United States District Court, D. Hawaii
UNITED STATES, for the use and benefit of KINGSTON ENVIRONMENTAL SERVICES, INC. Plaintiff,
DAVID BOLAND, INC., et al., Defendants.
ORDER DENYING DEFENDANTS' RENEWED MOTION FOR
PARTIAL SUMMARY JUDGMENT
Derrick K. Watson District Judge.
action arises out of an infrastructure construction project
at Wheeler Army Airfield in Oahu, Hawaii. The prime
contractor hired by the federal government, Defendant David
Boland, Inc., retained Plaintiff Kingston Environmental
Services, Inc., as a subcontractor to perform part of the
work. By all accounts, there were numerous problems during
the construction. Kingston brings this lawsuit under the
Miller Act, 40 U.S.C. Sections 3131-34, and holds Boland
responsible for the construction delays that occurred and the
losses it allegedly suffered as a result.
2017, this Court granted in part Defendants' motion for
summary judgment, stayed the case until Kingston had complied
with the remedial administrative procedures in the
subcontract, and reserved ruling on the issue of whether
Kingston's claims were barred by the “no damages
for delay” provision in the subcontract. Dkt. No. 145.
Now that the stay has been lifted, this matter is before the
Court on Defendants' renewed motion for summary judgment
as to the enforceability of the “no damages for
delay” provision. Dkt. No. 185. Because enforcement of
the “no damages for delay” provision hinges on
material facts disputed by the parties, Defendants'
motion is DENIED.
& PROCEDURAL BACKGROUND
Relevant Factual Background
29, 2012, the United States Army Corps of Engineers (USACE or
Government) entered into a contract with Defendant David
Boland, Inc., (Boland), making Boland the primary contractor
for a construction project known as the Combat Aviation
Brigade Infrastructure, Phase I, Wheeler Army Airfield, Oahu,
Hawaii (the Project). In November of 2012, Boland and Plaintiff
Kingston Environmental Services, Inc., (Kingston) entered
into a subcontract agreement (the Subcontract), valued at
more than $15.8 million. Dkt. No. 116-2 at 1. Under the
Subcontract, Kingston agreed to perform part of the work on
the Project and furnish the necessary labor, materials and
equipment to do so. Dkt. No. 116-2 at 13.
a month after mobilizing, Kingston encountered obstacles.
First, Kingston was unable to use its preferred labor force.
Dkt. No. 116-4, ¶ 13. In particular, an internal email
at Kingston states:
We need the union agreement signed so we can supplement
CAB/TEMF with our Seattle labor. Without some of our talents
our [sic] in the machines and working/pushing the locals, we
are and will continue to spend upwards of 50% more than
necessary in my limited opinion.
Id. Second, Kingston ended up procuring rental
equipment and labor at much higher rates than it had
accounted for. Kingston, for instance, rented a 25-ton
truck at $94.13 per hour and an excavator at $84.69 per hour,
when Kingston had bid, respectively, $50.71 per hour and
$37.78 per hour. Dkt. No. 116-4 at ¶ 14. Further, on
April 12, 2013, Kingston hired Delta Construction Company to
perform part of its work and to be compensated on a
“time and materials” basis. Id. at
¶ 15. Delta's hourly costs again substantially
exceeded what Kingston had projected. Id. at
¶¶ 16- 17. To make matters worse, Kingston installed
sanitary sewer manholes that did not conform to the
Project's specifications, and the USACE consequently
rejected them, causing Kingston to have to replace
Kingston does not contest that these events occurred or that
it incurred these costs. Dkt. No. 134, ¶¶ 11-13,
18. Nevertheless, Kingston maintains that Boland mismanaged
the Project and hindered the progress of Kingston and other
subcontractors. Dkt. No. 134, ¶ 10. According to
Kingston's expert, Boland caused Kingston to incur cost
overruns of $6, 882, 738. Dkt. No. 134-3.
March 2014, Kingston had completed approximately 46% of the
work it agreed to perform. Dkt. No. 134-2, ¶ 8. On March
6, 2014, Boland and Kingston revised the Subcontract by
executing Change Order No. 10, under which, inter
alia: (a) the scope of the work Kingston was to perform
was reduced by over $8.4 million; and (b) Boland and Kingston
“waiv[ed] and release[ed]” any claims they had
against each other “resulting directly from delays in
performance . . . and the schedule impacts of such delays
caused [at] any time prior to the date” of Change Order
No. 10. The
claims the contracting parties mutually released, however,
did not include “any claims related to delays”
for which Kingston had “previously notified [Boland] in
writing . . .” Dkt. No. 116-3 at 9, Section X.
and Kingston later revised the Subcontract on at least three
separate occasions by executing three additional Change
Orders-Change Order Nos. 12, 13, and 14-which were
respectively executed on June 20, 2014, September 5, 2014,
and September 22, 2015. The cumulative effect of Change Order Nos.
12-14 was to increase the amount Kingston was to be paid by
$338, 357.95. See Dkt. No. 116-1 at 90-93. Each of
these Change Orders stated that “[Kingston]
acknowledges that all claims for additional time, impact,
delay, and/or disruption have been included in the revised
subcontract amount.” Id.
filed this action on April 29, 2016, seeking payment from
Western Surety under its Miller Act bonds (Count I) and
alleging that Boland breached the Subcontract (Count II).
Dkt. No. 1, ¶¶ 38-50. Boland and Western Surety
moved for partial summary judgment, arguing that: (1)
Kingston failed to comply with the administrative remedial
procedure mandated in Paragraph 13A of the Subcontract; and
(2) Kingston's delay claims are barred by the “no
damage for delay” clause in Paragraph 12.B of the
Dkt. No. 145 at 7; Dkt. No. 185 at 3-4. On August 30, 2017,
the Court granted Defendants' motion as to the first
issue, reserved ruling on the second issue, and stayed the
case pending the outcome of the remedial procedure in
Paragraph 13A of the Subcontract. Dkt. No. 145 at 8.
the stay was lifted on June 28, 2019 (Dkt. No. 178),
Defendants renewed their motion for partial summary judgment
on the issue of the enforceability of the “no damages
for delay” provision in the Subcontract, and
incorporated the briefing and argument submitted as part of
their initial motion for partial summary judgment. Dkt. No.
185 at 5. Plaintiffs agreed that the matter was
“procedurally ripe” and should be decided on the
briefing and oral argument previously ...