Travelers Casualty & Surety Co. of America v. United States

75 Fed. Cl. 696, 2007 U.S. Claims LEXIS 78, 2007 WL 851209
CourtUnited States Court of Federal Claims
DecidedMarch 19, 2007
DocketNo. 04-487 C
StatusPublished
Cited by21 cases

This text of 75 Fed. Cl. 696 (Travelers Casualty & Surety Co. of America v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Travelers Casualty & Surety Co. of America v. United States, 75 Fed. Cl. 696, 2007 U.S. Claims LEXIS 78, 2007 WL 851209 (uscfc 2007).

Opinion

OPINION AND ORDER

BLOCK, Judge.

This is a breach of contract ease. Plaintiff, Travelers Casualty and Surety Company of America (“Travelers”), is the assignee of a claim by Red Samm Construction Company (“Red Samm”) asserted against the United States, acting through its agent the United States Army Corps Engineers (the “Corps”). Red Samm entered into a contract with the Corps to improve a small boat harbor in King Cove, Alaska, part of the Aleutian Island chain. The contract called for the harbor improvements to be performed in two stages in consecutive seasons: the first stage consisted of building a breakwater, the second [698]*698consisted of dredging the harbor behind the breakwater.

While the breakwater first stage proceeded without a hitch, Red Samm faced—literally faced—impediments in the second stage. These impediments were copious amounts of “cobbles”—rounded or ragged stones between three and twelve inches in diameter (not dissimilar in many ways to the cobblestones paving old-fashioned city streets). The presence of these abundant cobbles prevented Red Samm from timely completing stage two of the contract. Red Samm contends that the cobbles prevented it from employing a hydraulic dredge as the contract indications led them to attempt. As a result, Red Samm was forced to hire a subcontractor, which in turn used a combination of dredging techniques to complete the job the following year at the significant added cost of $2,729,242. The Corps withheld payment of $218,460 from the contract balance as a result of the delay. After the assignment, Travelers brought suit in this court asserting, inter alia, Type I differing site condition, misrepresentation and failure to disclose superior knowledge claims demanding reimbursement of the added costs incurred by Red Samm as well as a claim for the alleged wrongfully-withheld payment.

The contract specifications are the heart of the controversy, as plaintiff maintains the specifications misled Red Samm into believing that the dredging site contained only a “few” cobbles. The parties primarily battle over the meaning and application of the word “few.” Exhibits appended to the contract and incorporated by reference here help define the contract’s terms and meaning. The court does not face a Gordian knot. Meaning is ascertainable.

Before the Court are the parties’ cross-motions for summary judgment. As fully explained below, because Red Samm reasonably interpreted and relied upon the contract representations concerning the expected site conditions, and the actually-encountered conditions differed materially from those representations, plaintiffs motion is granted with respect to liability and defendant’s motion is denied.

I. FACTUAL BACKGROUND1

King Cove, Alaska is a small, rugged fishing town located on the southern side of the Alaskan Peninsula, on a sand spit fronting Deer Passage and Deer Island, some 625 miles from Anchorage. Bidding Documents SCR-3. King Cove is accessible only by air or sea. Id. Planes coming into King Cove commonly face gale force winds as they land on a 3,600-foot gravel runway. Id. at 3-4. Visitors may also visit King Cove via a state owned Ferry that operates bi-monthly between May and October. Id. King Cove’s climate is relatively mild with average temperatures of 25° F to 55° F, extremes from—9° F to 76° F, and precipitation totaling about 52 inches of snow and 33 inches of rain, annually. Id. Founded in 1911 and incorporated in 1949, King Cove has a population of 723 inhabitants.2 The King Cove economy is primarily dependent on the fishing and fish processing industries. Id. The present dispute centers on the Corps’ project to improve a small boat harbor in King Cove.

In 1974, the Corps completed an 11 acre small boat harbor in King Cove. PPFUF 1134. Twenty years later, the Corps decided to construct a new harbor and performed investigations and feasibility studies of three potential sites from 1995 to 1996. PPFUF 1135. On June 29, 1996, the Corps’ geotechnical engineer, Charles Wilson, excavated [699]*699five tidal-zone test pits3 at the project site. PPFUF HH 35, 38. The test pit explorations, excavated with a backhoe during low tide, were performed to explore for bedrock and to evaluate subsurface conditions with regard to dredging. PPFUF H 38. Wilson documented his work with five test pit logs, a test pit location map, photographs, and a two-page report (“the Wilson Report”). PPFUF 1139. Of the documentation compiled by Wilson, only the test pit logs were included or referenced in the contract documents. PPFUF 1139.

The following year, the Corps’ project team compiled the “Navigation Improvements Detailed Project Report and Environmental Assessment—King Cove, Alaska” (“the Detailed Project Report”), summarizing the investigation and analysis performed in the previous years. PPFUF 1140. The Detailed Project Report was not included as part of the contract. Id. A Detailed Project Report appendix, entitled “Geotechnical Report,” contained Wilson’s five test pit logs, a test pit location map, and five photographs taken during the excavation. PLApp. 182-06. The Detailed Project Report indicated that the Corps interpreted the test pit logs to show easily dredgable material conducive to hydraulic dredging. A cost estimate reflected this interpretation as well, indicating dredging material of “sand, gravel, and some boulders,” and assumed that dredging would be performed by a hydraulic, cutterhead pipeline operation. PPFUF IfH 41-42.

On May 13, 1998, the Corps published an initial solicitation for the King Cove Harbor Improvements Project (“the Project”), calling for the construction of a breakwater4 and the dredging of an entrance channel and mooring basin at the pre-existing harbor site. DPFUF HI; PPFUF H97. The solicitation included the standard Federal Acquisition Regulation (“FAR”) Site Investigations Clause, providing, in part:

The Contractor acknowledges that it has taken steps reasonably necessary to ascertain the nature and location of the work, and that it has investigated and satisfied itself of the conditions which can affect the work or its cost, including but not limited to ... (5) the character of equipment and facilities needed preliminary to and during work performance. The Contractor also acknowledges that it has satisfied itself as to the character, quality, and quantity of surface and subsurface materials to be encountered insofar as this information is reasonably ascertainable from inspection of the site, including all the exploratory work done by the Government.

DPFUF H 2. Additionally, the solicitation included a description of the area to be dredged. Section 02222, Dredging, Excavation, and Disposal, provided:

1.2-Character of Materials—Exploration Logs for the area to be dredged and excavated are enclosed in Appendix A. Incidental sunken logs, boulders, rock, snags and other miscellaneous debris from harbor and fishing operations should be expected. Geophysical data for this area can be obtained from the Corps of Engineers, Geo-technical Branch—Soils and Geology Section, Alaska District.

DPFUF H 3.

The referenced exploration logs, included in the contract documents as Appendix A, were the five test pits logs created by Wilson in 1996. The exploration log for Test Pit 1, dug to ten feet deep, indicated “Silty Sand” for the first foot,

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Cite This Page — Counsel Stack

Bluebook (online)
75 Fed. Cl. 696, 2007 U.S. Claims LEXIS 78, 2007 WL 851209, Counsel Stack Legal Research, https://law.counselstack.com/opinion/travelers-casualty-surety-co-of-america-v-united-states-uscfc-2007.