The Washington State Court of Appeals has ruled in favor of a construction company that has accused the city of Olympia of breach of contract.
In the spring of 2014, the city had sought bids to replace the Woodard Creek Culvert that runs underneath the Olympia Woodland Trail. The project called for replacing a broken concrete pipe to prevent further flooding and to eliminate what a city staff report had described as a “long-standing maintenance burden.” Beaver activity in the creek is a primary factor in flooding of the upstream wetlands and adjacent properties.
In May 2014, the city approved a low bid of $306,358 from Nova Construction to replace about 100 feet of pipe, but the project never got off the ground.
In the meantime, the Woodard Creek Culvert project still has not been constructed and is on hold, according to Andy Haub, water resources director for the city. He said maintenance is still being done on the culvert as needed.
Despite receiving the go-ahead from the city in 2014, Nova was unable to meet the original project schedule, and the city rejected multiple submittals for a revised schedule, according to court documents.
In September 2014, the city notified Nova that the contractor had defaulted because of a failure to mobilize construction and provide a new project timeline. The contractor had mobilized the work site the same day of that notification, which prompted the city to send a “stop work order” four days later.
The city sent a letter Sept. 24, 2014, that terminated the contract and said Nova had “chosen to assert protests and excuses rather than provide the requested documents and assurances.”
In response, Nova filed a lawsuit. Nova argued the city had “breached the duty of good faith and fair dealing” and prevented the company from “attaining its justified expectations under the contract.”
In February 2016, Thurston County Superior Court Judge Gary Tabor ruled in favor of the city and dismissed the claim. The city was awarded $42,140 in damages and attorney fees.
This month, the court of appeals reversed the dismissal of Nova’s claim. In the appeals court’s opinion, “the city prevented Nova from attaining its justified expectations under the contract.”
“Nova argues that it presented sufficient evidence to create a genuine issue of fact that the city breached its duty of good faith in the handling of those submittals,” according to the ruling. Nova also accused the city of using a “gotcha” review process on submittals, and accused city engineers of undermining the project.
Jordan Opdahl, acting president of Nova, told The Olympian that he is pleased with the court’s decision, but is disappointed that his company and the city could not work out an agreement.
“It’s a shame that so much taxpayer money and so much of Nova’s money was wasted on something we could have discussed,” he said, adding that city officials declined to meet about the project once it hit the courts. “We wanted to salvage the project.”