Engineering & Construction Innovations, Inc. v. Bradshaw Construction Corp.

Background

The City of Minneapolis planned a project requiring a microtunnel beneath the Mississippi River. Engineering & Construction Innovations, Inc. (ECI) contracted with the City and subcontracted the microtunneling work to Bradshaw Construction Corporation. Bradshaw agreed to install a 60-inch steel casing and was responsible for the means, methods, techniques, sequences, and procedures of its work.

Bradshaw began tunneling in November 2019. Groundwater flooded the tunnel on November 7, 2019, and a second flood occurred after tunneling resumed. Bradshaw later encountered high jacking loads and stopped tunneling. Bradshaw submitted two differing-site-condition claims, asserting that the conditions differed from those described in the Geotechnical Baseline Report. ECI terminated Bradshaw in February 2020 and hired another company to complete the project.

ECI sued Bradshaw and Travelers Casualty and Surety Company of America. Bradshaw asserted eight counterclaims against ECI: breach of contract, wrongful termination, prompt payment, professional negligence, breach of express and implied warranties, misappropriation of property, attorneys’ fees, and a bond claim. The parties filed cross-motions to exclude expert testimony and cross-motions for summary judgment.

Expert testimony

The court denied defendants’ motion to exclude Arthur McGinn’s testimony. McGinn’s limited experience with microtunneling affected the weight of his opinions, not whether he was qualified to testify. The court also denied defendants’ challenge to his opinions about ground permeability and muck-ring return rates because they were based on sufficient facts and data. To the extent defendants sought relief under a discovery rule, the court denied that request as untimely.

The court denied defendants’ motion to exclude Mark Gentry’s testimony about scheduling and damages. The court concluded that disputes about how the Subcontract affected the damages calculation, and about the factual basis for Gentry’s overhead-and-profit calculation, concerned the credibility and weight of his testimony rather than its admissibility.

ECI’s motion to exclude Donald Bergman’s testimony was granted in part and denied in part. The court granted the motion to the extent Bergman offered opinions on engineering and geological topics beyond his expertise. The court denied the motion regarding Bergman’s differing-site-condition opinions because his experience qualified him to offer those opinions. The court denied as moot ECI’s request concerning legal conclusions because the parties agreed those conclusions were inadmissible and defendants said they would not elicit them. The court also denied ECI’s challenges to Bergman’s factual statements and opinions about test borings.

The court denied ECI’s motions to exclude Kimberlie Staheli’s and Scott Bender’s testimony. Challenges to Staheli’s investigative methods and Bender’s qualifications affected the weight of their testimony rather than its admissibility.

Defendants’ summary-judgment motion

The court denied defendants’ motion for summary judgment in full. First, defendants argued that the Subcontract allowed ECI to recover either liquidated damages or actual delay damages, but not both. The court found a genuine dispute about how the claimed damages should be categorized and concluded defendants had not shown entitlement to judgment as a matter of law.

Second, defendants argued that ECI lacked standing to recover $2,583,041 connected to a City change order. The court found a factual dispute about whether ECI was seeking its own costs and about the effect of an agreement under which recovered money up to that amount would be distributed to the City. The court therefore denied summary judgment on standing.

Third, defendants argued that ECI’s claim for liquidated damages assessed by the City was not ripe because the damages had not been collected. The court rejected that argument because the City had assessed the liquidated damages and requested payment. The court concluded the alleged injury was sufficiently certain and denied summary judgment on that ground.

ECI’s summary-judgment motion

The court granted ECI summary judgment on Bradshaw’s breach-of-contract claim to the extent it was based on Bradshaw’s differing-site-condition claims. The first claim was untimely because Bradshaw first observed the event on November 7, 2019, but did not submit the claim until November 15, 2019. As to the second claim, the court found a factual dispute about when the condition was first encountered, but held that the Geotechnical Baseline Report did not address the tunnel voids at issue. Because a Type I differing-site-condition claim requires the contract documents to indicate the condition that was encountered, the court concluded Bradshaw was not entitled to an adjustment for the second claim. The court then granted ECI summary judgment on the breach-of-contract claim.

The court denied ECI summary judgment on Bradshaw’s wrongful-termination claim. ECI did not show that Bradshaw unreasonably failed to proceed with the work or stated that it would not perform. The court also rejected ECI’s alternative argument based on a termination-for-convenience provision because ECI had not invoked that provision and had terminated Bradshaw for cause.

The court denied summary judgment on Bradshaw’s prompt-payment claim. The record did not establish that no payments remained owed for undisputed services.

The court granted summary judgment on Bradshaw’s professional-negligence claim because Bradshaw agreed that it had failed to meet the required pleading and expert-disclosure requirements.

The court denied summary judgment on Bradshaw’s express- and implied-warranty claims. Although the contract disclaimed certain warranties concerning subsurface conditions, the court concluded ECI had not shown that the disclaimer resolved all of Bradshaw’s warranty theories. The court also found a factual issue about whether Bradshaw had discretion to deviate from project specifications despite being responsible for its means and methods.

The court granted summary judgment on Bradshaw’s misappropriation-of-property claim because Minnesota does not recognize that common-law tort. The court denied summary judgment on Bradshaw’s bond claim because some counterclaims survived. The court also denied summary judgment on Bradshaw’s attorneys’ fees claim because the bond claim survived and the applicable statute could authorize fees in a successful action to enforce bond claims.

Order

The court denied defendants’ motions to exclude McGinn and Gentry; granted in part and denied in part ECI’s motion to exclude Bergman; denied ECI’s motions to exclude Staheli and Bender; denied defendants’ motion for summary judgment; and granted in part and denied in part ECI’s motion for summary judgment.