Cent. Specialties, Inc. v. Large

482 F.Supp.3d 886

CENTRAL SPECIALTIES, INC. Plaintiff,

v.Jonathan LARGE and Mahnomen County, Defendants.

Civil No. 17-5276 (MJD/LIB)

United States District Court, D. Minnesota.

Signed August 31, 2020

Hugh D. Brown and Kyle E. Hart, Fabyanske Westra Hart & Thomson, PA, and Jeffrey A. Wieland, Moss & Barnett, Counsel for Plaintiffs.

Michael T. Rengel and Ryan D. Fullerton, Pemberton Law, P.L.L.P, Counsel for Defendants.

MEMORANDUM OPINION AND ORDER

Michael J. Davis, United States District Judge This matter is before the Court on Defendants’ Motion for Summary Judgment. [Doc. No. 64]

I. Factual Background

In late 2016, Plaintiff Central Specialties, Inc. ("CSI") submitted the lowest bid to the Minnesota Department of Transportation ("MnDOT") for road work to be performed on State Highway 59 which spanned Becker, Polk and Mahnomen Counties. (Large Aff. ¶¶ 7 and 8; Ex. A.) As part of the contract, CSI was to propose haul roads to be used by CSI to haul material from the material pits located near the project. (Fullerton Aff, Ex. A (Sweep Dep. at 26).) Pursuant to its "Standard Specifications for Construction" MnDOT has the ultimate authority to determine which roads will be used as haul roads. (Id. at 60, Ex. 7 (Specification 2051.3).)

Mahnomen County ("the County") asserts the selection of the haul road is significant to a county, as the county is responsible for the maintenance and upkeep of all of its county roads. (Large Aff. ¶ 2.) The type of use, weight and strain placed on the road, the existing condition of the road at the time of use and the time of year, all have an impact on the road. (Id. ¶ 3.)

Once a haul road is designated by MnDOT, the road is removed from county jurisdiction and MnDOT's contractors are permitted to use the road in connection with a project. See Minn. Stat. § 161.25. Once the haul road is released back to the county, state law requires MnDOT to reimburse the county for that use. Id.

The Standard Specifications for Construction apply to all MnDOT contracts, unless varied for a particular project. (Fullerton Aff., Ex. C.) Applicable here, Specification 1515, Control of Haul Roads, provides:

Haul Roads are those public Roads (other than trunk Highways) that the Contractor may use for the purposes specified in 2051.2 "Maintenance and Restoration of Haul Roads, Definitions."

Haul Roads do not include a connection between a natural material source and a public Road. The Contractor must secure the Rights Of Way for, construct, and maintain such connections between a material source and a public Road, without compensation from the Department other than payment received for the Contract Items.

The Department may, but is not required to, designate haul Roads in accordance with Minnesota Statutes § 161.25. If the Department has made a written designation of a haul Road, then the Department will have jurisdiction over the public Roads and Streets included in such designation. The requirements of 2051, "Maintenance and Restoration of Haul Roads," will govern the maintenance and restoration of such haul Roads.

If the Department has not made a written designation of a haul Road, then the Contractor will be responsible for the following:

(1) Arranging for the use of Roads not under the jurisdiction of the Department,

(2) Performing any maintenance and restoration as required by the applicable Road authority as a condition of using such Road as a haul Road, and

(3) Paying any fees, charges, or damages assessed by the applicable Road authority as a condition of using such Road as a haul Road.

All actions and costs with respect to non-designated haul Roads will be without compensation from the Department, other than payment received for the Contract Items.

In preparing its Proposal, the Contractor is not entitled to assume that the Department will designate a haul Road, or that the haul Road designated will be the most convenient and direct route or not subject to reduced weight limits. The Department will not consider its decision to designate or not designate a requested haul route as a basis for a contract revision.

(Id. )

As the above specification makes clear, a contractor cannot assume a particular road will be designated the haul road for a particular project.

After CSI's bid was accepted, a preconstruction meeting was held in April 2017 at the MnDOT offices in Detroit Lakes, Minnesota. (Id., Ex. A (Sweep Dep. at 32).) At the meeting were CSI representative Alex Sweep, MnDOT project manager Ross Hendrickson, Mahnomen County Engineer Jonathan Large, as well as others involved in the Highway 59 project. (Id. ) As County Engineer, Large is responsible for overseeing all county roads in Mahnomen County, and is responsible for the maintenance and upkeep of all county roads. (Large Aff. ¶ 2.) At this meeting, CSI proposed that it would ask MnDOT to designate County State Aid Highways ("CSAH") 5, 6 and 10 as the haul roads, as well as roads in other counties. (Id. ) CSI also proposed that it would haul 80,000 pound loads across the haul roads, which would exceed the spring weight restrictions on those roads. (Id. at 34.) Large made it known at that meeting that he objected to the use of CSAH 5, 6 and 10 as haul roads because he knew those roads were in poor condition, and he did not believe they could sustain that type of load over the course of the project and because portions of CSAH 5 and 10 would be undergoing construction in 2017. (Large Aff. ¶ 10.)

On May 5, 2017, Large sent an email to his counter-part at Norman County to inform her of his intent to get an agreement for damages to haul roads with MnDOT. (Brown Decl., Ex. N.) He further stated: "I said we will need something like this in place prior to allowing CSI to haul, because if we don't there is no way MnDOT is going to be able to hold CSI accountable without a lawsuit ... and we get the shaft." (Id. )

Another meeting was held on May 9, 2017, during which MnDOT informed CSI and Large that MnDOT would conduct testing on the proposed haul roads, including the use of a pavement rating van and a falling weight deflectometer. (Id. ¶ 11); Fullerton Aff., Ex. A (Sweep Dep., Ex. 3 (Hendrickson email dated May 10, 2017 to CSI and Large, in which he noted that MnDOT would not designate CSAH 5, 6 and 10 as haul roads pending further investigation of the condition of the roads in question).) The testing confirmed Large's concerns about the lack of strength of CSAH 5, 6 and 10. (Large Aff. ¶ 11.)

On or about May 18, 2017, Hendrickson spoke with CSI representatives and was informed that Large had told them that the County planned to leave the spring restrictions in place until MnDOT comes up with a plan in writing to compensate the County for damages on County routes. (Brown Decl, Ex. O.) Later that day, Hendrickson decided he was going to designate only some of the haul routes that CSI had proposed, and that CSI would have to make arrangements with the governing authority with regard to the non-designated roads and fix any damage to those roads as a result of their use as a haul road. (Id., Ex. P.)

On May 26, 2017, MnDOT informed CSI that it would designate portions of CSAH 5 (9 ton portion) and 10 (9 ton portion) as haul roads with a nine-ton weight restriction and that it would designate CSAH 6 as a haul road with a seven-ton weight restriction. (Fullerton Aff. Ex. A (Sweep Dep., Ex. 5).) A map was also provided which set forth the routes to be used. (Id. Ex. 1.) MnDOT did not designate all of the haul roads proposed by CSI. (Id. Ex. 2.)

After construction began, CSI informed Large and MnDOT that CSI planned to use portions of CSAH 6 and 10 that were not designated as haul roads as a return route for its empty trucks starting the following week, and that it would continue using CSAH 5 and 10 (9 ton portion) into the west side of Mahnomen. (Id. Sweep Dep., Ex. 6 (email dated July 14, 2017).) Large responded by reiterating that CSAH 10 is not a haul road, and that the County does not have an arrangement with CSI to use that route. (Id. ) He further stated that shouldering had not been completed on the road, and that the contractor completing the shouldering would be doing the work the following week, and pavement after that. He concluded by stating "I cannot allow this as a haul route at this time." (Id. ) CSI responded that it believed it did not need an agreement to use the road as the road was open and they would be using the road pursuant to the posted limits. (Id. ) Large responded by telling CSI to "[m]ake all vehicle trips, both loaded and unloaded, between material sources and the project on designated haul roads." (Id. ) Later that same day, CSI sent an email to Hendrickson stating: "Ross, Please designate these roads for the legal posted limits or direct us to not use the road." (Id. )

Hendrickson responded in an email dated July 17, 2017, in which he wrote: "Alex, Any use of the county roads is with an agreement between CSI and the local road authority per specification. MnDOT has already designated routes for this project as stated in a prior email; if you shall choose to use alternate routes, it is solely at the discretion of CSI and the local road authority." (Id. ) Despite being told by MnDOT not to use the road without agreement with the local road authority, CSI responded that they would use the road with legal loads. (Id. )

During the morning of July 18, 2017, the Mahnomen County Board of Commissioners approved a change to the weight restriction on CSAH 10 from five-ton axle weight to five-ton total weight. (Id. Ex. A (Sweep Dep. at 12); Large Aff. ¶ 16.) Before noon that day, County employees posted the new restrictions. (Large Aff. ¶ 16.) Large spoke with Hendrickson just prior to 1 p.m. to inform him of the change in weight restriction on CSAH 10 and asked him to contact CSI and let them know of the weight change. (Id. ¶ 17.) Hendrickson then sent CSI an email at 1:19 p.m. notifying them of the weight change. (Id. Ex. B.)

At approximately 2 p.m., Large...