COMPLAINT FOR BREACH OF CONTRACT CLAIM NOT …media.oregonlive.com/portland_impact/other/sell... · · 2016-11-08701 PIKE STREET, SUITE 1700 SEATTLE,\IVA 98101-3930 PHONE: (206)

$Page 1: COMPLAINT FOR BREACH OF CONTRACT CLAIM NOT …media.oregonlive.com/portland_impact/other/sell... · · 2016-11-08701 PIKE STREET, SUITE 1700 SEATTLE,\IVA 98101-3930 PHONE: (206)$
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IN THE CIRCUIT COURT OF THE STATE OF OREGON

FOR MULTNOMAH COUNTY

10 SLAYDEN/SUNDT, JOINT VENTURE, an Oregon corporation, Case No.

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Plaintiff,

v.

MULTNOMAH COUNTY,

Defendant.

COMPLAINT FOR BREACH OF CONTRACT

CLAIM NOT SUBJECT TO MANDATORY ARBITRATION

COMES NOW Plaintiff Slayden/Sundt, a Joint Venture, and for the causes of

action against Defendant Multnomah County, complains and alleges as follows:

I. PARTIES

1.1 Plaintiff, Slayden/Sundt, a Joint Venture (hereinafter "Plaintiff" or

"Slayden/Sundt"), is an Oregon joint venture comprised of (1) Slayden Construction

Group, Inc., an Oregon corporation doing business in Multnomah County, Oregon,

and (2) Sundt Construction, Inc., an Arizona corporation doing business in

Multnomah County, Oregon. At all times relevant to this dispute, Slayden/Sundt was

a duly registered contractor (OR License No. 186281) in good standing and

COMPLAINT FOR BREACH OF CONTRACT - 1 OLES MORRISON RINKER & BAKER LLP

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authorized to do business in the State of Oregon with its principal place of business

located at 500 Willamette Ave., Stayton, OR 97383. Slayden/Sundt has performed all

necessary prerequisites to maintain this action.

1.2 Defendant, Multnomah County, is a municipal corporation and home rule

charter county of the state of Oregon.

II. JURISDICTION AND VENUE

8 2.1 This case involves claims arising from acts and/or omissions of parties

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residing in and/or doing business in Multnomah County, Oregon. This Court has

jurisdiction over the parties pursuant to ORS § 14.030, and under the specific terms

of the parties' contract.

2.3 Venue is proper in Multnomah County pursuant to ORS§ 14.080(1 ), and

under the specific terms of the parties' contract.

Ill. FACTUAL ALLEGATIONS

A. The Project and Contract Award

3.1 On or about May 25, 2011, Slayden/Sundt and the County entered into

Contract No. 4600008713 (hereinafter the "Prime Contract") wherein Slayden/Sundt

was engaged to replace the Sellwood Bridge Main Span and Interchange (hereinafter

"the Project") in exchange for the County's payment of $151,274,496.00.

3.2 The Prime Contract incorporated portions of the 2008 Oregon

Department of Transportation ("ODOT") Standard Highway Specifications and the

ODOT CM/GC General Provisions, as modified by Multnomah County for the Project.



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1 3.3 The Project plans and specifications identified several reference

2 documents which contained information for bidders to determine the subsurface 3 conditions that could be reasonably anticipated on the Project. 4

3.4 On or about February 8, 2013, Slayden/Sundt entered into a subcontract 5

6 (hereinafter the "Subcontract") with Malcolm Drilling Company, Inc. (hereinafter

7 "Malcolm") whereby Malcolm agreed to provide, among other things, the installation

8 of drilled pier support shafts for the Project. In preparing its bid and work plan,

9 Malcolm properly relied upon the subsurface soil information provided by Multnomah

10 County. 11 B. Bent 11 Differing Site Condition 12

3.5 Multnomah County provided design and soil information depicting the 13

14 expected subsurface conditions at the Project site. The information provided

15 indicated that the material surrounding the shafts would stand open during

16 construction. Based on this information, Malcolm prepared its bid, planning to install

17 the two 5' diameter Bent 11 shafts utilizing conventional "open hole" drilling methods.

18 3.6 Nothing in the contract documents indicated that the side walls of the

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shaft would not stay open while being drilled. The Prime Contract boring logs, upon

which Malcolm reasonably relied, indicated that at Boring B-8-10 (the only available

sample taken nearest to Bent 11) course-grained material existed that would stand

open in the dry or under a water head during Malcolm's installation of shafts.

24 3. 7 During the course of installing the Bent 11 shafts, Malcolm encountered

25 soil substantially different than indicated in the contract documents. As a result of

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these materially different conditions, the side walls of the shaft were unable to stand

open in the dry and in fact caved in, frustrating Malcolm's use of its intended

construction method to install the shafts.

3.8 The Prime Contract specifically provides a mechanism by which

Multnomah County was to compensate Slayden/Sundt in the event actual conditions

materially differ from those indicated in the contract documents. Contract

Specification 00140.40, titled "Differing Site Conditions," defines a differing site

condition ("DSC") and outlines the parties' obligations upon the discovery of a DSC:

The following constitute differing Project Site conditions, provided such conditions are discovered at the Project Site after commencement of the Work:

• Type 1 - Subsurface or latent physical conditions that differ materially from those indicated in the Contract Documents, or

• Type 2 - Unknown physical conditions of unusual nature that differ materially from those ordinarily encountered and generally recognized as inherent in the Work provided for in the Contract.

The party discovering such a condition shall promptly notify the other party, in writing, of the specific differing conditions before they are disturbed and before the affected Work is performed. The Contractor shall not continue Work in the affected area until the Engineer has inspected such condition according to 00195.30 to determine whether an adjustment to GMP or Contract Time is required. ·

Payment adjustments due to differing Project Site conditions, if any, will be made according to 00195.30. Contract Time adjustments, if any, will be made according to 00180.80.



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1 3.9 Malcolm's work was significantly impacted by the differing subsurface 2

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soil conditions. · Due to the materially different conditions actually encountered,

Malcolm was forced to change its installation method, which created delay and

increased costs for equipment, time, and materials.

3.10 Pursuant to the terms of its Subcontract, Malcolm timely notified

Slayden/Sundt of the differing site conditions at Bent 11 and timely provided a claim

for additional contract time and costs. Pursuant to terms of the Prime Contract,

Slayden/Sundt timely and properly submitted Malcolm's claim to Multnomah County

for review and compensation.

3.11 Multnomah County has improperly denied Malcolm's claim in its entirety.

C.. Bent 5, Shaft 5-4 Unexpected Obstructions

3.12 In addition to the DSC encountered at Bent 11, Malcolm encountered

unexpected subsurface obstructions while installing a 1 O' diameter shaft (Shaft 4) at

Bent 5. Based on the geotechnical information provided by Multnomah County,

Malcolm planned, as part of the pile installation process, to first install a permanent 3

meter diameter casing for Shaft 5-4. While installing the casing for Shaft 5-4 at a

depth of more than 200' below the deck of its temporary work trestle and

approximately 60' below the water table, Malcolm twice encountered unexpected

subsurface obstructions believed to be boulders.

3.13 The unexpected subsurface obstructions seriously damaged Malcolm's

equipment. Additionally, Malcolm was forced to make substantial changes to its

planned equipment and tooling, which significantly decreased the rate of


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advancement. For example, Malcolm's original plan and schedule contemplated that

the installation of each shaft at Bent 5 would take 10 days to accomplish. However,

as a result of the unexpected subsurface obstructions, it took Malcolm 50 days to

complete Shaft 5-4. This. resulted in Malcolm incurring significant additional costs

and time not contemplated at the time Malcolm submitted its bid.

3.14 The contract documents contained no indication that Malcolm would

encounter subsurface obstructions at this elevation that would cause it to alter its

9 work plan. Specifically, the Prime Contract's boring logs, upon which Malcolm

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reasonably relied, gave no indication that subsurface obstructions of the type and

nature encountered existed at borings SEL 33-11 and SEL 52-11 (samples taken

nearest to Bent 5).

3.15 In addition to its DSC clause described in Paragraph 3.8, above, the

Prime Contract required Multnomah County to compensate Slayden/Sundt in the

event it or its subcontractors encountered unexpected obstructions while installing the

drilled shafts. Contract Specification Section 001512.43(d), titled "Unexpected Drilled

Shaft Obstructions," provides:

Remove any natural or manmade object encountered that was not revealed by the Agency's site investigation, and that would cause a significant decrease in the rate of advancement if removed using the techniques and equipment used successfully to excavate the shaft. The Engineer will be the sole judge of the significance of any reduced rate of shaft advancement and the classification of any unexpected obstructions. Removal of unexpected obstructions from the shaft excavation will be paid as Extra Work.


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3.16 Pursuant to the terms of its Subcontract, Malcolm timely notified

Slayden/Sundt of the unanticipated obstructions I differing site conditions at Bent 5 3 and timely provided a claim for additional contract time and costs. Pursuant to the 41 5

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terms of the Prime Contract, Slayden/Sundt timely and properly submitted Malcolm's

claim to Multnomah County for review and compensation.

3.17 Multnomah County has improperly denied Malcolm's claim in its entirety.

IV. CAUSES OF ACTION

9 A. First Claim for Relief: Breach of Contract

1 o 4.1 Slayden/Sundt incorporates the allegations contained in the preceding

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Paragraphs 1.1-3.17 above as though fully set forth herein.

4.2 Slayden/Sundt entered into a valid and enforceable written contract with

Multnomah County wherein Slayden/Sundt agreed to perform (or to engage other

subcontractors to perform on its behalf) certain specified construction related services

in exchange for payment by Multnomah County for those services. This included the

"Differing Site Condition" clause and the "Unexpected Drilled Shaft Obstructions"

clause, both of which entitled Slayden/Sundt to be compensated if it or its

subcontractors encountered conditions materially different to those indicated in the

contract documents.

4.3 Pursuant to the Prime Contract, Slayden/Sundt and its subcontractors

timely commenced the performance of the Project work.

4.4 Multnomah County has neglected, failed, or refused to pay for additional

work in accordance with the Differing Site Conditions clause and the Unexpected


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1 i Drilled Shaft Obstruction clause, even though Slayden/Sundt complied with all

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contractual requirements and despite Slayden/Sundt's demand for payment.

4.5 The foregoing actions and inactions on the part of Multnomah County

constitute a breach of the parties' Prime Contract. As a direct and proximate result of

said breac;h, Slayden/Sundt has been damaged in an amount to be proved at trial, but

in no event less than $1,546,408.55, plus interest, costs and attorneys' fees as

allowed by law.

9 8. Second Claim for Relief: Quantum Meruit

1 o 5.1 Slayden/Sundt incorporates the allegations contained in the preceding

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Paragraphs 11.-4.5 above as though fully set forth herein.

5.2 Alternatively, Slayden/Sundt is entitled to recover from the County in

Quantum Meruit on the basis that:

a. Slayden/Sundt or its subcontractors furnished valuable labor,

materials, equipment and/or supplies on the Project for the benefit

of Multnomah County;

b. Said services were performed with the actual knowledge of

Multnomah County, or the actual knowledge of the agents of

Multnomah County;

c. Multnomah County accepted, used and enjoyed said services and I

the value of Multnomah County's real property was increased by

said services;


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Tony Hernandez

1 d. Said services were performed under circumstances that

2 reasonably notified the County that Slayden/Sundt expected to be 3

paid for the same. 4

5.3 As a ·result of the foregoing, Slayden/Sundt is entitled to just 5

6 compensation based on Quantum Meruit in an amount to be proven at trial but in no

7 event less than a reasonable value of Slayden/Sundt's materials and services.

8 c. Third Claim for Relief: Unjust Enrichment

g 6.1 Slayden/Sundt incorporates the allegations contained in the preceding

10 Paragraphs 1.1-5.3 above as though fully set forth herein.

11 6.2 Alternatively, Slayden/Sundt is entitled to recover from Defendant 12

1 Multnomah County for unjust enrichment on the basis that: 13

a. Slayden/Sundt or its subcontractors supplied valuable labor, 14

15 materials, equipment and/or supplies for the Project for the benefit

16 of Multnomah County;

17 b. Multnomah County appreciated and had knowledge it was

18 receiving the benefit of Slayden/Sundt's work yet failed to pay for

19 said benefits; 20 c. It would be inequitable for Multnomah County to retain said 21

benefits without paying for their value. 22

23 6.3 Multnomah County was unjustly enriched and should be required to pay

24 . the reasonable value of the benefits conferred by Slayden/Sundt in an amount to be

25 proven at trial.

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v. PRAYER FOR RELIEF

WHEREFORE, based on the foregoing, Slayden/Sundt prays for relief against

Defendant Multnomah County as follows:

1. That pursuant to . Slayden/Sundt's First Claim for Relief (Breach of

Contract):

a. Slayden/Sundt be awarded damages against Multnomah County

in an amount to be proven at trial, but in no event less than

$1,546,408.55;

b. Slayden/Sundt be awarded pre- and post-judgment interest as

allowed by law;

C. Slayden/Sundt be awarded reasonable attorney fees and costs as

allowed by law.

2. That pursuant to Slayden/Sundt's Second Claim for Relief (Quantum

Meruit):

a. Slayden/Sundt be awarded its damages in Quantum Meruit in an

amount to be proven at trial, but in no event less than a

reasonable value of Slayden/Sundt's materials and services, plus

interest.

b. Slayden/Sundt be awarded reasonable attorney fees and costs as

allowed by law ..

3. That pursuant to Slayden/Sundt's Third Claim for Relief (Unjust

Enrichment):

COMPLAINT FOR BREACH OF CONTRACT-10 OLES MORRISON RINKER & BAKER LLP

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1 a. Slayden/Sundt be awarded its damages an amount to be proven

2 at trial, but in no event less than a reasonable value of the 3

benefits conferred upon Multnomah County by Slayden/Sundt, 4

plus interest. 5

6 b. Slayden/Sundt be awarded reasonable attorney fees and costs as

7 allowed by law.

8 4. For leave of Court to amend this Complaint for new causes of action

9 based on facts that may arise in discovery, or for such other proof as may arise; and

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5. For any such other and further relief as the Court deems just and

equitable.

Dated this 7th day of January, 2015.

By: s/ Jason R. Wandler Jason R. Wandler, OSBA 116556 Alix K. Schroeder, OSBA 144258 OLES MORRISON RINKER & BAKER LLP [email protected] [email protected] Attorneys for Plaintiff Slayden/Sundt, a Joint Venture

4838-8207-1840, v. 2


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