TRICKEY, J.
¶ 2 In 2006, King County hired a joint venture of three firms — Vinci Construction Grands Projets, Parsons RCI, and Frontier-Kemper, JV (collectively, VPFK)
¶ 3 VPFK encountered many difficulties during the construction of the tunnels, and the project was significantly delayed as a result. When VPFK failed to meet its contractual deadlines, King County retained another contractor to complete one of the tunnels.
¶ 4 King County then sued VPFK and the Sureties for default. The trial court ruled in favor of King County on three summary judgment motions, dismissing two of VPFK's claims concerning differing site conditions and defective specifications.
¶ 5 Following a three month trial, the jury found VPFK and the Sureties jointly and severally liable for King County's single claim of default, awarding King County $155,831,471.00 in damages. The jury also awarded VPFK $26,252,949.00 in damages for some of the many claims VPFK submitted to the jury. The trial court awarded King County attorney fees and costs.
¶ 6 VPFK and the Sureties appeal. VPFK asserts numerous challenges to the summary judgment rulings, the jury instructions, and the trial court's ruling excluding evidence. The Sureties appeal the trial court's award of attorney fees. King County cross-appeals, asserting that the trial court erred by denying its motion for judgment as a matter of law.
¶ 7 We affirm the trial court's summary judgment, evidentiary, and jury instruction rulings challenged by VPFK. We also affirm the trial court's denial of King County's motion for judgment as a matter of law. Finally, we affirm the award of attorney fees to King County, and award attorney fees to King County on appeal.
¶ 8 The Brightwater project was comprised of two major components: (1) a new treatment plant and (2) a conveyance system composed of pipelines and pumps that would carry raw sewage to the treatment plant and, in turn, carry clean effluent from the plant to Puget Sound.
¶ 9 King County (County) and its consultants began designing the Brightwater contract
¶ 10 According to the County's February 2004 "Predesign Report," the new tunnel would be situated below the "groundwater table."
¶ 11 The County selected an STBM over an EPBM because the BT-3 tunnel was anticipated to experience high pressures, and at the time, STBMs had the ability to operate in higher pressures than EPBMs.
¶ 12 The Contract contained a "Differing Site Conditions" clause, which allowed VPFK to request an equitable adjustment in contract time or price if it encountered site conditions different than those indicated in the Contract Documents.
¶ 13 The Contract also included provisions about interventions.
The Contract did not indicate what the pressure would be at any particular location in the tunnel.
¶ 14 The GDR contained raw data about the geotechnical conditions along the BT-2 and BT-3 tunnel alignments. The GDR included data on soil samples extracted from boreholes drilled approximately 300 to 400 feet apart along the tunnel alignments.
¶ 15 The GBR interpreted the raw data from the GDR.
¶ 16 The County submitted the Contract Documents for the Central Contract to the bidders on January 19, 2006.
¶ 17 VPFK submitted a bid for the Central Contract. To develop its tender for the Central Contract, VPFK reviewed and analyzed the Contract Documents, including the specifications and plans, and information about the boreholes, soil profiles, and water tables.
¶ 18 Relying on the information set forth in the GBR, Guertin prepared a report that included color-coded charts identifying the dominant soils in the tunnel.
¶ 19 In June 2006, the County awarded the Central Contract to VPFK, which had submitted the lowest bid of $209,756,058.00.
¶ 20 As required by RCW 39.08.010, VPFK obtained a performance and payment bond (Bond) from the Sureties.
¶ 21 Soon after VPFK began the tunneling work, and throughout the course of the project, it complained of many difficulties it encountered, which it claimed contributed to the significant delays in completion of the project.
¶ 22 In particular, at issue here are RCOs 65 and 66, which VPFK submitted to the County on November 7, 2008. RCO 65 was entitled, "Notice of Differing Site Condition, Request for Change Order No. 65 for Increased Hyperbaric Work."
¶ 23 In RCO 66, "Notice of Differing Site Condition and Defective Specification, Request for Change Order No. 66 for Tunnel Delays,"
¶ 24 In an attempt to resolve RCOs 65 and 66, on April 21, 2009, VPFK submitted to the County expert reports concluding that VPFK acted reasonably and consistently when its experts interpolated the soil conditions along the tunnel alignment.
¶ 25 On January 22, 2010, the County rejected RCO 66, concluding that VPFK failed to show that the actual soil conditions were different from what the Contract Documents indicated.
¶ 26 In May 2009, VPFK workers discovered that the rims of both STBMs were damaged, and all mining stopped.
¶ 27 In July 2009, VPFK and the County convened a jointly selected panel of international experts, including representatives from the County's Brightwater design team and independent experts.
¶ 28 The County concluded that it was not feasible to comply with the panel's recommendations.
¶ 29 The panel made its recommendations in July 2009. By October 2009, VPFK had not started to repair either STBM and was one year behind schedule.
¶ 30 VPFK submitted a corrective action plan on November 13, 2009.
¶ 31 On December 8, 2009, the County told VPFK that because its projected substantial completion date was much later than the Contract provided, the schedule proposed did not cure the default.
¶ 32 Subsequently, VPFK told the County that it could complete the mining of the BT-3 tunnel on December 15, 2012.
¶ 33 On February 15, 2010, after an extensive mediation process, VPFK and the County entered into an Interim Agreement, which allowed the County to delete the remaining BT-3 tunneling work from VPFK's contract and hire JayDee Coluccio (JDC), the BT-4 tunnel alignment contractor, to finish the BT-3 alignment.
¶ 34 In February 2010, VPFK completed the repair of the BT-2.
¶ 36 In its March 2010 response, the Sureties stated that it "reserves all of its rights and defenses to dispute the alleged underlying default which gave rise to King[] County['s] retention of [JDC,] including the reasonableness of any compensation paid by King County to [JDC] in connection with the BT-3 work" and that it "further reserves all of VPFK's rights, defenses, and claims of any nature or description, under the bonded contract, at law or equity."
¶ 37 In a March 2010 letter to VPFK's counsel, the County requested that pursuant to the Bond, the Sureties had a duty to correct VPFK's defaults.
¶ 38 On April 19, 2010, the County signed a contract with JDC to complete the BT-3 tunnel work.
¶ 39 The County filed suit against VPFK and surety Travelers in April 2010.
¶ 40 VPFK asserted several defenses and counterclaims.
¶ 41 All of the parties filed numerous summary judgment motions.
¶ 42 Trial was held from September 12 to December 6, 2012. While the County submitted a single claim to the jury for default on the Contract, VPFK submitted over a dozen defenses and claims.
¶ 43 The jury also found, however, that VPFK was in default under the contract, and awarded the County the entire amount of alleged damages of $155,831,471.00.
¶ 44 VPFK and the Sureties appeal; the County cross-appeals.
¶ 45 VPFK first contends that the trial court erred by dismissing on summary judgment its differing site condition claim. Specifically, VPFK asserts that it encountered more frequent changes between plastic and non-plastic soils than the Contract Documents indicated.
¶ 46 "The standard of review of an order of summary judgment is de novo, and the appellate court performs the same inquiry as the trial court." Smith v. Safeco Ins. Co., 150 Wn.2d 478, 483, 78 P.3d 1274 (2003). Summary judgment is proper if the pleadings, affidavits, depositions, and admissions on file demonstrate that there are no genuine issues of material fact, and that the moving party is entitled to judgment as a matter of law. CR 56(c).
¶ 47 We focus first on the question of what legal standard applies when determining the validity of a differing site condition claim. In answering this question, we are guided by two Washington decisions: Maryland Casualty Co. v. City of Seattle, 9 Wn.2d 666, 116 P.2d 280 (1941) and Basin Paving Co. v. Mike M. Johnson, Inc., 107 Wn.App. 61, 27 P.3d 609 (2001).
¶ 48 In Maryland Casualty, the contractor was hired to build a sewer following its successful bid. 9 Wash.2d at 668, 116 P.2d 280. While excavating the tunnel, he encountered ground that was too wet and soft to proceed. Maryland Casualty, 9 Wash.2d at 669, 116 P.2d 280. The contractor had to work under
¶ 49 In reviewing the contractor's claim, the Washington Supreme Court announced the "basic principle of law" applicable in these circumstances:
Maryland Casualty, 9 Wash.2d at 670, 116 P.2d 280 (internal quotation marks and citation omitted).
¶ 50 In Basin Paving, a public works contract involving heavy excavation included a differing site conditions clause. 107 Wash. App. at 62-64, 27 P.3d 609. The town of Lind had conducted boring tests along the tunnel at 50-foot intervals, and created drawings based on those tests. Basin Paving, 107 Wash.App. at 63, 27 P.3d 609. During excavation, however, the contractor encountered more rock than anticipated and sought additional compensation from the town. Basin Paving, 107 Wash.App. at 63, 27 P.3d 609.
¶ 51 The contractor argued that the unexpected amount of rock was a compensable changed condition because it exceeded the town's projections based on the boring tests. Basin Paving, 107 Wash.App. at 65, 27 P.3d 609. The Court of Appeals, Division Three disagreed, holding that "[r]ecovery is ... limited to when the `condition complained of could not reasonably have been anticipated by either party to the contract.'" Basin Paving, 107 Wash.App. at 65, 27 P.3d 609 (quoting Bignold v. King County, 65 Wn.2d 817, 821-22, 399 P.2d 611 (1965)). The court concluded, "[A] contractor cannot recover additional compensation for a `changed condition' if the complained of condition was foreseeable." Basin Paving, 107 Wash.App. at 67-68, 27 P.3d 609 (quoting Bignold, 65 Wash.2d at 822, 399 P.2d 611).
¶ 52 From these decisions, we discern the following requirements for establishing a differing site condition claim:
¶ 53 Applying this test here, we conclude that VPFK has failed to satisfy the first two elements. First, VPFK failed to demonstrate that the Contract Documents specifically indicated the frequency of transitions between plastic and non-plastic soils. VPFK concedes this point.
¶ 54 The record contains numerous admissions by VPFK that the Contract Documents contained neither location-specific baselines for the soil types between the boreholes nor indications of expected transitions from plastic to non-plastic soils. For example, Dr. Ronald Heuer, VPFK's expert witness, confirmed that "the GBR contains no baseline for expected number of changes in face composition."
¶ 55 VPFK argues that even though there was no explicit representation in the Contract Documents about the frequency of transitions in the soil, a question of fact remains about whether its assumptions about the soil conditions amounted to a reasonable interpretation of the Contract Documents. VPFK contends that neither the Contract Documents nor case law require an express representation about ground conditions in order to pursue a differing site conditions claim. Rather, VPFK asserts, all that is required is an indication, which may be proven by inferences and implications.
¶ 56 Even if Washington recognized this additional element of reasonable interpretation, however, VPFK's claim still fails because the Contract Documents contained no indication, express or implicit, as to the number of transitions. The authorities VPFK cites support this conclusion. See, e.g., Renda Marine, Inc. v. United States, 66 Fed.Cl. 639, 651 (2005) (a "differing site condition cannot exist where `the plans and specifications do not show or indicate anything about the alleged unforeseen condition, i.e., if they say nothing one way or the other about [the subsurface condition].'" (alteration in original) (internal quotation marks omitted) (quoting United Contractors v. United States, 177 Ct.Cl. 151, 368 F.2d 585, 595 (1996))); Foster Constr. C.A. and Williams Bros. Co. v. United States, 193 Ct.Cl. 587, 603, 435 F.2d 873 (1970) ("[A] contract silent on subsurface conditions cannot support a changed conditions claim....").
¶ 57 Nor does Washington case law or the Contract Documents support VPFK's argument that the County should be liable for its own interpretations of the Contract Documents. Washington courts have rejected differing site condition claims where the public works contract disclaimed liability for information it provided about subsurface information or gave no information about subsurface information. See, e.g., Basin Paving, 107 Wn.App. 61, 27 P.3d 609 (court rejected contractor's differing site condition claim where the city disclaimed liability for the accuracy of boring tests and for any conclusions drawn therefrom); Dravo Corp. v. Municipality of Metro. Seattle, 79 Wn.2d 214, 484 P.2d 399 (1971) (court refused to grant contractor additional compensation for a differing site condition claim where city disclaimed accuracy of subsurface test results and contractor assumed risk by agreeing to terms of contract).
¶ 58 Here, the Contract Documents explicitly stated that bidders should make their own interpretations and conclusions about the soil conditions along the tunnel. Importantly, the Contract Documents included a provision that shifted to the contractor any risk of assumptions made by the contractor that differed from the County's data:
¶ 59 Furthermore, in a "Warranty Statement" contained in the GBR, the County cautioned bidders that the "geotechnical baseline conditions contained herein are not necessarily geotechnical fact; the actual conditions encountered will be representative of the range of values, but the locations at which they are encountered will vary."
¶ 60 The trial court properly ruled that "there had been no representation ... as to the frequency or number of transition[s] except that there would be frequent transitions and that the soil conditions were variable."
¶ 61 VPFK also failed to establish the second element of a differing site condition claim — that it reasonably relied on contract indications when preparing its bid. The record does not support VPFK's claim that it retained Launay and Guertin to analyze the locations and expected frequency of transitions between plastic and non-plastic soils based on the County's data.
¶ 62 Launay's 2006 report about the expected tunnel conditions contained no prediction of the number of soil transitions between plastic and non-plastic soils.
¶ 63 Although Guertin's report identified the dominant soils at locations along the tunnel alignments, Guertin noted that "it [would] be difficult, if not impossible, to determine actual face conditions except when the machine is stopped and the front chamber evacuated to permit inspection and maintenance."
¶ 64 Debaire testified that in preparing for the bid, it was impossible to determine the exact composition of the soils between the boreholes.
¶ 65 We also note that at oral argument on the County's motion, the trial court repeatedly asked VPFK's counsel for evidence establishing VPFK's reliance on a particular estimate of the frequency of soils transitions.
¶ 66 VPFK failed to establish material questions of fact that the Contract Documents
¶ 67 Next, VPFK asserts that the trial court erred by summarily dismissing its defective specification claim. It contends that it raised genuine questions of fact that the County's plans and specifications, which required VPFK to use an STBM, were defective. We disagree.
¶ 68 "It is a well established rule in Washington that when ... a contractor is required to build in accordance with plans and specifications furnished by the owner, it is the owner, not the contractor, who impliedly guarantees that the plans are workable and sufficient." Weston v. New Bethel Missionary Baptist Church, 23 Wn.App. 747, 753-54, 598 P.2d 411 (1978) (citing several Washington decisions).
¶ 69 In its answer to the County's complaint, VPFK summarized its defective specification claim:
¶ 70 The trial court dismissed this claim, finding no material fact that the designation of the STBM was defective.
¶ 71 VPFK presented evidence that as early as 2005, when the Contract was 60 percent complete, the County acknowledged that specification of the STBM raised an implied warranty that only an STBM could complete the tunnel drives.
¶ 72 But although VPFK's evidence tends to show the County's awareness of potential risk associated with selecting the STBM, there was no evidence that a machine other than the STBM could effectively accomplish the task of boring the site-specific tunnel drives. The County ultimately selected the STBM because it was found that an EPBM could not control the external pressures.
¶ 73 In addition, the evidence before the trial court on summary judgment was that VPFK actually preferred the STBM over the EPBM.
¶ 74 VPFK contends that JDC's use of an EPBM to complete the BT-3 tunnel created a material issue of fact about whether it was feasible to excavate the BT-3 tunnel using a different machine. However, the record shows that the County hired JDC and approved its use of an EPBM because JDC's machine was the best and only available option at the time.
¶ 75 VPFK's additional allegations concerning the defective specification of the STBM do not persuade us. VPFK made many of its complicated arguments on defective specification as alternatives to a differing site condition claim. VPFK presented these same arguments as differing site condition claims to the jury. For example, VPFK asserted that the specification of the STBM was defective because the atmospheric pressures within the tunnel were much higher than anticipated and made the work more expensive and less efficient.
¶ 76 Furthermore, to the extent that VPFK's implied warranty argument related to difficult conditions of the soil — such as the unpredictable soil encountered, the abrasivity of the pressure, the face instabilities, or the variation of face conditions — VPFK also presented these arguments as differing site condition claims to the jury.
¶ 77 VPFK argues that the following evidence was not considered by the court and demonstrates that the plans and specifications were defective in their prescriptions of how to use the STBM: (1) the increased frequency of transitions between soil types; (2) the lack of provision in the Contract for additional exploratory holes to accommodate interventions of the STBM; and (3) tunnel face instability.
¶ 78 We conclude that the trial court's ruling was limited to the designation of the STBM, and VPFK failed to create a material question of fact that the STBM was defective. VPFK's additional, related allegations were either disposed of in the trial court's differing site conditions summary judgment ruling or were presented to the jury as separate differing site conditions claims. No material question of fact remained as to whether VPFK's specifications were defective.
¶ 79 VPFK next contends that the trial court erred by declining to give the jury its proposed jury instructions on its implied warranty claim concerning ground improvements.
VPFK proposed the following jury instructions:
¶ 80 We review a trial court's refusal to give a proposed jury instruction for abuse of discretion. Chunyk & Conley/Quad-C v. Bray, 156 Wn.App. 246, 252, 232 P.3d 564 (2010). We review alleged errors of law in a jury instruction de novo. Cox v. Spangler, 141 Wn.2d 431, 442, 5 P.3d 1265, 22 P.3d 791 (2000). "A trial court must instruct the jury on a party's case theory if substantial evidence supports it." Estate of Dormaier ex rel. Dormaier v. Columbia Basin Anesthesia, P.L.L.C., 177 Wn.App. 828, 851, 313 P.3d 431 (2013).
¶ 81 VPFK presented evidence at trial that the plans and specifications required VPFK to perform all interventions from inside the tunnel using slurry and compressed air, but the Contract did not provide for ground improvements. VPFK argues on appeal that "[t]his evidence supported the conclusion that the County breached its implied warranty that the tunnels could be dug using an STBM and without ground improvements. It also supported the conclusion that VPFK was entitled to the extra time and money required to make the ground improvements."
¶ 82 VPFK moved for partial summary judgment "to limit any recovery that King County may obtain to the contractually-specified liquidated damages, instead of the higher alleged actual damages that King County now seeks to recover."
¶ 83 A contract is construed to give controlling weight to the parties' intent, as expressed in the contract's plain language. Western Plaza, LLC v. Tison, 180 Wn.App. 17, 22, 322 P.3d 1, review granted, ___ Wash.2d ___, 336 P.3d 1165 (2014). "[W]e view the contract as a whole, interpreting particular language in the context of [the] other contract provisions." Viking Bank v. Firgrove Commons 3, LLC, 183 Wn.App. 706, 713, 334 P.3d 116 (2014).
¶ 84 Section 10.7(A) of the Contract, which dealt with liquidated damages against VPFK, stated that the liquidated damages "amounts shall be construed as the actual amount of damages sustained by the County."
¶ 85 Under the "Termination Provision" in Article 8 of the Contract, the County was permitted to terminate the Contract, or any part of it, upon the occurrence of any one or more of the nine specific events enumerated in that provision.
¶ 86 The Interim Agreement preserved these rights and remedies. It stated that the County "has the right to pursue a claim against VPFK based on the allegation that VPFK is in default and that King County's costs to complete the BT-3 tunnel that exceed $16,487,552[.00] were caused by that default."
¶ 87 The County's claims were not limited to its assertion that VPFK was liable because it failed to complete its work on time. Instead, it brought a claim of default. Sections 8.0(A)(4) and (7) of the Contract allowed the County to recover "all damages" as a result of VPFK's default "in addition to any other rights and remedies" provided in the Contract.
¶ 88 VPFK contends that the trial court erred by prohibiting VPFK's scheduling expert, Nessim Habashi, from giving opinion testimony that the County's delay damages were caused by a concurrent delay in completing repairs to defective pipes in the East Tunnel. We disagree and hold that even assuming the trial court erred by excluding this evidence, such error was harmless.
¶ 89 We review a trial court's admission or exclusion of expert testimony for abuse of discretion. Aubin v. Barton, 123 Wn.App. 592, 608, 98 P.3d 126 (2004) (citing Esparza v. Skyreach Equip., Inc., 103 Wn.App. 916, 924, 15 P.3d 188 (2000)). "A court abuses its discretion in admitting or excluding expert testimony when its decision is manifestly unreasonable or based on untenable grounds or reasons." Aubin, 123 Wash.App. at 608, 98 P.3d 126 (citing Hall v. Sacred Heart Med. Ctr., 100 Wn.App. 53, 64, 995 P.2d 621 (2000)).
¶ 90 On September 10, 2012, VPFK moved to continue the trial to allow it time to review newly discovered evidence.
¶ 91 On November 26, 2012, VPFK submitted an offer of proof to support its defense theory concerning concurrent delays.
¶ 92 The County objected to the admission of VPFK's new evidence, arguing that VPFK could have learned about the delays before the discovery cut-off, but failed to do so, and that the evidence was irrelevant.
¶ 93 VPFK argues that the trial court abused its discretion because it reached a decision not supported by the facts and because it "excluded evidence for a reason inconsistent with its own rationale for allowing additional discovery on the concurrent delay issue."
¶ 94 The County notes that VPFK did not timely disclose this evidence and argues that under local rules and case law, the untimely designation of a witness warrants exclusion of that witness. King County Local Rule 26(b)(4) (2011) provided, "Any person not disclosed in compliance with this rule may not be called to testify at trial, unless the Court orders otherwise for good cause and subject to such conditions as justice requires." In Scott v. Grader, 105 Wn.App. 136, 140, 18 P.3d 1150 (2001), this court held that "[a] party's untimely designation of a witness without reasonable excuse will justify an order excluding the witness." We do not find this argument compelling. Here, VPFK listed Habashi as a witness; it was the scope of his testimony that changed. These authorities, however, apply to the identity of the witnesses, not to portions of a witness's testimony. They do not lend strong support to the County's argument.
¶ 95 The County also contends that Habashi's testimony was irrelevant. The County's claim for delay damages was based on VPFK's 18-month delay from March 2011 to September 2012.
¶ 96 But even assuming without deciding that the trial court erred, VPFK has not shown that any prejudice resulted from the exclusion of Habashi's testimony. "An evidentiary error requires reversal only if it results in prejudice; only if it is reasonable to conclude that the trial outcome would have been materially affected had the error not occurred." Lutz Tile, Inc. v. Krech, 136 Wn.App. 899, 905, 151 P.3d 219 (2007).
¶ 97 The record shows that although the trial court excluded Habashi's testimony, it did not preclude VPFK from presenting its concurrent delay damages argument to the jury. VPFK elicited other testimony from Habashi in support of its argument that the East Tunnel repair work was a concurrent delay. VPFK then examined the County's witnesses about concurrent delays. It first questioned Judy Cochran, the County's employee in charge of Brightwater, about the project schedule, the East Tunnel pipe defects, and the impact of the repair work on the critical path for the project.
¶ 98 Because VPFK was able to present its concurrent delay theory, we conclude that VPFK was not prejudiced by the trial court's exclusion of portions of Habashi's testimony. The trial court did not abuse its discretion.
¶ 99 Following entry of the jury verdict, the trial court awarded attorney fees and costs to the County pursuant to Olympic Steamship, Inc. v. Centennial Insurance Co., 117 Wn.2d 37, 811 P.2d 673 (1991) and Colorado Structures, Inc. v. Insurance Co. of the West, 161 Wn.2d 577, 167 P.3d 1125 (2007).
¶ 100 The question whether a party is entitled to attorney fees is an issue of law that we review de novo. Colorado Structures, 161 Wash.2d at 586, 167 P.3d 1125.
¶ 101 Washington adheres to the "American rule," which holds that absent a contract, statute, or recognized equitable principle, attorney fees are not available as either costs or damages. City of Seattle v. McCready, 131 Wn.2d 266, 273-74, 931 P.2d 156 (1997). In Olympic Steamship, our Supreme Court recognized one such equitable principle. It held that "[a]n insured who is compelled to assume the burden of legal action to obtain the benefit of its insurance contract is entitled to attorney fees." Olympic Steamship, 117 Wash.2d at 54, 811 P.2d 673.
¶ 102 In Colorado Structures, 161 Wash.2d at 597-98, 167 P.3d 1125, our Supreme Court expressly extended the Olympic Steamship rule to apply to an action by an obligee to recover on a performance bond, such that a surety that wrongfully denies coverage is liable for attorney fees. The court reasoned that the same rationale for awarding attorney fees in the insurance context applied with equal force in the surety context: "[G]iven the underlying principles of Olympic Steamship and the nature of a performance bond, which guarantees the performance of the principal, we fail to find a material distinction [between performance bonds and a traditional insurance policy]. Indeed, all surety bonds are regarded as `in the nature' of insurance contracts, and controlled by the rules of interpretation of such contracts." Colorado Structures, 161 Wash.2d at 598, 167 P.3d 1125. The court explained, "`[W]hen an insurer unsuccessfully contests coverage, it has placed its interests above the insured. Our decision in Olympic Steamship remedies this inequity by requiring that the insured be made whole.'" Colorado Structures, 161 Wash.2d at 607, 167 P.3d 1125 (quoting McGreevy v. Or. Mut. Ins. Co., 128 Wn.2d 26, 39-40, 904 P.2d 731 (1995)). Our Supreme Court has also extended Olympic Steamship to apply to litigation expenses, including expert witness fees. Panorama Village Condo. Owners Ass'n Bd. of Dirs. v. Allstate Ins. Co., 144 Wn.2d 130, 144, 26 P.3d 910 (2001).
¶ 103 Here, the trial court's award of attorney fees and expenses was consistent with these cases. The County had to take legal action to obtain the benefit of the performance bond. Under Olympic Steamship and Colorado Structures, the County was entitled to recover attorney fees from the Sureties.
¶ 104 Nevertheless, the Sureties contend that the equitable principles acknowledged in Olympic Steamship and Colorado Structures do not apply here, arguing that cases arising out of public works contracts are governed solely by a comprehensive statutory scheme — RCW 4.84.250 through .280, as modified by RCW 39.04.240 of the Public Works Act, chapter 39.04 RCW.
¶ 105 RCW 39.04.240(1) provides:
RCW 4.84.260 allows for an award of attorney fees to the "prevailing party":
¶ 106 The Sureties assert that this statutory scheme does not authorize a fee award here because the County was not the prevailing party; it never made a settlement offer to VPFK or the Sureties. But the Sureties fail to recognize that RCW 4.84.250 through.280, as modified by RCW 39.04.240, is not the exclusive means for a governmental entity to recover attorney fees in a dispute over a performance bond. The legislature did not intend for the statutory scheme to preclude the courts from applying equitable principles, such as those embodied in Olympic Steamship, to recover attorney fees in such circumstances.
¶ 107 The legislature has the authority to supersede, abrogate, or modify the common law. Potter v. Wash. State Patrol, 165 Wn.2d 67, 76, 196 P.3d 691 (2008). "However, we are hesitant to recognize an abrogation or derogation from the common law absent clear evidence of the legislature's intent to deviate from the common law." Potter, 165 Wash.2d at 76-77, 196 P.3d 691. A statute in derogation of the common law "is to be construed strictly, and limited to its purposes." Carson v. Fine, 123 Wn.2d 206, 214, 867 P.2d 610 (1994).
¶ 108 "If a remedy provided by a statute is exclusive, the statute implicitly abrogates all common law remedies within the scope of the statute." Potter, 165 Wash.2d at 79, 196 P.3d 691. To determine whether the statute provides an exclusive remedy, we consider whether the statute in question contains an express statement of exclusivity, its statutory language, and other expressions of legislative intent. Potter, 165 Wash.2d at 80, 196 P.3d 691. "In the absence of an express statement declaring a remedy to be exclusive, we require clear evidence that the legislature intended to abrogate the common law." Potter, 165 Wash.2d at 81, 196 P.3d 691 (citing In re Parentage of L.B., 155 Wn.2d 679, 695 n. 11, 122 P.3d 161 (2005)).
¶ 109 Here, the language of the statutes does not explicitly convey the legislature's intent that RCW 39.04.240 be the exclusive method of recovering attorney fees in a dispute over a performance bond in a case arising out of public works contracts. We decline to hold that the legislature intended to abrogate the equitable power of courts in awarding attorney fees under the common law principles set forth in Olympic Steamship and Colorado Structures in cases arising from public works contracts.
¶ 110 The Sureties next argue that an award of fees would be inequitable because neither the Contract Documents nor the Bond provides for recovery of attorney fees. They argue that VPFK had no notice that it would be liable for attorney fees, unlike Colorado Structures, and thus, VPFK had no opportunity to plan its litigation strategy to minimize its risk that it would have to pay attorney fees. This argument lacks merit. "[I]t has long been held to `be the universal law that the statutes and laws governing citizens in a state are presumed to be incorporated in contracts made by such citizens, because the presumption is that the contracting parties know the law.'" Cornish Coll. of the Arts v. 1000 Va. Ltd. P'ship, 158 Wn.App. 203, 223-24, 242 P.3d 1 (2010) (quoting Leiendecker v. Aetna Indem. Co., 52 Wn. 609, 611, 101 P. 219 (1909)). Our Supreme Court's decisions in Olympic Steamship and Colorado Structures are well settled law. The Sureties cannot now argue that they lacked notice of their potential liability for attorney fees and costs when they improperly denied the County's claims against the Bond.
¶ 111 The Sureties next contend that even if the trial court properly awarded attorney fees, the trial court erred by failing to
¶ 112 We review a trial court's decision regarding the segregation of attorney fees for abuse of discretion. Loeffelholz v. Citizens for Leaders with Ethics & Accountability Now (C.L.E.A.N.), 119 Wn.App. 665, 690, 82 P.3d 1199 (2004).
¶ 113 Here, the trial court found that "[t]hroughout the litigation, the Sureties adopted VPFK's defenses, including VPFK's claims for differing site conditions (DSCs) that VPFK claimed were overlapping and interconnected and not capable of segregation for purposes of calculating damages."
¶ 114 The trial court then entered the following conclusions of law, which the Sureties challenge:
¶ 115 "If attorney fees are recoverable for only some of a party's claims, the award must properly reflect a segregation of the time spent on issues for which fees are authorized from time spent on other issues," even where the claims overlap or are interrelated. Mayer v. City of Seattle, 102 Wn.App. 66, 79-80, 10 P.3d 408 (2000); Loeffelholz, 119 Wash.App. at 690, 82 P.3d 1199. But segregation of attorney fees is not required if the trial court determines that the claims are so related that no reasonable segregation of successful and unsuccessful claims can be made. Loeffelholz, 119 Wash. App. at 691, 82 P.3d 1199. Where the "`plaintiff's claims for relief ... involve a common core of facts or [are] based on related legal theories,' a lawsuit cannot be `viewed as a series of discrete claims' and, thus, the claims should not be segregated in determining an award of fees." Fiore, 169 Wash.App. at 352, 279 P.3d 972 (internal quotation marks omitted) (quoting Brand v. Dep't of Labor & Indus., 139 Wn.2d 659, 672-73, 989 P.2d 1111 (1999)); see also Bloor v. Fritz, 143 Wn.App. 718, 747, 180 P.3d 805 (2008) (trial court was not required to segregate fees where "claims arose out of the same set of facts" and it was "virtually impossible" to segregate fees).
¶ 116 Olympic Steamship and Colorado Structures fees are available when the insurer or surety unsuccessfully denies coverage. See Solnicka v. Safeco Ins. Co. of Ill., 93 Wn.App. 531, 533, 969 P.2d 124 (1999); Axess Int'l Ltd. v. Intercargo Ins. Co., 107 Wn.App. 713, 721, 30 P.3d 1 (2001); Colorado Structures, 161 Wash.2d at 606, 167 P.3d 1125. But such fees are not available if the dispute is merely about the value of the claim. Solnicka, 93 Wash.App. at 533, 969 P.2d 124. In other words, attorney fees are available in cases involving coverage disputes, which generally concern interpretation of the meaning or application of a policy or bond. Colorado Structures, 161 Wash.2d at 606, 167 P.3d 1125. In contrast, claim disputes "raise factual questions about
¶ 117 Olympic Steamship "has been read broadly by Washington courts.... The only articulated limitation to this rule is that no fees are awarded when the insurer does not dispute coverage, but merely disputes the value of the claim." Nordstrom, Inc. v. Chubb & Son, Inc., 54 F.3d 1424, 1437 (9th Cir.1995) (citations omitted). Thus, the "claims dispute" exception to Olympic Steamship attorney fees is narrow. It applies where the surety or insurer acknowledges coverage, agrees to pay under the policy or bond, but disputes the value of the claim.
¶ 118 Here, the Sureties did not acknowledge that VPFK was in default, denied that the County was entitled to recover under the Bond, and did not agree to pay under the bond. In other words, it flatly denied coverage under the Bond, forcing the County to compel it to honor its commitment to do so. Because the Sureties denied liability when it expressly adopted VPFK's defenses, the County could only obtain the benefit of the Bond by defeating VPFK's defenses. The Sureties' claims arose out of the same set of facts and were based on related legal theories and defied segregation. The trial court did not abuse its discretion when it determined that the attorney fees could not be segregated.
¶ 119 The Sureties contend that the trial court erroneously instructed the jury that the Sureties would be jointly and severally liable for all of the County's damages.
¶ 120 The Bond expressly incorporated by reference all of the Contract Documents.
The Contract rendered the Sureties and VPFK liable for all damages, including consequential damages resulting from VPFK's breach. The trial court did not err in instructing the jury that the Sureties are also liable for breach of obligations under the Bond.
¶ 121 Following trial, the County moved for judgment as a matter of law on VPFK's claims for "extended repair of rim bar."
¶ 122 Under CR 50, a trial court may enter judgment as a matter of law if, "during a trial by jury, a party has been fully heard with respect to an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find or have found for that party with respect to that issue." "A trial court appropriately denies a motion for judgment as a matter of law if, viewing the evidence most favorably to the nonmoving
¶ 123 At the time VPFK discovered damages to the rim bar, both STBMs were in locations where the pressure was higher than 75 psi.
¶ 124 VPFK submitted RCOs 85 and 86, seeking $23,946,605.00 in repair costs and two time extensions.
¶ 125 VPFK sought compensation for its costs in this litigation, and the jury found that "VPFK proved a Type I differing site condition based on soils at the location where the [BT-2 and BT-3] rim bar[s] [were] repaired."
¶ 126 The County contends that the trial court erred because the Contract Documents made no representation regarding soil conditions at locations where VPFK repaired the damaged rim bars. But VPFK's claim was not based on the soil conditions it encountered. It introduced evidence that, based on the Contract Documents, it should have been able to find a natural safe haven to repair the rim bar that was located close to where the machines were damaged.
¶ 127 The County next contends that no evidence supported the jury's award of substantial damages. The jury instruction regarding the repair of the rim bar stated:
¶ 128 The County points to the GBR, in which it represented that the teal TSG would provide "up to 24 hours of stand-up time"
¶ 129 In any event, VPFK presented substantial evidence that it incurred high costs as a result of the differing site conditions it encountered when repairing the STBMs. To create safe havens, VPFK pumped water from the ground and had to find a way to dispose of it.
¶ 130 The County requests attorney fees on appeal. Pursuant to RAP 18.1, a party may be awarded attorney fees and costs on appeal "if applicable law grants to a party the right to recover reasonable attorney fees or expenses." The County relies on Olympic Steamship and Colorado Structures. Because the County is the prevailing party on appeal, we grant its request for appellate costs and reasonable attorney fees.
¶ 131 We affirm.
WE CONCUR: VERELLEN and BECKER, JJ.
