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WESTINGHOUSE ELEC. CORP. v. SEAL & CO.

January 21, 1994

WESTINGHOUSE ELECTRIC CORP., Plaintiff,
v.
SEAL & CO., et al., Defendants.



The opinion of the court was delivered by: CHARLES R. RICHEY

 The above-entitled cause of action was transferred to the undersigned Judge on July 19, 1993, from the docket of the Honorable George H. Revercomb. At issue in the case is an attempt by Plaintiff Westinghouse Electric Corporation ("Westinghouse") to seek reimbursement from Defendants Seal & Co. ("Seal") and Bechtel Associates Professional Corporation ("Bechtel") for repairs completed on a damaged escalator in the Tenleytown Metrorail Station.

 On May 5, 1993, Judge Revercomb issued an Opinion and Order in this matter, affirming the administrative decision of the Army Corps of Engineers Board of Contract Appeals and granting summary judgment in favor of the defendants. At that time, Judge Revercomb directed the Plaintiff to move for summary judgment on any issues remaining in the case or show good cause as to why the suit should not be dismissed. As such, this Court now has before it the Plaintiff's Motion for Summary Judgment, Seal's Opposition to Westinghouse's Motion for Summary Judgment and Seal's Cross Motion for Summary Judgment, Bechtel's Opposition to Westinghouse's Motion for Summary Judgment, Plaintiff's Rely and Opposition to Seal's Cross Motion for Summary Judgment, Further Briefing in support of Plaintiff's Motion for Summary Judgment, Seal's Amended Opposition to Plaintiff's Motion for Summary Judgment and Cross Motions for Summary Judgment, and Bechtel's Response to Plaintiff's Supplemental Memorandum in support of its Motion for Summary Judgment. After careful review of all of the foregoing submissions, the Court has determined that Plaintiff's Motion for Summary Judgment and Defendant Seal's Cross Motion for Summary Judgment must both be denied.

 II. FACTUAL BACKGROUND

 On February 6, 1981, Plaintiff Westinghouse Electric Corporation entered into a contract with the Washington Metropolitan Area Transit Authority ("WMATA") to design, build, and install 42 escalators for nine WMATA subway stations. One of these stations was the Tenleytown Metro Station. Thereafter, in July, 1982, WMATA contracted with Career Consultants, Inc. T/A Honor Guard Security Services ("Honor Guard") to provide unarmed uniformed security guards at various stations, including Tenleytown, on a 24-hour basis. WMATA also entered into contracts with Defendant Seal & Company to provide electrical services in connection with the building of the station, and with Defendant Bechtel Associates Professional Corporation, to perform certain engineering and construction management tasks at the Tenleytown station.

 The instant dispute then arose out of an incident that occurred sometime between August 5 and August 7, 1983, before the escalators were completed. During the course of that weekend, a 750 lb. reel of steel wire belonging to Defendant Seal either fell or was pushed down the middle escalator to the bottom floor mezzanine area of the station. On Monday, August 8, 1983, Mr. Jay Smith, a Westinghouse employee, reported the damage to the WMATA Transit Police. An investigation by the WMATA Transit Police later concluded that the damage was a result of vandalism by a person or persons unknown. *fn1" Although the individual(s) responsible have never been identified, the parties have agreed that the resulting damage to the escalator was not proximately caused by any negligent acts or omissions of Westinghouse or WMATA. See Judge Revercomb's May 5, 1993 Memorandum and Order at 2.

 After the damage was discovered, WMATA informally directed Westinghouse to make the necessary repairs. Westinghouse complied with this request, incurring what it claims were $ 91,452.19 in compensable costs. *fn2" Westinghouse ultimately completed the entire contract, including the repairs to the damaged escalator, within acceptable time constraints and the parties generally regarded the matter as one to be resolved by insurance considerations. See Army Corps of Engineers Board of Contract Appeals Decision at 7. On June 25, 1985, Westinghouse filed a claim with WMATA's insurance carrier for reimbursement, but the carrier denied the claim refusing to assume liability for vandalism. Concurrent with the filing of the insurance claim, Plaintiff filed this lawsuit on June 4, 1985 against WMATA, Seal, Bechtel, and Honor Guard.

 III. PROCEDURAL HISTORY

 Before turning to the issues currently pending before the Court, it is helpful to briefly review the procedural history of this case. After Plaintiff's Complaint was filed in district court in 1985, this action was stayed by Judge Revercomb on August 11, 1986, pending Plaintiff's exhaustion of its administrative remedies against WMATA. *fn3" WMATA's Contracting Officer later denied Plaintiff's claim on January 22, 1988.

 Relying on the "Permits and Responsibilities" clause in the Westinghouse-WMATA contract, the Contracting Officer determined that Westinghouse was responsible for all materials delivered and work performed until completion and acceptance of the work by WMATA. See Board of Contract Appeals Decision at 8. Westinghouse then appealed that decision to the Army Corps of Engineers Board of Contract Appeals ("BCA"). By a divided vote, the BCA affirmed the Contracting Officer's decision on September 30, 1991. *fn4" See Judge Revercomb's May 5, 1993 Opinion (citing Westinghouse Elevator [sic] Company, 92-1 B.C.A. (CCH) 24,474 (Sept. 30, 1991)).

 The basis for the BCA's decision was as follows: First, the BCA found that there was no evidence presented that either Westinghouse or WMATA was at fault for the damaged escalator. See BCA Decision at 12. The BCA further held that the risk of damage to site work falls within the normal "builder's risk" assumed under the "Permits and Responsibilities" clause of the Westinghouse-WMATA contract, and that the risk of loss never shifted from Westinghouse to WMATA. *fn5"

 Second, the BCA was not persuaded by Westinghouse's argument that the "Protective Devices" provision in the contract modified the "Permits and Responsibilities" clause to effectively relieve Westinghouse of its obligation to repair the escalator without an attendant increase in contract price. Rather, the BCA concluded that the "Protective Devices" provision did not limit the scope of the contractor's duties, but instead imposed other duties on Westinghouse. See BCA Decision at 9.

 Third, the BCA rejected Plaintiff's argument that the loss should be apportioned among the various contractors who were working on the project at the time of the incident. The BCA found nothing in the contract to suggest that losses resulting from vandalism or any other unknown risk would or could be apportioned by WMATA among the various contractors. See BCA Decision at 11.

 Finally, the BCA acknowledged that only two parties, Westinghouse and WMATA were before the Board on this appeal. As such, the BCA found that since there was no evidence that either of these parties was at fault, the contractual obligations between them remained unchanged. More specifically, only final acceptance of the escalator by WMATA would extinguish Westinghouse's duty to provide a functioning escalator and intervening damage by vandals would not change Westinghouse's obligation to deliver the end product, regardless of any negligence on the part of Westinghouse or any other party. *fn6"

 On December 4, 1991, Westinghouse then filed a motion in District Court to vacate the stay. This motion was granted by Judge Revercomb on February 27, 1992, and Plaintiff was allowed to appeal the BCA's ruling and to proceed against all Defendants.

 On May 5, 1993 Judge Revercomb issued an Order upholding the decision of the BCA and dismissing Westinghouse's appeal. In that Order, Judge Revercomb granted Summary Judgment in favor of WMATA, Seal, and Bechtel holding that Westinghouse was ...


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