Kingston Environmental Services, Inc., United States for the use and benefit of v. David Boland, Inc.

District Court, D. Hawaii·Decided November 20, 2019·No. 1:16-cv-00205·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAI‘I

UNITED STATES, for the use and Case No. 16-cv-00205-DKW-WRP benefit of KINGSTON ENVIRONMENTAL SERVICES, INC. ORDER DENYING DEFENDANTS’ RENEWED Plaintiff, MOTION FOR PARTIAL SUMMARY JUDGMENT vs.

DAVID BOLAND, INC., et al.,

Defendants.

This action arises out of an infrastructure construction project at Wheeler Army Airfield in Oahu, Hawaii. The prime contractor hired by the federal government, Defendant David Boland, Inc., retained Plaintiff Kingston Environmental Services, Inc., as a subcontractor to perform part of the work. By all accounts, there were numerous problems during the construction. Kingston brings this lawsuit under the Miller Act, 40 U.S.C. Sections 3131–34, and holds Boland responsible for the construction delays that occurred and the losses it allegedly suffered as a result. In 2017, this Court granted in part Defendants’ motion for summary judgment, stayed the case until Kingston had complied with the remedial administrative procedures in the subcontract, and reserved ruling on the issue of whether Kingston’s claims were barred by the “no damages for delay” provision in the subcontract. Dkt. No. 145. Now that the stay has been lifted, this matter is before the Court on Defendants’ renewed motion for summary judgment as to the enforceability of the

“no damages for delay” provision. Dkt. No. 185. Because enforcement of the “no damages for delay” provision hinges on material facts disputed by the parties, Defendants’ motion is DENIED.

FACTUAL & PROCEDURAL BACKGROUND A. Relevant Factual Background

On June 29, 2012, the United States Army Corps of Engineers (USACE or Government) entered into a contract with Defendant David Boland, Inc., (Boland), making Boland the primary contractor for a construction project known as the Combat Aviation Brigade Infrastructure, Phase I, Wheeler Army Airfield, Oahu, Hawaii (the Project).1 In November of 2012, Boland and Plaintiff Kingston

Environmental Services, Inc., (Kingston) entered into a subcontract agreement (the Subcontract), valued at more than $15.8 million. Dkt. No. 116-2 at 1. Under the Subcontract, Kingston agreed to perform part of the work on the Project and furnish the necessary labor, materials and equipment to do so. Dkt. No. 116-2 at 13.

1Dkt. No. 116, ¶ 1; Dkt. No. 116-1, ¶ 3; Dkt. No. 134 at 1. Defendant Western Surety Company (Western Surety) issued Miller Act performance and payment bonds for the Project on behalf of Boland. See Compl., Dkt. No. 1, ¶¶ 10–11; Boland’s Answer, Dkt. No. 32, ¶¶ 10, 11. Roughly a month after mobilizing, Kingston encountered obstacles. First, Kingston was unable to use its preferred labor force. Dkt. No. 116-4, ¶ 13. In

particular, an internal email at Kingston states: We need the union agreement signed so we can supplement CAB/TEMF with our Seattle labor. Without some of our talents our [sic] in the machines and working/pushing the locals, we are and will continue to spend upwards of 50% more than necessary in my limited opinion.

Id. Second, Kingston ended up procuring rental equipment and labor at much higher rates than it had accounted for.2 Kingston, for instance, rented a 25-ton truck at $94.13 per hour and an excavator at $84.69 per hour, when Kingston had bid, respectively, $50.71 per hour and $37.78 per hour. Dkt. No. 116-4 at ¶ 14. Further, on April 12, 2013, Kingston hired Delta Construction Company to perform part of its work and to be compensated on a “time and materials” basis. Id. at ¶ 15. Delta’s hourly costs again substantially exceeded what Kingston had projected. Id. at ¶¶ 16– 17.3 To make matters worse, Kingston installed sanitary sewer manholes that did

2Dkt. No. 116-4, ¶ 14; Dkt. No. 134-1 at 49–50; Dkt. No. 134-17 at 28–29. 3The specific cost differences are telling. Boland’s consultant in this case provided the following table that does not appear to be in dispute. See Dkt. No. 116-4 at 8.

Delta Equipment Sub Rate Kingston Equipment Bid Rate 769D Haul Truck $239.47 RT Truck 35T $156.79 CAT Excavator $390.29 JD 600 Excavator $190.92 HIT 350 Excavator $251.60 JD 350 Excavator $137.86 CAT D6R Dozer $219.79 JD 850 Dozer $147.06

Laborer $104.42 Laborer $57.65 not conform to the Project’s specifications, and the USACE consequently rejected them, causing Kingston to have to replace them.4 Kingston does not contest that

these events occurred or that it incurred these costs. Dkt. No. 134, ¶¶ 11–13, 18. Nevertheless, Kingston maintains that Boland mismanaged the Project and hindered the progress of Kingston and other subcontractors. Dkt. No. 134, ¶ 10.5 According

to Kingston’s expert, Boland caused Kingston to incur cost overruns of $6,882,738. Dkt. No. 134-3. By March 2014, Kingston had completed approximately 46% of the work it agreed to perform. Dkt. No. 134-2, ¶ 8. On March 6, 2014, Boland and Kingston

4Dkt. No. 116, ¶ 18; Dkt. No. 116-1, ¶ 13. As a result of the non-conforming manhole covers, Boland sponsored a claim by Kingston against the Government, seeking $3.5 million under the doctrine of economic waste. Dkt. No. 116, ¶ 18. That claim was denied by USACE and subsequently appealed to the U.S. Court of Federal Claims. Id. 5Bob Wysocki, Kingston’s General Manager, describes a smorgasbord of grievances against Boland. Dkt. No. 134-2 ¶¶ 4–7. These include allegations that, inter alia, Boland “continuously prevented Kingston from working in an orderly manner”; “prevent[ed] Kingston from accessing construction areas as planned”; “add[ed] unexpected restrictions to the work”; “fail[ed] to identify no-work areas prior to contracting with Kingston”; “fail[ed] to timely or diligently address and resolve issues to allow Kingston’s work to proceed”; “fail[ed] to complete other activities on site that disrupted and negatively impacted Kingston in the performance of its work”; “unreasonably revis[ed] safety requirements”; “exhibit[ed] constant indecision”; “fail[ed] to manage and facilitate a productive relationship with the USACE”; “chang[ed] site access points due to incomplete Boland work”; “fail[ed] to have areas ready for Kingston to perform its work”; “constantly direct[ed] [sic] to perform work in a piecemeal fashion and in different areas of the site, causing disruption of Kingston’s work forces”; “redirect[ed] Kingston’s planned work”; “fail[ed] to develop a coherent schedule”; “fail[ed] to update the schedule in a timely and organized manner”; “fail[ed] to let subcontractors have access to and review the schedule”; “fail[ed] to work with the subcontractors to timely achieve resolution of issues as they came up on the Project”; “artificially manipulate[ed] schedules”; had “excessive turnover”; “lack[ed] communication and behave[ed] slowly and incompletely when transmitting information gained in meetings with the USACE”; and “had Kingston skipping around the site performing work in a piecemeal fashion and putting out fires that Boland had created.” Id. revised the Subcontract by executing Change Order No. 10, under which, inter alia: (a) the scope of the work Kingston was to perform was reduced by over $8.4 million;

and (b) Boland and Kingston “waiv[ed] and release[ed]” any claims they had against each other “resulting directly from delays in performance . . . and the schedule impacts of such delays caused [at] any time prior to the date” of Change Order No. 10.6 The claims the contracting parties mutually released, however, did not include

“any claims related to delays” for which Kingston had “previously notified [Boland] in writing . . .” Dkt. No. 116-3 at 9, Section X. Boland and Kingston later revised the Subcontract on at least three separate

Free access — add to your briefcase to read the full text and ask questions with AI

Kingston Environmental Services, Inc., United States for the use and benefit of v. David Boland, Inc., (D. Haw. 2019).

Kingston Environmental Services, Inc., United States for the use and benefit of v. David Boland, Inc. (Kingston Environmental Services, Inc., United States for the use and benefit of v. David Boland, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Anderson v. Liberty Lobby, Inc.
477 U.S. 242 (Supreme Court, 1986)
Bourjaily v. United States
483 U.S. 171 (Supreme Court, 1987)
Scott v. Harris
550 U.S. 372 (Supreme Court, 2007)
Rector v. Larson's Marine, Inc.
479 So. 2d 783 (District Court of Appeal of Florida, 1985)
Newberry Square Dev. Corp. v. Southern Landmark, Inc.
578 So. 2d 750 (District Court of Appeal of Florida, 1991)
Southern Gulf Utilities, Inc. v. Boca Ciega Sanitary District
238 So. 2d 458 (District Court of Appeal of Florida, 1970)
CA Davis, Inc. v. City of Miami
400 So. 2d 536 (District Court of Appeal of Florida, 1981)
Triple R Paving, Inc. v. Broward County
774 So. 2d 50 (District Court of Appeal of Florida, 2000)
McIntire v. Green-Tree Communities, Inc.
318 So. 2d 197 (District Court of Appeal of Florida, 1975)
Hyman v. Cohen
73 So. 2d 393 (Supreme Court of Florida, 1954)
Clarence Jones v. Max Williams
791 F.3d 1023 (Ninth Circuit, 2015)
JAMES J. FORBES & FAY ANNETTE FORBES v. PRIME GENERAL CONTRACTORS, INC.
255 So. 3d 448 (District Court of Appeal of Florida, 2018)
United States ex rel. Kitchens to Go v. John C. Grimberg Co.
283 F. Supp. 3d 476 (E.D. Virginia, 2017)
Californians For Renewable Energy v. Ca Puco
922 F.3d 929 (Ninth Circuit, 2019)