Norfolk Southern Railway Company v. RailWorks Maintenance of Way, Inc., No. 2:2022cv00003 - Document 104 (E.D. Va. 2023)

Court Description: OPINION AND ORDER: the Court DENIES Norfolk Southern's motion for partial summary judgement, ECF No. 75, and GRANTS in part and DENIES in part RailWorks's motion for summary judgment, ECF No. 77. The Court GRANTS RailWorks's motion a s to Counts III, VII, and IX. The Court also GRANTS RailWorks's motion as to Count V to the extent it is based on § 5.1(a)(i)(B) of the Welding Agreement but DENIES RailWorks's motion as to Count V to the extent it is based on 67; 5.1(a) (iii) of the Welding Agreement. The Court DENIES RailWorks's motion as to Count I. Regarding RailWorks's damages-based arguments, the Court GRANTS RailWorks's motion as to the following categories of damages claimed by Norf olkSouthern: (1) the payment to Civicus Media LLC; and (2) attorneys' fees and costs for third-party claims. Otherwise, the Court DENIES RailWorks's motion as to Norfolk Southern's damages claims. Signed by Chief District Judge Mark S. Davis on 9/14/2023. (afar)

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Norfolk Southern Railway Company v. RailWorks Maintenance of Way, Inc. Doc. 104 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 1 of 56 PageID# 2682 UNITED STATES DISTRICT EASTERN DISTRICT OF COURT VIRGINIA Norfolk Division NORFOLK SOUTHERN RAILWAY COMPANY, Plaintiff, Civil V. RAILWORKS MAINTENANCE OF WAY, INC No. 2:22cv3 / Defendant. OPINION AND This summary action is judgment before filed the by ORDER Court on Plaintiff a motion Norfolk for partial Southern Railway Company ("Norfolk Southern"), ECF No. 15, and a motion for siummary judgment filed (formerly known ("RailWorks" ) , briefs by as ECF submitted Defendant RailWorks No. by RailWorks the Maintenance After 77 . Maintenance parties. careful the of of Way Way, Inc.) consideration Court LLC determines of the that a hearing is unnecessary because the facts and legal contentions are adequately presented, decisional process. Therefore, hearing. Court the DENIES judgment, ECF Fed. Court ECF No. and 76, oral R. Civ. DENIES at 25. argument P. 78(b); Norfolk For would the reasons Southern's motion No. and in GRANTS E.D. Va. Southern's Norfolk 75, not RailWorks's motion for summary judgment, part Loc. in R. request and partial DENIES the 7(J). for stated below, for ECF No. aid a the summary in part 77. Dockets.Justia.com Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 2 of 56 PageID# 2683 I. This case concerns a BACKGROUND^ train derailment in Bartow, Georgia (the "Derailment") .2 transportation company, ECF States. maintenance 2017, \\ 1 operator. Norfolk entitled Way No. occurred in 2019 Norfolk Southern is a rail primarily operating in the eastern United H 11. RailWorks ECF No. // Southern and 16 is 1 20. RailWorks a U On or entered qualified about into a track April 1, contract Service Contract for Work on or About Railway's Right of (the "Welding Agreement") It that pursuant to which RailWorks agreed to perform thermite welding on Norfolk Southern's tracks. ECF No. 76-9 . A. The somewhat is specifics relevant the thermite these motions. welding process Put simply, the parent weld. rail (known as the Then, and 1 Unless otherwise statements of fact undisputed. the parent rail") are only thermite welding a method of joining the ends of two pieces of rail. ends of the rail for to of Thermite Welding The two are heated to prepare a mold is placed around the two ends of the gap noted, in the between them. these background parties' summary A crucible containing facts are drawn from judgment briefing and the are 2 This case originally involved two train derailments, the Bartow Derailment Alabama. See ECF No. 1 (basing Counts I, III, V, VII, and IX on the Bartow derailment and Counts II, IV, VI, VIII, and X on the Woodville derailment). However, following a settlement with the Woodville derailment, the parties entered a Rule 41 respect to Stipulation of Dismissal with respect to the Woodville Counts. ECF No. 74. and another derailment in Woodville, Consequently, the only derailment now relevant to this case is the Bartow incident. 2 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 3 of 56 PageID# 2684 The thermite thermite is then placed over the mold. causing an exothermic metal, which hardens reaction that in the gap. fills leaving is ignited, mold with molten the a solid piece of rail. The portion of the parent rail that is pre-heated is known as the heat-affected zone" or w The HAZ . created by the molten metal "fusion zone" is the area thermite charge that fills from the the gap and the metal from either end of the parent rail that melts and fuses with the molten metal that fills the Sometimes, gap. when a portion of existing track needs to be replaced, that portion of rail is removed, is rail, and a piece of replacement rail, installed in its place, called "plug using thermite welds at either end of the plug rail to attach it to the existing track. B, As entered noted above, into the The Welding Agreement in 2017, Norfolk Welding Agreement, Southern pursuant and RailWorks to which RailWorks would provide thermite welding services on tracks owned by Norfolk Southern. Starting Welding Agreement, qualification Virginia. As in 2016, RailWorks welds a result before conducted parties two rounds executed of "test" the or at a Norfolk Southern facility in Roanoke, of these test welds. were made to MW&S Standard Procedure 425 welding specifications the a number ("MW&S 425"), of revisions the thermite that RailWorks was ultimately required to follow when performing thermite welds the Welding Agreement. 3 for Norfolk Southern under Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 4 of 56 PageID# 2685 Section 1.1 of the Welding Agreement, entitled "Work, // states in relevant part: [RailWorks] shall furnish, at superintendence, labor. [RailWorks]'s expense, all Training (as defined herein), tools, permits, signs. supplies, equipment, transportation and materials necessary to perform, and [RailWorks] shall perform and complete, the following work, which is more fully described in the Contract Documents listed Systemwide outlined ECF No. 76-9, in Section 1.2 below Thermite and in Attachment at 1. Electric (the "Work"): Welding Services as A Section 1.2, entitled "Contract Documents, // states: The following papers, plans and specifications are incorporated by reference in and made a part of this Contract, whether or not they are physically attached hereto (collectively, the "Contract Documents"): 1. CONTRACTOR'S excluding any PROPOSAL DATED standard sales documents of Contractor January order 27, 2017 or other but similar that may be attached to such proposal (the "Proposal") and provided that any terms of the Proposal that conflict with the terms otherwise set forth in this Contract shall be disregarded and have no legal effect. 2. ATTACHMENT A - GENERAL 3. ATTACHMENT B - SCHEDULE 4. NORFOLK SOUTHERN CONDITIONS OF PRICING AND OPERATING CONDITIONS GUIDELINES FOR CONTRACTORS Id. the Attachment A sets "Work" Agreement, respective here, forth the "general conditions" that RailWorks would undertake pursuant to governing the Welding including laying out Norfolk Southern's and RailWorks's responsibilities regarding Attachment A states: 4 that Work. As relevant Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 5 of 56 PageID# 2686 1. [RailWorks] will perform thermite welding for [Norfolk Southern] as designated and in accordance with This specifications approved by [Norfolk Southern]. work shall, at all times, be subject to the inspection and approval of [a Norfolk Southern] officer. 2. The thermite welding will be performed by [RailWorks] personnel at such times and locations designated by [Norfolk Southern]'s officer .... 4. [RailWorks] shall perform the work with crews consisting of a foreman-welder and a welder-helper. The [RailWorks] crew will have a suitable truck equipped with rail guide wheels, hydraulic power (specific charge), [Norfolk Southern] approved radio, tool and welding kit storage and grinding equipment. . . . 6. [Norfolk Southern] will supply the welding kits, The attachment specified tools and consumables, specifies [RailWorks] and [Norfolk Southern] supplied items. 7. [RailWorks] will provide, at the request of [Norfolk Southern] representatives, certain of the [Norfolk Southern] supplied materials reimbursed at actual cost as supported by invoice or credit card receipt. . . . Id. at 19-20. Section 2.3 of the Welding Agreement sets forth a number of warranties First, Work made RailWorks in a accordance safe. by two RailWorks, of or efficient with the relevant here. and workmanlike requirements of of this manner Contract [RailWorks] strictly and that in all shall have all licenses and/or certifications ... as may be necessary desirable RailWorks are warrants that it shall perform and complete the Persons performing Work on behalf training, which to perform warrants that the the Work Work 5 . shall be Second, Id. at 2. free of defects and Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 6 of 56 PageID# 2687 and imperfections, fully suitable for which each and every piece or part the use and purposes is intended, for for a period not less than one year after the date on which the Engineer certifies that the Work has been completed. C. The Id. Derailment The welding work and subsequent Derailment that form the basis for this case occurred near mile marker 112.98, On October 15, 2018, two thermite welds, in Bartow, Georgia. a RailWorks welder and welder helper performed one at either end of a piece of plug rail that previously had been installed in 2017 using "joint bars," than thermite welding, to hold the plug rail in place. welding After the the work was visually RailWorks crew finished the thermite welding, inspected, rather first by the crew itself and then by Norfolk Southern's Neither supervisor. Southern supervisor concerns with the the identified welding. RailWorks any crew visual Periodically nor the defects Norfolk or thereafter, other Norfolk Southern inspected its tracks in the area of the welding work as required by the Part 213, though Federal Railroad Administration under 49 RailWorks disputes "that the track C.F.R. inspectors were properly inspecting the areas on or adjacent to the track for conditions that may result in rail breaks. the weeks leading up to the Derailment, identify any defects ECF No. at 6. In Norfolk Southern did not of any kind in the ballast, 6 79, roadbed, track Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 7 of 56 PageID# 2688 structure welds. (including the ties) ECF No. 76, On January 6, both ends of the 10. 2019, the welding work, at less than three months after the relevant welded plug rail rail over it, without derailing, same day, as near mile marker 112.98 failed Norfolk Southern train 373 at approximately 4:41 p.m. at passed Later that Norfolk Southern train 192 approached the welds from the Video footage from both trains confirmed that opposite direction. the or the rail at the location of the welds were intact prior to train 373 crossing over them and were fractured prior to train 192 crossing over them. The parties therefore agree that the fractures occurred when train 373 passed over of the its welds. As train 192 crossed over the locomotives of the Derailment, and 39 of its 103 cars fractured rail, derailed. At the one time 50 of the 103 cars were loaded and approximately half of those loaded cars were carrying hazardous materials. Norfolk hazardous Southern materials alleges that four of the cars were damaged to the point that the hazardous materials they were transporting spilled or leaked. 1 44. the Southern further derailment area were shelter-in-place and that near to Norfolk the derailment area, to have carrying alleges evacuated [s]everal that and ECF "residents others residents were suffered and sustained personal 7 injuries as 1 living required in and as well as Norfolk Southern employees, No. around claimed a result of Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 8 of 56 PageID# 2689 their claimed exposure in connection with the to hazardous materials leaked or released Id. derailment. According to Norfolk Southern, H 45. it has "incurred substantial cost and expense in containing the release of hazardous materials caused by freight the cars Id. H 46. the loss derailment, and in repairing Norfolk of use removing its Southern also of the track of the derailment. D. repairing railroad claims involved the damaged track and roadbed. as damages in the a result derailment and of as a injury asserted against it as result of other claims for personal a result and Id. Procedural Background Norfolk Southern filed its complaint in this Court on January 4, 2022. In the five Counts involving the Bartow Derailment, Id. Norfolk Southern alleges: Negligence (Count [Norfolk and seeks: and/or Indemnity money (1) incurred breaches damages expenses, as of a (Count fees, result duty and indemnification for all IX) . {Count Id. sufficient actual, all for damages, suffered and/or complete Implied Southern] consequential conduct Express Warranty I) ; (Count III); Express Indemnity (Count V); Contribution VII); Southern Breach of of to compensate and/or incidental, costs and liabilities RailWorks'[s] obligation"; damages, Norfolk (2) expenses, wrongful full fees, and costs and liability suffered and/or incurred as a result of RailWorks'[s] wrongful conduct and/or breaches of duty and obligation"; 8 (3) all Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 9 of 56 PageID# 2690 attorneys' the costs fees Bartow and Derailment"; expenses and incurred prejudgment (4) interest on all money damages awarded. On April 13, summary 2023, judgment as to Count I RailWorks's defense Id. and at post-judgment 31-32. the parties filed their cross-motions for Norfolk j udgment. in connection with Southern (Breach of that the moved Express Derailment partial Indemnity) was ECF Nos. Southern's misuse of its tracks. for 75, caused 76. summary and as by to Norfolk RailWorks moved for total summary judgment as to all of Norfolk Southern's Counts, as well as summary judgment as to portions of Norfolk Southern's damages brief claim. ECF Nos. 77, Each party filed an opposition 78. to the other's motion on April Finally, 27, 2023. each party filed a reply brief motion on May 3, ECF Nos. 2023. 81, ECF Nos. 79, 80. in support of its own Accordingly, both motions 82 . are ripe for consideration. II. Rule 56(a) that a district movant some the of law. STANDARD Federal Rules of Civil Procedure provides court shall grant summary judgment in favor of a if the movant any material matter of LEGAL fact shows that there is no genuine dispute as to and Fed. the R. movant Civ. P. is entitled to judgment 56(a). The "mere as existence a of alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact. 9 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 10 of 56 PageID# 2691 Anderson v. (emphases Liberty in original). exists where, that a 323, party. 330 Inc., A 477 genuine U.S. 242, question 247-48 of [factfinder] Dulaney // (4th Cir. v. could return Packaging a Corp. (1986) material fact a court finds after reviewing the record as a whole, reasonable nonmoving Lobby verdict of for 673 Am., the F.3d 2012). Although the initial burden on summary judgment falls on the once a movant properly presents evidence supporting moving party, summary judgment, the nonmoving party may not rest upon the mere allegations in the pleadings, but instead must set forth specific facts and sworn statements in the form of exhibits Celotex Corp. genuine issue for trial. 322-24 necessary disagreement [the of F.3d 307, 251-52, law. 310 to determine whether to require submission to a evidence] matter Catrett, 477 U.S. 317, The Court must only evaluate the evidence to the (1986). extent v. illustrating a is so one-sided that McAirlaids, It (4th Cir. 255) . 2014) In making its Inc, there is u [factfinder] Kimberly-Clark (quoting Liberty Lobby, determination, W the or whether prevail one party must v. sufficient as Corp., 756 477 U.S. district a at court must view the evidence in the light most favorable to the nonmoving party. it (4th Cir. 650, 657 Jacobs V. 2015) N.C. Admin. (cleaned up) Off. of (quoting (2014) ) . 10 the Cts., Tolan v. 780 F.3d 562, Cotton, 572 568 U.S. Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 11 of 56 PageID# 2692 When faced with cross-motions for summary judgment, consider \\ must each determine whether matter law. 762 of F.3d 374, Richmond, Va., the Court rational motion either 392 475 must u (4th of in parties' the light Id. (quoting of the merits judgment Dep't of Bacon v. 2007)). factual disputes to as a Transp., City of In doing so. and any competing. favorable Rossignol v. to the party Voorhaar, 316 2003)). summary DISCUSSION judgment interrelated issues but at times nature N.C. (4th Cir. most own deserves (quoting 2014) 638 III. The parties its all H (4th Cir. on Wildlife v. Cir. resolve opposing that motion. 523 the F.3d 633, inferences F.3d 516, of Defenders // separately the Court simultaneous briefs raise a variety of talk past each other due to the briefing To schedules. analyze the issues as efficiently as possible, the Court first addresses choice of law misuse and n Norfolk defense, Southern's before argument analyzing regarding whether summary RailWorks's judgment is appropriate on each of Norfolk Southern's five claims and, finally, turning to RailWorks's argument regarding damages. A. Choice of Law A federal court exercising diversity jurisdiction applies the substantive 460, suit. 465 the law (1965). of the forum Hanna state. Because Virginia is the v. Plumer, forum state 380 for this Court applies Virginia choice-of-law principles. 11 U. S . See Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 12 of 56 PageID# 2693 Demetres v. E. W. Const., Inc., 776 F.3d 271, Virginia law provides that where, valid choice-of-law provision. law should be applied LLC V. Von (2007) ft to as here, Neumann-Lillie, 274 76, 2015). choice of substantive issues. Va. (4th Cir. a contract includes a the parties' contract 273 80, Settlement 645 S.E.2d Funding, 436, 438 The Welding Agreement's choice-of-law (citation omitted). provision states: The laws of the Commonwealth of Virginia shall govern the construction and interpretation of this Contract and all rights and obligations of the parties under it, except that the legal effect of any indemnity obligation under this Contract for claims arising from personal injury or property damage shall be governed by the law of the state in which that personal damage occurred. ECF No. 76-9, at Therefore, 15. Southern's contract claims, legal effect Agreement] of for claims Any Id. damage. any Virginia law applies to Norfolk except to the extent they concern indemnity arising such injury or property obligation from personal issues would [the under the Welding injury or property instead be analyzed under Georgia law because any personal injury or property damage claims stemming from the Bartow derailment necessarily occurred in Georgia. The Welding dictate the between Norfolk Virginia Agreement's applicable law Southern subscribes to choice-of-law for tort claims and RailWorks. the lex 12 loci provision that As to delicti arise tort does not directly claims. principle for Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 13 of 56 PageID# 2694 determining Demetres, Inc., the 776 F.3d at 273 246 Va. 3, the principle, applicable 5, substantive (citing Jones v. 431 S.E.2d 33, law of law the 34 place R.S. in which at 5, asserts 431 that claims that S.E.2d at Georgia sounds in applies tort. to ECF No. the injury Norfolk at 18 basis with for Again, RailWorks. this suit occurred in Bartow, is the the Bartow "injury" that Derailment, 246 RailWorks Southern's Norfolk n.7. Southern does not appear to dispute this assertion, agrees occurred (citing Jones, of 78, n According to that Id. any suits. & Assocs. , Based on this principle, 34). law tort Jones (1993)). governs the substantive cause of action. Va. in and the Court serves which as of the course Therefore, under Virginia's lex loci Georgia. delicti principle, Georgia law applies to all of Norfolk Southern's tort claims. B. Norfolk RailWorks's Southern seeks Misuse summary Defense judgment on RailWorks's anticipated defense that the welded rails fractured due to Norfolk Southern's misuse of the satisfy defense because its it burden did testimony could prove Under the Rule 16(b) than due to some flaw in Norfolk Southern argues that RailWorks RailWorks's welding work. cannot rather rails. not that of proof timely Norfolk scheduling on its disclose affirmative any experts Southern misused order entered in misuse whose the rails. this case, a party having the burden of proof upon the primary issue to which 13 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 14 of 56 PageID# 2695 potential Rule 702, 703 or 705 evidence is directed was required // to identify any expert witnesses on that issue by January 6, 2023, and to ECF No. file Rule 27, at 1; 26(a)(2)(B) ECF No. experts on the misuse disclosures^ RailWorks, 57. by February however, 2023, issue on March 20, 20, 2023. identified its when disclosures regarding rebuttal experts were due under the Rule 16(b) scheduling ECF order. Rules of experts No. 76, Civil at Procedure,^ should not be Citing Rule 24 . w Norfolk 37(c)(1) Southern Southern further asserts insufficient misused the Consequently, Norfolk RailWorks'[s] asserts Rule 26(a) (2) (B) testimony. of of reports Fed. Rule 37(c)(1) prove work cause of Southern offers forecloses disclosure n Id. at or that R. several summary that the [Norfolk derailment. seeks u summary counterarguments, judgment the Federal by witnesses Civ. provides, P. 23-24. those Rules who on of are this Civil Southern] Southern]'s Id. H at judgment Id. // each at of to which it From governs provide Civ. P. 26(a)(2)(B). in relevant part: 37(c)(1). 14 a the expert use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless. R. to 24-25 . If a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to Fed. 24. as issue. Procedure retained Norfolk RailWorks [Norfolk misuse defense as a matter of law. RailWorks Federal that argues without that testimony, to welding was the proximate misuse ^ that, evidence thermite the permitted to testify as to any issues on which RailWorks bears the burden of proof. has of Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 15 of 56 PageID# 2696 procedural standpoint, RailWorks argues that it is "premature for Norfolk Southern to seek summary judgment on this issue because it has not moved 37, to exclude which provides RailWorks's a mechanism to expert limit evidence testimony when fails to comply with orders regarding discovery. It 23 . is true that Norfolk Southern's pursuant to Rule 37, Still, basis. a ECF No. instant motion for summary judgment pursuant to Rule 56, under Rule party 79, at is a motion not a motion in limine and the Court considers the motion on that as another judge of this Court recently noted, the intention of Rule 37(c)(l)'s preclusionary measure is to prevent the practice of 'sandbagging' an opposing party with new evidence. and it applies on motions for summary judgement. LLC V. (E.D. Microstrategy Va. Aug. 18, Inc., 2023) No. 2:20cv551, (cleaned up) Pace V. Air & Liquid Sys. Corp., 2016)) . In other words, with a Rule 37 motion, the Rule 37 be 171 F. while the in 2023 WL 5337826, (emphasis added) Supp. Court 3d 2 54, has 265 at *8 (quoting (S.D.N.Y. not been presented it nonetheless has the discretion to apply standard and conclude considered Daedalus Blue, that certain evidence should not determining whether summary judgment is appropriate. Turning to the more substantive arguments, RailWorks asserts that the misuse defense is not actually an affirmative defense but rather merely rebuts argument that the RailWorks evidence is supporting Norfolk Southern's responsible 15 for the fractures and Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 16 of 56 PageID# 2697 The derailment. Court identified misuse as section entitled first observes an affirmative that defense "Affirmative Defenses, RailWorks in its Answer. RailWorks // limited mitigate to, Plaintiff's damages, misuse, estoppel and waiver. RailWorks does not ECF No. // poor 16 H 168. the that it including but contributory negligence, including In states will rely upon all affirmative defenses available, not expressly failure track to conditions, In its opposition brief, acknowledge or explain its apparent change of opinion about the nature of this defense. It misuse is not necessarily obvious should circumstances be of considered this an way or the affirmative In a case. one recent other whether defense opinion, under the the Virginia Supreme Court defined "affirmative defense" using the definition found in Black's Law Dictionary; and arguments claim, that, if all the even if a will true. allegations defendant's defeat in the the assertion of facts plaintiff's complaint are . . true. // Brown v. Virginia State Bar ex rel. Sixth Dist. Comm., Va. 886 (quoting S.E.2d Affirmative 492, 501 Defense, (2023) (alteration Black's Law in Dictionary original) (11th Black's Law Dictionary defines a "negative defense affirmative defense) as a defendant's outright n ed. 2019)) . 1.e., denial a of non- the plaintiff's allegations without additional facts pleaded by way of avoidance. U Negative Defense, Black's 2019)). 16 Law Dictionary (11th ed. Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 17 of 56 PageID# 2698 Comparing these two definitions illustrates why there may be a lack of On one clarity on this question. hand, demonstrating Norfolk Southern in fact did misuse its tracks and that such misuse caused the Derailment will require RailWorks to introduce additional evidence beyond the evidence that Norfolk Southern will present to prove its Those case. facts, could be fatal to Norfolk Southern's case. misuse Norfolk defense Southern demonstrates prevent goes causation. bears that Norfolk directly the Norfolk to one burden of Southern Southern from of if proven be true, On the other hand, the elements proof. misused meeting to and the its if on which RailWorks tracks, burden the it may regarding In other words, RailWorks's proof of its misuse defense could be mutually exclusive with Norfolk Southern carrying its burden on Consequently, causation. RailWorks's misuse defense does not fit neatly within the Black's Law Dictionary definition of an affirmative defense. affirmative defense all of the elements Regardless, which suggests is typically not of the cause of that proof inconsistent with proof the to conclude defense harmless. that - meaning identify its experts on this failure was of the Court need not wade further into this issue, Court were an affirmative an action. which is best left for Virginia courts to consider, if of RailWorks's that because even misuse defense RailWorks did not is timely issue - the Court finds that this See Hinkle v. 17 City of Clarksburg, W.Va., 81 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 18 of 56 PageID# 2699 F.3d 416, 426 (4th Cir. 1996) ("District courts enjoy nearly unfettered discretion to control the timing and scope of discovery and impose sanctions First, orders.") that because failures to as noted above, RailWorks's defense for misuse the qualifies speaks to one order proof the upon February 20, requires that primary issue 2023, // responses the from 2023. Because bear RailWorks causation, it does was at not least an the having their the affirmative elements the expert 27, burden justifiable 16(b) of opinions by at 1; on that burden opposing party's ECF Nos. the as of party u disclose were not due until March 20, discovery Although the Rule Norfolk Southern must prove to prevail. scheduling its it is not immediately obvious defense defense comply with the experts ECF No. 57. element for RailWorks to of think, whether mistakenly or not, that its misuse experts did not need to be disclosed solely expert] to until respond March to, 20, 2023, contradict or evidence" were to be made. Second, prejudice RailWorks's and that more importantly, Norfolk Southern As RailWorks "delay. ff disclosures when rebut [Norfolk ECF No. 27, the Court could at highlights, discern suffered Norfolk had the opportunity to depose RailWorks's experts and to Southern's 1. can have intended no from Southern (which it did) identify one or more experts to rebut RailWorks's misuse experts pursuant to the scheduling order (which it did not) . There is to no suggestion that this alleged delay — which amounts 18 70 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 19 of 56 PageID# 2700 days in the identification of the experts and only 28 days in the disclosure of their opinions Thus, any way in this litigation. to consider RailWorks's — has hindered Norfolk Southern in the Court finds it appropriate experts' opinions and, consequently. denies Norfolk Southern's summary judgment motion to the extent it is predicated on RailWorks's inability to pursue its misuse defense due to the absence C. In Count fractures of Count I, admissible I - Breach of Norfolk demonstrate evidence expert. Express Warranty Southern that from a defense alleges RailWorks that breached the two welded the of rail express warranties contained in Section 2.3 of the Welding agreement. No. 1 nil 75-90. promised: (1) imperfections, Under that and its the challenged Work would fully suitable less than one year"; the Work in a safe, and (2) that it would move 76-9, for at 2. of RailWorks defects and use and purposes is intended, \\ for for a period not perform and complete efficient and workmanlike manner strictly in accordance with the requirements of" No. free be for the which each and every piece or part warranties, ECF the Welding Agreement. ECF Because both Norfolk Southern and RailWorks cross- summary judgment on Count I, the Court — having first analyzed each motion separately — discusses the parties' arguments and counterarguments concurrently here for efficiency. Under action are Virginia (1) law, the elements of a breach of contract a legally enforceable obligation of a defendant to 19 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 20 of 56 PageID# 2701 a obligation; the (2) plaintiff; and (3) defendant's injury or damage the breach of obligation. Va. 338, Inc. , 344, 271 Va. 784 72, S.E.2d 79, Navar, tt 296, (2) the factual wrongful amount S.E.2d for Fifth Ave., 304, 311 (1) conduct those foundation (quoting Saks 630 of 299 48 by (2006)). of that Council, a between asserted proper 272 parties // method Id. // Ltd., 291 QSP, To prove damages. damages damages. the Bus. connection using James, Here, breach (quoting Ulloa v. (2006) ) . the calculating Inc.V. Fed. causal and damages v. (2016) a or to the plaintiff caused by Inc, 624 S.E.2d 43, a plaintiff must demonstrate defendant's violation at Va. and and 344-45 177, do not the 189, dispute that the Welding Agreement creates, as a general matter, a legally enforceable obligation of RailWorks to Norfolk Southern, although they disagree regarding the scope of the term "Work" in the Welding Agreement. Beyond that, the parties' dispute primarily centers on the remaining two elements, breach and causation.^ 5 In a footnote to its opening brief, RailWorks notes that, although it intends to argue at trial that it did not breach any contractual duty to Norfolk Southern, it "does not focus on the element of breach for purpose ECF No. of this motion because that [] is ultimately an issue of fact. 78, at 13 n.6. RailWorks instead argues that, even assuming Norfolk Southern can prove RailWorks breached § 2.3 of the Welding Agreement, Norfolk Southern cannot demonstrate causation. The Court observes, however, that breach and causation are substantially intertwined in this case, where the parties have only offered two possible versions of events: (1) that RailWorks performed bad welds; or (2) that Norfolk Southern misused its tracks. Although the inquiries are distinct, it seems that causation and breach If largely, if not entirely, rise and fall together in this case. RailWorks's improper welding caused the fractures and derailment, RailWorks necessarily breached § 2.3; if, on the other hand, the rails fractured due to Norfolk Southern's misuse, Norfolk Southern likely could not prove that RailWorks breached § 2.3. 20 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 21 of 56 PageID# 2702 1. Under the Welding perform would workmanlike and manner "Work n Agreement, complete and // and imperfections, The the Work the that less than one year. of because its (1) ECF No. // RailWorks thermite in Work a warranted safe, shall be that efficient free of it and defects and fully suitable for the use and purposes for which each and every piece or part that, RailWorks welding 76-9, \\ for a period not is intended. Norfolk Southern argues at 2. warranted that the completed product work would function to allow the safe passage of trains over the area where the work was performed for at least one year ft and (2) the welds broke less than one year after the work was performed, RailWorks necessarily breached the Welding Agreement as a matter of law. ECF No. 76, at RailWorks 1-2. counters that the warranties only applied to its "Work, as // defined by the Welding Agreement, and that the area of the welds where the fractures fall \\ "initiated" within undertook that to \\ (the heat-affected zone, Work. perform RailWorks ft thermite pursuant to the Welding Agreement, the thermite welds themselves. zone No. where 79, The at the two rail ends tt welds or "HAZ") argues tt for that does not because Norfolk it Southern the term "Work" is "limited to which consist "solely of the fusion are welded or fused together. tt ECF 11. Welding Agreement defines the Work tt as \v Systemwide Thermite and Electric Welding Services as outlined in Attachment 21 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 22 of 56 PageID# 2703 A" and provides that the "Work it more IS Contract Documents listed in Section 1.2 ECF No. and 76-9, at Id. [that] are incorporated by 1. CONTRACTOR'S ATTACHMENT A GENERAL 3. ATTACHMENT B SCHEDULE 4 . NORFOLK SOUTHERN OPERATING GUIDELINES reference PROPOSAL DATED January 27, in and the welding OF services PRICING AND . . CONDITIONS FOR CONTRACTORS the Work is most succinctly that RailWorks Both RailWorks provide to Norfolk Southern. 2017 CONDITIONS Taking these provisions together, as papers, plans the Welding Agreement: 2. described in the of the Welding Agreement. Section 1.2 provides a list of 1. specifications made a part of" it fully described contracted and Norfolk to Southern agree that the thermite welding process requires heating up the two ends of parent rail that are being joined and that doing so necessarily creates ("[T]he Southern) the See HAZ. performance and ECF No. 76, at completion of 16-17 (Norfolk thermite welds necessarily includes the creation of the heat-affected zone[.]")/ ECF No. 78, affected at 7 zone' (RailWorks) or exposed words, to the high The HAZ, 'HAZ.' region of base material ("Every thermite weld creates a 'heat immediately adjacent temperatures. creation of or heat affected zone, a HAZ it is (citations intrinsic to a weld which is omitted)). to is the the In other thermite welding services that RailWorks contracted to provide to Norfolk Southern under the Welding Agreement. the \\ creation of a HAZ is ECF No. a natural 22 78, at 7 (acknowledging that consequence of the Work"). Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 23 of 56 PageID# 2704 Consequently, the most natural interpretation of the "Systemwide Thermite and Electric Welding Services" composing the "Work" would include the HAZ.® Although RailWorks argues that the HAZ is excluded from the \\ Work, II RailWorks points to nothing in the Welding Agreement or in case law suggesting that the defined term "Work" is more limited in scope than the actual thermite welding services that RailWorks contracted because to the provide. essential RailWorks's purpose of RailWorks to produce welds, is its argument the seems to Welding Agreement be that was for Work" as defined by the Agreement But limited to those welds and nothing more. the creation of the HAZ is a necessary part of producing those welds; the HAZ would not exist without the and welding. It without also creating the HAZ. that RailWorks's warranties about no is its welds not could reasonable Work" were be achieved to conclude artificially limited to only a subpart of the final product, particularly given that the Welding Agreement does not define the "Work" as but rather as "Welding Services. n ECF No. 76-9, at "welds // 1. ® To provide additional context, the parties also disagree factually about the fracture initiated" right at the boundary between the fusion whether and the HAZ (Norfolk Southern's position) or 0.004 inches into the HAZ See ECF No. 80, at 4. This disagreement has no (RailWorks's position). legal significance here because the Court concludes that the HAZ is part of the Work, but it highlights the incredibly close connection between the fusion zone and the HAZ, as well as the potential challenge in identifying a clear boundary between them. zone 23 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 24 of 56 PageID# 2705 2. Unsurprisingly, centers on what causing the The Source the caused of crux of the the the dispute between the parties welded rails Norfolk Derailment. Fractures to fracture, Southern argues in that turn it is entitled to summary judgment on Count I because RailWorks violated the express warranty that its Work would be imperfections" suitable" and least one year, three months No. to 76, at "fully id. after at 2, its of defects intended use and for at as the welded rails fractured less than RailWorks completed the In contrast, 18. for free \\ thermite welds. ECF RailWorks argues that it is entitled summary judgment on Count I because Norfolk Southern does not have sufficient evidence caused the rails to to prove fracture. that ECF No. RailWorks's 78, at on their respective experts' work 13. In support of their respective positions, heavily welding both parties rely opinions to support the conclusion that they are entitled to summary judgment as a matter of law. own The Court has "consider [ed] and, in both instances, has disputes and any competing, rational merits factual light of omitted). by the tt most determine matter each motion separately on its favorable whether law. // either the of party the opposing to 762 \v resolve inferences that parties deserves Defenders of Wildlife, However, parties' to sought in motion judgment F.3d at 392 all the ff to as a (citations the competing analyses of causation presented respective experts 24 are mutually exclusive such Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 25 of 56 PageID# 2706 that there remain genuine cause of the therefore fractures sets resolved at up that a battle 417 (4th Cir. 3. RailWorks of material led to of the fact regarding the Derailment. experts, The which v. evidence should not Montgomery be Cnty., 2015). The Spearin Doctrine separately argues on Count the Reyazuddin summary judgment. 789 F.3d 407, judgment issues I under the that it is entitled to summary Spearin doctrine, named for the United States Supreme Court's decision in United States v. Spearin, 248 U.S. 132 if that. In (1918). [a] that case, the Supreme Court concluded contractor is bound to build according to plans and specifications prepared by the owner, the contractor will not be responsible defects for the to check up the plans, site, until of in completion and plans the even where the contractor agreed to specifications, work consequences \\ and examine the and to assume responsibility for the Id. acceptance. at 136-37. The Virginia Supreme Court adopted the Spearin doctrine in Southgate V. Sanford & Brooks, 88 (1927), S.E.2d Recreation, a 147 Va. 554, 562-64, 137 S.E. 485, 487- and later modified its application in Greater Richmond Civic Recreation, 106 Co., 595 Inc, (1959). v. A. As H. Ewing's announced Sons, in Inc., Greater 200 Va. Richmond the rule in Virginia is that: construction contractor who has followed plans and specifications furnished by the owner which have proved defective or insufficient will not be responsible to the 25 593, Civil Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 26 of 56 PageID# 2707 owner for loss or damage which results solely from the defective or insufficient plans and specifications in the absence of negligence on the contractor's part, or any express guarantee or warranty by him as to their being sufficient or free from defects. Id. at 595, 106 S.E.2d at RailWorks argues 597. that the Spearin doctrine applies here because Norfolk Southern "dictated every facet of the welding that and "RailWorks comprised RailWorks' [s] Work, th[ose] ECF No. that \\ requirements. n [n]othing in [the] warranty that // 78, at 17. RailWorks emphasizes Welding Agreement constitutes an express [Norfolk Southern's] MW&S 425 Procedures were free from error or would yield defect free Work. Norfolk doctrine Southern requires fully complied with argues RailWorks in Id. // opposition to prove that that the the Spearin given plans and specifications were deficient and that RailWorks cannot do so here u because RailWorks undisputed experts, n testimony. demonstrates testimony including // that \\ if RailWorks'[s] produce[d] a quality thermite weld that would not prematurely, 80, but would [have] perform[ed] welders they would followed the procedures outlined in MW&S 425, [have] as intended. from [have] fail[ed] n ECF No. Norfolk Southern separately argues that "the Spearin at 10-11. Doctrine's implied warranty may be waived by a contractor's express warranty allocating subcontractor amounts to It such and the that a waiver. risk of Section Id. at 26 a 2.3 defective of 12-13. the product Welding to the Agreement Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 27 of 56 PageID# 2708 Here, the Court does not squarely take up Norfolk Southern's primary counterarguments, which (as RailWorks argues) are grounded Rather, in case law from courts outside Virginia. the Court easily concludes that summary judgment on the Spearin doctrine issue is precluded by the parties' apparent genuine factual dispute about whether or not RailWorks did follow the procedures prescribed by the Welding Agreement and MW&S 425. (RailWorks) Agreement ("RailWorks for Southern] 's Southern) the MW&S performed Bartow 425 See, welds its in Procedures."); e-g- ^ Work ECF under accordance ECF No. No. 80, ("[T]he amount of finning on a weld is 78, at 8 Welding the with [Norfolk 3 (Norfolk at [a] reflection of the quality of the welder's work in properly applying and sealing the mold before performing the thermite weld. finning under . . . [was] [Norfolk discussed the amount of far beyond what would be expected or allowable Southern]'s in Part Here, III.C.2 MW&S 425.") For the same reasons disputed issues of material fact supra, remain regarding whether RailWorks properly executed the welds, and, therefore, Bartow the Court cannot conclude at this juncture that the Spearin doctrine bars recovery on Count I. * In sum, the Court holds * that * the "HAZ" falls within the Welding Agreement's definition of the "Work" but further concludes that genuine disputes of material fact remain precluding summary judgment for either party. 27 as to Count I, Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 28 of 56 PageID# 2709 D. In Count Count III - Negligence III, Norfolk Southern alleges that RailWorks performed the Bartow welds negligently in violation of its duty to w exercise care [Norfolk those for [Norfolk Southern]'s individuals Southern]'s employees and and entities safety, safety of the safety of and property, whose the persons or property were within reasonable proximity to the welds that RailWorks undertook to perform. claim, ECF No. tt Georgia negligence the tort: substantive existence a result N.A. V. of the Jenkins, Because Count To law applies. III is maintain a a tort viable a plaintiff must satisfy the elements of action, of breach of such duty, as 1 111 107-15. a duty on the part of the defendant, causation of the injury alleged, alleged breach 293 Ga. 162, of 163, 744 S.E.2d a and damages Wells duty. the 686, Fargo Bank, 687 (2013) (citation omitted). Under Georgia law, derive from contractual a negligent construction claim does not duties but rather requires proof of a breach of a duty implied by law to perform the work in accordance Schofield Interior Contractors, with industry standards. Standard Bldg. (2008) 521, Co., 293 Ga. (quoting Fussell v. 522, 428 S.E.2d 426, App. 812, Carl E. 427 (1993)). 814, 668 Jones Dev. The Inc, S.E.2d 316, Co., 2 07 law v. 318 Ga. App. imposes upon building contractors and others performing skilled services the skill, and obligation to exercise a reasonable 28 degree of care, Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 29 of 56 PageID# 2710 which ability. is generally degree of care and skill as of the App. same profession. 899, 900, for negligent must present Gardner, standard 221 Ga. App. this S.E.2d 560, competent to 561 cannot D.R. (1994)). u speculate be Ayers, Thus, establish Rite of introduction of Horton, such a 129 Ga. to prove a a plaintiff the relevant Augusta, 710 Inc, v. (1996). Inc., expert testimony. 215 Ga. App. 858, u 858, This method is preferred because a apply without professional n to Bilt rationally conduct circumstances, (1973)). 817, 472 S.E.2d 709, by the 452 \\ to plaintiffs in a negligent construction case must (citing Newberry v. professional 190-91 care. 817, burden \\ (quoting Howell v. sufficient of Id. factfinder considered construction under Georgia law. evidence Generally, satisfy Id. // and ... is ordinarily employed by others 202 S.E.2d 189, claim professional taken negligence evidence would have principles to demonstrating what done similar under a and because it is improper to permit the factfinder about what the professional custom may be, there must be expert evidence as to the professional custom required in Id. (citing Hughes v. Malone, such cases. 346, 247 S.E.2d 107, n 111 (1978)). However, 146 Ga. App. 341, as the Bilt Rite court made clear, expert testimony is not always necessary because in professional negligence cases, evidence of cases may be so 'clear and palpable' [the factfinder] without expert 29 345- negligence \> even in some that it may be understood by evidence as to a professional Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 30 of 56 PageID# 2711 standard of care. S.E.2d at 111); App. 563, 562, Id tt see also the regarding Southern has Khoury 382 S.E.2d 392, Consequently, judgment (quoting Hughes, Constr. 394 issues Count identified III an negligence in this before are Co. Earhart, v. this at 345, Court (1) two-fold: expert case App. 247 191 Ga. (1989). on the could on summary whether issue of the Norfolk relevant if not, whether the evidence professional standard of care; and (2) of 146 Ga. be considered so clear and palpable" that such expert testimony is not necessary to establish the standard contends that of Turning care. Norfolk Southern to has the not first issue, identified an can testify regarding the relevant standard of care. at both focus on one who ECF No. 78, of Norfolk Southern's experts: Brett Pond. Dr. Pond's expert report and his opinions contained therein Dr. on fractures No. expert In addressing this argument, Norfolk Southern and RailWorks 19. center RailWorks the and the In 80-10. RailWorks cause of rail Dr. performed the Bartow around Pond's "were the derailment fractures. opinion. defective. the tt by analyzing the See generally ECF thermite and the welds welds at failed because their stress limit was significantly reduced. at 10. Dr. that issue tf Id. Pond's report does not discuss either the standard of care or customs and practices in the thermite welding industry or how he believes RailWorks's such standard practices. thermite Put simply. 30 welding Dr. work fell short of Pond's report speaks to Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 31 of 56 PageID# 2712 causation but extension, its not to RailWorks's breach of professional that duty, both of duty which are by or, necessary elements for proving Norfolk Southern's negligence claim. Norfolk Southern fails to Pond's Dr. that could be read as Instead, Norfolk expert report addressing Southern this conclusion and Norfolk Southern does not point to instead merely argues past it. any portion of undermine the argues or deposition testimony relevant at length standard of that Dr. care. Pond is generally qualified to testify in this matter and that RailWorks \\ has established opinions. n 1 no ECF No. basis 80, at whatsoever to exclude Pond's Dr. But the question before the Court 7. at this juncture is not whether Dr. Pond is qualified to testify regarding the opinions he has been designated to provide in this case ; the Court assumes without deciding that he ^ so qualified for the purpose of summary judgment. Instead, disclosed standard the Court must address whether the opinions Dr. Pond establish[ing] the during of Southern. discovery care Bilt applicable Rite, (citation omitted). To be sure, are 221 Ga. capable to // \\ RailWorks's App. Based on the of at 817, work 472 for Norfolk S.E.2d summary judgment record, at 710 which RailWorks does assert in the statement of facts portion of its opening brief that Dr. Pond is not "qualified to testify about the forensic analysis of the fractured Bartow rail." ECF No. 78, at 9. RailWorks, however, does not raise its assertions regarding Dr. Pond's metallurgy qualifications in the context of its argument that Norfolk Southern has identified no expert capable of testifying regarding the relevant professional standard of care. 31 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 32 of 56 PageID# 2713 includes Dr. Pond's expert report and excerpts of his deposition transcript, the Court agrees with RailWorks that the expert opinion Pond would be permitted to offer at trial based evidence that Dr. on his prior expert disclosures would not establish, or even speak to. the professional standard of care as is necessary to prove a claim for negligent construction under Georgia law. The Court therefore turns to the second issue: whether the evidence of negligence by RailWorks in this case can be considered so 'clear factfinder] of care. and palpable' that it may be understood by [the without expert evidence as to a professional standard Id. n 8 (citations Silt omitted) . Rite provides two examples of cases where a court might find that expert testimony is not required: (1) the where defendant himself testifies that he should have performed and did perform an act which the evidence shows he did not perform, id. at 818, removed) v. (quoting S.E.2d 359, the 364 defendant Hudgins (1984)); failed to and Bacon, (2) follow 472 S.E.2d at 710 171 where, a Ga. as App. (emphasis 856, 859, in Bilt Rite manufacturer's 472 S.E.2d at 711. In both of these examples, itself, specifications when utilizing the manufacturer's product in construction, 818, 321 id. at there could be ® In its brief in opposition to RailWorks's motion for summary judgment, Norfolk Southern never explicitly argues that this is the sort of case where expert evidence is not needed to establish the professional standard of care, focusing instead on Dr. Pond's qualifications as a metallurgy expert. Nonetheless, to give Norfolk Southern the benefit of the doubt as the non moving party on this issue, the Court considers whether there is sufficient evidence in the summary judgment record to support that conclusion. 32 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 33 of 56 PageID# 2714 evidence of what, clear and palpable specifically, the defendant should have done but negligently failed to do. Here, however, in the the Court cannot identify any similar evidence summary judgment record that would allow a understand the appropriate professional standard of factfinder to Norfolk care. Southern has not put forth evidence that could support an inference that RailWorks, for example, materials necessary to the misused thermite necessary step in such process. certain equipment or welding process or missed a Even viewing the record evidence in the light most favorable to Norfolk Southern, it would not be possible for the factfinder to discern the applicable standard of care that Norfolk evidence of how thermite welds Southern a at believes "competent issue, the RailWorks professional" Court breached. would "cannot Absent perform rationally apply negligence principles to [RailWorks's] professional conduct. at 817, 472 S.E.2d at 710 (citation omitted) . finds shown that that evidence RailWorks to consequently, support has Norfolk there Southern's is Therefore, Id. the Court insufficient negligence the record claim and, grants RailWorks's motion for summary judgment with regard to Count III.® ^ RailWorks's opening brief in support of its motion for summary judgement includes the additional argument that summary judgment on Count III is ECF independently appropriate in light of Georgia's "acceptance doctrine. No. 78, at 19 (quoting Thomaston Acquisition, LLC v. Piedmont Constr. Grp., Inc., 306 Ga. 102, 107, 829 S.E.2d 68, 73 (2019)). Norfolk Southern argues in opposition that "a more careful reading of Thomaston confirms that the acceptance doctrine does not apply to claims by the owner or to claims 33 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 34 of 56 PageID# 2715 E. Count V - Express Indemnity Norfolk Southern alleges in Count V that, Welding Agreement, No. a result of or required the As referenced above, requires RailWorks to indemnify Norfolk damages and fees incurred in connection with 1 M 125-31. provision that w is for its costs, expenses, Southern as RailWorks under § 5.1 of the to § Bartow Derailment. 5.1 . tt . ECF is an indemnification indemnify Norfolk Southern against any and all liability, damages, claims, suits, judgments. costs and expenses . . , personal (1) either of . fines, penalties and losses arising out injury or property damage due to negligent acts or omissions or willful misconduct. RailWorks's § 5.1(a)(i)(B), or (2) \\ any alleged violation of any law, // statute. code, ordinance or regulation of the United States or of any state, county or municipal government" resulting from RailWorks's acts or omissions, In § ECF No. 5.1(a)(iii). their summary judgment 76-9, at 10-11. briefs, both RailWorks's and Norfolk Southern's positions on Count V rely on the arguments they raise in the context of Count III, Norfolk Southern's negligence ECF No. 80, at arising from defects hidden from reasonable inspection. 14. In its reply brief, RailWorks acknowledges that the Georgia Supreme Court has not addressed whether the acceptance doctrine applies where one contracting party sues another for negligent construction and suggests that the Court need not reach this issue at all. ECF No. 82, at 11. Because, as both parties seem to agree, the Georgia Supreme Court has not specifically addressed whether the acceptance doctrine would apply in a case like this one and because summary judgment is appropriate on Count III on an alternate the well-established basis. acceptance doctrine" argument. and Court 34 declines to take up RailWorks's Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 35 of 56 PageID# 2716 claim. RailWorks argues that, because Norfolk Southern has regarding conduct" No. u the not not Count III, Count identified an expert to customs applicable to V As discussed in Part III.D supra, specifically permissibly opine on argue the that Dr. relevant Pond fails testify RailWorks' [s] or "the statutes or other laws governing the Work. 78, at 20. does professional like It ECF Norfolk Southern has opined professional or will customs and practices, but rather that Dr. Pond is qualified to offer testimony as an expert in this case, and, consequently, that Norfolk Southern will be able to support each of its claims. ECF No. 80, at 7-10. Again as with Count III, RailWorks argues in its reply brief that Norfolk Southern's counterargument fails to point to admissible expert testimony that was timely disclosed in discovery that is capable of establishing the requisite standard of care. 10 RailWorks also argues in its reply brief that summary judgment is under Virginia law, a tort action cannot appropriate on Count V because, and RailWorks suggests be based solely on a negligent breach of contract, that Norfolk Southern has conceded this argument by failing to offer a 10 response in opposition. ECF No. Metro. St. Auth. v. McDevitt 82, Bovis, at 10 256 Va. (cleaned up) 553, 559, 507 (quoting Richmond S.E.2d 344, 347 (1998)). However, the Court declines to take up this argument given that RailWorks has presented it for the first time in a reply brief (despite RailWorks's suggestion to the contrary), and even then, RailWorks offers no analysis of how the rule from Richmond Metro. Auth. applies to this case's specific facts and claims. See Cavallo v. Star Enter., 100 F.3d 1150, 1152 n.2 (4th Cir. 1996) (citations omitted). RailWorks's opening brief does cite to Tingler v. Graystone Homes, Inc., 298 Va. 63, 834 S.E.2d 244 (2019), in which the Virginia Supreme Court analyzed this doctrine at length; but RailWorks only cites Tingler to support the analytically distinct assertion that "a contractor is generally not liable in tort for injuries occurring after the work is accepted by the owner. ECF No. 78, at 21; see also id. Moreover, while Virginia law governs the application of the Welding Agreement's indemnification provision, it is Georgia law, not Virginia law, that governs whether RailWorks owed Norfolk Southern a duty in tort. Although Georgia appears to follow a similar legal rule, see at 19-20 n.9. 35 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 36 of 56 PageID# 2717 Because Norfolk Southern identifies its express First, must indemnity because III, Norfolk negligence. Norfolk professional for generally provides that for losses claim. in the record, of For RailWorks has Norfolk standard each negligence length above, otherwise, analyzes Southern is insufficient evidence or Court in turn. RailWorks stemming from its viability rises and falls with Count Southern's discussed at the § 5.1(a) (i)(B) indemnify RailWorks's claim, two potential bases for Southern care as same reasons demonstrated that there whether through an expert to is the establish required the to applicable prevail on a negligent construction claim under Georgia law. In contrast, grounded in Southern's statute, indemnification negligence losses were but due to under rather turns RailWorks's code, ordinance or regulation. § 5.1(a)(iii) is on Norfolk whether violation of RailWorks seems any not law. to elide the differences between the two subsections of the indemnification provision, ECF No. 78, arguing that at 20. \\ [b]oth claims require expert testimony. RailWorks further argues that, [j]ust as an ordinary lay juror is not familiar with the professional customs applicable to RailWorks' [s] conduct, such a juror will not familiar with the statutes or other laws governing the Work. be Id. APT, LLC, 194 F. Supp. 3d 1331, 1339 (N.D. Ga. 2016), Allstate Ins. Co. v. the Court will not attempt to apply it here, given that RailWorks never cited the Georgia standard and, as noted, raised the Virginia version of this argument for the first time in its reply brief. 36 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 37 of 56 PageID# 2718 RaiIWorks, support however, its offers no case assertion Norfolk law Southern or is further analysis required to put on to an expert to testify regarding "the statutes and other laws governing the Work. Unlike // the more intangible practice within a particular industry, concept statutes of custom and and regulations are expressly written to define publicly what conduct does or does not violate the bench trial, RailWorks Moreover, law. not a jury trial, otherwise may the trial in this case will eliminating any lingering have had regarding the be a concern factfinder's ability to interpret any applicable legal standards. Therefore, the Court grants summary judgment to RailWorks Count V to the extent the claim is grounded in § 5.1(a)(i)(B) on but denies summary judgment on Count V to the extent it is grounded in § as 5.1(a)(iii) RailWorks has failed to carry its burden of proving that there is insufficient record evidence to support that portion of Norfolk Southern's express indemnity claim. F. Following the Count Bartow asserted property damage against Norfolk agreements liability. ECF No. alleges that. preparation \\ [h]undreds derailment. and personal Southern, settlement Contribution VII with and 1 nil 139-41. In persons injury claims and demands Norfolk these of Southern persons entered without Count VII, Norfolk into admitting Southern because RailWorks was negligent with respect to its and performance of the 37 broken/failed thermite weld Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 38 of 56 PageID# 2719 that caused the Bartow Derailment" ... and "failed in accordance with the to prepare terms and perform [that weld] [o] f the Welding [Agreement]," Norfolk Southern "is entitled to common law and/or statutory contribution from RailWorks under applicable law for all or a portion of the amount of Virginia and Georgia the Id. settlements. n 142-43. Under both See Va. statutory cause of action. As 51-12-32. Ann. law,i^ Code Ann. the Virginia Supreme contribution § 8.01-34; Court has contribution lies where two or more persons are or her [and] share. the one Ga. a Code explained, liable to pay a claim and one or more of them pays the whole of it, his is or more than so paying may generally recover from the others the ratable proportion of the claim that each ought n. 6, DPI Midatlantic, Safeway, Inc, v. to pay. 619 S.E.2d 76, citations omitted); 79 n.6 see also (2005) 285, 289 (internal quotation marks and Deaton Inc., that a tortfeasor has a substantive Inc. Holdings, Ga. App. 746, 748, 888 S.E.2d 333, 335 (2023) right 270 Va. V. Reid, 367 ("It is well-settled of contribution from other joint tortfeasors who were not sued in the action.") 11 As RailWorks notes, state's law governs ECF No. Count VII 78, at 21 n.ll, it is not readily clear which because, although contribution requires an underlying tort claim, it is also an equitable claim based on a theory of See, e.g., Powell v. Barker, 96 Ga. App. 592, 596, 101 implied contract. S.E.2dll3, 116-17 (1957). However, regardless of which state's law applies to the contribution claim itself, RailWorks's summary judgment argument on Count VII focuses on the underlying negligence claims to which Georgia law applies. 38 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 39 of 56 PageID# 2720 Looking to the basic negligence extension. for regard to Count Count Complaint, VII allegations the same III rises demonstrated Count VII that underpinning reasons discussed and a portion of and falls there with is is grounded in the Count at Count insufficient By above with the viability and III, III. 12 length Count V, same of RailWorks has evidence for record Norfolk Southern to establish the applicable professional standard of care as is required to prevail on a negligent construction claim The Court therefore grants summary judgment to under Georgia law. RailWorks on Count VII. G. Count IX - Implied Indemnity Count IX of Norfolk Southern's Complaint alleges that Norfolk Southern "is respect to entitled all connection with losses, the to implied expenses. be Norfolk 12 \> unjustly Southern. from costs damages Bartow Derailment entirely caused by RailWorks's would indemnity enriched ECF The Complaint alleges: No. it tt and because RailWorks the acts or omissions if 1 it did 149-54. RailWorks was not \\ responsible incurred derailment in was and RailWorks fully In its with indemnify n opening brief. for the injuries and damage arising from the Bartow Derailment because RailWorks was negligent with respect to its preparation and performance of the broken/failed thermite weld that caused the Bartow Derailment, and because RailWorks failed to prepare and perform the broken/failed thermite weld that caused the Bartow [Agreement] Derailment in accordance with the terms if and the warranties contained in the Welding [sic] the Welding [Agreement]. ECF No. 1 H 142. Although the second clause of this statement purports to rely on RailWorks's failure to comply with the terms of the Welding Agreement, the cause of action of contribution requires proof of a tort and cannot be predicated on a breach of contract. 39 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 40 of 56 PageID# 2721 RailWorks argues that implied have indemnity it is entitled to summary judgment on this count [c]ourts because repeatedly rejected claims for applying Virginia implied indemnity where parties agreed to an express indemnity provision. In its opposition brief, 22 . law ECF No. the 78, at Norfolk Southern offers no contrary argument or case law in support of its implied indemnity count and instead states that does it not intend claim for implied indemnity in this case. Given Agreement, viable the the express t! continue ECF No. provision to pursue a 80, in at the 16 n.7. Welding Court agrees with RailWorks that Count IX is not under Virginia Versatility, indemnity to 21 Inc., See law. F. Dacotah Supp. 2d Mktg. 570, 580 & Rsch. , (E.D. LLC Va. v. 1998) ("Principles of implied indemnity do not operate in the face of an express indemnification contract. of Md. (4th V. Cir. Bristol Steel & Iron Moreover, 1983) ) . (citing Fidelity & Deposit Co. Works, in Inc., light of 722 F.2d Norfolk 1160, 1163 Southern's decision not to pursue such claim, RailWorks's well-founded legal argument stands unrebutted, and the Court finds that RailWorks is entitled to summary judgment as a matter of law on Count IX. H. RailWorks its favor claimed burden also asks regarding damages. As Certain Damages the certain the Court to grant categories plaintiff, of Norfolk summary judgment Norfolk Southern in Southern's bears the of proving with reasonable certainty the amount of damages 40 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 41 of 56 PageID# 2722 and the cause from Homeowners Ass'n, 699 (2012) 514, 524 Inc, v. they Batt, resulted. 284 Va. (quoting Shepherd v. Davis, with mathematical to Southern circumstances 409, Manchester // 423, 265 Va. 108, S.E.2d 690, 732 125, 574 S.E.2d furnish to evidence permit it precision, the of does require sufficient fact-finder to make Norfolk facts at (quoting Dillingham v. (1988)). Damages Hall, based 235 on (1) costs 365 Id. S.E.2d Id. // 738, 739 contingencies, (quoting Shepherd, challenges the sufficiency of respect to claimed with third-party or 265 Va. (5) invoices; third-party (2) damages (3) municipal Southern's derailment incurred in defending and settling third-party claims; and interest. The Court (6) from: and pre-judgment settlements; Southern's arising lost lading; Norfolk (4) Norfolk fees expenses; (7) n destroyed or damaged railcars; and 4, an S.E.2d at 524). RailWorks evidence 1, uncertainties, speculation cannot be recovered. 574 Va. and least intelligent and probable estimate of the damages sustained. at 125, Oaks Although carrying this burden does not require (2003)) . [p]roof which attorneys' considers each of these categories in turn. 1. Destroyed or Damaged Railcars Norfolk Southern seeks approximately $1.8 million dollars for 31 destroyed railcars damaged railcars. and approximately $260,000 RailWorks argues 41 that for repairs summary judgment to is Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 42 of 56 PageID# 2723 appropriate as to both of these categories of damages because Norfolk Southern has provided insufficient evidence to prove the damages to a reasonable degree of certainty. 25 . ECF No. 78, at 24- The parties offer a variety of highly fact-specific arguments grounded in their respective and valuations expert reports. the Court need not rehash those arguments here because it However, concludes that, across the board. these arguments highlight existence of disputed issues of material fact. the RailWorks therefore has not carried its burden of demonstrating that it is entitled to summary judgment on this item of damages. 2. Lost Lading Norfolk Southern seeks approximately $100,000 in damages for lading lost from two shipments due to the Derailment. 17, at ECF No. 78- RailWorks initially argued in its opening brief that it 1. is entitled to summary judgment on this category of damages because Norfolk Southern has not provided evidence that: shipments were (2) the (1) the relevant actually damaged or lost due to the Derailment; claimed damaged/lost shipments were properly valued by their respective owners; or (3) Norfolk Southern actually paid one of the two shipment owners for the lost lading. Norfolk Southern highlighted responsive evidence However, after supporting its lost lading claim in its opposition brief, RailWorks has modified its position in its reply brief to argue that Norfolk Southern has failed to provide evidence of: 42 (1) the materials which were Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 43 of 56 PageID# 2724 actually review paid of ECF No. for th [e 82, as lost shipment] at lading owners' and (2) [Norfolk assessment of Southern] 's the materials. 13. After reviewing Norfolk Southern's proffered evidence in the light most there is favorable to sufficient RailWorks's revised Norfolk evidence arguments Southern, to the withstand speak to Court finds summary the judgment. persuasiveness Norfolk Southern's evidence for this category of damages, an issue for trial, Southern cannot at 423, prov[e] therefore denies 732 of which is rather than convincing the Court that Norfolk with reasonable certainty the amount of damages and the cause from which they resulted. 284 Va. that S.E.2d at 699 RailWorks's Manchester Oaks, (citation omitted). motion for summary The judgment Court as to this category of damages. 3. Municipal and Third-Party Invoices Norfolk that it party, 1. this Southern asserts it seeks made to Civicus Media LLC. RailWorks argues that category of damages approximately $14,700 local municipalities ECF No. 78-16, at 6; for payments and to ECF No. a third 78-17, at it is entitled to summary judgment on because (1) Norfolk Southern failed to produce any evidence of its claimed $3,186 payment to Civicus and (2) Norfolk Southern failed to produce evidence that it verified // the accuracy of the municipal invoices (by verifying that the first responders were present and performed services and that the hours 43 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 44 of 56 PageID# 2725 each first responder claimed to have worked were accurate) Norfolk Southern actually paid those invoices. Although Norfolk Southern asserts 80, at 19, RailWorks represents invoice was not produced until April 17, discovery, its 78, at opposition 26. brief supporting the Civicus payment, that it "has produced the invoice ECF No. in ECF No. or that in its 2023, reply that after the this close of including the period for taking depositions, and after the deadline for filing dispositive motions. ECF No. 82, at 13. In light of this unacknowledged and unexplained lateness, the Court exercises its discretion under Rule 37(c)(1) of the Federal Rules of Civil Procedure to refuse to consider the Civicus invoice. The Court arrives at a different conclusion here than it does on Norfolk Southern's Rule 37 argument regarding RailWorks's misuse experts because, unlike RailWorks, Norfolk Southern has not argued that Furthermore, its given delay that was the either Civicus justified invoice or was harmless. produced approximately ten months after the claimed payment was identified in Norfolk consequently, 13 Southern's Rule 26(a)(1) disclosures and that, RailWorks did not have the benefit of the records This representation is not contradicted by anything in Norfolk Southern's brief, which does not specify when the Civicus invoice was produced, nor has Norfolk Southern made any effort in the time since RailWorks filed its reply brief to contradict RailWorks's recitation of the timeline. Therefore, the Court relies on this representation by RailWorks's counsel, as officers of the Court, but the Court could reconsider its ruling on the Civicus invoice if it is suggested at a later date that this evidence in fact was produced before the close of discovery. opposition 44 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 45 of 56 PageID# 2726 when taking j udgment, depositions it is or difficult conclude the delay Southern had made was drafting for the justified such an its motion Court or to see harmless, argument. To the for summary how even it if Court's could Norfolk knowledge, there is no other record evidence supporting the Civicus payment. The Court therefore concludes that RailWorks is entitled to summary judgment as a matter of law as to the $3,186 Civicus payment. RailWorks has not similarly carried its burden with However, respect to the claimed payments to municipalities. RailWorks argues that Norfolk Southern's evidence — which includes testimony from John a Fletcher, member of Norfolk Southern's claims department who was present at the Derailment site — is insufficient because that it the does first services, not demonstrate responders that were present, Southern that they that the hours they claimed were accurate, invoices were whether through Yet, paid. case RailWorks law or of evidence, Norfolk does not testimony corroborating its assertion that, pieces Norfolk cite from verified performed or that the any support. its experts. without all of these additional Southern cannot prov[e] with reasonable certainty the amount of damages and the cause from which they 699 resulted. (citation disputed Manchester // omitted). issues of Oaks, The material 284 Court fact 45 as Va. at 423, concludes to the that 732 S.E.2d there at remain claimed payments to Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 46 of 56 PageID# 2727 municipalities and therefore denies RailWorks's motion for summary judgment as to this category of damages. 4. Norfolk Southern's Derailment Expenses Norfolk Southern claims approximately $2.5 million in damages for costs it incurred internally in responding to the Derailment. This category includes various subcategories that Norfolk Southern describes in its Rule 26(a) (1) Contract Labor, Services, tt Travel. W // NS \\ NS Material, Misc. ECF No. tt \\ NS Miscellaneous Services/Adjustments, 78-16, NS Labor, disclosures as at 6-7/ ECF No. 78-17, \\ NS Expenses, and // t! u NS Non- NS // Meals and RailWorks at 1-2. argues for a variety of reasons that it is entitled to summary Although the Court does judgment on each of these subcategories. not address each of these arguments individually, it has considered RailWorks them all and concludes that none of them is persuasive. asserts that Norfolk Southern has failed to produce numerous types of evidence various But, that RailWorks argues across the board, RailWorks provides these RailWorks has Southern circumstances intelligent to and not does carried not permit probable no case law or legal The Court is mindful that proof [p]roof with mathematical precision. of damages does not require Norfolk to proving subcategories of Norfolk Southern's Derailment expenses. argument to support its positions. and are necessary have the its burden evidence of fact-finder estimate 46 of of the demonstrating sufficient to make damages at n that facts least and an sustained. // Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 47 of 56 PageID# 2728 Manchester Oaks, omitted). summary 284 Va. the Therefore, judgment as at to 423, Court the 732 S.E.2d denies damages at 699 RailWorks's Norfolk {citation motion Southern for claims it incurred in responding to the Derailment. 5. Third-Party Settlements RailWorks seeks summary judgment on Norfolk Southern's claim for costs it incurred in settling third-party claims, arguing that Norfolk Southern's dollars to decision individuals to living reasonably contracting, RailWorks. its and ECF No. // payments to damage, contemplated is too 78, pay several cannot be considered a direct damage \\ by hundreds miles nor the a are of derailment it a consequential be at the assessed time compensable because of against Norfolk Southern argues 28-29. third parties is to thousands from parties remote at of that Norfolk Southern made these payments "to residents who provided sufficient documentation of residence in the evacuation zone" the because emergency release of hazardous materials. Although compensable responders as RailWorks either Derailment ECF No. n asserts direct the established by that 80, at these or consequential w involved 21. payments damages, are the Virginia Supreme Court has explained: two broad categories of contract damages: consequential damages. Direct direct damages and damages are those that flow naturally" from a breach of are \\ 47 not neither party grapples with this legal issue in any meaningful way. There the As Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 48 of 56 PageID# 2729 contract; i.e., those that, in the ordinary course of human experience, can be expected to result from the breach, and are compensable, Consequential damages arise from the intervention of special circumstances" not ordinarily predictable and are compensable only if it is determined that the special circumstances were within the contemplation of the parties to the contract. Whether damages are direct or consequential is a The determination whether special question of law. circumstances were within the parties' contemplation is a question of fact for a R.K. 481 Chevrolet, (1997) bears the Inc, Hayden, 253 omitted). As convincing the v. (citations burden of [factfinder]. Va. 50, 56, 480 S.E.2d 477, the moving party, Court (1) that: RailWorks as a legal these are not direct damages; and (2) there is insufficient matter. record evidence for Norfolk Southern to prove at trial that these contemplation at the damages were within the parties' in support opinion's of its explanation consequential damages. positions the of they But RailWorks cites only one entered into the Welding Agreement. case time and does difference Without more, so only between for that direct and RailWorks fails to convince the Court that summary judgment is appropriate. Further, it is not, Southern's burden at this as RailWorks time to have welds caused the Bartow derailment third parties Agreement. there would] ECF remains Therefore, the a No. be 82, a at question Court finds of As 48 suggest, Norfolk proven that RailWorks'[s] those payments consequence discussed material that to [such that] natural 15. seems RailWorks fact has of at the [to Welding length above. that issue. on not carried its Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 49 of 56 PageID# 2730 burden and denies its motion for summary judgment as to this category of claimed damages. 6. Attorneys' Fees and Costs for Third-Party Claims Norfolk Southern seeks fees and costs approximately $750,000 associated with defending and in attorneys' settling claims brought against it by third parties as a result of the Derailment. ECF No. 22 78-16, at 7; ECF No. 78-17, at 3; see also ECF No. RailWorks derailment"). judgment as to these Norfolk Southern and because, at attorney's fees spent (describing the claimed fees and costs as in defending cases filed against 80, [Norfolk Southern] because of the argues that it claimed attorneys' is entitled fees and to summary costs because has not produced any evidence of these damages, even if it had produced such evidence, Norfolk Southern has not designated an expert regarding the reasonableness of those ECF No. fees. 78, at 29 (emphasis in original). Norfolk Southern counters that, has produced and, incurred. eliciting [Norfolk (1) in although the second counsel the that remove ECF No. records from litigation to time to Southern] sufficient that: as testimony subsequent testimony. detailed 80, the it fees it of the the involved fees attorney's argument, immediate with it anticipates [] representing aftermath were tradition[al] at 22. expert as to the first argument, and reasonable. requirement during which of is expert In its reply, RailWorks highlights testimony 49 is not always required. Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 50 of 56 PageID# 2731 \\ Virginia case law is replete with instances where expert testimony is ordinarily required"; (2) Norfolk Southern "did not produce any of the time records it references until April 11, close of discovery motions"; and (3) and the deadline for filing after the dispositive declined to produce a witness Norfolk Southern to testify regarding its claim for attorneys' RailWorks'[s] 2023, fees in response to deposition notice" and instead intends to have "one of its counsel of record reasonableness of derailment the and the [in this case] fees incurred third-party testify at trial as to the in claims. investigating It 14 ECF No. the 82, Bartow at 16-17 (emphasis in original). The Court need not address whether expert testimony would be necessary here attorneys' to fees establish and costs the because reasonableness Norfolk of the Southern's claimed failure to produce any evidence of those fees and costs in a timely manner is Proof of these damages is part of Norfolk Southern's dispositive. prima facie case, and although it included a valuation category of damages in its June 2022 Rule 26(a) (1) ECF No. 78-16, of this disclosures, Norfolk Southern provided no supporting evidence representation regarding the Civicus invoice, these not contradicted by anything in Norfolk Southern's opposition brief, nor has Norfolk Southern made any effort in the time since RailWorks filed its reply brief to contradict RailWorks's representations. Therefore, the Court relies on these representations by RailWorks's counsel, 14 Like RailWorks's representations as officers of category of are the Court, damages if but the Court could reconsider its ruling on the it is suggested representations are inaccurate. 50 at a later date that these Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 51 of 56 PageID# 2732 for that valuation until April the close of discovery it Significantly, was and only the provided no 2023, filing after summary judgment on April 13, had 17, of dispositive RailWorks 2023, supporting after the deadlines for filed its motions. motion for arguing that Norfolk Southern evidence. that Norfolk Southern produced such documentation.^^ Consistent the Court with the exercises Federal Rules of its Civil Court's ruling discretion Procedure to on under the Rule refuse to Civicus invoice. 37(c)(1) of consider the the time records that Norfolk Southern produced after the close of discovery in light of its unacknowledged the Court could conclude that justified or harmless, argument. unexplained lateness in For the same reasons discussed above, producing these records. does not appear that and it the delay was even if Norfolk Southern had made such an 16 Without any evidence to support Norfolk Southern's claim for attorneys' related fees and third-party costs associated with the settlements. the Derailment Court and concludes the that In its First Set of Interrogatories and Request for Production of Documents, dated October 28, 2022, RailWorks requested that Norfolk Southern [a]ny documentation supporting the claimed damages incurred by produce 15 [Norfolk Southern] at 16 in connection with the [D]erailment[]. ECF No. 78-18, 12. Moreover, unlike the Civicus invoice, Norfolk Southern did not attach the late-produced time records to its opposition brief, has no access to those records even if 51 it were meaning that the Court inclined to review them. Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 52 of 56 PageID# 2733 RailWorks has carried its burden and is entitled to summary judgment as a matter of law on this category of claimed damages. 7. In \v its 17 Prejudgment Interest Complaint, Norfolk Southern seeks an award prejudgment and post-judgment interest on all money damages might be awarded to it in this action. ECF No. 1, at 32. tt of that RailWorks argues that the Court should grant summary judgment in RailWorks's favor on Norfolk Southern's claim for prejudgment interest because Norfolk Southern's "damages remain unliquidated and are disputed. ECF No. 78, at In 30. opposition, Norfolk Southern tt emphasizes that whether to award prejudgment interest is at the discretion of the trier of fact and that Norfolk Southern's claimed damages not abstract, like concrete expenses. \\ emotional ECF No. n distress 80, at damages, but w are are based on 22-23. Virginia law governs the award of prejudgment interest in a diversity case. F.3d 633 614, tf Hitachi (4th Cir. Credit 1999) Am. Corp. v. Signet (citation omitted). Bank, Section 166 8.01- RailWorks argues in a footnote in its reply brief that "the Court should deny [Norfolk Southern] any right to recover its attorneys' fees" for the instant litigation because Norfolk Southern's "only right to recover fees is under the indemnity clause in Section 5.1 of the Welding Agreement" and summary judgment is appropriate on Norfolk Southern's express and implied indemnity counts. ECF No. 82, at 18 n.ll. However, while the Court grants summary judgment on the implied indemnity claim and on part of the express indemnity claim, part of the express indemnity claim survives RailWorks's motion for summary judgment. The Court thus expresses no opinion regarding Norfolk Southern's ability in the future to recover attorney's fees incurred 17 in connection with this action. 52 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 53 of 56 PageID# 2734 382 of the Virginia Code provides for prejudgment interest as follows: In any . . . action at law or suit in equity, the final order, verdict of the jury, or if no jury the judgment or decree of the court, may provide for interest on any principal sum awarded, or any part thereof, and fix the period at which the interest shall commence. Va. Code § Ann. As 8.01-382. Norfolk Southern the argues, decision whether to award pre-judgment interest is discretionary with the Const. here, trier of 275 Va. Co. , the 41, court is the interest is Upper fact. 63, Occoquan 655 S.E.2d 10, trier of fact, 23 the V. Auth. (2008). issue Blake Where, as of prejudgment submitted to the sound discretion of the trial court. PRC Advanced Marine Enters., Inc, v. S.E.2d 148, Sewage 160 Inc., 256 Va. 106, 126, 501 (1998) . Although RailWorks is correct that Virginia courts generally do not grant prejudgment interest dispute between the parties,"^® id. summary judgment on that basis unliquidated on (citations omitted), alone (emphases to resolved some 18 The the final order, verdict or if no jury the judgment or decree of the court added) expected in granting would be premature. language of § 8.01-382 - which references of the jury, damages indicates consider or all that prejudgment of the a trier of interest plaintiff's fact only claims is generally after in its it has favor, The damages Norfolk Southern seeks here are "unliquidated" because they are based on a calculation of loss suffered by Norfolk Southern and are not proactively contemplated by the Welding Agreement. 53 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 54 of 56 PageID# 2735 While the typically at the conclusion of the trial. of prior cases applying Virginia law reveals Court's review that plaintiffs sometimes seek prejudgment interest as part of dispositive motions for summary judgment, the Court has been unable to identify any instances where a court applying Virginia law has granted (or even considered) seeking a a private defendant's dispositive pretrial 19 motion ruling for summary that, judgment because the plaintiff's damages are unliquidated, the plaintiff cannot recover prejudgment interest should it ultimately prevail at trial. e.g., Reid v. Ayscue, 246 Va. 454, 459, 436 S.E.2d 439, 442 See, (1993) (affirming the trial court's decision to grant summary judgment on the plaintiffs' contribution claim but to deny prejudgment interest); City Nat'l Bank v. Tress, No. 7:llcv73, 2013 WL 3879689, at *5 (W.D. Va. July 26, for summary judgment (granting the plaintiff's motion 2013) and ordering the defendant to pay damages. including prejudgment interest). As the Virginia Supreme Court has explained, the purpose of awarding prejudgment interest is: where appropriate, a court applying Virginia law will grant summary judgment to a public defendant on the availability of prejudgment interest because of the common-law principle of state immunity from interest charges 19 in the absence of Halco Eng'g, Inc. [a] statutory or contract obligation. 27 Va. Cir. Ill, 1992 WL 884473, at *3 (Fairfax County 1992) (citing Highway Comm'r. v. Parsonage Trustees, 220 Va. 402, 258 S.E.2d 503 (1979); City of Lynchburg v. Amherst Cnty. , 115 Va. 600, 80 S.E. 117 (1913)). In those cases, unlike this one, the factfinder does not have V. Commonwealth, discretion to award prejudgment interest because the defendant cannot be required to pay prejudgment interest as a matter of law. 54 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 55 of 56 PageID# 2736 to compensate [the p]laintiff for the loss sustained by not receiving the amount to which he was entitled at the time he was considered entitled to receive necessary to place it, the and such award [plaintiff] is in the position he would have occupied if the party in default had fulfilled his obligated duty. Marks V. (second Sanzo, 231 alteration Va. in 350, 356, original) 345 S.E.2d (quoting 263, 267 (1986) Emp.-Teamsters Joint Council No. 84, Health & Welfare Fund v. Weatherall Concrete, 468 F. Supp. 1167, 1171 (S.D.W. Va. 1979)). Thus, courts Inc., seek to weigh the equities in a particular case to determine whether an award of prejudgment interest is appropriate. V. Brown & Root, Inc. , 207 F.3d 717, u 20 727 Moore (4th Bros. Cir. Co. 2000) . Attempting to conduct this analysis on summary judgment would be premature; the Court will be far better placed to decide whether to award prejudgment interest at the parties have presented their evidence close of trial. once the in full and the Court has determined whether Norfolk Southern should prevail on its damages claims. Therefore, the Court denies RailWorks's motion for summary judgment as to the issue of prejudgment interest. For example, courts consider factors such as: whether "a legitimate controversy existed," Reid, 246 Va. at 459, 436 S.E.2d at 442; whether the amount of damages and the length of time the plaintiff "has been without their benefit are significant," Wells Fargo Eguip. Fin., Inc, v. State Farm Fire & Cas. Co., 823 F. Supp. 2d 364, 368 (E.D. Va. 2011); and, as noted above, whether the damages are "unliquidated" and "in dispute," Advanced 20 To (citations omitted), Marine, 256 Va. at 126, 501 S.E.2d at 160 (1998) be clear, however, there is no bona fide legal dispute exception" to § 8.01382. See Gill V. Rollins Protective Servs. Co., 836 F.2d 194, 199 (4th Cir. 1987). The factfinder retains its discretion to grant prejudgment interest even where the dispute between the parties is legitimate. 55 Case 2:22-cv-00003-MSD-LRL Document 104 Filed 09/14/23 Page 56 of 56 PageID# 2737 IV. For the reasons set CONCLUSION forth Southern's motion for partial GRANTS in part and DENIES judgment, ECF No. Counts III, as to VII, Count and IX. V to the the Court DENIES summary judgement, ECF No. Norfolk 75, and in part RailWorks's motion for summary The 77. above, Court The extent GRANTS Court it is RailWorks's also GRANTS based on § motion RailWorks's 5.1(a)(i)(B) as to motion of the Welding Agreement but DENIES RailWorks's motion as to Count V to the extent it is based on § 5.1(a) (iii) The Court DENIES RailWorks's motion RailWorks's damages-based arguments, of the Welding Agreement. as to Count Regarding I. the Court GRANTS RailWorks's motion as to the following categories of damages claimed by Norfolk (1) Southern: the payment to Civicus Media LLC; and (2) fees and costs for third-party claims. RailWorks's motion as The Order to IT Clerk all IS SO is of to the Court DENIES damages claims. to Norfolk Southern's REQUESTED Counsel Otherwise, attorneys' send a copy of this Opinion and Record. ORDERED. /s Mark CHIEF Norfolk, Virginia September 14- , 2023 56 UNITED S. Davis STATES DISTRICT JUDGE

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