINELLI, in her capacity as Executive Legal Counsel for the Rhode Island Department of Transportation; RICHARD FONDI, Individually, and in his capacity as Chief of Final Acceptance for the Rhode Island Department of Transportation; MICHAEL SWIFT, in his capacity as Principal Civil Engineer for the Rhode Island Department of Transportation; and, JAMES R. CAPALDI, Individually |
| Court | Rhode Island Superior Court |
DECISION
Before this Court is Defendants' (Defendants or State collectively) Motion for Summary Judgment on all counts of Plaintiff Shire Corporation, Inc.'s (Plaintiff or Shire) Second Amended Complaint (Complaint or 2d Am. Compl.) pursuant to Super. R. Civ. P. 56, as well as Defendants' Motion for Summary Judgment on Counts III (Abuse of Process) and VI (Civil Conspiracy) based on the Rhode Island Limits on Strategic Litigation Against Public Participation law (Anti-Slapp statute), codified at G.L. 1956 § 9-33-1 et seq. In addition to their arguments on the Anti-Slapp statute and their arguments with respect to each count, Defendants also argue that this Court should dismiss all counts for failure to exhaust administrative remedies and that this Court should dismiss Counts I (Art. I, § 2 of Rhode Island Constitution), IV (Tortious Interference with Contractual Relations), and V (Tortious Interference with Prospective Business Relations) for violating the statute of limitations set forth in G.L. 1956 §§ 9-1-14(b) and 9-1-25.
Shire's extensive claims, encompassing events spanning the last decade, relate to a myriad of assertions, agreements actions, and accusations involving Shire and departments and employees of the State of Rhode Island. A synopsis of this saga, as established by the pleadings, affidavits, and other materials submitted in connection with this Motion, is set forth below.
Shire is a family-owned and -operated highway and bridge contractor that has been in business since 1995.[1] Shire's business consists of highway, bridge, and other construction projects administered by the Rhode Island Department of Transportation (RIDOT) through contracts with the Rhode Island Department of Administration (RIDOA). RIDOA is the chief agency of the executive branch, and it is headed by the Director of Administration, who is the Chief Purchasing Officer for the State of Rhode Island. The Chief Purchasing Officer also appoints a Purchasing Agent for the State. RIDOA, among other things, is the signatory for all State public works project contracts.
RIDOT is the agency of the executive branch responsible for the maintenance and construction of highways, bridges, roads, and the like in the State of Rhode Island. It engages in public works projects funded through both State revenue sources and federal assistance, including funds from the Federal Highway Administration (FHWA). Typically, FHWA provides approximately eighty percent (80%) of the funding for federal-oversight transportation projects on which it concurs, with the State supplying the remaining twenty percent (20%). An agency of the United States Department of Transportation, FHWA has a division office with a Division Administrator in each state.
Transportation-related public works contracts are advertised by RIDOA, but designs plans, and specifications are prepared by engineering contractors of RIDOT. The contracts are subject to competitive bidding under the relevant state law. Once the contract is awarded and construction commences, the project is overseen by RIDOT and its engineers. If issues arise that require material changes to the construction contract Reports of Change and Contract Addenda (often referred to as change orders) may issue.
Shire has bid on and won numerous transportation-related public works contracts that form the foundation of its allegations. These projects include Greenwood Avenue, [2] Point Street, [3]Barrington Bridge, [4] and what will be termed the first I-95 project.[5] Shire made a claim for bid costs on the first I-95 contract after it was cancelled by RIDOA. With the Greenwood Avenue, I-295, Point Street, and Barrington Bridge projects, engineering design and construction issues arose, leading Shire to submit change orders and claims and to file civil actions.
On January 31, 2005, the parties entered into the Point Street Settlement Agreement, affording a $3, 100, 000 payment from the State to Shire and including an agreement to arbitrate future claims on then-pending projects, such as Barrington Bridge and Greenwood Avenue. The Point Street Settlement Agreement also created a Trust Account for all payments thereafter from the State to Shire on all of the listed pending projects, with disbursements from the account made by a consultant who would monitor Shire's daily work and report Shire's progress to the State at regular intervals.
In January 2005, bids were opened on two contracts, a second I-95 project[6] and Rawson Road, [7] on which Shire claims it was the low-bidder but was directed to withdraw its bids by RIDOA. Shire claims that RIDOA instructed it to withdraw these bids to facilitate resolution of issues on existing projects and that RIDOA implied there would be adverse economic consequences to Shire if it did not comply. Shire withdrew the bids, and the contracts were instead awarded to Aetna Bridge Corporation, a close competitor of Shire. There were also issues with RIDOT attempting to withhold award of the I-95 Ramps[8] project, on which Shire was the low-bidder, until Shire settled claims on the Barrington Bridge.
Shire alleges particular issues surrounding a Union Avenue[9] contract, on which it claims it was notified it was the low-bidder on June 23, 2005 and was promised the award by RIDOA officials. In November 2005, the Warren Bridge[10] contract opened for bidding, and Shire claims it was directed by RIDOA officials not to submit a bid in order to alleviate political concerns surrounding the Barrington Bridge and Point Street issues and to ensure Shire would receive the Union Avenue award. There was a meeting between RIDOA, RIDOT, and FHWA officials in mid-October, 2005, during which an agreement may have been reached to award Union Avenue but not to award Warren Bridge to Shire, even if it were the lowest responsible bidder. Shire did not immediately receive the Union Avenue contract, perhaps due to funding issues or delay on another project, but Shire remained in contact with RIDOA and continued to receive assurances it would be awarded the contract. Shire was allegedly assured the contract was being held open repeatedly until May 2008, when Shire learned it may not receive Union Avenue.
Previously, on September 29, 2006, the parties entered into the Barrington Bridge Settlement Agreement, as a result of which the State paid Shire $5, 300, 000. The settlement also established an Oversight Committee consisting of representatives of Shire, its Surety, RIDOA, RIDOT, and FHWA to meet monthly to review and discuss progress, change orders, and payments between the State and Shire with regard to the Barrington Bridge project. Shire believes that the Barrington Bridge Settlement upset some RIDOT personnel. Immediately following the settlement, the State sought liquidated damages from Shire on the Greenwood Avenue project. Shire further alleges the State, for some period of time, withheld retainage and payments in excess of $1, 000, 000 each and slowed approval of Shire's change orders.[11]
Meanwhile, in April 2008, RIDOT became suspicious that one of Shire's employees may have been illegally accessing portions of the RIDOT Project Management Portal (PMP), a computer system used to track ongoing construction projects. After an initial, internal investigation, RIDOT passed its suspicions along to the Rhode Island State Police, who, after conducting its own investigation, obtained a warrant, searched Shire's office, and arrested the employee on June 4, 2008. Shire claims that the information accessed was public information and led to no competitive advantage, although it admitted responsibility for the alleged misconduct in an Administrative Settlement and Compliance Agreement. Throughout, RIDOT was in contact with FHWA regarding a potential suspension of Shire from the bidding process, particularly because Shire was the low-bidder on new projects—the East Bay Bikepath[12] and the Conanicus Seawall.[13] On September 3, 2008, FHWA suspended Shire, and RIDOA suspended Shire based on the federal suspension on September 15, 2008.
The criminal charges against the Shire employee were initially dismissed on December 1, 2008. The employee was arraigned again in January 2009, and those charges dismissed pursuant to Super. Ct. R. Crim. P. 48A in January 2011. The federal suspension of Shire was lifted when the Administrative Settlement and Compliance Agreement was reached on April 24 2009. The state lifted its suspension April 30, 2009. Since that time, disputes between Shire and the State have continued, leading to arbitration, settlement, or litigation of Barrington Bridge, Greenwood Avenue, and I-295 claims, as well as...
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