Opinion ID: 2650166
Heading Depth: 2
Heading Rank: 2

Heading: The Asbestos Came From the Building

Text: Although the district court found that “[t]he source of the released asbestos was never determined[,]” our review of the record convinces us that the asbestos came from the building itself. Tracy K. Bramlett, was retained by the government to serve as an expert in this case. The “Factual Description” portion of his March 9, 2009 report stated in part: 6 Case: 12-11025 Document: 00512496503 Page: 7 Date Filed: 01/10/2014 No. 12-11025 Asbestos containing materials identified in the building consist of the following: 1. Non-friable floor planking; 2. Non-friable caulk; 3. Non-friable transite panels; 4. Non-friable floor tile and mastic; 5. Non-friable cove base mastic adhesive; 6. Non-friable texture over CMU block walls; and 7. Friable ceiling tiles. .... All of the surface samples collected within the USPS Greenville facility with the exception of five (5) have been determined to contain only Chrysotile asbestos. The other five (5) samples were determined to contain minor quantities of Amosite with Chrysotile asbestos being the dominate fiber in these samples. The asbestos survey of the facility indicates that the ceiling tiles which are friable contain Amosite asbestos. Chrysotile asbestos has been identified in the floor tile, floor tile mastic, caulk, cove base mastic and the texture on the CMU block walls in the structure. All of these materials are considered non-friable. Nonfriable materials are difficult to get into the air unless they are abraded, sanded, cut, or ground. The only area in the facility that damaged non-friable materials were identified was on the north end of the processing area where there was exposed cove base mastic which had been disturbed at one time. In addition, damage was noted to the texture on the CMU block walls. It was also reported that there have been numerous fires in the surrounding area and that smoke from these fires entered the facility from the return air grills on the south side of the building. It is possible that the burning structures may have contained asbestos which became airborne and was transmitted into the building via the fresh air makeup system. From November 27, 1999 to September 25, 2006[,] an asbestos fiber release occurred in the Greenville Post Office. It is not possible to make a determination of the airborne asbestos levels at the time of the release. Air sampling was performed at [the] facility in June and October 2006 which did not detect any asbestos structures in the air within the facility. The Amosite asbestos detected in the wipe samples indicates a minor fiber release from the ceiling tiles. The Chrysotile asbestos on surfaces indicates that an unknown source either internal or external to the building has caused a fiber release. 7 Case: 12-11025 Document: 00512496503 Page: 8 Date Filed: 01/10/2014 No. 12-11025 There are no industry standards regarding asbestos dust. The dust on the horizontal surfaces would not pose a health hazard to employees unless the material is disturbed and allowed to become airborne. However, the actions, taken by the USPS to evacuate the facility were appropriate and timely based on wipe sample results which indicate an unknown source of Chrysotile asbestos in the building on some horizontal surfaces. A fiber release did occur at the USPS Greenville facility. It is unlikely that USPS employees have been exposed to asbestos from other sources in the building unless materials were disturbed allowing asbestos fibers to be entrained in the air. Although the report stated that asbestos had been released from an “unknown source either internal or external to the building,” the only potential external sources of asbestos identified in the report were fires in the surrounding area which caused smoke to enter the building. But at trial, Mr. Bramlett indicated that there was actually a single fire. Specifically, Mr. Bramlett was asked: “With respect to the possibility that [the asbestos] came from the outside, other than having been told that there was a house fire in the area, did you have any other data that you went by?” Mr. Bramlett responded: “No.” Mr. Bramlett’s answers to further questions demonstrated that he was not aware of the specific details of that house fire. Furthermore, our own review of the incident report from that house fire and the deposition of the Fire Marshal addressing the same, revealed no evidence that asbestos was released during the house fire or even that the house contained asbestos. We agree with the Spodeks that Mr. Bramlett’s suggestion that the asbestos may have come from outside the building was speculative and not supported by the evidence. Additionally, the government has not directed us to evidence in the record that there was another plausible source of asbestos which was external to the building. Therefore, we find that the asbestos came from the building itself. 8 Case: 12-11025 Document: 00512496503 Page: 9 Date Filed: 01/10/2014 No. 12-11025 C. The Significance of the Building Plans and Specifications Turning to the asbestos in the building, the district court correctly determined that the issue of whether the building plans and specifications were relevant to the relationship of the parties was a “Threshold Issue” in its analysis. In addressing this issue, the district court relied on United Post Offices Corp. v. United States, 79 Ct. Cl. 173 (1934) (“UPOC”). In UPOC, the United States Court of Claims considered whether the government or the lessor was responsible for updating the lighting under a lease which required the lessor to provide “satisfactory . . . lighting fixtures.” Id. at 177. The lessor argued that because the building was constructed with the lighting required by the government’s plans and specifications, it was not required to update the lighting after the government rearranged the furniture and additional lighting was needed. Id. The UPOC court found: Under existing law the undertaking exacted two contracts, the first to be faithfully executed prior to the execution of the second, and it is under the second that this cause of action arises. The defendant’s obligation under the first was to enter into a lease of the building after its satisfactory completion. The first proposal did not fix the terms of the lease to be thereafter agreed upon. The plaintiff upon the record may not relieve itself of its assumed obligations under a ten-year lease by a contention that the plans and specifications for a building to be leased determine the relationship of landlord and tenant under the separate lease. The mere fact that the plans and specifications dealt expressly with the same subject matter in some respects is not determinable of the issue. In the first instance the lighting system was a constructional detail. In the second place, it was a matter of meeting satisfactorily the necessities of the tenant with respect to lighting during the tenancy. Id. at 178-79 (emphasis in original). Therefore, even though the building had been built to the government’s specifications, the court found that the lessor was responsible for updating the lighting under the lease. Id. at 179-80. 9 Case: 12-11025 Document: 00512496503 Page: 10 Date Filed: 01/10/2014 No. 12-11025 Relying on UPOC, the district court below found, “[a]s a matter of law, the duties of the parties in this case are governed by the terms of the lease, not by the plans and specifications for the building.” This was a critical juncture in the district court’s analysis because this determination necessarily caused it to disregard the parties stipulation that “the building was built according to plans and specifications required by and approved by the Postal Service, including the use of asbestos-containing materials” and the related stipulations and evidence regarding the plans and specifications. The Spodeks argue that the district court should have instead applied Poorvu v. United States, 190 Ct. Cl. 640, 644-47 (1970), in which the United States Court of Claims addressed who was responsible when a building which was being leased by the government began to settle as a result of insufficient foundation pilings under the maneuvering area. The Court of Claims found that “[t]he documents which constitute the obligations undertaken by [the lessors’ predecessors in interest] and the government are the government’s advertisement for bids, the agreement to lease submitted by [the lessors’ predecessors in interest] and accepted by the government and the lease.” Id. at 653. The Poorvu court distinguished UPOC stating: It is therefore evident that unlike the obligations undertaken by the plaintiff in [UPOC], the contract between [the lessors’ predecessors in interest] and the government was of a dual nature—to build a post office facility in accordance with the government’s plans and to lease it. This was not a case of two contracts—one to build and one to lease. Such an interpretation is not consonant with the explicit references in the lease, to the plans on file with the Post Office Department. Id. at 654. Based on United States v. Spearin, 248 U.S. 132 (1918), and its progeny, the Poorvu court found that by providing plans and specifications the government had created an implied warranty that a building “constructed in 10 Case: 12-11025 Document: 00512496503 Page: 11 Date Filed: 01/10/2014 No. 12-11025 accordance with [those plans and specifications] . . . would be fit for its intended purpose.” 190 Ct. Cl. at 647-652. As the court explained: I can see no reason why a warranty which would arise if the government were the owner should not arise in this situation when it is the designerlessee. This conclusion becomes more obvious when it is realized that the government could not avoid a lease on a building which was built for it, in accordance with plans supplied by it, on the ground that the building was not sufficient for its needs. In the present situation, as in the situation where it is to be the owner of the facility, the government must answer for damage incurred because of inadequate plans it has furnished. Nor does the fact that in this case the proof of the deficiency in the plans did not manifest itself until after the building was standing for a number of years . . . remove it from the purview of the principles enunciated above. It would make little sense to impose the obligation of an implied warranty and then limit the life of the warranty to the period of construction. It is an implied warranty that the plans, if followed, will result in a properly constructed building; not merely a warranty that the contractor will be able to build a building within a given time period for a certain price. Id. at 651 (emphasis added). The Poorvu court also rejected the contention that the lessor’s obligation to “keep the demised premises . . . in good repair and tenantable condition . . . except in case of damage arising from the act or the negligence of the Government’s agents or employees,” 4 id. at 652, cut off the government’s liability: The essence of this argument is that even if there is an implied warranty that the plans and specifications will be sufficient, when that warranty is weighed against the covenant to repair, the latter must reign supreme. This cannot be accepted. This court has often held that it will not give literal effect to broad exculpatory clauses (assuming for the moment that paragraph 7 is such a clause) if the result is to negate another provision of that contract. . . . Therefore, this paragraph 7 must be read to require the lessor to sustain the burden of repairing the premises if those repairs are not 4 This language is nearly identical to the language of the lease in the present case. 11 Case: 12-11025 Document: 00512496503 Page: 12 Date Filed: 01/10/2014 No. 12-11025 necessitated by damage caused by insufficient plans and specifications. Moreover, it may be further argued that paragraph 7 imposes no duty to repair upon the lessor in this case because of the proviso that he is not responsible for repairs ‘arising from the act or the negligence of the Government’s agents or employees.’ Since the decision to delete the pilings under the parking and maneuvering area is directly traceable to the [government], it may be concluded that this proviso negates any duty on the lessor to repair in this instance. Id. at 652-53 (internal citations omitted). The Poorvu court then determined that the government was responsible for the settling of the building. Id. at 667. In the present case, the building was built pursuant to the “Advertisement for Bids to Lease (Construction),” the Agreement to Lease which was accepted by the government (“Executed Agreement to Lease”), and the lease. Although our review of the record did not reveal the Executed Agreement to Lease, the sample Agreement to Lease in the “Advertisement for Bids to Lease (Construction)” specifically incorporated the construction specifications; the parties stipulated that the plans and specifications required “the use of asbestos-containing materials”; Paragraph 19 of the executed lease specifically incorporated the Executed Agreement to Lease; and the parties have not identified any evidence in the record to suggest that the Executed Agreement to Lease did not reference the construction specifications. Therefore, we find that the Executed Agreement to Lease incorporated the government’s construction specifications. Thus, similar to the situation in Poorvu, in the present case there was a single agreement because the lease incorporated the Executed Agreement to Lease which in turn incorporated the plans and specifications. Accordingly, the district court below erred in finding that there were two separate agreements. This error was significant because it caused the district court to 12 Case: 12-11025 Document: 00512496503 Page: 13 Date Filed: 01/10/2014 No. 12-11025 disregard the government’s construction plans and specifications and the related stipulations and evidence regarding the asbestos containing materials which were required by those plans and specifications. In short, the district court’s finding that the plans and specifications were not relevant was central to its conclusions regarding liability. Therefore, we vacate the judgment of the district court and remand for reconsideration consistent with this opinion. On remand the threshold issue for the district court to consider is the existence and scope of an implied warranty as set forth in Poorvu. 5 Importantly, the existence of an implied warranty does not necessarily mean that the government is strictly liable for all of the consequences of the asbestos in the building. For example, if the evidence demonstrates that the Spodeks breached their maintenance responsibility under the lease and that such breach contributed to the release of asbestos which was required by building plans and specifications, the district court may find it appropriate to apportion the damages “in accordance with the liability of each party.” Spodek v. United States, 73 Fed. Cl. at 26. Because the existence and scope of an implied warranty is a threshold matter, we decline to reach the remaining issues which were briefed by the parties. III. CONCLUSION The district court erred in finding that the construction plans and specifications were a part of a separate agreement than the lease and irrelevant as a matter of law. Because the plans and specifications were part 5The district court’s opinion contained the following statement: “Plaintiffs failed to prove that asbestos-containing materials were a known contaminant when the plans and specifications for the bidding were acquired and approved by the Department.” We are unaware of any authority which supports the view that the government’s knowledge of a defect is an element of an implied warranty. 13 Case: 12-11025 Document: 00512496503 Page: 14 Date Filed: 01/10/2014 No. 12-11025 of the same agreement as the lease, we vacate the judgment of the district court in its entirety and remand for reconsideration in light of this opinion. VACATED and REMANDED. 14