in the federal district court eastern district of michigan alternately dismissed based on race shooting caught up to this court that the finding was reversed in the matter was remanded following the entertained a nother series of motions for summary just position ultimately dismiss the case based on collateral estoppel and then as to the merits on several of the claims that were presented it's important to know this is a contract dispute arising out of a design construction of a hospital for the university of michigan initially it was a mechanical contractor it was retained by the general contractor to install roughly twenty five million dollars worth of piping and dump work and especially equipment within the within the hospital all as designed by these defendants there was no question that the design was deficient that was recognized at the project level the change orders were issued to try to address the issue along the way w j o'neill expanded nearly seven dollars in additional amounts in order to correct the design deficiencies simply put the decision had been made to shrink the size of the hospital and that shrunk the amount of space that was available to refused to extend the schedule for the project which required not only the reconfiguration of the systems but required w g o'neill to massively over me on the job and incur truly incur seven million dollars in additional expenses after the project was over the suit was filed against both the bar mallow the general contractor and the two designers the district court of the state court granted a motion to compel arbitration of the dispute between o'neill and the general contractor barbell that started the arbitration process along the way the university and was brought in on a separate arbitration by  melville general contractor and they in turn brought in the engineers and they all were there during the arbitration hearing however o'neill's claims against the designers were pending still in state court there was no required to arbitrate its claims against the engineer had no contract with them no fundamental underlying basis to give jurisdiction to any arbitrator to make these decisions so the case against the engineers architect engineer remained pending while the arbitration pursued it no claims were presented in the arbitration against the engineer architect the only claims that were presented were for breach of contract against bart m mellowing the university all promised the arbitrator's that they were going to pursue indemnity claims against the engineers tactically they chose not to do so and as a result it is the court knows from the briefs at the end of the hearing a portion of o'neal's damages were awarded only the portion that was allowed by its contract and there was an alternative claim against the contractor for abandonment of that contract and had that claim succeeded all of the damages that were incurred both the direct in consequential as would have been recoverable however the arbitrator's decided that the contract was not abandon and therefore strictly limited o'neill's recovery to what the contract provided as as you know mr in the arbitration proceeding and i understand the difference in contrary damages and tort damages and whether you did or didn't agree to arbitrate certain claims but the grab amount of this seems to be at least according to the defendants th for whatever reason you did put in proofs about those you didn't apportion them to different defendants and you sought the full amount so for just explain if you would please why it least for the first element contract claim they were presented there's no question about that but they weren't decided and i think that's the more critical point here they were not actually decided even though they were presented but they were not actually decided as a tort claim they were reviewed within the prism of the contract and as you saw from the earth traders decision potential change orders were evaluated the schedule implications of the underlying design errors is what ultimately caused the panels to award some two million dollars in damages but it was within the scope of the contract and as we point out in the brief this particular contract required that the damages be extraordinary and on forseeable which is completely foreign to a tort standard of liability we address the issues pursuant to the contract the damages were presented they were not decided it'd be an outrage tracing proceeding say that the said we're enforcing the contract we reject the abandonment theory then they observe that the contract specifically prohibited consequential damages and that's the damage element that you're speaking of it went on gratuitously to say that we don't think it's factual you're legally supported but we can't know whether they were looking at it from the perspective of a breach of contract you know the words a breach of contract the image and the alice's looks at the damages is contemplated by the parties at the time they enter into their contract so the panel in my view at least was looking into whether or not consequential damages would have been allowed under the contract had they not been expressly prohibited by the contract you're almost claiming that this dish and all statement that i think you said was gratuitous is dicta against it were that to have been a decision from a court we don't of course we don't apply the same standards that that we do to judges in terms of what our obligations are so do you have any cases that say that even though they arbitration decision does cover these other damages which from what i can tell are identical to what you still want to pursue that because it was quote gratuitous and quote or because it was quote or end quote that that somehow is not still enforceable it goes even deeper than that when we've cited the cases in our brief this is ar ration the arbitrator has no authority to make any decision on any issue unless it's been specifically agreed to by both parties and granted the contract was observed by the panel to prohibit consequential damages but let's let's assume that you had only submitted contract damages and that not the consequential damages that are barred by the terms of the contract if you would only submitted that then i get your argument but for whatever reason you chose to submit damage claims that were beyond the contractual limitation that you were arguing should be enforced correct because we had the abandonment of contract alternative claim but an ask you why you did do that so why is that once having then invited them to rule perhaps on a different theory why are you not now stuck with the result well truly they did not have the authority to make that ruling and that goes back to the underlying arbitration if you submitted the damages over something that they didn't have the authority to rule on then that's almost the equivalent of invited errors in it we don't think so your honor we submitted them as i said under an alternative theory of aban contract but once the arbitrator said the contract was in the bin in the lock themselves into the grant of authority under that contract and they had no authority whatsoever to rule on the consequential damages but what if they had said in the order we find there's a contract and that the contract limits consequential damages we also know that the that o'neal is claiming an abandonment of contract theory so we're we are ruling is on issue preclusion it's a very harsh remedy you've got to know that that's what they were intending despite the fact they didn't have jurisdiction to make the ruling i believe there was a ruling based on the forsee ability of damages between contracting parties not you'll concede that at least in most arbitration arbitrators don't even have to give or they don't have to give reasons they could have simply said you get two point nine million dollars period that would have been an enforceable arbitration awarded i believe in this of process to avoid the ticket just parties wasting their own resources this case has been wasting everybody's resources since two thousand and six or what do you deal what do you do with mr al argument that you all apparently stipulated that the arbitrator's would give a reasoned decision instead of just win lose a number your honor i seems to be saying that because just a belated  therefore we can we can or should go beyond the language in the arbitration decision and look at questions like the one he's raising about use we don't know why they said why the atm contract i can tell you that or there must mean he must be claiming the reason that you reach some sort of side deal as a part of the process of arbitration he's claiming that and as i said there's nothing in the record that confirms that not in either of these appeals that have been coming back and forth and there are federal claims here at all as i said i don't i was not i didn't up to speed at the arbitration i took over for the appeal but in my mind it doesn't make a with it if they they never objected to the arbitrators making that ruling they never moved to vacate it and at this point for them to come back and try to second guess why get their their arguments were that this was first and foremost a design malpractise case where you'd have to concede that they that they didn't submit it to the arbitrator's in the context of being of being based on the tort theory they did confine their arguments to a breach of contract or abandonment of patrick theory correct correct as to partly out so then we look at whether the purpose of tarting contract are different here in terms of restoring the parties to where they would have been without either the breach of contract or without the to consequential bandages those kinds of things should not be before the tray ssion perceiving we couldn't because that's why we were there we were brought in by the hospital and i'm glad that have been before the ration then you're saying you couldn't object because they were those were the correct so if you look at it from the standpoint of how this all came together o'neill's spartan and and us work yes we were brought in bits so what happens again we have about mello then brings in the hospital who is the owner of the project ok the hospital then brings in s b r a the architects and the architects in term bring in and i assume you wanted everything covered once and for all you know right or wrong absolutely and that is exactly what all the parties agreed to do when they entered their contracts including the media they agreed to this global arbitration  other tort claims that might be outside the arbitration clause and we're not gonna fight that either and they're not going to find that so we have to imply that by virtue of them seeking damages they knew to be outside the contract limitations not only that but by seeking it by claiming assuming collateral stop i'm just not apply here which i think as far as we're concerned it does wholeheartedly they don't they cannot pursue an existence claim against us because we did not owe them a duty of care under michigan their claims entirely sound in the performance of our contractual obligations that we owe to the hospital supreme court michigan supreme court has made it exceedingly clear that's not a basis for  obviously we can't win and race judicata now having lost that before but collateral estoppel applies when the issue that they're trying to litigate was already litigated and it doesn't even matter whether we were at the arbitration because mutuality is not required all that matters is they litigated with everything they had the issue of their damages all the damages that were caused by our alleged negligence they were the that the evidence presented by o'neill on these issues was too speculative to support the claims and is not supported legally or factually so they litigated their damages they lost the arbitration panel said you don't have any damages you didn't prove entitle them to them they are now trying to litigate the exact same issue against us as a tort claim and i notice what mr thomas did too he began by saying this is a contract claim of course it is that's exactly what it is that's why it was arbitrated at length on the contracts and this attempt to sue us in tort is a classic second bite at the apple that they're trying and they shouldn't be allowed to because of collateral stop gate a damages claim in tort because they said there's a difference between tort and contract but here's the important difference in that case the arbitration panel said that there were they didn't prove causation they didn't prove that their damages were caused by the breach of contract and the michigan court of appeals said causation can be different in a tort case versus a contract case in our case panel didn't find a causation problem they found the damages don't exist they said you're they're not supported legally or factually the existence of damages that's why it's the exact same issue and that's why any difference between contract damages and tort damages is irrelevant in this case because they're seeking the exact same damages the issue that the already lost on the arbitration judge cleveland got that right he also was correct  the absence of a torque judge mckeague you're right this is an alternative basis for a firm and this is what i was going to address mr thomas is going to focus on will let me just say quickly on this to me the best case is probably rinaldo those judge clay you authored a case called d b i investments that cited written all those which says that's a michigan supreme court case that says the supposed duty to perform a contract in a non negligent manner only applies when you have property damage or bodily injury there is no such claim as negligent performance of a contract causing only economic damages that's what they're saying they're saying we negligent performed our contract causing them economic damages honorine all those are in all these there is no such claim and under your decision and d b i investments which cites that that's that's really all i have there are some other judicial evaluation of the a word because the party settled right after the hearing and in the award was never reduced to a judgment and push you into the the collateral estoppel elements requirements that had been reviewed by a court that the issues were not the same the claims were not the same the liability standards different the damages standard is different and i do need to correct something brother counsel said he took the statement that i was asked about the return of this comment about the consequential damages and tried to apply it to all the damages nets just falls of seven million dollars of direct damages only two million  were warded the other five million were not awarded because they were not recoverable under contract they weren't decided there was no decision about whether they were incurred whether they were actual damages or not you're just saying that the language that you call gratuitous that said certain damages speculative only related to the difference between two and seven and didn't include the whole nineteen all it referred to was the consequential damages the court th first said we know that the contract precludes consequential damages and then they went out and said in any way we think they're too speculative and not we were factually supported they were just talking about that five million dollar difference between the two thought that the arbitrators when they said speculative were talking about everything between the two they awarded and the one thousand year requested we disagree and what where do we look to award for your reading of that  exactly in which i was asked about in that paragraph the piano describe what they were awarding for they awarded two point one i believe for the contract schedule changes and then some potential change orders and contract retention all elements of the contract they disallowed any consequential damages in the by the statement that you saw and said we from i think from a contracting perspective from a concurrent contractual d images analysis they may have been too speculative or arm supported we don't think that applies to a tort because it's a different standard of liability different standard of damage calculation but again we would be cause to speculate why the whether the panel was looking at it from a you're not saying that or you were saying that the images that we're pursuing here were not available under the contract they were presented part of an alternative they were sought they were sought but that's not an element of collateral estoppel they have to be decided and they weren't decided that's critical requested which they were they have to be actually litigated which they were that's element number one element number two you had it have had a fair opportunity to litigate what it now seeks what you're claiming is all you saw it you didn't have the opportunity to seek it under a tort theory as opposed to a contractor is correct it might do i say that right is ok and it wasn't decided on that work theory that's the critical part the elevated based on contract only i only have a few seconds left i really want to draw the panel's attention to the rick meehan decision i encounter i represent written in and i handle that arbitration as well and i can tell you from being involved they are identical the exact same thing happened direct damages were awarded the attrition consequential damages were disallowed by the contract and the mission core of appeals has allowed those consequential damages to be pursued in the face of a collateral stoppel challenge and i'll just say this in closing if i may i haven't spoken on the duty issue but the decision of the michigan supreme court is directly on point and contradicts the argument completely and i would submit that the fact pattern in that case where a contractor was stacking sheets of dry wall and did it badly and injure another employee that contractor was stacking the dry along part of it as part of his contract that doesn't matter under michigan law anybody who undertakes an action regardless of why