Court Opinion

ID: 4229812
Source: CourtListenerOpinion
Date Created: 2017-12-18 21:00:34.838605+00
Date Added: 2024-06-11T07:47:57.823810
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            DEC 18 2017
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

PACIFIC BORING, INC., a California               No.   15-35837
corporation,
                                                 D.C. No. 2:14-cv-00187-RSM
              Plaintiff-Appellant,

 v.                                              MEMORANDUM*

STAHELI TRENCHLESS
CONSULTANTS, INC., a Washington
corporation, and KIMBERLIE STAHELI
LOUCH, P.E., Ph.D, individually,

              Defendants-Appellees.

                    Appeal from the United States District Court
                      for the Western District of Washington
                    Ricardo S. Martinez, Chief Judge, Presiding

                     Argued and Submitted December 6, 2017
                              Seattle, Washington

Before: O’SCANNLAIN, TALLMAN, and WATFORD, Circuit Judges.

      1. The district court properly granted summary judgment to Staheli

Trenchless Consultants, Inc. (STC) and Kimberlie Staheli Louch (Staheli) on

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                                                                          Page 2 of 5
Pacific Boring, Inc.’s (PBI) professional negligence claims. Under Washington

law, PBI may not recover in tort for economic injuries caused by a design

professional’s negligent plans. See Berschauer/Phillips Constr. Co. v. Seattle Sch.

Dist. No. 1, 881 P.2d 986, 992–93 (Wash. 1994). PBI’s reliance on Affiliated FM

Ins. Co. v. LTK Consulting Servs., Inc., 243 P.3d 521 (Wash. 2010), is misplaced.

There, the Washington Supreme Court held that an engineer may be liable if her

negligent design results in injuries to persons or property. Id. at 528. But PBI

alleges economic harm based on construction delays and cost overruns, not

physical injury. Berschauer/Phillips bars recovery for those damages, and that

holding remains good law. See id. at 526 n.3.

      2. The district court properly denied PBI’s cross-motion for partial

summary judgment on the preclusive effect of the state court’s rulings.

      On appeal, PBI contends that two of the four factors Washington courts

require before applying issue preclusion—a final judgment on the merits and a

determination that it would not be unjust to apply preclusion—are not present.

This argument is unpersuasive.

      The state court proceeding resulted in a final decision. Washington courts

take a “pragmatic approach” to determine finality for the purposes of issue

preclusion. Cunningham v. State, 811 P.2d 225, 228 (Wash. Ct. App. 1991). They
                                                                              Page 3 of 5
consider whether the parties were fully heard in the prior proceeding and whether

the decision was deliberated, firm, supported by a reasoned opinion, and subject to

appeal. Id. These factors support the conclusion that the state proceeding was

final. While the state litigation was dismissed without prejudice and was not

subject to appeal, the parties fully litigated each issue before the state court, the

court dismissed PBI’s claims with prejudice, and it explained its reasoning on the

record.

      Nor would it be unjust to apply issue preclusion. In assessing the injustice

element of the issue preclusion analysis, Washington courts focus on the

procedural fairness of the prior proceeding. Thompson v. Dep’t of Licensing, 982

P.2d 601, 608 (Wash. 1999). PBI had a full and fair opportunity to present

arguments regarding its contractual obligations. Nothing more than that is required

to render it just to preclude PBI from relitigating issues decided by the state court

on partial summary judgment.

      3. The district court properly granted summary judgment to STC and Staheli

on PBI’s negligent misrepresentation claim. This claim fails because Staheli’s

statements did not proximately cause PBI’s injuries. A defendant’s act is not the

legal cause of a plaintiff’s injury if the connection between the act and harm is too

attenuated to impose liability. Schooley v. Pinch’s Deli Mkt., Inc., 951 P.2d 749,
                                                                               Page 4 of 5
754 (Wash. 1998). That is the case here. After Staheli made the allegedly untrue

statements, PBI assumed a legal duty to “dewater the work area as necessary,”

design an alternative boring method, and use the original auger boring plan if the

alternative method proved infeasible. PBI’s decision to accept these contractual

obligations, and its failure to fulfill them, proximately caused its injuries. To the

extent PBI claims that Staheli failed to disclose the risk of flowing soils, that

argument fails for lack of legal causation as well. PBI did not give timely notice of

the allegedly differing site conditions, as it was required to do under the bid

contract. That failure is the legal cause of any injury PBI suffered due to flowing

soils.

         Contrary to PBI’s argument, it could have satisfied its contractual

obligations without risking injury to its workers. If, as PBI claims, it could not

dewater along the open shield pipe jacking alignments because they ran under a

wetland, Change Order 1 provided that PBI would complete the project using the

original auger boring design. That design required PBI to bore along different

alignments that did not run under wetlands. And if PBI dewatered those

alignments as necessary, as it agreed to do when it accepted the terms of the bid

contract, the auger boring method would not have posed a risk of injury to

workers.
                                                                   Page 5 of 5
AFFIRMED.

Appellants shall bear the costs of appeal. See Fed. R. App. P. 39(a)(2).