In 2011, the Washington State Department of Transportation (WSDOT) agreed to pay Seattle Tunnel Partners (STP) $1.35 billion to construct a new tunnel under Seattle under a design-build contract. The project came to an abrupt halt when Bertha, the tunneling machine, encountered a steel pipe. The obstruction resulted in significant damage to Bertha and led to delays and complications from both parties.
Initially, WSDOT sued for delay as STP failed to complete the project in a timely manner. STP counterclaimed, asserting the pipe in the path of the tunnel was an undisclosed condition that was the fault of WSDOT. WSDOT placed the 119-foot-long steel pipe, known as “Test Well 2,” into Seattle’s waterfront soil to measure groundwater that might flood some future tunnel construction project. WSDOT abandoned the pipe in 2002, but presented evidence in 2019 that STP’s own foreman encountered the pipe lid before Bertha arrived. This evidence strongly suggested that WSDOT was aware of the pipe but said little to STP about the need to address it as part of the tunneling project. STP argued the pipe caused Bertha to stall and kicked off a massive operation to replace cracked gears and bearings. The giant drill finally completed the dig from South Seattle to South Lake Union in April 2017, more than two and half years late. WSDOT argued before the jury that the pipe was similar to a toothpick compared to the world-record 57-foot-wide cutting disc from Big Bertha.
STP appealed the jury trial decision in favor of WSDOT, claiming multiple errors in its evidentiary rulings and in its instruction of the jury on the theory of its case. Additionally, STP contends that the court erred in sanctioning STP for losing evidence—namely the steel pipe that was shredded by Bertha. Ultimately, the appellate court showed no interest in second guessing the trial court rulings in favor of WSDOT.
The Washington Court of Appeals decision provides a textbook review of contract terms related to construction projects, including Differing Site Condition (DSC). This alone might be sufficient public interest for the opinion to get published for the benefit of the construction bar concerning the DSC issue. The court affirmed that, “[W]here plans or specifications lead a public contractor reasonably to believe that conditions indicated therein exist, and may be relied upon in making his bid, he will be entitled to compensation for extra work or expense made necessary by conditions being other than as so represented.”
The appeals court found that the trial court’s instruction was an accurate expression of the legal standard for establishing a DSC claim and was not misleading as to the parties’ agreement. In sum, the court found that there was not a reasonable probability that the trial’s outcome was materially affected by the jury instruction and STP fails to show that the trial court’s error, if any, was not harmless.
The court also addressed the destruction of evidence, namely the lost pipe that was chewed up by the tunneling machine, which resulted in the project coming to a stop and expensive machinery repairs. The pipe pieces, along with the journal entries related to this time period, went missing. The question was whether STP was at fault for failing to preserve this evidence. To help determine whether a party has provided a “satisfactory explanation” related to the missing evidence, courts have considered the Henderson factors: (1) “the culpability or fault of the adverse party;” and (2) “the No. 54425-3-II 28 potential importance or relevance of the missing evidence.” Homeworks Const., Inc. v. Wells, 133 Wn. App. 892, 898-99, 138 P.3d 654 (2006). Judge Murphy had advised jurors to assume the missing evidence would reflect adversely on STP’s pipe-damage scenario. The appellate court found that Judge Murphy acted properly. They noted that jurors determined that WSDOT did provide enough notice to STP about underground conditions, so the jury never reached their second key question of whether a steel pipe was the cause of Bertha’s damage.
It is interesting to note that this case arises in Division Two of the Court of Appeals, which is often hearing appeals from Washington State government entities. The appeals court appears to offer great deference to the trial court and does not interfere in how the case was tried. If a significant party like STP cannot get a trial court or court of appeals to take a close review of its assignment of error, it is a warning to other litigants that may take on public agencies in this particular court. On the other hand, taxpayers are not responsible for over $300 million for Highway 99 tunnel cost overruns sought by STP. Instead, STP is liable for the $57.2 million WSDOT award, now having grown to $74 million with interest. It is possible STP will seek discretionary review from the Washington Supreme Court, but the lack of publication status certainly does not help in making that happen.
