Supreme Court of the State of Washington: King County v. Vinci Construction Grands Projets, Parsons RCI, Frontier-Kemper, et al.
By colevuk
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Olympic Steamship Co. v. Centennial Insurance Co.
This Washington Supreme Court case establishes an insured's right to recover attorney's feeds in litigation against insurers. This set precedent for the King County case. -
King County advertises the Central Contract
The county calls for for construction bids for tunneling work on the Brightwater Wastewater Treatment System Expansion Project. The Central Contract includes segments 2 and 3 of the 13 mile tunnel system leading to the wastewater facility. -
King County accepts bid with VPFK, issues Notice to Proceed
Vinci Construction Grands Projets, Parsons RCI, and Frontier-Kemper created a joint venture of three large construction companies and submits a successful bid to mine 13 miles of conveyance facilities leading to the wastewater treatment facility. The Central Contract included tunnel segments 2 and 3. The Central Contract requires substantial work to be complete in 1,540 days or by Nov. 15, 2010. RCW 39.08.010 required VPFK to obtain a performance bond. Five large sureties companies agreed. -
Colorado Structures v. Insurance Co. of the West
This Washington State Supreme Court case rejected the defendant's argument that performance bonds are somehow different from an insurance policy with regard to the recovery of attorney's fees. This set precedent for the King County case. -
Repairs needed on VPFK tunnel boring machines
By December 2008, both VPFK boring machines in segments 2 and 3 are damaged and need extensive repairs. It takes 3 months to complete repairs. -
More repairs needed on damaged machines
By May/June of 2009 the machines were in need of repairs again. -
One year delay and cost overruns
By October of 2009, King County knew that VPFK was more than one year behind schedule and had not yet repaired the two damaged boring machines. -
King County issues Notice of Default
Soon after learning that VPFK was more than a year behind schedule, the county issued a Notice of Default against VPFK and directed VPFK to provide a corrective action plan. The insurance companies that issued VPFK's performance bond were notified one day after the county sent the Notice of Default to VPFK. -
VPFK submits Corrective Action Plan
In the submitted plan, VPFK delays substantial completion of the project until Dec. 22, 2011 and then pushes that date back farther to Feb. 2012 then Feb. 2014. -
VPFK unsure if it can finish the project
On Feb. 19, 2010, just nine months before the completion date outlined in the original Central Contract, VPFK states that it is not sure it will be able to complete the mining for the tunnel and that if it did it would cost the city an additional $98 million, plus or minus 15%. -
King County offers incentives to finish segment 2
To incentivize completion of segment 2 of the project, King County offers VPF $5 million if it can complete this segment by Nov. 5, 2010. VPFK completes the tunnel segment and is paid the $5 million incentive. -
King County subcontracts with JDC to finish segment 3
JDC, a construction company that won the West Contract was finishing its work and was near the tunnel 3 segment that VPFK was struggling with. King County, with the approval of the performance bond sureties, contracted with JDC to finish the tunnel faster and at a lower cost than VPFK had estimated. -
King County files lawsuit against VPFK
King County files a lawsuit against VPFK and one if its sureties. The remaining four sureties under the performance bond join the lawsuit as defendants. King County presented one claim for default and claimed damages totaling $155 million. VPFK claimed more than a dozen different claims and varying damages. -
Jury trial takes three months
From September to December of 2012, the lawsuit was tried in court with a jury. -
Jury rejects VPFK's claims and awards 100% damages to King County
On December 16, 2012, the jury rejected the claims made by VPFK and the sureties. They awarded King County the $155 million in damages they were seeking. The trial court also awarded attorney's fees and costs to the County given the precedent set in the Olympic Steamship and Colorado Structures cases. The Sureties did not agree with this and argued the county was not entitled to recover those fees. -
King County prevails on appeal
A Washington State Court of Appeals found that King County's award of attorney's fees and costs was appropriate, despite the sureties arguments to the contrary. The case then heads to the Washington State Supreme Court for review. -
Washington State Supreme Court hears oral arguments
The Washington State Supreme Court heard oral arguments for the case in which the arguments were centered on the precedent set by Olympic Steamship and Colorado Structure to award attorney's fees on public works projects.
