Pacific Boring, Incorporated v. Staheli Trenchless Consultants, Inc. et al, No. 2:2014cv00187 - Document 44 (W.D. Wash. 2015)
Court Description: ORDER granting defts' 24 Motion for Summary Judgment on pltf's remaining claims; denying pltf's 33 Cross-Motion for Summary Judgment denying defts' collateral estoppel affirmative defense, by Judge Ricardo S Martinez. (PM)
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Pacific Boring, Incorporated v. Staheli Trenchless Consultants, Inc. et al Doc. 44 1 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 9 10 Case No. C14-187RSM PACIFIC BORING, INCORPORATED, a California corporation, 11 12 13 14 15 16 17 18 Plaintiff, v. STAHELI TRENCHLESS CONSULTANTS, INC., a Washington corporation, and KIMBERLIE STAHELI LOUCH, P.E., Ph.D., individually, ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT ON PLAINTIFF’S REMAINING CLAIMS AND DENYING PLAINTIFF’S CROSSMOTION FOR PARTIAL SUMMARY JUDGMENT Defendants. I. INTRODUCTION 19 This matter comes before the Court on Defendants’ Motion for Summary Judgment on 20 21 Plaintiff’s Remaining Claims, Dkt. #24, and Plaintiff’s Cross-Motion for Summary Judgment 22 Denying Defendants’ Collateral Estoppel Affirmative Defense, Dkt. #33. Defendants Staheli 23 Trenchless Consultants, Inc. (“STC”) and Kimberlie Staheli, Ph.D. (“Dr. Staheli”) argue that 24 Plaintiff Pacific Boring, Inc. (“Pacific Boring”)’s remaining claims relitigate issues previously 25 26 settled by Judge Shaffer in King County Superior Court and are otherwise contrary to 27 Washington law. Pacific Boring opposes Defendants’ Motion, arguing that Defendants rely 28 heavily on unsettled facts pulled from Judge Shaffer’s nonbinding decisions. Pacific Boring ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 1 Dockets.Justia.com 1 also moves for summary judgment dismissal of Defendants’ affirmative defense of collateral 2 estoppel, arguing that the effect will be to “strike from the record… essentially the entire 3 factual foundation upon which defendants’ [summary judgment] motion, and its several legal 4 arguments, are premised.” Id. at 2. Having reviewed the parties’ briefing, and having 5 6 7 determined that oral argument is not necessary, the Court agrees with Defendants, GRANTS their Motion and DENIES Plaintiff’s Motion. II. 8 9 10 BACKGROUND On or about April 19, 2010, Staheli Trenchless Consultants, Inc. (“STC”) contracted with the Northshore Utility District (“the District”)1 to provide engineering and/or surveying 11 12 consulting services related to the installation of a sewer bypass line at O.O. Denny Park in 13 Kirkland, Washington. Dkt. #1-1 at 2-4; Dkt. #25 at 1.2 Within the scope of its consulting 14 services, STC reviewed and edited a report by Gray & Osborne, Inc., the engineer of record for 15 the sewer bypass project. Dkt. #25 at 1-2. Although the work was originally contracted as a 16 microtunneling project, the District decided to terminate that contract and redesign the project 17 18 as an auger bore project. Id. STC later contracted with Gray & Osborne to consult about auger 19 bore specifications. Id; Dkt. #1-1 at 20. 20 21 The subsequent background facts were previously summarized in King County Superior Court: 22 In July of 2011, the District invited contractors to bid on a public works project to install 1,300, approximately, sewer lines near [O.O. Denny Park]. The bidding documents contained information on the site and required that the contractor use an auger boring machine to complete the job. 23 24 25 26 27 28 1 The District is a water and wastewater district that serves over 20,000 residents in the north end of Lake Washington. Dkt. #26-1 at 19. 2 Although the Declaration of Kimberlie Staheli, Dkt. #25, is submitted by Defendants without the necessary statement that it is declared under penalty of perjury, the Court notes that the facts from that Declaration cited by the Court are not challenged by Plaintiff and will thus be relied on. ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 2 1 2 3 4 5 6 7 New West… in consultation with it’s (sic) subcontractor, Pacific Boring, bid for and won this job. The original specification (sic) designed by the District were for the contractor to use the auger bore method. And the specifications contained several baselines that told the contractor what kinds of conditions to prepare for…. And the specifications also require the contractor to dewater the work area as necessary to prevent uncontrolled flows of water and soil. The District included the geotechnical data report which we’ve all been calling the GDR created by Geotechnical Engineers, Inc., (sic) detailing findings from ten borings along the planned route. 8 9 10 11 12 … In August of 2011, New West approached the District with a proposal to use an alternative design for the project. And what New West wanted to do was open shield pipe jacking instead of the auger bore design with a different alignment using two segments instead of three. 13 … 14 16 So the parties executed Change Order No. 1… in September of 2011…. The responsibility for design under the change order was put on New West. 17 … 15 18 19 In Late November of 2011, New West began to tunnel using the alternative method, but there were problems that prevented Pacific Boring from completing as planned. 20 21 22 On December 6th, workers found a big sink hole right above the alignment and New West put in its first notice of differing site condition indicating that the sink hole was caused by excessive cobbles. 23 24 25 26 27 28 … On January 31, Pacific Boring removed its boring machine because it wasn’t feasible to finish the section with that method. The District asked New West to continue with an auger bore. New West told Pacific Boring to do that, and Pacific Boring said that wasn’t feasible. The parties executed Change Order No. 2 which let New West go forward with an open cut method and provided ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 3 1 2 3 4 5 6 7 8 9 the framework for doing that and New West ended up finishing segment one by open trench method. Pacific Boring didn’t do further work on segment one. Before it started work on segment two, New West sought permission to complete the job using micro-tunneling—still another method—because of concerns that using auger boring or open shield hacking would result in the same problems seen in segment one. After some dispute, the parties executed Change Order No. 3 to allow micro tunneling, and the second one was finished on April 5th, 2012. Dkt. #26-3 at 44-47. These background facts appear to be undisputed between the parties. In May of 2012, New West brought suit against the District and Pacific Boring for 10 breach of contract before Judge Catherine Shaffer in King County Superior Court. Dkt. #24 at 11 12 5; Dkt. #37-4 at 43. Pacific Boring then brought its own suit against New West and the District 13 for breach of contract, among other claims. Id. The two cases were consolidated. Id. A 14 review of the submitted briefing, declarations, and orders from the state court case makes clear 15 that it involved the same underlying nexus of events as this federal case, i.e., unexpected soil 16 conditions at a sewer line project at O.O. Denny Park in Kirkland, Washington. 17 18 19 20 21 22 23 24 25 26 27 28 On September 6, 2013, Judge Shaffer reached several rulings on partial summary judgment. See Dkt. # 26-3. Relevant rulings are renumbered below: 1. “…pursuant to the flowdown provisions in the subcontract between New West and Pacific Boring, Pacific Boring agreed to assume all obligations and responsibilities which New West had assumed toward the District for Pacific Boring’s work in its subcontract with New West;” 2. “…Pacific Boring agreed to the provisions in Change Order No. 1…;” 3. “…Pacific Boring assumed toward New West the obligations referenced in that order of the contract between New West and the District;” 4. “…any determinations made by the Court with regard to the existence of differing site conditions, or lack thereof, under the contract with the District are equally binding on both New West and Pacific Boring.” ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 4 1 2 3 4 5. “Pacific Boring’s differing site condition claims based on encountering Cobbles or Boulders or Groundwater (or any combination thereof) on the Project are hereby dismissed.” 6. “New West’s claims based on that [sic] it and/or its subcontractor Pacific Boring encountering Cobbles or Boulders of Groundwater (or any combination thereof) on the Project are hereby dismissed with Prejudice.” 5 Dkt. # 26-3 at 2-9. Judge Shaffer also ruled “[t]o the extent this order requires interpretation, 6 7 the transcript for the ruling on September 6, 2013 is incorporated by reference.” Id. at 7. That 8 transcript shows Judge Shaffer ruled: 9 10 11 12 13 14 15 16 17 18 7. “So the parties executed Change Order No. 1, the infamous and notorious Change Order No. 1 in September of 2011. ... The responsibility for design under the change order was put on New West.” Id. at 45. 8. “…the thing I look to first is the contract. And the baselines in the contract are both broad and clear. They require the contractor to be capable of extracting and ingesting any and all quantities of cobble actually encountered and limits the District’s payment for boulders to those over 36 inches. It's crystal clear that groundwater is another disclosed situation in the sense of the parties being involved in working under the level of groundwater was disclosed even in the GDR [Geotechnical Data Report], and that's just not disputed here. So with regard to whether we have a DSC claim based on encountering [cobbles, boulders, or groundwater] the answer to that question is no.” Id. at 47-48. 19 On December 13, 2013, Judge Shaffer reached several further rulings on partial 20 21 22 23 24 25 26 27 28 summary judgment, including, inter alia: 9. The court dismissed with prejudice New West’s claim against the District that dewatering along the alignment of the Project was outside the scope of the prime Contract; 10. The court dismissed with prejudice all claims (whether raised by New West or Pacific Boring) arising from Segment 2 of the Project; 11. The court dismissed with prejudice Pacific Boring and/or New West’s claim for defective specifications, including but not limited to any claim for additional compensation on the basis that the Project could not have been constructed using the District’s specified auger bore method. ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 5 1 Dkt. # 26-4 at 40-41. Judge Shaffer’s oral ruling makes clear that the Court was dismissing 2 Pacific Boring’s differing site condition claim as to Segment 2 “for the simple reason that there 3 was no timely notice under the contract of differing site conditions on Segment 2.” Dkt. #26-5 4 at 21. 5 Defendants assert that at some point after this “PBI brought claims against Staheli in 6 7 King County Superior Court, the exact claims raised in the present lawsuit, and immediately 8 requested the court consolidate the two lawsuits.” Dkt. #24 at 9.3 While the record does not 9 confirm this assertion, it does show that Pacific Boring requested a continuance of the trial date 10 in King County Superior Court on January 22, 2014, in part so that it could “add causes of 11 12 action directly related to the existing causes of action against the District’s engineer, not yet a 13 party to the action…” Dkt. #26-4 at 45. Pacific Boring, through the same counsel as the 14 instant action, argued that “good cause exists… to have all related claims arising out (sic) these 15 facts and circumstances to be litigated in the same action…. Moreover, should this Court deny 16 the Motion for a Continuance, it is likely that Pacific Boring will file a separate action against 17 18 Staheli Trenchless Consultants and the District. The causes of action will arise out of certain of 19 the same facts and circumstances and involve a common set of law and facts also at issue in the 20 present litigation.” Id. at 46-47. Judge Shaffer denied this motion. Dkt. #26-5 at 1-6. The 21 remaining claims between the parties in that matter were settled and Pacific Boring stipulated 22 to a dismissal without prejudice. See Dkt. #26-5 at 7-13. 23 24 25 26 27 28 3 Defendants’ citation for this assertion is to “PBI's Opp. To Mot. Summ. J., at 15, New West Devel. (Aug. 5, 2013, Dkt. # 60).” This citation, to the middle of a section of Pacific Boring’s August 5, 2013, opposition brief entitled “The Detail Specifications of the Prime Contract,” appears to be in error and does not provide any evidence of the fact asserted. Additionally, citing to the title of the document and the original docket number assigned in the King County Superior Court action does not conform to LCR 10(e)(6). The parties are advised to cite to the record by the docket number and page as filed in this case, i.e. “Dkt. #26-2 at 25.” ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 6 1 On February 7, 2014, Plaintiff Pacific Boring filed a new action against Defendants 2 STC and Dr. Staheli in this Court. Dkt. #1. The degree of similarity between the issues in the 3 instant action and the issues in the King County Superior Court action is debated by the parties. 4 Plaintiff alleges in the instant matter that Defendants contacted Plaintiff on June 30, 5 6 2011, “and solicited [Plaintiff] to bid the job. Id. at 12. Plaintiff further alleges that, at some 7 later date before Plaintiff bid on the project, Defendants advised Plaintiff about the ground 8 conditions, stating they were “very dense and ‘should stand’ and flowing water was not 9 anticipated.” Id. Plaintiff further alleges that Defendants “advised that open shield pipe 10 jacking (‘OSPJ’) was an appropriate trenchless tunneling method based on anticipated ground 11 12 conditions.” Id. at 12-13. Plaintiff alleges that Defendants “manipulated” the aforementioned 13 geotechnical reports to “shed liability” for unanticipated conditions. Dkt. #12 at 6-7. Plaintiff 14 alleges that after successfully starting the project, it encountered unanticipated, wet flowing 15 ground, a condition it alleges was known by Defendants, but hidden from Plaintiff, causing the 16 sinkhole, prohibiting forward progress, and giving rise to a claim for differing site conditions. 17 18 19 20 21 Dkt. #1 at 15-16. On November 21, 2014, this Court dismissed with prejudice Plaintiff’s claims for declaratory relief and violations of Washington’s Consumer Protection Act. Dkt. #21. Plaintiff’s claims of professional negligence and negligent misrepresentation remain and are the 22 subject of Defendants’ Motion for Summary Judgment. See Dkt. #24. 23 24 25 26 III. DISCUSSION A. Legal Standard on Summary Judgment Summary judgment is appropriate where “the movant shows that there is no genuine 27 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. 28 ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 7 1 R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). Material facts are 2 those which might affect the outcome of the suit under governing law. Anderson, 477 U.S. at 3 248. In ruling on summary judgment, a court does not weigh evidence to determine the truth of 4 the matter, but “only determine[s] whether there is a genuine issue for trial.” Crane v. Conoco, 5 6 7 Inc., 41 F.3d 547, 549 (9th Cir. 1994) (citing Federal Deposit Ins. Corp. v. O’Melveny & Meyers, 969 F.2d 744, 747 (9th Cir. 1992)). 8 The Court must draw all reasonable inferences in favor of the non-moving party. See 9 O’Melveny & Meyers, 969 F.2d at 747, rev’d on other grounds, 512 U.S. 79 (1994). However, 10 the nonmoving party must make a “sufficient showing on an essential element of her case with 11 12 respect to which she has the burden of proof” to survive summary judgment. Celotex Corp. v. 13 Catrett, 477 U.S. 317, 323 (1986). Further, “[t]he mere existence of a scintilla of evidence in 14 support of the plaintiff's position will be insufficient; there must be evidence on which the jury 15 could reasonably find for the plaintiff.” Anderson, 477 U.S. at 251. 16 B. Plaintiff’s Cross-Motion for Summary Judgment on Collateral Estoppel 17 18 a. Washington Law on Collateral Estoppel 19 Collateral estoppel is a judicially created doctrine designed to conserve judicial 20 resources and provide finality to litigants. State v. Barnes, 85 Wn. App. 638, 652-53, 932 P.2d 21 669 (1997). Because this is a diversity action, state law controls whether the previous state 22 court determinations have a preclusive effect on Plaintiff’s claims. Jacobs v. CBS Broad., Inc., 23 24 291 F.3d 1173, 1177 (9th Cir. 2002) (citing Pardo v. Olson & Sons, Inc., 40 F.3d 1063, 1066 25 (9th Cir. 1994) (“Because this is a diversity case, we apply the collateral estoppel rules of the 26 forum state . . . .”); Costantini v. Trans World Airlines, 681 F.2d 1199, 1201 (9th Cir. 1982) 27 (holding that “a federal court sitting in diversity must apply the res judicata law of the state in 28 ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 8 1 which it sits”); Priest v. Am. Smelting & Ref. Co., 409 F.2d 1229, 1231 (9th Cir. 1969) (“Since 2 federal jurisdiction in this case is based upon diversity of citizenship, the district court and this 3 court must apply the substantive law of the forum state, . . . including the law pertaining to 4 collateral estoppel.”)). 5 6 Under Washington law, collateral estoppel is appropriate when four factors are present: 7 “(1) the issue decided in the prior adjudication is identical with the issue now before the court, 8 (2) there was a final judgment on the merits, (3) the party against whom the plea is now 9 asserted is a party or is in privity with a party to the prior adjudication, and (4) the application 10 of the collateral estoppel doctrine will not work an injustice against the party against whom the 11 12 doctrine is applied.” San Telmo Assocs. v. Seattle, 108 Wn.2d 20, 22-23, 735 P.2d 673 (1987) 13 (citing Rains v. State, 100 Wn.2d 660, 665, 674 P.2d 165 (1983)). The Court will address each 14 of these Rains factors in turn. 15 i. Factor 1: Identical Issues 16 Plaintiff argues that this case “involves claims of misrepresentation and negligence on 17 18 the part of a professional engineer” and that such claims “were neither pled, argued, or decided 19 in the State Court case.” Dkt. #33 at 10. Plaintiff cites to no law to support their contention 20 that this is fatal to a defense of collateral estoppel as to specific issues. Defendants argue that 21 “[w]hether the claims of the first action are different from the claims in the second action has 22 no bearing on whether a party can relitigate issues decided in the first action,” citing to S. Pac. 23 24 R&R v. United States, 168 U.S. 1, 48-49,42 L. Ed. 355, 18 S Ct. 18 (1897) for the proposition 25 that “a right, question, or fact distinctly put in issue and directly determined by a court of 26 competent jurisdiction as a ground of recovery, cannot be disputed in a subsequent suit… ; and 27 even if the second suit is for a different cause of action, the right, question, or fact once so 28 ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 9 1 determined must ... be taken as conclusively established….” Dkt. #36 at 18. Plaintiff fails to 2 address this case law on Reply. See Dkt. #40 at 11. 3 4 The Court agrees with Plaintiff that the claims at issue in this case are not identical to those pled in the state court matter. However, several of the issues before Judge Shaffer are 5 6 7 identical to the issues before the Court. For those issues that were previously decided in the state court matter, this factor is met. ii. Factor 2: Final Judgment on the Merits 8 9 Plaintiff argues that “[b]ecause Judge Shaffer’s summary judgment rulings lacked any 10 CR 54(b) certification of finality, and adjudicated fewer than all claims of all parties, they 11 12 remained subject to revision at any time before entry of final judgment.” Dkt. #33 at 4. 13 Plaintiff argues that these rulings were “effectively so revised” by the eventual settlement 14 agreement between Plaintiff and the Defendants in the previous state court matter, and that 15 because this settlement resolved Plaintiff’s claims without prejudice, collateral estoppel cannot 16 apply, citing to Marquardt v. Fed. Old Line Ins. Co., 33 Wn. App. 685, 689-90, 658 P.2d 80 17 18 (1983). 19 Defendants argue that the issue of whether partial summary judgment can satisfy this 20 factor has been addressed by a Washington court of appeals in Cunningham v. State, 61 Wn. 21 App. 562, 811 P.2d 225 (1991), also citing to In re Dependency of H.S., 2015 Wash. App. 22 LEXIS 960, *7 (Wash. Ct. App. Apr. 30, 2015) (“For the purposes of collateral estoppel, a final 23 24 judgment includes any prior adjudication of an issue in another action that is determined to be 25 sufficiently firm to be accorded conclusive effect.”). 26 Cunningham held that the CR 54 standard does not apply when determining whether an 27 order on partial summary judgment can bar relitigation of the same issues in a different lawsuit. 28 ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 10 1 61 Wn. App. at 566 (stating "[w]e recently rejected a similar [CR 54] argument on the ground 2 that such a rigorous finality requirement does not implement the purposes of collateral 3 estoppel: to protect prevailing parties from relitigating issues already decided in their favor, and 4 to promote judicial economy.”) Cunningham discusses aligning Washington law “with the 5 6 majority of courts which employ a pragmatic approach to determine finality for purposes of 7 collateral estoppel.” Id. at 566-567. Cunningham cites to several sources for sub-factors to 8 consider, including Lummus Co. v. Commonwealth Oil Ref. Co., 297 F.2d 80 (2d Cir. 1961), 9 cert. denied, 368 U.S. 986 (1962) (whether a judgment not otherwise final ought to be 10 considered final for purposes of collateral estoppel turns on “the nature of the decision (i.e., that 11 12 it was not avowedly tentative), the adequacy of the hearing, and the opportunity for review”); 13 and The Restatement (Second) of Judgments (1982) § 13 (a final judgment “includes any prior 14 adjudication of an issue in another action that is determined to be sufficiently firm to be 15 accorded conclusive effect…. Factors for a court to consider in determining whether the 16 requisite firmness is present include whether the prior decision was adequately deliberated, 17 18 whether it was firm rather than tentative, whether the parties were fully heard, whether the 19 court supported its decision with a reasoned opinion, and whether the decision was subject to 20 appeal or in fact was reviewed on appeal.”). 61 Wn. App. at 567. 21 In examining the language of the state court settlement agreement, it is not clear to the 22 Court that the parties agreed to revise the rulings of Judge Shaffer, or that such an agreement 23 24 could effectively do so. Plaintiff’s citation to Marquardt is inapposite, as Defendants are not 25 hoping to apply collateral estoppel to the judgment of dismissal based on the settlement 26 agreement, but to Judge Shaffer’s earlier partial summary judgment decisions. 27 28 ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 11 1 Under Cunningham, partial summary judgments can satisfy this Rains factor, and the 2 application of collateral estoppel to issues resolved by partial summary judgment is within the 3 purpose of the judicially created collateral estoppel doctrine—to conserve judicial resources 4 and provide finality to litigants. Here, the Court finds that the previous decisions of Judge 5 6 Shaffer were “sufficiently firm,” Plaintiff was fully heard, the hearing was adequate, there was 7 opportunity for appeal, and Judge Shaffer’s opinions were reasoned, despite Plaintiff’s protests 8 to the contrary. This factor is met. 9 iii. Factor 3: Same Party Against whom the Plea is Now Asserted 10 Plaintiff does not address this factor in its motion and thus concedes that it is the same 11 12 party as in the King County Superior Court matter. iv. Factor 4: Injustice of Applying Collateral Estoppel 13 14 Plaintiff, as the party asserting that the application of collateral estoppel would be 15 unjust, has the burden of showing injustice. Garcia v. Wilson, 63 Wn. App. 516, 522-23 n.19, 16 820 P.2d 964 (1991) (citing Pend Oreille PUD I v. Tombari, 117 Wn.2d 803, 819 P.2d 369 17 18 (1991)). 19 In its section devoted to this Rains factor, Plaintiff argues that it filed suit before this 20 Court rather than pursuing its claims in King County Superior Court because that would have 21 entailed “a trial and likely appeal” “because of patent erroneous rulings by Judge Shaffer.” 22 Dkt. #33 at 8. Defendants argue that the substantive merits of the previous court’s ruling is 23 24 outweighed by the fact Plaintiff was given ample incentive and opportunity to litigate these 25 issues before Judge Shaffer, citing to Thompson v. State Dept. of Lic., 138 Wn.2d 783, 982 P.2d 26 601(1999). Thompson held “[t]he public policy of avoiding duplication of proceedings where 27 the parties had ample incentive and opportunity to litigate an issue indicates that no injustice is 28 ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 12 1 done in giving preclusive effect to a decision from the first proceeding, even if, as here, we may 2 have reason to believe the first result is erroneous.” 138 Wn.2d at 799. 3 4 The Court finds Defendants’ argument the more persuasive. As the Washington Supreme Court noted in Thompson, “it may be that the [previous] court was in error in its 5 6 ruling…. This would undoubtedly have subjected the judgment to reversal on appeal, or to 7 reversal by some other form of direct attack, but it does not subject it to a collateral attack.” 138 8 Wn.2d at 799 (citing Kinsey v. Duteau, 126 Wash. 330, 333 218 P. 230 (1923)). 9 b. Applying Collateral Estoppel to this Case 10 Having met the four factors outlined in Rains, it is clear that Plaintiff can be estopped 11 12 from relitigating issues decided by Judge Shaffer on partial summary judgment. Thus, for 13 purposes of Defendants’ Motion for Summary Judgment, the Court concludes that Pacific 14 Boring is estopped from arguing contrary to Judge Shaffer’s previous rulings listed above. 15 C. Hearsay 16 Plaintiff argues that “Judge Shaffer’s rulings on contract issues are hearsay…” Dkt. #27 17 18 at 14. Defendants argue that orders, judgments, and hearing transcripts of prior rulings are not 19 hearsay when admitted to determine collateral estoppel effect, citing Weurfel v. City of Seattle, 20 Case No. Civ. 03-3660 JLR, 2006 U.S. Dist. LEXIS 1398 at * 10 2006 WL 27207 (W.D. 21 Wash. Jan. 5, 2006). The Court agrees with Defendants—Judge Shaffer’s rulings are 22 admissible for purposes of establishing collateral estoppel. 23 24 25 26 D. Defendants’ Motion for Summary Judgment on Professional Negligence Pacific Boring alleges nearly identical professional negligence claims against Defendants STC and Dr. Staheli. See Dkt. #1 at 16-19; 21-24. 27 28 ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 13 1 In order to recover for negligence, Plaintiff has the burden to show that (1) Defendants 2 owed it a duty, (2) Defendants breached that duty, (3) an injury resulted, and (4) the breach was 3 the proximate cause of the injury. Lowman v. Wilbur, 178 Wn.2d 165, 169, 309 P.3d 387 4 (2013) (citing Crowe v. Gaston, 134 Wn.2d 509, 514 (1998)). 5 a. Existence of a Duty 6 7 “A duty may be predicated on violation of either a statute or common law principles of 8 negligence.” Alhadeff v. Meridian on Bainbridge Island, LLC, 167 Wn.2d 601, 618, 220 P.3d 9 1214 (2009) (citing Bernethy v. Walt Failor's, Inc., 97 Wn.2d 929, 932, 653 P.2d 280 (1982)). 10 Whether an actionable duty was owed to a plaintiff is a threshold determination. Munich v. 11 12 Skagit Emergency Commc’n Cent., 175 Wn.2d 871, 877, 288 P.3d 328 (2012). 13 Plaintiff’s Complaint alleges that Defendants STC and Staheli owed Pacific Boring a 14 duty under professional standards applicable to engineers in the state of Washington, citing to 15 several WAC regulations and RCW statutes.4 See Dkt. #1 at 16-19; 21-24. Plaintiff does not 16 appear to allege that Defendants owed it a duty under common law. See id. 17 18 Defendants argue that the regulations and statutes cited to by Plaintiff establish ethical 19 obligations owed to the public at large, an engineer’s client and employer, and to the Board. 20 However none of these statutes or regulations govern the relationship between the parties at 21 issue in this case—that of a professional engineer providing services to a utility district and a 22 subcontractor on a project with that district. Dkt. #24 at 12-13. 23 24 Defendants argue that in order for the duty of care to be actionable it must be one owed 25 to the injured plaintiff, and not to the public in general, citing Taylor v. Stevens Cnty., 111 26 Wn.2d 159, 759 P.2d 447 (1988) for the proposition that a duty to the public in general is 27 28 4 Plaintiff cites to RCW 18.43 et seq. and RCW 18.235.130; WAC 196-27A-020(1)(a); WAC 196-27A-020(1)(b); WAC 196-27A-020(1)(e); WAC 196-27 A-020(1 )(f)). See Dkt. #1 at 17. ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 14 1 considered a duty to no one in particular; or stated another way, “a duty to all is a duty to no 2 one.” 111 Wn.2d at 163 (quoting J&B Dev. Co. v. King Cnty., 100 Wn.2d 299, 303, 669 P.2d 3 468, (1983), overruled on other grounds, Taylor, 111 Wn.2d at 167; see also Chambers- 4 Castanes v. King Cnty., 100 Wn.2d 275, 284, 669 P.2d 451 (1983)). 5 Defendants cite to Burg v. Shannon & Wilson, Inc., 110 Wn. App. 798, 804, 43 P.3d 6 7 526 (2002) as an illustrative case. In Burg, a group of homeowners sued a design firm hired by 8 the City of Seattle to analyze the cause of recent landslides on City-owned property. Id. at 801. 9 The design firm concluded that the City needed to install dewatering wells to protect against 10 future slides. The advice was ignored and additional landslides later caused significant 11 12 property damage to plaintiffs' properties. Id. The homeowners sued the engineering firm, 13 alleging the engineers owed a duty to warn them of the potential dangers to their properties. Id. 14 The appellate court held that the statutory and regulatory provisions governing the ethical 15 obligations of engineers do not create an individual duty. “The broad pronouncements that 16 engineers owe a general duty to the public welfare alone, do not establish that engineers owe a 17 18 duty to any identifiable group or individual.” Id. at 807. Defendants argue that these are the 19 very same statutory and regulatory provisions relied on by Plaintiff. 20 21 In Response, Plaintiff points out that the homeowners in Burg failed to provide any evidence of a relationship outside the engineer’s general duty to the public. Id. at 807. Plaintiff 22 argues that “Burg left open the possibility that if a sufficiently close relationship exists between 23 24 a professional and a third party, such as one forged by the ‘affirmative conduct’ of [a] 25 tortfeasor, then a third party may bring a claim of professional negligence.” Dkt. #27 at 21. 26 Plaintiff argues that a defendant engineer firm who engaged in “affirmative conduct”5 with a 27 28 5 Plaintiff’s examples of affirmative conduct in this matter include: “…Defendants took a correct microtunneling design and manipulated it by deleted [sic] pertinent information and creating extreme baseline conditions, in an ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 15 1 plaintiff subcontractor may open itself up to liability for that conduct, citing Donatelli v. D.R. 2 Strong Consulting Engineers, Inc., 179 Wn.2d 84, 93 (2013) (“Engineers may also assume 3 additional professional obligations by their affirmative conduct.”). 4 Despite Plaintiff’s desire to rely on Donatelli for a new source of liability, that case only 5 6 addressed affirmative conduct between an engineer firm and its client. See 179 Wn.2d at 92- 7 93. As such, Donatelli does not provide clarity as to the specific issue before the Court— 8 whether an engineer owes a professional, statutory duty to a subcontractor. 9 Defendants cite to Berschauer/Phillips Construction Co. v. Seattle School District No. 10 1, 124 Wn.2d 816, 826-827, 881 P.2d 986 (1994) as a case directly on point. Defendants argue 11 12 that “Berschauer still governs claims by contractors against design professionals where there is 13 not contract, and holds that a design professional does not owe a duty of care to a contractor. 14 As such, a design consultant who did not stamp any design drawings under a contract with the 15 design engineer also does not owe a duty to a subcontractor…” Dkt. #24 at 15. 16 Much ink is spilled by the parties over the applicability of the “independent duty 17 18 doctrine.” 19 Consulting Servs., Inc., 170 Wn.2d 442, 243 P.3d 521 (2010): 20 21 22 23 24 25 26 As the Washington Supreme Court stated in Affiliated FM Ins. Co. v. LTK In a case like this one, where a court applying Washington law is called to “distinguish between claims where a plaintiff is limited to contract remedies and cases where recovery in tort may be available,” the court's task is not to superficially classify the plaintiff's injury as economic or noneconomic. Rather, the court must apply the principle of Washington law that is best termed the “independent duty doctrine.” Under this doctrine, “[a]n injury is remediable in tort if it traces back to the breach of a tort duty arising independently of the terms of the contract.” Using “ordinary tort principles,” the court decides as a matter of law whether the defendant was under an independent tort duty. 27 28 effort to claim-proof the project…. Defendants then lured [Pacific Boring] into the project based on false assurances and oversaw the change to [open shield pipe jacking], without dewatering, never disclosing their firm determination that the concept was not feasible.” Dkt. #27 at 22. ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 16 1 170 Wn.2d at 449 (internal citations omitted). 2 There are policy reasons for limiting the duties between contracting parties. The Court 3 “assume[s] private parties can best order their own relationships by contract.” Id. at 451. “The 4 law of contracts is designed to protect contracting parties’ expectation interests and to provide 5 6 incentives for ‘parties to negotiate toward the risk distribution that is desired or customary.’” 7 Id. (quoting Berschauer, 124 Wn.2d at 827). By contrast, “tort law is a superfluous and inapt 8 tool for resolving purely commercial disputes.” Id. at 452 (quoting Miller v. U.S. Steel Corp., 9 902 F.2d 573, 574 (7th Cir. 1990)). According to the Washington State Supreme Court, “[i]f 10 aggrieved parties to a contract could bring tort claims whenever a contract dispute arose, 11 12 13 ‘certainty and predictability in allocating risk would decrease and impede future business activity.’” Id. (quoting Berschauer, 124 Wn.2d at 826). 14 Plaintiff argues that Affiliated FM Ins. stands for the proposition that “Washington 15 courts… impose a duty of care to third parties on several classes of professionals.” Dkt. #27 at 16 18. While it would appear at first glance that Affiliated FM Ins. allows for a duty owed by 17 18 engineers to a party like Plaintiff not in contractual privity with the engineer, the court in that 19 case cited favorably to Berschauer and stated “[o]ur decisions in this case and in Eastwood 20 leave intact our prior cases where we have held a tort remedy is not available in a specific set of 21 circumstances.” 170 Wn.2d at 450, n.3. Affiliated FM Ins. thus appears to carve out a source 22 of liability for engineers, specific to the facts of that case, and specifically not applicable to the 23 24 facts of Berschauer. On Reply, Defendants highlight that the Berschauer holding was 25 specifically endorsed in 2010 by a plurality opinion from the same court as Affiliated FM Ins. 26 Dkt. #38 at 4 (citing Eastwood v. Horse Harbor Found., Inc., 170 Wn.2d 380, 390-91 (2010)). 27 28 ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 17 1 In sum, the Court finds that Berschauer is still good law in Washington, applies to the 2 undisputed facts of this case more closely than the cases cited by Plaintiff, and that Washington 3 law does not support Plaintiff’s claim that Defendants owed it a professional duty. The absence 4 of a duty is fatal to Plaintiff’s claim of professional negligence. 5 6 b. Defective Design Claim and Spearin Claim 7 Defendants additionally argue that, even if they had owed a duty to Plaintiff in this case, 8 Plaintiff’s subsequent actions constitute an intervening cause or assumption of risk sufficient to 9 destroy liability or bar recovery. Dkt. #24 at 19-25. Defendants argue that Plaintiff “failed to 10 construct the District’s design,” and that this is a bar to defective design liability under Valley 11 12 Constr. Co. v. Lake Hills Sewer Dist., 67 Wn.2d 910, 915-16, 410 P.2d 796 (1965) and 13 Atherton Condominium Apartment-Owners Ass'n Bd. Of Dirs. v. Blume Dev. Co., 115 Wn.2d 14 506, 534, 799 P.2d 250 (1990). That Plaintiff agreed to deviate from the District’s design for 15 the project is a settled issue that Plaintiff is estopped from relitigating. See Plaintiff’s Cross 16 Motion for Collateral Estoppel, ruling ##1-3, and 7, supra. To the extent that Plaintiff’s claim 17 18 of professional negligence relies on a claim of defective plans and specifications, this claim 19 would fail even if a duty were established. 20 21 Defendants argue that Plaintiff seeks additional compensation for costs overruns and nonpayment, allegedly caused by the District's inadequate and defective plans and 22 specifications, through an implied warranty claim under United States v. Spearin, 248 U.S. 132 23 24 (1918). Dkt. #24 at 16. The Court agrees with Plaintiff that Defendants’ citation to the Spearin 25 Doctrine is inapposite as Plaintiff has brought negligence and negligent misrepresentation 26 claims, not a warranty claim. See Dkt. #27 at 15. 27 E. Defendants’ Motion for Summary Judgment on Negligent Misrepresentation 28 ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 18 a. Legal Standard 1 2 To establish negligent misrepresentation, a plaintiff must show by clear, cogent, and 3 convincing evidence that the defendant negligently supplied false information the defendant 4 knew, or should have known, would guide the plaintiff in making a business decision, and that 5 6 the plaintiff justifiably relied on the false information. Lawyers Title Ins. Corp. v. Baik, 147 7 Wn.2d 536, 545, 55 P.3d 619 (2002). In addition, the plaintiff must show that the false 8 information was the proximate cause of the claimed damages. Id. Proximate cause can be 9 divided into two elements: cause in fact and legal cause. Michaels v. CH2M Hill, Inc., 171 10 Wn.2d 587, 609, 257 P.3d 532, 544 (2011) (citing Schooley v. Pinch's Deli Mkt., Inc., 134 11 12 Wn.2d 468, 478, 951 P.2d 749 (1998)). “The focus in the legal causation analysis is whether, 13 as a matter of policy, the connection between the ultimate result and the act of the defendant is 14 too remote or insubstantial to impose liability. A determination of legal liability will depend 15 upon mixed considerations of logic common sense, justice, policy, and precedent.” Id. at 611 16 (citing Schooley, 134 Wn.2d at 478–79) (internal quotation marks omitted). Legal causation is 17 18 a question of law. Kim v. Budget Rent A Car Sys., Inc., 143 Wn.2d 190, 204, 15 P.3d 1283 19 (2001). 20 21 Plaintiff’s Complaint suffers from a lack of clarity as to 1) what false information provided by Defendants to Plaintiff is relevant to this claim; 2) why it was false; 3) why it was 22 negligent to provide this information; and 4) why Plaintiff’s reliance on this information was 23 24 justified. Plaintiff alleges that Defendants supplied “flawed documents for bidding and 25 construction purposes” “concerning the nature of the ground conditions” and the “baselines” 26 for the project, and that this “misled bidders.” Dkt. #1 at 19. Plaintiff also alleges that 27 Defendants communicated misleading information directly to Plaintiff. Id. at 20. 28 ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 19 1 In reviewing the factual background provided in Plaintiff’s Complaint, it is apparent 2 that Plaintiff’s claim refers to two separate acts of alleged negligent misrepresentation. First, 3 there are the alleged modifications made by Defendants to a GeoEngineer’s geotechnical report 4 and/or the creation by Defendants of one or more Geotechnical Design Report(s), all of which 5 6 were created for and transmitted to the District. Id. at 7-10. Second, there is a “discussion with 7 Staheli about the nature of the ground conditions,” where Defendants allegedly advised 8 Plaintiff that the ground conditions “were very dense and ‘should stand’ and flowing water was 9 not anticipated” and where Defendants allegedly advised that open shield pipe jacking was 10 appropriate. Id. at 12-13.6 These facts are also cited to in Plaintiff’s Opposition to Defendants’ 11 12 Motion with additional detail. See Dkt. #27 at 9-10. 13 Defendants argue that “[t]he first claim involving allegedly false information in the 14 contract documents fails as a matter of law for the same reasons why PBI's professional 15 negligence claims fail.” Dkt. #24 at 18. Presumably, Defendants are arguing that this claim 16 fails for lack of a duty. Defendants argue that the second claim fails because Plaintiff cannot 17 18 prove Defendants’ oral assertions were the proximate cause of Plaintiff’s damages. 19 Defendants highlight that the discussion between Defendants and Plaintiff as to the ground 20 conditions occurred “pre-bid” and was made during “a short call.” Dkt. #24 at 18. Defendants 21 Id. argue that this conversation did not proximately cause Plaintiff’s damages because it occurred 22 before Change Order No. 1, and because Plaintiff “failed to ensure, design and engineer its 23 24 OSPJ method to perform under the soil indicated in the contract and failed comply with its 25 contractual obligations to dewater.” Id. at 20. 26 27 28 6 Plaintiff also alleges that Defendants contacted Plaintiff on June 30, 2011, “and solicited [Plaintiff] to bid the job.” Dkt. #1 at 12. Although Plaintiff strongly emphasizes this fact, it is not clear at all to the Court that the mere solicitation of Plaintiff is alleged by Plaintiff to constitute evidence of negligent misrepresentation. ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 20 1 Defendants do not deny communicating the information at issue to Plaintiff, nor do they 2 deny that Plaintiff’s reliance on these statements was justifiable. Defendants do not address the 3 “flawed” or “misleading” nature of the information, except to point to Judge Shaffer’s prior 4 rulings. 5 In its Opposition, Plaintiff still does not clarify 1) what specific false information 6 7 provided by Defendants is relevant to this claim; 2) why it was false; 3) why it was negligent to 8 provide this information; and 4) why Plaintiff’s reliance on this information was justified. 9 Plaintiff’s Opposition’s Statement of Facts fails to highlight facts supporting the above 10 negligent misrepresentation elements. In its Legal Analysis section on negligent 11 12 misrepresentation, Plaintiff refuses to connect any specific facts with its claim, instead listing 13 the basic elements of a negligent misrepresentation claim and “[Plaintiff] addressed each 14 above.” Dkt. #27 at 24. Presumably, the “above” is its entire Statement of Facts. This does 15 not satisfy the “sufficient showing on an essential element of her case” required under Celotex, 16 supra. 17 18 Instead of supporting its claim, Plaintiff attacks Defendants’ arguments. 19 intriguingly, Plaintiff argues that its execution of Change Order 1 “was as much induced by 20 Staheli’s misrepresentation as was the contract it modified.” Dkt. #27 at 24. However, this is 21 Most not sufficient to prevent summary judgment on this claim because, taking all inferences in 22 favor of Plaintiff, Plaintiff is still unable to sufficiently show legal causation. Plaintiff is 23 24 estopped from rearguing that the ground conditions encountered in the Project differed from 25 those anticipated in the contract that Plaintiff signed with the District, and from rearguing that 26 dewatering was not part of the contract. See Plaintiff’s Cross Motion for Collateral Estoppel, 27 ruling ## 5, 8, and 9, supra. Because the conditions encountered were anticipated in the written 28 ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 21 1 contract, the Court finds that Plaintiff’s alleged damages were not proximately caused by 2 Defendants’ oral statements, but by their own actions contrary to their contractual obligations. 3 4 As Plaintiff is unable to show causation, the Court need not address Defendants’ assumption of risk defense. 5 6 7 8 9 F. Plaintiff’s Relief of Attorneys’ Fees As the Court has dismissed Plaintiff’s remaining claims, it need not address Plaintiff’s attempted relief of attorneys’ fees. G. Defendants’ Motion to Strike Inadmissible Evidence 10 Defendants attempt to move to strike the Declaration of Sam Baker, Dkt. #28, within 11 12 their Reply. See Dkt. #38 at 13. This Motion is made improperly without providing an 13 opportunity for a Response. While the Court agrees that Dkt. #28 “more resemble[s] an 14 adversarial memorandum than a bona fide affidavit,” see id, the Court declines to rule on this 15 issue at this time. 16 IV. CONCLUSION 17 18 19 20 21 Having reviewed the relevant pleadings, the declarations and exhibits attached thereto, and the remainder of the record, the Court hereby finds and ORDERS 1. Defendants’ Motion for Summary Judgment on Plaintiff’s Remaining Claims, Dkt. #24, is GRANTED. 22 2. Plaintiff’s Cross-Motion for Summary Judgment Denying Defendants’ Collateral 23 24 25 Estoppel Affirmative Defense, Dkt. #33, is DENIED. 3. This case is now CLOSED. 26 27 28 ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 22 1 2 DATED this 5 day of October 2015. 3 4 5 6 7 A RICARDO S. MARTINEZ UNITED STATES DISTRICT JUDGE 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT - 23
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