complaint for breach of contract claim not …media.oregonlive.com/portland_impact/other/sell... ·...
TRANSCRIPT
1
2
3
4
5
6
7
8
9
IN THE CIRCUIT COURT OF THE STATE OF OREGON
FOR MULTNOMAH COUNTY
10 SLAYDEN/SUNDT, JOINT VENTURE, an Oregon corporation, Case No.
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Plaintiff,
v.
MULTNOMAH COUNTY,
Defendant.
COMPLAINT FOR BREACH OF CONTRACT
CLAIM NOT SUBJECT TO MANDATORY ARBITRATION
COMES NOW Plaintiff Slayden/Sundt, a Joint Venture, and for the causes of
action against Defendant Multnomah County, complains and alleges as follows:
I. PARTIES
1.1 Plaintiff, Slayden/Sundt, a Joint Venture (hereinafter "Plaintiff" or
"Slayden/Sundt"), is an Oregon joint venture comprised of (1) Slayden Construction
Group, Inc., an Oregon corporation doing business in Multnomah County, Oregon,
and (2) Sundt Construction, Inc., an Arizona corporation doing business in
Multnomah County, Oregon. At all times relevant to this dispute, Slayden/Sundt was
a duly registered contractor (OR License No. 186281) in good standing and
COMPLAINT FOR BREACH OF CONTRACT - 1 OLES MORRISON RINKER & BAKER LLP
701 PIKE STREET, SUITE 1700 SEATTLE, WA 98101-3930
PHONE: (206) 623-3427 FAX: (206) 682-6234
1/7/2015 4:19:08 PM15CV00400
1
2
3
4
5
6
7
authorized to do business in the State of Oregon with its principal place of business
located at 500 Willamette Ave., Stayton, OR 97383. Slayden/Sundt has performed all
necessary prerequisites to maintain this action.
1.2 Defendant, Multnomah County, is a municipal corporation and home rule
charter county of the state of Oregon.
II. JURISDICTION AND VENUE
8 2.1 This case involves claims arising from acts and/or omissions of parties
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
residing in and/or doing business in Multnomah County, Oregon. This Court has
jurisdiction over the parties pursuant to ORS § 14.030, and under the specific terms
of the parties' contract.
2.3 Venue is proper in Multnomah County pursuant to ORS§ 14.080(1 ), and
under the specific terms of the parties' contract.
Ill. FACTUAL ALLEGATIONS
A. The Project and Contract Award
3.1 On or about May 25, 2011, Slayden/Sundt and the County entered into
Contract No. 4600008713 (hereinafter the "Prime Contract") wherein Slayden/Sundt
was engaged to replace the Sellwood Bridge Main Span and Interchange (hereinafter
"the Project") in exchange for the County's payment of $151,274,496.00.
3.2 The Prime Contract incorporated portions of the 2008 Oregon
Department of Transportation ("ODOT") Standard Highway Specifications and the
ODOT CM/GC General Provisions, as modified by Multnomah County for the Project.
COMPLAINT FOR BREACH OF CONTRACT - 2 OLES MORRISON RINKER & BAKER LLP
701 PIKE STREET, SUITE 1700 SEATTLE, WA 98101-3930
PHONE: (206) 623-3427 FAX: (206) 682-6234
1 3.3 The Project plans and specifications identified several reference
2 documents which contained information for bidders to determine the subsurface 3 conditions that could be reasonably anticipated on the Project. 4
3.4 On or about February 8, 2013, Slayden/Sundt entered into a subcontract 5
6 (hereinafter the "Subcontract") with Malcolm Drilling Company, Inc. (hereinafter
7 "Malcolm") whereby Malcolm agreed to provide, among other things, the installation
8 of drilled pier support shafts for the Project. In preparing its bid and work plan,
9 Malcolm properly relied upon the subsurface soil information provided by Multnomah
10 County. 11 B. Bent 11 Differing Site Condition 12
3.5 Multnomah County provided design and soil information depicting the 13
14 expected subsurface conditions at the Project site. The information provided
15 indicated that the material surrounding the shafts would stand open during
16 construction. Based on this information, Malcolm prepared its bid, planning to install
17 the two 5' diameter Bent 11 shafts utilizing conventional "open hole" drilling methods.
18 3.6 Nothing in the contract documents indicated that the side walls of the
19
20
21
22
23
shaft would not stay open while being drilled. The Prime Contract boring logs, upon
which Malcolm reasonably relied, indicated that at Boring B-8-10 (the only available
sample taken nearest to Bent 11) course-grained material existed that would stand
open in the dry or under a water head during Malcolm's installation of shafts.
24 3. 7 During the course of installing the Bent 11 shafts, Malcolm encountered
25 soil substantially different than indicated in the contract documents. As a result of
261 I
COMPLAINT FOR BREACH OF CONTRACT - 3 OLES MORRISON RINKER & BAKER LLP
701 PIKE STREET, SUITE 1700 SEATTLE,\NA 98101-3930
PHONE: (206) 623-3427 FAX: (206) 682-6234
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
these materially different conditions, the side walls of the shaft were unable to stand
open in the dry and in fact caved in, frustrating Malcolm's use of its intended
construction method to install the shafts.
3.8 The Prime Contract specifically provides a mechanism by which
Multnomah County was to compensate Slayden/Sundt in the event actual conditions
materially differ from those indicated in the contract documents. Contract
Specification 00140.40, titled "Differing Site Conditions," defines a differing site
condition ("DSC") and outlines the parties' obligations upon the discovery of a DSC:
The following constitute differing Project Site conditions, provided such conditions are discovered at the Project Site after commencement of the Work:
• Type 1 - Subsurface or latent physical conditions that differ materially from those indicated in the Contract Documents, or
• Type 2 - Unknown physical conditions of unusual nature that differ materially from those ordinarily encountered and generally recognized as inherent in the Work provided for in the Contract.
The party discovering such a condition shall promptly notify the other party, in writing, of the specific differing conditions before they are disturbed and before the affected Work is performed. The Contractor shall not continue Work in the affected area until the Engineer has inspected such condition according to 00195.30 to determine whether an adjustment to GMP or Contract Time is required. ·
Payment adjustments due to differing Project Site conditions, if any, will be made according to 00195.30. Contract Time adjustments, if any, will be made according to 00180.80.
COMPLAINT FOR BREACH OF CONTRACT - 4 OLES MORRISON RINKER & BAKER LLP
701 PIKE STREET, SUITE 1700 SEATTLE, WA 98101-3930
PHONE: (206) 623-3427 FAX: (206) 682-6234
1 3.9 Malcolm's work was significantly impacted by the differing subsurface 2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
soil conditions. · Due to the materially different conditions actually encountered,
Malcolm was forced to change its installation method, which created delay and
increased costs for equipment, time, and materials.
3.10 Pursuant to the terms of its Subcontract, Malcolm timely notified
Slayden/Sundt of the differing site conditions at Bent 11 and timely provided a claim
for additional contract time and costs. Pursuant to terms of the Prime Contract,
Slayden/Sundt timely and properly submitted Malcolm's claim to Multnomah County
for review and compensation.
3.11 Multnomah County has improperly denied Malcolm's claim in its entirety.
C.. Bent 5, Shaft 5-4 Unexpected Obstructions
3.12 In addition to the DSC encountered at Bent 11, Malcolm encountered
unexpected subsurface obstructions while installing a 1 O' diameter shaft (Shaft 4) at
Bent 5. Based on the geotechnical information provided by Multnomah County,
Malcolm planned, as part of the pile installation process, to first install a permanent 3
meter diameter casing for Shaft 5-4. While installing the casing for Shaft 5-4 at a
depth of more than 200' below the deck of its temporary work trestle and
approximately 60' below the water table, Malcolm twice encountered unexpected
subsurface obstructions believed to be boulders.
3.13 The unexpected subsurface obstructions seriously damaged Malcolm's
equipment. Additionally, Malcolm was forced to make substantial changes to its
planned equipment and tooling, which significantly decreased the rate of
COMPLAINT FOR BREACH OF CONTRACT - 5 OLES MORRISON RINKER & BAKER LLP
701 PIKE STREET, SUITE 1700 SEATTLE, I/VA 98101-3930
PHONE: (206) 623-3427 FAX: (206) 682-6234
1
2
3
4
5
6
7
8
advancement. For example, Malcolm's original plan and schedule contemplated that
the installation of each shaft at Bent 5 would take 10 days to accomplish. However,
as a result of the unexpected subsurface obstructions, it took Malcolm 50 days to
complete Shaft 5-4. This. resulted in Malcolm incurring significant additional costs
and time not contemplated at the time Malcolm submitted its bid.
3.14 The contract documents contained no indication that Malcolm would
encounter subsurface obstructions at this elevation that would cause it to alter its
9 work plan. Specifically, the Prime Contract's boring logs, upon which Malcolm
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
reasonably relied, gave no indication that subsurface obstructions of the type and
nature encountered existed at borings SEL 33-11 and SEL 52-11 (samples taken
nearest to Bent 5).
3.15 In addition to its DSC clause described in Paragraph 3.8, above, the
Prime Contract required Multnomah County to compensate Slayden/Sundt in the
event it or its subcontractors encountered unexpected obstructions while installing the
drilled shafts. Contract Specification Section 001512.43(d), titled "Unexpected Drilled
Shaft Obstructions," provides:
Remove any natural or manmade object encountered that was not revealed by the Agency's site investigation, and that would cause a significant decrease in the rate of advancement if removed using the techniques and equipment used successfully to excavate the shaft. The Engineer will be the sole judge of the significance of any reduced rate of shaft advancement and the classification of any unexpected obstructions. Removal of unexpected obstructions from the shaft excavation will be paid as Extra Work.
COMPLAINT FOR BREACH OF CONTRACT - 6 OLES MORRISON RINKER & BAKER LLP
701 PIKE STREET, SUITE 1700 SEATTLE,\IVA 98101-3930
PHONE: (206) 623-3427 FAX: (206) 682-6234
1
2
3.16 Pursuant to the terms of its Subcontract, Malcolm timely notified
Slayden/Sundt of the unanticipated obstructions I differing site conditions at Bent 5 3 and timely provided a claim for additional contract time and costs. Pursuant to the 41 5
6
7
8
terms of the Prime Contract, Slayden/Sundt timely and properly submitted Malcolm's
claim to Multnomah County for review and compensation.
3.17 Multnomah County has improperly denied Malcolm's claim in its entirety.
IV. CAUSES OF ACTION
9 A. First Claim for Relief: Breach of Contract
1 o 4.1 Slayden/Sundt incorporates the allegations contained in the preceding
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Paragraphs 1.1-3.17 above as though fully set forth herein.
4.2 Slayden/Sundt entered into a valid and enforceable written contract with
Multnomah County wherein Slayden/Sundt agreed to perform (or to engage other
subcontractors to perform on its behalf) certain specified construction related services
in exchange for payment by Multnomah County for those services. This included the
"Differing Site Condition" clause and the "Unexpected Drilled Shaft Obstructions"
clause, both of which entitled Slayden/Sundt to be compensated if it or its
subcontractors encountered conditions materially different to those indicated in the
contract documents.
4.3 Pursuant to the Prime Contract, Slayden/Sundt and its subcontractors
timely commenced the performance of the Project work.
4.4 Multnomah County has neglected, failed, or refused to pay for additional
work in accordance with the Differing Site Conditions clause and the Unexpected
COMPLAINT FOR BREACH OF CONTRACT - 7 OLES MORRISON RINKER & BAKER LLP
701 PIKE STREET, SUITE 1700 SEATTLE,VVA 98101-3930
PHONE: (206) 623-3427 FAX: (206) 682-6234
1 i Drilled Shaft Obstruction clause, even though Slayden/Sundt complied with all
2
3
4
5
6
7
8
contractual requirements and despite Slayden/Sundt's demand for payment.
4.5 The foregoing actions and inactions on the part of Multnomah County
constitute a breach of the parties' Prime Contract. As a direct and proximate result of
said breac;h, Slayden/Sundt has been damaged in an amount to be proved at trial, but
in no event less than $1,546,408.55, plus interest, costs and attorneys' fees as
allowed by law.
9 8. Second Claim for Relief: Quantum Meruit
1 o 5.1 Slayden/Sundt incorporates the allegations contained in the preceding
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Paragraphs 11.-4.5 above as though fully set forth herein.
5.2 Alternatively, Slayden/Sundt is entitled to recover from the County in
Quantum Meruit on the basis that:
a. Slayden/Sundt or its subcontractors furnished valuable labor,
materials, equipment and/or supplies on the Project for the benefit
of Multnomah County;
b. Said services were performed with the actual knowledge of
Multnomah County, or the actual knowledge of the agents of
Multnomah County;
c. Multnomah County accepted, used and enjoyed said services and I
the value of Multnomah County's real property was increased by
said services;
COMPLAINT FOR BREACH OF CONTRACT - 8 OLES MORRISON RINKER & BAKER LLP
701 PIKE STREET, SUITE 1700 SEATTLE, VI/A 98101-3930
PHONE: (206) 623-3427 FAX: (206) 682-6234
1 d. Said services were performed under circumstances that
2 reasonably notified the County that Slayden/Sundt expected to be 3
paid for the same. 4
5.3 As a ·result of the foregoing, Slayden/Sundt is entitled to just 5
6 compensation based on Quantum Meruit in an amount to be proven at trial but in no
7 event less than a reasonable value of Slayden/Sundt's materials and services.
8 c. Third Claim for Relief: Unjust Enrichment
g 6.1 Slayden/Sundt incorporates the allegations contained in the preceding
10 Paragraphs 1.1-5.3 above as though fully set forth herein.
11 6.2 Alternatively, Slayden/Sundt is entitled to recover from Defendant 12
1 Multnomah County for unjust enrichment on the basis that: 13
a. Slayden/Sundt or its subcontractors supplied valuable labor, 14
15 materials, equipment and/or supplies for the Project for the benefit
16 of Multnomah County;
17 b. Multnomah County appreciated and had knowledge it was
18 receiving the benefit of Slayden/Sundt's work yet failed to pay for
19 said benefits; 20 c. It would be inequitable for Multnomah County to retain said 21
benefits without paying for their value. 22
23 6.3 Multnomah County was unjustly enriched and should be required to pay
24 . the reasonable value of the benefits conferred by Slayden/Sundt in an amount to be
25 proven at trial.
26
COMPLAINT FOR BREACH OF CONTRACT - 9 OLES MORRISON RINKER & BAKER LLP
701 PIKE STREET, SUITE 1700 SEATTLE,\/\/A 98101-3930
PHONE: (206) 623-3427 FAX: (206) 682-6234
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
v. PRAYER FOR RELIEF
WHEREFORE, based on the foregoing, Slayden/Sundt prays for relief against
Defendant Multnomah County as follows:
1. That pursuant to . Slayden/Sundt's First Claim for Relief (Breach of
Contract):
a. Slayden/Sundt be awarded damages against Multnomah County
in an amount to be proven at trial, but in no event less than
$1,546,408.55;
b. Slayden/Sundt be awarded pre- and post-judgment interest as
allowed by law;
C. Slayden/Sundt be awarded reasonable attorney fees and costs as
allowed by law.
2. That pursuant to Slayden/Sundt's Second Claim for Relief (Quantum
Meruit):
a. Slayden/Sundt be awarded its damages in Quantum Meruit in an
amount to be proven at trial, but in no event less than a
reasonable value of Slayden/Sundt's materials and services, plus
interest.
b. Slayden/Sundt be awarded reasonable attorney fees and costs as
allowed by law ..
3. That pursuant to Slayden/Sundt's Third Claim for Relief (Unjust
Enrichment):
COMPLAINT FOR BREACH OF CONTRACT-10 OLES MORRISON RINKER & BAKER LLP
701 PIKE STREET, SUITE 1700 SEATILE, WA 98101-3930
PHONE: (206) 623-3427 FAX: (206) 682-6234
1 a. Slayden/Sundt be awarded its damages an amount to be proven
2 at trial, but in no event less than a reasonable value of the 3
benefits conferred upon Multnomah County by Slayden/Sundt, 4
plus interest. 5
6 b. Slayden/Sundt be awarded reasonable attorney fees and costs as
7 allowed by law.
8 4. For leave of Court to amend this Complaint for new causes of action
9 based on facts that may arise in discovery, or for such other proof as may arise; and
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
5. For any such other and further relief as the Court deems just and
equitable.
Dated this 7th day of January, 2015.
By: s/ Jason R. Wandler Jason R. Wandler, OSBA 116556 Alix K. Schroeder, OSBA 144258 OLES MORRISON RINKER & BAKER LLP [email protected] [email protected] Attorneys for Plaintiff Slayden/Sundt, a Joint Venture
4838-8207-1840, v. 2
COMPLAINT FOR BREACH OF CONTRACT - 11 OLES MORRISON RINKER & BAKER LLP
701 PIKE STREET, SUITE 1700 SEATILE, WA 98101-3930
PHONE: (206) 623-3427 FAX: (206) 682-6234