# Electric MacHinery Enterprises, Inc. v. Hunt Construction Group, Inc. (In Re Electric MacHinery Enterprises, Inc.)

> United States Bankruptcy Court, M.D. Florida · August 28, 2009 · 416 B.R. 801

URL: https://www.frixlaw.com/law-library/cases/1879100

## Case

- **Full name:** In Re ELECTRIC MACHINERY ENTERPRISES, INC., Debtor. Electric MacHinery Enterprises, Inc., Plaintiff, v. Hunt Construction Group, Inc., the Clark Construction Group, Inc., and Construct Two Construction Managers, Inc., Individually and as Joint Venturers Trading as Hunt/Clark/Construct Two, a Joint Venture, Defendants
- **Court:** United States Bankruptcy Court, M.D. Florida
- **Decided:** August 28, 2009
- **Citations:** 416 B.R. 801; 22 Fla. L. Weekly Fed. B 77; 2009 Bankr. LEXIS 2374; 2009 WL 2710266
- **Precedential status:** Published
- **Opinion:** Opinion by Williamson
- **Judges:** Michael G. Williamson
- **Cited by:** 15 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/1879100

## How later opinions describe it (automated extraction)

- explaining that “where the defense merely gives a reason for why the plaintiff should not prevail, it is simply a defense”
- holding that setoff or recoupment are considered counterclaims against the estate, even if pled as a defense

## Opinion text

FINDINGS OF FACT AND CONCLUSIONS OF LAW
MICHAEL G. WILLIAMSON, Bankruptcy Judge.
The Orange County Convention Center in Orlando, Florida, is a beautiful conven
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tion space located north of Disney World, in between Universal Studios and Sea World.
1
Throughout the eight-week trial in this adversary proceeding, none of the parties questioned the fact that the Orange County Convention Center was built well and has shown no major construction or design flaws. This adversary proceeding is not about the failure of construction managers and subcontractors to construct a well-built convention space — it is
not
about a failed project. The dispute between the Defendants in this case, acting as the construction manager in charge of the Orange County Convention Center, Phase V project (“Project”), and the Plaintiff, Electric Machinery Enterprises, Inc. (“EME”), one of the three major electrical subcontractors employed on the Project, is, generally, about coordination and efficiency, and who should pay for the costs incurred when neither is achieved.
On March 24, 2000, Orange County, Florida, entered into a contract with a joint venture composed of Hunt Construction Group, Inc. (“Hunt”), The Clark Construction Group, Inc. (“Clark”), and Construct Two Construction Managers, Inc. (“Construct Two”), doing business as Hunt/Clark/Construct Two, A Joint Venture (together, “HCC”) to be the construction manager for the Project (“CM Agreement”). Construct Two is a Florida-based construction company. Hunt and Clark are two of the largest national construction management firms. The HCC joint venture was created specifically for the purpose of constructing the Project.
This Project was a substantial undertaking. The Project consisted of the design and construction of a 2.8 million square-foot building with four-story north and south concourses and a 58 foot high, single-story exhibit hall in the center of the building. At the peak of construction, there were 2,500 workers a day employed at the Project site. The CM Agreement executed by Orange County and HCC established a guaranteed maximum price for the Project of $490 million and a “Construction Reserve” of $30 million. HCC committed to a substantial completion date of May 1, 2003.
As set forth in the CM Agreement, HCC’s relevant major responsibilities included, specifically, garnering subcontractor bids on all parts of construction, conducting a review of the project designs, creating a project schedule that adequately coordinated the construction of the entire project, and, most importantly, efficiently managing the construction of the project, including the coordination of the work of subcontractors, such as EME.
As a general matter, one of the tasks of a construction manager on a major project such as the Orange County Convention Center is the coordination of all of the subcontractor work. Subcontractor work must generally be done in sequence — each subcontractor’s work must be completed in order. If a subcontractor works out of order, it is likely that, if they are able to complete their work at all, they will have either ruined another subcontractor’s work, or their work will be ruined by a subcontractor whose work should have been completed first. This is especially true for an electrical subcontractor — which generally completes its work at the end of the line.
The scheduling method that is the industry standard in construction is the critical path method (“CPM”), which is a system for creating an efficient flow of subcontractor work from area to area. To start working in an area, subcontractors must
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bring machinery, tools, materials, and workers into that area. If a project is coordinated efficiently, a subcontractor will complete work in one space and move on to the next adjoining space, and then the next adjoining space, and so on. Moving materials, machinery, and tools takes time, and the farther the distance those items must be moved, the more time and money is wasted.
Another typical responsibility of a construction manager on a large project is to conduct an extensive constructability review of all of the design documents to determine whether there are any problems that will require revision. Such review should take place before construction begins, so that no major revisions to the design will be required in the middle of construction. During construction, when questions arise as to the designs, requests for information (“RFI’s”) are sent to the project’s architect or design team. RFI’s are intended to be a process to clarify design specifics, not a process for making revisions to project designs.
Finally, for many subcontractors, including electrical, much of their work cannot take place before the building is “dried-in” without risking ruination in the face of bad weather. A space is “dried-in” when the roof and exterior walls are complete such that the interior space will be protected from the elements. It is a fact commonly known in central Florida that the summer months bring summer storms, which may not last long but generally involve large amounts of rainfall.
HCC sought bids for the electrical work on the Project, which it divided into three parts for purposes of bidding. EME was the winning bidder on parts 16.2 and 16.3 of the electrical work. Another electrical subcontractor, Encompass Electrical Technologies-Florida, LLC, also known as TriCity Electrical Contractors (“Encompass”), was the winning bidder on part 16.1 of the electrical work. Florida Industrial Electric (“FIE”) was the electrical subcontractor employed early in construction on the Project, generally responsible for bringing power into the building. EME, Encompass, and FIE were the primary electrical subcontractors on the Project. EME signed an electrical subcontractor agreement on August 6, 2001 (“Trade Contract”) (J. Ex. 239) in the amount of $13,386,827, and began working on the Project.
EME’s Trade Contract, like the contracts of all subcontractors employed on the Project, attached and included in the supplemental “Contract Documents” a document entitled “General Conditions.” The Trade Contract and General Conditions include provisions that create a contractual obligation on the part of HCC to adequately coordinate and schedule EME’s work on the Project.
When EME signed the Trade Contract in August 2001, the overall project schedule in operation was called the “HOLE” schedule, which was produced in November 2000. On August 9, 2001, three days after EME signed the Trade Contract, and one day before HCC affixed its signatures, HCC issued a new overall project schedule, or “GMUP” schedule, identified as the OC 25 schedule (“OC 25”). While the HOLE schedule may have created the appearance of an orderly, properly scheduled project in which work patterns followed an efficient flow from space to space, the OC 25 schedule did not. The OC 25 schedule’s coordination of work resulted in something more akin to a game of hopscotch than a sensible work flow and clearly departed from the critical path method. Moreover, the OC 25 schedule was compressed. Although the estimated date of completion of the Project had not changed, work had not progressed as quickly as anticipated in the HOLE schedule. Therefore, the OC 25
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schedule, in order to keep the final date steady, compressed all aspects of the work on the Project. Many of the individual tasks listed in the OC 25 schedule were allotted less time for completion.
The OC 25 schedule was not followed for long. Throughout the course of the work on the Project, scheduling became a bigger and bigger problem for subcontractors. While additional versions and updates to the GMUP schedule were issued, the overall plan for the Project was not reconfigured again as Project conditions changes. Instead, HCC began to coordinate work through short-term look-ahead schedules rather than through an overall project schedule. As the Project was nearing completion, even these look-ahead schedules had been abandoned. The result was an inefficient mess in which trade contractors stumbled over each other, work had to be re-done in many places, and EME’s work teams were required to move haphazardly throughout the Project as directed by HCC on an almost daily basis.
Prior to construction, HCC never conducted a constructability review of the electrical drawings, and as a result, EME was required to use RFI’s to fix design defects throughout the course of construction. Because spaces where EME was working had not been “dried-in” when scheduled, when a storm occurred on May 30, 2002, several areas of work were ruined. The trouble was complicated by the failure of HCC to use adequate equipment to remove the storm water from the building. Somehow, in what appears to this Court to be a state of chaos, a convention center was built.
Discussions arose as early as October 31, 2001, regarding a demand for additional payment to EME for additional costs arising from HCC’s failure to competently schedule and coordinate the subcontractor work on the Project (see Pl.’s Ex. 47). Towards the end of the work on the Project, HCC had instituted an ad hoc claims process through “change orders” signed by HCC and various subcontractors, allowing for additional payment above the contract amount due to changes in work or due to the impact of scheduling. Change Order No. 17 (Pl.’s Ex. 221), which was forwarded to EME on May 1, 2003, specifically addressed the impact of scheduling on EME and provided that $1.5 million would be the first payment on that claim, the final amount of which would be determined at a later date. The parties are now at that later date.
On May 29, 2003, towards the end of construction, EME filed a petition for relief under Chapter 11 of the Bankruptcy Code. However, EME completed its work on the Project during the post-petition period. This adversary proceeding commenced on December 23, 2003, with a Complaint for Injunctive Relief (Doc. No. 1) and a Motion for a Temporary Restraining Order and Preliminary Injunction (Doc. No. 3) filed by the Debtor, EME, against Hunt, Clark, and Construct Two, separately and collectively as joint ventur-ers, and Orange County, Florida. Counsel for EME had learned that various HCC documents relating to the Orange County Convention Center project were in the process of being destroyed, deleted, or literally tossed into a dumpster at the Project site. The Court issued a Temporary Restraining Order on December 24, 2003 (Doc. No. 10), and a Preliminary Injunction on January 6, 2004 (Doc. No. 26). Several of the particularly relevant documents produced at trial were recovered from the dumpsters at the Project site at significant expense to EME. Orange County was dismissed from the proceeding on November 1, 2004, pursuant to a settlement reached between it and EME (see Doc.No. 290, 292). EME’s Motion for Sanctions Against HCC For Post-Petition Set-off of Amounts Due Under Contract
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(Bankr.Doc. No. 374), filed in the main case, was consolidated with this proceeding for purposes of trial (Order Consolidating, Bankr.Doc. No. 374).
The trial in this proceeding lasted a total of 39 days, spread out over the greater part of a year.
2
The trial proceeded on the Amended Complaint (Doc. No. 22), which contains five counts. Count One is for injunctive relief against all Defendants, to prevent the destruction of the books and records of HCC relating to the Project until they could be reviewed by EME and for damages based on spoliation of evidence. Count Two is for turnover of $538,280, the amount still owed to EME under the Trade Contract. Count Three is a claim for approximately $11 million in damages for HCC’s breach of implied duties and warranties, including the implied duties to coordinate the work on the Project, to provide EME with reasonable access to the work site, and to provide adequate plans and specifications to EME. Count Four is a breach of contract claim against HCC, seeking as damages the amount remaining due under the Trade Contract of $538,280. Count Five is a claim for $11 million in damages for breach of contract based on HCC’s breach of its contractual obligation to properly coordinate and schedule the Project and the resulting delays, disruptions, and damages experienced by EME.
In its Answer (Doc. No. 113), HCC raised a number of affirmative defenses, including estoppel, waiver, accord and satisfaction, release of claims, setoff, statute of limitations, and laches. Two other affirmative defenses pled by HCC are, first, that the claims are barred, in whole or in part, by EME’s “failure to follow the contractual dispute resolution procedures” agreed to in the Trade Contract, and see-ond, that the damages, if established, “were caused by the actions or nonactions of persons or entities other than HCC and for whom HCC is not liable.” HCC demanded a jury trial on the claim of spoliation in Count One of the Complaint, which the Plaintiff moved to strike. Prior to trial, the Court granted the motion to strike the jury demand because, first, in the Trade Contract the parties waived the right to a jury trial, and, second, there is no right to a jury on a claim of spoliation. (Doc. No. 242).
In the findings of fact, the Court will first analyze the contractual relationships between the parties and provide an overview of the specific requirements regarding scheduling and coordinating in the Trade Contract and General Conditions. Second, the Court will discuss at length the evidence presented concerning the failure of HCC to meet its contractual obligations to adequately schedule and coordinate the work of subcontractors on the Project, including EME, and will address the cause of this failure. Third, the Court will weigh the facts supporting HCC’s various defenses to liability. Next, the Court will consider the appropriate measure of damages to be applied to this breach of contract action, based on the facts of this case and the testimony of the experts. The Court will then address HCC’s claim that it is owed back-charges under the Trade Contract. Finally, the Court will consider the evidence supporting EME’s claim for spoliation of evidence based on the actions of HCC in December 2003.
In the conclusions of law, the first question addressed is the Court’s jurisdiction over this proceeding. Second, the Court will address Count One and EME’s claim based on spoliation of evidence. Third, the
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Court will analyze the breach of contract claims in Counts Four and Five; fourth, the various defenses asserted by HCC; and fifth, the standard of damages that should be applied to the breach of contract claim under Count Five of the Complaint. Sixth, the Court will address EME’s motion for sanctions for violation of the automatic stay. Finally, the Court will turn to the award of attorneys’ fees in this case. Because the Court will rule in EME’s favor on the breach of contract claims, Count Three, for damages based on HCC’s implied duties, will be dismissed as moot. Count Two, the claim for turnover, will be granted, consistent with this Court’s ruling on the breach of contract claims.
Based on the evidence before the Court, and for the reasons set forth below, judgment will be entered against HCC for damages arising out of breach of contract in the amount of $6,376,000.00, plus interest, attorneys’ fees, and costs.
FINDINGS OF FACT
I. The Contractual Relationships Between the Parties
While EME has asserted several claims for relief in this action, for the most part, this is a breach of contract action. EME contends that HCC, as project manager, breached its contractual obligations under the Trade Contract with EME to properly manage, schedule, and coordinate the work on the Project and that this breach caused damages to EME. In order to fully understand HCC’s overall role with respect to the Project, the Court will first review the provisions of the CM Agreement that define that role. While the provisions of the CM Agreement do not serve as the basis for EME’s action against HCC, they do demonstrate HCC’s role and responsibilities with respect to the Project and give context to the similar provisions contained in HCC’s Trade Contract with EME. Second, the Court will generally review the Trade Contract between EME and HCC and the provisions that impose a duty on HCC to properly manage and coordinate the work of the trade contractors, including EME, on the Project.
A. HCC and Orange County
HCC and Orange County’s relationship is reduced to writing in the CM Agreement, which imposes a variety of management obligations on HCC. While EME is not a party to the CM Agreement, the CM Agreement is an attachment to the Trade Contract. Although the CM Agreement was not included in the bid package originally provided to EME, representatives of HCC testified that EME would have been allowed to review the CM Agreement if they had asked, and that EME was entitled to rely on it. (Trial Tr. 7684:20-7685:3, July 21, 2005.) While HCC is correct in arguing that the CM Agreement cannot be the basis for EME’s breach of contract claim, the provisions of the CM Agreement do, however, establish what were HCC’s role and responsibilities with respect to the Project. Additionally, understanding the role that HCC had contracted to fill on the Project as the construction manager will help to put the provisions of EME’s Trade Contract into their proper perspective.
The CM Agreement designated a “Construction Team” for the Project composed of Orange County, its project director and representative, HCC as construction manager, and the Project architect, Helman Hurley Charvat Peacock/Architects, Inc. (“Architect”). (J. Ex. 239, CM Agreement, Art. 1.1.) The Architect’s role was to “provide leadership during the design phase with support from the Construction Manager.”
(Id.)
The construction manager, HCC, was to “provide leadership to the Construction Team on all matters relating
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to construction.”
(Id.)
In the CM Agreement, HCC accepted full responsibility for the whole of the construction of the Project and agreed to exercise its best skill and judgment and to be judged by a high standard of care for the industry. The preamble states that HCC accepts “the relationship of trust and confidence established between it and the Owner.” (J. Ex. 239, CM Agreement pmbl.) Further, HCC agreed to accept “the relationship of trust and confidence established by this Agreement, ... exercise [its] best skill and judgment in furthering the Project in order to adhere to and comply with ... the Master Project Schedule.” (J. Ex. 239, CM Agreement, Art. 2.11.1.) HCC’s services were to “be judged by a standard of care, that is consistent with the standards and quality prevailing among first-rate, nationally recognized construction management and general contracting firms of superior knowledge, skill and experience engaged in projects of similar size and complexity.” (J. Ex. 239, CM Agreement, Art. 2.11.2.) The CM Agreement also required HCC to provide efficient business administration and superintendence in order to complete the work in a sound way, consistent with the requirements of the contract documents. (J. Ex. 239, CM Agreement, Art. 1.)
HCC assumed full responsibility for all tasks required to construct the Project for Orange County, including the coordination and scheduling of the work on the Project. The CM Agreement described HCC’s responsibility as follows:
The Construction Manager’s construction responsibility is all inclusive. It shall be the Construction Manager’s responsibility to administer,
coordinate, schedule,
obtain, contract, inspect, control, arrange, supervise, manage and/or otherwise provide and perform all the Work in a manner that is in full accordance with the requirements of the Contract Documents.
(J. Ex. 239, CM Agreement, Art. 2.4.1 (emphasis added).) As this provision indicates, the primary function of HCC as Construction Manager was to schedule and coordinate all the work on the Project, which largely consisted of coordination of the trade contractors. To accomplish this coordination, HCC was obligated under the CM Agreement to develop a critical path method (“CPM”) network schedule and bar chart schedules to illustrate the activities of the trade contractors and the logical relationships between the activities. The development of the Project schedule was to be an ongoing process, and “[a]ll changes in the planned sequence, interrelationship, description, or duration of any activity [were to] be incorporated into the networks, as they are determined.” (J. Ex. 239, CM Agreement, Art. 2.2.3(1).) HCC was obligated to “distribute updated CPM plots and bar charts to the Owner on a monthly basis.”
(Id.)
The CM Agreement states that the “schedule will be used to plan, analyze, and control progress during the construction and occupancy phases of the Work.”
(Id.)
The CM Agreement specifically described HCC’s scheduling responsibilities both before and during construction. Article 2.2.3(2) of the CM Agreement required HCC to prepare and incorporate, at the required intervals, the following schedules:
(a) Master Project Schedule — Within 4 weeks of receiving each set of Schematic Drawings, Design Development Documents, and the Construction Documents from the Architect, the Construction Manager shall submit a Master Project Schedule for the Work covering the permitting, all submittals requiring Owner acceptance or approval, construction, and occupancy of the Work. This CPM schedule will serve as the framework for the subsequent development of all detailed schedules. The Master Project Schedule shall be produced and updated
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monthly throughout the term of this Agreement by the Construction Manager....
(b) Pre-Bid Schedules (Sub-Networks) — The Construction Manager shall prepare a construction schedule for that portion of the Work encompassed in each Trade Contract and material/equipment supplier bid package. The schedule shall be sufficiently detailed as to be suitable for inclusion in the bid package as a framework for contract completion by the successful bidder. It shall show the interrelationships between the Work of the successful bidder and that of other Trade Contractors and material/equipment suppliers and shall establish milestones keyed to the overall Master Project Schedule.
(c) Construction Schedules (Sub-Networks) — Upon the award of each Trade Contract, the Construction Manager shall develop, with the Trade Contractor’s input, a schedule which is more detailed than the Pre-Bid Schedule included in the specifications, taking into account the Work schedule of the other Trade Contractors. The Construction Schedule shall include as many activities as necessary to make the schedule an effective tool for construction planning and for monitoring the performance of the Trade Contractor....
(J. Ex. 239, CM Agreement, Art. 2.2.3(2),) Once construction began, the CM Agreement required that HCC do the following:
[CJontinue to provide current scheduling information and provide direction and coordination regarding milestones, beginning and finishing dates, responsibilities for performance and relationships of the Construction Manager’s work to the work of its Trade Contractors and suppliers to enable them to perform their respective tasks so that the development of construction progresses in a smooth and efficient manner in conformance with the overall Master Project Schedule.
The Construction Manager shall hold job-site meetings at least once each week with the Construction Team and at least once each week with the Trade Contractors and the representative of the Architect, or more frequently as required by Work progress, to review progress, discuss problems and their solutions, and coordinate future Work with all Trade Contractors.
(J. Ex. 239, CM Agreement, Art. 2.4.5.)
The key purpose of the detailed scheduling obligations assumed by HCC was to provide for the efficient and orderly coordination of the various trade contractors, suppliers, and others performing work on the Project so as to ensure the timely completion of the Project. The CM Agreement specifically stated that schedule conflicts among the trade contractors were not merely undesirable, but they constitute “errors, omissions or deficiencies” in HCC’s work, which it would be required to “promptly correct” at its own cost. (J. Ex. 239, CM Agreement, Art. 2.1.1.3.) The CM Agreement required HCC to:
[Establish, implement, and maintain throughout the entire period of the contract administration, practices so that the status of planned and actual Work is progressing in a proper, orderly, harmonious, well documented, well coordinated manner without conflict, interruption, disruption or delay in the schedule prosecution, execution, and completion of the required Work.
(J. Ex. 239, CM Agreement, Art. 2.4.11.) The CM Agreement further provided as follows:
[S]o as to ensure that all of the Work is well coordinated, executed without delay and completed within the contract time period, and done in full compliance and
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conformance with the requirements of the Contract Documents, [HCC] shall establish, implement and maintain throughout the entire period of the contract procedures and practices to supervise, monitor, and control those portions of the Work provided and performed by all Trade Contractors, subcontractors and others.
(J. Ex. 239, CM Agreement, Art. 2.4.11(9).) To ensure that it would have the necessary capabilities to undertake this intricate scheduling and coordination effort, HCC pledged to “maintain off-site support staff and competent full-time staff at the Project site authorized to act on behalf of the Construction Manager to coordinate, inspect the Work in place, and provide general direction of the Work and progress of the Trade Contractors.... ” (J. Ex. 239, CM Agreement, Art. 2.4.2.)
In addition to the above, a litany of other provisions obligated HCC to address scheduling, coordination, and constructa-bility issues on the Project. For example, the CM Agreement required HCC to do the following: (1) submit monthly reports regarding cost, schedule, and claim issues (J. Ex. 239, CM Agreement, Art. 2.2.2(2)); (2) use the CPM schedule “to plan, analyze and control progress during the construction”
(id.
at Art. 2.2.3(1)); (3) develop a construction schedule that “shall include as many activities as necessary to make the schedule an effective tool for construction planning and for monitoring the performance of the Trade Contractors”
(id.
at Art. 2.2.3(2)(c)); (4) submit written comments to Orange County and the Architect before construction begins regarding construction feasibility and constructability
(id.
at Art. 2.3.1); (5) disclose any known defects in the design, drawings, specifications, other construction documents, the constructability of the design, and numerous other issues
(id.);
(6) waive any claims based on design defects HCC reasonably should have identified in its pre-construction review
(id.
at Art. 2.3.2); (7) interface the work of the trade contractors so the work will be sequenced to maintain completion on schedule
(id.
at Art. 2.3.7); (8) report to Orange County on any “omissions, lack of correlation between drawings, and any other deficiencies noted” in the pre-con-struction phase
(id.);
(9) “coordinate” the work and “provide general direction of the Work and progress of the Trade Contractors”
(id.
at Art. 2.4.2); (10) ensure “that the portions of the Work provided and/or performed by Trade Contractors, subcontractors, and others is fully coordinated”
(id.
at Art. 2.4.10); (11) “[pjromptly address[] and resolv[e] any conflicts, gaps, or uncertainties that exist in the Contract Documents or which occur during the Work so as to ensure that the Work of all of the Trade Contractors, subcontractors, and all others is clearly understood [and] fully coordinated”
(Id.)
In sum, HCC was responsible for all matters relating to the construction of the Project.
B. EME and HCC
EME’s claim for breach of contract is based on -HCC’s breach of its duty, under the Trade Contract, to schedule and coordinate the work on the Project. HCC has argued that no such duty can be found in the Trade Contract or other contract attachments binding on the parties. The provisions of the Trade Contract giving rise to a duty to schedule and coordinate the work on the Project will be described thoroughly below, in the Conclusions of Law. This section will provide an overview of the Trade Contract and the general relationship between the parties. To the extent relevant, it will also present the testimony of various representatives of HCC and EME regarding HCC’s contractual obligations.
Under the Trade Contract, EME agreed to perform specific categories of electrical
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work on the Project in exchange for the contract price of $18,376,827. EME signed the Trade Contract on August 6, 2001, and HCC affixed its signature on August 10, 2001. (J. Ex. 239, Trade Contract Agreement, § 1.5; J. Ex. 12, 2.) The Trade Contract is a 43-page document, which specifically incorporates by reference several attachments. Also attached to the Trade Contract are the “Contract Documents,” which “supplement and complement” the Trade Contract. (J. Ex. 239, Trade Contract Agreement, § 2.2.) Attachment III to the Trade Contract is merely a list of these Contract Documents. The list alone is 96 pages long. (J. Ex. 239, Trade Contract Agreement, § 2.1; J. Ex. 239, Attach. III.) Various provisions of the Trade Contract and Contract Documents required HCC to schedule and coordinate the activities of the trade contractors.
The most important contractual provisions are summarized as follows. Under the provision of the General Conditions describing “Information and Services Required of [HCC],” HCC is required to provide staff for the “coordination and direction” of EME’s work and to “establish procedures for coordination among the Owner, Architect, Trade Contractor, other Trade Contractors and the Construction Manager with respect to all aspects of the Project.” (J. Ex. 239, General Conditions Art. 2.1.3.) Article 5.1.1 of the General Conditions, which apply to all trade contractors working on the Project, provides that the “Construction Manager will provide for coordination of the activities of other Trade Contractors.... ”
(Id.
at Art. 5.1.) Article 5.1.2 provides that “the Construction Manager will schedule and coordinate the activities of the Trade Contractor in accordance with the latest Project Construction Schedule.”
(Id.
at Art. 5.1.2.) Under Sections 9.3 and 9.4 of the Trade Contract, EME was required to “participate and cooperate in the development of HCC’s project schedule” and to “continuously monitor HCC’s Project Schedule so as to be fully familiar with the timing, phasing and sequence of operations of its Work and of other work on the Project....” (J. Ex. 239, Trade Contract Agreement, §§ 9.3 — 9.4.) Clause A.5.1 of Attachment II of the Trade Contract required the parties “to mutually agree to a schedule that will allow for the efficient completion of Trade Contractor’s Work, as well as coordination with the overall project schedule.” (J. Ex. 239, Attach. II cl. A.5.1.) Under Article 4.10.8 of the General Conditions, EME was to furnish to HCC short-term interval schedules covering eight week periods, “two week history and six week future.” (J. Ex. 239, General Conditions Art. 4.10.8.)
Although EME was required to both participate in the development of the overall project schedule and develop its own construction schedule in coordination with the overall project schedule, it was not able to do either. As described below, EME was not able to participate in the development and monitoring of the overall project schedule, in compliance with Section 9.3 of the Trade Contract, because HCC never provided EME with an updated and relevant overall project schedule. (Trial Tr. 4232: 9-13.) From the date of the execution of the Trade Contract through completion of the Project, an accurate overall project schedule never existed. Additionally, and as a consequence, EME and HCC never “mutually agree[d] to a schedule that will allow for the efficient completion of Trade Contractor’s Work, as well as coordination with the overall project schedule.” (J. Ex. 239, Attach. II cl. A.5.1.) HCC’s construction manager Pete Milner testified on this point as follows:
Q. And what they [EME] have to rely on in becoming familiar with the timing, phasing and sequence of operations is HCC’s schedule. Correct?
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A. Yes, sir.
Q. Okay. So in order for [Section 9.3] to make any sense, then, HCC’S schedule better be correct and up-to-date. Right?
A. I think you can make that leap, yes. (Trial Tr. 4232: 9-17.) As elaborated below, an accurate overall project schedule never existed.
It is clear from the evidence that HCC refused to acknowledge its responsibilities as problems with project coordination continued throughout the course of construction. For example, EME’s Assistant Project Manager Barry Hughes testified that when EME approached HCC during construction about the problems of lack of coordination and scheduling, HCC replied with its consistent refrain, we will “move the job along as we see fit [and] ... deal with [the] repercussions later.” (Trial Tr. 284: 15-16, Oct. 18, 2004; PL’s Ex. 242, Record of Conversation no. 64.) These repercussions would presumably include damage claims based on the lack of coordination. Mr. Hughes testified that he viewed HCC’s role as including the coordination of the Project, but that HCC’s typical response to objections to the poor coordination of the work of the trade contractors was as follows: “You take care of it, it’s your responsibility.” (Trial Tr. 202:7.) “I don’t care. Read your contract.” (Trial Tr. 241:5-8; Trial Tr. 338:21-23, Oct. 19, 2004; Trial Tr. 557:25-558:7, Oct. 20, 2004.) “We will deal with repercussions later.” (Trial Tr. 284:15-16; PL’s Ex. 242, Record of Conversation no. 64.)
In accordance with HCC’s position at trial, HCC Construction Manager Pete Milner testified that he did not believe that HCC had
any
contractual obligation to coordinate the work of the trade contractors. He testified specifically as follows:
I believe I’ve testified, again, not being a lawyer, I don’t believe that our trade contract requires or obligates us to do that coordination to the trade contractor. I believe the issues of fairness and reasonableness are those — are what give us that relationship with our trade contractors, to help coordinate their work.
(Trial Tr. 4246:10-17.) This position is not supported by the Trade Contract.
During the cross examination of Mr. Milner, he was asked whether his earlier testimony that HCC owed no coordination obligations to EME was contradicted by Section 5.1.2 of the General Conditions. He responded as follows:
Q. [T]he question I’m asking is, sir, would you not agree that section 5.1.2, where it says the construction manager will schedule and coordinate the activities of the trade contractor, that contradicts your testimony that you had no obligation to coordinate the work on the project?
A. If your question is related to looking at 5.1.2 in isolation without the rest of the contract, is it contrary to my testimony as far as our obligations for coordination.
Q. That’s my question.
A. Is that your question? Then my answer would be, yes, it is contrary to my testimony.
(Trial Tr. 4408:24-4809:11, Feb. 24, 2005;
see also
J. Ex. 239, General Conditions Art. 2.1.3.) Although he persistently denied that HCC owed any duty to coordinate the work of trade contractors, Pete Milner did agree that HCC had to be
reasonable
in how it coordinated the trade contractors. (Trial Tr. 4235:5-7.)
HCC Senior Electrical Project Manager Mike Sincavage likewise testified that while there might be an overall duty to coordinate, there was no duty to the trade contractor to coordinate the work on the Project. (Trial Tr. 6727:7-17, July 13,
*821
2005.) However, Mr. Sincavage later testified that he believed that a trade contractor would be entitled to payment if HCC did not meet its obligations of coordinating the overall Project. That testimony was as follows:
Q. Remember you talked about if the contractors could prove things to you, you would pay them additional monies? That was the predicate question. Do you remember us talking about that?
A. Yes.
Q. ... And if a trade contractor came to you and they were able to prove or establish that in fact, “Look HCC, you didn’t do your job, you didn’t coordinate the overall project,” is that something you would then pay them for?
A. Yes.
(Trial Tr. 6844:3-18, July 14, 2005.)
HCC’s position at trial was that it owed absolutely no duty to its trade contractors to coordinate the work on the Project. However, the testimony described above indicates that HCC’s representatives did not unequivocally support the hardline position asserted by HCC in this litigation. At least certain members of the HCC team operated under the assumption that HCC was required to be reasonable in scheduling and that an overall failure to coordinate would justify the payment of damages.
II. Breaches of Contract by HCC
As described above, HCC had a duty to adequately schedule and coordinate the work of the trade contractors, including EME, on the Project. Ample evidence was presented at trial establishing that HCC failed to adequately coordinate and schedule the work of the trade contractors on the Project, in violation of its obligations under the Trade Contract. Work on the Project took place in an uncoordinated nightmare, with trade contractors tripping over one another and hampering each others’ work. The work on the Project was completed, but in the most unproductive way possible.
It is always helpful to hear testimony from expert witnesses when dealing with the performance of duties in a highly specialized field such as the management of large, complex construction projects. The Court heard testimony from one expert retained to testify as to the adequacy of HCC’s efforts at scheduling and coordination of the Project. This expert was Gordon Curtis of Wagner, Hohns, & Inglis, who was retained by EME to testify at trial as an expert on a number of matters including the scheduling and management of the Project. (Trial Tr. 1443:16-23, 1449:4-6.) Mr. Curtis was a well-qualified expert in all matters on which he gave an opinion, and the Court gives great weight to his expert testimony.
Based on the evidence presented, including expert testimony, the Court will first describe the industry standards in construction management for scheduling and coordinating a major project such as the Orange County Convention Center. The Court will then walk through the various ways in which HCC breached its duties under the Trade Contract by failing to create and maintain an adequate overall project schedule and failing to adequately coordinate the work of the trade contractors on the Project, which resulted in damages to EME. Finally, the evidence indicates that these failures were exacerbated by the conflicts and problems within the HCC joint venture.
A. Best Practices in Construction Management
All established industries have standards, and the same is true of construction management. The standard practice in the construction industry for the scheduling and coordination of the work of trade
*822
contractors is called the critical path method of construction management, or CPM. (Trial Tr. 1461:19-1462:22.) The ordinary-practice in construction management is for schedules to be prepared in advance of construction that detail the process and flow of construction of the entire project, specifically providing the start and end dates of the various subcontractors on the different parts of the project. (Trial Tr. 1607:11-1610:5.) Under a CPM schedule, a subcontractor will know, in advance of construction, precisely what crews and equipment will be needed each day on the Project, and the location of their work at any given time. (Trial Tr. 207:1-22;
see also
Trial Tr. 238:5-25.) Another general responsibility of a construction manager is to perform a constructability review of the design documents. (Trial Tr. 2292:11-2293:11, Dec. 15, 2004.) A constructability review determines whether the project can be constructed as designed and will reduce the number of RFI’s on the project.
(Id.)
As a general rule in subcontractor scheduling, “the big stuff rules.” (Trial Tr. 194:2-195:1.) Heavy mechanical equipment and components must be in place before the work by other trade contractors, including electrical subcontractors, can begin. The term “predecessor activity,” as used in the construction industry, describes the work that must be done in an area before a subcontractor can begin its work. (Trial Tr. 177:9-178:6.) For an electrical subcontractor, several significant relevant predecessor activities include “block,” mechanical, duct work, pipe and sprinkler installation, framing, and the installation of outside electrical feeders.
(See
Trial Tr. 195:2-198:7; Trial Tr. 6132:4-16; Trial Tr. 6183:6-20.) These are predecessor activities that must be complete before electrical work in the area can commence. (Trial Tr. 1463:3-24.) Also, much electrical work cannot be installed until an area is “dried-in,” until the structure is completed such that rain cannot enter the interior space, without facing the chance that the work will be ruined. (Trial.Tr.221:19-223:16.)
A schedule instituting the CPM will appropriately dictate the flow of work across the project in a way that ensures that all relevant predecessor activity takes place before any trade contractor begins working in an area. (Trial Tr. 1607:11-1610:5.) Subcontractors are scheduled to follow one another such that before a subcontractor would be scheduled to commence work on a particular portion of the project, any subcontractors engaged in relevant predecessor activity will have completed their work on that portion. (Trial Tr. 177:9-17.) This logical flow also applies to the components of the work performed by a particular subcontractor. For an electrical subcontractor, rough work must be completed before trim work can begin. Rough crews install conduits, boxes on the walls, and wiring. The trim crews follow, installing the electrical devices. (Trial Tr. 212:7-22.) Electrical subcontractors invariably come at the end of the line of trade contractors. (Trial Tr. 1462:3-24.)
Where a project schedule departs from the CPM, one common result is something referred to as “trade stacking.” Trade stacking occurs when several trade contractors end up working simultaneously in the same area of a project. (Trial Tr. 804:6-18.) It happens when areas within the project are not available for subsequent trade contractor work to start in a timely manner. When the areas do become available for trade contractors to begin their work, “there is a stacking of the trades to try to accomplish the work ... all at one time. It causes all the trades to be trying to be working in the exact same location at the same time.... ” (Trial Tr. 804:13-17.) As is easily understood, the result is “not very productive.” (Trial Tr. 804:18.)
*823
B. The Failure of HCC to Adequately Schedule the Work on the Project
From the very start of construction, issues emerged with the Project schedule. By the time EME started working on the Project, there was no longer an overall project schedule in use as the means of coordinating the work of the trade contractors. EME’s expert witness, Mr. Curtis, testified that based on his analysis HCC did not use a CPM schedule to “plan, analyze and control the progress” of the work. (Trial Tr. 1604:3-22, 1606:2-10; J. Ex. 239, CM Agreement, Art. 2.2.3(1).) While HCC may have published schedules, there was no scheduling. (Trial Tr. 2275:13-16, 2279:13-18.) The result was a complete failure at coordination of the trade contractors. While EME expended every reasonable effort to coordinate its work with the other trade contractors (for example, by coordinating the spacing requirements for equipment), the actual coordination of the work on the Project required a schedule from HCC. (Trial Tr. 202:4-19.) As EME Assistant Project Manager Barry Hughes stated:
The distinction is, one, you’re sitting down in a trailer, in a room with the representatives of all the different trade contractors figuring out by the plan of what you know of your system a space to be able to use it so that the installations are coordinated at a level and no conflicts ...
The other side of that is the coordination of the installation of that work, that’s where the sequence and schedule and the layering of that installation is actually worked out on paper for a schedule.
(Trial Tr. 202:21-203:10.)
From the date EME stepped foot on the Project, there was no usable overall project schedule to coordinate the trade contractors working on the Project. (Trial Tr. 234:3-20.) The master project schedule became the focus of immense criticism on the Project. The trade contractors felt that the method and manner of scheduling that HCC had represented would be followed on the Project when the trade contractors were preparing their bids was not the way in which HCC had begun construction of the Project. HCC was not using the project schedule to manage or sequence work, and the contractors were not being allowed to work in an efficient manner. The scheduling and sequencing of work is particularly critical to trade contractors at the end of the line, such as EME, whose work is dependent on predecessor trade contractors, including concrete, glazing, roofing, framing, drywall, plumbing, and mechanical trade contractors. (Trial Tr. 1463:3-1464:25, Oct. 25, 2004; Trial Tr. 1710:7-10, Oct. 26, 2004.) The following sections will present in chronological fashion HCC’s continuing failure to adequately schedule the Project using the industry-standard CPM.
1. 2001
The evidence at trial established that work on the Project became unsynchron-ized at the very beginning of construction, and that HCC never recovered — HCC was never able to achieve a synchronized job sequencing pattern.
{See
Trial Tr. 234:3-20.) The failed schedule affected earlier trade contractors, including the structural trade contractors.
{See
Trial Tr. 236:17-23.) It was the subject of daily conversation in the Project.
{See
Trial Tr. 236:24-237:3.) HCC’s January 2001 monthly report to Orange County noted the scheduling issue as follows:
Based on the review of the preliminary Composite Building Set, HCC is concerned that the 2/1/01 issuance [of the Composite Building Set] will be substantially incomplete and lacking in coordination. If this turns out to be the case,
there will be impacts to the overall schedule.
*824
(Pl.’s Ex. 235, Jan. 2001 Report pt. 3A (emphasis added).) EME Assistant Project Manager Barry Hughes identified the scheduling problem as early as September 1,2001. (Trial Tr. 236:11-16.)
On August 9, 2001, three days after EME signed the Trade Contract, HCC published a new overall CPM schedule for the Project. (Trial Tr.2012:20-25, Oct. 27, 2004; J. Ex. 239, Trade Contract Agreement signature page.) Upon receiving the revised baseline schedule, and becoming aware of the new-sequencing of work, EME had serious concerns about incomplete or missing schedule items, flaws in schedule logic, and the lack of proper coordination among the trade contractors. (Trial Tr. 268:8-23.) EME began facing schedule impacts due to delays (Pl.’s Ex. 242, Record of Conversation no. 15), limited work area and site access problems
(id
at no. 19), and lack of sequencing and coordination of the trade contractors
(id
at nos. 22 and 34).
As problems arose in the field that delayed or impeded the work, HCC began manipulating the project schedule to make it appear to Orange County that it was upholding the completion date of May 1, 2003. For example, in the new OC 25 schedule of August 9, 2001, HCC reduced the time allotted for punch list and final inspections by eleven days. (PL’s Ex. 38.) In other words, HCC reduced the time allotted for a controlling piece of work at the end of the Project so as to conceal the lack of progress during earlier phases. In this way, HCC was able to hide from Orange County (and for a while the trade contractors) the true extent of the delays. (Trial Tr. 3976:17-3980:5, Feb. 9, 2005.) This made it appear as though HCC had not lost any time, when in fact the schedule was beginning to be compressed. HCC had schedules, but they were not for scheduling. (Trial Tr. 2283:21-23, Dec. 14, 2004.)
On August 21, 2001, HCC sent out a memorandum entitled “Baseline Schedule Status Reporting Procedures” setting forth the manner in which the senior project managers were to provide the necessary information for the baseline schedule updates. (PL’s Ex. 39.) The memorandum concluded as follows:
It is important that the procedures outlined above are adhered to on a monthly basis. The schedule can be used for its intended purpose only if accurate update information is provided.
(Id.)
This memorandum was part of HCC’s efforts to fulfill its coordination and scheduling obligations.
(See, e.g.,
Trial Tr. 2746:14-2747:12, Feb. 1, 2005.) However, HCC never actually followed the scheduling procedures outlined in the memorandum. (Trial Tr. 6871:18-6872:20.) The CPM schedule was supposed to be updated monthly by HCC so that it could be used for its “intended purpose” of scheduling the work. (Trial Tr. 6871:3-25, July 14, 2005.) It was not.
(Id.)
EME was not the only party becoming concerned with the Project schedule. Some members of HCC’s senior management were likewise uneasy about the state of affairs on the Project. On September 29, 2001, HCC Senior Project Manager Gordon Gibson wrote to HCC Project Executive Bob May concerning management failures within the HCC joint venture. Mr. Gibson complained that “the level of input from those managing the work is so lacking.” (PL’s Ex. 424.) He continued as follows:
I could go on and on about what’s not being done to get on top of this job because all I need to do is look at the cost issues and the [request for information] issues and neither of these is being addressed as they should be. I’m glad that someone is coming in to take [HCC Construction Manager] Jim [McElroy]’s
*825
old position[
3
] but I doubt very seriously if it will make a difference. The mold has been cast and
no one seems to care whether [HCC General Superintendent] Tom Spall has the material and manpower necessary to meet the dates that he discussed in Thursday’s staff meeting. How many of the [project managers] are aware of what the Schedule says?
... If nobody else cares then why should I.
I must admit that I’m getting to the point where I don’t care anymore. Let the chips fall where they may.
(Id.
(emphasis added).)
An HCC internal memorandum, authored by a senior manager and dated October 16, 2001, contains several revealing statements. First, the senior manager admitted that the revised baseline schedule, or CPM schedule, had forced the trade contractors to work out of sequence and that HCC was attempting “to remedy this situation.” (PL’s Ex. 45, Item 4.) Second, in discussing the revised baseline schedule, he admitted that HCC’s baseline schedule and subsequent updates did not “reflect the actual progress in the field.”
(Id.
at Item 2.) Third, the senior manager contended that because the baseline schedule and updates were inaccurate, HCC was “attempting” to use the look-ahead schedules to get the work “back to a logical flow....”
(Id.)
Look-ahead schedules, also referred to as “short term schedules” and “near term schedules,” were short-term, non-detailed, bar-chart schedules outlining generally where the trade contractors could expect to be working. Initially the look-ahead schedules were 90-day schedules, but they were reduced to three-week schedules, then two-week schedules, and finally were abandoned entirely. (Trial Tr. 6084:22-6085:6, Apr. 28, 2005.) Instead of being used as a tool to supplement the project schedule, they were not tied into or connected with the project schedule and did not allow for any degree of long-term planning, sequencing, or organization of the trade contractors’ crews, equipment, or materials. (Trial Tr. 4470:9-21, Mar. 24, 2005.) The memorandum dated October 16, 2001, was the second HCC memorandum in a month in which HCC acknowledged that it was not using a baseline schedule to coordinate the work on the Project. (PL’s Ex. 45, Item 2; PL’s Ex. 424.)
As concerns with HCC’s scheduling efforts grew, EME retained an outside scheduling consultant, Chitester Management, to review the updated baseline schedule of August 9, 2001 (the 2001 GMUP schedule, also labeled OC 25), against the original schedule of November 8, 2000 (the 2000 HOLE schedule). (Trial Tr. 785:4-9; Trial Tr. 1098:11-21.) The 2001 GMUP schedule was produced by HCC three days after EME signed the Trade Contract and one day before HCC affixed its signature. (Trial Tr. 5697:1-8; J. Ex.239, Trade Contract Agreement signature page.) On October 26, 2001, Chi-tester Management reported its findings, which confirmed EME’s suspicions that the 2001 GMUP schedule that HCC adopted after EME signed the Trade Contract was unworkable without wholesale changes. (Trial Tr. 786:9-14.)
On October 31, 2001, EME forwarded to HCC Senior Project Manager Mike Sinca-vage a copy of the report of Chitester Management, showing the negative impact of HCC’s failure to competently schedule the work on the Project. (PL’s Ex. 47, 1; Trial Tr. 785:4-786:4.) In this communica
*826
tion, EME notified HCC that the new master project schedule would have catastrophic consequences for the scheduling and coordination of EME’s work and would result in significant changes to EME’s work and untold increased costs. (Pl.’s Ex. 47, 1;
see
Trial Tr. 787:3-788:19.) The Chitester Management report also described the actual flow of work on the Project and demonstrated that the actual flow had no correlation to the 2001 GMUP schedule. (Trial Tr. 781:15-23.)
EME’s letter of October 31, 2001, also notified HCC that the 2001 GMUP schedule failed even to depict all of the work EME was to perform and did not tie EME’s work to the critical path at all, which would result in “numerous and inefficient” mobilizations and demobilizations within the job site. (Pl.’s Ex. 47, 1.) The letter further described several areas where EME’s work was not coordinated with other trade contractors, which would “result in EME incurring labor inefficiencies.”
(Id.
at 1-2.) The October letter also contained a schedule analysis describing the likely effect of reducing EME’s work duration from 116 weeks to 79 weeks.
(Id.)
However, because the schedules were incomplete, a comparison of the labor hours required under the two schedules could not be done, and it was impossible to predict the full impact of the new schedule. (Trial Tr. 1102:15-1109:1.)
HCC did not respond in writing to EME’s letter of October 31, 2001. (Trial Tr. 4262:21-4263:7, Feb. 10, 2005.) In response, HCC met several times with EME to discuss the schedule. (Trial Tr. 788:20-789:5.) During at least two of these meetings, senior personnel from the Clark Construction arm of the HCC joint venture stated candidly that they were aware of the issues with the schedule, but that because Hunt Construction was the controlling member, there was nothing they could do to help EME. (Trial Tr. 789:7-22.) As anticipated in the Chitester Management report, EME experienced enormous difficulties in efficiently performing its work. EME was required to work under conditions that were quite different than what had been represented in the Trade Contract and upon which EME had based its bid price.
Throughout the fall of 2001, EME repeatedly requested a copy of HCC’s overall project schedule. (Trial Tr. 1114:2-10.) Although both the Trade Contract and the CM Agreement unambiguously required HCC to furnish this schedule to EME at the very outset for use as the basis for scheduling and coordinating EME’s work and the work of the other trade contractors, HCC refused to provide a copy for months after EME began work. (Trial Tr. 319:8-23, Oct. 19, 2004.) Testifying about the difficulty EME had in acquiring the overall project schedule from HCC, EME’s Assistant Project Manager Barry’ Hughes stated as follows:
In the beginning we kept being told that we were going to get one, it’s coming, they’re still working on [it], then several months later it was, well, we don’t know if we’re going to use one, we’re using a three week now and that’s what we’re going to use to build the job....
(Id.
at 11. 15-20.)
As highlighted in HCC Scheduler George Perkowski’s memorandum of October 16, 2001, other trade contractors were voicing similar complaints.
(See
Pl.’s Ex. 45.) Encompass, the electrical subcontractor awarded the part I electrical work, repeatedly wrote to HCC regarding HCC’s failure to provide an overall project schedule incorporating Encompass’s schedule. (PL’s Exs. 50, 56, 58, & 60.)
2. 2002
In mid-January 2002, HCC finally provided the trade contractors with the re
*827
vised baseline schedule (also called OC 30). (OC 30; Data Date of December 31, 2001;
see
Pl.’s Ex. 67.) After performing an analysis of the revised schedule similar to the analysis EME commissioned of the 2001 GMUP schedule, Encompass responded to the OC 30 schedule on February 15, 2002. (Pl.’s Ex. 62, 1.) Encompass advised HCC that the revised schedule was not accurate — it contained a “fatal logic error” and was incomplete.
(Id.)
Moreover, Encompass warned HCC that substantial completion would be delayed six to eight months because “precedent work by others has not progressed in a timely manner.”
(Id.)
EME echoed similar complaints about the schedule being incomplete. EME Senior Project Manager Mike Estes testified that the overall project schedule that EME eventually received from HCC was only half complete. (Trial Tr. 1114:23-1115:4.) Among the most glaring errors, it inexplicably omitted the electrical work from the entire south structure. (Trial Tr. 1115:1-4.)
On March 18, 2002, EME wrote to HCC, stating that the “schedules produced by HCC are incorrect and do not realistically represent the actual sequence, durations, or delays to the activities” EME was performing. (Pl.’s Ex. 66, 1.) In the same letter, EME pointed out that the oversights had already caused delays and inefficiencies and would continue to do so.
(Id.)
EME balked at the position taken by HCC that the coordination of the trade contractors was not HCC’s responsibility and that the sequencing, scheduling, and coordination of the trade contractors was as good as it was going to get. HCC had told EME that it would “just [have to] deal with it.”
(Id.)
Also on March 18, 2002, Lou Wells, one of the two HCC schedulers, wrote in a draft letter to Encompass that “construction is progressing based on the HCC near term schedule,” not based on the overall master schedule. (Pl.’s Ex. 67.)
On April 23, 2002, EME wrote HCC again to complain about the lack of an overall master schedule incorporating the trade contractors’ schedules. (Pl.’s Ex. 78.) EME pointed out that HCC was relying solely on the look ahead schedules, despite the requirement in the Trade Contract for EME to participate and cooperate in the development of the master schedule and to monitor the master schedule as work progressed.
(Id.)
EME warned HCC that if the looming completion deadlines were “to be met, it is imperative that EME receive some feedback on the schedule which was submitted three months ago and that all contractors on this project get a grasp on an overall
published
Project Schedule” instead of relying on three-week look ahead schedules which vary from month to month and are “preventing all parties on this Project from seeing the overall picture.”
(Id.
(emphasis in original).) EME warned that “a massive stacking and compression of trade [would] occur during the next year of work. This should never have happened.”
(Id.)
HCC’s Senior Project Electrical Manager Mike Sincavage acknowledged that EME was damaged as a result of the problems addressed in EME’s letter of April 23, 2002. He testified as follows:
Q. Do you agree that the issues that EME complained about with regard to scheduling and coordination resulted— or caused EME to incur additional costs in the performance of their work?
A. Yes.
Q. Okay. And, in fact, those are the very same issues that we’re looking at here, or at least some of the very same issues in Plaintiffs Exhibit 78, correct?
A. Some of the issues, yes.
(Trial Tr. 6984:12-20, July 18, 2005.)
On April 24, 2002, HCC Scheduler Lou Wells prepared a schedule review of HCC’s most recent schedule update of
*828
March 29, 2002, OC 33. (Pl.’s Ex. 322, Schedule Review as of March 29, 2002.) The schedule review confirmed that the Project was behind schedule and that, without question, the Project would be completed late.
(Id.
at Pt. I Summary of Findings and Pt. II Summary of Findings.) Mr. Wells predicted that HCC would complete the Project 70 days late and that the Project was, at that time, six percent behind schedule.
(Id.
at Pt. I Summary of Findings.) At that rate, HCC would be assessed $2,100,000 in liquidated damages.
(See
J. Ex. 239, General Conditions Art. 9.4.1.) After analyzing the possibilities for making up lost time, Mr. Wells bluntly told his superiors that “total recovery is not an option.” (Pl.’s Ex. 322 at Pt. I Summary of Findings and Pt. II Summary of Findings.) Confirming what EME and the other trade contractors had said, HCC Scheduler Lou Wells stated as follows:
[T]he [Master] [Sjchedule no longer reflects the true project status, and there- • fore will not accurately forecast project completion.
Continuing to update the schedule based on the established Critical Path, without regard to the concurrent activities NOT ON THE CRITICAL PATH has resulted in a condition known as stacking of trade contractors[.]
This produces an un-manageable and un-achievable schedule due to resource demands.
(Id.
at Pt. I Sched. Critique — OC 33 (emphasis in original).)
On May 1, 2002, EME wrote to inform HCC that it was unable to plan its work, organize with other trade contractors, or determine its labor needs because of HCC’s reliance on three-week look-ahead schedules. (Pl.’s Ex. 80.) EME suggested that HCC had ignored the issue.
(See id.)
EME Assistant Project Manager Jim Hughes testified as follows regarding the impact on EME of HCC’s failure to properly schedule the Project:
[Electricians are one of the last MEP trades to come through. So all of the changes in scheduling, all this bouncing around by other contractors prior to us impacts us all over again....
Everything impacts each other because I’m told to go over in this area, well, there was somebody there that had to perform work but he’s not there yet, he wasn’t scheduled to be there until next week, now I’m in his way. Well, then he has to go out and work somewhere else because HCC said to do this and he delays somebody else or causes problems for somebody else. Eventually all these variables spread out in what I call the spider web impacting just about everybody eventually.
(Trial Tr. 296:17-297:10.)
On May 24, 2002, EME Assistant Project Manager Barry Hughes met with HCC’s Moe Young and Tom Spall about HCC’s failure to schedule the work. (Pl.’s Ex. 242, Record of Conversation no. 172.) HCC agreed that the value engineering changes to the mechanical design and the resulting delays with installation had impacted EME’s schedule.
(Id.)
Mr. Hughes recorded the following in his notes:
I told him that I thought that HCC was overwhelmed. That was probably the case, however the fact remains that they were unable to schedule any work for EME. The subject of Tom’s scheduling inspections for area and expecting the trades to perform their work based only on inspection date came up again. Told him that we found that unacceptable. To schedule an inspection without being able to schedule and sequence the work prior to the inspection was “ludricrous” [sic] (I did not use this word, but this is how I felt).... It is my impression that Tom will never be able to schedule and
*829
sequence EME’s work. I will have to try to spend more time in the building and do it for ourselves. I have discussed the inefficiencies involved with this type of installation and apparently this is not important to them. ‘Their only goal is to get the job done and to push, push, push.
(Id.)
HCC delayed incorporating all of the trade contractors’ schedules into an overall project schedule.
(See
Trial Tr. 319:9-23.) Not until OC 35, the updated schedule dated May 31, 2002,
4
did HCC include Encompass and EME’s schedules in the master schedule. (PL’s Exs. 88, 425.) A second part to the schedule review, relating to OC 35, was issued on June 26, 2002. (PL’s Ex. 322, Intro.) Part two “responded] to [HCC Senior Construction Manager] Pete Milner’s request that instead of using historical data, [HCC Scheduler Lou Wells] take a look at the most recent three month’s progress to reflect a higher level of productivity.”
(Id.)
The result was “[a]lmost identical to the previous findings of [completing] 2.5 months late....”
(Id.)
Moreover, when Mr. Wells forecasted a completion date based on the gross billings as of April 24, 2002, he concluded that the Project would be completed five months late.
(Id.)
In the recommendations section of the report, HCC’s Mr. Wells echoed EME’s sentiments regarding the reliance on look-ahead schedules:
Dependence on the short interval schedules to measure the overall project performance must be discontinued. Routine failure to complete activities shown on these schedules indicates a lack of focus on the overall objectives. And since the master schedule is not properly structured the impact of missing schedule dates is diluted, and non consequential.
(Id.
at Pt. I Recommendation.) Despite Mr. Wells’ recommendation that dependence on short-interval schedules should be discontinued, HCC continued to use them as the sole means of scheduling the Project. (Trial Tr. 3977:21-23.)
HCC also continued to insist that the completion date for the Project had not •been affected. In the November 2002 monthly report to Orange County, HCC stated:
Although much work remains to be completed and virtually all of the float time in the Project schedule has evaporated, overall construction progress continues to be satisfactory and remains on track for the scheduled Substantial Completion by May 1,2003.
(PL’s Ex. 235, Nov. 2002 Report pt. 1A.) On November 5, 2002, after a scheduling meeting involving HCC, the Architect, and Orange County, the Architect wrote that the scheduling meetings “do not appear to update us on what is going on in the field” and are a waste of time because the construction manager could not address scheduling concerns. (PL’s Ex. 45, Email from Susan Richardson to Mark Gustetter, HHCP/Arehitects, Inc. (Oct. 31, 2002, 4:47 PM).) The Architect further noted that HCC Senior Construction Manager Pete Milner assured a “frustrated Owner” that HCC “will get done by May 1, and that his gut feeling is that the job is 75% complete.”
(Id.)
HCC could provide no details because it had no realistic overall schedule.
(See id.)
*830
Two weeks later, on November 13, 2002, EME wrote HCC a letter that included the following:
We know what [sic] the public and newspapers are saying that the Convention Center is ahead of schedule and under budget but if you stand back and look at the project and where it is that in
&k
months this job will not be done as everyone is being told.
In closing, we need to know how HCC is planning to complete this project in the time allotted. We feel that now the schedule can not be achieved by any electrical contractor as per the original bid requirements. Finally how is HCC planning to compensate various trade contractors for the clear and provable items that have caused the schedule to slip or not be achieved for the past 14(sic) months of this scope.
(Pl.’s Ex. 152, 1.) EME attached a copy of its letter of October 31, 2001, enclosing the Chitester Report. The October 2001 letter had placed HCC on notice that the problems EME and the other trade contractors had been and would be experiencing were the anticipated direct result of HCC’s failure to develop a workable overall project schedule at the outset.
(See id.)
These frustrations are echoed in a letter dated December 20, 2002, from subcontractor Exterior Walls, Inc., which described the problems resulting from having to install drywall in a building that is not yet dried-in. (Pl.’s Ex. 171.) The letter states that there is “no evidence of a working CPM schedule” and that since Exterior Walls’ letter of May 16, 2002, the “entire project has endured a pathetic state of disarray.”
(Id.)
The subcontractor remonstrated, “I think we have been exposed to a society of ineptism (sic).”
(Id.)
Exterior Walls likewise complained about the lack of coordination of the trade contractors:
If we were granted (1) Christmas wish for 2002, it would be a completion schedule identifying all other trades[] outstanding activities with projected completion dates.
It seems that our work on the South Concourse has changed from installing metal framing and drywall finishes to tracking down inspections and hunting for each traders] sign-off for any given area. There are many reasons we have been forced to play this game but nevertheless, EWI still awaits sign-offs despite the lack of building dry-in.
Hopefully our Christmas wish will come true and based on the way this project is managed thus far, a punch list for this project will be a mile long and no direction where to start. Good luck,
we’ll be looking for Santa or someone with a written plan.
(Id.
(emphasis added).)
3. 2003
HCC was unable to keep pace with the demands of maintaining, updating, and implementing a project schedule to coordinate the work. To further aggravate the situation, around the 2003 New Year, one of HCC’s two schedulers, Lou Wells, passed away. (Trial Tr. 3973:24-3974:2.) HCC’s junior scheduler, George Purkow-ski, took over scheduling responsibilities, but Mr. Wells was never replaced. (Trial Tr. 6249:24-6250:17.) Shortly thereafter, HCC completely gave up trying to schedule the Project. On January 13, 2003, HCC issued the last look-ahead schedule. (J. Ex. 91, 1.) On January 31, 2003, HCC issued the last master schedule, OC 43. (Trial Tr. 1638:22-1639:3.)
On February 20 and February 24, 2003, EME wrote HCC about the effect of the acceleration of the metal stud and drywall contractor’s work and complained that it was being required to simultaneously work
*831
over the entire 2.8 million square foot building site like a “cost plus contractor.” (Pl.’s Ex. 177; J. Ex. 69.) EME pointed out that the acceleration of the work of the metal studs and drywall contractor had not been coordinated with EME or shown on any schedule, and that the result was significant out-of-sequence work. (Pl.’s Ex. 177; J. Ex. 69 & 70.) EME also stated that while design changes had delayed the Project, the impact of the changes was more pronounced because of the lack of scheduling and coordination. (PL’s Ex. 177; J. Exs. 69, 70.)
On May 29, 2003, EME filed its Chapter 11 proceeding in the Middle District of Florida. The building was substantially completed on August 8, 2003. Even without the benefit of a qualified expert witness, it is clear to the Court that HCC failed to adequately schedule the work of the trade contractors, and because of that failure, substantial additional effort and expense was incurred by EME.
4. Expert Analysis of HCC’s Scheduling
EME’s expert witness Mr. Curtis began his analysis by reviewing the various Project schedules. (Trial Tr. 1461:9-18.) He testified that project schedules are a “coordination communication tool” between the trade contractors and the construction manager and are particularly important to an electrical contractor because they are a “follow-on contractor” that is at the “mercy of everybody else on the project.” (Trial Tr. 1462:16-1464:25.) An electrical contractor is one of the first trade contractors on the job doing temporary power and one of the last trade contractors to leave. (Trial Tr. 1463:10-17.) Further, “most of the time they have to follow the drywall contractor and follow the mason contractor, obviously follow the steel [and] concrete [trade contractors].” (Trial Tr. 1463:21-24.) An electrical contractor has no ability to force another trade contractor to relocate their crews or materials to another area. (Trial Tr. 309:10-15.)
Mr. Curtis testified that in his opinion the HCC schedules were “just horrible,” had “no resemblance of being a schedule at all” and were the biggest problem EME faced on the Project. (Trial Tr. 1465:16-23, 1602:11-16, 2280:23-2281:24;
see
PL’s Ex. 280, 60-62.) He further testified that it was the worst attempt at scheduling he had ever seen in his forty years of experience in construction. (Trial Tr. 2283:5-11.) The following testimony summarizes Mr. Curtis’s assessment of HCC’s overall failure to adequately schedule and manage the Project:
Q. All right. What opinions did you form after reviewing the documentation, discussing with the individuals, various individuals you talked about yesterday, what opinion did you form with regard to lack of a real schedule?
A. I believe there was no real schedule on the project, there was no master schedule, and subsequent look-ahead schedules that really had any meaning. There were schedules but the schedules didn’t have the scheduling elements that are necessary to coordinate the trades and complete the job, project, in an economical, smooth process for the contractors.
Q. And as a result of that was — did EME incur any damages?....
A. I believe most of their damages was (sic) due to the lack of scheduling.
(Trial Tr. 1601:23-1602:16.)
It was Mr. Curtis’s opinion, which this Court finds credible and well supported by the evidence, that the master schedule was not actually used by HCC in the field to build the Project but was more likely used for public relations purposes — to show Orange County that “everything was okay on the job .... [b]ecause they were holding the end date.” (Trial Tr. 1466:5-6;
see
*832
Trial Tr. 555:12-556:25, Oct. 20, 2004; Trial Tr. 1637:14-1638:6; Trial Tr. 2276:3-21.) To keep the same Project completion date, HCC began manipulating the schedule. Mr. Curtis further testified as follows:
Q. Did you see any indication based on your review whether or not HCC was manipulating the schedule in this matter?
A. Yes, they were.
Q. Can you explain that?
A. Well, what happened here is that there was a critical activity and the critical activity did not get performed during that month so it showed up the next month. Well, if it showed up 20 days later, 20 working days later the project would be extended 20 days. What 1 did is I went through each of the schedules and determined how the activities were changed through digger reports, this is a special program that you use, and for each month the completion date stayed the same, but the previous critical path activities kept on moving out and moving out.
So they were getting delayed on the project which would normally have delayed the completion of the project, but the schedule was revised continuously to make sure that the schedule showed to be complete on time, that I consider manipulating the schedule.
(Trial Tr. 1610:20-1611:17.)
Many of the problems with scheduling stemmed from the fact that HCC’s schedules did not coordinate or “tie-in” the dates between the finish of one work activity and the finish of subsequent work activity. (Trial Tr. 2225:1-2229:22, 2267:5-12.) Instead of coordinating the finish dates of related work activities, HCC used the project completion date as the tie-in. The schedule “continually held the finish date on the project while all these activities were taking longer and longer and longer to do, so there was no logic as you go through [CPM] methods, so that’s why everything happened at once.” (Trial Tr. 2229:18-22;
see also
Trial Tr. 2276:3-21.)
Additionally, the schedules allotted an excessive amount of float time. (Trial Tr. 2266:24-25.) “Float” is the amount of time reflected in a schedule to accomplish a particular task in excess of the time actually needed to complete the activity. (Trial Tr.l962:9-15.) Items of activity on a schedule’s critical path should have no float time. These activities should “be done when [the schedule] says they have to be done.” (Trial Tr. 2268:10.) HCC’s schedules had a “tremendous amount[s] of float,” had improper scheduling logic, and were not proper CPM schedules. (Trial Tr. 2229:3-22, 2266:24-2267:12, 2274:16-2276:21.)
Thanks to the internal memoranda prepared by HCC Scheduler Mr. Wells, HCC was alerted to these scheduling problems but took no action to correct them.
(See
Pl.’s Ex. 322, Intro.) HCC had been informed that the Project was behind schedule, that “total recovery [was] not an option”
(id.
at Pt. I, Summary of Findings), that the HCC schedules were causing and would continue to cause stacking “due to improper logic relationships between activities”
(id.
at Pt. I, Sched. Critique — OC 33), that the published schedules were “unmanageable and un-achievable”
(id.),
and that dependence on the short-term interval schedules to measure overall performance should stop
(see
Trial Tr. 2272:6-2279:23). HCC was aware, as early as April 2002, that although the published schedule showed that the job would be completed on time, they “no longer reflected] the true project status, and therefore will not accurately forecast project completion.” (Pl.’s Ex. 322, Pt. I, Sched. Critique — OC 33.) Nevertheless, HCC changed nothing. (Trial Tr. 2279:19-23.) HCC continued to rely on short-term schedules that had no
*833
relationship to the overall project schedule and eventually gave up altogether in scheduling the Project. (Trial Tr. 2279:19-2280:3.) The result was that the Project had no overall schedule. (Trial Tr. 2275:13-16, 2279:1-18, 2280:16-21.) At most, HCC scheduled a room or an area for a given time. (Trial Tr. 2279:15-18.)
The Court finds credible and persuasive the expert testimony of EME’s expert witness, Mr. Curtis. Together with the Court’s own conclusion based on a review of the lengthy evidence presented at trial, it is quite clear that HCC failed to create or maintain schedules that in any way established the critical path for this Project. HCC’s failure to schedule the work of EME and the other trade contractors on the Project was utter and complete and clearly resulted in significant damage to EME.
C. The Failure of HCC to Adequately Coordinate the Work on the Project
HCC also failed to adequately coordinate the work of the trade contractors on the Project. HCC’s failure to provide and maintain an adequate CPM schedule heavily impacted Project coordination. Without workable schedules, HCC coordinated the trade contractors in an ad hoc manner during the Project. The failure to prepare and follow a schedule sequencing the activities of the various subcontractors working on the Project had a negative effect on the ability of subcontractors to perform their work as originally contemplated in their bids. As the work continued to be delayed, and the schedule compacted, these problems worsened. However, HCC was most concerned with the requirement that it complete the Project in time for the scheduled September “Surf Expo.” (Trial Tr. 1475:8-17.) Several of the major contributing and resulting problems associated with the poor coordination of this Project were the misuse of requests for information, the haphazard flow of work, trade-stacking, and uncoordinated inspections. These problems will be addressed in order.
1. Requests for Information
One of the failures and inefficiencies on the Project that contributed to the lack of coordination was the improper utilization of requests for information, or RFI’s, as a means of making revisions to the construction designs. During construction, 5,555 RFI’s were issued.
(See
Trial Tr. 6761:13-18.) Using RFI’s to make revisions during the process of construction is inefficient and had a negative impact on the coordination of the work of the trade contractors, including EME. This problem arose early in the construction, long before EME signed the Trade Contract and began working on the Project.
As explained by EME’s expert, Mr. Curtis, a constructability review of the design documents, including a review of the whole project and of the work of the trades, is one of the general responsibilities of a construction manager. (Trial Tr.l963:6-1964:14.) Mr. Curtis testified on cross examination that “[ajnybody who has even a minimal background in the construction industry would know that a construction manager, like HCC, on a project like the phase V project!,] was going to perform a design review....”
(Id.)
While HCC did perform a design review for constructability, its review did not cover any of the electrical work on the Project. (Trial Tr.l983:13-17.) Instead, HCC decided not to perform a constructability review of the electrical drawings and instead forced EME to use the RFI’s process to complete the designs.
(See
Trial Tr. 6504:2-7.) Although HCC Senior Project Manager Mike Sineavage asserted that this process “worked out great,” the overwhelming evidence was to the contrary.
(Id.)
Under
*834
the General Conditions, HCC shared the responsibility of promptly responding to RFI’s with the Architect: “The Construction Manager and/or Architect shall respond to RFIs within ten (10) working days.” (J. Ex. 239, General Conditions Art. 1.2.5.)
HCC was aware that the design documents were not complete. In its January 2001 monthly report, HCC noted that “it is apparent that, similar to previous Drawing Packages, significant revisions and numerous RFIs will be required to complete the documents.” (PL’s Ex. 235, Feb. 2001 Report pt. 1A.) Likewise, HCC’s February 2001 Monthly Report stated that “the Composite Building Set was far less than complete and coordinated. In particular, the electrical work and reflected ceiling plans were significantly incomplete.... ”
(Id.
at pt. 3A.)
From the beginning, the Architect blamed HCC for the RFI’s and the lack of coordination, arguing that any problems arising from the designs occurred because HCC had not performed the necessary “final coordination of the design amongst the disciplines” during the design development phase. (Pl.’s Ex. 9, Email from Mark Gustetter, Project Architect, HHCP/Architects, Inc., to Bob Wilson, et al. (Mar. 29, 2001, 6:20 p.m.).) According to the Architect, the failure of HCC to complete a pre-construction review resulted in the many revisions and changes to construction drawings that were otherwise “complete.”
(Id.)
The Architect accused HCC of constantly attempting to shift the blame away from itself and onto others, stating that the problems HCC complained of were caused by HCC. (PL’s Ex. 161, 2.)
HCC continued to complain to Orange County that it was dealing with excessive RFI’s throughout the Project. HCC’s April 2002 monthly report stated that “[i]n lieu of issuing Revisions for changes in the work, the Design Team has been increasing the use of the RFI process to make the changes, when the RFI process is supposed to be for the purpose of clarifying the Contract Documents, not changing the Contract Documents.” (PL’s Ex. 235, Apr. 2002 Report pt. 3A) Likewise, in the June 2002 monthly report, HCC stated that the RFI process was being misapplied:
The volume of Revisions to the Construction Documents issued by [the Architect] has subsided significantly. However, many design coordination issues still exist that are having to be handled in the RFI process in lieu of the reissuance of conformed and coordinated drawings, which would benefit HCC and the multiple trade contractors and subcontractors involved. In addition, the RFI process is now frequently used by [the Architect] as the method to issue changes to the Construction Documents. The numerous and substantial Revisions previously issued continue to impact both the physical work and administrative work.
(PL’s Ex. 235, June 2002 Report pt. 3A.) In HCC’s March 2003 monthly report, it further complained that the lack of completeness and coordination of the design documents was resulting in excessive RFI’s. (PL’s Ex. 235, Mar. 2003 Report pt. 3A; Trial Tr. 6761:17-6762:13.)
At trial, however, HCC Senior Project Manager Mike Sincavage, who was working on his first project for Hunt, testified that the RFI’s did not create significant problems for HCC and the trade contractors. (Trial Tr. 7032:1-10.) He disagreed with the statements in HCC’s monthly reports and contended that the number of RFI’s were not unusual and did not create any problems. (Trial Tr. 6762:7-6763:24.) He testified as follows:
Q. Even looking at the internal opinions between members of the HCC
*835
team, you can have different perspectives, right?
A. Individuals would have different perspectives, correct.
Q. For instance, you think that the number of — the 5,555 RFI’s is not excessive, and someone else thinks that they are excessive, right?
A. That’s possible. Yes.
(Trial Tr. 6763:16-24.) In response to another report, Mr. Sineavage further testified that “we had numerous RFI’s that were in fact signed and sealed, so those are a change to the contract documents. Apparently — or it’s possible this individual is incorrect.” (Trial Tr. 6767:17-22.) Mr. Sineavage noted that the HCC monthly reports presented a “different perspective.” (Trial Tr. 6778:17-19.) He testified that he disagreed with many of these statements “in hindsight.” (Trial Tr. 7031:24-25.)
EME’s expert witness, Mr. Curtis, testified that the lack of coordination on this Project, combined with the large number of RFI’s, impacted EME. He noted that work on any project is schedule-driven. (Trial Tr.1988:5-10.) While a contractor generally expects a certain number of RFI’s on a given project, on a project like this, where improper scheduling exists and EME was being forced to work concurrently in many areas, the “RFIs are going to have a bigger impact. The job is driven by its schedule. That’s why we have scheduling.” (Trial Tr. 2282:1-17;
see
2169:7-25.)
2. Haphazard Work Flow
Work on the Project did not flow in a logical progression. Instead, work flowed haphazardly across the many grids that made up the work site. (Trial Tr. 777:7-778:12.) Because predecessor work was often delayed, rather than follow a logical work flow and progression, EME was forced to “hop-scotch” around the Project to find places to work. (Trial Tr. 298:6-16, 337:14-338:2.) Work that was commenced on one level was not completed on that level. Rather, the work was interrupted and redirected to another level, where again, it would not be completed prior to its being interrupted and redirected to another area. EME communicated with HCC regarding this problem. EME stated that the “lack of continuity in schedules is causing” EME to have to continually “bounce around” the Project in a way that is “highly inefficient.” (Pl.’s Ex. 242, Record of Conversation no. 103.) For example, according to the sequence set forth in the Trade Contract, EME was supposed to begin its work on the Project on the north structure at the concourse level (first floor) with the intention of working west to east through the structure. (Trial Tr. 176:10-25, 211:6-15, Oct. 18, 2004.) However, instead of following the expected progression and flow of work, HCC directed EME to start work at the mezzanine level (third floor) of the north structure. (Trial Tr. 214:2-9.)
Additionally, EME was forced to work in a piecemeal fashion. (Trial Tr. 317:19-318:4.) Instead of being able to install an entire rack of conduit, EME would only be able to install ten feet in one area before being required to move to another area. (Trial Tr. 318:5-11.) The piecemeal installation of conduit affected the labor and material costs, the job knowledge of EME’s workers, and the overall continuity.
(Id.)
Work that should have been finished, for example, in one continuous nine-day flow was broken into three separate three to four days segments. Returning workers had to reposition their crews, equipment, and materials and try to remember the site work details to get back “up to speed” before a new work rhythm could be achieved. The resulting low morale negatively affected efficiency, as did the time and labor required to move equipment and
*836
materials from one part of the Project to another as work was repeatedly interrupted and rescheduled. (Trial Tr. 209:21-210:11.) Work crews were demoralized because recently gained “learning curves” had to be quickly replaced by other unrelated work and new “learning curves.”
CSee
Trial Tr. 208:11-210:11, 264:20-266:8.) Such problems occurred, for instance, in the exhibit hall. (Trial Tr. 217:7-221:13.) Because of sequencing problems, a large amount of duct work and the installation of the sprinklers were not completed in time for EME to start its work.
(Id.)
Further, because HCC directed EME to deviate from the normal progression of the work, EME was forced to split its rough-in crew and spread its workers throughout the Project. (Trial Tr. 214:10-16.) Significant additional hours were spent as a direct result of working in multiple locations at the same time rather than working under a typical coordinated flow of work across the Project.
(See
Trial Tr. 1106:14-1107:14.) Working in multiple locations also made supervision difficult. (Trial Tr. 1107:9-10.) EME experienced significant overtime charges as a result of the lack of project coordination.
3. The Problem of Trade Stacking
EME was severely impacted and damaged by the trade stacking that resulted from the lack of coordination of the trade contractors. The evidence before the Court clearly established that trade stacking occurred on the Project. Trade stacking on the Project resulted because the time sequences for work were compressed without regard to the inability of trade contractors to simultaneously perform necessarily sequential work. EME was often unable to proceed because it was blocked by predecessor trade contractors, such as the mechanical, dry wall, roofing, and painting subcontractors. (Pl.’s Ex. 242, Record of Conversation no. 63 & no. 69.)
EME Assistant Project Manager Barry Hughes testified as follows regarding the trade stacking he experienced:
Once it really got started going good it was what 1 would term a free-for-all stacking. Almost every where every day the whole job was pretty much mushroomed at that point where everything was working at it all the time, somebody was always trying to work somewhere somebody else was.
(Trial Tr. 235:19-25.) The trade stacking problem is also reflected in a letter from Encompass to HCC Senior Project Manager Mike Sincavage, dated July 18, 2002:
I will reiterate as in numerous letters sent before, that the stacking of activities of our scope of work throughout the project has been and still continues to grow, and the concern of having to work at a later date in more areas than anticipated, while at the same time starting and completing activities in other areas has been and remains a concern.
(Pl.’s Ex. 108, 1;
see also
Trial Tr. 6875:16-6876:15.) Encompass again complained about trade stacking in a letter dated October 4, 2002, to HCC:
We, and all the other trade contractors on this project, have a right to rely on your Master Schedule to plan and coordinate our activity and resources to perform the work. Your failure to utilize the Master Project Schedule to coordinate the work and the trades involved, has thus far led to massive impacts to our labor productivity. These impacts are due to incomplete predecessor work, out of sequence work, stacking of trades and the like, which were and are entirely beyond our control and can be directly attributed to your decision to utilize uncoordinated Near-Term Schedules that have not been generated from the Master Project Schedule.
*837
(Pl.’s Ex. 134, 1;
see also
Trial Tr. 6884:6— 18.)
After reviewing Encompass’s letter of October 4, 2002, Mr. Sincavage testified that he agreed that trade stacking had occurred on the Project. (Trial Tr. 6884:16-18.) Mr. Sincavage further testified that HCC had paid for at least some of the resulting damages. His testimony was as follows:
Q. I want to ask the question over again. Okay? There were legitimate complaints that trade contractors made about trade [stacking] that resulted in additional costs to them for which HCC paid, true or false?
A. Yes. True. Sorry.
Q. So it happened on the job?
A. Yes.
(Trial Tr. 6879:24-6880:5.) Orange County Construction Manager John Morris also testified that he heard of scheduling and trade stacking issues on the Project, as follows:
Q. And Dick Larson with OBK, they talked about problems with the schedule that may lead to stacking of trades. Do you recall receiving information along those lines?
A. Yes.
Q. Okay. They warned you about that. Right?
A I don’t think they were warning me. I think they were just bringing it to the attention that, you know, that’s what they’re hearing and that’s what they’re seeing on some of the scheduling.
(Trial Tr. 2755:14-25.)
One of the specific problems that EME encountered as a result of trade stacking was that often during the course of the Project EME was unable to access the electrical rooms where it needed to work. (Trial Tr. 191:17-192:5.) Before EME could begin its work in the electrical rooms, the walls needed to be dry-walled and painted, the switch gears needed to be on, and transformers and the racks supporting the conduit needed to be installed. (Trial Tr. 193:24-194:11.) Encompass, the other electrical contractor working on the Project, also encountered problems due to delayed predecessor activity and lack of access to the electrical rooms. On March 4, 2002, Encompass wrote to HCC, observing that the building was “still not dried-in and the electrical rooms continue to be unavailable-” (Pl.’s Ex. 63.) As a result of these problems, Encompass decided to decrease its workforce on the Project.
(Id.)
Many problems arose due to the lack of coordination. For example, EME needed to be able to use the scaffolding that was used by the dry wall subcontractor. (Trial Tr. 293:18-294:21.) Normally, work would flow so that the scaffolding would be available to EME when it began its work following the dry wall preliminary work.
(Id.)
However, because a gap developed between these tasks, the scaffolding became unavailable. (Trial Tr. 294:14-21.) EME also experienced problems due to the lack of notice of concrete pours. (Pl.’s Ex. 242, Record of Conversation no. 61.) The roof work continuously caused problems. Only one subcontractor was working on the roof-a father and son company with only a handful of workers. (Trial Tr. 1740:4-12; Trial Tr. 6401:3-6402:7.) Roof work is critical to the flow of work since the job cannot be “dried in” until the roof is complete. (Trial Tr. 222:4-13.) The failure to complete the roof on time slowed down the work of other trade contractors who needed a dry working space.
(See id.)
In the assessment of EME’s expert witness Mr. Curtis, “everything was going wrong on the project, all the correspondences said things were going wrong and the end date was being kept firm, firm, firm, and all it kept doing was pushing all the activities towards the end overlapping
*838
and collapsing the activities.” (Trial Tr. 1466:7-12.) This resulted in trade stacking and lack of efficiency. (Trial Tr. 1466:19-1467:2, 1473:9-22; Trial Tr. 2229:12-2230:1.) Mr. Curtis gave the following description of what occurred on this Project:
I guess an analogy would be ... if your escalator is going too fast and something goes on and you’re all standing on the escalator and it goes too fast, everybody ends up in a pile at the end of the escalator because you have runaway escalator. ...
That’s a good analogy of what happened on this job. All the project, all the trades were going to the end of the project, they’re all stacking up and they’re all hurrying up to meet that end date and they met the end date but at a terrific cost.
(Trial Tr. 1782:21-1783:14.)
4. Failure to Coordinate Inspections
EME and other trade contractors also were delayed by HCC’s problematic coordination of inspections.
(See
Pl.’s Exs. 110, 171;
see also
Trial Tr. 4088:1-24; Trial Tr. 4280:3-25.) Even when EME’s work was completed, Orange County would not inspect and approve EME’s work if non-conforming work by other trade contractors existed in the area. (Pl.’s Ex. 426;
see
Pl.’s Ex. 171; Pl.’s Ex. 118, 1; Trial Tr. 247:10-249:24.) EME was forced to wait until all other electrical subcontractors in an area being inspected had completed their work before its work could be inspected and approved. (Trial Tr. 248:14-249:1, 253:2-7.) The reason for this taxing inspection process was both because there were multiple electrical contractors and subcontractors on the Project and because HCC had agreed to the procedure during an inspection meeting. (Trial Tr. 250:3-252:25.) Problems with the schedule and sequencing of the work further impacted EME’s inspections. (PL’s Ex. 242, Record of Conversation no. 172.)
HCC Senior Project Manager Mike Sin-cavage testified that the inspection process on this job was “typical” of other projects. (Trial Tr. 6656:2-6657:7.) This testimony, however, is not credible given the extent of the evidence and the conflicting testimony of other HCC representatives and statements documented in HCC reports. HCC Field Manager Moe Young testified that there were problems with coordinating inspections that “definitely” impacted EME, by forcing it to “jump around.” (Trial Tr. 6124:16-23.) HCC Project Executive Bob May testified that the inspection process on the Project was “onerous.” (Trial Tr. 7299:19.) HCC’s July 2002 report to Orange County also asserted that the inspection process “impacted the progress and schedule of the Work.” (PL’s Ex. 235, Mar. 2003 Report pt. 1A; Trial Tr. 6745:19-22.) The report complained about the issues surrounding the construction documents, revisions, and inspections. (PL’s Ex. 235, July 2002 pt. 1A; Trial Tr. 6773:18-22.) HCC wrote in the report that “[mjechanical and electrical coordination and inspections continue to be a significant factor in the overall schedule.” (PL’s Ex. 235, July 2002 Report pt. 2A; Trial Tr. 6776:11-17.)
D. Management Failures in the HCC Joint Venture
The scheduling and coordination failures on the part of the HCC joint venture have been clearly established by the evidence presented at trial. It is also clearly indicated that these failures were the result of breakdowns in management between the joint venture partners and within the HCC joint venture structure. This breakdown in management explains how such experienced construction management firms
*839
were responsible for such a terrible failure in construction management.
Soon after commencement of the Project, an atmosphere of distrust and finger pointing arose between the HCC joint venture partners. Throughout the Project, the two principal joint venture partners, Hunt and Clark, and their respective employees, maintained a volatile and strained relationship that spilled over into HCC’s management. HCC Senior Construction Manager Pete Milner, a Hunt employee, acknowledged that when he arrived on the Project in October 2001, there were communication problems within the joint venture. (Trial Tr. 3948:4-3949:22.) Contrary to Mr. Milner’s assertion that communications within the joint venture improved over time, it is clear from the record that the communication problems continued, particularly between the Hunt and Clark employees. (Trial Tr. 3951:2-20; Pl.’s Ex. 430.)
Management problems within the HCC joint venture are evident in multiple internal communications. One of the first is an email dated September 29, 2001, from HCC Senior Project Manager Gordon Gibson, a Clark employee, to HCC Project Executive Bob May, a Hunt employee. Mr. Gibson complained that “no one seems to care whether [HCC General Superintendent] Tom Spall has the material and manpower necessary to meet the [schedule] dates .... ” (Pl.’s Ex. 424.) Mr. Spall, of Clark, himself authored a memorandum dated June 25, 2002, to HCC Project Executive Bob May and HCC Senior Construction Manager Pete Milner, both of Hunt, further addressing these issues. Mr. Spall’s memorandum included the following:
I have managed and pushed a lot of work. I have delivered many projects. I never got the work done by being ignored or turned into some kind of lame duck. The lack of support the field receives from this Joint Venture is clear.... There is only one Senior PM that attends the Superintendents meeting. Do any of the rest ever review the look ahead? 1 never get questioned about performance or the multitude of questions 1 should get from individuals so unfamiliar about what goes on in the field. Is there any interest in the schedule beside giving George [Perkowski] his monthly update? You know the one all the PM’s give to the Superintendent to do! ...
This job is dying. You can feel it in our office. “Team work” is non existent.... Look where we are and DO THE MATH! IT DOES NOT ADD UP!!!
(Pl.’s Ex. 427, 1-2 (emphasis in original).) Mr. Spall also discussed the failures and criticisms of the look-ahead schedules as follows:
The look ahead [schedule] that I produce is supposed to be a plan for the [trade contractors] to work to. That look ahead has become a joke. I go through the motions week after week. I schedule work with trade contractor input. They fail to perform. I push the dates out. The time to stop accepting this as fact is now!
(Id.
at 1.) Mr. Spall further stated that the “biggest rock in the road is the financial log jam expressed by all the trade contractors” over unresolved and outstanding proposed change orders.
(Id.)
When questioned at trial about Mr. Spall’s memorandum, HCC Senior Project Manager Mike Sincavage, of Hunt, stated that he disagreed with these conclusions, had never asked Mr. Spall about it, and could only conclude that Mr. Spall was “upset” and in a “strange state of mind.” (Trial Tr. 6864:23-6869:7.) When asked on cross-examination if he knew whether anyone else shared Mr. Spall’s opinion, Mr. Sincavage responded: “I don’t know. Pos
*840
sibly the sycophants to Tom [Spall] might, to appease him. Beyond that, I don’t know.” (Trial Tr. 6852:14-15.) Mr. Sinca-vage’s tenor during this exchange further demonstrates the breakdown in the joint venture relationship and communications among the HCC leadership.
HCC Senior Project Manager Gordon Gibson, of Clark, sent an internal memorandum, dated September 9, 2002, to HCC Senior Construction Manager Pete Milner and HCC Project Executive Bob May, both of Hunt, in which he openly complained that HCC’s staff was not performing their responsibilities or using “basic engineering processes and practices” to manage the Project. (Pl.’s Ex. 124,1.) Mr. Gibson chastised Mr. Milner for his failure to support him in his efforts to timely post RFI’s from trade contractors, to use up to date submittal registers to ensure materials were timely obtained, and to promptly review trade contractor cost proposals. Mr. Gibson noted that each of the disciplines, each team of HCC engineers and employees, was working separately instead of working together for the good of the overall Project. He wrote, “[e]ach team does it differently. Each team has a different set of rules.”
(Id.
at 4.) Mr. Gibson quoted Mr. Milner as having said that they “all should probably be fired.”
(Id.)
Gibson concluded as follows:
[M]y frustration is based on the fact that people are not doing the job they were hired to do. Most of these individuals, and the specifics for management of this project, work for you. I have little, if any, control over correcting or changing the outcome of the above issues. However, I seem to be the only one who actually knows the specifics of the above issues. And I seldom, if ever, see you taking the time to review the information that I detailed above. 1 close by saying that all of the above are statements of fact.
(Id.
at 5.)
Finally, another memorandum from Mr. Gibson, of Clark, dated September 19, 2002, to Sid Jordan, Clark’s senior member of the HCC joint venture, complained of Hunt’s reactive management philosophy and the communication problems he was having with HCC Project Executive Bob May and HCC Senior Construction Manager Pete Milner, both of Hunt. (Pl.’s Ex. 430.) Mr. Gibson relayed his frustration to Mr. Jordan as follows:
To follow up on our phone conversation of yesterday evening, I believe there is an inherent difference in management philosophies between Hunt and Clark. Hunt seems to be typically reactive whereas Clark attempts to be proactive ....
I really was hoping that the memo would force Bob [May] to put the three of us (Bob, Pete, and myself) in a room to discuss. To date, Pete [Milner] has yet to say anything to me about sitting down and discussing the memo. Hopefully, if we meet tomorrow, we can come away with a game plan that will be beneficial to the project.
PS — In addition to the above, 1 know that the engineers are frustrated and have been speaking to me on two different issues. One is advancement (and the future) and the other being the frustration of working for Hunt managers who provide no input or guidance. Maybe we can chat about this as well tomorrow.
(Id.)
All of these communications clearly demonstrate the internal conflicts within the HCC joint venture. This internal fight spilled over onto the Project, affecting
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HCC’s efforts to meet its management obligations, as has been fully described above.
III. HCC’s Affirmative Defenses
A. Notice that EME Intended to Present a Claim
One of HCC’s defenses is that EME has waived its claims for damages or otherwise should be estopped from asserting a claim so long after the damage-causing events took place. The facts clearly establish, however, that EME has not been negligent in bringing its claim to HCC’s attention. HCC was clearly made aware, from a very early date, that EME intended to assert a claim against HCC for damages based on the scheduling and coordination failures. The argument based on estoppel and waiver is not well founded.
Shortly after EME began working on the Project, HCC received notice that EME believed it had been negatively impacted by HCC’s failures in scheduling and coordinating the work of EME and expected or intended to make a claim against HCC for damages. This was reiterated in communications between EME and HCC throughout the time EME worked on the Project. The first clear communication from EME regarding damages due to the negative impact of the Project schedule was the letter of October 31, 2001, from EME to HCC Senior Project Manager Mike Sincavage. (Pl.’s Ex. 47, 1; Trial Tr. 785:4-786:4.) The letter enclosed the report of Chitester Management, an outside scheduling consultant retained by EME to compare the overall project schedule of August 9, 2001, identified as OC 25, against the prior schedule of November 8, 2000. (Trial Tr. 785:4-9; Trial Tr. 1098:11-21.) Chitester Management concluded that the OC 25 schedule was unworkable without wholesale changes in a report dated October 26, 2001. (Trial Tr. 786:9-14.) EME’s letter to HCC included the following statement:
This schedule revision will require EME to increase (ramp up) its work crews earlier than originally planned in an effort to support the current schedule. In addition, the current plan requires that EME forego a plan that moves from building grid to building grid in a progressive order that economically minimizes mobilizing and demobilizing work areas and efficiently utilizes work crew labor, to one where EME is required to move in a random pattern (exhibit 3).
(Pl.’s Ex. 47,1;
see
Trial Tr. 787:3-788:19.) The letter contained a schedule analysis describing the likely effect of reducing EME’s work duration from 116 weeks to 79 weeks.
(Id.)
At trial, EME Senior Project Manager Mike Estes was asked to compare the number of labor hours required under the two schedules. (Trial Tr. 1102:12-15.) First, he stated that a comparison of the labor hours required could not be done because the schedules were incomplete.
(Id.
at 11. 15-22.) Second, he stated that any calculation could not take into account the impact of acceleration (Trial Tr. 1105:15-1107:24), but that the Chitester Management analysis included the best estimate that could be made at the time of the increased labor hours that EME would incur. (Trial Tr. 1107:15-1109:1.) The report clearly stated that it was impossible to know what the full impact of the new schedule would be.
(Id.)
Thus, the letter of October 31, 2001, clearly put HCC on notice of a claim-causing event-the issuance by HCC of an unworkable revised master schedule. The letter also made clear that EME would incur damages as a result, including acceleration damages, labor costs, delay and disruption damages, and provided EME’s best estimate of the damages likely to be incurred, based on
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the information available at the time. EME requested that HCC revise the schedule so as to prevent these damages. (Pl.’s Ex. 47.)
On April 8, 2002, EME advised HCC that it would be submitting a claim for the additional costs, additional direct labor, lost productivity, and labor inefficiency associated with the Lutron Dimming and Lighting System. (Pl.’s Ex. 73.) On May 8, 2002, EME Assistant Project Manager Barry Hughes met with Kevin Hale, HCC’s electrical superintendent, informing him of the following:
EME could no longer afford to continue to build this job piece work. It is killing us in [Field Correction Reports], inspection problems [and] that EME was not going to roll over ... anymore just to satisfy them if they could not get us some areas to work in. Told him the Job was still out of sequence, out of schedule—no schedule.
(Pl.’s Ex. 242, Record of Conversation no. 164.) Further, Mr. Hughes insisted that “EME needs a schedule, we need to be able to plan more than 4 hours in advance on this project. It is very unproductive and does nothing for us.”
(Id.)
In February 2003, EME again notified HCC that it “need[s] to get compensated for the extra out of sequence work [it has] been forced to do.” (J. Ex. 69.) On April 15, 2003, HCC wrote Orange County asking for “an extension of the Date of Substantial Completion to May 15, 2003.” (Pl.’s Ex. 187.) Also on April 15, 2003, at HCC’s request, EME furnished HCC with a breakdown of EME’s monthly general conditions costs on the Project. (J. Ex. 112.) On April 16, 2003, EME requested a partial payment from HCC for the additional overhead and labor hours that EME had expended. (J. Ex. 117.) EME notified HCC “of its intent to present a claim” in an April 23.2003, letter. (PL’s Ex. 78.) On May 27, 2003, HCC wrote Orange County requesting an additional “extension of the Date of Substantial Completion to June 30, 2003.” (PL’s Ex. 192; Trial Tr. 4268:3-4270:2.)
Many of the other trade contractors on the Project, in addition to EME, were insisting that HCC compensate them for the additional costs associated with improper scheduling and coordination. For example, in multiple additional correspondences. Encompass pointed out the additional costs it was incurring due to being forced to work out of sequence, the lack of available work areas, the lack of coordination, and improper scheduling.
(See
PL’s Ex. 49.)
B. The Impact of the May 2002 Storm,
On May 30, 2002, the area in which the Project is located experienced a very strong storm. Although the parties may disagree as to .the severity and overall impact of the May 2002 storm, both acknowledged that it caused some damage to portions of previously completed work. One of the reasons for the damage was that as of the date of the storm, the roof had not been completed, and the building had not achieved “dry in” status. The storm inundated the Project with water. Rain came through numerous openings in the roof, flooding interior sections. John Morris, Orange County’s construction manager who was present during the storm, testified that it was a “pretty substantial storm,” but “I’ve seen worse.” (Trial Tr. 2727:8-14.) He continued, “[i]t was one of those summer, you know, Florida, hit hard and go away type of storms that we’re all accustomed to” in central Florida.
(Id.
at 11.15-17.)
Initially, HCC seemed to acknowledge that the storm’s impact was minimal, but during construction, HCC came to view the storm as a way to justify the request for additional construction time, which it
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desperately needed. By blaming construction delays on the storm, HCC was able to claim that Orange County and its builders risk carrier, Zurich American Insurance Company, were responsible for the additional costs of scheduling changes and impacts. As one of HCC’s trial experts reasoned in an e-mail, “However, it strikes me that if we, perhaps jointly with EME, can develop a [unintelligible] realistic storm damage claim, this would be found money to help settle the global claim. Zurich’s money is still green.” (Pl.’s Ex. 438.)
There are many problems with putting the blame for EME’s delays and additional costs on the May 2002 storm. First, HCC’s own analysis concluded that the impact of the storm was minimal. On August 26, 2002, HCC Scheduler George Perkowski concluded in an internal memorandum that the total impact of the May 30, 2002, storm was only “9 calendar days to the project completion date.” (Pl.’s Ex. 120.) The claim HCC submitted to Zurich contended that the storm delayed completion by 84 days and resulted in $22,912,666 in damages, in addition to the direct “brick and mortar” damages paid by Zurich separately. Of the approximately $23 million in damages, HCC claimed it was owed $12 million directly, with the remainder to be allocated between Orange County and various trade contractors.
Second, much of the damage from the May 2002 storm was exacerbated by the failure of HCC to properly prepare the work site for a storm. The roof was behind schedule. Scheduling and coordination problems were also exacerbated because the building had not been timely dried-in. (Trial Tr. 779:11-25.) HCC’s roofing contractor, Sunshine Roofing, “was supposed to be complete in May on the North building,” but the evidence shows that they were not. (PL’s Ex. 427, 1; PL’s Ex. 242, Record of Conversation no. 183 (noting that water was pooling up in contractor work areas).) In fact, water continued to come into the building throughout the summer of 2002 because the roof was not finished. (Trial Tr. 226:5-227:1.) Moreover, HCC had not put adequate temporary closures on windows and openings. Nevertheless, HCC had directed the installation of interior finish work in areas with little or no protection from summer rains. Plywood and roofing materials had not been secured, and as a result, during the storm those materials were blown around, causing extensive puncturing of portions of the roof that had been completed. (Trial Tr. 224:1-24.) These roofing materials also damaged EME’s work.
(Id.
at 11. 17-24.) HCC Project Executive Bob May accepted that HCC was obligated to take precautions to protect the Project from storms or extreme weather. (Trial Tr. 7811:1-7813:11; J. Ex. 239, CM Agreement, Art. 2.3.9.) Further, Mr. May acknowledged that EME was entitled to rely upon HCC’s obligation to protect the Project from storms and extreme weather. (Trial Tr. 7813:12-20.)
Third, it is clear from the evidence that the delays HCC seeks to blame on the storm existed prior to May 30, 2002. HCC Scheduler Lou Well’s schedule review dated March 29, 2002, used two different models to estimate a lengthy delay of completion, of either a two-and-a-half or a five-month delay. (PL’s Ex. 322, Intro.) Several items were incurred either prior to the storm or were principally the result of HCC’s failure to schedule and manage the work, including the “acceleration] and mitigation] damages,” the “extended general condition costs, costs for extended scaffold rental, costs for extended temporary power and lighting, costs for additional supervision, and other costs.” (PL’s Ex. 292, Vol. 1, no. 4A.)
Fourth, many water problems that HCC experienced after the storm were caused
*844
by the failure of HCC to properly manage the removal of the water from the Project. (Trial Tr. 779:2-10, Oct. 21, 2004; Pl.’s Ex. 100.) Trade contractors complained that their work was being damaged because of the manner in which HCC was attempting to remove water from the building. Specifically, HCC crews were using squeegees to move the water and pushing it to any available floor opening, causing areas that might otherwise have been dry to become wet.
(See
Pl.’s Ex. 100; Pl.’s Ex. 242, Record of Conversation no. 183.) Problems due to HCC’s poor handling of excess water continued for at least several weeks. In an internal e-mail dated June 26, 2002, HCC admitted that the efforts of its cleanup crews were causing additional problems and that their ability to remove the water was being hampered by the failure to provide sufficient equipment. (Pl.’s Ex. 100.) HCC General Superintendent Tom Spall wrote to HCC Field Manager Moe Young, stating that “HCC does need more equipment to expedite water removal. One vacuum for each building doesn’t make a dent.”
(Id.)
Orange County, upon learning of the water removal problem, questioned HCC’s lack of supervision in dealing with the excess water and pointed out that “[ejvery rainstorm WILL NOT be the cause for an insurance claim.” (Pl.’s Ex. 99, 1.) Orange County’s Construction Manager John Morris testified as follows:
Q. Isn’t what’s going on is that you finally had to put your foot down and say, look, guys, every time it rains out here you’re not going to have an insurance claim?
A. That’s pretty much where I was coming from, yes.
(Trial Tr. 2738:24-2739:4.)
C. Damages Caused by Orange County and the Architect
HCC has likewise argued that part of EME’s purported damages can be attributed to the actions of Orange County and the Architect, for which, HCC argues, it cannot be held liable under the Trade Contract. HCC was, however, required to cooperate with EME in order to benefit from this limitation of liability provision, as will be discussed below. As established by the evidence at trial, HCC did not cooperate with EME in the submission of pass-through claims. Under Articles 16.4 and 16.1(b) of the CM Agreement, upon receipt of a pass-through claim from EME, HCC had ten days to give Orange County written notice of a claim or potential claim by EME, and 15 days thereafter to submit a written claim. (J. Ex. 239, CM Agreement, Art. 16.) HCC failed to provide the necessary notice to Orange County, much less submit a written statement, in response to any of EME’s letters or notices regarding its impact claim based on the scheduling and coordination failures on the Project. (Trial Tr. 7680:12-7684:19.) HCC Project Executive Bob May testified that the reason HCC did not submit the claim to the Owner is that EME’s damages were covered by an allowance in the guaranteed maximum price. (Trial Tr. 7681:18-7682:1.) However, nowhere does the Trade Contract suggest that pass-through claims need not be forwarded to Orange County if there is an allowance. HCC’s argument also fails because the damages EME seeks in this breach of contract claim flowed from HCC’s breach of its obligations to schedule and coordinate the work on the Project, not from actions of Oran

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/1879100. Public record. Not legal advice.