1 2 3 4 5 6 SUPERIOR COURT FOR THE STATE OF WASHINGTON IN THE COUNTY OF KING 7 8 TURNER CONSTRUCTION COMPANY, a New York corporation, Plaintiff, 9 11 12 COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF v. 10 NO. CENTRAL PUGET SOUND REGIONAL TRANSIT AUTHORITY, a regional transit authority, Defendant. 13 14 COMES NOW Plaintiff Turner Construction Company (Turner), by and through its 15 counsel, Carney Badley Spellman, and for its Complaint hereby pleads, states, and alleges as 16 follows: I. 17 1.1 18 19 INTRODUCTION In March 2016, the Central Puget Sound Regional Transit Authority (Sound Transit) opened a new light rail station in the Capitol Hill neighborhood of Seattle. 1.2 20 Turner was hired to construct the Capitol Hill station via public procurement 21 process and was ultimately awarded a General Contractor/Construction Manager (GC/CM) 22 contract in December of 2011. 1.3 23 Sound Transit’s initial, internally projected cost of construction was $90 million, 24 and the Capitol Hill station was initially projected by Sound Transit to be completed in August 25 2015. 26 COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 1 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 1.4 From an outsider’s point of view, the Capitol Hill station Project was a success. 2 The finished Project has received praise, with Turner receiving multiple awards for its work 3 and the Seattle Times noting that within the first week of opening, tens of thousands of people 4 started using the new rail line. 5 1.5 However, for Turner the Project has been a financial burden because of Sound 6 Transit’s arbitrary, unilateral, and improper actions by which it breached its contract with 7 Turner, detailed in part below. 8 1.6 Sound Transit’s actions have caused Turner to finance a significant portion of 9 the Project’s cost when Turner should have been paid by Sound Transit. Despite Sound 10 Transit’s public announcement that the Project came in on time and under budget, Sound 11 Transit significantly delayed the construction schedule due to substantial changes initiated late 12 in the Project, numerous design issues and changes, a lack of coordination between interrelated 13 construction projects under Sound Transit’s control and other issues discussed herein. 14 1.7 Turner’s actual construction cost is projected to be approximately $125 million, 15 including all amounts Sound Transit has wrongfully refused to pay, which represents at least a 16 twenty-eight percent increase above Sound Transit’s original, internally created estimate. 17 1.8 Due to Sound Transit’s poor management, inadequate and incomplete plans and 18 specifications, untimely responses to questions that arose during construction, and poor 19 coordination between multiple contractors on different sections of the U-Link system, Turner 20 incurred substantial additional costs for which Turner should be compensated. 21 1.9 In addition, because of these failings by Sound Transit, Turner was forced to re- 22 sequence its work, bring on additional project management and other staff, keep staff on the 23 Project longer than it would have had Sound Transit not improperly impacted Turner’s 24 performance, and accelerate and extend its work to perform the many changes and impacts 25 caused by Sound Transit’s actions, inactions, decisions and indecisions. Despite all of these 26 COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 2 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 Sound Transit caused problems, Turner achieved substantial completion of the Project prior to 2 the March 2016 grand opening. 3 1.10 While Sound Transit has failed to compensate Turner for all of Turner’s extra 4 costs that exceed $10 million, Sound Transit spent approximately $858,379 on its grand- 5 opening celebrations for the U-Link extension. 6 1.11 Turner and its subcontractors followed the contractual procedures to notify 7 Sound Transit of, and submit claims for, the extra costs incurred as a result of Sound Transit’s 8 changes, delays, constructive acceleration, coordination problems, design issues, and other 9 breaches of Sound Transit’s contractual obligations. 10 1.12 Despite the problems caused by Sound Transit, Turner and its subcontractors 11 performed outstanding work. Turner’s project manager for the Capitol Hill station was named 12 Project Manager of the Year by the Associated General Contractors of Washington. Turner also 13 received a 2014 Build Washington Award for Technology Excellence for its innovative 14 traveling concrete formwork system. 15 16 17 18 1.13 Even with an award-winning Project and team members, Sound Transit has refused to fairly compensate Turner and its subcontractors for the work performed. 1.14 Having tried and failed to resolve these disputes under the claim and dispute resolution procedures of the contract, Turner now seeks relief through the judicial system. II. 19 20 21 22 23 24 25 26 2.1 PARTIES Turner is a domestic business corporation with its principal place of business in New York, New York. 2.2 Turner is registered as a general contractor in the State of Washington under Contractor Registration No. TURNECC237D2. 2.3 Turner and its international affiliates are leading providers of construction services around the world. 2.4 Turner maintains an office in Seattle, Washington. COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 3 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 2.5 1 Since 1976, Turner has managed the construction, expansion, and renovation of 2 many of Seattle’s signature buildings and public projects, including the Fred Hutchinson Cancer 3 Research Center Campus, the Seattle-Tacoma Airport Consolidated Rental Car Facility, 4 CenturyLink Field & Exhibition Center, Two Union Square and the renovation of Husky 5 Stadium that is often referred to as the greatest setting in College Football and many others. 6 2.6 7 81.112.010 et seq. 8 2.7 9 Defendant Sound Transit is a regional transit authority authorized under RCW Sound Transit operates express bus, commuter rail, and light rail transit services in Pierce, King, and Snohomish Counties. 2.8 10 In addition to operating such services, Sound Transit has also overseen the 11 development and construction of the light rail system with several of its projects resulting in 12 legal disputes involving claims for extra costs. III. 13 JURISDICTION 14 3.1 This Court has subject matter jurisdiction pursuant to RCW 2.08.010. 15 3.2 Sound Transit consented to personal jurisdiction in this Court pursuant to 16 contract. 17 3.3 Venue is proper pursuant to contract. 18 3.4 Turner has exhausted all administrative and dispute resolution processes 19 required under the parties’ contract or otherwise agreed with Sound Transit in writing to forego 20 certain administrative and dispute resolution processes. 3.5 21 22 This action is timely because less than 180 days have passed since Final Acceptance, which acceptance Sound Transit has failed to provide. IV. 23 24 25 26 A. FACTS North Bound Extension 4.1 After voter approval, Sound Transit undertook a $1.8 billion expansion of its light rail services that opened in March 2016. The northbound extension from downtown Seattle COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 4 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 to new stations at Capitol Hill and the University of Washington is known as the University 2 Link Light Rail Extension (U-Link). The U-Link consists of approximately 3.15 miles of 3 double-track light rail. 4.2 4 The U-Link line is routed in an underground configuration of two bored tunnels 5 and two cut-and-cover stations: one at Capitol Hill (U240) and one at the University of 6 Washington (U250). 7 B. 4.3 8 9 4.4 The Project covers approximately three city blocks in the Capitol Hill neighborhood of Seattle, with three separate above-ground entrances to the light rail station. 4.5 12 13 The U240 Capitol Hill Station Construction Project (Project) is one of nine major public construction contracts comprising the overall U-Link extension. 10 11 Capitol Hill Station The station is approximately 550 feet long, 50 feet wide, and 55 feet below grade at the passenger platform. 4.6 14 In addition to providing public access to and from light rail, the Capitol Hill 15 station houses significant mechanical, electrical, and other systems for the tunnels and transit 16 systems that pass through the station. 17 C. 18 19 20 21 22 23 24 25 26 Sound Transit Procured the Capital Hill Station Project Under the GC/CM Procurement Process 4.7 Sound Transit utilized the GC/CM delivery method to procure the Project. 4.8 Turner has experience with GC/CM contracts and offered its services to Sound Transit for the Project. 4.9 By contrast, Sound Transit had very little prior experience using the GC/CM delivery method – U240 was only the third GC/CM project that Sound Transit ever procured. 4.10 The GC/CM delivery method allows the public body to select a single entity to serve as both the general contractor and the construction manager before the Project is completely designed. This delivery method, when properly administered by an owner, COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 5 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 encourages early collaboration with the GC/CM to provide input on the constructability of the 2 design and other aspects of construction. 4.11 3 4 Consistent with the statutory requirements, Sound Transit solicited GC/CM proposals for the Project. 4.12 5 Sound Transit’s public solicitation estimated the maximum allowable 6 construction cost (MACC), which is “the maximum cost of the work to construct the project 7 including a percentage for risk contingency, negotiated support services, and approved change 8 orders,” to be $90,000,000. 9 D. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Sound Transit and Turner Negotiate GC/CM MACC and Lump Sum Price for Related Services 4.13 Sound Transit selected Turner as the GC/CM for the Project. 4.14 In December 2011, Turner and Sound Transit entered into a GC/CM Preconstruction Services Contract to perform preconstruction services in preparation for the Project. 4.15 Sound Transit involved Turner late in the design process, however, effectively precluding the full benefit of the anticipated input of the builder into the design process. 4.16 Making matters worse, on the few occasions when Turner was allowed to make substantive design, engineering, code compliance, or constructability suggestions, most of Turner’s suggestions were ignored by Sound Transit and its design team. 4.17 Subsequently, during construction, issues arose that caused delay and extra work when Sound Transit was finally forced to address them. Many of these issues could have been avoided if Sound Transit and its design team had adopted more of Turner’s suggestions, including suggestions related to Station Illumination, Switchgear Drip Pans, VFD’s Hot Plenums. 25 26 COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 6 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 4.18 When the construction documents and specifications were at least ninety percent 2 complete, Sound Transit and Turner negotiated the MACC for the Project. The MACC was set 3 at $97,566,098. 4 4.19 Based on the negotiation of the MACC, Turner developed a plan for staffing and 5 managing the Project that would allow Turner to meet its obligations and address issues that 6 could reasonably be anticipated to develop on a major public works project. Turner’s plan called 7 for Turner to quickly ramp up its Project staff at the beginning of the Project, following Sound 8 Transit’s issuance of a Notice to Proceed and Release for Site Access. 9 10 4.20 On the back-end of the Project, Turner’s plan was to gradually reduce on-site staff through 2015 in anticipation of achieving Contract Milestone #4. Sound Transit’s original Substantial Complete Date for this Contract Milestone 11 4.21 12 was August 2, 2015. 13 4.22 14 15 16 17 18 19 20 21 Turner’s final staffing plan and approach developed after award and agreement on the MACC was reasonable and consistent with the MACC schedule. 4.23 As part of the negotiated MACC, Turner and Sound Transit also negotiated a lump sum of $11,452,582 for Negotiated Support Services (NSS). 4.24 NSS are services that “a general contractor would normally manage or perform on a construction project.” 4.25 On this Project, NSS included items such as hoisting, safety enforcement, toilet facilities, trash removal, temporary heat, temporary fencing, and traffic control, among others. 4.26 The negotiated lump sum for NSS was limited in scope and in duration, based 22 on the anticipated duration of the Project, before the uncontemplated, substantial extra work 23 and delays imposed by Sound Transit during the course of the Project. 24 4.27 For example, the lump sum for surveying included a Lead Surveyor and two- 25 person crew for a specific time period of only twenty-four months, and thereafter only on a 26 part-time basis as needed; the lump sum for security included one security guard working COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 7 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 twelve hours per day, six days per week, for a period of only thirty-four months from November 2 2012, and a second security guard for only thirty months from March 2013. Sound Transit 3 expressly agreed to, and negotiated for these limited time periods to receive a reduced price. 4.28 4 In November 2012, Sound Transit and Turner entered into the GC/CM 5 Construction Contract (the Contract) with a Total Contract Cost (TCC) of $104,850,276. The 6 TCC is comprised of the negotiated MACC, the Percent Fee, and the fixed amount for Specified 7 General Conditions. 8 E. 9 Project Performance Issues 4.29 The Project did not evolve as originally planned by the Parties as evidenced by 10 the fact the Project was not opened until March of 2016 when completion was initially 11 anticipated in August of 2015. 12 4.30 Given the challenges actually faced during construction, Turner’s staffing plan 13 and management was overwhelmed by an unusually high number of Owner-initiated changes, 14 design issues, and Sound Transit’s poor coordination between Turner’s work and that of the 15 other Sound Transit contractors charged with track construction and overall systems integration 16 (U830). 17 4.31 The Project’s design, provided by Sound Transit to Turner, proved to be 18 incomplete and contained multiple issues that required changes and modifications to deliver the 19 Project in the manner Sound Transit ultimately decided it wanted. 20 21 22 23 24 4.32 Many of the problems encountered are attributed by Turner to Sound Transit’s lack of prior experience with the GC/CM contracting method. 4.33 The only other two GC/CM projects that Sound Transit had undertaken in its history were in progress simultaneously with this Project. 4.34 Sound Transit’s lack of experience with the GC/CM delivery method was 25 evident from Sound Transit’s limitation of Turner’s involvement in the design process, its 26 reluctance to accept Turner’s suggestions during the pre-construction phase, and Sound COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 8 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 Transit’s adversarial approach to addressing design problems, scope changes, and overall 2 communication. 3 4.35 Over the course of the Project, a number of disputes emerged that the parties 4 have been unable to resolve in the administrative claim and dispute escalation processes set 5 forth in the Contract General Conditions. 6 7 8 9 4.36 Transit initiated changes to the scope of the Project. 4.37 12 13 Specific examples of Sound Transit’s numerous breaches of its contractual obligations to Turner are set forth below: 1. 10 11 Most of these disputes arise from Sound Transit caused problems or Sound 4.38 Partition Walls Claim Turner followed Sound Transit’s furnished drawings and specifications for the construction of concrete partition walls in the U240 station box. 4.39 Consistent with the Contract’s requirements, Turner completed multiple rounds 14 of drawing submittals and obtained appropriate approvals prior to commencing construction of 15 the partition walls. 16 4.40 17 18 Initial construction involved setting of structural rebar followed by installation of the required concrete formwork. 4.41 After this work had been completed, Sound Transit decided that it wanted the 19 partition walls to be isolated from the structural walls in the station contrary to what was 20 required by the plans Sound Transit had provided to Turner as part of the Contract Documents. 21 4.42 After belatedly raising this issue, Sound Transit proceeded to reevaluate its 22 design before ultimately determining that Sound Transit’s preference was to have the concrete 23 partition walls isolated from the structural walls in the station. 24 25 4.43 Despite the fact that Sound Transit had made a fundamental change in the design by directing that the partition walls must be isolated from the structural walls, after changing 26 COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 9 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 its mind Sound Transit took the position that it would not compensate Turner for the costs of 2 what was obviously a change in Sound Transit’s design. 3 4.44 The fact that Sound Transit changed its design in this regard is conclusively 4 evidenced by the fact that the design Sound Transit provided to Turner, with integrated walls, 5 differs from the design with isolated walls that Sound Transit had provided the contractor for 6 the University of Washington U250 station, another station that Sound Transit was having 7 constructed contemporaneously with the U240 station. 8 4.45 For the construction of the U250 station at the University of Washington, that 9 was also a part of the U-Link Project, Sound Transit’s furnished design clearly depicted isolated 10 partition walls from the outset. Unlike the Capitol Hill station design provided to Turner, the 11 U250 Project design furnished by Sound Transit specifically directed the contractor to isolate 12 the partition walls, place joints, and secure the walls with dowels placed in the slabs. Ultimately, 13 Sound Transit required Turner to build the U240 station in a manner inconsistent with the 14 original U240 design documents and consistent with the U250 design documents. 15 4.46 Because of Sound Transit’s decision to alter the contract requirements for 16 construction of the partition walls of the U240 station, Turner incurred both impacts to the 17 Project schedule and extra costs in excess of $2.8 million. Turner’s unreimbursed costs include 18 production losses, additional labor, overtime costs, materials, equipment rental, staffing, 19 subcontractor costs, and other losses. 20 21 22 4.47 Turner timely and properly advised Sound Transit of its right to make a claim for the impacts and costs associated with the partition walls. 4.48 Despite initially denying Turner’s claim entirely, ultimately, Sound Transit 23 acknowledged that it had, indeed, required Turner to perform extra and additional work in 24 response to Turner’s Request for Change arising from the partition wall design change. On 25 August 28, 2015, Sound Transit issued Unilateral Change Order 253R in the amount of 26 COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 10 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 $355,876, an amount Sound Transit unilaterally attempted to dictate that Turner accept which 2 was a small fraction of the costs Turner actually incurred for this design change. 3 4 5 4.49 In response, Turner timely submitted a Notice of Intent to Claim on September 2, 2015 followed by a Claim on October 30, 2015 for Turner’s additional costs. 4.50 Despite the clear decision of Sound Transit to alter the design, to date Sound 6 Transit has refused to pay Turner for the total costs incurred to mitigate Sound Transit’s 7 decision to alter the design of the partition walls. 8 GC/NSS Costs Claim for $4.7 Million of Added Staff and Support Services Caused by Sound Transit 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4.51 Sound Transit’s design decision, poor management and lack of required coordination between U240 and the other U-Link projects significantly impacted the Project Schedule, as well as lead to increased costs. 4.52 Numerous design and coordination problems arose on the Project which required Turner to absorb non-critical float time, accelerate work, stack work, and re-sequence work in an effort to stay on or as close to schedule as possible. 4.53 Turner’s mitigation efforts allowed Turner to maintain the scheduled completion date without impacting the Critical Path for a substantial period of time. 4.54 Eventually, the protracted impact of Sound Transit’s conduct and failures proved too much and Turner was no longer able to continue to re-sequence work or absorb noncritical float time without impacting the Critical Path. 4.55 The issues were so prevalent that Sound Transit ultimately recognized that its changes and required design modifications had impacted and delayed the Project such that an extension of the Contract Time and modification of the Schedule was appropriate. 4.56 Specifically, Sound Transit extended Contract Milestone 4 (Substantial Completion) by 152 days to December 31, 2015. 26 COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 11 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 4.57 Despite Sound Transit’s acknowledgement of delays of approximately five 2 months and shifting of the schedule to account for a multitude of changes that occurred in the 3 last third of the Project, as well as the time spent dealing with the design and coordination 4 problems, Sound Transit refused to compensate Turner for its expanded and extended General 5 Conditions or NSS costs. 6 4.58 Turner initially advised Sound Transit that its actions were causing Turner to 7 incur extra costs for General Conditions as early as November 14, 2014 based on Sound 8 Transit’s response to RFI 01088A on October 30, 2014. 9 4.59 Turner’s pricing for the impacts with this event was updated on March 18, 2015. 10 Consistent with the fact that each change and disruption caused by Sound Transit was having 11 an adverse impact on the Project, the schedule and Turner’s costs, Turner was adding additional 12 costs to each new issue as Turner was effectively being required to add or keep staff past the 13 date of the original staffing plan to manage the additional managerial workload of Sound 14 Transit’s changes. 15 4.60 In addition to including an amount corresponding to Turner’s expanded General 16 Conditions, Turner also added costs as appropriate for the necessary extension of the NSS costs 17 that had previously been set at a lump sum based on schedule durations as agreed to and set in 18 part by Sound Transit. 19 4.61 Sound Transit did not react favorably to Turner’s inclusion of these costs. 20 4.62 For example, on May 6, 2015 while agreeing to pay the entire amount of a proper 21 Turner Cost Proposal for additional costs chargeable to Sound Transit, Sound Transit 22 completely rejected Turner’s additional General Conditions costs based on the incorrect 23 position that such costs were “not allowed by contract.” 24 4.63 Sound Transit’s incorrect position that the Contract prohibited additional 25 compensation for General Conditions and NSS costs created a problem with processing change 26 orders going forward where all other costs were agreed as valid and appropriate. COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 12 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 4.64 To allow partial payments to be made in light of Sound Transit’s position that 2 certain extra costs were barred under the Contract, Turner suggested and Sound Transit 3 eventually agreed to allow Turner to reserve all rights and defenses with respect to Turner’s 4 entitlement to additional or expanded General Conditions or NSS costs as a result of Sound 5 Transit actions or inactions. 6 4.65 The agreement to allow a reservation of rights by Turner of the disputed amounts 7 to permit the undisputed funds to flow was confirmed via written letters exchanged between 8 the parties between May 7, 2015 and June 1, 2015. 9 10 11 4.66 Subsequently, the reservation of rights agreement was confirmed in various Project documentation including but not limited to RFC 391. 4.67 Turner’s claim for such costs is based in part on the relevant provisions of the 12 Project General Conditions which require Sound Transit to compensate Turner for costs 13 associated with delays caused by Sound Transit. 14 15 16 4.68 Turner has been delayed in completing its work on the Project because of the actions and conduct of Sound Transit and its agents. 4.69 The delays caused by Sound Transit were not within the contemplation of the 17 Contract and the extra costs and actual losses incurred by Turner as a result of the delays caused 18 by Sound Transit and its agent could not be mitigated despite Turner’s reasonable efforts. 19 4.70 Turner has incurred damages in excess of $4.7 million in expanded and extended 20 General Conditions and NSS costs, plus other associated costs and fees, as a result of Sound 21 Transit’s Owner-initiated changes to the scope of work and many design errors and omissions 22 that either delayed the Critical Path or caused Turner to accelerate its work. 23 4.71 Despite providing a partial time extension, in breach of the Contract, Sound 24 Transit continues to refuse to provide any additional compensation to Turner for extended 25 General Conditions and NSS costs. 26 COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 13 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 2. 1 2 3 4 4.72 Formwork Removal Claim In addition to the Partition Walls, Turner also incurred additional costs associated with ambiguities in Sound Transit’s Formwork Removal Criteria. 4.73 At the time of the bid, Sound Transit specified the conditions required before 5 the contractor could remove concrete formwork from four structural conditions: conditions with 6 more than twenty feet between supports; floor slabs; free standing walls; and sides of beams, 7 footing, slabs on grade, and vertical surfaces. 8 9 10 11 4.74 The bid specification required that formwork could not be removed from vertical surfaces until the concrete had attained thirty percent compressive strength or been in place for two days, whichever was greater. 4.75 Floor slabs had a different requirement. For floor slabs, Sound Transit required 12 at least seventy percent compressive strength or fourteen days before the formwork could be 13 removed. 14 15 16 4.76 Turner solicited subcontractor bids for the concrete package in July 2012. As allowed under the GC/CM statute, Turner submitted a bid for this portion of the work. 4.77 Because Turner was bidding on this scope of work with other approved 17 contractors, Sound Transit was allowed to determine who was the low responsive bidder. In 18 performing this independent function, Sound Transit concluded that Turner was the low bidder. 19 4.78 Based on Sound Transit’s review and analysis of the competitive and bidding 20 process with respect to the concrete scope of work, Turner operated as a subcontractor to itself. 21 At Sound Transit’s insistence and to insure an equal and fair bidding process, this included 22 having to have separate management assigned to the concrete scope of work just like any other 23 subcontractor. 24 4.79 Having been placed in the role of a subcontractor with respect to this work, 25 Turner was allowed to resolve any construction issues that arose in the same manner that Turner 26 could legitimately deal with any other subcontractor related issues or extra costs. COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 14 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 4.80 Turner’s winning bid for the concrete work was based in part on an innovative 2 approach to forming and shoring the concrete walls in the station box. Turner’s developed 3 approach used a traveling form system, which could expand and collapse while traveling along 4 the base slab without having to deconstruct and reconstruct the formwork for each pour. 5 6 7 4.81 The benefit of the system is that it allowed for the saving of both time and money, which were both a benefit to the overall Project. 4.82 While the system was new, it worked. Turner received a Technology Excellence 8 Award for the innovative traveling form system that was implemented on the Project. In 9 addition, Sound Transit confirmed that the system was “innovative” and “time saving” in a 10 2013 press release. 11 4.83 Unfortunately, despite publicly praising the time saving aspect of the system, 12 behind the scenes Sound Transit actively prohibited Turner for recognizing the full benefits of 13 the system Sound Transit had accepted in awarding the scope of work to Turner. 14 15 16 4.84 The system saved time and money because it relied upon the two days or thirty percent compressive strength specification for formwork removal on vertical surfaces. 4.85 In the submittal process that followed the decision to award the work to Turner, 17 Sound Transit ignored the 30% compressive strength criteria and asserted that the cure time 18 was longer than two days because certain portions (called “wales”) of the traveling system 19 included horizontal surfaces. 20 4.86 Sound Transit made this arbitrary decision that deprived Turner of the benefits 21 of the accepted form system despite the fact that Turner had demonstrated that the “wales” 22 would reach the most restrictive, seventy percent compressive strength—the strength required 23 to remove formwork from floor slabs (even though none of the structures at issue were floor 24 slabs)—in two days. 25 26 COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 15 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 4.87 However, in an implicit admission that its initial position was flawed, Sound 2 Transit made up a new cure time which required Turner to keep the formwork in place for at 3 least five days. 4 4.88 Sound Transit’s arbitrary and manufactured five-day cure period resulted in 5 almost nine extra weeks of work that were not accounted for at the time of the award of the 6 concrete scope of work to Turner. 7 4.89 Assuming, arguendo, that Sound Transit’s position is correct regarding 8 applicable cure times, extra costs were incurred because of a subcontract buyout error or 9 mistake. 10 4.90 Given these events, and in an effort to avoid a contested claim, Turner 11 appropriately requested that it be allowed to use the MACC Risk Contingency Account (RCA) 12 to offset the additional costs caused by Sound Transit’s refusal to allow Turner to recognize the 13 full benefits of the innovative system and time saving system. 14 4.91 The RCA is a contingency account that may be used to offset certain costs, 15 including “all costs related to Subcontractor claims or charges that result from mistakes or 16 omissions in the subcontract buyout.” 17 4.92 While the use of the RCA requires the approval of Sound Transit, the use of the 18 contingency fund is for the benefit of the contractor and its use is not to be unreasonably denied 19 by Sound Transit. Despite its contractual duty to allow Turner to use the RCA, Sound Transit 20 denied Turner’s request to use the RCA to offset extra costs that exceeded $1.3 million. 21 4.93 Sound Transit’s refusal to allow Turner to use the RCA for its intended purpose 22 was a material breach of the Contract that immediately caused Turner damages equal to its 23 claimed and incurred costs. Without the use of the then available funds, Turner was forced to 24 finance the costs on its own and lost the ability to use the funds to help offset and mitigate 25 additional impacts to the Project. 26 COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 16 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 3. 1 2 3 4 5 6 7 8 9 10 11 12 13 4.94 accepted changes to the Contract Scope of Work caused by Sound Transit. 4.95 18 The current increase of over $18 million to the initial bid estimated MACC of $90,000,000 as set by Sound Transit represents an overall percentage increase of 20.09% of the bid estimated MACC. 4.96 Because the MACC varies by more than fifteen percent, the parties are required to renegotiate Turner’s Percent Fee for the Project pursuant to RCW 39.10.370 which mandates that under such circumstance “the percent fee shall be renegotiated”. 4.97 Despite the mandatory renegotiation clause set forth in the very statute under which Sound Transit elected to procure the Project, Sound Transit has refused to renegotiate and adjust the Percent Fee. 4. 15 17 Even without payment of Turner’s outstanding and valid claims over the course of the Project, the negotiated MACC increased to $108,085,646 to account for negotiated and 14 16 Sound Transit’s Refusal to Renegotiate the Applicable Percent Fee 4.98 Sound Transit’s Refusal to Pay Turner for Extra Costs Associated With Maintenance Work or Additional Work Associated With the Waterproofing Design of the Below Grade Station In early 2016, issues with water intruding into the below grade station became an issue on the Project. 4.99 During construction, the waterproofing work was signed off on 250 occasions 19 by multiple inspectors during each step of the relevant construction process, including 20 inspectors in the direct employment of Sound Transit. 21 4.100 Despite the lack of any exceptions being taken or deficiencies being noted and 22 not corrected, Sound Transit unilaterally (and without a proper design or root cause analysis) 23 jumped to the conclusion that the water intrusion was Turner’s responsibility to address and 24 resolve without compensation. 25 4.101 Consistent with this erroneous conclusion, on January 28, 2016, a proposed 26 solution was sent to Turner by Sound Transit that required Turner to use grouting ports that COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 17 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 provided access to the interior of the walls and that were a part of the original design as 2 furnished by Sound Transit to pump grout into the walls of the station. 3 4.102 The grout ports are an intentional part of the original design to deal with the 4 inevitable appearance of water that will make contact with the outside of the below grade 5 concrete structure. Given the fact that all concrete develops some cracks and that concrete is 6 porous, and the wet conditions of the Pacific Northwest, Sound Transit’s original design 7 anticipated the appearance of water and called for the installation of remediation grout ports at 8 numerous locations to allow for additional work to be performed whenever water appeared in 9 a given area. 10 4.103 Despite the fact that the conditions were expected and that grouting would 11 therefore be a maintenance issue for Sound Transit to manage, pay for and perform, Sound 12 Transit directed Turner to perform the work without compensation. 13 4.104 Sound Transit’s effort to transfer its maintenance work to Turner was improper 14 and entitled Turner to additional compensation, for which Turner advised Sound Transit on 15 January 28, 2016. 16 4.105 Despite the use of the built in design feature, given the historical wet seasons of 17 2015-16 and 2016-17, water has continued to appear at new and different locations throughout 18 the below grade structure. Sound Transit has continued to direct Turner to spend additional time 19 and money to pump grout into the walls via the grout ports that were included in the original 20 design as access points for Sound Transit. 21 4.106 To date, as a result of Sound Transit’s directions to perform extra work that was 22 originally intended to be the maintenance work of Sound Transit, Turner has incurred extra 23 costs in excess of $1,300,000.00 for which Sound Transit refuses to pay for. 24 4.107 At the time of bid, there was no reasonable basis for Turner or any of the other 25 GC/CM bidders to assume that the grout ports that offer access to Sound Transit for use after 26 the Project is built would have to be filled with grout without additional compensation. The COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 18 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 costs for performing the work as directed by Sound Transit is additional work that was not 2 contemplated by the parties at the time of the negotiation and setting of the MACC. 3 4.108 The design of the U240 Station is not the first below grade section of the light 4 rail system built for Sound Transit that has used the below grade waterproofing design which 5 was furnished to Turner for use on this Project. Prior portions of the light rail system have also 6 required the use of the grout ports to address the appearance of water on the interior of the 7 tunnels and below grade structures. 8 4.109 For all of the above items, and all other additional costs sought by Turner as a 9 result of Sound Transit’s conduct, Turner has provided the necessary notices and information 10 to preserve such claims under the Contract or otherwise agreed with Sound Transit to alter or 11 forego certain notice or claim procedures. 12 4.110 The above specific claims are only a summary of representative examples of the 13 claims Turner has against Sound Transit. There are many other specific claims that Turner 14 provided the necessary notices and information on that Turner is pursuing in this action. V. 15 16 17 18 19 20 21 22 23 24 25 26 5.1 FIRST CAUSE OF ACTION BREACH OF CONTRACT Turner incorporates all preceding paragraphs of this Complaint as if fully set forth herein. 5.2 Turner and Sound Transit mutually assented to the terms and conditions of the Contract. 5.3 Turner and Sound Transit entered into an enforceable Contract supported by valuable consideration. 5.4 Sound Transit breached the Contract by acts and omissions including, but not limited to, refusing to compensate Turner for compensable delay in violation of Subsection 10.02F of the General Conditions; arbitrarily withholding consent for Turner to use the Risk Contingency Account to offset certain authorized costs in violation of Subsection 9.10D(3) of COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 19 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 the General Conditions; refusing to compensate Turner for additional costs incurred at Sound 2 Transit’s direction in violation of Article 4 of the General Conditions; and refusing to engage 3 in negotiations to adjust the Percent Fee. 4 5 6 7 8 9 10 5.5 Contract. 5.6 5.7 15 16 17 18 19 20 21 22 23 24 25 26 Turner has complied with the notice and claim procedures in the Contract with respect to the claims at issue in this lawsuit to notify Sound Transit of, and request compensation for, the amounts claimed for breach of contract. VI. SECOND CAUSE OF ACTION UNJUST ENRICHMENT/QUANTUM MERUIT 12 14 Turner is entitled to monetary damages in an amount to be proven at trial arising from Sound Transit’s breaches of the Contract. 11 13 Turner suffered actual losses as a result of Sound Transit’s breaches of the 6.1 Turner incorporates all preceding paragraphs of this Complaint as if fully set forth herein. 6.2 Turner conferred a benefit upon Sound Transit in the form of furnishing additional and/or changed professional services, labor, materials, and equipment to the Project. 6.3 Sound Transit had an appreciation for and/or knowledge of the benefit conferred upon it. 6.4 Sound Transit has accepted the benefit conferred upon it under circumstances that make it inequitable for Sound Transit to retain such benefit without paying fair value. 6.5 Sound Transit has been unjustly enriched. 6.6 Turner is entitled to restitution in quantum meruit for the value of the benefit conferred upon, and accepted by, Sound Transit. 6.7 Turner has complied with the notice and claim procedures in the Contract with respect to the claims at issue in this lawsuit to notify Sound Transit of, and request compensation for, the amounts claimed in quantum meruit. COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 20 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 VII. THIRD CAUSE OF ACTION BREACH OF IMPLIED WARRANTIES OF DESIGN 1 2 3 4 5 6 7.1 Turner incorporates all preceding paragraphs of this Complaint as if fully set forth herein. 7.2 Turner was bound to construct the Project according to plans and specifications prepared and furnished to Turner by Sound Transit and its design consultants. 7.3 By furnishing the plans and specifications to Turner, Sound Transit impliedly 7 warranted the suitability and fitness of the plans and specifications, and Turner was entitled to 8 rely upon such plans and specifications as specified. 9 7.4 By furnishing the plans and specifications to Turner, Sound Transit also 10 impliedly warranted that, at a minimum, the plans and specifications were adequate, accurate, 11 and complete. 12 7.5 Sound Transit breached its implied warranties by furnishing plans and 13 specifications that contained multiple errors, omissions, conflicts, and ambiguities, including, 14 but not limited to, plans and specifications for buried concrete walls that are, by design, 15 incapable of preventing leaks, along with other issues. Turner incurred actual losses as a result of Sound Transit’s breaches of the 16 7.6 17 implied warranties. 18 7.7 19 20 Turner is entitled to monetary damages in an amount to be proven at trial arising from Sound Transit’s breaches of implied warranties. 7.8 Turner has complied with the notice and claim procedures in the Contract with 21 respect to the claims at issue in this lawsuit to notify Sound Transit of, and request compensation 22 for, the amounts claimed for breach of the implied warranties. 23 24 25 26 VIII. FOURTH CAUSE OF ACTION BREACH OF IMPLIED WARRANTY NOT TO HINDER OR INTERFERE 8.1 Turner incorporates all preceding paragraphs of this Complaint as if fully set forth herein. COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 21 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 2 3 4 5 8.2 Sound Transit impliedly warranted to Turner that Sound Transit would not hinder or interfere with Turner’s performance of the Contract work. 8.3 In addition, Sound Transit had a duty to Turner to affirmatively assist Turner in achieving Turner’s expected benefits under the Contract. 8.4 Through its acts and conduct, Sound Transit breached the implied warranty not 6 to hinder or interfere with Turner’s performance of the Contract work by, among other acts and 7 omissions, failing to negotiate a change to the Percent Fee, and failing to negotiate a change to 8 work associated with partition walls. 9 8.5 Through its acts and conduct, Sound Transit breached the duty to affirmatively 10 assist Turner in achieving Turner’s expected benefits under the Contract by obstructing 11 Turner’s efforts to use the Risk Contingency Allowance, denying Turner’s legitimate claims 12 for cost recovery, and other acts and omissions. 13 8.6 Turner incurred actual losses as a result of Sound Transit’s breaches of its 14 implied warranty not to hinder or interfere and its duty to affirmatively assist Turner in 15 achieving Turner’s expected benefits under the Contract. 16 8.7 Turner is entitled to monetary damages in an amount to be proven at trial arising 17 from Sound Transit’s breaches of its implied warranty not to hinder or interfere and its duty to 18 affirmatively assist Turner in achieving Turner’s expected benefits under the Contract. 19 8.8 Turner has complied with the notice and claim procedures in the Contract with 20 respect to the claims at issue in this lawsuit to notify Sound Transit of, and request compensation 21 for, the amounts claimed for breach of the implied warranties. IX. FIFTH CAUSE OF ACTION VIOLATION OF RCW 39.10.370 22 23 24 25 9.1 Turner incorporates all preceding paragraphs of this Complaint as if fully set forth herein. 26 COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 22 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 9.2 1 RCW 39.10.370(6) provides that the public body and the GC/CM must 2 renegotiate the Percent Fee when “the maximum allowable construction cost varies more than 3 fifteen percent from the bid estimated maximum allowable construction cost due to requested 4 and approved changes in the scope by the public body.” 5 9.3 The bid estimated maximum allowable construction cost was $90,000,000. 6 9.4 The maximum allowable construction cost due to requested and approved 7 changes in scope by the public body is currently over $113,000,000 and still subject to change. 9.5 8 9 percent. 10 11 12 13 The changes to the Contract have resulted in a variation of more than fifteen 9.6 Sound Transit has refused to renegotiate the Percent Fee in good faith as required 9.7 Turner is entitled to declaratory relief ordering Sound Transit to renegotiate the by law. Percent Fee in good faith. X. 14 15 16 17 18 WHEREFORE, having set forth its Complaint, Plaintiff respectfully requests the following relief: (1) Award of monetary damages in excess of $12,500,000.00, the exact amount to proven at trial. 19 (2) 20 good faith. 21 (3) 22 PRAYER FOR RELIEF Declaratory judgment that Sound Transit must renegotiate the Percent Fee in Declaratory judgment that Sound Transit does not have the contractual authority to unilaterally direct Turner to pay sums from the MACC Risk Contingency Account. 23 (4) Costs and attorneys’ fees to the fullest extent permitted by law and Contract. 24 (5) Pre-judgment interest at the statutory rate of interest from the date of liquidation 25 of any amounts in dispute until the date of entry of judgment. 26 COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 23 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020 1 2 (6) Post-judgment interest at the statutory rate of interest from the date of entry of judgment until the date the judgment is satisfied in full. 3 (7) 4 DATED this 2nd day of February, 2018. 5 Any other relief the Court deems just and equitable. CARNEY BADLEY SPELLMAN, P.S. 6 7 By: Christopher A. Wright, WSBA #26601 John C. Dippold, WSBA #25658 Sommer B. Clement, WSBA #31497 Attorneys for Plaintiff 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF – 24 TUR021-0020 5067224 CARNEY BADLEY SPELLMAN, P.S. 701 Fifth Avenue, Suite 3600 Seattle, WA 98104-7010 (206) 622-8020