Court Opinion

ID: 9565061
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:14:07.425136+00
Date Added: 2024-06-11T09:19:21.999524
License: Public Domain

Brachtenbach, J.
(concurring in part, dissenting in part) — I concur with the majority on all holdings except for approval of damages for the Swamp Creek project damages. I write specially on the Cooney damage claim to explain in more detail why I believe it to be barred.
*12First, the Cooney damages. These damages represent Cooney's cost overruns on its subcontract with SWI as a result of SWI's breach thereof plus SWI's overhead and profit markup on this amount. TAMS contends that the 3-year statute of limitations, RCW 4.16.080(2), bars SWI's claim for damages on behalf of its subcontractor, Cooney. A more detailed recitation of the procedural context in which this claim of damages arose is necessary for resolution of TAMS' contention.
In March of 1982, Cooney sued SWI, City, Mowat and the bonding company. Cooney alleged its contract with SWI, its full performance, acceptance of its work, and assertion of a lien against the retained percentage. As to SWI, Cooney alleged a breach by SWI of its contract with SWI and claimed a contract amount due of $47,272.78. Cooney sought the same amount in a separate cause of action against all defendants on a theory of unjust enrichment. TAMS was not a defendant.
In answering Cooney's complaint, SWI asserted breaches by Cooney and a counterclaim for extra contract work for Cooney and damages from Cooney's breach of the subcontract. SWI pleaded a third party claim against TAMS by incorporating all the allegations of its amended complaint against TAMS and others, including allegations of TAMS' negligence, and also by asserting a misrepresentation theory.
Thus at this stage of the lawsuit the pleadings consisted of the following: (1) Cooney's suit against SWI and others for contract breach damages; TAMS was not a defendant. (2) SWI's suit against TAMS and others for breach of contract, misrepresentation and negligence. (3) SWI's answer to Cooney's suit, which included a third party claim against TAMS, the latter based upon negligence and misrepresentation. (4) TAMS was a defendant in the SWI suit and a third party defendant through the Cooney suit. Thereafter, SWI settled the Cooney suit against it for a promise to pay $15,000 and agreed to pursue Cooney's claim against TAMS and others and to pay Cooney 20 percent of the entire net *13settlement judgment which SWI might recover from TAMS and others. Cooney agreed to cooperate with SWI and to do nothing adverse to SWI's pursuit of the claims.
A few months later SWI settled all of its claims against all defendants except TAMS. SWI received $155,000 as settlement from Mowat, City and BRH. SWI and Cooney agreed that the $155,000 included any amount that SWI owed Cooney under their earlier settlement agreement. SWI agreed it would be liable to Cooney for such sums, and no more, as may be recovered from TAMS by an award to Cooney. Presumably the earlier agreement allocated to Cooney 20 percent of the entire judgment against TAMS; the testimony so indicates.
In March 1984, after the 3-year statute of limitations had expired and after the settlements, SWI filed an amended complaint aimed solely at TAMS. SWI sought damages in its own right for $1 million and "by and through Cooney, Mowat and the City" for $1,250,000. SWI and Cooney are alleged to be the real parties in interest against TAMS by virtue of the settlement agreement.
Prior to the amended complaint Cooney had not asserted any claim against TAMS. Arguably, the rather general pleadings would include a claim that TAMS was liable to SWI for SWI's damages caused by Cooney's claim of damages against SWI. However, now TAMS was faced with a direct Cooney negligence claim through SWI's allegation.
To avoid the statute, SWI argues, on behalf of the Cooney damages, that the 1984 amended complaint related back to the original timely third party pleading. CR 15(c) provides:
Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. . . .
The conduct, transaction and occurrence which Cooney timely pleaded was a breach of a contract. That case could have been decided solely upon the issue whether the *14defendants had breached their contractual obligations to Cooney. In short, had those defendants paid Cooney all the money which he claimed was due? TAMS had nothing to do with that question. More than 3 years later, TAMS is a defendant facing issues of negligent design with respect to Cooney's claim for breach of contract. I agree that SWI's negligence cause of action on behalf of Cooney does not relate back and is barred by the statute of limitations.
Second, the Swamp Creek project. These claimed damages involve SWI's increased costs on the Swamp Creek project — a separate bridge construction project for which SWI had contracted to do the steel fabrication work. TAMS assigns error to the jury award of these damages on two grounds. TAMS first contends that in a negligence action by a subcontractor against the project architect/ engineer, any damages beyond those incurred on the specific project are unforeseeable as a matter of law and thus unrecoverable. TAMS also contends that SWI presented insufficient evidence to allow the Swamp Creek damages claim to go to the jury. I do not reach the foreseeability issue because I conclude that there was insufficient evidence that SWI's increased costs on the Swamp Creek project were proximately caused by TAMS' negligence.
Proximate cause is defined as "a cause which in a natural and continuous sequence, unbroken by a new, independent cause, produces the event, and without which that event would not have occurred." Bernethy v. Walt Failor's, Inc., 97 Wn.2d 929, 935, 653 P.2d 280 (1982). To prove its damages on the Swamp Creek project allegedly caused by TAMS' negligence, SWI divided its work on the Swamp Creek project into two phases and came up with a Phase I overrun by subtracting the expected Phase I hours (estimated by comparing the actual Phase II hours) from the actual Phase I hours. SWI contended that the two phases were similar jobs under nonimpact conditions and that, therefore, the increased labor on Phase I, which overlapped the Merrill-Ring Bridge project during October 1980 through January 1981, was caused by the negligence of *15TAMS. SWI's proof of causation also included the following evidence: that its work on the Merrill-Ring Bridge project would have been completed by September 1980 absent the change in truss orientation; that the contracted delivery date for Phase I of the Swamp Creek project was January 1981; that SWI was scheduled to begin fabrication on this project in early fall, after the Merrill-Ring Bridge project was to be completed; and, that TAMS' negligence and the delay on the Merrill-Ring Bridge project, which resulted therefrom, forced SWI to do both the Merrill-Ring Bridge and Swamp Creek projects contemporaneously, thereby compromising the availability of SWI personnel, materials, and floor space and requiring SWI to temporarily expand its facilities and increase its labor forces, all of which adversely impacted its work on both projects.
Assuming that SWI adduced sufficient evidence to indicate that some damage to SWI in the Swamp Creek project was proximately caused by TAMS' negligence, there is insufficient evidence which would afford the jury a reasonable basis for estimating which losses, if any, were caused by TAMS' negligence and which were the result of other factors. SWI made no effort to keep track of its damages or segregate its costs and provided no justification for its failure to do so. Furthermore, in calculating its damages, SWI assumed that its bid costs were realistic and that its work on Phase I and Phase II was substantially similar, thus involving similar labor costs. However, SWI presented scant evidence which would support either assumption. In considering the evidence and inferences therefrom in favor of SWI, I conclude that SWI presented insufficient evidence to support the jury's award of damages on the Swamp Creek project.
Pearson, C.J., and Dolliver and Andersen, JJ., concur with Brachtenbach, J.