United States District Court, N.D. California
ORDER DENYING PB&A'S MOTION FOR SUMMARY
JUDGMENT RE BALFOUR BEATTY'S CONTRACT CLAIMS AND GRANTING
PB&A'S MOTION FOR SUMMARY JUDGMENT ON LIABILITY RE
PB&A'S COUNTER-CLAIM DKT. NO. 109
William H. Orrick United States District Judge.
case involves disputes arising out of construction of the
Transbay Transit Center in San Francisco. Balfour Beatty
Infrastructure Inc. (“BBII”) has brought claims
against PB&A, Inc., for breach of contract. PB&A
argues that BBII's claims should be dismissed under the
doctrine of judicial estoppel because BBII took clearly
inconsistent positions in prior litigation with other parties
involved in the Transbay project and should not be permitted
to change its position now. Alternatively, it argues that
under California Code of Civil Procedure section 877 it may
offset the $20 million in settlement awards that BBII
received, through mediation with other parties involved in
the Transbay construction project, against the $18 million in
damages BBII claims in this case. Since the offset amount is
greater than BBII's potential damages against PB&A,
PB&A argues that BBII's claims should be dismissed.
For the reasons outlined below, PB&A's arguments are
not convincing: PB&A has failed to demonstrate that BBII
took a clearly inconsistent position in the prior litigation
and section 877 is not applicable to the contract claims
brought against PB&A. PB&A's motion for summary
judgment on BBII's contract claims is DENIED.
also moves for summary judgment on its counter-claim for
approximately $100, 000 in unpaid fees against BBII. There is
no material dispute that BBII has not paid PB&A all of
the fees owed under the contract between the parties.
However, since BBII may be entitled to set off these damages
if it succeeds on its claims against PB&A, whether
PB&A is entitled to any damages cannot yet be determined.
PB&A's motion for summary judgment on its
counter-claim is GRANTED with regard to liability. The
damages on PB&A's claim will be determined at trial.
Transbay Transit Center
Transbay Transit Center is a transit hub and development
project located in downtown San Francisco developed by the
Transbay Joint Powers Authority (“TJPA”). The
architect for the Center was Pelli Clark Pelli Architects
(“PCPA”). PCPA contracted with Arup North America
(“ARUP”) to be the Engineer of Record for the
overall project. TJPA retained URS to peer review the
project's design and retained Webcor/Obayashi Joint
Venture (“WOJV”) to be the general contractor for
the project. Given the large scope of the project, WOJV
divided construction of the Center into major scopes of work.
The first scope of work was the Buttress, Shoring, and
Excavation (“BSE”) package which required a
prospective subcontractor to design and build the Internal
Bracing to prevent movement of the Cement Deep Soil Mix
(“CDSM”) Wall that formed the perimeter of the
project site during construction and to design and build an
Access Trestle to allow access to the work site.
August 2010, PB&A contacted BBII to offer its services to
be BBII's designer and engineer of record on a bid for
the BSE package. Oppo. Ex. B3 at 14:8-14 (Dkt. No. 119-4). On
August 16, 2010, BBII provided PB&A with the prime
contract specifications for the Internal Bracing and Access
Trestle and asked PB&A to prepare preliminary designs for
these elements. Mot. Ex. E. (Dkt. No. 110-8); Oppo. Ex. B4
(Dkt. No. 119-5). BBII's project engineer, Gardner, used
some of PB&A's design work and incorporated it into
his preliminary designs in preparing BBII's bid. Mot. Ex.
D at 91:1-93:1, 99:2-4 (Dkt. No. 110-7). PB&A accompanied
BBII during an initial meet and greet with TJPA, WOJV, and
San Francisco to discuss the design concepts. Mot. Ex. G,
¶3 (Dkt. No. 110-10). BBII won the BSE bid and
contracted with PB&A to complete the design-build
elements. BBII Oppo. Ex. B1 at 37:3 - 38:2; 62:3-17. PB&A
was BBII's Engineer of Record on the project.
prepared its interior bracing design, relying on the
specifications prepared by URS and ARUP. Mot. Ex. H at
17:5-18:10; Brokken Dep. Tr., Mot. Ex. I at 36:12-14. BBII
submitted PB&A's Internal Bracing design to WOJV on
April 22, 2011 and it was accepted and approved on June 2,
2011. Mot. Ex. J. After excavation and installation of the
Internal Bracing system in Zone 1 began, the CDSM wall began
to leak and move more than was permitted under the contract.
WOJV and TJPA made various claims why the wall might be
moving, including that there was a flaw in the bracing
design. Mot. Ex. K at 2; Ex. A at 1-6. BBII responded to this
claim by noting that it had limited knowledge regarding a
potential flaw in the bracing design as it did not design the
CDSM wall, but highlighted that “all of the loading
requirements are specified in the contract documents and
BBII's approved bracing design utilized these loads as
directed in the contract” and that “at no point
throughout the submittal and approval process for the
Internal Bracing did BBII receive comments regarding this
issue.” Mot. Ex. L (Dkt. No. 110-15). WOJV and TJPA
directed BBII to mitigate the wall movement in Zone 1 and
re-design the Internal Bracing system for Zone 4 by
connecting the walers and making the walers continuous. Mot.
Ex. M; Oppo. Ex. B9 at 31:23-33:16 (Dkt. No. 119-10). BBII
resolved the issues in Zone 1 by connecting the CDSM wall
soldier piles. Oppo. Ex. B3 (Dkt. No. 119-4). PB&A
re-designed the Internal Bracing wall for Zone 4 per WOJV and
TJPA's instructions, which resolved the movement issue.
Oppo. Ex. B9 at 31:23-33:16.
Access Trestle Specification provided by TJPA incorporated a
seismic criteria included in the bridge design which stated
that “design loads shall include design for an
earthquake corresponding to a ground motion with a 10%
probability of exceedance in 50 years (475-year
earthquake).” Oppo. Ex. B36 (Dkt. No. 119-35). BBII and
PB&A's initial design for the Access Trestle was not
able to meet this seismic requirement. Because the design did
not meet the seismic requirements of the specification,
during construction TJPA rejected the Access Trestle design
and BBII and PB&A were required to revise and redesign
the Access Trestle. Oppo. Ex. B12; Ex. B11 (Dkt. No. 119-13;
Contractual Claims Process
prime contract on the Transbay project included a claims
process whereby BBII had a limited time to submit any Change
Order Request (“COR”) to preserve the right to
seek additional money and contractual payments related to an
“occurrence.” Oppo. Ex. B13 at 36 (Dkt. No.
119-14). With the advice and cooperation of PB&A, BBII
submitted CORs and claims to WOJV and TJPA regarding extra
costs incurred in resolving the issues with the Internal
Bracing, Oppo. Ex. B6 at 70:9-72:9, and submitted a COR and
claim with regard to costs incurred redesigning the Access
Trestle design, Oppo. Ex. B6 at 45:22-47:16. In making these
claims BBII took the position that BBII's and
PB&A's Internal Bracing design met the contractual
specifications, Mot. Ex. N at 2, and that the TJPA had
required BBII to revise its Access Trestle design beyond the
clear requirements of the contract. BBII certified that each
of these claims was made in good faith and was accurate to
the best of BBII's knowledge. Mot. Ex. Q (Dkt. No.
110-19; 110-20). PB&A in turn certified the substantive
basis of these claims to BBII. Oppo. B14 (Dkt. No. 119-15).
October 23, 2012, DND Construction (“DND”), a
subcontractor for BBII who built the CDSM wall, filed suit
against BBII in Superior Court for the County of San
Francisco seeking unpaid construction costs associated with
building the CDSM wall. Oppo. Ex. B15 (Dkt. No. 119-16). BBII
filed a cross-complaint against WOJV for the same amounts
claimed by DND and for declaratory action against TJPA. Oppo.
B17 (Dkt. No. 119-18). It also brought claims against WOJV
based on the unresolved certified claims. Id. WOJV
filed a cross-complaint against BBII asserting that
BBII's claims against WOJV should be asserted as
pass-through claims against TJPA. Oppo. Ex. B18 (Dkt. No.
119-19). Given the number of claims and legal issues, WOJV
and TJPA decided to try to resolve the claims through an
alternative dispute resolution process with the Disputes
Review Board (“DRB”). Oppo. Ex. B7. Because a DRB
was not part of the original prime contract, it took WOJV and
TJPA some time to revise the prime contract to provide for a
DRB. Id. Neither BBII nor DND was a party to the DRB
Agreement reached between WOJV and TJPA but BBII was allowed
to participate in selecting a DRB panel. Oppo. Ex. B19 (Dkt.
No. 119-20). All the parties agreed to stay the DND
litigation to focus on the DRB proceedings and the case was
stayed on May 22, 2013. Oppo. Ex. B20; Ex. B21 (Dkt. No
Process was voluntary, the DRB's recommendations were to
be non-binding, any recommendations from the DRB regarding
CDSM wall movement were agreed to be non-admissible in any
future proceedings and attorneys were not permitted to speak.
Oppo. Ex. B19. BBII and PB&A worked together to prepare
written materials and presentations to be made at the DRB
proceeding. Oppo. Ex. B7 at 103:22-104:20; 108:2-109:1.
PB&A was required to assist BBII in this process per the
parties' Professional Services Agreement
(“PSA”), which states at section 2.3.11 that
“Engineer shall advise the trade contractor (BBII) and
prepare to serve as a witness in connection with any dispute
resolution procedure set forth in the Contract or any other
public hearing, arbitration or legal proceeding relating in
any way to Engineer's services.” Oppo. Ex. B2
¶ 2.3.11 (Dkt. No. 119-3). BBII directed PB&A not to
communicate with TJPA or WOJV because the PSA required
PB&A to route any communications directed at TJPA or WOJV
through BBII. Oppo. Ex. B2 ¶ 2.1.3.
met on November 13-14, 2013 to hear presentations regarding
various aspects of the Transbay project, including the CDSM
wall movement. Oppo. Ex. B7 at 78:18-23. At the DRB, Gardner,
from BBII, and VAK, an expert BBII had retained, made
presentations regarding the CDSM wall movement. Mot. Ex. BB
at 111:21-113:3. PB&A's representative, Qing Liu,
also participated in the process and was asked questions
regarding the CDSM wall following Gardner's presentation.
Oppo. Ex. B9 at 64:3-66:14. The DRB issued a recommendation
regarding the CDSM wall movement on February 14, 2014,
concluding that BBII was not entitled to additional
compensation for the Zone 1 and Zone 4 re-designs and that
PB&A's Internal Bracing design had failed to prevent
CDSM wall movement. Oppo. Ex B7 at 70:17-71:8. BBII rejected
the DRB recommendation and withdrew from the DRB process.
Oppo. Ex. B22 (Dkt. No. 119-23).
PB&A Tolling Agreement
BBII's withdrawal from the DRB proceedings it sent
PB&A a proposed tolling agreement to preserve claims it
had against PB&A. Oppo. Ex. B23 (Dkt. No. 119-24).
PB&A retained counsel who proposed a Common Interest
Agreement that included a tolling provision. Oppo. Ex. B24
(Dkt. No. 119-25). This Agreement acknowledged,
“Although the undersigned Counsel and their respective
Clients believe that there may be certain areas in which they
presently or in the future may have divergent or opposing
positions, there is a mutuality of interest in a common and
joint prosecution and defense of the ...