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Honorable Ronald B. Leighton

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT TACOMA

10 GENERAL METALS OF TACOMA, INC., a

Washington Corporation; and ARKEMA

11 INC., a Pennsylvania Corporation,

12 Plaintiffs,

13 v.

NO. CV05-5306 RBL

JOINT STATEMENT OF DISPUTED

INSTRUCTIONS

14 BEAN ENVIRONMENTAL LLC, a Delaware

limited liability company; and BEAN

15 DREDGING LLC, a Louisiana limited

liability company,

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Defendants.

JOINT STATEMENT OF DISPUTED JUY INSTRUCTIONS - 1

(CV05-5306 RBL)

Wiliams, Kastner & Gibbs PLLC

Two Union Square, Suite 4100 (98101-2380)

Mail Address: P.O. Box 21926

Seattle, Washington 98111-3926

(206) 628-6600

1953791.1
1 DATED this 10th day of January, 2007.

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stJohn P. Evans, WSBA No. 08892

Heidi L. Evatt, WSBA No. 29527

Thomas W. Falkner, WSBA No. 28429

Attorneys for Plaintiff

General Metals of Tacoma, Inc.

WILLIAMS, KASTNER & GIBBS, PLLC

Two Union Square

601 Union Street, Suite 4100

Seattle, WA 98101

Telephone: 206.628.6600

Facsimile: 206.628.6611

E-mail: ievans(áwkQ.com

Email: hevatt(áwkQ.com

E-mail: tfalkner(áwkQ.com

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and

stMarisa M. Bavand, WSBA No. 27929

Kristi D. Favard, WSBA No. 34419

Attorneys for Plaintiff Arkema, Inc.

GROFF MURPHY TRACHTENBERG &

EVERARD

300 East Pine Street

Seattle, W A 98122

Telephone: 206.628.9500

Facsimile: 206.628.9506

E-mail: mbavandcagroffmurphv.com

E-mail: kfavard(áqroffmumhy.com

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JOINT STATEMENT OF DISPUTED JUY INSTRUCTIONS - 2

(CV05-5306 RBL)

Wiliams, Kastner & Gibbs PLLC

Two Union Square, Suite 4100 (98101-2380)

Mail Address: P.O. Box 21926

Seattle, Washington 98111-3926

(206) 628-6600

1953791.
1 CERTIFICATE OF SERVICE

2 I hereby certify that on January 10, 2007, I electronically filed the foregoing with

3 the Clerk of the Court using the CM/EFC system which wil send notification of such

4 fiing to the following:

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William F. Cronin

Kevin C. Craig

Corr Cronin Michelson

Baumgardner & Preece LLP

1001 Fourth Avenue, Suite 3900

Seattle, WA 98154-1051

Attorneys for Defendant

Bean Environmental LLC

DATED this 10th day of January, 2007.

s/

John P. Evans, WSBA No. 08892

Heidi L. Evatt, WSBA No. 29527

Thomas W. Falkner, WSBA No. 28429

Attorneys for Plaintiff

General Metals of Tacoma, Inc.

WILLIAMS, KASTNER & GIBBS, PLLC

Two Union Square

601 Union Street, Suite 4100

Seattle, WA 98101

Telephone: 206.628.6600

Facsimile: 206.628.6611

E-mail: ievanscawkg.com

Email: hevattcawkg.com

E-mail: tfalknercawkg.com

JOINT STATEMENT OF DISPUTED JURY INSTRUCTIONS - 3

(CV05-5306 RBL)

Wiliams, Kastner & Gibbs PLLC

Two Union Square, Suite 4100 (98101-2380)

Mail Address: P.O. Box 21926

Seattle, Washington 98111-3926

(206) 628-6600

1953791.1
Table of Contents for JUry Instructions

JOINT STATEMENT OF DISPUTED INSTRUCTIONS

Instruction Title Source Page No. Party

Number

10 Contract Defined WPI 301.01 1 Plaintiffs

2 Defendant

11 Contract WPI 301.05 3 Plaintiffs

Interpretation 4 Defendant

12 Breach of WPI 302.01 5 Plaintiffs

Contract 6 Defendant

13 Material Breach WPI 302.03 7 Plaintiffs

8 Defendant

14 Burden of Proof WPI 300.03 9 Plaintiffs

14.1 1 0-11 Defendant

14.2 12-13 Defendant

15 Differing Site Weeks 14 Plaintiffs

Condition Dredqinq & 15 Defendant

Contractinq,

Inc. v. U.S., 13

CI. Ct. 193, 218

(1987); All

Power, Inc. v.

U.S., 60 Fed.

CI. 679, 685

(2004 )

16 Measure of WPI 303.02 16-17 Plaintiffs

Expectation of 18-19 Defendant

Damages

17 Mitigation of Model Ninth 20 Plaintiffs

Damages Circuit Jury 21 Defendant

Instructions,

7.3

18 Guarantee Stipulation 22 Plaintiffs

23 Defendant

19 Negligent ESCA Corp. v. 24 Plaintiffs

Misrepresentation KPMG Peat 25 Defendant

Marwick, 135

Wn.2d 820,

827-88 (1998)

22 Fraud WPI 160.01 26 Plaintiffs

27 Defendant

23 Burden of Proof - WPI 160.03 28 Plaintiffs

fraud and 29 Defendant

negligent

1953793.1
misrepresentation

27 Return of Verdict Model Ninth 30 Plaintiffs

Circuit Jury 31 Defendant

Instructions,

4.4

28 Issues WPI 300.01 32-34 Defendant

35 Plaintiffs

29 Trade Usage Restatement 36 Defendant

(Second) of 37 Plaintiffs

Contracts §

222; Puqet

Sou nd

Financial.

L.L.C. v.

Unisearch, Inc.,

146 Wn.2d

428, 434

(2002).

30 Waiver WPI 302.07 38 Defendant

39 Plaintiffs

32 Fraudulent Restatement 40-41 Defendant

inducement (Second) 42 Plaintiffs

Contracts §§

162,164,167.

33 Contract Better Financial 43 Defendant

Interpretation Solutions, Inc. 44 Plaintiffs

v. Transtech

Electric, Inc.,

112 Wn.App.

697,711,

(2002); Adler v.

Fred Lind

Manor, 153

Wn.2d 331,

354 (2004)

34 30(b)(6) Fed. R. Civ. 45 Defendant

Deposition Proc. 30(b )(6); 46 Plaintiffs

Testimony Fed. R. Civ.

Proc. 32(a)(2).

35 Performance of Puqet Sound 47 Defendant

Useless Act Not Service Com. 48 Plaintiffs

Required v. Bush, 45

Wn. App. 312,

318 (1986);

L. K. Comstock

& Co., Inc. v.

1953793.1
United

Enoineers &

Constructors

Inc., 880 F.2d

219, 232 (9th

Cir.1989)

36 Reasonable ESCA Corp. v. 49 Defendant

Basis for Amount KPMG Peat 50 Plaintiffs

of Damages Marwick, 86

Wn. App. 628,

639 (1997).

1953793.1
PLAINTIFFS' PROPOSED INSTRUCTION NO.1 0

(Contract Defined)

A contract is a legally enforceable promise or set of promises.

WPI 301.01.

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19536771
DEFENDANT'S PROPOSED INSTRUCTION NO.1 0

Defendant Bean Environmental objects to Plaintiff's Proposed Instruction

No. 10 on the following grounds:

Plaintiff's Proposed Instruction NO.1 0 is not necessary because the existence of

a contract between the parties and its terms is not an issue in this case. Furthermore,

even if there were a dispute as to whether a contract existed, the instruction itself

provides no guidance or direction as to what is legally enforceable except to suggest

erroneously that a promise, by itself, constitutes a contract. Accordingly, Bean

Environmental respectfully requests that the Court refuse Plaintiffs' Proposed Instruction

No. 10 in its entirety.

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19536771
PLAINTIFFS' PROPOSED INSTRUCTION NO. 11

(Contract Interpretation)

A contract is to be interpreted to give effect to the intent of the parties at the time

they entered the contract.

You are to take into consideration all the language used in the contract, giving to

the words their ordinary meaning, unless the parties intended a different meaning.

You are to determine the intent of the contracting parties by viewing the contract

as a whole, considering the subject matter and apparent purpose of the contract, all the

facts and circumstances leading up to and surrounding the making of the contract, the

subsequent acts and conduct of the parties to the contract, and the reasonableness of

the respective interpretations offered by the parties.

WPI 301.05.

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19536771
DEFENDANT'S PROPOSED INSTRUCTION NO. 11

A contract is to be interpreted to give effect to the intent of the parties at the time

they entered the contract.

You are to take into consideration all the language used in the contract, giving to

the words their ordinary meaning, unless the parties intended a different meaning.

You are to determine the intent of the contracting parties by viewing the contract

as a whole, considering the subject matter and apparent purpose of the contract,

industry practice and custom, all the facts and circumstances leading up to and

surrounding the making of the contract, the subsequent acts and conduct of the parties

to the contract, and the reasonableness of the respective interpretations offered by the

parties.

However, the subjective intent of either party that was not communicated to the

other party should not be considered as evidence of the parties' intent at the time they

entered the contract, and yOU may not consider evidence outside the written document

that adds to, subtracts from. varies. or contradicts the contract.

PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 11

Washington Pattern Jury Instruction 301.05 provides adequate instructions on

how the jury is to interpret the Contract. Defendant's proposed instruction contains

additional language that is confusing and unnecessary.

WPI 301.05. Contract Interpretation; Hearst Communications, Inc. v. Seatte Times Co., 154 Wn.2d 493,

503-04, 115 P.3d 262 (2005); Restatement (Second) of Contracts § 222; Puget Sound Financial, L.L.C. v.

Unisearch, Inc., 146 Wn.2d 428,434,47 P.3d 940 (2002).

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19536771
PLAINTIFFS' PROPOSED INSTRUCTION NO. 12

(Breach of Contract)

The failure to perform fully a contractual duty when it is due is a breach of

contract.

WPI 302.01.

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19536771
DEFENDANT'S PROPOSED INSTRUCTION NO. 12

The plaintiffs the HHCG claim that the defendant Bean Environmental breached

the contract by failino to perform in accordance with the contract requirements, in

particular that Bean failed to substantially complete performance on or before

February 15, 2005.

The defendant Bean Environmental claims that the plaintiffs, the HHCG,

breached the contract in the followinq ways: by refusinq to pay the amounts owed to

Bean Environmental: by refusinq Bean Environmental an extension of time to complete

the work: by an untimely delay in providino Bean Environmental information that would

have assisted Bean Environmental in performing its services under the contract: and by

failinq to advise Bean Environmental that the HHCG. General Metals or Arkema knew

or had reason to suspect the presence of asbestos contamination in the sediments

Bean Environmental was to dredoe.

The failure to perform fully a contractual duty when it is due is a breach of

contract.

PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO.12

Washington Pattern Jury Instruction 302.01 provides adequate instruction on

what constitutes breach of contract. Defendant's proposed instruction contains

additional language that is confusing and unnecessary, and is repetative of its Proposed

Instruction No. 28.

WPI 302.01. Breach of Contract -- Non-performance of Duty.

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19536771
PLAINTIFFS' PROPOSED INSTRUCTION NO. 13

(Material Breach)

A "material breach" is a breach that is serious enough to justify the other party in

abandoning the contract. A "material breach" is one that substantially defeats the

purpose of the contract, or relates to an essential element of the contract, and deprives

the injured party of a benefit that he or she reasonably expected.

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19536771
DEFENDANT'S PROPOSED INSTRUCTION NO. 13

The defendant Bean Environmental claims that its oblioations under the contract

were suspended and ultimately discharoed by the HHCG's prior material breach of the

contract.

A "material breach" is a breach that is serious enough to justify the other party in

abandoning the contract. A "material breach" is one that substantially defeats the

purpose of the contract, or relates to an essential element of the contract, and deprives

the injured party of a benefit that he or she reasonably expected.

PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 13

Washington Pattern Jury Instruction 302.03 provides adequate instruction on

what constitutes a material breach. Defendant's proposed instruction contains

additional language that is confusing and unnecessary.

WPI302.03. Material Breach - Definition; Jacks v. Blazer, 39 Wn.2d 277, 285, 235 P.2d 187 (1951) ("A

breach or nonperformance of a promise by one party to a bilateral contract, so material as to justify a

refusal of the other party to perform a contractual duty, discharges that duty.").

WPI 302.03.

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19536771
PLAINTIFFS' PROPOSED INSTRUCTION NO. 14

(Burden of Proof - Breach of Contract with Affirmative Defenses)

Plaintiffs, the HHCG, have burden of proving each of the following propositions

on their claim of breach of contract against Bean Environmental:

That defendant Bean Environmental entered into a cost-plus

dredging contract with plaintiff HHCG;

That the terms of the contract included, among other things, Bean

Environmental's promise that it would substantially complete the dredging

on or before February 15, 2005;

That Bean Environmental breached the contract in one or more of

the ways claimed by HHCG; and

That the HHCG was damaged as a result of Bean Environmental's

breach.

If you find from your consideration of all the evidence that any of these

propositions has not been proved, your verdict should be for Bean Environmental. On

the other had, if each of these propositions have been proved, then you must consider

the affirmative defenses claimed by Bean Environmental.

Bean Environmental has the burden of proving the following affirmative defense:

That Bean Environmental's failure to complete the dredging by February 15,

2005 was caused by differing site conditions and that Bean Environmental complied

with the differing site conditions notice provisions contained within the parties' contract.

If you find from your consideration of all the evidence that this affirmative defense

has been proved, your verdict should be for Bean Environmental. On the other hand, if

this affirmative defense has not been proved, then your verdict should be for the HHCG.

WPI 300.03 (adopted).

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19536771
DEFENDANT'S PROPOSED INSTRUCTION NO. 14.1

Plaintiffs, the HHCG, have the burden of proving each of the following

propositions on their claim of breach of contract:

(1) That Bean Environmental entered into a contract with the HHCG;

(2) That the contract provided:

That Bean Environmental would substantially complete

performance on or before February 15. 2005;

(3) That Bean Environmental breached the contract in one or more of

the ways claimed by the HHCG; and

(4) That the HHCG was damaged as a result of Bean Environmental's

breach.

If you find from your consideration of all the evidence that any of these

propositions has not been proved, your verdict should be for Bean Environmental. On

the other had, if each of these propositions has been proved, then you must consider

the affirmative defenses claimed by Bean Environmental.

Bean Environmental has the burden of proving the following affirmative defenses:

(a) The HHCG's claims arose from differinQ site conditions and

not from Bean Environmental's performance:

(b) Bean Environmental's contractual duties were suspended

and ultimately discharQed by the HHCG's prior material breach of the

contract.

(c) Bean Environmental's contractual duties were discharged by

the HHCG's breach of their covenant of Qood faith and fair dealino.

(d) Bean Environmental's contractual duties were discharQed by

the HHCG's failure to follow contractually specified procedures and

remedies.

(e) Bean Environmental's contractual duties were discharged by

the failure of a condition precedent.

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19536771
(f) The HHCG's claims are barred by the contract.

(g) The HHCG's damaqes. if any. were caused by the fault.

acts, or omissions of its own employees. for whose conduct Bean

Environmental is not responsible.

(h) The HHCG's damaqes. if any. were caused by the fault.

acts. or omissions of others, includinq but not limited to Dalton Olmsted &

Fuqlevand. Inc. (DO F). for whose conduct Bean Environmental is not

responsible.

(i) The HHCG's claim is barred and/or reduced because the

HHCG failed to mitiqate their damaoes, if any.

If you find from your consideration of all the evidence that one or more of these

affirmative defenses have been proved, your verdict should be for Bean Environmental,

unless the only affirmative defense yOU find to have been proved is that the HHCG

failed to mitiqate damaqes, in which case YOU should reduce the HHCG's damaqes

claim accordinqly. On the other hand, if none of these affirmative defenses have been

proved, then your verdict should be for the HHCG.

PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 14.1

Washington Pattern Jury Instruction 300.03 provides adequate instruction on the

burden of proof for breach of contract with affirmative defenses. Defendant's proposed

instruction contains additional language that is confusing and unnecessary.

WPI 300.03. Burden Of Proof On The Issues -- Breach of Contract -- With Affirmative Defenses

WPI 302.03.

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1953677.1
DEFENDANT'S PROPOSED INSTRUCTION NO. 14.2

Defendant, Bean Environmental, has the burden of proving each of the following

propositions on their claim of breach of contract:

(1) That the HHCG entered into a contract with Bean Environmental;

(2) That the contract provided:

(a) That the HHCG would pay Bean Environmental for services

performed pursuant to the contract:

(b) That Bean Environmental was entitled to an extension of

time to complete performance because Bean Environmental was

prevented from substantially completinq performance within the contract

times due to delays beyond its control:

(c) That the HHCG would timely provide information to Bean

Environmental that would assist Bean Environmental in performino its

services under the contract: and

(d) That the HHCG, General Metals or Arkema, would disclose

to Bean Environmental any information that the HHCG knew or had

reason to suspect concerninq the existence of asbestos contamination in

the sediments Bean Environmental was to dredoe.

(3) That the HHCG breached the contract in one or more of the ways

claimed by Bean Environmental; and

(4) That Bean Environmental was damaged as a result of the HHCG's

breach.

If you find from your consideration of all the evidence that any of these

propositions has not been proved, your verdict should be for the HHCG. On the other

had, if m1of these propositions has been proved, then you must consider any

affirmative defenses claimed by the HHCG.

The HHCG has the burden of proving any affirmative defenses to Bean

Environmental's claims of breach.

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19536771
If you find from your consideration of all the evidence that an affirmative defense

has been proved by the HHCG, your verdict should be for the HHCG on that claim of

breach. On the other hand, if none of these affirmative defenses have been proved,

then your verdict should be for Bean Environmental on that claim of breach.

PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 14.2

Washington Pattern Jury Instruction 300.03 provides adequate instruction on the

burden of proof for breach of contract with affirmative defenses. Defendant's proposed

instruction contains additional language that is confusing and unnecessary; improperly

interprets the contract, which usurps the jury's function; and mistates the express terms

of contract. Furthermore, Defendant's Proposed Instruction No. 14.2 singles out and

favors particular contractual issues over others in this case. There is no reason to

provide a specific instruction as to these, while ignoring others. The Contract must be

read together as a whole.

WPI 300.03. Burden Of Proof On The Issues -- Breach of Contract -- With Affirmative Defenses

WPI 302.03.

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19536771
PLAINTIFFS' PROPOSED INSTRUCTION NO. 15

(Differing Site Condition)

In order to prove a differing site condition, Bean Environmental must

prove:

1. The contract documents must have affirmatively indicated or

represented the subsurface conditions which form the basis of the

HHCG's claim;

2. Bean Environmental must have acted as a reasonably

prudent contractor in interpreting the contract documents;

3. Bean Environmental must have reasonably relied on the

indications of subsurface conditions in the contract;

4. The subsurface conditions actually encountered, within the

contract site areas, must have differed materially from the subsurface

conditions indicated in the same contract area;

5. The actual subsurface conditions encountered must have

been reasonably unforeseeable; and

6. Bean Environmental's failure to substantially complete the

work by February 15, 2005 must be shown to be solely attributable to the

materially different subsurface conditions within the contract site.

Or, in the alternative, Bean Environmental must prove:

1. The condition must have been unknown to Bean

Environmental at the time of bidding;

2. An unusual condition, or the condition could not have been

foreseen by a reasonable contractor; and

3. The condition must be materially different from comparable

work.

Weeks Dredqinq & Contractinq, Inc. v. U.S., 13 CI. Ct. 193,218 (1987); All Power. Inc. v. U.S., 60 Fed.

CI. 679, 685 (2004).

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19536771
DEFENDANT'S PROPOSED INSTRUCTION NO. 15

Defendant Bean Environmental objects to Plaintiff's Proposed Instruction

No. 15 on the following grounds:

There is no Washington authority for Plaintiffs' Proposed Instruction No. 15. The

authority cited by Plaintiffs is from the Federal Claims Court, and is not binding on a

court applying Washington law. Furthermore, Plaintiffs' Proposed Instruction No. 15

singles out and favors one particular contractual issue among many in this case. There

is no reason to provide a specific instruction as to this issue, while ignoring other

contractual issues. Accordingly, Bean Environmental respectfully requests that the

Court refuse Plaintiffs' Proposed Instruction No. 15 in its entirety.

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19536771
PLAINTIFFS' PROPOSED INSTRUCTION NO. 16

(Measure of Expectation of Damages)

It is the duty of the court to instruct you as to the measure of damages. In this

case, the plaintiff and the defendant each claim to have suffered damages as a result of

a breach of contract by the other. By instructing you on damages the court does not

mean to suggest for which party your verdict should be rendered.

In order for either party to recover actual damages, that party has the burden of

proving that the other party breached a contract with it, that the party incurred actual

damages as a result of the other party's breach, and the amount of those damages.

If you find that the HHCG has proved that they incurred actual damages and the

amount of those actual damages, then you shall award actual damages to the HHCG.

If you find that Bean Environmental has proved that it incurred actual damages

and the amount of those actual damages, then you shall award actual damages to the

defendants.

Actual damages are those losses that were reasonably foreseeable at the time

the contract was made. A loss may be foreseeable as a probable result of a breach

because it follows from the breach either

(a) in the ordinary course of events, or

(b) as a result of special circumstances, beyond the ordinary course of

events, that the party in breach had reason to know.

In calculating a party's actual damages, you should determine the sum of money

that wil put that party in as good a position as that party would have been in if both

parties had performed all of their promises under the contract.

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19536771
The burden of proving damages rests with the party claiming them and it is for

you to determine, based upon the evidence, whether any particular element has been

proved by a preponderance of the evidence. In determining an award of damages to

either party, you must be governed by your own judgment, by the evidence in the case,

and by these instructions, rather than by speculation, guess, or conjecture.

WPI 303.02.

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1953677.1
DEFENDANT'S PROPOSED INSTRUCTION NO. 16

It is the duty of the court to instruct you as to the measure of damages. In this

case, the plaintiff and the defendant each claim to have suffered damages as a result of

a breach of contract by the other. By instructing you on damages the court does not

mean to suggest for which party your verdict should be rendered.

In order for either party to recover actual damages, that party has the burden of

proving that the other party breached a contract with it, that the party incurred actual

economic damages as a result of the other párty's breach, and the amount of those

damages.

If your find that the HHCG has proved that it incurred actual damages and the

amount of those actual damages, then you shall award actual damages to the HHCG,

minus an offset for any amount owed by the HHCG to Bean Environmental.

If you find that Bean Environmental has proved that it incurred actual damages

and the amount of those actual damages, then you shall award actual damages to Bean

Environmental.

Actual damages are those losses that were reasonably foreseeable at the time

the contract was made. A loss may be foreseeable as a probable result of a breach

because it follows from the breach either

(a) in the ordinary course of events, or

(b) as a result of special circumstances, beyond the ordinary course of

events, that the party in breach had reason to know.

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19536771
In calculating a party's actual damages, you should determine the sum of money

that wil put that party in as good a position as that party would have been in if both

parties had performed all of their promises under the contract.

The burden of proving damages rests with the party claiming them and it is for

you to determine, based upon the evidence, whether any particular element has been

proved by a preponderance of the evidence. In determining an award of damages to

either party, you must be governed by your own judgment, by the evidence in the case,

and by these instructions, rather than by speculation, guess, or conjecture.

PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 16

Washington Pattern Jury Instruction 303.02 provides adequate instruction on the

measure of damages. Defendant's proposed instruction contains additional language

regarding an "offset amount" that is confusing and unnecessary.

WPI 303.02. Measure of Expectation Damages -- Breach of Contract -- Counterclaim

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19536771
PLAINTIFFS' PROPOSED INSTRUCTION NO. 17

(Mitigation of Damages)

The HHCG has a duty to use reasonable efforts to mitigate damages. To

mitigate means to avoid or reduce damages.

Bean Environmental has the burden of proving by a preponderance of the

evidence:

1. That the HHCG failed to use reasonable efforts to mitigate its

damages; and

2. The amount by which damages would have been mitigated.

Model Ninth Circuit Jury Instructions, 7.3 "Damages - Mitigation."

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19536771
DEFENDANT'S PROPOSED INSTRUCTION NO. 17

A plaintiff who sustains damage as a result of a defendant's breach of contract

has a duty to minimize its loss.

If the HHCG proves that Bean Environmental breached the contract. the HHCG

is not entitled to recover for any part of the loss that it could have avoided with

reasonable efforts.

Bean Environmental has the burden to prove the HHCG's failure to use

reasonable efforts to minimize its loss, and the amount of damages that could have

been minimized or avoided.

PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 17

There is an applicable Model Ninth Circuit Jury Instruction that should be used

for mitigation of damages: 7.3 "Damages - Mitigation." In addition, although Defendant

cites WPI 303.06, its Proposed Instruction No. 17 is not in compliance with that

instruction and contains additional language that is confusing and unnecessary.

WPI 303.06. Contract -- Mitigation of Damages

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PLAINTIFFS' PROPOSED INSTRUCTION NO. 18

(Guarantee)

Any damages which you award to the HHCG against Bean Environmental should

also be awarded against Bean Dredging.

By stipulation.

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DEFENDANT'S PROPOSED INSTRUCTION NO. 18

Defendant Bean Environmental objects to Plaintiff's Proposed Instruction

No. 18 on the following grounds:

Plaintiffs' Proposed Instruction No. 18 does not address an issue that is before

. the jury. Bean Environmental does not dispute that Bean Dredging is a guarantor.

Plaintiffs' Proposed Instruction No. 18 is therefore not necessary, and potentially

confusing. Accordingly, Bean Environmental respectfully requests that the Court refuse

Plaintiffs' Proposed Instruction No. 18 in its entirety.

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19536771
PLAINTIFFS' PROPOSED INSTRUCTION NO. 19

(Negligent Misrepresentation)

Bean Environmental has asserted a claim against the HHCG for negligent

misrepresentation. To prevail on its claim, Bean Environmental has the burden of

proving the following propositions:

That the HHCG supplied information for the guidance of the Bean

Environmental in the business transactions that was false; and

That the HHCG knew or should have known that the information

was supplied to guide the Bean Environmental; and

That the HHCG was negligent in obtaining or communicating false

information; and

That the Bean Environmental relied on the false information

supplied by HHCG; and

That the Bean Environmental's reliance on the false information

supplied by the HHCG was justified (that is, that reliance was reasonable

under the surrounding circumstances); and

That the false information was the proximate cause of damages to

Bean Environmental.

If you find from consideration of all the evidence that Bean Environmental has

proved each of these propositions by clear, cogent, and convincing evidence, your

verdict should be for it with respect to its claims of negligent misrepresentation against

HHCG.

On the other hand, if any of these propositions has not been proved by clear,

cogent, and convincing evidence, your verdict should be for the HHCG on Bean

Environmental's claim for negligent misrepresentation.

ESCA Corp. v. KPMG Peat Marwick, 135 Wn.2d 820, 827-88 (1998).

24

19536771
DEFENDANT'S PROPOSED INSTRUCTION NO. 19

Defendant Bean Environmental proposes the following changes to

Plaintiff's Proposed Instruction No. 19:

Defendant Bean Environmental proposes that the first paragraph of Plaintiff's

Proposed Instruction No. 19 be edited to reflect the following changes:

Bean Environmental has asserted a claim against the HHCG for damaqes

for negligent misrepresentation. To prevail on its damaoes claim, Bean

Environmental has the burden of proving the following propositions:

This edit serves to distinguish Bean Environmental's claims for fraud and

negligent misrepresentation from its claim for rescission.

PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 19

Plaintiffs object to the additional language proposed by Defendant because the

instruction adopted by ESCA Corp. provides adequate instruction for the jury to decide

the claim of negligent misrepresentation. In addition, there is no reason to distinguish

between claim Bean's damage and rescission claim because the jury will neither hear

nor decide an equitable claim such as rescission.

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PLAINTIFFS' PROPOSED INSTRUCTION NO. 22

(Fraud)

Bean Environmental has asserted a claim against the HHCG for fraud. There

are nine essential elements of fraud. Each element of fraud must be established by

clear, cogent, and convincing evidence. The nine elements of fraud are:

(1) Representation by the HHCG of an existing fact;

(2) Materiality of the representation;

(3) Falsity of the representation;

(4) The HHCG's knowledge of its falsity;

(5) The HHCG's intent that it be acted upon by the plaintiff;

(6) Bean Environmental's ignorance of the falsity;

(7) Bean Environmental's reliance on the truth of the representation;

(8) Bean Environmental's right to rely upon it; and

(9) Resulting damages.

WPI160.01.

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DEFENDANT'S PROPOSED INSTRUCTION NO. 22

Bean Environmental has asserted a claim aqainst the HHCG for damaoes for

fraud.

There are nine essential elements of fraud. Each element of fraud must be

established by clear, cogent, and convincing evidence. The nine elements of fraud are:

(1) Representation by the HHCG of an existing fact;

(2) Materiality of the representation, meaninq that it was

reasonable for Bean Environmental to attach importance to its existence

or nonexistence in determinino whether to sian the contract;

(3) Falsity of the representation;

(4) The HHCG's knowledge of its falsity;

(5) The HHCG's intent that it be acted upon by Bean

Environmental;

(6) Bean Environmental's ignorance of the falsity;

(7) Bean Environmental's reliance on the truth of the

representation;

(8) Bean Environmental's right to rely upon it; and

(9) Resulting damages.

PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 22

Washington Pattern Jury Instruction 160.01 provides adequate instruction on the

measure of damages. Defendant's proposed instruction contains additional language

that is confusing and unnecessary.

WPI 160.01. Elements of Fraud; Restatement (Second) of Torts § 538

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PLAINTIFFS' PROPOSED INSTRUCTION NO. 23

(Burden of Proof -fraud and negligent misrepresentation)

A party who alleges fraud or negligent misrepresentation has the burden of

proving each by clear, cogent, and convincing evidence. However, this burden of proof

is applicable only to the proofs of fraud and negligent misrepresentation. All other

allegations of the respective parties must be proved by a preponderance of the

evidence as that term is more fully defined in other instructions.

When it is said that a proposition must be proved by clear, cogent, and

convincing evidence it means that the proposition must be proved by evidence that

carries greater weight and is more convincing than a preponderance of evidence.

However, it does not mean that the proposition must be proved by evidence that is

convincing beyond a reasonable doubt.

WPI160.03.

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DEFENDANT'S PROPOSED INSTRUCTION NO. 23

Bean Environmental has the burden of provinq fraud, neolioent

misrepresentation and/or fraudulent or material inducement by clear, cooent. and

convincino evidence.

However, this burden of proof is applicable only to the proof of fraud, negligent

misrepresentation and/or fraudulent or material inducement. All other allegations of

defendant Bean Environmental must be proved by a preponderance of the evidence as

that term is more fully defined in other instructions.

When it is said that a proposition must be proved by clear, cogent, and

convincing evidence it means that the proposition must be proved by evidence that

carries greater weight and is more convincing than a preponderance of evidence.

However, it does not mean that the proposition must be proved by evidence that is

convincing beyond a reasonable doubt.

PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 22

Washington Pattern Jury Instruction 160.03 provides adequate instruction on the

measure of damages. Defendant's proposed instruction contains additional language

that is confusing and unnecessary.

WPI160.03. Fraud -- Burden of Proof -- Combined With Preponderance of Evidence

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PLAINTIFFS' PROPOSED INSTRUCTION NO. 27

(Return of Verdict)

A verdict form has been prepared for you. After you have reached unanimous

agreement on a verdict, your presiding juror will fill in the form that has been given to

you, sign and date it, and advise the court that you are ready to return to the courtroom.

Model Ninth Circuit Jury Instructions, 4.4 "Return of Verdict."

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DEFENDANT'S PROPOSED INSTRUCTION NO. 27

A verdict form has been prepared for you. You should read throuoh the entire

verdict form before beqinnino to answer the questions submitted to you. After you have

reached unanimous agreement on a verdict, your presiding juror wil fil in the form that

has been given to you, sign and date it, and advise the court that you are ready to

return to the courtroom.

PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 27

Model Ninth Circuit Jury Instructions, 4.4 provides adequate instruction on the

measure of damages. Defendant's proposed instruction contains additional language

that is unnecessary.

Model Ninth Circuit Jury Instructions, 4.4 "Return of Verdict"

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(e) Bean Environmental's contractual duties were discharoed bv the

failure of a condition precedent.

(f The HHCG's claims are barred by the contract.

(0) The HHCG's damaoes. if any, were caused by the fault, acts, or

omissions of its own employees. for whose conduct Bean Environmental is not

responsible.

(h) The HHCG's damaQes, if any, were caused by the fault. acts, or

omissions of others, includinq but not limited to Dalton Olmsted & Fuqlevand, Inc.

(DOF), for whose conduct Bean Envirohmental is not responsible.

(i) The HHCG's claim is barred and/or reduced because the HHCG

failed to mitiqate its damaoes. if any.

The HHCG denies these affirmative defenses.

Bean Environmental further denies that the HHCG was damaged.

Bean Environmental further denies the nature and extent of the claimed damage.

(2) The defendant Bean Environmental claims that the HHCG breached the

contract in the following ways: by refusino to pay the amounts owed to Bean

Environmental; by refusinq Bean Environmental an extension of time to complete the

work; by an untimely delay in providinq Bean Environmental information that would have

assisted Bean in performinq its services under the contract; and by failinq to advise

Bean Environmental that HHCG, General Metals or Arkema knew or had reason to

suspect the presence of asbestos contamination in the sediments Bean was to dredqe.

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Bean Environmental also claims that it sustained damages as a result of the

HHCG's breach of the contract, and Bean Environmental seeks a judgment against the

HHCG for these damages.

The HHCG denies these claims.

In addition, to denyinQ Bean Environmental's claims. the HHCG claims the

followinq affirmative defenses:

HHCG's contractual duties were discharged by Bean Environmental's prior

breach in failing to comply with the terms of the Contract.

Bean Environmental denies these affirmative defenses.

The HHCG further denies that Bean Environmental was damaged.

The HHCG further denies the nature and extent of the claimed damage.

Washington Pattern Jury Instructions - Civil (UWPI") 300.01. Issues -- Breach Of Contract - Damages

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PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 28

Subsection (1)(a), misstates HHCG's claim. HHCG does not make a claim

based on differing site conditions and this jury instruction is an attempt to restate

HHCG's claim to favor Bean's affirmative defense. There wil be no evidence to support

this instruction.

Subsection (1 )(b), is contrary to the express terms of the Contract. Article 14.02

states that the HHCG may terminate for cause for reasons including "failure to supply

sufficient skilled workers or suitable materials or equipment or failure to adhere to the

progress schedule. . .; violat(ingl in any substantial way any provisions of the contract

documents." The evidence wil show that HHCG had more than sufficient reason to

terminate Bean and there wil be no evidence to support this instruction.

Subsection (1 )(c), is not a proper instruction under Washington law. Defendants

cannot prove an independent breach of the covenant of good faith and fair dealing. As

a matter of law, there cannot be a breach of the duty of good faith when a party simply

stands on its rights to require performance of a contract according to its terms. See

Badgett v. Sec. State Bank, 116 Wn.2d 563, 569-572, 807 P.2d 356, 360-361 (Wash.

1991). There will be no evidence to support this instruction.

Subsections (1 )(d)-(h) are objectionable because there will be no evidence to

support them.

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DEFENDANT'S PROPOSED INSTRUCTION NO. 29

The HHCG and Bean Environmental dispute the meaning of the following term

contained in the contract: "stepping time."

The HHCG claims that the term "stepping time" was not intended by the parties

to mean productive operating time. Bean Environmental claims that the term "stepping

time" was intended by the parties to mean productive operating time.

Words in a contract are generally interpreted according to their ordinary meaning.

However, words may have a specific meaning when used in a particular trade. If you

find that the term "stepping time" is given a particular meaning when used in the

dredging industry with such regularity that both parties would have been justified in

expecting that meaning to be understood, then the term "stepping time" should be

defined in accordance with that meaning, just as though the contract expressly stated it.

Restatement (Second) of Contracts § 222; Puget Sound Financial, L.L.C. v. Unisearch, Inc., 146 Wn.2d

428,434,47 P.3d 940 (2002); Bremerton Concrete Products Co., Inc. v. Miler, 49 Wn. App. 806, 810,

745 P.2d 1338 (1987).

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PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 29

"Stepping Time" is not a defined term in the Contract. Defendant's Proposed

Instruction No. 29 is unnecessary because WPI 301.05 provides adequate instruction

on how the jury is to interpret the Contract.

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DEFENDANT'S PROPOSED INSTRUCTION NO. 30

Either party to a contract may waive the right to require performance of the other.

A waiver is the intentional giving up of a known right.

A party asserting that its performance is excused on the ground of waiver has the

burden of proving that the other party intended to give up its right to that performance

under the contract after knowing all of the relevant facts.

A right may be waived in either of two ways. A party may directly state an intent

to waive a contractual right, or a party may imply such an intent through his or her

statements or conduct. An implied waiver, however, may be based only upon

unequivocal, rather than doubtful or ambiguous, statements or conduct.

In this case, Bean Environmental's duty to to provide notice to HHCG of intent to

make a claim was excused if Bean Environmental has proved, by a preponderance of

the evidence, that the the HHCG waived its right to that performance under the contract.

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PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 30

Plaintiffs do not believe that the evidence will support giving an instruction on

waiver. However, if the evidence presented at trial does support giving an instruction on

waiver, the Plaintiffs have no objection to the language proposed by Defendant, except

for the last paragraph of Proposed Instruction No. 30, which states:

"In this case, Bean Environmental's duty to to provide notice to HHCG of intent to

make a claim was excused if Bean Environmental has proved, by a preponderance of

the evidence, that the the HHCG waived its right to that performance under the

contract. "

This language is unnecessary and beyond Washington Pattern Jury Instruction

No. 302.07.

WPI 302.07. Excuse Of Performance - Waiver

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DEFENDANT'S PROPOSED INSTRUCTION NO. 32

The defendant Bean Environmental claims that the plaintiffs the HHCG

committed fraudulent inducement by failing to disclose information regarding actual or

suspected asbestos contamination. Fraudulent inducement occurs when a party is

induced to enter into a contract by the other party's misrepresentation.

To establish a claim of fraudulent inducement, Bean Environmental must prove

each of the following elements:

(1) The HHCG made a false representation when it represented

to Bean Environmental that it had fully disclosed to Bean Environmental

any information that the HHCG knew or had reason to suspect concerning

the existence of asbestos contamination at the project site;

(2) The HHCG's assertion was either fraudulent or materiaL.

The HHCG's assertion was material if it would be likely to induce a

reasonable party in Bean Environmental's position to agree to the contract

as written, or if the HHCG knew that its assertion would be likely to induce

Bean Environmental to enter the contract as written;

The HHCG's assertion was fraudulent if the HHCG intended to

induce Bean Environmental to enter the contract as written and: (a) the

HHCG either knew or believed that the assertion was false, or (b) did not

have the confidence that it stated or implied in the truth of the assertion, or

(c) knew that it did not have the basis that it stated or implied for the

assertion;

(3) The HHCG's representation induced Bean Environmental to

enter into the contract as written, meaning it substantially contributed to

Bean Environmental's decision to enter into the contract as written; and

(4) Bean Environmental justifiably relied on the HHCG's

representation, meaning Bean Environmental's reliance was reasonable

under the surrounding circumstances.

If you decide that Bean Environmental has proved each of these elements, then

your verdict should be for Bean Environmental on Bean Environmental's claim of

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fraudulent inducement. Otherwise, as to this claim, you should find for the plaintiffs the

HHCG.

Restatement (Second) Contracts §§ 162, 164, 167.

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PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 32

Defendant's instruction relies on Restatement (Second) Contracts but there is a

Washington Pattern Jury Instruction on fraud that should be used in place of

Defendant's proposed instruction. See WPI 160.01

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DEFENDANT'S PROPOSED INSTRUCTION NO. 33

The contract between the parties consists of a number of different documents.

If you determine that there is an apparent conflict or discrepancy between

different contract documents, you should attempt to resolve that conflict or discrepancy

in the following way:

(1) To the extent the parties have established a priority among the different

contract documents for resolving conflicts or discrepancies, you should give effect to

that priority.

(2) If the parties have not established a priority, or if the apparentconflict or

discrepancy exists between two contract documents that have the same priority, you

should try and interpret the provisions so as to give effect to both, so that the

interpretation of one provision does not render another provision meaningless or

ineffective.

(3) If you are unable to give effect to both provisions, you should give more

weight to the provision that is more specific.

Better Financial Solutions, Inc. v. Transtech Electric, Inc., 112 Wn.App. 697, 711,51 P.3d 108 (2002)

(interpretation of a contract which gives effect to all of its provisions favored over one which renders some

of the language meaningless or ineffective); Adler v. Fred Lind Manor, 153 Wn.2d 331,354, 103 P.3d 773

(2004) ("specific terms and exact terms are given greater weight than general language.").

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PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 33

Plaintiffs object on the basis that the parties exchanged proposed jury

instructions on January 5,2007, Defendant did not proposed Instruction No. 33 at that

time. The first time that Plaintiffs were given notice of proposed Instruction No. 33 was

at 2:15 pm on January 10,2007. Plaintiffs wil state further specific objections once

they have had a reasonable time to respond.

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DEFENDANT'S PROPOSED INSTRUCTION NO. 34

The deposition testimony of a witness who is designated by a corporate party to

speak as a 30(b)(6) witness on a certain subject on behalf of that party is treated the

same as if the corporation itself were speaking.

Fed. R. Civ. Proc. 30(b)(6); Fed. R. Civ. Proc. 32(a)(2).

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PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 34

Plaintiffs object on the basis that the parties exchanged proposed jury

instructions on January 5,2007. Defendant did not proposed Instruction No. 34 at that

time. The first time that Plaintiffs were given notice of proposed Instruction No. 34 was

at 2:15 pm on January 10, 2007. Plaintiffs will state further specific objections once

they have had a reasonable time to respond.

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DEFENDANT'S PROPOSED INSTRUCTION NO. 35

If contract performance by one party is a condition precedent to a duty of the

other party to perform, the first party is not required by law to do a useless act and

tender performance where the other party cannot or will not perform that party's part of

the agreement.

Puget Sound Service Corp. v. Bush, 45 Wn. App. 312, 318,724 P.2d 1127 (1986) (A "party need not

perform a condition precedent if it appears that the other party cannot or will not perform... the law does

not require tender of a useless performance."); L.K. Comstock & Co., Inc. v. United Engineers &

Constructors Inc., 880 F.2d 219, 232 (9th Cir. 1989) (holding that party need not comply with notice

provision in contract where such compliance would have been a "useless gesture," because "(t)he law

does not require a useless act(.)".

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PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 35

Plaintiffs object on the basis that the parties exchanged proposed jury

instructions on January 5,2007. Defendant did not proposed Instruction No. 35 at that

time. The first time that Plaintiffs were given notice of proposed Instruction No. 35 was

at 2:15 pm on January 10, 2007. Plaintiffs will state further specific objections once

they have had a reasonable time to respond.

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DEFENDANT'S PROPOSED INSTRUCTION NO. 36

Proof of damages must be established with enough certainty to provide a

reasonable basis for estimating the amount of damages. Although the precise amount

of damages need not be shown, damages must be supported by competent evidence in

the record. To be competent, the evidence or proof of damages must be established by

a reasonable basis and not by mere speculation or conjecture.

ESCA Corp. v. KPMG Peat Marwick, 86 Wn. App. 628, 639, 939 P.2d 1228 (1997).

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PLAINTIFFS' OBJECTION TO DEFENDANT'S PROPOSED NO. 36

There is a Washington Pattern Jury Instruction on damages that should be used

in place of Defendant's proposed instruction. See WPI 160.01

Plaintiffs further object on the basis that the parties exchanged proposed jury

instructions on January 5,2007. Defendant did not proposed Instruction No. 36 at that

time. The first time that Plaintiffs were given notice of proposed Instruction No. 36 was

at 2:15 pm on January 10,2007. Plaintiffs wil state further specific objections once

they have had a reasonable time to respond.

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