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Nippo Corporation/International Bridge Corporation v. Amec Earth & Environmental

March 30, 2011

NIPPO CORPORATION/INTERNATIONAL BRIDGE CORPORATION, PLAINTIFF/COUNTERDEFENDANT,
v.
AMEC EARTH & ENVIRONMENTAL, INC. DEFENDANT/COUNTERCLAIMANT.



The opinion of the court was delivered by: Rufe, J.

MEMORANDUM OPINION AND ORDER

This matter involves claims and counterclaims arising from a construction subcontract between Plaintiff Nippo Corporation/International Bridge Corporation ("the Joint Venture") and Defendant and Counterclaimant AMEC Earth and Environmental, Inc. ("AMEC"). Before the Court is a motion by AMEC to strike portions of a declaration by the Joint Venture's asphalt expert Richard Root [doc. no. 90]. Additional motions for partial summary judgment are also pending before this Court. For the reasons that follow, the Court will grant AMEC's motion to strike.

I. F ACTUAL AND P ROCEDURAL B ACKGROUND

In November 2003, AMEC entered into a prime contract with the United States government through the Air Force Center for Engineering and the Environment for various construction projections, including work at the Andersen Air Force Base in Guam. *fn1 On September 27, 2004, the Air Force issued Task Order 0013, which included demolition, removal and replacement of the north runway at Andersen (the "Project"). *fn2 In April 2005, following a competitive bidding process, AMEC awarded the Joint Venture a subcontract to carry out the Project for a fixed price of $21,293,061. *fn3 The Project involved removal of the existing asphalt runways and their replacement with portland cement concrete pavement, installation of asphalt at taxiway tie-ins, runway shoulders and overruns, and removal and reinstallation of runway lighting fixtures. *fn4 Due to a series of problems with availability the materials required for the project, the subcontract's specifications, and installation and completion of the Project's various components, the initial scheduled completion date of April 26, 2006 was extended to June 29, 2006, and the project was ultimately completed ten months later on May 31, 2007. *fn5 The Parties dispute which Party bears the fault for the problems that led to delays, whether the corrective action required by AMEC was economically wasteful, and whether the Joint Venture may recover resultant delay and other damages.
The Joint Venture alleges seven counts of breach of contract, each involving a different and specific aspect of the Project, and an eighth count for consequential damages. Count 2 of the Complaint arises from the subcontract's hot mixed asphalt ("HMA") specifications, which the Joint Venture alleges were defective. Specifically, the Joint Venture claims that the requirement that the HMA meet a 13% "voids in mineral aggregate" *fn6 ("VMA") standard was impossible to satisfy using locally available aggregate, and that the standard was unnecessary in a tropical environment. *fn7 Count 7 seeks equitable adjustment of the fixed price contract to account for compensable performance delays and to adjust the term of the subcontract for excusable delays for which AMEC is allegedly improperly assessing $837,500 in liquidated damages, or $2,500 per day of work required beyond the extended completion date. *fn8 A portion of Claim 7 involves delays resulting from the allegedly defective HMA specifications. The Joint Venture asserts total losses associated with the claims in an amount nearly equal to the initial subcontract price-more than $17 million. *fn9 Of that amount, the Joint Venture attributes at least $1.7 million in damages due to purportedly defective HMA specifications and related damages. *fn10

AMEC has filed counterclaims seeking a declaratory judgment pursuant to 28 U.S.C. § 2201 and Rule 57 of the Federal Rules of Civil Procedure that AMEC is entitled to deduct $837,500 in liquidated damages from any amounts owed to the Joint Venture. *fn11 AMEC also seeks attorneys' fees and expenses associated with defending against the Joint Venture's allegedly false and overstated claims, including demands for payment by the Air Force. *fn12

This Court's December 14, 2009 and March 24, 2010 case management orders set the discovery deadlines in this case: (1) fact discovery closed on February 16, 2010, and the Joint Venture was required to serve its affirmative expert reports by that date; (2) AMEC was required to serve its expert reports, including rebuttal reports, by March 29, 2010; (3) all expert depositions were to be completed by May 21, 2010; and (4) dispositive motions were to be filed by May 28, 2010. *fn13

On February 15, 2010, the Joint Venture served its asphalt expert Richard E. Root's report regarding the HMA aspect of the subcontract. *fn14 In that report, Root opined that it was impossible to meet the allegedly excessive voids-in-mineral-aggregate standard set forth in the subcontract's specifications by using only aggregate available on Guam. *fn15 He also asserted that no project on Guam had ever met that standard. *fn16 On March 29, 2010, AMEC served the report of its expert, M.W. Witzcak, which did not address any of Root's assertions regarding impossibility. *fn17

On April 13, 2010, AMEC deposed fact witness William Toelkes, the President of International Bridge Corporation ("IBC"), a member of the Joint Venture. *fn18 During that deposition, Toelkes testified that IBC had met the same VMA standard in a prior housing construction project on Guam by using only locally available aggregate. *fn19 On April 28, 2010, Root submitted his report in rebuttal to the Witzcak expert report. *fn20 Root's rebuttal report did not address Toelkes's testimony regarding purportedly compliant HMA using only local aggregate or any other issues regarding whether meeting the VMA standard was possible. *fn21 This is because, according to Root, Toelkes's testimony did not change Root's view that no previous project had met the HMA requirement, and none of AMEC's experts rebutted or contradicted Root's opinions as to impossibility or indicated they intended to rely on Toelkes's testimony at trial. *fn22 Root was deposed on May 12, 2010, and during that deposition testified, consistent with this initial report, that no contractor in Guam has ever met the VMA requirements. *fn23 During the deposition, Root was questioned by AMEC regarding Toelkes's assertion that IBC had met the VMA requirement. *fn24

On June 11, 2010, three weeks after the close of all expert discovery, AMEC filed a motion for partial summary judgment [doc. no. 80]. In that motion, AMEC seeks partial summary judgment as to the HMA claim and the portion of Count 7 that was attributable to delays resulting from the difficulties in designing a compliant asphalt mix. *fn25 AMEC asserts that undisputed facts show that the Joint Venture could have designed compliant HMA, but failed to do so and thus breached the contract, rendering its claims for damages associated with the HMA meritless. *fn26 The Joint Venture responded that it was not responsible for the failure to produce a compliant HMA because it was impossible to meet AMEC's VMA specification using only local aggregate. *fn27 The challenged Root declaration, dated July 1, 2010, was included as an exhibit to the Joint Venture's response in opposition to AMEC's motion for summary judgment as to the HMA claim as evidence in support of the Joint Venture's contention of impossibility. *fn28

In the challenged declaration, Root reiterated that AMEC's HMA specifications "simply could not be met using aggregate that is locally available on Guam," that the "VMA requirement is not necessary or helpful in a tropical location such as Guam," and that he was "unaware of any HMA work on Guam that has ever met the HMA specifications AMEC selected for the Project." *fn29 Root also asserted that Toelkes's belief that IBC had previously met the same VMA specification for the housing project was mistaken because it was based on a flawed report by Geo-Engineering. Geo-Engineering tested the HMA mix for the housing project. *fn30 Root's declaration stated:

While Mr. Toelkes of IBC now apparently claims to have developed an HMA mix design that would have met AMEC's specifications for the Project, Mr. Toelkes' claim is based upon an erroneous report from Geo Engineering. I have obtained a copy of the test results from Geo Engineering purporting to show that IBC had met the Project's HMA specifications on subsequent work IBC performed for a housing project. The Geo Engineering test results upon which Mr. Toelkes relied incorporates [sic] incorrect data. In order to measure VMA, test samples have to be measured against data from the aggregate that was used to make the HMA. Geo Engineering used data from the wrong aggregate-i.e. aggregate other than the aggregate that was being tested. Even putting aside Geo Engineering's calculation error, two of the three reported VMA values for the housing subdivision fail to meet the VMA requirements for the North Runway project, and the one value that appears to meet the VMA requirement has a very low asphalt content and high air void value, which renders the VMA result invalid. *fn31

It is unclear from the record when the Joint Venture and Root received the data from Geo Engineering on which Root relied in his summary judgment declaration. An e-mail between the Parties indicates that AMEC obtained the data on March 11, 2010, informed the Joint Venture that same day that it had the data, and offered to produce it to the Joint Venture. *fn32 But Root stated during his May 12 deposition that those data had not yet been produced though he had requested them soon after learning of the Toelkes deposition. *fn33

AMEC moves to strike the "untimely and new opinions and analyses" in Root's summary judgment declaration and all references and assertions based on that declaration included in the Joint Venture's responsive papers, ...


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