Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

HDR Environmental, Operations and Construction, Inc. v. Deason

United States District Court, S.D. California

March 28, 2018

DARWIN DEASON; and DOES 1-100 inclusive Defendant.




         Pending before the Court is Defendant Darwin Deason's (“Defendant” or “Deason”) Motion to Dismiss Plaintiff HDR Environmental Operations and Contruction, Inc, 's (“HDR” or “Plaintiff”) Second Amended Complaint (“SAC”) for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. [Doc. No. 30]. HDR's SAC alleges four causes of action: (1) breach of contract, (2) money due and owing on an open book account, (3) a quantum meruit claim for work, labor and services provided, and (4) promissory fraud. After a careful review of the pleadings, relevant law, and reasons set forth below, Defendant's motion to dismiss is GRANTED IN PART and DENIED IN PART.


         This matter arises from a contract dispute. The following facts are taken from Plaintiff's SAC, the written agreement between the parties, including amendments and modifications, as well as documents in the form of written communications incorporated by reference, integral to, or explicitly relied upon in the Complaint.

         I. Factual Background

         In 2011, Deason began the demolition and reconstruction of his residence located at 1900 and 1912 Spindrift Drive (hereinafter the “Spindrift Sites”) along the La Jolla coast in the City of San Diego, California. Doc. No. 29, p2; SAC ¶ 6. HDR and Deason entered into an agreement for HDR to perform work at both sites, including the excavation, recovery and monitoring of soils containing Native American artifacts (including human remains). Id. To comply with regulations implemented by the City of San Diego, HDR proposed an Alternative Archaeological Data Recovery Mitigation Monitoring and Reporting Program (“Alternative MMRP Program”) for the excavation and analysis of a Native American habitation and burial site where the potential to encounter intact human remains was high. Doc. No.29, p20; SAC Ex 1. The Alternative MMRP Program included three main components: (1) the Archeological Data Recovery Program (ADRP), (2) a Cultural Materials Inventory Program (CMIP) and Mitigation Monitoring. Id.

         In the original proposal, dated November 14, 2011, HDR outlined work to be done under each component, identifying a project area of approximately 230 square meters of the Spendthrift Site at 1912 Spindrift Drive. Id. at 20-22. The Archeological Data Recovery (“ADR”) consisted of the excavation of 30 square meters of the approximately 206 square meters of deposits to be impacted. Id. at 20. In addition, for the portions of the site that were disturbed [by construction] or the portions that were intact and not subject to the ADRP, HDR recommended a Cultural Material Inventory Program (CMIP) be implemented. Id. at 21 .Within the project area, HDR “estimated 326m3 of sediment would be processed, either by hand or mechanically excavated. Doc. No.30-3, p10; Def's. Ex 1. Finally, HDR offered monitoring of any remaining ground disturbing construction and landscaping activities after the completion of the ADRP and CMIP phases. Doc. No.29, p22; SAC Ex 1.

         Estimating a total cost of $451, 864.76, HDR listed thirteen assumptions in which the estimated cost was based - namely:

8. …[A] total of 206 square meters of Site CA SDI-39 will be impacted by the proposed development… [o]f the …176 square meters that were subject to CMIP treatment, half (88 square meters) would require excavation to a maximum depth of 2 meters and the other half would require a maximum depth of 1 meter within the project area[1]. Id. at 24; SACEx1.

         The proposal also estimated 688 man hours of fieldwork. Id.

         The parties added the “1900 Spindrift Drive Scope of Work (“SOW”) Addendum” in which HDR assumed responsibility for CMIP treatment of 143 square meters (55.8 m3 of sediment), with compensation not-to-exceed $64, 046.20. Doc. No. 29, p.4-5; SAC19-20; Doc. No 30-3, p.6; Def's. Ex: 1. This resulted in total compensation for time and materials not-to-exceed $515, 910.96 for both sites. Doc. No. 29, p.4-5; SAC19-20.

         The Short Form Agreement (“Agreement”), attachments and addendum included, and/or referenced by incorporation, the following pertinent provisions:

Provision 12: Changes
The parties agree that no change or modification to the Agreement, or any attachments hereto, shall have any force or affect unless the change is reduced to writing, dated, and made part of this Agreement. The execution of the change shall be signed in the same manner as the Agreement. Adjustments in the period of services and in compensation shall be in accordance with applicable paragraphs and sections in this Agreement… In any event, as the project progresses, the facts developed may dictate a change in the services to be performed, which may alter the scope. ENGINEER will inform OWNER of such situations so that changes in scope and adjustments to the time of performance and compensation can be made as required. If such change, additional services, or suspension of services results in an increase or decrease in the cost of or time required for performance of the services, an equitable adjustment shall be made, and the Agreement modified accordingly.
Provision 13: Controlling Agreement
These Terms and Conditions shall take precedence over any inconsistent or contradictory provisions contained in any proposal, contract, purchase order, requisition, notice-to-proceed, or like document.
Compensation for Engineer's services under this Agreement shall be on the basis of Time and Materials not to exceed…. $515, 910.96.
… If any specified dates for the completion of Engineer's services are exceeded through no fault of the Engineer, the time for performance of those services shall be automatically extended… and all rates, measures and amounts of Engineer's compensation shall be equitably adjusted.

         On May 15, 2012, HDR submitted the 1900 and 1912 Spindrift Drive Modification Request (“Modification Request”) as a result of “changes in the construction work plan…the amount of disturbance to culturally-bearing soils…cultural data uncovered, …[and] changes in the landscape plans.” Doc 30-3, p.2; Def's. Ex: 1. HDR discusses the challenging nature of treating cultural resources and the unknown factors that can be (and were) exposed during demolition. Id. HDR noted impacts to cultural resources due to the landscaping improvements, demolition, and tree stump removal. Id. at 3-5; Def's. Ex: 1. HDR indicated that “substantial additional landscaping was undertaken” impacting and extending beyond the original expected scope requiring “unanticipated monitoring and screening… [and] result[ing] in the need for CMIP excavations, significantly increasing the cost of the overall project. ” Id. Additionally, it notes that such “improvements for the 1900 Spindrift Drive property are ongoing and may continue to change.”

         The Modification Request states that the original proposal greatly underestimated the anticipated depth of intact cultural materials and midden soils on site. Id. at 7; Def's. Ex: 1. The original 1912 Spindrift Drive SOW stipulated to the excavation of 36 cassions. However, in the Modification Request, HDR placed the number of proposed caissons at 50, with the CMIP Treatment Plan resulting in greater levels of examination and an increase of labor to 835 man hours. Id. In sum, to meet the conditions of the contracted scope of work and to recover expenses related to “out-of-scope” efforts, HDR outlined an additional cost of $66, 191.96 for treatment of an additional 24m3 at 1912 Spendrift and $93, 701.12 for examination of an additional 41.7m3 at 1900 Spindrift.. Doc 30-3, p.6, 10; Def's. Ex: 1. The new combined total compensation was “not to exceed” $675, 804.04 as confirmed by Jeff Hokanson, Vice President HDR EOC on or about May 21, 2012. Id. at 14-15; Def's. Ex: 2.

         The Modification Request concluded with the following:

Assumptions for 1900 and 1912 Construction and Cost
In order for HDR EOC to successfully complete the cultural resource recovery program for 1900 and 1912 Spindrift, it is imperative that we are able to effectively communicate landscape issues and demolition problems that have a significant impact to the existing cost structure. We believe that in order to prevent such significant changes in the future, the following assumptions/ stipulations need to be understood between both parties. If the modifications listed above are accepted, no additional changes or modification requests will be made unless:
a) Intact human remains or intact cultural features are found, and/or
b) It is determined by the regulators that the landscaping proposed for 1912 requires CMIP treatment.

         Further, HDR agreed:

[T]o not, under any circumstance, complete additional out-of-scope work without written approval from the client or the client's representative. If additional out-of-scope work is identified, HDR EOC will wait until a clear understanding between HDR EOC and the client is reached. Finally, HDR EOC understands that Bruce Mezan is our designated point person for vetting and approving any additional change orders.

Doc 30-3, p.12; Defs. Ex: 2.

         In late 2012, Plaintiff alleges Defendant's contractor, Sharratt Construction, disturbed significantly more soil than that outlined in the permit application and approved by the City's Planning Department in the July 2011 Final Mitigated Negative Declaration. Doc. No. 29, p.3, 4; SAC ¶¶9, 14. The volume of material to be excavated nearly doubled the amount covered by the Modification Request due to the disturbance of a much larger surface area. Id. at 5-6; SAC ¶24. HDR requested a second contract modification. Although the parties agreed during negotiation of the first modification request that HDR would not charge for additional work due to increase in depth, no agreement was reached for additional disturbed soil outside of the agreed surface area. Id. at 5; SAC ¶23. The parties were unable to reach an agreement as to the terms of the second contract modification and HDR ceased all work. Id. at 6; SAC ¶26.

         HDR returned to the Project around December 26, 2012, after being threatened with a lawsuit for delay damages, replacement costs, and punitive damages. Doc. No. 29, p.6; SAC ¶27. On February 9, 2013, Defendant's son, Doug Deason (“Doug”), spoke with Brian Hoppy (“Hoppy”), the director and Senior Vice President of HDR's Environmental Sciences and planning division. Id. at 10; SAC ¶53(c). Plaintiff alleges during the phone conversation, Doug agreed HDR should receive a second contract modification for material processed over and beyond the 290m3 identified in the original contract and stipulated modification. Id. Plaintiff further alleges that at an in-person meeting on February 19, 2013, Doug agreed to execute a second modification to process an additional 300m3. Id. at 11; SAC ¶53(b)-(d). On February 27, 2013, HDR sent a “scope and cost modification proposal” to process an additional 300m3 of soil at the 1912 Spindrift property. Doc. 30-3, p.31;Def's Ex: 7. As the terms were being negotiated, Doug urged HDR to expedite the completion of project and get them to “the finish ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.