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  • Geotechnical equipment for standard penetration testsA shipbuilding company and a port commission brought this suit against a company that performed soil stabilization work for a large shipbuilding facility in Louisiana. The troubles started when the soil stabilization work began to fail. This litigation against Defendant was brought, inter alia, for breach of contract and negligent failure to warn under Louisiana law. After a 10-day bench trial, the district court entered judgment for Defendant, dismissing Plaintiff and the Port Commission’s claims.

    Plaintiff was the owner and operator of a shipbuilding operation, and the port commission was a political subdivision of the State of Louisiana. Plaintiff undertook the construction of a large shipbuilding facility in Houma (the “Project”) on land that it owned, as well as on land belonging to Port Commission but under lease to Plaintiff. Phases I and III of the Project were completed on Plaintiff’s land, and Phase II involved the bulkhead for the facility’s waterfront access located on the Port Commission’s land.

    Plaintiff retained an engineering company to design the foundation system in Phases I and III. Based on the results of its soil borings, they concluded that soil-mixed columns were the right option to support the foundation system. Defendant won the bid to complete the soil mixing and drilled shaft work on the Project. The contract called for Defendant to install subterranean soil-mix columns to form the foundation of the shipbuilding facility and prevent it from falling victim structurally to the soft and compressible Louisiana soil.

    As part of its Project obligations, Defendant was to obtain “wet grab” samples from two of the columns made each day to ascertain the columns’ strength. Some of the six-foot diameter columns that were installed satisfied the strength requirements, but still had spiraling, a symptom of both mixed and unmixed soil. In addition, Defendant had several cave-ins during its installation of the drill shafts on some of the columns. Against Defendant’s wishes, Plaintiff ultimately decided to abandon the 156 six-foot columns, move the footprint, and switch to eight-foot columns. Defendant resumed the installation in the new location but continued to have issues.

    There was no written contract linking Defendant to the Port Commission for Defendant’s work on Phase II of the Project. The Port Commission awarded the Phase II contract to another company—which then subcontracted with Defendant to complete the soil-mixing job.

    Unwanted settlement of the foundation columns occurred during Phase III much like it did during Phase I. After all the foundation columns had been installed, Plaintiff commissioned additional strength testing of the columns which showed a range of column strengths. It hired another contractor (“Contractor B”) to perform what Plaintiff alleged to be remedial work on Phase I.

    After removal from state court, the federal district court dismissed Plaintiff’s unjust enrichment claim, and its claims for breach of contract, negligence. The breach of the implied duty of workmanlike performance claim proceeded to trial. Defendant brought a counterclaim against Plaintiff for breach of contract when Plaintiff failed to compensate it for the additional soil mixing that it completed during Phase I. The Port Commission joined the lawsuit and filed a negligence claim against Defendant, contending that Defendant’s column installation was insufficient and that it acted negligently in failing to warn of a dangerous condition.

    After a 10-day bench trial, the district court’s 66-page ruling and judgment was for Plaintiff and awarded a $375,000 mobilization refund that Defendant owed to Plaintiff pursuant to their agreement. The district court held that Plaintiff failed to prove by a preponderance of the evidence its other claims against Defendant, and also found for Defendant on its breach of contract counterclaim against Plaintiff. The court also found that the Port Commission’s claims against Defendant were delictual in nature and were therefore prescribed because they were filed after the one-year cutoff date under state law. Plaintiff and The Port Commission both appealed.

    The Port Commission argued that the district court erred in excluding the expert testimony of its geotechnical engineer, which it tried to enter under Rule 26(a)(2)(C) of the Federal Rules of Civil Procedure. Further, Port Commission argued that the district court erred by relying on Defendant’s experts.

    In a per curiam opinion, Circuit Judges Jolly, Higginbotham, and Prado of the Fifth Circuit Court of Appeals wrote that Rule 26(a)(2)(C) addresses the disclosure of expert witnesses who were involved in the events leading up to litigation and may testify both as an expert and as a fact witness. Subsection (C), the Court noted, is to be contrasted with Rule 26(a)(2)(B), which accounts for experts who are retained specifically for litigation. Rule 26(a)(2)(B) expert witnesses are required to file a written report.

    The district court found that the geotechnical expert didn’t fit the criteria for classification as a Rule 26(a)(2)(C) witness. The expert worked with a consultancy, and when Contractor B contracted with Plaintiff and the Port Commission to complete Plaintiff’s remediation work on the Project, Contractor B subcontracted with that same consultancy to complete Cone Penetrometer Testing (“CPT”) to “measure soil strength and compressibility and to assess the soil type in areas where Defendant had installed soil-mixed columns.”

    To explain its reasoning, the court referred to emails between Plaintiffs and the geotechnical expert, as well as the content of expert’s testimony—both of which supported the district court’s conclusion that the expert’s opinion was prepared specifically for litigation and didn’t constitute to the ground-level opinion of an expert who was involved in the events leading up to litigation. The Fifth Circuit held that the district court didn’t err in excluding the geotechnical expert’s expert testimony because an expert report pursuant to Rule 26(a)(2)(B) wasn’t filed.

    With respect to the Port Commission’s claim that the district court improperly relied on the testimony of Defendant’s experts, the Court of Appeals would not disturb the district court’s expert witness credibility determination. The Fifth Circuit affirmed the judgment of the district court.

     

    LaShip v. Hayward Baker, Inc., 2017 U.S. App. LEXIS 3694 (5th Cir. March 1, 2017)