Opinion ID: 185896
Heading Depth: 2
Heading Rank: 2

Heading: The Contract Provisions

Text: 33 KiSKA's remaining challenges involve the district court's interpretation of two contract provisions: section 205 (dewatering) and section 239 (pre-support grouting). Both challenges rely upon United States v. Spearin, 248 U.S. 132, 39 S.Ct. 59, 63 L.Ed. 166 (1918), [t]he seminal case recognizing a cause of action for breach of contractual warranty of specifications, Hercules Inc. v. United States, 516 U.S. 417, 424, 116 S.Ct. 981, 986, 134 L.Ed.2d 47 (1996), which held that if [a] contractor is bound to build according to plans and specifications prepared by the owner, the contractor will not be responsible for the consequences of defects in the plans and specifications, Spearin, 248 U.S. at 136, 39 S.Ct. at 61. Relying on Spearin, KiSKA argues that WMATA warranted by implication that (1) its dewatering system would lower the groundwater table in the project area two feet below the tunnel invert and (2) the surface pre-support grout holes required under the contract could be drilled vertically at the precise locations specified by WMATA.
34 KiSKA maintains that the district court erred as a matter of law in holding that the contract was ambiguous as to whether the contract required—and thus warranted —that the dewatering system would lower the groundwater table in the project area two feet below the tunnel invert. Relying chiefly on section 205(1.2)(B)(3), KiSKA argues that the contract specifically and unambiguously warranted that the groundwater table would be lowered two feet below the invert of the tunnel by the dewatering system WMATA designed. In KiSKA's view, none of the provisions relied on by WMATA abrogates the clear statement contained in section 205(1.2)(B)(3) and, accordingly, KiSKA claims that its reading of the contract provides the only reasonable interpretation of the dewatering provisions contained therein. Its argument fails. 35 Section 205(1.2)(B)(3) provided that [f]or mined earth tunnels, additional wells beyond the specified minimum dewatering system may be required to ... control groundwater in [the] soil surrounding each tunnel in order to ... [m]aintain groundwater 2 feet below invert. Contract § 205, ¶ 1.2(B)(3) (emphasis added). Noting that the groundwater table could not be maintain[ed] two feet below the tunnel invert if it was not already at that level, KiSKA asserts that section 205 required, and hence warranted, that WMATA's dewatering system would indeed lower the groundwater table to two feet below tunnel invert. In KiSKA's view, its reading of section 205(1.2)(B)(3) is confirmed by section 228(1.5)(A)(2)(a)((1)), which provided: The water table shall be lowered as specified in the Specification Section 205. Id. § 228, ¶ 1.5(A)(2)(a)((1)) (emphasis added). 36 WMATA, however, reads section 205(1.2)(B)(3) not as an implied warranty but as a statement that the minimum dewatering system might not lower the groundwater to two feet below invert [and that KiSKA] might have to install additional wells to accomplish that goal. Br. for Appellee at 40 (emphasis in original). 15 According to WMATA, section 205(1.1)(A) likewise put KiSKA on notice that groundwater may remain in the tunnel despite the dewatering system. Contract § 205, ¶ 1.1(A) (The designed dewatering system may not eliminate all groundwater from the tunnel excavation.). WMATA further asserts that both section 228(1.5)(A)(1) and section 228(3.5)(A) suggest that groundwater could remain above the tunnel invert without violating the contract. Id. § 228, ¶ 1.5(A)(1) (providing that KiSKA must [c]ontrol groundwater along the tunnel alignment and within the tunnel heading to prevent certain specified events from occurring) (emphasis added); id. § 228, ¶ 3.5(A) (If the tunnel invert is below groundwater level, [KiSKA must] maintain qualified personnel on duty to monitor conditions that might threaten stability of heading whenever tunnel excavation is suspended or shut down.) (emphasis added). 37 The law requires contracts to be read as a whole, with meaning given to every provision contained therein. See Fort Sumter Tours, Inc. v. Babbitt, 202 F.3d 349, 357 (D.C.Cir.2000) (citing United States v. Ins. Co. of N. Am., 83 F.3d 1507, 1511 (D.C.Cir.1996) (noting the `cardinal principle of contract construction: that a document should be read to give effect to all its provisions') (quoting Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 63, 115 S.Ct. 1212, 1219, 131 L.Ed.2d 76 (1995))). If the contract is susceptible to more than one reasonable interpretation, however, the court must find that the contract is ambiguous as a matter of law. Metric Constructors, Inc. v. NASA, 169 F.3d 747, 751 (Fed.Cir.1999). 38 If the court finds the contract to be ambiguous, it must then determine whether that ambiguity is patent or latent. Id. An ambiguity is patent if it is glaring, substantial, or patently obvious. Comtrol, Inc. v. United States, 294 F.3d 1357, 1365 (Fed.Cir.2002). Patent ambiguities are construed against a government contractor absent an inquiry about the correct meaning of the terms at issue. P.R. Burke Corp. v. United States, 277 F.3d 1346, 1353 (Fed.Cir.2002). If the ambiguity is neither glaring nor substantial nor patently obvious, Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990, 997 (Fed.Cir.1996) (internal quotations omitted), however, and therefore latent, the ambiguity is ordinarily construed against the drafting party, see, e.g., Jowett, Inc. v. United States, 234 F.3d 1365, 1368 & n. 2 (Fed.Cir.2000). 39 Applying these principles, the district court concluded that both KiSKA and WMATA proposed reasonable interpretations of the contract's dewatering provisions, holding the contract to be ambiguous, but not patently so. Second Order at 7. We disagree and find the provisions to be patently—not latently—ambiguous. 40 Although KiSKA provides a sensible explanation for each of the provisions relied upon by WMATA, 16 we do not accept KiSKA's assertion that section 205(1.2)(B)(3) provided a clear statement that WMATA warranted that its design would lower the groundwater table two feet below tunnel invert. The grammatical difficulties of the provision aside, see infra note 17, section 205(1.2)(B)(3) cannot, in our opinion, carry the interpretive weight placed upon it by KiSKA. Contract § 205, ¶ 1.2(B)(3). Section 228(1.5)(A)(2)(a)((1)) likewise fails to advance KiSKA's cause as it appears to speak to the manner of dewatering and not to the level at which the groundwater must be maintained. Id. § 228, ¶ 1.5(A)(2)(a)((1)). 41 In our view, the grammatical errors of section 205(1.2)(B)(3) render the ambiguity of the dewatering provisions sufficiently obvious that KiSKA had a duty to inquire as to the true meaning of the contract. 17 See P.R. Burke Corp., 277 F.3d at 1353. By failing to so inquire, KiSKA assumed the risk that the government would offer a reasonable, but conflicting, interpretation, see Triax Pacific, Inc. v. West, 130 F.3d 1469, 1474-75 (Fed.Cir.1997), which interpretation would then be accepted by the court—a risk realized by our rejection of KiSKA's claim, see Jowett, 234 F.3d at 1368 & n. 2.
42 Finally, KiSKA argues that the district court erred as a matter of law by holding that, while the contract affords no flexibility with regard to the locations of grout drillings, Third Order at 8 (emphasis in original), the contract permitted [KiSKA] to drill all grout holes, including surface grout holes, `horizontally, vertically or inclined,' id. at 9 (quoting Contract § 239, ¶ 3.2(A)). Specifically, KiSKA maintains that the contract specified that all such grout holes must be drilled vertically. Br. for Appellant at 37-38. Because KiSKA could not drill the surface grout holes vertically at many of the locations specified in the contract without drilling into existing utilities, KiSKA reasons that WMATA breached its contractual warranty of specifications. We reject KiSKA's argument. 43 Section 239(1.1)(B) provided that [p]re-support chemical grouting shall be preformed [sic] from the existing ground surface at locations shown on the contract drawings. Contract § 239, ¶ 1.1(B). As even WMATA concedes, the contract drawings depicted the surface grout holes as drilled vertically. See JA 1001. Yet section 239(3.2)(A) provided that grout pipes were to be installed horizontally, vertically or inclined, as required. Contract § 239, ¶ 3.2(A). Observing that the contract contained no clear directive that the [surface grout] holes should be drilled at a particular angle, the district court concluded that the flexible language of [section 239(3.2)(A)] applies. Third Order at 8-9. Accordingly, the district court held that the contract permitted [KiSKA] to drill all grout holes, including surface grout holes, `horizontally, vertically or inclined.' Id. at 9 (quoting Contract § 239, ¶ 3.2(A)). 44 On appeal, KiSKA argues that the district court's reliance upon section 239(3.2)(A) was misplaced because the provision did not remotely purport to override any other provisions of the contract requiring particular grout holes to be drilled at particular angles. Br. for Appellant at 40. KiSKA places particular emphasis upon the fact that section 239(3.2)(A) provided that the contractor shall drill grout holes `as required.' Id. at 41 (quoting Contract § 239, ¶ 3.2(A)). Because the contract drawings depicted the grout holes as drilled vertically, KiSKA argues that the contract required the surface grout holes to be drilled vertically, thus warranting that the surface grout holes could be drilled vertically. 45 We find that KiSKA's reading of the contract places too much emphasis on the contract drawings, while ignoring other crucial provisions of the contract. As WMATA correctly observes, General Provision No. 2 of the contract clearly stated that [i]n [the] case of [a] discrepancy between Drawings and Specifications, the Specifications shall govern. JA 755. Given that the contract unambiguously indicated that WMATA did not know the location of the utilities and, in addition, expressly assigned KiSKA the responsibility of ultimately locating the utilities, KiSKA's reading of the contract cannot stand. See, e.g., Contract § 101, ¶ III(D)(18)(a) (The Contract Drawings show some known public and private utilities in their approximate locations within the limits of the project which are expected to interfere with the work. The Contractor is, however, cautioned that these locations are not guaranteed, nor is there any guarantee that utilities lines in existence within the limits of the project have been shown.); id. § 101, ¶ III(D)(18)(b) (Before commencing construction, the Contractor shall verify the locations of utilities which may be affected by his operations.); id. § 207, ¶ 1.5(A)(2) ([The contractor must] [v]erify by field investigation locations of [utility] facilities within and adjacent to limits of project which may be affected by construction operations.). Read in conjunction with section 239(3.2)(A)'s mandate to drill surface grout holes horizontally, vertically or inclined, as required, id. § 239, ¶ 3.2(A), the aforementioned provisions sufficiently refute KiSKA's warranty argument. 18