Judicial Opinion - AMEC v. VDOT (2008)

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Legal opinion I wrote as a Judicial Law Clerk in 2008.

Text of Judicial Opinion - AMEC v. VDOT (2008)

  • 1. November 16, 2013 Brian P. Heald, Esquire Gregory Martin, Esquire Moye, OBrien, OBourke, Pickert & Martin, LLP 800 South Orlando Avenue Maitland, Florida 32715 Stephen G. Test, Esquire Williams Mullen 222 Central Park Avenue, Suite 1700 Virginia Beach, Virginia 23462 Thomas B. Dickenson, Esquire Daniel D. Dickenson, III, Esquire Dickenson & Dickenson 1170 Lexan Avenue, Suite 203 Norfolk, Virginia 23508-1274 William R. Mauck, Jr., Esquire Matthew S. Sheldon, Esquire Williams Mullen Two James Center 1021 East Cary Street Richmond, Virginia Richard McGrath Office of the Attorney General 900 E. Main Street, 2nd Floor Richmond, Virginia 23219 RE: AMEC Civil, LLC v. Commonwealth Circuit Court No. 06-0340-00 Dear Counsel: On July 10, 2007, the Court heard oral argument on several motions in this action. Having considered all of the pleadings filed to date, the several written submissions of the parties, and oral argument of counsel, the Court denies the Defendant's Pleas in Bar asserting that AMEC's claims are barred for failure to provide written notice. FACTUAL AND PROCEDURAL HISTORY For familiar reasons, the Court views the facts in the light most favorable to the Plaintiff. In the spring of 2000, the Virginia Department of Transportation (VDOT) awarded AMEC Civil, LLC ("AMEC") the contract for construction of the Route 58 Clarksville Bypass in Mecklenburg County (State Project Nos. 6058-058-E26, C501, B610, B640, B641, B642, B643, B644, B645, B646, B647, B648) at a contract price of $72,479,999.49. The project consisted of 11 bridges and approximately four miles of roadway. The largest of the bridges, B616, spanned
  • 2. Page 2 RE: AMEC v. VDOT the Kerr Reservoir, an Army Corps of Engineers controlled reservoir with hydroelectric spillway. Bridge B616 consisted of 81-drilled shafts, 28 bents, and 18,950 cubic meters of concrete and was the centerpiece of the project. On November 22, 2006, AMEC filed an Amended Complaint against VDOT alleging breach of contract, encompassing approximately thirteen specific claims. See Amended Complaint. In response, VDOT filed various Pleas in Bar asserting that AMEC's claims are barred due to AMEC's failure to provide VDOT with written notice as required under Contract Specification 105.16. Specifically, VDOT claims that the contract and the applicable statutes require written notice from the Plaintiff as an absolute prerequisite for filing. The Plaintiff asserts, inter alia, that actual notice complies with the contract and statutes. DISCUSSION I. CONTRACTUAL NOTICE REQUIREMENTS VDOT correctly asserts that 105.16 of the contract required AMEC to give VDOT timely written notice of any potential claim it had against the Commonwealth at the time the occurrence causing the claim arose. However, VDOT incorrectly concludes that failure to give written notice is fatal to the claim. Contract Specification Section 105.16, entitled Submission and Disposition of Claims states: Early or prior knowledge by the Department of an existing or impending claim for damages could alter the plans, scheduling, or other action of the Department or result in mitigation or elimination of the effect of the act objected to by the Contractor. Therefore, a written statement describing the act of omission or commission by the Department or its agents that allegedly caused damage to the Contractor and the nature of the claimed damages shall be submitted to the Engineer at the time of occurrence of beginning of the work upon which the claim and subsequent action are based. Contract Specification 105.16 (emphasis added). The rationale behind requiring a written notice is to put VDOT on notice of any potential claims for damages and to give it an opportunity to investigate the situation and take action to mitigate or eliminate the effects of the problems. In the case sub judice, VDOT insists that AMECs failure to provide a written statement of alleged damages to the Engineer pursuant to the contract is tantamount to negating any potential claims it may seek against the Commonwealth.
  • 3. Page 3 RE: AMEC v. VDOT AMEC responds that even if it failed to comply with the contractual written notice provision, VDOT at all times had actual notice of its claims. In particular, AMEC notes that VDOT actively investigated the contractors alleged claims and took actions to defend itself in adversarial proceedings despite the imperfect format in which those claims were brought. Furthermore, AMEC asserts that VDOT has suffered no prejudice by not receiving AMECs claims in writing. Therefore, AMEC contends that actual notice substantially satisfied the purpose behind the contractual written notice provision. For these reasons, inter alia, AMEC claims that the actual notice it provided VDOT was a valid substitute for written notice. Alternatively, AMEC asserts that 104.03, not 105.16, provides the proper notice requirement for differing site conditions and that VDOT is applying the wrong section of the contract in defending its position on this issue. Regardless of which provision applies to the present case, AMEC argues that VDOT implicitly waived AMECs contractual duty to provide written notice. a. Interpreting the Contractual Written Notice Provision in 105.16Submission and Disposition of Claims Regarding the construction of a contract, courts across the United States consistently hold that the parties intentions and the contracts underlying purpose remain the paramount considerations: [I]t is well settled that the whole instrument is to be considered, and not one provision only, in determining the meaning of any and all its parts; not the words merely in which the provisions are expressed but their object and purpose, as disclosed by the language, by the subject matter, the condition and situation of the parties. Consideration must be given to the general circumstances surrounding or attending its execution, and effect given to each provision, if possible. Carpenter v. Gate City, 185 Va. 734, 740-741, 40 S.E.2d 268, 271 (1946) (emphasis added). Significantly, the Supreme Court of Virginia has held that although the academic definition of words is often important, [] more important still is the purpose of the covenant. Id. (emphasis added) (citing Krikorian v. Dailey, 171 Va. 16, 24, 197 S.E. 442, 446 (1938) (Holt, J.)); see also Rice v. United States, 428 F.2d 1311, 1314 (Ct. Cl. 1970) (When a court interprets contractual terms, the context and intention[s] [of the parties] are more meaningful than the [terms] dictionary definition[s].). In other words, when interpreting a contract, the ends of justice require that the court look to the underlying purpose the contractual terms are designed to achieve. See Flippo v. CSC Assocs. III, L.L.C., 262 Va. 48, 64, 547 S.E.2d 216, 226 (2001) (When interpreting a contract provision, a court must take into consideration [t]he facts and circumstances surrounding the parties when they made the contract, and the purposes for which it was made . . . .) (emphasis added); see also Hunt Constr. Group v. United States, 281 F.3d
  • 4. Page 4 RE: AMEC v. VDOT 1369, 1372 (Fed. Cir. 2002) (The contract must be considered as a whole and interpreted to effectuate its spirit and purpose, giving reasonable meaning to all parts.) (emphasis added); Hol-Gar Mfg. Corp. v. United States, 351 F.2d 972, 975 (Ct. Cl. 1965) (The language of a contract must be given that meaning that would be derived from the contract by a reasonably intelligent person acquainted with the contemporaneous circumstances.); 5 Arthur L. Corbin, Corbin on Contracts 24.20 (Rev. ed. 2002) (When the principal purpose of the parties becomes clear, further interpretation should be guided thereby.) (emphasis added). Accordingly, in the case sub judice, the Court looks to the underlying purpose of the contracts written notice requirement. Section 105.16 of the contract clearly outlines the rationale requiring AMEC to provide VDOT with written notice of any claim it might have against the Commonwealth. The principal purpose of written notice provision is to put VDOT on notice of any existing or impending claim for damages that might alter the plans, scheduling, or other action of the Department or that could result in VDOT taking action to mitigate or eliminate the effect of the act objected to by the [AMEC]. Contract Specification 105.16. Importantly, the purpose of the notice requirement can effectively be realized even if the notice is not in writing. In fact, mere verbal notice may satisfy the writing requirement if it is later reduced to writing. See Welding, Inc. v. County Serv. Auth., 261 Va. 218, 227, 541 S.E.2d 909, 914 (2001). This is true even if the government itself reduces the verbal notice to writing. Id. (Governments assertion that the contractors verbal notice of claim during progress meeting did not satisfy statute was not a valid argument; meeting minutes may provide sufficient notice, even if recorded by the government). It follows that any writing that memorializes the fact the VDOT had actual notice of a claim could be sufficient. Accordingly, evidence of actual knowledge, constructive notice, and verbal notice must be taken into account in conjunction with any available writings (including meeting minutes and all written correspondence between the parties) to demonstrate whether adequate notice was provided. b. Interpreting the Contractual Written Notice Provision in 104.03Differing Site Conditions Alternatively, AMEC contends that the Differing Site Conditions clause of 104.03 is the controlling section of the Standard Specifications, rather than 105.16 as VDOT claims. Particul