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WILLIAMS ENTERPRISES v. STRAIT MFG. & WELDING

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA


January 4, 1990

WILLIAMS ENTERPRISES, INC., Plaintiff and Cross-Defendant,
v.
STRAIT MANUFACTURING & WELDING, INC., et al., Defendants. STRAIT MANUFACTURING & WELDING, INC., Third Party Plaintiff and Cross-Defendant, v. THE SHERMAN R. SMOOT CO., Third Party Defendant and Cross-Plaintiff

The opinion of the court was delivered by: PARKER

MEMORANDUM OPINION

 INTRODUCTION

 In this proceeding, the Court is faced with disputed claims of three corporate litigants covering payment of delay damages arising from the construction of an addition to a public school building in Washington, D.C. At a bench trial, full consideration was given to the testimony of the various witnesses for the parties, their credibility was carefully assessed, and the numerous documents supporting their testimony were reviewed.

 The Court determines that cross-plaintiff The Sherman R. Smoot Co. ("Smoot"), has proved by a preponderance of credible evidence that it should prevail and be awarded damages against Williams Enterprises, Inc. ("Williams") and Strait Manufacturing & Welding, Inc. ("Strait").

 Pursuant to Rule 52, Fed.R.Civ.P., the Court enters Findings of Fact and Conclusions of Law as follow.

 FINDINGS OF FACT

 A.

 (1) This negligence and breach of contract action arises from the construction of a new gymnasium and certain modernizations at the Coolidge High School ("Project") in Washington, D.C. ("District"). The prime contract for the Project was between the District and Smoot, an Ohio corporation.

 Smoot entered into a subcontract with Strait on December 15, 1983. Strait undertook to fabricate and erect the steel frame for the Project. That subcontract provided that Strait would take reasonable safety precautions. Thereafter Strait engaged Williams to undertake the steel erection on the Project.

 (2) On September 25, 1984, a steel tower assembled in the area of the Project, which was almost completed by Williams, collapsed causing 25 tons of steel to fall nearly 50 feet to the ground below. The work on the steel erection was totally interrupted. This accident was highly visible, dramatic; it was featured prominently in reports by the print and electronic media. The damaged steel was removed from the job and replaced. The new refabricated steel was delivered to the Project on December 17, 1984.

 (3) This legal action was originally brought in 1986 by Williams a second-tier steel erection subcontractor and a local corporation, against a first-tier subcontractor, Strait, a Pennsylvania corporation. Williams sought certain retention payments alleged to be due and owed by Strait. Williams had been employed to accomplish steel erection by Strait. Strait had responsibility for both fabrication and erection of the structural steel for the Project. In turn, Strait filed a third party complaint against Smoot, the prime contractor. Smoot denied the claim for retention payments. In addition, Smoot filed a counterclaim against both Strait and Williams alleging delay damages.

 In its counterclaim, Smoot sued the defendant Strait for breach of contract and negligence and the defendant Williams for negligence. Smoot claimed both delay damages, attorneys' fees, costs, and other expenses from Williams and Strait.

 (4) In July 1987, while the litigation was then pending, Williams and Strait entered into an indemnity agreement in which Williams agreed to hold Strait harmless for any responsibility for damages to Smoot arising from Smoot's claims in this action. Williams also assumed full responsibility for defense of this matter both for itself and Strait.

 B.

 (5) The prime contract was the Project awarded to Smoot by the District government in late 1983. That contract included a base bid of $ 9.4 million for the school gymnasium and established a final completion date of 900 days from the date of notice to proceed. That period was established to permit completion of all work on the Project, including the base bid and certain add-ons.

 Smoot was required to prepare a Project schedule for submission to and approval by the District. Data for this schedule were gathered by Smoot's manager, Arthur Durrah. He testified that in the process of schedule preparation, he consulted with subcontractors to verify the timing and duration of sub-elements of the work. This first project schedule, called for a computerized critical path method ("CPM") document, prepared on December 21, 1983, and approved in due course by the District.

 (6) The subcontract between Smoot and Strait contained important provisions related to this present dispute. Section 1 of the subcontract incorporated by reference all terms of the prime contract between Smoot and the District, including the scheduling requirements. Section 2 required that Strait furnish all labor, materials, and equipment to erect structural steel, steel joist, and steel deck in strict accordance with specifications. Section 6 provided that Strait prosecute the work in a prompt and diligent manner whenever such work, or any part of it, became available, or at such other time the contractor may direct, so as to promote the general progress of the entire construction, and shall not, by delay or otherwise, interfere with or hinder the work of the contractor or any other subcontractor. Strait agreed to pay to Smoot such damages as Smoot might sustain by reason of any delays.

 (7) In the original CPM, Smoot established a projected completion date of October 10, 1985, for the Project. Also indicated in the schedule was the final contract completion date required by the District, June 13, 1986. The CPM also specified a duration for each sub-activity. In the case of structural steel erection, the original CPM provided for a total duration of 40 work days. The CPM was updated periodically. A CPM revision dated September 7, 1984 (reflecting the status of the Project as of August 13, 1984, the date on which steel erection actually began) extended the permitted duration of structural steel erection from 40 work days to 45 work days on the critical path.

 C.

 (8) With respect to the September 25, 1984 steel collapse, Smoot presented expert testimony, including impressive investigative reports of the Occupational Safety and Health Administration ("OSHA"), and other reputable and creditable sources. Wholesale violations of industry and government safety standards were indicated. Williams' attorney presented no contrary evidence, and he admitted that his client did not contest that its failure to follow appropriate safety standards caused the collapse.

 (9) There is no dispute that the steel erection was on the CPM. The original schedule established for steel erection was 40 work days, expanded to 45 days as of August 13, 1984. According to daily job logs, August 13, 1984 was the day on which Williams mobilized and began steel erection, pursuant to arrangements with Smoot and Strait. Scheduled completion of structural steel as of that date was October 16, 1984.

 (10) It is generally accepted that a delay to an item on the critical path of a project will cause an equal delay to the completion of the project. To quantify delay, Smoot presented expert testimony of Barry Brower, of Brower & Associates, who measured the delay by using two alternate methods. First, he examined the Project which scheduled completion of steel erection on October 16, 1984. Actual completion of structural steel, including completion of the setting of roof decking on the building as required by the subcontract, was not achieved until January 30, 1985. This was also the same day on which the first precast concrete panels (the next item on the CPM) began to be erected. The result was a delay on the critical path of the Project of 106 calendar days.

 (11) In the alternative method, Brower began with September 25 as the date of the steel collapse and noted that the following period was characterized by three phases. First, from September 26 through October 5, the only work accomplished was clearing of the damaged steel and securing of the work area. Eight work days were lost. The next phase from October 6 to December 17, reflected very low activity and a complete absence of the use of the Project crane used in hoisting steel members. Finally, there was the period from December 18 to January 11, 1985, at which point steel erection had reached approximately the same point which had been achieved on September 25.

 Calculated by either method, the result was a total delay related to the collapse of 106 calendar days. From this period Brower subtracted 23 calendar days attributable to actual progress achieved by Williams on the Project, minor change order work accomplished, and an allowance for the fact that the first precast panels were not ready for erection until November 8.

 The Court finds that cross examination of Brower did not reveal significant flaws in his analysis.

 D.

 (12) It is obvious that the critical path delay occurred from the date of the collapse until the steel was reerected. Williams did not deny that this did occur, but rather asserted that other events created a "concurrent delay." To avoid confusion, particular care is required in use of the word "concurrent." For example, Williams does not assert that it was delayed by Smoot or any other party in its work in erection of structural steel. Williams began work on August 13, 1984, and continued unimpeded until the day of the collapse. Further, no argument is made that any party interfered with the reerection work; that process was completed on or about January 30, 1985. Thus, this delay was of Williams' making.

 (13) Stated otherwise, Williams' defense of "concurrency" was that other events cancelled out the delay resulting from the collapse and therefore absolved Williams of liability. These arguments are affirmative defenses and should be examined closely. Williams' arguments are best analyzed by dividing the project into three distinct periods: (1) pre-collapse issues; (2) the immediate impact period (September 25, 1984 to January 30, 1985); and (3) post-January 30 events. The Court concludes that the arguments are not meritorious.

 1.

 (14) Williams pointed to delays in the approval of shop drawings for structural steel and shop drawings for precast fabrication which occurred in the first months of the Project. Both Williams and Strait argued strenuously that a delay in approval of structural steel shop drawings presented a concurrency with the delay caused by the collapse.

 The testimony and evidence, however, is to the contrary. Structural steel erection could not begin until shop drawings had been completed and the structural steel had been fabricated. But structural erection began in fact on August 13, 1984. Williams continued unimpeded until the September 25 day of the collapse. Similarly, it is clear that any delays in approval of precast shop drawings had no impact on the beginning or performance of structural steel erection in the period prior to the collapse. Any delays of other parties prior to August 13 could not be charged to defendants. The Court finds that there was no "concurrent" delay in this period.

 2.

 (15) A more likely argument was made by defendants that delay in approval of precast drawings could have caused delay in fabrication of the exterior precast panels which were used to enclose the building. Precast panel erection was the next activity scheduled on the critical path after steel erection. The panels were to be hung from the completed steel superstructure. Williams, through a separate, affiliated company, Marietta Concrete ("Marietta") was responsible for precast erection, which began in fact on January 30, 1985, the same day that the final steel erection work was completed.

 (16) If defendants could have shown that, notwithstanding the collapse, precast siding would not have been available any earlier than January 30 (the date on which precast erection actually began) that might present a concurrency and undercut Smoot's claim. The evidence presented, however, fails to support such a contention. Delays were clearly experienced in obtaining approvals of precast shop drawings by the District and its Architect, H. L. Walker. Nevertheless, defendants' witness Arthur Durrah testified for Williams that some drawings had been approved as early as July and full approval was provided by October 12. The precast panels had been fabricated by Marietta and were awaiting erection as of November 7. A large number of panels were fabricated as of November 27. It is important to note that at this point the collapse had already occurred and that there was no possibility of precast erection until the replacement steel was fabricated and erected.

 (17) Meanwhile, approval of the drawings was withdrawn by the architect on November 26. However, Durrah, the project manager for Smoot, ordered Marietta to continue production notwithstanding. Marietta apparently produced some 190 panels by December 18 and an additional 171 between December 18 and January 14, 1985. It is clear that any problems with the drawings at this point were of little consequence since production proceeded and no evidence was produced that any panel fabricated was later rejected. On the contrary, the evidence indicates that some 360 panels were produced without interruption in late November, December, and early January with no evidence of special pressure on the fabricator to rush. These facts create a strong inference that Marietta could have begun, not later than November 8, to fabricate precast panels at a rate sufficient to maintain project momentum.

 (18) To the extent that Williams' argument on concurrency relates to the process of precast fabrication and to the effect of precast shop drawing delays on project progress, the Court noticed that Williams failed to call as witnesses any officials from Marietta or subpoena its company records. Instead, it presented Mr. Arthur Williams, who in 1984 was a 22 year old engineer in training and in charge of his first precast erection project. He was employed by Williams and testified on its behalf. He was not on-site but rather handled the project from his office in Virginia. Mr. Williams was scarcely in a position to comment authoritatively on conditions at Marietta at the time or on the actual impact, if any, of the precast shop drawing delays. The Court regards his testimony as of minimal value.

 (19) The precast drawing issue requires the Court to make inferences based on practical experience and to consider the credibility of witnesses, the actions of the parties on this project, and the correspondence and documents referred to by counsel. Given the magnitude of the disruption caused by the steel collapse, the Court hesitates to reconstruct in retrospect what might have happened had the collapse not occurred.

 (20) Given the importance of precast in getting the building enclosed for the winter and its position as the next item on the critical path, the Court finds the evidence considered as a whole indicates that, in the absence of the collapse, precast fabrication would have been begun by Marietta on a continuous basis not later than November 8, and perhaps earlier. Smoot, in estimating the 83 days of delay, had already credited the defendants for the precast issue to take account of the November 8 date.

 3.

 (21) Williams and Strait then argued that there were additional Project delays after January 30, 1985, and that these negate their responsibility for delay resulting from the collapse. This argument is without merit. Defendants pointed out that while Smoot had originally scheduled Project completion for October 10, 1985, final inspection did not occur until May 8, 1986, and actual acceptance was not achieved until early January 1987. Exhibits admitted into evidence contain observations and criticisms by the District of various items of construction work. Such comments from the owner are normal in any on-going construction, but defendants argue that these problems demonstrate, in effect, that the Project would have been delayed in any event.

 (22) This argument ignores an 83 calendar day delay on the critical path. In addition, Smoot's president testified that the impact of the collapse was to cause a loss of momentum which was never recovered. Even without this circumstance, however, the logical inference was that regardless of whatever other delays might have occurred, the Project would have been completed 83 days earlier, but for the collapse. Smoot does not charge defendants with any delay after the steel reerection was complete. Instead, a clearly identified 83 day period, proximately related to the collapse, is found to be defendants' responsibility.

 E. (23) After carefully considering the parties' testimony and the record concerning the case and after having concluded that 83 calendar days of delay have been demonstrated, the Court turns to the quantification of damages attributable to the defendants Strait and Williams. Smoot's expert, Brower & Associates, and the plaintiff's other witnesses quantify these as follows: Items Cost Extra labor for job security and safety; anchor bolt removal and reinstallation $ 3,554 Loss of labor productivity due to disrupted site and discontinuity of work 19,604 Unabsorbed home office overhead (Eichleay formula) 109,911 Unabsorbed field office overhead 74,463 Extended equipment cost 5,000 (Plaintiff estimated these damages at $ 11,205. Upon review, this Court has awarded the sum of $ 5,000.) Escalated cost of winter protection 2,888 Labor escalation 4,049 Increase of insurance premium 135,000 Claims of attorneys' fees and expert witness 138,561 $ 493,030

19900104

© 1992-2004 VersusLaw Inc.



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