Mar 30 2013

Court of Appeal Sides With Piedmont in Procedural Motion in Undergrounding Lawsuit

Litigation with Harris and Gray returns to trial court – 

Legal procedures continue as the City of Piedmont attempts to recover funds spent on the Piedmont Hills Undergrounding Assessment District (PHUAD) established for undergrounding of utilities.  The City is charging two engineering firms with liability for the over $2.4 million spent to complete the project after rock was discovered in the area.

On March 21, 2013, the California Court of Appeal sided with the City of Piedmont in a procedural motion in its suit against two of the three engineering firms involved in the Piedmont Hills Undergrounding Assessment District. The Court of Appeal upheld a lower court ruling that arbitration was not mandated by the City’s contract with Harris and Associates (Harris).  The case will now go back to Superior Court. No trial date has been set.

Attorneys for Harris and Associates, a civil engineering firm, filed an August 2011 motion to compel the City of Piedmont to participate in arbitration on the issue of their 2011 breach of contract lawsuit against Harris.  The City had two contracts with Harris, the March, 2007 On-Call City Engineer agreement, which had a mediation and binding arbitration provision.  The other contract was a 2005 Underground Utility contract, which did not contain an arbitration clause.  This contract was amended in 2008 to delete Harris’ responsibility in civil engineering work on the undergrounding.  On the same day the City transferred the engineering work, signing an Underground Utility contract with Robert Gray and Associates (Gray) to provide design, final plans, specifications, and bid documents. (In 2011, the City also sued Gray.)

Gray’s preliminary design drawings without specifications were submitted to the City in January 2009.  The City approved four hours of review by Harris of the preliminary drawings, resulting in three pages of comments. In its capacity as on-call City Engineer, Harris was not asked to review or approve the final plans by Gray.  Instead the City hired ILS Associates* (ILS)  to review the final plans.

The first district Court of Appeal reviewed the history of the motion to compel arbitration:

“On October 4, 2011, the trial court sustained Harris’s objections to many aspects of Piedmont’s three declarations.  It issued a tentative decision exercising its discretion to deny the petition to compel on two grounds.  First, it rejected Harris’s invitation to make a conclusive finding that the Piedmont action was not based on the 2005 contract.  The trial court concluded that to make such a binding determination on a petition to compel arbitration would be improper.  Instead, the trial court accepted Piedmont’s allegations that Harris breached both the 2005 and the 2007 contracts.  (See § 1281.2(c), par. 3.)

The trial court also found that the resolution of some issues arising from the 2007 arbitration agreement and other issues in litigation involving third party Gray created a substantial risk of conflicting rulings on common issues of law and fact.  It found that Piedmont’s claims against Harris were not easily severable from those alleged against Gray.  It also rejected Harris’s claim that the issues involving Gray involved no common issues of law or fact that could affect the Harris aspect of the Piedmont action.  It found that Gray took over a project on which Harris had worked for several years, and on which Harris continued to have “at least a modest role.”  (See § 1281.2(c), pars. 1, 4.)”

On October 21, 2011, the trial court denied the petition to compel arbitration.  And, on March 21, 2013, the Court of Appeal affirmed the denial of Harris’s petition to compel arbitration.

*The City is not suing ILS for its role as engineering reviewer of the final plans.

All court documents can be seen here.

Further information can be found on The Patch.

One Response to “Court of Appeal Sides With Piedmont in Procedural Motion in Undergrounding Lawsuit”

  1. It’s about time!!!!!!!!!!!
    Hopefully we can now look forward to seeing the City (meaning all of us taxpayers) recover most of the wasted dollars foisted on us by this fiasco in the not too distant future.

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