W. C. English, Inc. v. Rummel, Klepper & Kahl, LLP, 934 F.3d 398 (4th Cir. 2019)
W.C. English, Inc. (“English”) contracted with Virginia Department of Transportation (“VDOT”) to construct a bridge over Interstate 81 near Lexington, Virginia. English subcontracted with Rummel, Klepper, & Kahl, LLP (“RK&K”) to provide project quality assurance services and with CDM Smith, Inc. (“CDM”) to provide project quality control services.
The dispute between English and its subcontractors arose from deficiencies in the concrete bridge deck. The VDOT contract required the bridge to have an 8.5-inch concrete deck reinforced using two mats of crisscrossed rebar, with 2.75 inches of concrete cover on top of the rebar. In order to achieve these dimensions, English planned to include 2.5-inch spacers between the two rebar mats. During construction, certain English and RK&K personnel decided to insert 1.75-inch spacers instead. This resulted in an amount of concrete cover above the rebar exceeding the specified 2.75- inch requirement. VDOT determined that the structural capacity of the bridge as constructed was insufficient and required English to demolish and replace it. Doing so cost English over $3.1 million. English brought suit in the Western District of Virginia against RK&K and CDM for breach of contract and indemnification seeking to recover those costs.
In March 2018, the Western District granted summary judgment in favor of RK&K and CDM. The Western District found that the indemnification provisions of the RK&K subcontract excused RK&K from its duty to indemnify English when English’s own negligence contributed to the damages (which the court determined to be the case here due to the involvement of certain English personnel in the decision to use smaller spacers). The Western District found that CDM was not liable to English because CDM had satisfied its contractual performance obligations. English appealed to the Fourth Circuit.
The Fourth Circuit reversed the Western District’s decision, vacated the judgment, and remanded for further proceedings. With regard to RK&K, the Fourth Circuit found the indemnification provisions of the subcontract to be ambiguous. Whereas the Western District held that the indemnification provisions of the subcontract relieved RK&K of its indemnification obligations if English’s negligence contributed in any way to the damage for which English sought indemnification, the Fourth Circuit determined that the provisions at issue were ambiguous in application and therefore could not provide the basis for summary judgment against English. With regard to CDM, the Fourth Circuit found that the question of whether CDM had satisfied its contractual performance obligations, a point in dispute between CDM and English, was a question of fact and not a proper basis for summary judgement.
*Credit and thanks to the VSB Construction and Public Contracts Law Section Newsletter Committee for the preparation of this digest.