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April 4, 1997


The opinion of the court was delivered by: GREENE

 This case was retried before the Court between plaintiff Harbor Insurance Company ("Harbor"), subrogee of OMNI Construction, Inc. ("OMNI"), and defendant Schnabel Foundation Company ("Schnabel"), OMNI's sheeting and shoring subcontractor, following a remand by the Court of Appeals.


 This dispute revolves around damage to the restored nineteenth century structure at 633 Pennsylvania Avenue, N.W., Washington, D.C. owned by Sears, Roebuck & Company ("Sears Building") from the construction of an adjoining office building at 601 Pennsylvania Avenue. The damage occurred when the excavation and construction caused the ground under the Sears Building to settle. The crux of the dispute is whether Schnabel was negligent in designing and installing the sheeting and shoring system at the 601 Pennsylvania Avenue site (the "Project").

 American Insurance Company ("American") was the primary liability insurance carrier, providing a maximum coverage of $ 300,000, and Harbor was the umbrella liability insurance carrier for both Westminster and OMNI. Both carriers, as subrogees of OMNI, originally brought this action for breach of contract and negligence against Schnabel and three co-defendants to recover monies paid under the respective policies to OMNI for liabilities incurred when the Sears Building was damaged. The case went to trial in June of 1990, and a jury returned a verdict in favor of Schnabel on all claims. The Court of Appeals reversed, holding that the Court erred in submitting Schnabel's contributory negligence to the jury because there was insufficient evidence to support such a finding by a reasonable jury. *fn1" The case was remanded for a new trial. The Court heard the case again *fn2" -- this time without a jury -- on April 22, 1996 through May 1, 1996.

 After consideration of the testimony and exhibits introduced at trial, and the parties' briefs and post-trial material, the Court makes the following findings of fact and conclusions of law pursuant to Fed. R. Civ. P. 52(a). Any conclusions of law which constitute findings of fact and findings of fact which constitute conclusions of law shall be considered as having been determined accordingly.



 OMNI was Westminster's general contractor on the project. Westminster hired Leo A. Daly & Associates ("Daly") as the Project's Architect/Engineer. Daly generated the construction specifications and drawings for the project. Westminster also hired Schnabel Engineering Associates ("SEA"), a geotechnical engineering firm, to analyze subsurface soil conditions at the project. SEA produced three reports dated April 30, 1982, November 16, 1983, and January 23, 1984. The original SEA report provided the "recommended scope of excavation sheeting and underpinning, and criteria for design," as well as "geotechnical construction considerations that should be considered both in the design, and in the construction plans and specifications."

 SEA made recommendations regarding the "sheeting and shoring" system -- the system of support installed to retain the walls of the excavation and protect adjacent properties. The sheeting and shoring system ensures that material does not fall into the site during the excavation and that the adjoining earth and properties do not slip into the excavation site as it is dug. The report recommended that a "free draining sheeting system," using wood lagging and soldier piles, be used. Soldier piles are driven vertically into the earth spaced some distance apart, with wood lagging or boards placed between the soldier piles to hold the earth back. SEA recommended that the system be designed to a lateral earth retention criteria of 40H and that the construction should use two tiers of tiebacks to provide support for the system and to provide an underpinning for the Sears Building. *fn3" It was recommended that these tiebacks be installed at a maximum angle of 30 degrees and that the anchors for these tiebacks penetrate the gravelly sand stratum rather than the soft clay layer below Pennsylvania Avenue This was for a maximum height of excavation of twenty-six feet.

 After this report was completed, plans for the project changed when the building line was set back an additional twenty-five feet from the Brady Building. Due to this setback, Daly requested that SEA provide additional soils and geotechnical reports. In response, on November 16, 1983 SEA submitted an Amendment No. 1 to its previous report. The "Sheeting and Shoring" section recommended that steel sheet piling be installed for the wall of the excavation closest to the Sears Building. This steel sheeting would have eight foot of toe in below the new foundation level. Steel sheet piling consists of either Z or U shaped steel sheets which are driven into the ground with a pile driver. The sheets have an interlocking joint between them and as they are driven into the ground the sheets lock together. This minimizes or prevents clay or water from seeping through. In this amended report, SEA also recommended that tiebacks as outlined in the original report should be used.

 OMNI did not perform the sheeting and shoring design or installation but solicited bids from subcontractors. *fn4" On March 23, 1984, Schnabel submitted a bid proposal for the design and construction of the sheeting and shoring system for the project. OMNI provided Schnabel with the documents relating to the contract with Westminster, including the SEA reports, but as was its practice it did not require a design in accordance with these reports. Schnabel proposed a system employing steel H-beams and wood lagging on all sides with one tier of tiebacks, and a lateral earth retention of 30H.

 Sears was also provided with information regarding the use of a wood lagging system nearest to the Sears Building. Sears hired its own engineering consultants to evaluate Schnabel's design. Sears' consulting engineers, Skidmore, Owings & Merrill ("Skidmore"), brought in STS Consultants, Ltd. ("STS") who completed a separate evaluation of the system designed by Schnabel. The report prepared by STS observed that the proposed system did not agree with the report of the geotechnical engineer. STS was concerned with the use of soldier beams and wood lagging and the use of only one level of tiebacks. It speculated that ground loss could occur during installation of tiebacks as well as a loss of ground from below the tieback level as the excavation progressed because the soft clay could squeeze between the soldier piles before wooden lagging boards could be placed to hold the clay back. It thought that the use of steel sheeting would minimize this effect. STS stated that when the excavation reached its deepest level -- elevation 79 -- the building foundations would be in the "zone of influence" that the excavation would have on adjoining soils and that the soft clay would induce settlement from the excavation. Skidmore concurred with this analysis.

 Sears forwarded the conclusions of both consultants to Westminster. Because Schnabel's proposal varied from the system recommended by SEA, Westminster sought evaluations of the proposal from Mueser-Rutledge, Johnston & Desimone ("Mueser-Rutledge") a geotechnical engineering consulting firm, and SEA. Mueser-Rutledge commented primarily on the effects of dewatering, but SEA submitted an evaluation of the sheeting and shoring system, this time after reviewing Schnabel's shop drawings. SEA predicted that settlement of one-quarter to one-half inch could be expected because of loss of ground between soldier piles as the clay moves into the excavation before the placement of the boards and the resulting movement of the whole sheeting and shoring system.

 OMNI forwarded copies of the Sears' consultants reports to Schnabel. Despite the concerns these reports expressed, however, Schnabel informed OMNI on July 26, 1984 that its system was "the system required for the project and it will be installed in consideration of the Sears property." Pl. Exhibit 78. Charles Carey and Julius Wlaschin -- registered engineers at Schnabel -- designed a sheeting and shoring system in accordance with Schnabel's bid proposal.

 Installation of the sheeting and shoring system commenced around August 2, 1984 (excavation of the Project site had begun on July 9, 1984). Schnabel drove steel H-beams along the Sears Building side of the excavation between August 2 and August 3. On August 12, 1984, Westminster and Sears entered into an agreement by which Sears granted OMNI and Westminster access to its property to install foundation tiebacks to support the walls of the Project excavation. Between August 20 and 23, 1984, excavation for the tieback anchors on the soldier piles next to the Sears Building was completed.

 On August 23, 1984, a vertical crack was discovered at the upper right portion of the north face of the Sears Building. By August 24, 1984 data tracking the settlement indicated that the Sears Building had settled about one-half inch at this northeast corner. Although there was some concern expressed that this indicated horizontal motion of the soil, installation of the sheeting system continued. However, precautions were taken to minimize the damage. Additional tiebacks were installed at certain locations, including the far northeast corner of the site, as well as bracers at the base of some soldier beams.

 At the beginning of November, the final excavation was made down to thirty-five feet below Pennsylvania Avenue. Just prior to the final excavation, points 13 and 14 (next to the Sears building) had settled a total of 1.5 inches. After the weekend of November 3 and 4, 1984 total settlement was measured at 2.1 inches on November 8. Thus, over the weekend there was an additional three-eighths inch settlement at these two points. Settlement gradually increased. On December 6, 1984 Schnabel installed a system of steel braces to support the northeast corner. In the meantime, however, the Sears Building had sustained structural and cosmetic damage.

 As a result of this damage, Sears, Westminster and OMNI entered into an agreement providing for repairs caused by the settlement. In a August 3, 1984 agreement Westminster agreed to indemnify Sears for damage caused to the Sears property during construction of the project. By the terms of the main contract document, OMNI was required to reimburse Westminster for damage caused in whole or in part by the negligence of itself or a subcontractor. *fn5" OMNI repaired the Sears Building and submitted its claim to plaintiff. On December 13, 1988 this Court adjudged plaintiff liable to OMNI for $ 844,199.60 in addition to post-judgment interest, attorneys' fees and prejudgment interest. Harbor has paid OMNI almost one million dollars.


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