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URS Corp. v. Transpo Group, Inc.

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

June 19, 2015

URS CORPORATION, a Nevada corporation, Plaintiff,
v.
TRANSPO GROUP, INC., a Washington corporation, Defendant.

BENCH ORDER, FINDINGS OF FACT, AND CONCLUSIONS OF LAW

RICARDO S. MARTINEZ, District Judge.

I. INTRODUCTION

In this action, Plaintiff, URS Corporation (hereinafter "URS"), has brought claims for Breach of Contract, Negligence and Indemnity against Defendant Transpo Group, Inc. (hereinafter "Transpo"). Dkt. #3. Transpo also brought a Counterclaim against URS seeking a declaration of the rights and legal relations between Transpo Group with respect to responsibility for costs associated with the need to accommodate forward compatibility requirements on the I-405 N.E. 6th to I-5 Widening and Express Toll Lanes Design-Build Project. Dkt. #6. However, prior to trial in this matter, the Court granted Plaintiff's Motion for Judgment on the Pleadings, dismissing Transpo's Counterclaim as duplicative of its affirmative defenses and concluding it therefore has no useful purpose in this litigation. Dkt. #17. Also prior to trial, the Court determined that the Teaming Agreement provisions survive and may be applicable to the instant dispute because the Agreement does not cover the same subject matter as the Master Subcontractor Agreement, and that the limitation on liability precluding the recovery of consequential and indirect damages between the parties "flows down" from the agreement between Flatiron and URS to the agreement between URS and Transpo. Dkt. #28.

Between June 1 and June 9, 2015, the Court conducted a bench trial in this matter. Both parties presented lay and expert witnesses, as well as numerous documentary exhibits. Following the bench trial, the parties submitted proposed Findings of Fact and Conclusions of Law. Dkts. #52 and #53.

Having considered the pleadings, trial briefs, sworn testimony of witnesses, and exhibits, the Court now FINDS AND CONCLUDES that URS has failed to meet its burden of proving by a preponderance of the evidence that Transpo is responsible for the error at issue in this action, and makes the following Findings of Fact and Conclusions of Law.

II. FACTS STIPULATED BY THE PARTIES[1]

1. This dispute arises out of a design-build construction project known as the I-405 NE 6th to I-5 Widening and Express Toll Lanes Design-Build Project to widen and add toll lanes to a segment of I-405 from Bellevue to Lynnwood ("the Project"), located in King and Snohomish Counties, Washington.
2. The design-builder for the Project is Flatiron Constructors, Inc. ("Flatiron") who is not a party to this action.
3. The owner of the Project is the Washington State Department of Transportation ("WSDOT") which is also not a party to this action.
4. URS, as designer, and Flatiron, as contractor, entered into a "Contractor/Designer Teaming Agreement." Under the Agreement, Flatiron and URS agreed to exclusively work together to assemble a design/build team to respond to a Request for Proposal ("RFP") to be published by WSDOT. The Agreement designated URS as lead designer for the RFP response. URS's responsibilities included reviewing and analyzing owner materials and preparing preliminary designs sufficient to allow for the development of quantity and cost estimates. URS subcontracted portions of its design responsibilities to Transpo and others.
5. On July 21, 2011, the Flatiron Design-Build Team was short-listed as a qualified proposer for the Project by WSDOT.
6. On July 25, 2011, WSDOT released the Project Request for Proposals (RFP). Section 2.19 entitled "Signing" described the permanent signing requirements for the Project.
7. The RFP contained the following definition of "Forward Compatible" - "Project elements that are constructed so they can be integrated into the Forward Compatibility Plans provided in Appendix M2 of the Technical Requirements, without significant demolition or significant reconstruction of the elements. The Design-Builder shall demonstrate, with engineering plans and calculations, how the Project elements can be integrated into the Forward Compatibility Plans, including a discussion of how changes may impact future freeway operations and constructability." The RFP also contained the following explanation of "Forward Compatibility Plans":
Forward Compatibility Plans - The Forward Compatibility Plans modify the existing condition by adding lanes in each direction on I-405. The Forward Compatibility Plans also add auxiliary lanes, improve interchanges in selected locations, and install an Active Traffic Management system. Although the Forward Compatibility Plans are not funded at this time, it is anticipated that the Project and each future project will include elements that are compatible with them.
8. URS and Transpo signed a Teaming Agreement effective August 29, 2011, and agreed to work with one another during the proposal phase of Project work. URS, as "Prime Consultant, " was to " prepare those portions of the proposal relating to and perform the work entailed in, matters described in Exhibit B, subject to the assignment of such additional responsibility by mutual agreement between Team Members from time to time. " Transpo's scope of work under the Teaming Agreement was identified in Exhibit B to the Teaming Agreement. Transpo was identified as the "lead" for " MOT [maintenance of traffic]/staging/signal/signing/striping. " Transpo's work related to MOT, staging, signal and striping is not at issue in this litigation.
9. In August of 2011, Flatiron established a Task Force to review and evaluate WSDOT's RFP in preparation for submission of a response to the RFP.
10. On October 21-22, 2011, representatives of design team members and subcontractors participated in "Estimating Workshops" for the Flatiron proposal. At the workshops assignments were made among design team members to begin developing information for use by Flatiron and its subcontractors in pricing the construction work contained in the proposal. After the workshops, a spreadsheet of "Summary Action Items" was distributed by Flatiron to the participants. The spreadsheet contains an action item for Transpo's traffic engineers Merrill and Binder stating: " create sign structure matrix including, cantilever, bridge and tolling structures, provide type, station and location in x-section. " The spreadsheet contains an action item for URS's roadway engineers Mudayankavil and Hansen stating: " After creating sign structure matrix, cut x-sections at specific locations, evaluate for feasibility. " The spreadsheet contains an action item stating: " Develop basic design parameters for sign bridges (lengths, leg heights and location in cross section) and draw into xsections, " no person was identified as responsible for this action item.
11. On October 27, 2011, Mr. Binder forwarded to Hansen and Mudayankavil a partial signage matrix, which listed the stations of all the signs Transpo had identified as required on the Project. Binder requested in his October 27, 2011 email that Hansen and Mudayankavil provide him with cross-sections along the roadway at stations Transpo had identified. Binder stated: " We are going through and populating the rest of the spreadsheet now for foundation types, and, based on your [URS's] crosssections, [we] will estimate structure length and elevations. "
12. On October 28, 2011, Mr. Hansen of URS "cut" and forwarded cross-sections to Mr. Binder at Transpo, copying Mr. Mudayankavil at URS. Hansen stated in his email: " Attached are the cross-sections cut for the sign structures. "
13. On November 3, 2011, WSDOT issued Addendum No. 16 to the RFP. Addendum No. 16 added language to Section 2.19.4.1.1 of the RFP requiring that " all overhead sign structures shall be forward compatible if shown on the Forward Compatibility Plans (Appendix M2). "
14. On November 7, 2011, Transpo's Merrill emailed three file attachments relating to "I-405 Sign Structures (RFI 31)" to Hart Crowser, KPFF and URS.
15. URS provided additional cross-sections requested by Transpo on November 8, 2011, November 11, 2011 and November 14, 2011.
16. Flatiron delivered its bid proposal to WSDOT on December 19, 2011. On January 6, 2012, WSDOT revealed bid results; the Flatiron Design-Build Team was the successful bidder.
17. On January 25, 2012, Flatiron and URS entered into a Standard Subcontract for Design Services. The Standard Subcontract for Design Services bears an effective date of August 15, 2011.
18. On February 28, 2012, URS and Transpo entered into a Master Subcontract for Services. The Master Subcontract bears an "effective date" of October 24, 2011.
19. Transpo's scope of work under the Post-Award phase of the Project was defined in a Work Order entered on March 8, 2012 with URS. Pursuant to URS/Transpo Work Order # 267372, Transpo agreed to " provide all professional supervisory and technical personnel, services, equipment, materials and supplies necessary to prepare and provide the traffic, signal, signing, pavement marking and MOT design for the Project. " Signing design submittals were identified as " Preliminary Design Submittal (2.19.5.1) " and " Permanent Signing Plans (Final Design Submittal) (2.19.5.2). " Transpo's "Assumptions" stated "Geotechnical work and foundation design to be provided by others;" and "Structural design, including structural design of sign gantries, to be provided by others."
20. In the spring of 2013, the design team discovered that eight overhead sign structures that had been released for construction were not forward compatible.
21. On March 28, 2013, the design team issued a Field Design Change/Notice of Design Change indicating that eight sign structure designs that had been released as "Ready for Construction" were being re-designated as "Not for Construction Design."
22. Flatiron asserted a claim against URS as a result of the failure of certain sign structures to meet Forward Compatibility requirements contained in the Project Contract Documents.
23. URS has tendered Flatiron's claim to Transpo and Transpo has refused to accept full responsibility for the claim. URS has withheld payments from Transpo.

III. CREDIBILITY OF THE WITNESSES

The following fact witnesses testified at trial: Mindy Steckmest, Garth Merrill, Shane Binder, Jacob Fullington, Erik Hansen, Jeremy Chin and Paul Mayo. The Court finds that all of these witnesses were credible. Their answers during testimony were complete and appeared to be honest, and their demeanor and behavior on the witness stand leads the Court to conclude that they were truthful, credible witnesses. See Singh-Kaur v. INS, 183 F.3d 1147, 1151 (9th Cir. 1999) ("We give special deference' to a credibility determination that is based on demeanor.").

Weight is given to the [] judge's determinations of credibility for the obvious reason that he or she "sees the witness and hears them testify, while the Board and the reviewing court look only to cold records." All aspects of the witness's demeanor - including the expression of his countenance, how he sits or stands, whether he is inordinately nervous, his coloration during critical examination, the modulation or pace of his speech and other nonverbal communication - may convince the observing trial judge that the witness is ...

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