BROWARD COUNTY, FLORIDA v. CH2M HILL, INC. and TRIPLE R PAVING, INC.

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
BROWARD COUNTY, FLORIDA,
Appellant,
v.
CH2M HILL, INC., and TRIPLE R PAVING, INC.,
Appellees.
No. 4D18-3401
[July 22, 2020]
Appeal and cross-appeals from the Circuit Court for the Seventeenth
Judicial Circuit, Broward County; Jack B. Tuter, Judge; L.T. Case No. 09-
48929 (CACE) 07.
Andrew J. Meyers, Broward County Attorney, Benjamin Salzillo, Rocio
Blanco Garcia, Keoki M. Baron, and Joseph K. Jarone, Assistant County
Attorneys, Fort Lauderdale, for appellant.
Laura A. Baker of Ferencik Libanoff Brandt Bustamante & Goldstein,
P.A. Fort Lauderdale, and E. Britton Monroe and J. Langford Floyd of
Lloyd, Gray, Whitehead & Monroe, P.C., Birmingham, Alabama, for
appellee, CH2M Hill, Inc.
David J. Metcalf and Megan M. Warren of McRae & Metcalf, P.A.,
Tallahassee, for appellee, Triple R Paving, Inc.
Curtis L. Brown and J. Michael Moorhead of Wright, Fulford, Moorhead
& Brown, P.A., Altamonte Springs, for Amicus Curiae, American Council
of Engineering Companies of Florida.
Mike Piscitelli, W. Robert Vezina, III, and Megan S. Reynolds of Vezina
Lawrence & Piscitelli, P.A., Fort Lauderdale, for Amicus Curiae, Florida
Transportation Builders’ Association, Inc.
GROSS, J.
This is a dispute between Broward County, an engineering firm, and a
general contractor, arising from a construction project at the Fort
Lauderdale-Hollywood International Airport. After a non-jury trial, the
circuit court entered judgment in favor of Broward County.
The County appeals that portion of the final judgment apportioning
damages between the engineering firm, the general contractor, and a
former party in the lawsuit who had settled with the County before trial.
The engineering firm and the general contractor each cross-appeal the
final judgment. We affirm the final judgment apportioning damages, but
reverse the damage amount, and remand for the circuit court to determine
damages.
County’s Contract with CH2M
In 1998, the County contracted with the engineering firm CH2M Hill,
Inc., for aviation design services for various improvement projects at the
Fort Lauderdale-Hollywood International Airport, including the
construction of Taxiway C. In 2004, the County and CH2M entered into
the Fourth Amendment to their contract, which required CH2M to advance
its 95% design for Taxiway C to the 100% completion stage. Under the
Fourth Amendment, CH2M was required to “revise the technical
specifications in accordance with the latest FAA design circular
requirements” and “add FAA technical specifications necessary for the
Taxiway C extension.” The FAA circulars, in turn, required taxiways to be
designed and constructed to receive a useful life of twenty years.
Additionally, the Fourth Amendment to the contract removed Project
Resident Engineer services and material testing services from CH2M’s
scope of work.
The site for the construction of Taxiway C had two typical field
conditions: (1) the “cut” or “excavation” areas on the project’s east side,
where the native ground needed to be cut down to the bottom of the
subbase and then compacted to a specified density; and (2) the “fill” or
“embankment” areas on the project’s west side, where the native soil was
unsuitable and had to be removed, refilled, and then compacted to the
specified density.
CH2M’s final design of Taxiway C called for the following layers in the
two typical taxiway areas:
Embankment/Fill Area Excavation/Cut Area
6” asphalt (P-104 layer) 6” asphalt (P-104 layer)
10” lime rock (P-211 layer) 10” lime rock (P-211 layer)
5” subbase (P-154 layer) 5” subbase (P-154 layer)
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22” subgrade (P-152 layer – “deep 22” subgrade (P-152 layer – “deep
compaction” layer – 100% compaction” layer – 100%
maximum density) maximum density)
19” subgrade (P-152 layer – 95%
maximum density)
18” subgrade (P-152 layer – 90%
maximum density)
16” subgrade (P-152 layer – 85%
maximum density)
County’s Contracts with Settling Parties
Before construction of Taxiway C began, the County and URS
Corporation entered into a contract for URS to serve as Program Manager
for the improvement projects at the Airport. As Program Manager, URS
was to be the County’s on-site representative and was to provide overall
management of the Airport’s improvement projects. Additionally, the
County contracted with the engineering firm Bureau Veritas North
America (“BV”) for BV to provide quality assurance materials testing and
inspecting services for the project, which included density testing of the P-
211 (base course), P-154 (subbase), and P-152 (subgrade) layers beneath
the P-104 asphalt layer.
County’s Contract with Triple R
In 2005, the County entered into a contract with Triple R Paving, Inc.,
a general contractor, for construction of the project. The FAA General
Conditions were incorporated as a part of the County’s contract with Triple
R.
Under the contract, the Engineer (i.e., URS) “shall decide any and all
questions which may arise as to the quality and acceptability of materials
furnished, work performed, and as to the manner of performance . . . of
the work.”
The contract required Triple R to construct the project in “reasonably
close conformity” with CH2M’s design plans and specifications. For
purposes of the contract, the term “reasonably close conformity” provided
the Engineer “with the authority to use good engineering judgment in
his/her determination as to acceptance of work that is not in strict
conformity but will provide a finished product equal to or better than that
intended by the requirements of the contract, plans and specifications.”
However, the contract also stated that “the term ‘reasonably close
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conformity’ shall not be construed as waiving the Contractor’s
responsibility to complete the work in accordance with the contract, plans,
and specifications.” Additionally, other provisions of the contract made
clear that Triple R assumed responsibility for its workmanship. Finally,
the contract provided: “Failure to reject any defective work or material
shall not in any way prevent later rejection when such defect is discovered,
or obligate COUNTY to final acceptance.”
The Premature Failure of Taxiway C and the Ensuing Dispute
Construction of the project commenced sometime around January
2007. Taxiway C opened to traffic in November 2007. In June 2008, the
County first noticed rutting (i.e., indentations in the surface) on Taxiway
C. Once the rutting occurred, the County began an investigation into the
causes of the rutting.
In an attempt to correct the rutting, the County directed Triple R to mill
away two inches of the asphalt surface and fill it with new asphalt.
Triple R achieved substantial completion of the project in September
2008 and final completion in November 2008.
In December 2008, Triple R submitted its final payment application to
the County, requesting over $2.9 million in payment. Later that month,
URS recommended that the County approve Triple R’s final pay
application. However, the County never issued a Final Certificate of
Payment.
In July 2009, the Contract Administrator at the time, Greg Recht,
affirmed to the FAA that the County had “authorized final payment to
Triple R” and that “all work in connection with” the Taxiway C project had
been “accomplished in reasonable conformance with the plans and
specifications.”
On August 24, 2009, however, the County received a final report from
an engineering consultant regarding the results of its investigation into the
causes for Taxiway C’s failure. That same day, Recht sent a letter to Triple
R in which he stated that the County would seek compensation for issues
involving Taxiway C.
In December 2009, a new Contract Administrator sent Triple R a letter
stating that the County would release over $2.3 million in payment to
Triple R but would retain $600,000 for any necessary repairs attributable
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to Triple R. The letter also noted that this amount was not a cap or a floor
on any potential exposure.
In 2011, the County hired the engineering firm RS&H to redesign
Taxiway C. The RS&H design was substantially more robust than the
CH2M design, which RS&H believed was necessary to achieve a twenty-
year expected lifespan for Taxiway C. After RS&H provided the County
with its redesign, a different contractor reconstructed Taxiway C between
2012 and 2013.
The reconstruction of Taxiway C cost the County millions of dollars.
The Lawsuit
In 2009, Triple R sued the County for breach of contract and for
violating the Local Government Prompt Payment Act, alleging in both
counts that the County withheld payment owed to Triple R. Triple R also
asserted a claim against CH2M for professional negligence in the design of
Taxiway C.
The County brought a counterclaim against Triple R for breach of
contract and a crossclaim against CH2M for breach of contract and
indemnification. The County alleged that Triple R breached its contract
with the County by performing defective work which caused or contributed
to the defective construction of Taxiway C, that CH2M breached its
contract with the County through “errors, omissions, or defects” in the
design of the project, and that CH2M was obligated to indemnify the
County for any of its potential liability to Triple R arising out of CH2M’s
design of the project.
The County also brought claims for breach of contract and
indemnification against both URS and BV. The County’s claims against
URS and BV were settled at mediation for $600,000 and $125,000,
respectively.
Triple R answered and raised the affirmative defense that the County’s
damages were caused in whole or in part by the County, CH2M, URS, and
BV. CH2M answered and raised the affirmative defenses that fault should
be apportioned under section 768.81, Florida Statutes, to Triple R and to
various nonparties, including URS and BV.
The Trial
A. The County’s Engineering Expert
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At trial, the County’s engineering expert, Chris Spandau, testified that
both CH2M and Triple R contributed to the rutting on Taxiway C.
With respect to CH2M, Spandau testified that CH2M’s design deviated
from FAA design requirements. Spandau testified that, for the
excavation/cut area, CH2M’s design did not take into account any of the
native, loose soils below the top 22 inches of the subgrade, which was “one
of the principal factors” that caused the rutting. Spandau opined that
CH2M’s design was “doomed to fail.” Spandau believed that even if Triple
R had followed CH2M’s design “to a T,” Taxiway C still would have failed.
During CH2M’s cross-examination, Spandau agreed that any rutting in
the embankment/fill area was the responsibility of Triple R. Spandau also
admitted that Triple R did not properly build Taxiway C to CH2M’s
specifications. Finally, Spandau acknowledged that “we are never going
to know” how Taxiway C would have reacted had Triple R built the CH2M
design, and that Taxiway C “would have reacted differently” had it been
built to CH2M’s design.
With respect to Triple R, Spandau testified that Triple R “did contribute
to the rutting,” but that Triple R’s work was a lesser contributing factor to
the failure of Taxiway C. Spandau testified that Triple R failed to properly
construct the subgrade in accordance with CH2M’s design because it did
not compact the top 22 inches of the subgrade in both the excavation/cut
and embankment/fill areas to maximum dry density, and did not compact
the three layers below that level in the embankment/fill areas to the
required density. In the 22-inch layer that ran the entire length of Taxiway
C, 29 out of 34 (or about 85%) of the density tests showed less than 100%
compaction. Triple R also did not achieve 100% compaction in the P-154
layer. And in the embankment/fill areas, there were “essentially 43 inches
of uncompacted saturated soil that got dumped in,” which did not conform
to CH2M’s plans or specifications.
B. Triple R’s Engineering Expert
Triple R’s expert, Randolph Ahlrich, testified that there were two
reasons for the premature rutting of Taxiway C: (1) undercompaction and
(2) design. Triple R’s expert testified that the CH2M design did not meet
the standard of care in the excavation/cut areas. However, Triple R’s
expert testified that the CH2M design in the embankment/fill area met the
standard of care, and that any rutting in the embankment/fill area was
“probably due to the bridging layer put in by Triple R.” If URS did not give
Triple R permission to put in the bridging layer, then the rutting in the
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embankment/fill area was the responsibility of Triple R. However, the
embankment/fill area represented only 700 feet of the 3,800 feet that
made up the entire length of Taxiway C.
C. CH2M’s Engineering Expert
CH2M’s engineering expert, Mr. Oakland, testified that “the cause of
the rutting was undercompaction of the 22-inch layer.”
D. Evidence of URS’s Negligence
CH2M’s expert in construction management, William McConnell,
testified that URS’s conduct fell below the standard of care by allowing
Triple R to deviate from CH2M’s design in various ways. McConnell
testified that every time URS allowed a deviation from the design engineer’s
documents, URS was responsible for the deviation because URS was
redesigning the project.
A former URS employee who worked on the Taxiway C project testified
that URS was understaffed and did not have the capacity to properly
inspect all of Triple R’s work.
The County ultimately terminated URS for performance issues in
December 2008.
The Final Judgment
The trial court entered a final judgment in favor of the County and
against CH2M and Triple R, memorializing the findings it made at the
conclusion of trial.
The trial court found that “the redesign and reconstruction of Taxiway
C was a direct and proximate result of the breaches of contract by Triple
R and CH2M and both are liable for those incidental damages that flow
from their breach.” The trial court relied “on the testimony of the County’s
expert, Mr. Chris Spandau” in finding that CH2M breached its contract
with the County, and relied on experts from both the County and CH2M
in finding that Triple R breached its contract with the County “by failing
to build Taxiway C in conformity with not only the specifications, but also
the density testing . . . .” The trial court found that “the cause for the
failure of Taxiway C in close proximity to its opening to aircraft traffic was
a combination of failure to compact correctly and failure to extricate the
water from the job site.”
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The trial court rejected Triple R’s negligence claim against CH2M,
finding that there was “not competent substantial evidence to support that
claim.” The trial court also rejected Triple R’s Prompt Payment Act claim
against the County, finding that “there was a good faith dispute” justifying
the County’s withholding of $600,000 from Triple R.
The trial court also found that URS, whether due to negligence or
breach of contract, was “the main participant on the job site that caused
the failure of Taxiway C,” as URS was the project manager and had the
opportunity to make changes to the plans as well as to the construction.
Therefore, the trial court reasoned, “URS was substantially in breach of its
contract with the County and at fault for what occurred on Taxiway C.”
The trial court found that the County’s total damages were $6,723,303,
but the court deducted the $725,000 paid by the settling parties, reducing
the County’s damages to $5,998,303. The trial court then “allocate[d]
damages for breach of contract between URS, Triple R, and CH2M” as
follows: (1) 60% of the damages to URS; (2) 25% of the damages to Triple
R; and (3) 15% of the damages to CH2M.
After factoring in a $600,000 credit to Triple R for the amount the
County withheld from Triple R’s final payment application, the trial court
ordered Triple R to pay the County $899,575.75. As for CH2M, the trial
court ordered it to pay the County $899,745.45.
The County appealed the final judgment. CH2M and Triple R both
cross-appealed.
The circuit court properly apportioned damages pursuant to
section 768.81(3), Florida Statutes (2018).
In its appeal, the County attacks the circuit court’s allocation of fault,
which placed the bulk of responsibility on the conduct of URS. It argues
that comparative fault is not applicable to breach of contract cases and
contends that the court should have followed the rule that where separate
breaches of contract cause a single, indivisible injury, comparative fault is
inapplicable, so that the breaching parties are held jointly and severally
liable for the plaintiff’s damages.
We reject the County’s argument and conclude that section 768.81,
Florida Statutes (2018), authorized the circuit court to allocate fault in this
case.
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Section 768.81 is contained in Part II of Chapter 768. In describing the
applicability of Part II, the legislature adopted an expansive view that
applied the statute to both contract and tort actions, “[e]xcept as otherwise
specifically provided.” § 768.71(1), Fla. Stat. (2018). That provision states
in full: “(1) Except as otherwise specifically provided, this part applies to
any action for damages, whether in tort or contract.” Id. (emphasis
supplied).
Although section 768.81(3) requires apportionment of damages in
“negligence” actions, section 768.81(1) defines negligence in a way that
embraces the County’s action against CH2M. Subsection 768.81(1)(c)
defines a “negligence action” as
without limitation, a civil action for damages based upon a
theory of negligence, strict liability, products liability,
professional malpractice whether couched in terms of contract
or tort, or breach of warranty and like theories. The substance
of an action, not conclusory terms used by a party, determines
whether an action is a negligence action.
(Emphasis supplied).
An engineer is a “professional” within the meaning of subsection
768.81(1)(c). The Florida Supreme Court has acknowledged that persons
performing “engineering services are performing professional services, and
the law imposes upon such persons the duty to exercise a reasonable
degree of skill and care, as determined by the degree of skill and care
ordinarily employed by their respective professions under similar
conditions and like surrounding circumstances.” Moransais v. Heathman,
744 So. 2d 973, 976 (Fla. 1999), receded from on other grounds by Tiara
Condo. Ass’n, Inc. v. Marsh & McLennan Cos., 110 So. 3d 399, 407 (Fla.
2013). In the context of the statute of limitations, our supreme court has
held that a “profession” means “any vocation requiring at a minimum a
four-year college degree before licensing is possible in Florida.” Garden v.
Frier, 602 So. 2d 1273, 1275 (Fla. 1992); see also Pierce v. AALL Ins., Inc.,
531 So. 2d 84, 87 (Fla. 1988) (“[F]or purposes of the professional
malpractice statute of limitations, we define a profession as a vocation
requiring, as a minimum standard, a college degree in the specific field.”)1;
Pensacola Exec. House Condo. Ass’n, Inc. v. Baskerville-Donovan
1 The Florida Supreme Court later receded from other language in Pierce
suggesting that the equivalent of a four-year degree would suffice. Garden, 602
So. 2d at 1275.
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Engineers, Inc., 566 So. 2d 850, 851 (Fla. 1st DCA 1990) (holding that an
engineer is a professional as that term was defined in Pierce).
Under the common law of negligence, professionals rendering
professional services are required to perform such services “in accordance
with the standard of care used by similar professionals in the community
under similar circumstances.” Trikon Sunrise Assocs., LLC v. Brice Bldg.
Co., 41 So. 3d 315, 318 (Fla. 4th DCA 2010). “Where an express provision
within a professional services contract provides for a heightened standard
of care, however, the professional must perform in accordance with the
terms of the contract.” Sch. Bd. of Broward Cty. v. Pierce Goodwin
Alexander & Linville, 137 So. 3d 1059, 1065–66 (Fla. 4th DCA 2014).
Thus, “if the professional contracts to perform duties beyond those
required by ordinary standards of care, the quality of that performance
must comport with the contractual terms.” CH2M Hill Se., Inc. v. Pinellas
Cty., 698 So. 2d 1238, 1240 (Fla. 2d DCA 1997).
The gravamen of the County’s action against CH2M was that CH2M
failed to adhere to the contractual standard of care that required it to
design a taxiway in accordance with FAA standards. Under subsection
768.81(1)(c), the essence of a professional malpractice action is the breach
of a standard of care, whether that standard is derived from the common
law or contract. The crucial statutory language is this: “professional
malpractice whether couched in terms of contract or tort.” Id. The
County’s claims against CH2M were “couched in terms of contract” and
fell within the definition of a “[n]egligence action” in the statute. 2
If the action against CH2M is a subsection 768.81(1)(c) “negligence
action,” where does that leave Triple R, which is a general contractor, not
a professional under that subsection? Section 768.81(3) requires a court
to “enter judgment against each party liable on the basis of such party’s
percentage of fault.” Applying a holistic approach to analyzing the
complaint, we conclude that the contract action against Triple R fell under
the umbrella of the “negligence action” against CH2M, so that the circuit
court’s allocation of fault was appropriate. See Martinez v. Miami-Dade
Cty., 975 F. Supp. 2d 1293, 1296 (S.D. Fla. 2013) (analyzing complaint in
its entirety to determine whether it was a section 768.81(1)(c) “negligence
action”). After all, Triple R was to perform the contract according to
2 The County relies on Bre/Cocoa Beach Owner, LLC v. Rolyn Companies, Inc.,
2012 WL 12905849 (M.D. Fla. 2012), to argue that section 768.81 has no
application here. That case is distinguishable because it involved a breach of
contract action against a general contractor who performed post-hurricane
repairs, not a “professional” such as CH2M.
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specifications designed by CH2M, so the causes of action against each
were necessarily intertwined. To prove its case against Triple R, the
County was required to prove that Triple R’s “breach of its contractual
responsibilities was a substantial factor in causing the County’s extensive
damages.” Centex-Rooney Const. Co. v. Martin Cty., 706 So. 2d 20, 25 (Fla.
4th DCA 1997). This is compatible with the concept of “fault” that is at
the heart of subsection 768.81(3) and parallels the tort notion of a violation
of a duty of care that is the proximate cause of damages. Based on the
evidence, the circuit court properly allocated fault among all actors whose
conduct substantially contributed to the County’s damages.
Triple R’s Challenge to the Measure of Damages
This brings us to the question of damages. On cross-appeal, Triple R
argues, among other things, that the County failed to present evidence of
the proper measure of damages, namely, the cost to repair or replace
Taxiway C using CH2M’s original design.
“The proper measure of damages for construction defects is the cost of
correcting the defects, except in certain instances where the corrections
involve an unreasonable destruction of the structure and a cost which is
grossly disproportionate to the results to be obtained.” Kritikos v.
Andersen, 125 So. 3d 885, 888 (Fla. 4th DCA 2013) (quoting Temple Beth
Sholom & Jewish Center, Inc. v. Thyne Construction Corp., 399 So. 2d 525,
526 (Fla. 2d DCA 1981)). Stated another way, “the measure of damages
for breaching a construction contract is the reasonable cost of
construction and completion in accordance with the contract, if this is
possible and does not involve unreasonable economic waste.” Magnum
Constr. Mgmt. Corp. v. City of Miami Beach, 209 So. 3d 51, 56 (Fla. 3d DCA
2016) (emphasis and internal quotation marks omitted). However, “[i]f in
the course of making repairs the owner elects to adopt a more expensive
design, the recovery should be limited to what would have been the
reasonable cost of repair according to the original design.” Temple Beth
Sholom, 399 So. 2d at 526.
For example, in Centex-Rooney, we affirmed a damages award in a
construction defect case based upon the plaintiff’s “actual costs to
remediate, redesign, and reconstruct the buildings, as well as relocate and
finance, reduced by the costs for upgrades and improvements.” 706 So.
2d at 28. However, in that case, we noted that the plaintiff “did not claim
reconstruction expenses for any upgrades or improvements over the
original plans and specifications.” Id. at 27.
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As an alternative to benefit-of-the-bargain damages, an injured party
has a right to damages based on its reliance interest, including
expenditures made in performance or in preparation for performance, the
recovery of which will place the injured party in the position it occupied
before entering into the contract. Del Monte Fresh Produce Co. v. Net
Results, Inc., 77 So. 3d 667, 673 (Fla. 3d DCA 2011). However, “[a]ny
benefit retained from the expenditures made in reliance on the contract
must be offset against the injured party’s damages.” Standard Fed. Bank
v. United States, 62 Fed. Cl. 265, 294 (2004) (citation omitted). In other
words, a reliance recovery may be reduced to the extent that the breaching
party can prove that a “deduction” is appropriate for any benefit received
by the injured party. DPJ Co. Ltd. P’ship v. F.D.I.C., 30 F.3d 247, 250 (1st
Cir. 1994).
Here, the proper measure of damages under an expectation theory was
the cost of repair to bring Taxiway C to its bargained-for state. However,
the trial court computed damages based upon the County’s expenditures
in redesigning and reconstructing Taxiway C in accordance with a
completely different design. The new design was more expensive and more
robust than CH2M’s original design. Accordingly, we conclude that the
trial court erred in computing the County’s damages based upon an
improper measure of the County’s expectation interest.
We disagree with Triple R, however, that the proper remedy on appeal
is a reversal for judgment in its favor. Even if it was not possible to repair
the design defects and construction defects in the original Taxiway C, a
viable alternative measure of damages was the County’s out-of-pocket
costs, less any benefits the County received from the contracts. Thus,
although there was no evidence of the County’s damages under an
expectation theory, the County presented evidence of its reliance damages.
Specifically, the County presented an exhibit showing that its out-of-
pocket expenses for the original design and construction totaled
$4,770,503. However, during CH2M’s cross-examination, the County’s
damages expert admitted that, if certain deductions were made, including
a 23% deduction to account for the percentage of Taxiway C’s expected
useful life that the County received, the County’s out-of-pocket costs
related to the original construction of Taxiway C totaled $3,223,301. That
said, the County’s expert did not concede that each of the proposed
deductions was appropriate, only that CH2M’s math was correct. Thus,
the County’s evidence showed that its reliance damages were at least
$3,223,301 and were possibly higher.
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Conclusion
In sum, we affirm the trial court’s allocation of fault, but we reverse on
the damages issue raised in Triple R’s cross-appeal. On remand, we direct
the trial court to make a finding in the first instance as to the County’s
reliance damages and to enter judgment against Triple R and CH2M based
upon the court’s previous apportionment of fault. 3
We affirm without comment on all other issues raised in the cross-
appeals.
WARNER and GERBER, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
3 Although CH2M did not raise this issue on cross-appeal, we conclude that
CH2M necessarily benefits from the reversal on this issue in Triple R’s cross-
appeal. Section 768.81(3) contemplates a single damage amount to which
percentages of fault are applied to craft a final judgment.
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