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Oldcastle Precast Inc. v. Concrete Accessories of Georgia Inc.

United States District Court, D. Idaho

January 31, 2019

OLDCASTLE PRECAST, INC., Plaintiff,
v.
CONCRETE ACCESSORIES OF GEORGIA, INC., AREVA FEDERAL SERVICES LLC, and LIBERTY MUTUAL INSURANCE COMPANY, Defendants. AREVA FEDERAL SERVICES LLC, Counterclaimant/Crossclaimant,
v.
OLDCASTLE PRECAST, INC., CONCRETE ACCESSORIES OF GEORGIA, INC., Counterdefendants, & LIBERTY MUTUAL INSURANCE COMPANY, Crossclaim defendant.

          MEMORANDUM DECISION AND ORDER

          B. LYNN WINMILL U.S. DISTRICT COURT JUDGE.

         INTRODUCTION

         The Court has three ripe summary judgment motions before it: Crossclaim Defendant Liberty Mutual Insurance Company's Motion for Summary Judgment, Dkt. 63; Concrete Accessories of Georgia, Inc.'s (hereinafter, “CONAC”) Motion for Partial Summary Judgment, Dkt. 71; and, Oldcastle Precast, Inc.'s Motion for Partial Summary Judgment, Dkt. 72.

         In addition, the Court has two ripe motions in limine: CONAC's Motion in Limine to exclude all or part of the testimony of Areva Federal Services LLC's expert, Henry Spieker, Dkt. 64; and CONAC's Motion in Limine to exclude all or part of the testimony of Oldcastle's expert, Ronald Mayville, Dkt. 67.

         BACKGROUND

         This case arises out of an accident that occurred during the construction of the Remote Handled Low-Level Waste Disposal Facility at the Idaho National Laboratory. The legal relationships between the various parties to this litigation are as follows:

1. Areva, working on behalf of the project owner, Battelle Energy Alliance, performed the role of general contractor for the construction of the Remote Handled Low-Level Waste Disposal Facility.
2. Areva entered into a Subcontract Agreement with Oldcastle (hereinafter, the “Oldcastle Subcontract”), by which Oldcastle agreed to fabricate and deliver precast concrete vaults for the project. See Dkt. 72-3, Dkt. 72-4, Dkt. 72-5, Dkt. 72-6, Dkt. 72-7.
3. As part of its agreement with Oldcastle, Areva required Oldcastle to furnish a Subcontract Performance Bond. See Dkt. 72-9. To fulfill this obligation, Oldcastle obtained the Performance Bond from Liberty Mutual and furnished it to Areva. Id.
4. In addition to securing the Performance Bond, Oldcastle entered into an agreement with CONAC for the purchase of metal anchors (hereinafter, the “CONAC Agreement”).[1]

         FINDINGS OF FACT

         1. Areva Enters into the Oldcastle Subcontract

         On September 14, 2015, Oldcastle and Areva entered into the Oldcastle Subcontract. Dkt. 31 at ¶ 6. In exchange for payment, Oldcastle agreed to, among other things, fabricate and deliver precast concrete vaults to a site at the Idaho National Laboratory. Id. The vaults were intended for use at the Remote-Handled Low-Level Waste Disposal Facility located near Scoville, Idaho. Id.

         2. Oldcastle Obtains a Performance Bond from Liberty Mutual

         Shortly after Oldcastle entered into the Oldcastle Subcontract with Areva, Oldcastle secured a Performance Bond from Liberty Mutual on September 29, 2015. See Dkt. 72-9. The following portions of the Performance Bond are relevant to the dispute:

         NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION is such that, if the Principal shall promptly and faithfully perform said Subcontract, then this obligation shall be null and void; otherwise it shall remain in full force and effect.

         PROVIDED AND SUBJECT TO THE CONDITIONS PRECEDENT:

1.0 Whenever the Principal shall be, and be declared by the Obligee to be in default under the Subcontract, the Obligee having performed the Obligee's obligations thereunder, the Surety may promptly remedy the default, or shall promptly:
1.1. Arrange for the Principal, with consent of the Obligee, to perform and complete the Subcontract; or
1.2. Undertake to perform and complete the Subcontract itself, through its agents or through independent contractors; or
1.3. Obtain a bid or bids from alternative contractors to complete the Subcontract in accordance with its terms and conditions, and upon determination by Surety of the lowest bidder, or if the Obligee elects, upon determination by the Obligee and Surety jointly of the lowest responsible bidder, arrange for a subcontract between such bidder and the Obligee …; or
1.4. Waive its right to perform and complete, arrange for completion, or obtain a new subcontractor and with reasonable promptness under the circumstances:
a. After investigation, determine the amount for which it may be liable to the Obligee and, as soon as practicable after the amount is determined, tender payment therefore to the Obligee; or
b. Deny liability in whole or in part and notify the Obligee citing reasons therefore…
5.0 Any claims must be presented in writing to Liberty Mutual Insurance Company, to the attention of The Surety Law Department at the above address.

Id. at 2-3.

         3. Oldcastle Enters into the CONAC Agreement

          a. Basic Parameters of the CONAC Agreement

         In addition to securing the Performance Bond from Liberty Mutual, Oldcastle entered into the CONAC Agreement. In exchange for payment, CONAC agreed to supply certain metal anchors to be used as part of the assembly of the precast concrete vaults that Oldcastle was assembling for Areva. See Dkt. 21. For demonstrative purposes only, photos of the metal anchor supplied by CONAC and the final precast concrete vault follow as Figure 1 and Figure 2, respectively.

         (Image Omitted)

         (Image Omitted)

         b. The Contested Terms of the CONAC Agreement

          The exact contents of the CONAC Agreement are disputed. According to CONAC, the Agreement between CONAC and Oldcastle incorporated CONAC's “Terms and Conditions of Sale” which, again according to CONAC, are conspicuously posted on CONAC's website (Dkt. 74-1 at 2) and in CONAC's purchase catalog (Dkt. 74-1 at 1). The relevant portion of CONAC's “Terms and Conditions of Sale” reads as follows:

It is the responsibility of the user to check supplied products prior to use. Any product believed to be defective should be returned to CONAC for inspection. CONAC will refund the purchase price or replace, at its election, any product which it finds to be defective, provided the product has been used properly. Such refund or replacement shall be the exclusive remedy available, and CONAC hereby disclaims any and all express or implied warranties, and excludes any liability for consequential damages, in accordance with Article 2-719 of the Uniform Commercial Code.

Id.

         The Parties do not dispute that Michael Blackham, an engineer employed by Oldcastle who placed the order for the CONAC anchors, (1) had a copy of CONAC's catalog when he made the order and (2) accessed CONAC's website before ordering them. Dkt. 86 at 2. Oldcastle, however, argues that the “Terms and Conditions of Sale” “were [n]ever provided to Oldcastle” and were not conspicuously located on CONAC's website or in CONAC's magazine. Id. at 3. Mr. Blackham gave the following testimony during his deposition on this issue:

Q. (BY MR. STUBBS [Counsel for CONAC]) Mr. Blackham, I've handed you what has been marked Deposition Exhibit 5 [Dkt. 74-1]. I'll represent to you that these are terms and conditions of sale that are published by CONAC. They are OCP 00001 and 2. One is from the website for CONAC. Another is a document they published in their catalog. Have you seen these before?
A. No.
Q. You have accessed the CONAC website before; correct?
A. Yes.
Q. And were you aware that the CONAC terms and conditions of sale were present on the website?
A. No, I've never seen these.
Q. And in terms of the CONAC catalog, do you have a CONAC catalog?
A. Yes.
Q. Have you ever looked at the terms and conditions of sale that are in there?
A. No.

Dkt. 74.

         4. Areva Seeks Increase in Compensation from Battelle

         After construction on the Remote Handled Low-Level Waste Disposal Facility was underway, Areva sought an increase in contract compensation from Battelle. To this end, on August 9, 2016, Areva filed Baseline Change Request (“BCR”) 193 (Dkt. 89-3 at 8) seeking an increase of roughly $3.25 million in contract compensation as a result of “[c]hanges requested by … [Battelle].” Id. BCR-193 did not include a request to alter the construction schedule. Id. (“There has been a schedule impact [from the project changes for which Areva was seeking additional compensation], but it has been mitigated largely be [sic] adding resources. We are not seeking [sic] change in schedule or costs for schedule delays at this time.”).

         5. The ...


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