the Port of Houston Authority of Harris County, Texas v. Zachry Construction Corporation

ACCEPTED 14-10-00708-CV FOURTEENTH COURT OF APPEALS HOUSTON, TEXAS 6/12/2015 5:04:25 PM CHRISTOPHER PRINE CLERK No. 14-10-00708-CV FILED IN IN THE FOURTEENTH COURT OF APPEALS 14th COURT OF APPEALS HOUSTON, TEXAS HOUSTON, TEXAS 6/12/2015 5:04:25 PM CHRISTOPHER A. PRINE PORT OF HOUSTON AUTHORITY OF HARRIS Clerk COUNTY, TEXAS v. ZACHRY CONSTRUCTION CORPORATION On appeal from the 151st Judicial District Court of Harris County, Texas Trial Court Cause No. 2006-72970 ZACHRY CONSTRUCTION CORPORATION’S SUPPLEMENTAL BRIEF OF APPELLEE GIBBS & BRUNS, LLP REYNOLDS FRIZZELL, LLP Robin C. Gibbs Brandon T. Allen State Bar No. 0785300 State Bar No. 24009353 rgibbs@gibbsbruns.com ballen@reynoldsfrizzell.com Jennifer Horan Greer 1100 Louisiana, Suite 3500 State Bar No. 00785611 Houston, Texas 77002 jgreer@gibbsbruns.com Phone: (713) 485-7200 Sydney G. Ballesteros Fax: (713) 485-7520 State Bar No. 24036180 sballesteros@gibbsbruns.com ALEXANDER DUBOSE Michael R. Absmeier JEFFERSON & TOWNSEND LLP State Bar No. 24050195 Douglas W. Alexander mabsmeier@gibbsbruns.com State Bar No. 00992350 Amanda B. Nathan dalexander@adtappellate.com State Bar No. 00784662 515 Congress Avenue, Suite 2350 anathan@gibbsbruns.com Austin, Texas 78701-3562 1100 Louisiana, Suite 5300 Phone: (512) 482-9301 Houston, Texas 77002 Fax: (512) 482-9303 Phone: (713) 650-8805 Fax: (713) 750-0903 ORAL ARGUMENT REQUESTED  IDENTITY OF PARTIES AND COUNSEL 1. Petitioner: Zachry Construction Corporation Represented in the trial court and on appeal by: Robin C. Gibbs Brandon T. Allen State Bar No. 07853000 State Bar No. 24009353 rgibbs@gibbsbruns.com REYNOLDS FRIZZELL, L.L.P. Jennifer Horan Greer 1100 Louisiana, Suite 3500 State Bar No. 00785611 Houston, Texas 77002 jgreer@gibbsbruns.com Phone: (713) 485-7200 Sydney G. Ballesteros Fax: (713) 485-7250 State Bar No. 24036180 Email: ballen@reynoldsfrizzell.com sballesteros@gibbsbruns.com Michael R. Absmeier State Bar No. 24050195 mabsmeier@gibbsbruns.com Amanda B. Nathan State Bar No. 00784662 anathan@gibbsbruns.com GIBBS & BRUNS L.L.P. 1100 Louisiana, Suite 5300 Houston, Texas 77002 Phone: (713) 650-8805 Fax: (713) 750-0903 Represented on appeal by: Douglas W. Alexander State Bar No. 00992350 dalexander@adtappellate.com ALEXANDER DUBOSE JEFFERSON & TOWNSEND LLP 515 Congress Avenue, Suite 2350 Austin, Texas 78701-3562 Phone: (512) 482-9301 Fax: (512) 482-9303 i 2. Respondent: Port of Houston Authority of Harris County, Texas Represented in the trial court and on appeal by: Marie R. Yeates David E. Keltner State Bar No. 22150700 State Bar No. 11249500 myeates@velaw.com david.keltner@kellyhart.com Catherine B. Smith Marianne Auld State Bar No. 03319970 State Bar No. 01429910 csmith@velaw.com marianne.auld@kellyhart.com VINSON & ELKINS L.L.P. KELLY HART & HALLMAN LLP 1001 Fannin, Suite 2500 201 Main Street, Suite 2500 Houston, Texas 77002 Fort Worth, Texas 76102 Phone: (713) 758-4576 Phone: (817) 878-3560 Fax: (713) 615-5544 Fax: (817) 878-9760 Michael A. Heidler Bill Sims State Bar No. 24059921 State Bar No. 18429500 mheidler@velaw.com bsims@velaw.com VINSON & ELKINS L.L.P. VINSON & ELKINS L.L.P. 2801 Via Fortuna, Suite 100 2001 Ross Avenue, Suite 3700 Austin, Texas 78746 Dallas, Texas 75201 Phone: (512) 542-8579 Phone: (214) 220-7703 Fax: (512) 236-3217 Fax: (214) 999-7703 Karen L.T. White David H. Brown State Bar No. 20274500 State Bar No. 03109200 karen@kltwpc.com dbrown@bkllp.com KAREN L.T. WHITE, P.C. BROWN & KORNEGAY LLP 2777 Allen Parkway, Suite 977 2777 Allen Parkway, Suite 977 Houston, Texas 77019 Houston, Texas 77019 Phone: (832) 646-4667 Phone: (713) 528-3703 Fax: (713) 528-3701 ii Represented in the trial court by: Lawrence J. Fossi State Bar No. 97280650 lfossi@fossijewell.com FOSSI & JEWELL LLP 4203 Yoakum Boulevard, Suite 100 Houston, Texas 77006 Phone: (713) 529-4000 Fax: (713) 529-4094 iii  TABLE OF CONTENTS IDENTITY OF PARTIES AND COUNSEL .......................................................... i TABLE OF CONTENTS .......................................................................................iv INDEX OF AUTHORITIES............................................................................... viii STATEMENT OF THE CASE ............................................................................xiv ISSUES PRESENTED........................................................................................xvii STATEMENT OF FACTS ..................................................................................... 1 I. PHA hires Zachry to construct a wharf and understands Zachry plans to use a freeze-wall means and methods. ..................................................... 1 II. The Contract makes Zachry solely responsible for choosing the means and methods of construction and precludes PHA control. ........................... 4 III. PHA belatedly adds an extension to the wharf design and recognizes only Zachry can timely build it and only with the frozen-cutoff wall. ........ 5 IV. PHA conceals its unsubstantiated “concerns” about the frozen-cutoff wall to induce Zachry into agreeing to build the extension. ........................ 8 V. PHA waits to reject the frozen-cutoff wall until after Zachry is bound by CO4, which plainly incorporates the frozen-cutoff wall. ...................... 11 VI. PHA issues its R&R Order, which everyone understands rejected the frozen-cutoff wall and which Zachry makes clear to PHA constitutes a breach. ......................................................................................................... 15 VII. PHA’s rejection of the frozen-cutoff wall forces Zachry to complete construction in the wet. ............................................................................... 16 VIII. Working in the wet causes Zachry substantial damages for which it sues.............................................................................................................. 21 SUMMARY OF ARGUMENT ............................................................................ 24 ARGUMENT ........................................................................................................ 26 iv I. Ample evidence supports the jury’s breach-of-contract findings. ............. 26 A. Section 5.10 prohibited PHA’s R&R Order, and no other Contract provision authorized it. ...................................................... 26 1. Section 5.10 forbids PHA control of Zachry’s means and methods. ................................................................................. 26 2. Section 4.07 forbids PHA control over Zachry’s health- and-safety plans...................................................................... 28 3. None of PHA’s other cited provisions authorize the R&R Order. ..................................................................................... 29 4. PHA is not remediless. ........................................................... 32 5. The drilled-shaft submittal is consistent with Zachry’s reading. ................................................................................... 32 B. PHA’s R&R Order breached CO4. .................................................. 33 C. Question 1 was proper. ..................................................................... 35 II. The jury's verdict on causation and damages is supported by the evidence. ..................................................................................................... 35 A. Draper’s assumptions on damages were supported by the evidence and did not vary materially from undisputed facts. .......... 36 1. Draper’s treatment of freeze-pipe removal was supported by the evidence....................................................................... 37 2. Draper’s treatment of sheet-pile installation was supported by the evidence...................................................... 39 B. The evidence establishes causation. ................................................. 40 1. Ample evidence supported the jury’s causation finding........ 40 2. PHA’s “Contract completion deadline” argument fails......... 41 3. PHA’s “alternative cause” argument fails. ............................ 42 C. PHA’s lack-of-authority argument does not defeat causation. ........ 43 v III. Sections 5.41 and 5.42 do not bar Zachry’s breach-of-contract claim. ...... 45 A. The “changes” clauses are inapplicable by their terms. ................... 45 B. Alternatively, common-law and statutory rules preclude application of the “changes” clauses here. ....................................... 48 1. The Shintech doctrine. ........................................................... 48 a. Green does not preclude application of Shintech. ....... 49 b. Technip does not preclude application of Shintech. .... 50 2. The radical-change doctrine................................................... 51 3. Section §16.071...................................................................... 52 C. The “changes” clauses were not tried. ............................................. 53 D. If the trial court erred, remand—not rendition—is required............ 54 E. Zachry’s failure to seek a §5.08 extension was irrelevant. .............. 54 IV. The trial court did not abuse its discretion in excluding PHA’s $8.6 million in alleged harms claimed as offsets. .............................................. 55 V. PHA’s “open-the-door” theory did not support admission of PHA’s alleged harms regarding the no-damages-for-delay exceptions. ................ 58 A. The trial court properly excluded PHA’s actual-harms evidence under Rule 403. ................................................................................ 58 B. Any error was harmless. ................................................................... 60 VI. The trial court did not err in instructing the jury as to fraud. ..................... 60 A. The Supreme Court approved the recklessness instruction. ............ 60 B. No charge error tainted the no-damages-for-delay exceptions. ....... 61 VII. The apparent-authority instructions were proper. ...................................... 62 A. Apparent authority is a fact issue. .................................................... 62 B. Zachry pleaded apparent authority. .................................................. 63 vi VIII. PHA is not entitled to attorneys’ fees if Zachry prevails on any theory. ... 64 IX. Zachry’s recovery on its pass-through claim should be affirmed. ............. 67 A. Zachry asserts a valid pass-through claim. ...................................... 67 B. The Court correctly charged the jury on pass-through. ................... 70 C. Waiver of immunity applies to the pass-through claims.................. 70 PRAYER ............................................................................................................... 71 CERTIFICATE OF SERVICE ............................................................................. 72 CERTIFICATE OF COMPLIANCE .................................................................... 74 vii  INDEX OF AUTHORITIES Cases 4901 Main, Inc. v. TAS Automotive, 187 S.W.3d 627 (Tex. App.—Houston [14th Dist.] 2006, no pet.) .....................65 Abraxis Petrol Corp. v. Hornburg, 20 S.W.3d 741 (Tex. App.—El Paso 2000, no pet.) ............................................41 Allison v. Service Lloyds Ins., 437 S.W.3d 589 (Tex. App.—Houston [14th Dist.] 2014, pet. denied) ...............64 Alvarado v. Farah Mfg., 830 S.W.2d 911 (Tex. 1992) ................................................................................55 America’s Favorite Chicken Co. v. Samaras, 929 S.W.2d 617 (Tex. App.—San Antonio 1996, writ denied) .................... 39, 40 American Airlines Employee Federal Credit Union v. Martin, 29 S.W.3d 86 (Tex. 2000) ....................................................................................52 Atwood Oceanics v. Zust Bachmeier, 2007 WL 2766192 (5th Cir. 2007) ........................................................................52 B.F.&C.M. Davis v. W.E. Callaghan Constr., 298 S.W. 273 (Tex. Comm’n App. 1927) ............................................................51 Beneficial Personnel Servs. v. Rey, 927 S.W.2d 157 (Tex. App.—El Paso 1996, vac. w.r.m.) ...................................61 Bhatia v. Woodlands North Houston Heart Center, 396 S.W.3d 658 (Tex. App.—Houston [14th Dist.] 2013, pet. denied) ...............67 Board of Regents v. S&G Constr. Co., 529 S.W.2d 90 (Tex. Civ. App.—Austin 1975, writ ref’d n.r.e.) ............................................................................................ 46, 47, 48, 49, 50 Burroughs Wellcome v. Crye, 907 S.W.2d 497 (Tex. 1995) ................................................................................36 Chapapas v. Delhi Taylor Oil, 323 S.W.2d 64 (Tex. Civ. App.—San Antonio 1959, writ ref'd n.r.e.) ...............64 viii City of San Antonio v. Valemas, 2012 WL 2126932 (Tex. App.—San Antonio 2012, no pet.) ....................... 70, 71 County of Dallas v. Wiland, 216 S.W.3d 344 (Tex. 2007) ................................................................................54 Cox v. Humble Oil & Refining, 16 S.W.2d 285 (Tex. Comm’n App. 1929) ..........................................................64 Criswell v. European Crossroads Shopping Center, 792 S.W.2d 945 (Tex. 1990) ................................................................................48 Douglass v. Panama, 504 S.W.2d 776 (Tex. 1974) ................................................................................62 Equitable Life Assur. Society v. Ellis, 147 S.W. 1152 (Tex. 1912) ..................................................................................62 Flagship Hotel. v. City of Galveston, 117 S.W.3d 552 (Tex. App.—Texarkana 2003, pet. denied).................. 65, 66, 67 Frost Nat’l Bank v. L&F Distrib’rs, 165 S.W.3d 310 (Tex. 2005) ......................................................................... 26, 47 Ft. Worth ISD v. City of Ft. Worth, 22 S.W.3d 831 (Tex. 2000) ..................................................................................53 Galveston I.S.D. v. Clear Lake Rehab. Hosp., 324 S.W.3d 802 (Tex. App.—Houston [14th Dist.] 2010, no pet.) ......................70 Gen. Elec. Co. v. Moritz, 257 S.W.3d 211 (Tex. 2008) ..................................................................................5 Green Int’l, Inc. v. Solis, 951 S.W.2d 384 (Tex. 1997) ................................................................................49 Hanks v. GAB Bus. Servs., 644 S.W.2d 707 (Tex. 1982) ................................................................................50 Harris Cty. v. Inter Nos, Ltd., 199 S.W.3d 363 (Tex. Civ. App.—Houston [1st Dist.] 2006, no pet.).................55 ix Hayden v. State, 296 S.W.3d 549 (Tex. Crim. App. 2009) .............................................................59 Helena Chemical Co. v. Wilkins, 47 S.W.3d 486 (Tex. 2001) ..................................................................................40 Hensel Phelps Constr. v. McCarthy Bld'g, 2005 WL 1489932 (N.D. Tex. 2005) ...................................................................70 Horizon/CMS Healthcare. v. Auld, 34 S.W.3d 887 (Tex. 2000) ..................................................................................59 In re ADM Inv. Servs., 304 S.W.3d 371 (Tex. 2010) ................................................................................64 Intercontinental Group Ptnrshp. v. KB Home Lone Star, 295 S.W.3d 650 (Tex. 2009) ......................................................................... 65, 66 Interstate Contracting Corp. v. City of Dallas, 135 S.W.3d 605 (Tex. 2004) .................................................... xxiv, 25, 68, 69, 71 Iron Mtn. Bison Ranch v. Easley Trailer Mfg., 42 S.W.3d 149 (Tex. App.—Amarillo 2000, no pet.) ..........................................64 Kiefer v. Continental Air., 10 S.W.3d 34 (Tex. App.—Houston [14th Dist.] 1999, pet. denied)....................35 Mann v. Fitzhugh-Straus Medina Ranch, 640 S.W.2d 367 (Tex. App.—San Antonio 1982, no writ) .................................61 McCreary v. Bay Area Bank & Trust, 68 S.W.3d 727 (Tex. App.—Houston [14th Dist.] 2001, pet. dism’d) .................26 Nat’l Env’l Serv. v. Homeplace Homes, 961 S.W.2d 632 (Tex. App.—San Antonio 1998, no writ) .................................52 North Harris County Jr. College Dist. v. Fleetwood Constr. Co., 604 S.W.2d 247 (Tex. Civ. App.—Houston [14th Dist.] 1980, writ ref’d n.r.e.) .....................................................................................................................49 Pace Concerts v. Resendez, 72 S.W.3d 700 (Tex. App.—San Antonio 2002, pet. denied) .............................63 x Paramount Nat’l Life Ins. v. Williams, 772 S.W.2d 255 (Tex. App.—Houston [14th Dist.] 1989, writ denied) ...............62 Prodigy Comms. Corp. v. Agricultural Excess & Surplus Ins., 288 S.W.3d 374 (Tex. 2009). ...............................................................................54 Provident Life & Accident Ins. v. Hazlitt, 216 S.W.2d 805 (Tex. 1949) ................................................................................53 Robinson v. Lubbering, 2011 WL 749197 (Tex. App.—Austin 2011, no pet.) .........................................55 Secure Comm. v. Anderson, 31 S.W.3d 428 (Tex. App.—Austin 2000, no pet.)..............................................55 SEECO, Inc. v. K.T. Rock, 416 S.W.3d 664 (Tex. App.—Houston [14th Dist.] 2013, pet. denied) ...............67 Shintech, Inc. v. Group Constructors, Inc., 688 S.W.2d 144 (Tex. App.—Houston [14th Dist.] 1985, no writ)............... 46, 49 Shupe v. Lingafelter, 192 S.W.3d 577 (Tex. 2006) ................................................................................35 Solar Soccer Club v. Prince of Peace Luth. Church, 234 S.W.3d 814 (Tex. App.—Dallas 2007, pet. denied) .....................................65 Sprague v. Sprague, 363 S.W.3d 788 (Tex. App.—Houston [14th Dist.] 2012, pet. denied) ...............57 State v. F&C Eng’g, 438 S.W.2d 647 (Tex. Civ. App.—Houston [14th Dist.] 1969, writ ref’d n.r.e.) .....................................................................................................................47 State v. Martin Bros., 160 S.W.2d 58 (Tex. 1942) ..................................................................................47 Structural Metals, Inc. v. S&C Elec. Co., 590 Fed. Appx. 298 (5th Cir. 2014) ......................................................................65 Taber v. W. Union Tele. Co., 137 S.W. 106 (Tex. 1911) ....................................................................................52 xi Tennessee Gas Pipeline v. Technip USA Corp., 2008 WL 3876141 (Tex. App.—Houston [1st Dist.] 2008, pet. denied) .............50 The Port of Houston Authority of Harris County v. Zachry Construction Corp., 377 S.W.3d 841 (Tex. App.—Houston [14th Dist.] 2012, pet. filed) ........... xv, 23 Thota v. Young, 366 S.W.3d 678 (Tex. 2012) ......................................................................... 61, 62 West v. Triple B Servs., LLP, 264 S.W.3d 440 (Tex. App.—Houston [14th Dist.] 2008, no writ)......................49 Zachry Construction Corp. v. The Port of Houston Authority of Harris County, 449 S.W.3d 98 (Tex. 2014) ............... xv, 1, 5, 9, 11, 12, 15, 16, 21, 23, 27, 60, 61 Statutes TEX. CIV. PRAC. & REM. CODE §16.071(a) ..............................................................52 TEX. LOC. GOV’T CODE §271.151(2) .......................................................................45 TEX. LOC. GOV’T CODE §271.152 ..................................................................... 45, 70 TEX. LOC. GOV’T CODE §271.153(a)(1) ...................................................................62 TEX. LOC. GOV’T CODE §271.153(a)(2) ...................................................................62 TEX. WATER CODE §60.408(i) .................................................................................45 Rules TEX. R. CIV. P. 193.1 ................................................................................................55 TEX. R. CIV. P. 193.6 ................................................................................................55 TEX. R. CIV. P. 194.2(c) ...........................................................................................55 TEX. R. CIV. P. 194.2(d) ...........................................................................................55 TEX. R. CIV. P. 403 ...................................................................................................54 xii Other Authorities  1 BRUNER & O’CONNOR CONSTR. LAW §4.23 .........................................................46 Brown & Rondon, TEXAS RULES OF EVIDENCE HANDBOOK §107 (2015) ...............59 Goode, Wellborn & Sharlot, 1 TEX. PRAC.: TEX. RULES OF EVID. 107.1 (3d ed. 2015) .....................................................................................................................59 McCormick, The New Code of Evidence, TEX. L REV. 661, 673 (June 1942) ........60 TEX. P.J.C. BUSINESS §105.2 (2014) ........................................................................61 TEX. P.J.C. BUSINESS §105.3B (2014) .....................................................................61 xiii  STATEMENT OF THE CASE Nature of Case: Appellee Zachry Construction Corporation (“Zachry”), a contractor, sued Appellant Port of Houston Authority of Harris County, Texas (“PHA”) for damages arising out of PHA’s breach of its contract with Zachry, pursuant to which Zachry promised to construct a wharf and PHA promised not to interfere with Zachry’s means and methods of construction. Trial Court: Hon. Mike Engelhart, 151st Judicial District, Harris County. Jury Verdict: The jury found PHA breached both §5.10 of the Bayport Terminal Complex Phase 1A Wharf and Dredging Contract (“the Contract”) and Change Order 4 thereto. CR59:17390- 91(A4).1 The jury further (1) awarded Zachry $18,602,697 in damages, CR59:17392-93(A4);2 (2) found that PHA’s breach was not excused by waiver, equitable estoppel, quasi-estoppel, release, or fraudulent inducement, CR59:17396-99(A4); (3) found that PHA did not fail to comply with the Contract by withholding $600,000 for dredging from PHA’s payment on amounts invoiced by Zachry, CR59:17402(A4); (4) with respect to the trial court’s determination that PHA failed to comply with the Contract by failing to pay Zachry $2.36 million that PHA withheld as liquidated damages, found (a) PHA’s breach was excused to the extent of $970,000 that PHA withheld from payments to Zachry for allegedly defective fenders, and (b) PHA’s breach was not excused based on release, CR59:17405-06(A4); and (5) found the reasonable fees for the necessary services of PHA’s attorneys totaled $10,697,750 for all stages of litigation and breach of contract theories, CR59:17407-08(A4). Judgment: Judge Engelhart rendered judgment on the verdict, awarding 1 Abbreviations in this brief are the same as in Zachry’s previously filed briefs in this case. “PHASupp.” refers to PHA’s Post-Remand Supplemental Brief of Appellant. 2 The jury found 58.13% of these damages to be delay damages, CR59:17394(A4), but the trial court entered an agreed order disregarding the jury’s answer, finding that 100% of those damages were conclusively established to have been delay damages, CR60:17526. xiv  Zachry $19,992,697 in damages, which the court calculated by adding the $2.36 million in improperly withheld liquidated damages the court awarded Zachry on directed verdict plus the $18,602,697 jury award for a total of $20,962,697, and then deducting the $970,000 offset found by the jury. CR62:18166(A1). The court declined to award Zachry the $600,000 that Zachry claimed PHA wrongfully withheld from Zachry’s payments but that the jury had declined to award to Zachry. Id. The court also declined to award PHA attorneys’ fees. CR62:18163-67(A1). The court awarded pre- and post- judgment interest and taxable costs. CR62:18166-67(A1). Court of Appeals: PHA appealed, and Zachry cross-appealed. CR64:18706-11; CR64:18925-27. A panel of the Fourteenth Court of Appeals consisting of Justices McCally, Christopher, and Boyce heard oral argument. In an opinion authored by Justice McCally, the Panel reversed and rendered judgment against Zachry, holding that (1) the no-damages-for-delay provision in §5.07 of the Contract precluded Zachry’s damages as a matter of law, (2) Zachry unambiguously released its claims for liquidated damages and for $600,000 withheld for dredging (Christopher, J., dissenting), (3) the trial court did not err in offsetting the judgment against PHA by $970,000 for allegedly defective wharf fenders, and (4) PHA should recover its attorneys’ fees from Zachry. The Port of Houston Authority of Harris County v. Zachry Construction Corporation, 377 S.W.3d 841 (Tex. App.—Houston [14th Dist.] 2012), rev’d, 449 S.W.3d 98 (Tex. 2014)(A2). Supreme Court: In a 5-4 decision, the Supreme Court reversed the Fourteenth Court’s judgment. Zachry Construction Corporation v. Port of Houston Authority of Harris County, 449 S.W.3d 98, 119-20 (Tex. 2014)(A3). In an opinion authored by Justice Hecht, the majority held that Zachry’s claim for delay damages was not barred by governmental immunity or by the no-damages-for- delay provision of the Contract. It also held that Zachry was entitled to recover liquidated damages withheld by PHA, but that there was some evidence to support the jury’s award of the $970,000 offset for allegedly defective wharf fenders. Finally, xv it concluded that PHA was not entitled to attorneys’ fees. Because PHA had raised a number of other issues, the Supreme Court remanded the case to the Fourteenth Court for further consideration. Id. at 120(A3). xvi  ISSUES PRESENTED 1. Breach of §5.10. The jury’s finding in Question 1 that PHA failed to comply with §5.10 of the Contract is supported by factually and legally sufficient evidence, because, inter alia, (a) §5.10 provided PHA had no “right to control” Zachry's means and methods, (b) no other provision of the Contract gave PHA such a right of control, and (c) the evidence established that PHA exercised control over Zachry’s means and methods by issuing a revise-and-resubmit order (“R&R Order”) in response to Zachry's frozen-cutoff wall design. See Argument Part I.A. 2. Breach of CO4. The jury’s finding that PHA failed to comply with Change Order 4 (“CO4”) is supported by factually and legally sufficient evidence, because, inter alia, PHA only challenges Zachry's interpretation of the change order—not whether PHA failed to comply with it—and the evidence established that PHA agreed in CO4 that Zachry could use the frozen-cutoff wall embodied in the September 9 design, thereby obviating any purported right PHA had to issue the R&R Order. See Argument Part I.B. xvii 3. Instruction in Question 1. The trial court did not abuse its discretion in instructing the jury in Question 1 that it was “not being asked to decide whether PHA failed to comply with §5.10.” See Argument Part I.C. (a) The instruction properly clarified that the jury was being asked to decide in Question 1 whether CO4 gave Zachry the right to use the frozen-cutoff wall embodied in the Sept. 9 design, and if so, whether PHA failed to comply with such a right, as distinguished from the question whether PHA complied with §5.10, which the jury considered in Question No. 2. See Argument Part I.C. (b) PHA has not shown and cannot show reversible error, because the jury found in Question 2 that PHA failed to comply with §5.10; Zachry was entitled to a directed verdict on its claim for breach of CO4, and Question 1 should not have been submitted; and PHA has not otherwise shown harm. See Argument Part I.C. 4. Damages. The evidence was legally and factually sufficient to support the jury's finding of damages in Question 3. See Argument Part II.A. And the trial court did not abuse its discretion in refusing to exclude Draper’s testimony. See Argument Part II.A. xviii 5. Causation. The evidence was legally and factually sufficient to support the jury’s finding that PHA’s failure to comply with §5.10 and/or CO4 caused Zachry’s damages. See Argument Part II.B. (a) Zachry offered sufficient evidence to support the jury’s finding of causation, and expert testimony was not required. See Argument Part II.B. (b) PHA waived its argument that Zachry was required to prove that, absent PHA’s breach, it would have completed all of Milestone-A in the dry before either February 15 or May 15, 2006. See Argument Part II.B. (c) The trial court did not abuse its discretion in charging the jury as to apparent authority, and PHA shows no harm. See Argument Part II.C. 6. Sections 5.41/5.42. The trial court did not err in holding that §§5.41/5.42 (and §5.52 to the extent it imposes the same requirements as §5.41) do not bar Zachry’s breach-of-contract claim based on the R&R Order. See Argument Part III. (a) The plain language of §§5.41/5.42 applies to changes during the performance of the Contract, not to PHA’s breach of contract. See Argument Part III.A. xix (b) The Shintech rule precludes application of §§5.41/5.42 to bar Zachry’s breach-of-contract claim. See Argument Part III.B.1. (c) The radical-change doctrine precludes application of §§5.41/5.42 to bar Zachry’s breach-of-contract claim. See Argument Part III.B.2 (d) Section 16.071 of the Texas Civil Practice and Remedies Code precludes application of §5.42 to bar Zachry’s breach-of-contract claim. See Argument Part III.B.3. (e) Zachry’s compliance with §§5.41/5.42 was not tried to the jury because the trial court ruled before trial that §§5.41/5.42 were invalid and/or inapplicable, the jury was instructed that it could only consider §§5.41/5.42 for state of mind, and no jury question was submitted regarding §§5.41/5.42. Even if §5.42 could be considered to have been tried in such circumstances, there was factually and legally sufficient evidence that Zachry substantially complied with §5.42. See Argument Part III.C. (f) Because §§5.41/5.42 were inapplicable, the trial court did not abuse its discretion in instructing the jury that, to recover its damages from the R&R Order, Zachry was not required to obtain a §5.41 change order or give §5.42 notice, but could consider these provisions only in xx  assessing state of mind, and PHA shows no harm. See Argument Part III. (g) Even if PHA could establish error with respect to §§5.41/5.42, the proper remedy is remand, not rendition. See Argument Part IV.D. 7. Section 5.08. The trial court did not abuse its discretion in excluding evidence that Zachry did not seek an extension of time under §5.08 for PHA’s breach of contract, given that §5.08 does not apply to breaches of contract and is thus irrelevant; any probative value of such evidence is outweighed by the danger of unfair prejudice to Zachry; and PHA has shown no harm, because the evidence is not controlling on a dispositive, material issue, nor did it probably cause the rendition of an improper judgment. See Argument Part IV.E. 8. Exclusion of $8.6 Million in Alleged Harms. The trial court did not abuse its discretion in excluding PHA's claimed $8.6 million in alleged “actual harms” claimed as offsets based on PHA’s failure to timely disclose any intent to seek these harms as an offset defense to be deducted from Zachry’s damages award. PHA is not entitled to a new trial to try an additional offset defense based on the trial court’s exclusion of PHA’s claimed harms. See Argument Part IV. 9. PHA’s Open-the-Door Theory. The trial court did not abuse its discretion in excluding a subset of PHA’s claimed actual-harms evidence with respect to the xxi arbitrary-and-capricious and bad-faith no-damages-for-delay exceptions despite finding that the “door” had been “opened.” See Argument Part V. (a) There was no misimpression to correct, because Zachry only argued that PHA promised that it would not charge liquidated damages if the crane-ship could dock when it arrived—not that PHA would not charge LDs if it suffered no harm at all. See Argument Part V.A. (b) In any event, the probative value of PHA’s actual-harms evidence in refuting any minor misimpression would be substantially outweighed by undue delay and the danger of unfair prejudice to Zachry. See Argument Part V.A. (c) Any error in excluding the evidence was harmless. See Argument Part V.B. 10. Recklessness instruction. The trial court did not err in instructing the jury that recklessness could support fraud based on a promise made with an intent not to perform. And PHA shows no harm. See Argument Part VI. (a) The Texas Supreme Court held that the trial court properly instructed the jury as to the no-damages-for-delay exceptions, including fraud. See Argument Part VI.A. (b) The instruction was consistent with Texas law and the pattern charge. See Argument Part VI.A. xxii  (c) There is factually and legally sufficient evidence that PHA intentionally defrauded Zachry (as PHA claims it must be defined) by entering into CO4 with no intent to perform. See Argument Part VI.B. (d) Even if error, remand for a new trial is not necessary, because the Court can be reasonably certain that the jury was not significantly influenced by the fraud issue. See Argument Part VI.B. (e) PHA’s evidentiary challenge to the fraud finding is limited to the sufficiency of the evidence to show that PHA knew that CO4 included an agreement that Zachry could use the frozen-cutoff wall, because that was the only basis for its evidentiary challenge in its original Brief of Appellant. See Aple.Br:48. 11. Apparent Authority Instruction. The trial court did not err in instructing the jury on apparent authority. See Argument Part VII. (a) Apparent authority is a fact issue, and there was factually and legally sufficient evidence that CH2M-Hill had apparent authority. See Argument Part VII.A. (b) The trial court did not abuse its discretion in finding that Zachry pleaded apparent authority. See Argument Part VII.B. xxiii  (c) Any error in instructing the jury regarding apparent authority is harmless. Aple.Br:73-74. 12. Attorneys’ fees. PHA is not entitled to attorneys’ fees if any judgment is entered for Zachry in this case. See Argument Part VIII. 13. Pass-through damages. The trial court properly entered judgment allowing Zachry to recover damages that were incurred by the subcontractor that it created in a corporate reorganization and that performed some of the Contract work pursuant to a “pass-through agreement” with Zachry, as authorized by Interstate Contracting Corp. v. City of Dallas, 135 S.W.3d 605, 610 (Tex. 2004). See Argument Part IX. (a) Zachry asserted a valid pass-through claim. See Argument Part IX.A. (b) The trial court did not abuse its discretion in instructing the jury with respect to the pass-through damages. See Argument Part IX.B. (c) Governmental immunity does not bar Zachry's pass-through claim. See Argument Part IX.C. 14. Waiver. PHA cannot obtain reversal of the judgment based on arguments not raised in the trial court, errors as to which PHA has shown no harm, errors raised for the first time in its supplemental brief, and errors as to which PHA on appeal has provided no meaningful argument and/or has not cited authority or evidence. xxiv  STATEMENT OF FACTS In the Supreme Court, PHA and Zachry briefed the facts pertaining to PHA’s multiple issues, all of which PHA raises again here. The Court observed the evidence “was hotly disputed” and the standard of review required it to view disputed evidence in Zachry’s favor: In reviewing any case tried to a jury, we must view the evidence “in the light most favorable to the verdict”—in this case a verdict for [Zachry]—“crediting favorable evidence if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not”.... Zachry, 449 S.W.3d at 101 n.3(A3). The Court recited the evidence “in that light.” Id. The same standard applies to this Court’s review on remand. Yet PHA never mentions the governing standard and ignores the Supreme Court’s factual recitations pursuant to it. As a result, PHA erroneously portrays the evidence in the light most favorable to PHA, not Zachry. This fact statement comports with the standard governing this Court’s review on remand. I. PHA hires Zachry to construct a wharf and understands Zachry plans to use a freeze-wall means and methods. In 1999, PHA hired DMJM to design a 1660-foot wharf. 6:8-9, 90. The project was subsequently delayed five years. 67:40-41; PX466.0004. In 2004, PHA hired CH2M-Hill as construction manager—PHA’s on-site representative 1 and primary point-of-contact with the project’s general contractor (ultimately, Zachry). 6:84-86; 20:38; 44:43-44. That same year, PHA chose Zachry to build the wharf because, among other reasons, Zachry’s unique means and methods of construction—a frozen wall— used fewer emissions credits, as the freeze-wall would enable Zachry to build the wharf primarily on dry land (“in the dry”), rather than in the water (“in the wet”). 7:15-16; 39:46. Zachry’s choice of means and methods was critical to sequencing construction tasks. The project originally entailed installing the following alongside the bay: * a five-section, concrete wharf deck; * thousands of under-deck concrete drilled shafts, or piers; and * concrete revetment blocks protecting the under-deck soil slope. 9:25, 27-28, 59-61. To accomplish these tasks in the dry, Zachry’s unique means and methods entailed building a frozen, u-shaped soil berm around the construction site to hold back the bay. 9:58-61. Zachry would sink pipes into the berm and then freeze it by circulating sub-freezing brine through the pipes. While building the wall, Zachry would simultaneously build the wharf in the dry behind it, drilling concrete piers into the ground and then building the deck on top, using the ground as a concrete form. Zachry would then excavate dirt under the wharf and among the 2 piers using dry-land equipment (e.g., bulldozers). Once the u-shaped berm was frozen, Zachry could excavate even deeper. As it completed excavation, Zachry would place revetment on the under-deck slope. Zachry would then breach the freeze-wall, allowing water to reach the wharf, and then remove the remainder of the freeze-wall in the wet. See 9:27-28, 59-73. This plan depended on using the freeze-wall and—importantly—working in the dry until the freeze-wall was breached: a contractor working in the wet would never build the piers and deck before excavating, given the difficulty and cost of excavating and placing revetment underwater, beneath the deck, and among the piers. 9:76-77; 47:34. By October 2003, PHA began asking Zachry about the effect of freezing soil near piers. 7:24-27; 37:31-32; PX49.0002-3; PX67; PX116. Among other precautions, Zachry and freeze-wall-designer Dan Mageau stated they would keep frozen soils nine feet away from the drilled shafts “wherever possible.” PX6.006. Thus, if it were not possible, they would not. 9:149. PHA—which had no soil- freeze expertise—requested the nine-foot distance, which had no scientific basis. 29:62-63. Mageau, the project’s only soil-freeze expert, established through tests provided to PHA that “one freeze-thaw cycle does not appear to reduce the shear strength in the soil.” PX138.0014; PX7.0010; 29:106-08; see 21:112. PHA and Zachry executed the Contract June 1, 2004. DX1. It was PHA’s 3 form contract. 6:21-24. Given its 5-year delay, PHA imposed a tight, two-year completion deadline. 6:88; 64:22; DX1-1.0002. There was an interim deadline (“Milestone-A”) of February 1, 2006 to finish 660 feet of wharf to allow a ship to deliver cranes from China. 9:79. II. The Contract makes Zachry solely responsible for choosing the means and methods of construction and precludes PHA control. The freeze-wall (and later, frozen-cutoff wall) was undisputedly Zachry’s construction means and methods. 6:76; 8:90, 94; 26:123; 37:52-53. Contract §5.10 made Zachry solely responsible for its means and methods and barred PHA interference: The Port Authority shall not have the right to control the manner in which or prescribe the method by which the Contractor performs the Work. As an independent Contractor, the Contractor shall be solely responsible for supervision of and performance of the Work and shall prosecute the Work at such time and seasons, in such order or precedence, and in such manner, using such methods as Contractor shall choose.... DX1-1.0214(A13). 3 Nothing in §5.10 permitted PHA to reject Zachry’s methods. 27:26-27; pp.26-27. PHA conceded §5.10’s purpose was to “isolat[e] the Port Authority from having any responsibilities for the contract[or]’s means and methods,” and “keep the responsibility and liability on [the contractor’s] side of the table.” 8:91, 93; see 6:39-42; 27:6-7. The Supreme Court recognized this “provision benefitted the 3 Emphasis added unless noted otherwise. 4 Port, insulating it from liability to which it would be exposed were it exercising control over Zachry’s work.” 449 S.W.3d at 102 & n.4(A3)(citing Gen. Elec. v. Moritz, 257 S.W.3d 211, 214 (Tex. 2008)). Consistent with this purpose, nothing in the Contract gave PHA the right to issue the October 11, 2005 revise-and-resubmit order (“R&R Order”). See pp.26- 34. To avoid any claim of control and attendant liability, PHA did not approve or reject the main freeze-wall, but simply ensured it had been approved by a Texas Professional Engineer (“PE”) and “accepted [it] for records.” 37:115-16; 44:90; pp.28-29. III. PHA belatedly adds an extension to the wharf design and recognizes only Zachry can timely build it and only with the frozen-cutoff wall. Nine months into the Contract—less than a year before Milestone-A—PHA belatedly realized its 5-year-old wharf design was too short, and added a 332-foot sixth section. PX130.0004; PX141.0016; 7:34-37. PHA concluded only Zachry could timely build the extension within emissions limits. PX3(A28); PX224(A24); 8:22-27; 22:103-07; 45:138-40; see 7:37-40, 78; 38:34-35; PX192.002. PHA knew Zachry was pressed to timely finish, and that PHA had to move quickly to avoid delay. PX164, ¶9; PX172 at 3; 7:35-37, 44, 84-85; 25:50-53; 45:79. To accommodate PHA’s belated addition, Zachry would have to modify its methods to add a “frozen-cutoff wall” to ensure it could timely complete Milestone-A to allow the crane-ship to dock and finish the remainder of the wharf 5 in the dry. 7:99-101; 9:138-39; 27:96; 38:51-53; PX8.0011(A20). On April 5, 2005, Zachry’s Project Manager Andy Anderson told CH2M-Hill’s Construction Manager Andy Thiess and Design Manager Jeff Ely that Zachry’s extension proposal was based on using a frozen-cutoff wall, which he sketched and explained would encompass one B-row pier. PX8.0004-5, .0013(A20); 10:18-29; 21:128-30; 38:39, 46, 48-49, 61-62, 130-31. Thiess and Ely understood the frozen-cutoff wall would also be 4.5 feet from two rows of piers, and promptly sketched and described the wall to PHA officials, including Project Manager Jim McQueen and Bayport Engineer Mark Vincent (who reported to Chief Engineer Steve DeWolf, managed the project for him, and was charged with helping administer the Contract correctly on PHA’s behalf). 7:32, 104-11; 21:104-08, 128-29; 24:120, 135-39; 38:62-63; 44:83; 45:41-46; 64:34-35; PX61. PHA contends Thiess and Ely were not concerned about the design at the April 5 meeting because they believed the frozen soil would impact only the single B-row pier entirely encompassed by the frozen-cutoff wall. PHASupp:5. But Ely and Vincent testified they were concerned because the 4.5-foot distance between the frozen-cutoff wall and piers was half the nine-foot buffer Zachry said it would maintain “whenever possible.”4 21:110-11, 138-39; 45:63; p.3. Furthermore, 4 PHA’s assertion that Thiess was unconcerned because he thought 4.5 feet (1½ pier diameters) was acceptable based on a “rule of thumb” was discredited: nothing documented the “rule,” and PHA’s geotechnical experts were unaware of it. 27:121-23; 38:68-69, 73-74. 6 Thiess, Ely, Vincent, and DeWolf knew the “freeze front” would migrate away from the freeze-pipes and “go around” the piers 4.5 feet away (if not stopped). 7:52-53, 106-14; 10:26-27; 21:139; 25:38-39; 29:68; 37:117-18; 45:63; PX138.0018. Ely told Vincent, Thiess, and McQueen that freezing would occur very close to some piers, in his view potentially reducing their capacity. 22:96-97, 128-29; 23:5-8, 24. PHA also asserts Anderson had considered a frozen-cutoff wall as an option to help Zachry timely complete Milestone-A. PHASupp:4. However, PHA understood the frozen-cutoff wall became “required if Zachry were going to do the extension” and still meet the Milestone-A deadline. 7:99-101; see 9:138-39; 10:31, 112; 27:96; 28:31-32; 38:51-53; PX8.0011(A20). The reason was simple. With the frozen-cutoff wall, Zachry could timely accommodate the crane-ship’s arrival on one side of the cutoff-wall and still finish the remainder of the wharf, including the extension, in the dry on the other. 10:35; 38:38; 7:100-01; 28:31-33; PX172 at 4-5. Without the frozen-cutoff wall, the addition of the sixth wharf section meant Zachry would have to try to complete, excavate, and place revetment under the entirety of the now-20% longer wharf by the Milestone-A deadline; at that time, the main freeze-wall would be breached to dock the crane-ship, and Zachry would have to finish the entire project in the wet. 9:135-36; 21:94; 28:33-34; PX8.0011(A20). 7 IV. PHA conceals its unsubstantiated “concerns” about the frozen-cutoff wall to induce Zachry into agreeing to build the extension. On April 13, 2005, Zachry sent PHA a proposal to build the wharf extension based on an “[u]ninterrupted work process” and the “[u]se of a freeze wall—cut off wall, encompassing one (1) ‘B’ row piling.” PX9(A21); 10:111. These conditions were unchanged by a May 18 proposal and July 11 supplemental proposal. PX179(A22); PX219(A23). PHA understood Zachry’s price was based on these conditions, and that the frozen-cutoff wall in the proposals was the same one described to Thiess and Ely on April 5. 22:22-25; 25:44-47; 38:96-97; 45:75-76. PHA also knew the frozen- cutoff wall was Zachry’s only means and methods to timely complete the wharf. 22:125-26; 26:119-20; 38:112; 45:103-04; 46:40. Even though PHA knew the frozen-cutoff wall was “required,” it never told Zachry its concerns, 11:13; 22:96, 146, despite knowing quick resolution of such concerns was critical to avoid delaying Zachry under the tight schedule. PX46.0001; 7:43-44, 67-68; 20:53-56. The Supreme Court recognized that PHA—afraid Zachry might decline to build the extension—induced Zachry into entering Change Order 4 (“CO4”) to build it by intentionally concealing PHA’s concerns about the frozen-cutoff wall: As a practical matter, only Zachry could perform the additional work. . . . The Port had reservations about this [frozen-cutoff wall] plan. But the Port was also concerned that if it rejected Zachry’s plan, Zachry 8  might simply refuse to undertake the addition of a sixth section. So the Port did not raise its concern with Zachry. 449 S.W.3d at 102-03(A3). The Supreme Court’s conclusion was amply supported. PHA knew only Zachry could build the extension without undue additional cost and delay. See p.5. But Zachry was already on a tight schedule. See pp.4, 5. Adding the sixth section meant Zachry would have to do 20% more work, p.7, though CO4 would only extend Milestone-A by 15 days, see p.4; PX12.0004 (A30). However, PHA had not signed CO4. 8:36; 27:40. As a result, Zachry could not begin working on the extension, exacerbating the already-tight schedule. PX225 at 4-5; PX226 at 3-6; PX228; PX229; PX232 at 13; 10:52-54, 68, 73; 26:68; 18:84-87; 26:93-94, 102-09. And Zachry was not contractually bound to build it. 27:40. PHA Project Manager McQueen blamed PHA “bureaucrats” for the delay. PX215 at 7. Aware of Zachry’s time-crunch and that Zachry was not yet bound, PHA “management [wa]s afraid ZCC w[ould] back out of the extension agreement.” PX280(A29); 27:40; 45:113. PHA therefore acted to keep Zachry on the hook by inducing it into CO4. First, although PHA knew throughout the summer of 2005 that Zachry projected it would not timely complete Milestone-A (because Zachry was including an extension of time it claimed under Contract §5.08 due to a global- 9 cement shortage), PHA decided to pay Zachry anyway and delay taking any formal action against it—such as demanding a recovery schedule—until after CO4’s execution. PX159; PX176; PX210; PX280(A29); PX319; 18:143-49; 22:109-11; 27:36-40; 39:17-18; see p.17. Second, PHA allayed Zachry’s concerns about the $20,000/day Milestone-A liquidated damages (“LDs”). PHA had denied Zachry’s request to extend Milestone-A based on the global-cement shortage. PX159; PX175; PX176; 25:60- 61. Zachry thus sought assurances that PHA would not charge LDs if the crane- ship could dock upon arrival. 25:66-67; PX177. In that case, PHA would not be charged demurrage—the basis for Milestone-A’s $20,000/day LDs. 45:65-66; see also PX935 at 1, PX936 at 4; DX1-1.0021(A17). Recognizing the ship was delayed, PHA’s Vincent told McQueen that “[a]lthough we will not put it in writing,” McQueen should tell Zachry PHA “will not charge penalties if no expense or loss to PHA occurs….” PX176; 28:71. McQueen complied, telling Anderson PHA would not charge LDs if the ship could dock upon arrival (because PHA would not be charged demurrage). 10:41; see 28:74. Although PHA contends it promised not to charge LDs only if PHA sustained no harm whatsoever, McQueen confirmed Zachry’s understanding: he testified PHA acted contrary to its promise in charging LDs even though the crane- ship docked upon arrival. 28:74; see also PX205.0002. The Supreme Court 10 correctly concluded that “[i]n negotiating [CO4], PHA had promised not to impose [LDs]...as long as the [crane-]ship…could dock when it arrived,” but “[n]evertheless, after the ship successfully docked,…began withholding [LDs].” 449 S.W.3d at 103(A3). Third, despite its “concerns” about the frozen-cutoff wall it knew was “required” to allow Zachry to meet Milestone-A, PHA did not object to it before CO4 was signed. 11:13, 106; 19:80-81; 22:76, 96, 119. PHA instead agreed in CO4 that Zachry could use the frozen-cutoff wall. See pp.12-13, 33-34. V. PHA waits to reject the frozen-cutoff wall until after Zachry is bound by CO4, which plainly incorporates the frozen-cutoff wall. On September 9, 2005, soil-freeze expert Mageau sent Zachry the frozen- cutoff-wall design. PX10(A25). It was identical in all material respects to the wall discussed at the April 5 meeting and incorporated into the proposals. PX10.0001- .0002, .0005(A25); 8:42-43, 53; 10:94-98, 111; 22:73-77; 29:123-24. Anderson directed the design be sent to PHA “for review. Not approval— but review.” PX267; 10:92-93. On September 12, Zachry labeled the design “Correspondence” (not “Submittal”) and uploaded it to PHA, noting PHA could “see what will be happening and gather questions.” PX897; 8:39; 11:33-34; 38:152, 157; 45:143. PHA knew it was not provided as a Submittal, and that Zachry was not asking for approval, just comments. 38:152-53, 157; 45:143-44. Like the main freeze-wall, PHA could review it for a Texas PE’s approval, but 11 could not approve, reject, or order Zachry to revise and resubmit it. 9:49-50; 11:28; 22:70-72, 93-94; 23:91-92; DX5.002; pp.5, 28-29. CH2M-Hill’s Thiess told PHA’s McQueen internally, “[t]his isn’t going to be an approval-type thing,” PX274 at 3(A26); 39:37-38, but recognized PHA “need[ed] due diligence to identify and communicate any technical issues,” PX11(A27); 22:93-94. Based on the September 9 design, PHA’s Vincent and McQueen understood the frozen-cutoff wall “was freezing up and near the shafts.” 46:5; see 26:150-52. CH2M-Hill’s Ely noted they needed to “verify the freeze wall won’t reduce the capacity of the…piers.” PX11(A27). Nevertheless, PHA management on September 14 formally recommended PHA execute CO4. PX3(A28); 26:161-63; 39:44-49; 45:147-48. PHA finally executed CO4 on September 27. PX12.0002(A30). As the Supreme Court recognized, CO4 gave Zachry the right to use the frozen-cutoff wall embodied in the September 9 design: To complete the two sections of the wharf needed by February 2006 and to continue to work ‘in the dry,’ Zachry proposed to build another freeze-wall—a cutoff wall—through the middle of the project....Change Order 4, using Zachry’s approach to add a sixth section of the wharf...was finalized September 27, 2005. 449 S.W.3d at 101, n.3(A3). CO4 provided Zachry would construct the extension “in accordance with the attached Scope, Time and Price Modifications,” which incorporated Zachry’s 12 proposals conditioned on an “[u]ninterrupted work process” and the “[u]se of a freeze wall—cutoff wall, encompassing one (1) ‘B’ row piling.” See pp.8, 33-34; PX12.0001, .0004(A30); 26:112-14. PHA had reviewed the September 9 design, which embodied the April 5 design described in the proposals, for two weeks before executing CO4. 10:111-16, 118, 8:50-51; 22:92, 119-20; 27:37; 45:147-48; p.34. Although PHA’s Vincent and McQueen had known for two weeks (and really since April 5, p.6-7) that the frozen-cutoff wall design involved freezing near piers, Ely—on the same day PHA signed CO4—reiterated to McQueen that frozen soils would be kept only one foot from piers, allegedly putting 23 piers “at risk for capacity reduction.” PX286. He did so despite freeze-soil expert Mageau’s tests proving “one freeze-thaw cycle does not appear to reduce the shear strength in the soil.” See p.3. On September 28, Mageau provided PHA more analyses proving that even if soil were frozen all the way around the piers, there would be virtually no increase in settlement. PX14.0001(A31); 22:150-51; 27:66; 29:76-77; 39:66-69. PHA knew there was no reason for concern. 39:66-69; PX504(A36). But no one associated with PHA would take responsibility for allowing Zachry to move forward: * McQueen told CH2M-Hill “I have a problem and we need an answer ASAP,” and that Ely and Thiess had “to take the lead in resolving this 13  problem w/a solution.” PX301. * CH2M-Hill would not opine on the design, because it did not want to incur liability for Zachry’s methods. 23:89; 30:84-85; 46:43. * Wharf-designer DMJM refused to review the design because it was Zachry’s means and methods. 30:63-64; 46:41-42. * PHA had not yet hired its geotechnical engineer, GeoTest, to review the design, and knew GeoTest would never give a definitive answer anyway. PX1(A32); 23:23, 75-76. Instead, Ely surveyed CH2M-Hill’s geotechnical experts about his “concern,” explaining he wanted to “give our client some guidance without incurring additional liability if possible.” PX15; 22:157-61; 23:25-28. Most responders— including some with soil-freeze experience—concluded the design presented no concern. PX290; PX292; PX293; 23:31-47; 46:19-24. Nevertheless, Ely disregarded these geotechnical experts, and sent PHA a memo expressing unsubstantiated “concerns” about this geotechnical issue “from a structural engineering, not geotechnical perspective.” PX301; 23:56-62; see PX11(A27). PHA conceded at trial it had not determined—or even tried to determine— that the frozen-cutoff wall was likely to adversely affect piers, 8:79-80, 89-90; 22:84; 23:97, 101-02; 24:112-14; 27:32, 80-84; 46:30-36, 58-59, although Chief Engineer DeWolf expected his engineers to get GeoTest involved, 6:7, 10; 7:110- 14. PHA’s only information consisted of soil-freeze expert Mageau’s reports proving freezing would have no adverse effect. 24:112-13; 27:66; 39:96; 46:27, 14 30-31, 57-59; PX14(A31); PX138.0014. VI. PHA issues its R&R Order, which everyone understands rejected the frozen-cutoff wall and which Zachry makes clear to PHA constitutes a breach. Despite knowing the tight schedule and imminent Milestone-A deadline, pp.4, 5, 9, on October 11, 2005, PHA switched the September 9 design’s label from “Correspondence” to “Submittal” and issued the R&R Order. PX266(A33); 11:31, 33-34; 27:82, 88-89. The order expressed concern about freezing’s effect “on the friction resistance of the piles,” and stated “preliminary indications are that the design may have an indeterminate affect [sic] on a significant number of nearby shafts which may present unacceptable risk to the Port”—a concern Vincent and McQueen admitted was “speculation.” PX266(A33); 27:84; 46:49-50. Everyone knew the R&R Order rejected the frozen-cutoff wall. See, e.g., 39:133-36; PX1(A32); PX2(A35); PX358.0001. PHA conceded this at trial. 4:94; 27:74; 39:135. The frozen-cutoff wall was undisputedly Zachry’s means and methods, and Zachry had the right to use it under Contract §5.10 and CO4. See pp.4-5, 12-13, 26-34. Yet, as the Supreme Court recognized, “[t]he practical effect of the Port’s [R&R] order was to refuse to allow the construction of the cutoff wall.” 449 S.W.3d at 103(A3); see 8:69-70; 21:58-59; 45:34-35; DX1-1.0219-20, §5.22(A13) (subject of revise-and-resubmit order “may not be used for performance of the Work”). Although PHA now claims Zachry could have offered 15 a means of mitigating the frozen-cutoff wall’s “risk,” PHA demanded a nonfrozen alternative. PX4.0003 (“The cut-off wall…cannot be constructed using freeze-wall technology.”); PX314 at 3-4(A34); 11:56; 23:101; 27:87-88; 68:114. Although PHA mischaracterizes this as a “secret breach,” the Supreme Court correctly concluded Zachry told PHA it was a breach: “Zachry protested that, under [§]5.10…, the Port had no right to determine the method and manner of the work, but the Port would not budge.” 449 S.W.3d at 103(A3). At the October 11 meeting where the R&R Order was delivered, Anderson immediately objected that it was contrary to the Contract: he told PHA the design was “not a submittal that requires approval,” but “is for information purposes only,” and Zachry’s risk to accept. PX314 at 4, 6-7(A34); 11:33-34, 39; 18:127-28; 23:102-04; 27:88-89. McQueen responded, “I understand.” PX314 at 7(A34). McQueen expressed concern PHA could be liable and admitted he knew Anderson was saying PHA violated the Contract. PX1(A32); PX287; 23:82-85; 27:48-49, 89-90, 93-94; see also 44:82-83 (Vincent). Later on October 11, Anderson told Thiess the R&R Order was a breach. 11:40-41. A month later, Thiess acknowledged Zachry had claimed PHA’s “rejection of the cutoff-wall design is a breach of the change order contract.” PX2(A35); 39:130; 68:122. VII. PHA’s rejection of the frozen-cutoff wall forces Zachry to complete construction in the wet. Contrary to PHA’s claim that Zachry voluntarily switched to working in the 16 wet, the evidence establishes PHA forced Zachry to do so. First, PHA barred Zachry from using its frozen-cutoff wall—the means and methods PHA knew was “required” to timely complete the wharf in the dry, given the additional extension work. See pp.7, 8, 15. Then, three days later, despite having known for months that Zachry projected a delayed Milestone-A completion, pp.9-10, 18. Chief Engineer DeWolf for the first time sent Zachry a letter demanding a recovery schedule (showing Zachry would finish by the Contract deadlines, which were conditioned on the frozen-cutoff wall) and threatening LDs. PX319; 19:29-31. Higher-ranking PHA officials repeated this demand in October and November. See, e.g., 40:32-33, 38-40; 46:82-83; 66:86-87; DX85; DX205.003; PX373.0003; PX925. See also 35:6; 36:5-7. By demanding a recovery schedule after barring Zachry’s frozen-cutoff wall, PHA necessarily forced Zachry to begin working in the wet far earlier than it otherwise would have. 18:115-17, 123-26; 28:31-33; see 9:137-38; 11:82-96; 19:33-50; DX404. Without the frozen-cutoff wall, neither Milestone-A nor the remainder of the wharf could be constructed in the dry. 9:137-38; 11:85-86; p.7, 20. There was no viable alternate cutoff wall. 46:83; p.20. This demand constituted a direction to perform additional work, because—as PHA knew, 40:131; 46:133-34; PX373.0003; PX461—building the wharf in the wet would take far more time and money than building it in the dry, id.; 10:62; 29:40-42; 17 33:6; 47:60-61; 52:31, 102; 61:110. Zachry refuted PHA’s assertion that Zachry voluntarily switched to working in the wet because it could not meet the schedule using the freeze-walls. In late September/early October, Zachry was still projecting a March 22 Milestone-A completion. 18:116-18; DX404. But PHA knew—based on reports from PHA’s on-site inspectors and Zachry’s scheduler—that Zachry could finish Milestone-A by the February 15 deadline and that schedules showing a March 22 completion were a “paperwork trail” preserving Zachry’s claim for extension of time based on the global-cement shortage.5 PX251; PX252; PX283; 26:100-02; 45:103-05; 65:92-93, 99-100, 105; pp.9-10. Three days after PHA’s rejection, Mageau projected Zachry could finish Milestone-A by the February 15 deadline and certainly by March 22—before the crane-ship’s arrival. PX320; 30:115-16; 32:105-06. And Larry Applegate, the freeze-wall subcontractor’s president, stated on November 11, 2005 that freeze- down Phase 1 could begin immediately with the remainder starting by Thanksgiving. PX360.0002; 33:47, 50-54. Mageau and Anderson agreed, despite freeze-pipe-related and other challenges Zachry faced. 18:105-11; 30:115-18; 32:100-01; PX320. This would have allowed Zachry to finish Milestone-A before 5 Anderson’s comment post-Hurricane Rita that there wasn’t “a snowball’s chance in hell of having that wharf open by March...’cause the math don’t work,’” DX1157A, referred to Zachry’s 9-day extension request for hurricane-caused delays. 19:113-15. Adding 9 working days to the projected March 22 date pushed completion into April. Id. 18 the crane-ship arrived. 19:43-45. PHA points to schedules Zachry created on October 31 purportedly showing Zachry finishing much later than projected in its October 3 schedule. But the October 31 schedules were unfinished, non-concurrent schedules: they listed tasks end-to-end rather than accurately reflecting concurrent performance, thereby appearing artificially lengthy. 40:45-47, 55. See PX779.0005; PX777.0005; PX780.0005; 18:119-23; 19:50-55; 28:11-13, 16. More importantly, these schedules were brain-storming exercises created after PHA’s October 11 rejection of the frozen-cutoff wall that PHA knew was “required” to allow Zachry to meet the Milestone-A deadline. See pp.7, 8, 11. Without the frozen-cutoff wall, it was difficult for Zachry to create schedules without knowing its means and methods. 19:38-43; 40:69-79; 46:67. Zachry created 38 draft schedules in an attempt to determine which construction method to use. 11:83-87; 40:70-71; PX373. Unlike the pre-October 11 schedules, none used a frozen-cutoff wall under the wharf—thus confirming its rejection. 18:124-25; 35:101; 46:76-82; see 28:22, 31-33. PHA contends the schedules showed Zachry would finish soonest by removing the main freeze-wall and working in the wet. PHASupp:12. But these schedules were the result of PHA’s rejection of the frozen-cutoff wall—combined with the lack of a viable alternate-cutoff wall. Zachry’s alternate-cutoff-wall 19 schedule projected a later finish date because the alternative method of building the cutoff wall was still “unidentified,” and Zachry had to project extra time to design it, procure materials, and build it. PX779; 40:45, 48; 46:91. Zachry quickly determined an alternate cutoff wall was not viable, because there were serious doubts it could be designed and no time to implement it, given the imminent Milestone-A deadline. 19:38-50; 28:22; 46:78-79, 90-92. Indeed, when Mageau delivered an alternate-cutoff-wall design on November 16, it was unworkable, unsafe, and could have damaged piers. 11:50, 52-58; 19:45-50; 42:64-67, 77-79, 91-98; PX366; PX931 at 19-21; see 58:107-08. PHA’s rejection of the frozen-cutoff wall made meeting the Contract deadlines “an impossible task,” in light of the wharf extension. 19:57-60. Without the frozen-cutoff wall, Zachry would now have to complete the entire main freeze- wall, freeze it, and excavate the entire 2,000 feet of the now-extended wharf by the Milestone-A deadline, 28:33-34—all of which would take far longer than the prior plan of completing only the Milestone-A area. 11:45-49; 32:131-33. For this reason, someone at Zachry noted on November 3 that—in the absence of the frozen-cutoff wall—the main “freezewall” was “killing [the] baseline schedule.” DX82.006; 19:56-58. Given PHA’s rejection and recovery-schedule demands, Zachry’s only hope of meeting the Milestone-A deadline was to use the unfrozen berm as a seawall as 20 long as possible, completing Milestone-A and excavating under the wharf as quickly as possible, then breaching the berm for the crane-ship’s arrival and finishing the remainder in the wet. 11:87-89. The Supreme Court correctly concluded that, following the R&R Order, “Zachry’s only option was to finish the western-most sections in time for the ship from China to dock, then remove the wall altogether and continue to work ‘in the wet,’ which would delay completion of the project and increase its cost.” 449 S.W.3d at 103(A3). Having now deprived Zachry of its freeze-wall methods, PHA grew concerned about its liability. 24:70-73. It met with lawyers, and on November 18 told Zachry, “[i]n accordance with...[§]5.10,” PHA had no right to interfere with Zachry’s methods. PX18; 46:123-24. But PHA did not withdraw its rejection. 46:126. Instead, PHA insisted PHA’s lawyers choose from among the schedule options, and they chose an in-the-wet schedule with a May 28 Milestone-A completion date. PX367.002; PX373.0002, PX380; 19:66-71; 40:120-22, 128. On January 16, 2006, Zachry sent PHA a letter confirming its change to working in the wet was the “direct result” of PHA’s rejection of the frozen-cutoff wall, recovery-schedule demands, and LD threats. PX20.0003. VIII. Working in the wet causes Zachry substantial damages for which it sues. Zachry worked in the dry behind the berm as long as possible. 47:47-58. After it was breached, Zachry completed the wharf in the wet under “nightmare” 21 conditions, excavating and placing revetment underwater beneath the deck with almost zero visibility. 29:40-42; 40:131; 47:79. Zachry sufficiently completed Milestone-A to allow the crane-ship to dock upon arrival May 15, 2006. 11:117; 40:131-33; 47:68-69; PX893.0076. Yet PHA back-charged Zachry $2.36 million in LDs from the Milestone-A deadline forward, although PHA incurred no demurrage. 40:131-32; 45:72-73. McQueen admitted this was contrary to his promise. 28:73-74. In October 2008, Zachry substantially completed the project. 47:80-81; PX578. Despite heavy losses, Zachry sought only damages caused by PHA’s breach—the increased cost of construction as a result of PHA’s delays and forcing Zachry to work in the wet earlier than it otherwise would have. 47:86-87. After a three-month trial, the jury found PHA failed to comply with CO4 and §5.10, causing Zachry $18,602,697 in damages. CR59:17390-93(A4). The judgment awarded those damages, plus $2.36 million PHA withheld as LDs, minus a $970,000 offset for wharf fenders, for a recovery of $19,992,697, plus interest. CR62:18166(A1). This Court, based on its holdings that the no-damages-for-delay clause precludes Zachry’s recovery and that PHA’s release defense barred Zachry’s recovery of the LDs, reversed and rendered judgment that Zachry take nothing and PHA recover $10,500,000 in attorney’s fees, plus contingent appellate fees. 377 22 S.W.3d at 865(A2). The Supreme Court held governmental immunity did not bar Zachry’s claims, reversed this Court’s judgment regarding the no-damages-for-delay clause and LDs, and remanded. 449 S.W.3d at 119-20(A3). 23  SUMMARY OF ARGUMENT The Supreme Court rejected PHA’s main appellate points—immunity, no- damages-for-delay, and release. PHA is left with a laundry list of second-tier arguments that largely invite this Court to revisit evidentiary disputes resolved by the jury, issues committed to the trial court’s discretion, and issues the Supreme Court previously decided against PHA. PHA’s invitation should be declined. In Questions 1 and 2, the jury properly rejected PHA’s contrived reading of CO4 and §5.10. Unlike Zachry, PHA offers no interpretation that harmonizes all Contract provisions and satisfies PHA’s business purpose—to avoid liability from control of Zachry’s methods. PHA’s challenge to the damages and causation findings in Question 3 likewise ignores the substantial evidence supporting them. Nor do Contract §§5.41/5.42 bar Zachry’s claims. These “changes” clauses plainly allow PHA to change the scope of the Work during Contract performance. They do not govern Zachry’s rights in the event of a PHA breach. If they did, they would be inapplicable under common-law and statutory rules. PHA’s remaining arguments are also without merit. The trial court did not abuse its discretion in rejecting PHA’s eleventh-hour attempts to inject $8.6 million of claimed “harms” into the case. Furthermore, as the Supreme Court held, the trial court properly instructed the jury on the no-damages-for-delay exceptions, including recklessness. The trial court did not abuse its discretion in finding 24 Zachry pleaded apparent authority, and its instruction was proper. And PHA is not entitled to attorneys’ fees so long as the judgment awards Zachry damages. Finally, PHA’s attempt to deny Zachry pass-through recovery for the work of its subcontractor—a Zachry entity created during corporate restructuring— contravenes Interstate Contracting v. City of Dallas, 135 S.W.3d 605, 610 (Tex. 2004). 25  ARGUMENT I. Ample evidence supports the jury’s breach-of-contract findings. PHA contends the Contract and CO4 unambiguously authorized PHA to issue the R&R Order barring Zachry’s freeze-wall means and methods. But PHA fails to “consider the entire writing and…harmonize and give effect to all the provisions….” Frost Nat’l Bank v. L&F Distrib’rs, 165 S.W.3d 310, 312 (Tex. 2005). Nor does PHA “construe [the] contract[] from a utilitarian standpoint bearing in mind the particular business activity sought to be served.” Id. PHA also ignores that specific provisions control over general. See McCreary v. Bay Area Bank & Trust, 68 S.W.3d 727, 731-32 (Tex.App.—Houston [14th Dist.] 2001, pet. dism’d). Applying these principles, there is only one reasonable interpretation: PHA had no right to issue the R&R Order. At a minimum, Zachry’s reading is reasonable, and ample evidence supported the jury findings in Questions 1 and 2. A. Section 5.10 prohibited PHA’s R&R Order, and no other Contract provision authorized it. 1. Section 5.10 forbids PHA control of Zachry’s means and methods. Section 5.10 plainly barred PHA from controlling Zachry’s means and methods, which undisputedly included the frozen-cutoff wall. See p.4. It stated, “[PHA] shall not have the right to control the manner in which or prescribe the 26 method by which the Contractor performs the Work,” and that Zachry was “an independent Contractor…solely responsible for the supervision and performance of the Work…in such manner, using such methods as Contractor shall choose.” DX1-1.0214(A13). This prohibition on PHA control was not “subject to” the “proviso” at the end of §5.10, PHASupp:1: it merely clarified that Zachry’s right to choose its methods did not eliminate its obligation to comply with the Contract. DX1-1.0214, §5.10(A13) (“…provided, however…the order, time, manner and methods of prosecution shall be…in accordance with the Contract Documents”). When the R&R Order was issued, Zachry was in compliance with the Contract; PHA does not argue otherwise. As discussed below, some Contract provisions allowed PHA to receive means-and-methods-related submittals. However, none authorized PHA to exercise control over Zachry’s methods by barring Zachry from using them and ordering Zachry to revise them. Arguing these clauses granted PHA such control fails to harmonize all Contract provisions and renders §5.10’s prohibition on PHA control meaningless. It also vitiates PHA’s business purpose: “insulating [PHA] from liability to which it would be exposed were it exercising control over Zachry’s work.” 449 S.W.3d at 102 & n.4(A3); see pp.4-5. Finally, PHA’s 27 argument improperly gives controlling weight to general provisions relating to submittals, like §5.22, rather than specific provisions, like §5.10. 2. Section 4.07 forbids PHA control over Zachry’s health-and- safety plans. Contract §4.07 required Zachry to submit a health-and-safety plan to PHA, but made clear PHA could not control it: Notwithstanding the Chief Engineer’s review of the health and safety plan, the Contractor, and not the Port Authority, shall be responsible for and have control over ensuring the safety of its personnel and its Subcontractors… DX1-1.0204(A13). Zachry agreed to submit the main freeze-wall design as a shoring-safety- plan addendum to its previously filed health-and-safety plan, “in accord[] with Technical Specification [‘T.S.’]02161(1.3)” and “conforming to OSHA standards, with a statement signed and sealed by a registered Professional Engineer licensed in…Texas.” PX86; see DX1-1.0325, §1.3(A14); PX93.0007; 21:78; 6:60. T.S.02161 required the shoring-safety plan to include details about the Contractor’s means and methods but did not authorize PHA to control them. DX1- 1.0325, §1.3(A14). Nor could it: T.S.02161 was expressly “[s]ubject to the General and Special Conditions,” which included §5.10 and §4.07. DX1-1.0324, §1.1(A14). Instead of PHA approval, T.S.02161 required Zachry to obtain a Texas PE’s approval. Id. The purpose of this review was to ensure the shoring plan 28 satisfied OSHA safety rules, so the wall would not harm workers; as PHA witnesses testified, it did not allow PHA to approve or reject the wall based on any purported effect on the wharf. 6:62-67; 7:62; 20:111; 27:19-21; 37:106-07. The Texas PE’s approval ensured PHA would not be liable for Zachry’s activities. 44:90. Consistent with §4.07 and §5.10, PHA did not “approve” the original freeze- wall design, but rather “accepted [it] for records” based on the Texas PE’s certification. 37:115-16, 120-21; 37:114-16; 38:5-6, 156-57; 44:100-01, 109-11; 45:32; PX88(A19). PHA’s witnesses testified PHA did not approve or reject the original freeze-wall or safety submittals to avoid claims it controlled Zachry’s methods and any attendant liability. 37:115; 44:95-97. No one contemplated PHA could approve or order Zachry to revise its main freeze-wall plan: Zachry built it and installed freeze-pipes before giving PHA the design. 44:110-11. 3. None of PHA’s other cited provisions authorize the R&R Order. Section 5.22. Although §5.22 allowed PHA to “review” Submittals “to determine whether Contractor is complying with…the Contract Documents,” it did not authorize PHA to control Zachry’s means and methods—contrary to §5.10—by rejecting them. Consistent with §5.10 and §4.07, §5.22 specifically forbade PHA to approve Zachry’s safety plan or means and methods: “The Port Authority’s…review and 29 acceptance of the Contractor’s Submittals shall not constitute approval of safety precautions or any construction means, methods….” DX1-1.0220(A13); 6:70-71. Thus, §5.22 insulated PHA from liability for Zachry’s methods. 6:57, 71. In contrast, §5.22 did not disclaim PHA’s right to approve Submittals relating to matters PHA was authorized to control under the Contract: Submittals relating to the “Work.” Section 5.22 required Zachry to provide submittals to PHA’s Design Consultant, DMJM, “showing all materials and details of Work to be incorporated into the Project.” DX1-1.0218(A13). “Work” was defined as “the construction” and “services” “required by the Contract” or “pursuant to the Contract.” DX1-1.0190, §1.42. Thus, the wharf and any contractually specified means and methods—for example, the Technical Specification requiring a particular method for vibrating concrete pours—would be part of the “Work” and subject to PHA approval. 6:47, 53-55; 9:36-37; 21:33; DX1-10430. This ensured the permanent Work (wharf) was built according to the Contract specifications. 6:58-59; 8:11. In contrast, Zachry’s chosen means and methods—the freeze-walls—were not required by the Contract, 20:96; 37:66, 99; 44:78, would not be part of the Work, 21:33, 63; 27:11, and would not be required Submittals under this clause, 6:54-57, 59, 74-75; 21:71-73; 37:99. In August 2004, Thiess confirmed this: “[r]egarding the freeze wall, we have no requirement for a submittal as it was not 30 anticipated by the designers.” PX84(A18). PHA’s designer refused to approve any freeze-wall, because it was Zachry’s means and methods. 20:110-11; 44:95; PX93.0007. Submittals relating to Zachry’s safety plan and methods were controlled by §5.22’s prohibition on PHA approval. T.S.01500. Although T.S.01500 required Zachry to protect the Work, it did not authorize the R&R Order. DX1-1.0271, §1.1A(A15); 27:29-30. T.S.01500 was “[s]ubject to the General and Special Conditions,” DX1-1.0271, §1.1A(A15); see DX1-1.0191, §2.02(a)(A13), including §5.10’s bar on PHA control, and §4.07 and §5.22’s prohibition of PHA approval of Zachry’s safety plans and methods. Consistent with PHA’s goal of avoiding liability, T.S.01500 required Zachry to fix any damage “done by, or on account of...the Contractor.” DX1-1.0278, §1.11A.4(A15). PHA’s argument grants PHA control, destroying this protection. Section 1.39. Nothing in §1.39 authorized PHA to order Zachry to revise Zachry’s means and methods. It defined “Submittals” as “information provided by [Zachry] for approval of proposed Equipment, Materials, means or methods.” DX1-1.0189(A13). Critically, §5.22 prohibited PHA from approving Zachry’s means and methods (as opposed to contractually specified methods). See pp.29- 31. Thus, any submission of Zachry’s methods was not “information provided by [Zachry] for approval.” And reading §1.39’s general “Submittal” definition to authorize the R&R Order improperly allows §1.39 to control over §5.10 and 31 §4.07’s specific prohibitions on PHA control. 4. PHA is not remediless. PHA contends Zachry’s argument deprives PHA of any recourse if PHA believed Zachry’s means and methods “could cause the Wharf to collapse.” PHASupp:25. Even if such a belief could authorize the R&R Order, ample evidence established PHA did not actually or reasonably believe the frozen-cutoff wall could cause wharf collapse. See pp.13-15. Furthermore, the Contract contains numerous provisions allocating to Zachry the risk of damage from Zachry’s methods and providing PHA a remedy. See, e.g., DX1-1.0198, .0200, .0223, .0229, .0234, §§ 3.06, 3.08, 5.36, 5.53, 6.14(A13); DX1-1.0278, §1.11A.4(A15); 9:33-35; 27:13-18, 23-25. And if PHA were truly concerned about wharf collapse, it could terminate the Contract without cause. DX1-1.0227, §5.47(A13). The one thing the Contract did not allow PHA to do was control Zachry’s means and methods by issuing the R&R Order. PHA drafted the Contract, pp.3-4, and the Court should not rewrite it to grant PHA rights omitted from it and contrary to PHA’s business purpose. 5. The drilled-shaft submittal is consistent with Zachry’s reading. PHA suggests Zachry’s drilled-shaft submittal shows PHA’s right to issue the R&R Order. PHASupp:2. But it related only to piers—which were part of the “Work,” which PHA had the right to approve—not Zachry’s freeze-wall methods, 32 which PHA had no right to approve. See PX6; PX69; 7:45; pp.26-32. PHA recognized this, warning “any ice…encountered during drilled-shaft construction will be cause for rejecting the affected work”—not Zachry’s freeze-wall methods. DX133.002 B. PHA’s R&R Order breached CO4. PHA argues CO4 did not “delete PHA’s §5.22 right to require Zachry to revise and resubmit Zachry’s frozen-COW design.” PHASupp:25. But §5.22 afforded no such right. See pp.29-31. Even if PHA had such a right, ample evidence supported the jury’s finding that PHA agreed in CO4 that Zachry could use the frozen-cutoff wall, and CO4 controls. DX1-1.0191, §2.02(a)(A13). CO4 incorporated “Proposer’s Specifications and Proposal dated April 13, 2005, as amended by Proposals for 330 feet Wharf Extension [the May 18 proposal, 26:110-12] and as further amended by Proposer’s Supplemental Proposal dated July 11, 2005….” PX12.0001, .0004(A30). Both the April and May proposals were conditioned on an “[u]ninterrupted work schedule” and the “freeze wall-cutoff wall, encompassing one (1) ‘B’ row piling”—the same one described to PHA representatives on April 5 and memorialized in the September 9 design. PX9(A21); PX179(A22); pp.8, 11. 6 The July 11 proposal did not delete these 6 PHA’s claim it rejected the April 13 proposal is immaterial. The May 18 proposal—which 33 conditions: it was merely a “[s]upplemental proposal” that offered “additions and clarifications.” PX219(A23); 8:60; 10:116. PHA signed CO4 after reviewing the September 9 design—which embodied the April 5 design described in the proposals—for two weeks. 10:111-16, 118, 8:50-51; 22:92, 119-20; 27:37; 45:148; p.13. 7 Thus, CO4 included PHA’s agreement that Zachry could use the frozen- cutoff wall. See pp.12-13. PHA concedes CO4 is at least ambiguous as to Zachry’s right to use the frozen-cutoff wall, but argues there is “no intent evidence.” PHASupp:27. CO4’s language incorporating the April and May proposals refutes this. Furthermore, Zachry’s Anderson testified CO4 “included language with the frozen-cutoff wall” and “expressly said that we had the right to use it as a result of this change order.” 15:61. PHA cites nothing for its argument CO4 did not bind the parties if it authorized, but did not require, Zachry to use the frozen-cutoff wall. Thus, the evidence supports the jury’s finding that CO4 authorized Zachry to use the frozen-cutoff wall. PHA does not challenge the sufficiency of the evidence of breach under this interpretation to support Question 1, because it cannot. See pp.15-16. PHA does not claim was rejected—was also conditioned on the frozen-cutoff wall. PX179(A22). Furthermore, PHA cites nothing holding a previously rejected proposal cannot be incorporated into an agreement. 7 PHA’s irrelevant claim that Zachry changed its theory on CO4 is disproved by PHA’s citations. CR31:8541; 1(9/11/09):27, 80. 34  C. Question 1 was proper. The instruction in Question 1 that the jury was “not being asked to decide whether PHA failed to comply with §5.10” was necessary to obtain separate findings on whether CO4 gave Zachry the right to use the frozen-cutoff wall (Question 1) and whether §5.10 barred PHA from issuing the R&R Order (Question 2). CR59:17390(A4). The instruction was within the court’s broad discretion. Kiefer v. Continental Air., 10 S.W.3d 34, 37 (Tex.App.—Houston [14th Dist.] 1999, pet. denied). Any error was harmless. The jury found PHA breached §5.10 in Question 2; thus, deleting the instruction from Question 1 would not have changed anything. See id. at 38; Shupe v. Lingafelter, 192 S.W.3d 577, 579-80 (Tex. 2006).8 II. The jury's verdict on causation and damages is supported by the evidence. Given the evidence that PHA’s rejection of the frozen-cutoff wall, demands for a recovery schedule, and threats of LDs caused Zachry to switch to working in the wet, pp.16-21, the remaining issue was the quantification of the effect of the switch (damages). 51:152-54; 52:4-10. Zachry’s damages expert, Gary Draper, testified about that quantification; he did not also need to opine on the cause of the switch. Id.; p.40. 8 Question 1 should never have been submitted: CO4 unambiguously authorizes Zachry to use the frozen-cutoff wall, pp.12-13, 33-34, and PHA does not dispute breach under this reading, p.34. Zachry was entitled to a directed verdict. CR59:17299-313. 35  Draper (a) identified the construction activities the switch impacted; (b) as to each impacted activity, calculated the cost Zachry would have incurred absent PHA’s breach working in the dry as long as possible; (c) compared those costs to the costs Zachry reasonably incurred as a result of switching to the wet earlier than it would have absent PHA’s breach; and (d) excluded all other costs. 52:4-10, 16, 26, 72-74, 103-111; 117:172, 261. Draper calculated the costs of the switch (after excluding other costs) to be approximately $27 million. 52:7-10, 110-11. After hearing the evidence, the jury awarded Zachry $18,602,697. CR59:17393(A4). A. Draper’s assumptions on damages were supported by the evidence and did not vary materially from undisputed facts. PHA incorrectly asserts the assumptions underlying Draper’s model failed to comply with Burroughs Wellcome v. Crye, which holds that experts may not “assume[] facts that vary materially from the actual, undisputed facts.” 907 S.W.2d 497, 499 (Tex. 1995). PHA ignores the substantial evidence supporting Draper’s model, and instead asserts Draper’s dry schedule “varies drastically” from “dozens of schedules Zachry prepared around the time of the” Port’s rejection. PHASupp:29. But Draper scheduled a frozen-cutoff-wall methodology. 52:8. In contrast, the schedules PHA cites were not based on a frozen-cutoff wall, because they were created after the rejection. See PHASupp:29; p.19-20. Thus, these schedules did not even attempt to project what Draper projected—a completion schedule using a 36 frozen-cutoff wall. Moreover, because they were drafts, they did not reflect concurrent performance of tasks to accurately project completion dates. 11:49-50, 83-86; 18:124-25, 151-57; 19:32-60; p.19. PHA’s other challenges to Draper’s assumptions—regarding freeze-pipe removal and sheet-pile installation—ignore evidence supporting Draper’s assumptions and do not show his assumptions vary materially from undisputed evidence. 1. Draper’s treatment of freeze-pipe removal was supported by the evidence. PHA incorrectly asserts the “undisputed” evidence showed freeze-pipe removal would occur prior to berm removal and in a manner that would add a material amount of time to Draper’s overall dry schedule. First, Draper’s dry model—consistent with the evidence—provided for freeze-pipe removal to occur concurrently with berm removal. 53:31-32; PX320; 30:106-08, 116-17. • Zachry’s dry approach was to remove the berm and freeze-pipes simultaneously and using the same equipment. 53:31-32; 10:61; DX404.004. • PHA’s own freeze-wall expert at trial, Mageau, concluded at the time of the R&R Order that Zachry could remove the freeze-pipes and perform the remainder of the work by mid-February to mid-March 37  2006 so the crane-ship could timely dock—even though he was aware of freeze-pipe issues and other challenges Zachry faced. PX320; 30:106-08, 116-17; pp.18-19. • Draper’s schedule was consistent with the contemporaneous frozen- cutoff-wall project schedule created by Zachry shortly before the rejection. DX404; 18:115-18, 124. Second, even if freeze-pipe removal would occur separately from berm removal, it would account for no more than one day of the critical path of the schedule: the day after pipe-removal started, Zachry would begin the more time- consuming critical-path activity of berm removal where the pipes had been removed. After the first day, pipe and berm removal would proceed simultaneously. 53:29-30. Draper included sufficient “float” to accommodate this. Id.; 54:91-93. PHA incorrectly characterizes Draper’s testimony as “assum[ing] a thousand freeze-pipes could be removed in one day.” PHASupp:31 (emphasis original). PHA’s suggestion that Draper should have scheduled more than one day to remove pipes incorrectly assumes that pipe and berm removal could not occur concurrently. See, e.g., 53:31-32; 10:61; DX404.004. Third, PHA cross-examined Draper on this point, and the jury’s award–– substantially less than Zachry sought––accounted for any weight the jury gave it. 38 53:29-32; America’s Favorite Chicken Co. v. Samaras, 929 S.W.2d 617, 629 (Tex.App.—San Antonio 1996, writ denied). 2. Draper’s treatment of sheet-pile installation was supported by the evidence. PHA contends “it is undisputed…Zachry was not ready to install…sheet pile until after November 15—40 days later than Draper assumed.” PHASupp:31. 9 But PHA’s citations provide no support. PHA relies on Anderson’s testimony referencing a November 15 list of remaining tasks. Neither that list nor Anderson’s testimony references sheet-pile-installation timing for the frozen-cutoff wall, because it was rejected a month earlier. See DX91; 16:29-31; 14:93-104. PHA nevertheless inserts “frozen” into Anderson’s testimony “that there was work to be done before we were ready for the [frozen] cutoff wall.” PHASupp:31. But Anderson was discussing the status as of November 15—when Zachry was considering the alternate-cutoff wall’s viability. See p.19-20. PHA’s argument incorrectly assumes that, after PHA's October 11 rejection, Zachry proceeded exactly as if PHA had not breached. See, e.g., 16:135-36; 54:91. Even if Anderson was saying work remained as of October 11, Anderson testified it would take “a couple of days at best.” 14:103; see 16:30. Although Draper’s schedules showed sheet-pile installation starting October 7, it was on 9 “Sheet pile”—steel sheets—would have lined the frozen-cutoff wall berm and would have composed Mageau’s alternate-cutoff wall. 10:21-22; 11:52-53. 39 “early start,” meaning it could start later with no impact on his analysis. 53:159- 60; 54:91-94; PX580 at 273. Indeed, his schedule’s float allowed sheet-pile installation to be delayed until November 15 or later. Id. The evidence supports Draper’s assumption that—absent the breach—Zachry could have accomplished pre-freeze-down work like sheet-pile installation in time to freeze-down the walls and complete Milestone-A before the crane-ship arrived. See pp.18-19; 52:14-15. Third, PHA raised this issue during Anderson’s cross-examination, and the jury’s award––less than Zachry sought––accounted for any weight the jury gave it. 16:29-31; Samaras, 929 S.W.2d at 629. B. The evidence establishes causation. 1. Ample evidence supported the jury’s causation finding. Contrary to PHA’s assertion, expert testimony was not required to prove PHA’s breach caused Zachry to abandon its dry-construction methodology. See Helena Chemical Co. v. Wilkins, 47 S.W.3d 486, 504 (Tex. 2001) (non-expert testimony may establish causation, exclude alternative causes). Abundant evidence supported the jury’s finding that PHA’s rejection of the frozen-cutoff wall caused Zachry to switch to a wet-construction methodology. See pp.16-21. Anderson and geotechnical expert Hugh Lacy testified that—in the face of PHA’s rejection of the frozen-cutoff wall—Zachry had no viable alternative-cutoff wall to bifurcate the project and complete the wharf in the dry 40 while still allowing the crane-ship to dock, and thus had to switch to the wet far earlier than it otherwise would have. 19:32-50; 42:59-104; p.19-20.10 2. PHA’s “Contract completion deadline” argument fails. PHA asserts Draper did not opine that Zachry could have met the Contract deadlines by working in the dry with the frozen-cutoff wall. PHASupp:34-35. But Zachry was not required to show it would have completed all its work in the dry by the Contract deadlines to prove the R&R Order caused Zachry’s damages. The jury could have reasonably found a causal connection between PHA’s breach and the damages awarded based on evidence showing PHA’s breach caused Zachry to use a wet approach for a far greater portion of the work than if Zachry had been allowed to use the frozen-cutoff wall. 52:41-43, 94-97, 102-07; p.17-18; Abraxis Petrol Corp. v. Hornburg, 20 S.W.3d 741, 758 (Tex.App.—El Paso 2000, no pet.). Draper calculated that increased cost, 52:110-11, and excluded the cost of work Zachry would have performed in the wet even with the frozen-cutoff wall, 52:41- 43, 94-98; 10:59-62. PHA’s contention that Zachry failed to prove causation because Draper’s model assumed a small amount of work in the wet is unfounded. But even if required, Zachry presented ample evidence it would have completed Milestone-A in the dry by February 15, 2006, if PHA had not rejected the frozen-cutoff wall. See, e.g., PX320; 30:115-16; PX357; 19:43-45; 18:107-11; 10 PHA’s argument that Zachry’s schedules showed Zachry finishing faster and cheaper by abandoning its dry methodology was debunked at trial. See pp.19-20, 36-37. 41 32:100-01; PX893.0055; PX251; PX252; 26:100-02; 45:103-05; see also 29:35-36, 115-16; 123-24; pp.18-19. 11 Other evidence showed that absent PHA’s breach, Zachry could have completed Milestone-A by May 15, 2006—the crane-ship’s actual arrival date, see, e.g., id.; 56:96-97; pp.18-19,—and achieved final completion by the Contract deadline, 16:102-04; PX771; 19:86-90; 18:115-18; 27:40-42; 35:57-58. PHA ignores this evidence and that Draper adopted a conservative approach in preparing his analysis. 52:60-63. 3. PHA’s “alternative cause” argument fails. PHA incorrectly argues Draper “failed to rule out alternative causes of Zachry’s switch to working ‘in the wet.’” PHASupp:33. Expert testimony was not required to rule out alternative causes. See p.40. PHA’s suggestion Zachry was planning on eliminating the freeze-wall was refuted by evidence establishing that, until the R&R Order, Zachry intended to use the freeze-walls and was building the wharf and freeze-walls consistent with that intent. See 10:99-102, 118, 124; 19:33; 35:63. Anderson testified that in the absence of an alternative-cutoff wall, Zachry’s only option was to work in the wet. 18:151-57; 19:32-50; see also pp.17, 19-21. And geotechnical expert Lacy offered unrebutted expert testimony that the alternative-cutoff wall design was not safe or 11 Anderson also testified about scheduling and construction progress in light of his construction experience and first-hand observation of the work. 9:81-86, 94, 101-02, 109-110; 11:49-50, 82- 86, 91-93; 12:111; 18:64-65, 115-25, 151-57; 19:32-76. Anderson testified Zachry would have timely completed the project with the frozen-cutoff wall. 19:43-45. 42 feasible. 42:59-104. The jury could reasonably have found that—in the absence of a viable alternative method to bifurcate construction and allow the crane-ship to dock—PHA’s rejection of the frozen-cutoff wall, demands that Zachry comply with the Contract deadlines, and threats of LDs forced Zachry to switch to a predominantly wet methodology earlier than it otherwise would have. See pp.16- 21. Finally, PHA’s argument that Anderson offered conclusory testimony lacks merit. Anderson was questioned for days regarding scheduling options he analyzed after PHA’s breach. See, e.g., 11:49-50, 83-86; 18:124-25, 151-57; 19:32-45, 50-60. Anderson’s contemporaneously prepared schedules showed that, without a frozen-cutoff wall, Zachry could only dock the crane-ship if it moved to wet construction far earlier than planned. Id. C. PHA’s lack-of-authority argument does not defeat causation. PHA contends that because “Thiess had no authority [under Special Condition §12(d)] to change Contract terms, Thiess’s R&R response could not…have caused Zachry’s R&R damages.” PHASupp:38-39. However, §12(d) is inapplicable: the R&R Order was not a change to the Contract, but a breach. Cf. p.45-48. Furthermore, PHA’s argument is based on the incorrect premise that “Thiess issued the R&R response.” PHASupp:37. The R&R Order, which bore PHA’s 43 seal, was PHA’s decision and act; Thiess (with PHA’s McQueen) was simply PHA’s messenger. 8:16; 46:50-51, 53-54; PX266(A33); PX314(A34); DX1- 1.0244, §12(c)(A16). The day before the R&R Order issued, PHA’s McQueen told Thiess and Ely, “[t]he cutoff wall was rejected.” PX1(A32). Vincent concurred. 46:39. But even if Thiess made the R&R-Order decision, it would still have been PHA’s act. Chief Engineer DeWolf testified he delegated his §5.22 authority to review safety-related Submittals to PHA’s Vincent and McQueen, who were responsible for getting CH2M-Hill’s assistance. 8:16. Apparent authority is a fact issue. See p.62. Moreover, other PHA acts caused Zachry’s damages. Three days after the R&R Order’s issuance, Chief Engineer DeWolf sent Zachry a letter demanding Zachry finish by the Contract deadlines (which were conditioned on use of the frozen-cutoff wall) and threatening LDs. PX319; 19:29-31. DeWolf’s superiors repeated this demand in October and November. See p.17. By demanding a recovery schedule after barring Zachry from using its “required” frozen-cutoff wall, PHA—not Thiess—forced Zachry to spend more money and time building the newly extended wharf in the wet. See pp.17-18, 21-22. The Water Code and Chapter 271 impose no bar: the Contract PHA breached was undisputedly written and properly executed as required by PHA’s 44 cited statutes. See PHASupp:37-38 (citing TEX. WATER CODE §60.408(i); TEX. LOC. GOV’T CODE §§271.151(2), 271.152)(A42). III. Sections 5.41 and 5.42 do not bar Zachry’s breach-of-contract claim. A. The “changes” clauses are inapplicable by their terms. By their plain terms, §5.41 and §5.42 do not apply to breach-of-contract claims for damages. Instead, they set forth procedures allowing PHA to make changes within the scope of the Work during performance of the Contract, either through Change Orders (§5.41) or “Changed Conditions or Contract Interpretations” (§5.42). Section 5.41 applies to “changes and modifications to the Contract Documents within the general scope of the Work,” and requires a Change Order to “stipulate the Work to be performed” and “any difference in the Contract Price.” DX1-1.0224-25(A13). Similarly, §5.42 requires five days’ notice of any “interpretation of the Contract” by PHA “the Contractor believes...constitutes a change to the Contract,” “[i]f the Contractor believes it is entitled to an adjustment in the Contract Time [or] Contract Price.” DX1-1.0225(A13). The Chief Engineer’s determination as to whether there should be a “modification” or “equitable adjustment” is “final and conclusive,” and the Contractor is forbidden to “begin performing that portion of the Work affected by such interpretation” before giving notice. Id. 45  Zachry does not assert that in forbidding Zachry to use the frozen-cutoff wall, PHA effected “changes or modifications to the Contract Documents within the general scope of the Work” as in §5.41, or that PHA made an “interpretation of the Contract” that “constitutes a change to the Contract” as in §5.42. Rather, PHA breached the Contract and CO4 by rejecting the frozen-cutoff wall. Thus, Zachry never sought the “difference in the Contract Price” under §5.41 nor “an adjustment in the...Contract Price” under §5.42. Rather, Zachry sought—and the jury properly awarded—damages for PHA’s breach of the Contract. CR29:08142- 44(A8); CR59:17390-93(A4). Furthermore, §§5.41/5.42 apply only to changes relating to “the Work,” which does not include Zachry’s means and methods. See p.30. Authorities recognize that “changes” clauses like §§5.41/5.42 do not apply to claims the owner breached and is liable for damages. See, e.g., Shintech, Inc. v. Group Constructors, Inc., 688 S.W.2d 144, 151-52 (Tex.App.—Houston [14th Dist.] 1985, no writ) (delay damages recoverable despite “changes” clause); Board of Regents v. S&G Constr. Co., 529 S.W.2d 90, 97 (Tex.Civ.App.—Austin 1975, writ ref’d n.r.e.). Instead, “changes” clauses are a “vehicle to add or delete work, substitute materials, alter geographic locations, increase or decrease quantities, extend or reduce contract time and adjust contract price....” 1 BRUNER & O’CONNOR CONSTR. LAW §4.23. They “necessarily exclude[] the power to 46 unilaterally change the terms of the contract or its general risk-allocation provisions, as distinguished from the work itself.” Id. §4:23. For example, §5.42 would apply if the specifications required “steel,” and PHA interpreted that to mean galvanized steel, but Zachry believed black steel complied. RR16:62. But §5.42 would not allow PHA to unilaterally change the Contract’s General Conditions precluding PHA from interfering with Zachry’s methods or CO4’s frozen-cutoff-wall authorization. S&G rejected the owner’s argument that the contractor could recover for breach only under the change-order provision, holding the argument ignored the difference between (1) suits seeking breach-of-contract damages and (2) suits seeking additional compensation in the absence of a breach. 529 S.W.2d at 96-97. “Changes” clauses apply only to (2), and S&G distinguished cases (cited by PHA) applying “changes” clauses, finding there was no breach in those cases. Id. (distinguishing State v. Martin Bros., 160 S.W.2d 58 (Tex. 1942); State v. F&C Eng’g Co., 438 S.W.2d 647 (Tex.Civ.App.—Houston [14th Dist.] 1969, writ ref’d n.r.e.)). PHA’s reading also improperly fails to construe §§5.41/5.42 in light of the entire contract. Frost, 165 S.W.3d at 312. PHA knew how to write a condition precedent to filing a lawsuit, but did not in §§5.41/5.42. DX1-1.0230, §5.55(A13). Furthermore, according to PHA, every PHA breach would be a “change” PHA’s 47 Chief Engineer had the right to make under §5.41 or an “interpretation...constituting a change” for which the Chief Engineer was the final arbiter under §5.42. Zachry could never recover damages, because its remedy would be a “claim for compensation” calculated under §5.43. DX1-1.0225-26, §5.43(A13). PHA’s reading fails to give meaning to other contract clauses recognizing PHA could have liability under the contract not only for a “claim for compensation” but also a “claim for damages.” DX1-1.0192, §2.03(A13); see DX1-1.0217, §5.16(A13); DX1-1.0217, §5.19(A13). At a minimum, Zachry’s reading of §§5.41/5.42 as inapplicable to breach- of-contract claims is reasonable. Any ambiguity should be construed against PHA as the drafter. See S&G, 529 S.W.2d at 99; p.3-4. Furthermore, “forfeiture by finding a condition precedent is to be avoided when another reasonable reading… is possible.” Criswell v. European Crossroads Shopping Ctr., 792 S.W.2d 945, 948 (Tex. 1990). Even if ambiguous, §§5.41/5.42 should be construed not to impose a condition precedent to breach-of-contract recovery. B. Alternatively, common-law and statutory rules preclude application of the “changes” clauses here. 1. The Shintech doctrine. Even if §§5.41/5.42 apply to breach-of-contract claims, the trial court correctly held that they do not bar Zachry’s claim. “[W]hen an owner breaches a construction contract, it relinquishes its contractual procedural rights concerning 48 change orders and claims for additional costs.” Shintech, 688 S.W.2d at 151. This Court and others have held Shintech precludes breaching owners like PHA from invoking procedural clauses to bar contractors’ claims. See, e.g., Shintech, 688 S.W.2d at 151 (written-notice requirement); West v. Triple B Servs., LLP, 264 S.W.3d 440, 446-47 & n.4, 449-50 (Tex.App.—Houston [14th Dist.] 2008, no writ) (30-day notice requirement); North Harris Cty. Jr. College Dist. v. Fleetwood Constr. Co., 604 S.W.2d 247, 254 (Tex.Civ.App.—Houston [14th Dist.] 1980, writ ref’d n.r.e.) (change-order requirement); S&G, 529 S.W.2d at 96 (same). a. Green does not preclude application of Shintech. PHA’s argument that Shintech does not apply if the contractor continued to perform after the breach is incorrect: in the cases above, the contractors continued to perform after defendants’ breaches. Nor does Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 389 (Tex. 1997), support PHA. In Green, the general contractor asserted the subcontractor’s lien releases barred its claim for extra work. Id. at 388. The Supreme Court disagreed, but for a different reason than the Court of Appeals, which had characterized the question as a Shintech problem—whether the general contractor relinquished procedural rights by breaching. In dictum, the Supreme Court recognized the question in Green was instead whether “the remedy of excuse of performance” applied—that is, whether the breaching defendant was precluded from relying on 49 its substantive right to a lien release to bar its subcontractor’s claims. The Supreme Court did not address the Shintech rule. See id. at 389. Green’s citation of Hanks v. GAB Bus. Servs., 644 S.W.2d 707 (Tex. 1982), confirms the Court did not reject Shintech, but rather recognized its inapplicability to substantive contract rights. Like Green, Hanks involved a nonbreaching plaintiff’s failure to perform a substantive requirement: the defendant-buyer of a business asserted the plaintiff-seller’s breach of a covenant-not-to-compete excused the buyer’s failure to pay the full price. 644 S.W.2d at 708. Hanks relied on S&G to hold that the nonbreaching party’s performance was not excused because it continued to perform. Id. The Court did not disavow S&G’s application of the Shintech rule to procedural requirements. Compare id., with S&G, 529 S.W.2d at 96. b. Technip does not preclude application of Shintech. Tennessee Gas Pipeline v. Technip USA Corp., 2008 WL 3876141 (Tex.App.—Houston [1st Dist.] 2008, pet. denied), is distinguishable. It involved a provision requiring the owner to give notice of defective work. Id. at *17. As the Court observed, if the contractor’s alleged breach based on defective work excused the owner from giving notice of defective work, the provision would never apply, rendering it “meaningless.” Id. at *23 n.11. The court did not disapprove but distinguished cases—including Fleetwood—holding when an owner breaches a 50 building contract, it relinquishes procedural rights concerning change orders and additional-cost claims. Id. Technip’s refusal to apply the Shintech rule turned not on the fact that the provision required notice, but rather that applying the provision as the owner argued would require “circular reasoning” rendering it “without effect.” Id. In contrast, applying Shintech here would not render §5.42 “without effect,” as it would still apply in the absence of a breach to differing Contract interpretations relating to the Work when the contractor seeks an adjustment to the Contract Price/Time. Indeed, this Court has applied Shintech to failures to comply with notice provisions. See, e.g., p.49. 2. The radical-change doctrine. The trial court also concluded that §§5.41/5.42 are inapplicable to Zachry’s claim by analogy to the radical-change doctrine. Under this doctrine, “changes” clauses do not apply to changes “requir[ing] contractors to perform large quantities of work, radically different in its character, nature, and cost from that originally contemplated....” B.F.&C.M. Davis v. W.E. Callaghan Constr., 298 S.W. 273, 279 (Tex.Comm’nApp. 1927). The trial court’s analogy did not turn Zachry’s claim for breach of the written Contract into an implied-contract claim. Besides, a radical change can constitute a breach giving rise to damages (not quantum 51 meruit). See Nat’l Env’l Serv. v. Homeplace Homes, 961 S.W.2d 632, 635 & n.3 (Tex.App.—San Antonio 1998, no writ). 3. Section §16.071. According to PHA, §5.42 makes giving 5-days’ notice of Zachry’s breach- of-contract-damages claim a condition precedent to suit. However, any “contract stipulation that requires a claimant to give notice” “within less than 90 days” “of a claim for damages as a condition precedent to the right to sue on the contract” is “void.” TEX. CIV. PRAC. & REM. CODE §16.071(a)(A43); see Taber v. W. Union Tele. Co., 137 S.W. 106, 109 (Tex. 1911); Atwood Oceanics v. Zust Bachmeier, 2007 WL 2766192, *1 (5th Cir. 2007). American Airlines Emp. Federal Credit Union v. Martin, 29 S.W.3d 86 (Tex. 2000), is distinguishable. That clause required a bank customer to give notice of unauthorized signatures or be barred from asserting they were unauthorized. Id. at 91-92. In contrast, PHA argues §5.42 requires Zachry to give 5-days’ notice of its breach-of-contract-damages claim and that failure to do so bars Zachry’s claim. Plus, in PHA’s view, §5.42 gives PHA the “final and conclusive” right to decide the correct “interpretation” and thus whether there was a breach. Unlike American, where the clause’s purpose was to inform the bank of unauthorized signatures, §5.42 (under PHA’s reading) has no purpose except to bar 52 Zachry’s breach-of-contract claim.12 C. The “changes” clauses were not tried. PHA asserts that whether Zachry complied with §§5.41/5.42 was tried to the jury, that Zachry failed to prove that it obtained a change order or gave notice, and that rendition is appropriate. However, Zachry’s compliance with these clauses was expressly not tried, because the court held pre-trial that §§5.41/5.42 are inapplicable to Zachry’s claims. CR46:13299-301, 13305(A5). Zachry was not required to continue litigating these issues. Provident Life & Accident Ins. v. Hazlitt, 216 S.W.2d 805, 807 (Tex. 1949). Although the jury was instructed that it may consider §§5.41/5.42 for state of mind, it was not required. See, e.g., 49:112; CR59:17392(A4).13 Indeed, the jury was instructed Zachry was not required to obtain a §5.41 Change Order or give §5.42 notice. CR59:17392(A4). Zachry had no obligation to offer evidence on §§5.41/5.42. But if §5.42 notice was tried, Zachry substantially complied. See Aple.Br:61 n.54; 11:39-40; PX2(A35); PX314(A34); 27:89-90, 93-94; 35:95-96; p.16. 12 PHA asserts the notice period should be reformed to 90 days under Contract §3.12. PHASupp:46 n.3. However, §3.12 is an unenforceable agreement to agree. Ft. Worth ISD v. City of Ft. Worth, 22 S.W.3d 831, 846 (Tex. 2000); CR42:12179. PHA never sought reformation on any other basis. 13 PHA notes the instruction also concerned §5.52. PHASupp:45 n.2. Zachry’s §§5.41/5.42 arguments apply equally to §5.52. 53  D. If the trial court erred, remand—not rendition—is required. Even if §§5.41/5.42 could reasonably be read to govern Zachry’s recovery of breach-of-contract damages—which Zachry disputes—the proper remedy is not rendition, but rather remand to permit Zachry to offer evidence. County of Dallas v. Wiland, 216 S.W.3d 344, 357 (Tex. 2007). Zachry’s reading—that these clauses do not apply to its damages claim for breach of §5.10/CO4—is at least one reasonable reading. Accordingly, if not resolved by rules of construction in Zachry’s favor, a jury should resolve this dispute. Alternatively, a jury should determine whether Zachry substantially complied with §5.42. Finally, PHA must prove prejudice from any lack of notice. Prodigy Comms. Corp. v. Agricultural Excess & Surplus Ins., 288 S.W.3d 374, 377-78 (Tex. 2009). E. Zachry’s failure to seek a §5.08 extension was irrelevant. Zachry’s failure to seek a §5.08 time extension for PHA’s breach was irrelevant: Zachry sought damages—not a time extension—for PHA’s breach. Requesting a §5.08 extension was not a prerequisite to damages. Furthermore, §5.22 states, “revision and…resubmission of Submittals shall not entitle…Contractor to any extension of time.” DX1-1.0219(A13). Zachry’s failure to request an extension for PHA’s R&R Order thus proves nothing. Additionally, any suggestion Zachry had to request an extension would have caused unfair prejudice. TEX. R. CIV. P. 403. And PHA shows no harm. 54 IV. The trial court did not abuse its discretion in excluding PHA’s $8.6 million in alleged harms claimed as offsets. PHA asserts the trial court improperly “denied PHA its offset defense” by excluding PHA’s evidence that it allegedly suffered $8.6 million in harms from Zachry’s performance. PHASupp:50. Parties must timely disclose their theories of the case and amount of damages—for defenses as well as claims—or face mandatory exclusion. TEX. R. CIV. P. 193.1, 193.6, 194.2(c), (d) & cmt.; Alvarado v. Farah Mfg., 830 S.W.2d 911, 914 (Tex. 1992) (“The rule is mandatory, and its sole sanction—exclusion of evidence—is automatic….”); Harris Cty. v. Inter Nos, Ltd., 199 S.W.3d 363, 367-68 (Tex.Civ.App.—Houston [1st Dist.] 2006, no pet.) (litigant must disclose basis for contesting damages). The interpretation of pleadings and determination of the adequacy of disclosures are within the trial court’s discretion. See Secure Comm. v. Anderson, 31 S.W.3d 428, 430 n.2 (Tex.App.—Austin 2000, no pet.); Robinson v. Lubbering, 2011 WL 749197, *3, 7 (Tex.App.—Austin 2011, no pet.). The trial court did not abuse its discretion in excluding PHA’s alleged $8.6 million in harms, because as shown below, PHA’s limited disclosures of alleged harms were made solely in connection with its attempt to prove the LD clauses were reasonable forecasts of just compensation and thus enforceable. They did not give Zachry notice that PHA intended to seek an $8.6 million jury finding on an offset defense to be deducted from Zachry’s damages award. An $8.6-million- 55 offset claim would have required Zachry to conduct substantial discovery into whether PHA sustained the harms, causation, and quantification. From this suit’s beginning in 2006, Zachry sued for sums PHA wrongfully withheld, including the $25,000/day LDs for Milestone-A. CR1:00005; CR4:00934. When PHA disclosed—for the first time on June 3, 2009—that it sustained actual damages, its disclosure was solely in the context of arguing the LD provisions were a “reasonable forecast of just compensation because…the Port Authority sustained actual damages in an amount that was not disproportionate to the [LDs].” CR45:13023, ¶41(A9). The next day, PHA filed its Second Amended Disclosures stating PHA had suffered general categories of actual damages, but again solely in the context of arguing the LD provisions were enforceable: The difficulty of quantifying and proving…actual damages is one…reason[] the parties included liquidated damages provisions in the Contract…The [LD] provisions are enforceable….The [LDs] were a reasonable forecast of just compensation because…[PHA] sustained actual damages in an amount that is not disproportionate to the [LDs] …. CR46:13076(A10). Zachry immediately sent PHA an interrogatory on June 11 asking it to quantify these harms. CR46:13105(A11). That PHA responded by Zachry’s July 24 deadline by quantifying more than $8 million in alleged actual harms does not help PHA: Zachry sent its interrogatory in response to PHA’s disclosure that it suffered harm proportional to its LDs, and PHA’s response again referenced the 56 difficulty in “know[ing] the precise nature and extent of damages,” and did not disclose it sought to offset them against Zachry’s damages. CR46:13108(A11); see CR46:13105-10(A11). And PHA’s general, conclusory pleadings of an offset defense failed to notify Zachry of the amount of damages PHA sought to offset. See PHASupp:51 (citing CR47:13428, §57). Even if these disclosures were not limited to LDs, the trial court did not abuse its discretion in excluding them as untimely. Trial had been scheduled to begin July 20, 2009, and the discovery deadline had lapsed six months earlier, on January 16. CR45:12933; CR17:04679. See Sprague v. Sprague, 363 S.W.3d 788, 800 (Tex.App.—Houston [14th Dist.] 2012, pet. denied) (continuance does not nullify scheduling-order deadlines). PHA later increased its claimed harms to approximately $10.5 million on September 16, but continued to make this disclosure in the LD context. CR46:13117-20. Nothing disclosed PHA intended to submit these harms to the jury as an offset defense to reduce Zachry’s damages. Indeed, PHA’s September 17 draft charge did not seek any finding as to PHA’s actual damages for an offset defense to reduce Zachry’s damages award. See CR43:12401-20(A12). Not until the eve of trial did PHA reveal it intended to seek an $8.6 million alleged-harms offset as a defense to reduce Zachry’s damages. (10/9/09):19-21. The trial court correctly ruled PHA disclosed the harms only in support of the LD 57 provision, not as an offset defense. CR51:14949-51(A6). It also correctly found PHA failed to show good cause and that injection of the $8.6 million in alleged harms would require extensive discovery and “dramatically change the landscape of what promises to be a lengthy and complicated trial.” CR51:14951-52(A6). The trial court did not abuse its discretion. V. PHA’s “open-the-door” theory did not support admission of PHA’s alleged harms regarding the no-damages-for-delay exceptions. A. The trial court properly excluded PHA’s actual-harms evidence under Rule 403. PHA contends the trial court erred in refusing to allow PHA to prove—with respect to the bad-faith and arbitrary-and-capricious no-damages-for-delay exceptions—that PHA suffered actual harm to rebut a purported “misimpression” Zachry allegedly gave the jury. PHASupp:54-56. But Zachry never opened the door to PHA’s claimed harm. Zachry never argued PHA suffered no harm at all. Rather, Zachry argued PHA: (1) promised not to charge Milestone-A LDs if the crane-ship was able to dock on arrival, but (2) nevertheless charged LDs even though the crane-ship was able to dock on arrival. See, e.g., 4:51; 25:61-62, 66-68; 71:98; p.10. Zachry did not argue PHA: (1) promised it would not charge LDs if it suffered no harm at all, but 58  (2) charged LDs even though it suffered no harm. At most Zachry opened the door to evidence the ship was not able to dock on arrival—evidence that did not exist, as the ship was able to dock on arrival. See p.22. There was no misleading impression. Moreover, any probative value of PHA’s actual-harms evidence in refuting any minor misimpression would be substantially outweighed by undue delay and the unfair prejudice to Zachry. 1SCR6:1116(A7). The trial court noted direct and cross-examination of PHA witnesses would be lengthy and could devolve into a long battle over the alleged harms, causation, and quantification. Id. Plus, requiring Zachry to cross-examine without discovery would be highly prejudicial. Id. PHA incorrectly contends once evidence is deemed admissible under an open-the-door theory, Rule 403 cannot exclude it. But PHA’s case reached no such holding. See PHASupp:55-56 (citing Horizon/CMS Healthcare. v. Auld, 34 S.W.3d 887, 905-07 (Tex. 2000)). Authorities have concluded that “even if a party opens the door to rebuttal evidence, the trial judge still has the discretion to exclude the evidence under Rule 403.” Hayden v. State, 296 S.W.3d 549, 554 (Tex. Crim. App. 2009); accord Brown & Rondon, TEXAS RULES OF EVIDENCE HANDBOOK §107, at 95 (2015); Goode, Wellborn & Sharlot, 1 TEX. PRACTICE: TEX. RULES OF EVID. 107.1 (3d ed. 2015); McCormick, The New Code of 59 Evidence, TEX. L. REV. 661, 673 (June 1942). B. Any error was harmless. The case did not turn on actual-harms evidence: any misimpression was minimal, as Zachry argued only that PHA said it would not charge LDs if the crane-ship docked on arrival—not if PHA suffered no harm at all, p.10; PHA’s evidence of harms from the Milestone-A delay was nonexistent, 26:16-17, 20-21, or weak at best, 67:5-10; 70:15-27; and PHA did offer actual-harms evidence, 35:24-26; 64:44-45; 65:57-59; DX419; Aplt.Br:68. Plus, other evidence— including PHA’s last-minute rejection of Zachry’s methods PHA knew were “required”—supported the arbitrary-and-capricious and bad-faith findings. See pp.5-9, 11-22. VI. The trial court did not err in instructing the jury as to fraud. A. The Supreme Court approved the recklessness instruction. The Supreme Court rejected PHA’s argument—briefed in that Court—that recklessness does not support a promise-of-future-performance-made-with-an- intent-not-to-perform fraud: it quoted the fraud charge in full, and held “[t]he charge correctly described the misconduct that cannot be covered by a no- damages-for-delay provision.” Zachry, 449 S.W.3d at 104 n.7, 118(A3). In its rehearing motion, PHA asked the Court to reconsider this holding, PHAMot/Reh’g:25, but it declined. 60  Authorities confirm a promise with no intent to perform may be based on either knowledge of falsity or recklessness. See Beneficial Personnel Servs. v. Rey, 927 S.W.2d 157, 167-70 (Tex.App.—El Paso 1996, vac. w.r.m.); Mann v. Fitzhugh-Straus Medina Ranch, 640 S.W.2d 367, 371 (Tex.App.—San Antonio 1982, no writ); TEX. P.J.C. BUSINESS §§105.2, 105.3B. PHA’s first four cases do not consider whether promise-with-no-intent-to-perform fraud can be based on recklessness. See PHASupp:57. The last three contain no analysis, and cannot overrule the Supreme Court’s Zachry decision. Id. B. No charge error tainted the no-damages-for-delay exceptions. Assuming error, PHA asserts a new trial is required because the jury might have concluded PHA was reckless. PHASupp:57. But there is ample evidence PHA intentionally defrauded Zachry as PHA defines it. See Zachry, 449 S.W.3d at 103(A3); pp.10-11; Aple.Br:48-50. Any error was harmless. Furthermore, Casteel would not require retrial, because it is “reasonably certain” the jury was “not significantly influenced” by the allegedly erroneous fraud issue, since PHA never challenged the evidentiary sufficiency of the other no-damages-for-delay exceptions. See Thota v. Young, 366 S.W.3d 678, 688 (Tex. 2012); Aple.Br:48-49 n.38. 61 VII. The apparent-authority instructions were proper. A. Apparent authority is a fact issue. Section 12(d)’s limits on Thiess’s authority to “change” the Contract are irrelevant to Zachry’s claim PHA breached it. Cf. pp.45-48. PHA’s assertion Thiess—not PHA—directed Zachry to work in the wet is likewise incorrect. See p.43-44.14 Regardless, apparent authority is a fact issue even when limitations are present. See Equitable Life Assur. Soc’y v. Ellis, 147 S.W. 1152, 1158 (Tex. 1912); Paramount Nat’l Life Ins. v. Williams, 772 S.W.2d 255, 261-62 (Tex.App.—Houston [14th Dist.] 1989, writ denied). PHA’s case merely holds that if the only evidence regarding apparent authority is a limitation, the limit controls. See Douglass v. Panama, 504 S.W.2d 776, 779 (Tex. 1974). CH2M-Hill and Theiss had apparent authority to convey decisions and information to and from Zachry on PHA’s behalf: Q. And you had designated in your dealings with Zachry, CH2M-Hill to be your representative for those purposes in exchanging information back and forth…? A. [DeWolf]: That was one of their roles, yes. 14 PHA’s additional-work argument appears limited to its incorrect causation argument. PHA does not challenge damages under TEX. LOC. GOV’T CODE §271.153(a)(2)’s additional-work measure. Nor could it: the Supreme Court confirmed delay damages are recoverable under §271.153(a)(1), and PHA obtained an order finding 100% of Zachry’s damages are delay damages. CR60:17517-18; 60:17526. The Court can be “reasonably certain” the jury was “not significantly influenced” by the additional-work measure (which was proper anyway, Aple.Br:50-52). See Thota, 366 S.W.3d at 688. 62 6:86; see 6:84-87; 8:44-46; 25:9-12. Other evidence proved PHA expected Zachry to rely on CH2M-Hill communications, 6:85-86; 8:45-46; 21:34; 44:47-48; CH2M-Hill was DeWolf's representative, 8:45-46; DX1-1.0244, §12(c)(A16); CH2M-Hill was PHA’s primary point-of-contact with Zachry, 44:43-44; see 37:36; and PHA executives treated CH2M-Hill like PHA staff, 46:74-75. Additionally, the PHA-approved Construction Management Plan—posted on the Constructware website for Zachry to view—told Zachry CH2M-Hill is “an extension of the PHA staff,” would “act as [PHA’s] representative on site,” and would “have all authority normally attributed to a [construction manager] acting as owner’s agent (not at risk).” PX57.0009, §2.2(A39); see 9:46-47; 37:37-38; 44:54- 58; 47:156-57; see also 44:44; 68:101; 69:106. Thus, even if §5.42 notice was tried, Zachry substantially complied by giving notice to CH2M-Hill’s Thiess, whom PHA led Zachry to believe was authorized to accept such information for PHA. See pp.62-63. B. Zachry pleaded apparent authority. The trial court’s determination that Zachry pleaded apparent authority was within its “broad discretion when interpreting pleadings.” Pace Concerts v. Resendez, 72 S.W.3d 700, 703 (Tex.App.—San Antonio 2002, pet. denied). Zachry pleaded PHA “expressly charged and designated its Construction Manager, CH2M-Hill, to act on its behalf on this critical cutoff-wall issue.” CR29:8137, 63 ¶13(A8); see id. at 8138, ¶13 (calling CH2M-Hill “PHA’s designated agent”). Zachry also alleged PHA took actions a non-human entity like PHA could only take through agents. See id. at 8133-46. Because PHA did not specially except, Zachry’s pleadings are construed “liberally…to include all claims that reasonably may be inferred….” Allison v. Service Lloyds Ins., 437 S.W.3d 589, 592 n.2 (Tex.App.—Houston [14th Dist.] 2014, pet. denied). Zachry’s agency allegation is not limited to actual authority. Both actual and apparent authority are based on a principal's designation of authority; they differ only as to whether the designation is communicated to the agent or a third party. See In re ADM Inv. Servs., 304 S.W.3d 371, 374 (Tex. 2010). Courts have held apparent authority alleged in the absence of those words. See, e.g., Iron Mtn. Bison Ranch v. Easley Trailer Mfg., 42 S.W.3d 149, 157 (Tex.App.—Amarillo 2000, no pet.); Cox v. Humble Oil & Refining, 16 S.W.2d 285, 286 (Tex.Comm’n App.1929); Chapapas v. Delhi Taylor Oil, 323 S.W.2d 64, 66 (Tex.Civ.App.—San Antonio 1959, writ ref'd n.r.e.). VIII. PHA is not entitled to attorneys’ fees if Zachry prevails on any theory. PHA is not entitled to attorneys’ fees because judgment for Zachry should be affirmed. See DX1-1.0201, §3.10(A13). Even if Zachry does not prevail on its R&R-Order breach-of-contract theory, PHA is not entitled to attorneys’ fees. Contract §3.10 permits PHA to recover fees 64 on the Contractor’s claim only “[i]f…Contractor does not prevail with respect to such claim.” DX1-1.0201(A13). A party prevails if it recovers some relief on its claim, regardless of the amount. Intercontinental Grp. Ptnrshp. v. KB Home Lone Star, 295 S.W.3d 650, 654 (Tex. 2009); Flagship Hotel. v. City of Galveston, 117 S.W.3d 552, 564 (Tex.App.—Texarkana 2003, pet. denied). “[I]t is the judgment, not the verdict, that we must consider in determining whether attorneys’ fees are proper.” Intercontinental, 295 S.W.3d at 656. Zachry brought one claim: breach of contract. CR29:08142-44. Zachry asserted PHA breached the parties’ Contract in multiple ways, including by issuing the R&R Order and withholding LDs. The judgment awarded Zachry one lump sum for this breach-of-contract claim, without distinguishing between damages for each underlying theory. CR62:18166(A1). Indeed, Texas law holds a single claim may include multiple liability theories, and a plaintiff prevails on that single claim if it prevails on any theory. See, e.g., 4901 Main, Inc. v. TAS Automotive, 187 S.W.3d 627, 633-35 (Tex.App.—Houston [14th Dist.] 2006, no pet.); Flagship Hotel, 117 S.W.3d at 564-66; Solar Soccer Club v. Prince of Peace Luth. Church, 234 S.W.3d 814, 829 n.2 (Tex.App.—Dallas 2007, pet. denied); Structural Metals, Inc. v. S&C Elec. Co., 590 Fed. Appx. 298, 305 (5th Cir. 2014). PHA’s cases defining “claim” as 65 “demand for compensation” do not address whether a claim can encompass multiple theories. See PHASupp:61. 15 Accordingly, if Zachry obtains relief on any theory underlying its breach-of- contract claim—for example, its judgment for improperly withheld LDs affirmed by the Supreme Court—then Zachry prevails, and PHA is not entitled to fees. PHA argues it should recover attorneys’ fees if it wins on the R&R claim because it is the “main issue.” PHASupp:62-63. But the judgment determines whether attorneys’ fees are proper. Intercontinental, 295 S.W.3d at 656. As long as Zachry obtains relief in the judgment on its breach-of-contract claim, regardless of theory, it prevails. See id. at 654; see Flagship, 117 S.W.3d at 564 (inquiry is whether agreement was breached, “not the extent of the breach.”). Furthermore, Intercontinental cast doubt on whether the prevailing party should be determined by “main issue” analysis. See Intercontinental, 295 S.W.3d at 661; see also id. at 659 n.42. Even if “main–issue” analysis is viable, when only one party receives 15 PHA implies that because the attorneys’-fee question segregated fees between breach-of- contract theories, Zachry does not assert a single claim. PHASupp:61-62. Nothing required Zachry to object to the Charge—which broke out fees by theory to avoid any need for retrial if Zachry was incorrect—to preserve its argument that Zachry prevails if it wins any breach-of- contract theory. But Zachry did object. 71:72(A41) (“Attorneys’ fees should not be submitted at all….”). As here, it argued, “regardless of what happens on the remaining breach-of-contract theories, Zachry will have a net recovery on its breach-of-contract claim, and as a matter of law, [PHA] cannot be the prevailing party.” Id. 66 judgment in its favor, “regardless of the amount of damages,” “courts have concluded that party prevailed on the main issue.” Flagship, 117 S.W.3d at 564. “Main-issue” analysis applies (if at all) in cases—like those cited by PHA—where the Court must determine who prevails when neither party obtains relief. See Bhatia v. Woodlands North Houston Heart Ctr., 396 S.W.3d 658, 663, 671 (Tex.App.—Houston [14th Dist.] 2013, pet. denied); SEECO, Inc. v. K.T. Rock, 416 S.W.3d 664, 666, 674 (Tex.App.—Houston [14th Dist.] 2013, pet. denied). IX. Zachry’s recovery on its pass-through claim should be affirmed. On January 1, 2008, Zachry reorganized. PX529; 47:123-29. Under the new structure, Zachry subcontracted with a new Zachry entity, “the Sub,” to finish the wharf. Id.; 47:129-31; PX643(A37); PX642(A38). The Sub employed the same people that worked on the project pre-reorganization. 47:129. Going forward, the Sub incurred the costs from PHA’s breach. PX642(A38); PX643(A37); 47:132-34. Zachry must reimburse the Sub for those costs, including any recovery in this case. Id. A. Zachry asserts a valid pass-through claim. PHA contends Zachry cannot assert a pass-through claim because it hired the Sub after PHA’s breach, and thus “PHA’s…breach…did not cause Zachry to breach the subcontract.” PHASupp:65. But nothing in the seminal case approving pass-through agreements requires a breach by Zachry. See Interstate Contracting 67 Corp. v. City of Dallas, 135 S.W.3d 605, 619-20 (Tex. 2004) (outlining “requirements”). Interstate requires only that Zachry “remain liable to the subcontractor for damages sustained by the subcontractor.” Id. at 619. Interstate also recognizes a general contractor’s decision to hire a sub to perform work necessitated by the owner’s breach does not preclude the contractor from recovering the cost for the sub. Id. at 611. “Otherwise, the owner could receive a windfall because the subcontractor lacked privity with the owner and the contractor lacked standing to sue the owner for damages suffered by the subcontractor.” Id. at 615-16. Here, Zachry established its continuing liability to the Sub for the costs the jury assessed. In the Management Services Agreement (“MSA”), Zachry promised (1) “to pay to [the Sub] the Reimbursable Costs” it incurred while performing Services for Zachry, and (2) to pay to the Sub any payments it received from the owner. PX643.0004, ¶3.1(A37). In the Pass-Through Agreement, Zachry “agree[d]...it is liable to [the Sub], to present the ZCC Claims and remit any recovery from the Port of Houston to [the Sub], in accordance with the terms of this Agreement.” PX642, ¶1.1(A38). Testimony confirmed Zachry’s continuing liability to the Sub. 47:127, 130-34. The burden therefore shifted to PHA to negate this continuing liability: “If the owner disputes that this requirement [of continuing liability] has been met, it 68 bears the burden of proving, as an affirmative defense, that the pass-through arrangement negates the contractor's responsibility for the costs incurred by the subcontractor.” 135 S.W.3d at 619-20 (“The owner disproves…contractor’s continuing liability only if it can show… contractor is not obligated to remit any recovery to…subcontractor.”). PHA asserts Zachry might not remain liable to the Sub. PHA speculates— incorrectly—that owners on other MSA contracts might have paid Zachry more than the Reimbursable Costs on their contracts, and that any such excess payments limit Zachry’s liability for Reimbursable Costs for the PHA Contract. PHA’s argument fails to meet its burden. First, PHA misunderstands the MSA. It unambiguously states, “Zachry agrees to pay to Manager [the Sub] the Reimbursable Costs.” PX643.0004, §3.1(A37). PHA incorrectly reads §3.2 to limit Zachry’s obligation to pay Reimbursable Costs when Contract Payments exceed Reimbursable Costs. To the contrary, it unambiguously provides the parties shall divide “such excess amounts” in “a mutually satisfactory allocation.” Id. at §3.2(A37). Nothing in the MSA suggests that allocation of “such excess amounts” limits Reimbursable Costs Zachry must pay to the Sub on other contracts. Id.(A37). Second, even if PHA reads the MSA correctly, PHA proved no other contract “windfall” to negate Zachry’s liability for the Sub’s Reimbursable Costs 69 on this Contract. B. The Court correctly charged the jury on pass-through. PHA’s charge-error arguments likewise fail. Zachry unambiguously agreed to pay the Sub Reimbursable Costs, and PHA failed to negate Zachry’s liability to the Sub. Accordingly, the trial court properly granted a directed verdict recognizing the pass-through agreement’s validity and Zachry’s right to recover the Sub’s damages, and properly declined to charge the jury to include those costs only “to the extent” Zachry agreed to reimburse the Sub for them. 71:11-13(A40); CR59:17365-74. Nor was the Court’s instruction that the jury “should” include in damages any Reimbursable Costs an improper comment. C. Waiver of immunity applies to the pass-through claims. Nor does immunity bar pass-through claims. City of San Antonio v. Valemas, 2012 WL 2126932, *7 (Tex.App.—San Antonio 2012, no pet.); Hensel Phelps Constr. v. McCarthy Bld'g, 2005 WL 1489932, *4 (N.D. Tex. 2005). Cf. Galveston I.S.D. v. Clear Lake Rehab. Hosp., 324 S.W.3d 802, 810 (Tex.App.— Houston [14th Dist.] 2010, no pet.) (“§271.152’s waiver…[applies to] a class of suits—suits for purposes of adjudicating a claim for breach of contract subject to [Chapter 271]—without restricting which parties can bring suit”) (emphasis original)).16 16 The pass-through did not evade the no-assignment clause. PHASupp:63 n.6. Zachry expressly did not assign the Contract. PX643.0001, ¶C (A37). Interstate recognized the validity of pass- 70  PRAYER The trial court’s judgment should be affirmed. Respectfully submitted, By: /s/ Robin C. Gibbs REYNOLDS FRIZZELL LLP GIBBS & BRUNS, L.L.P. Brandon T. Allen Robin C. Gibbs State Bar No. 24009353 State Bar No. 0785300 ballen@reynoldsfrizzell.com rgibbs@gibbsbruns.com 1100 Louisiana, Suite 3500 Jennifer Horan Greer Houston, Texas 77002 State Bar No. 00785611 Phone: (713) 485-7200 jgreer@gibbsbruns.com Fax: (713) 485-7520 Sydney G. Ballesteros State Bar No. 24036180 ALEXANDER DUBOSE sballesteros@gibbsbruns.com JEFFERSON & TOWNSEND LLP Michael R. Absmeier Douglas W. Alexander State Bar No. 24050195 State Bar No. 00992350 mabsmeier@gibbsbruns.com dalexander@adtappellate.com Amanda B. Nathan 515 Congress Avenue, Suite 2350 State Bar No. 00784662 Austin, Texas 78701-3562 anathan@gibbsbruns.com Phone: (512) 482-9301 1100 Louisiana, Suite 5300 Fax: (512) 482-9303 Houston, Texas 77002 Phone: (713) 650-8805 Fax: (713) 750-0903 ATTORNEYS FOR APPELLEE, ZACHRY CONSTRUCTION CORPORATION through agreements as distinct from assignments. 135 S.W.3d at 616; see also Valemas, 2012 WL 2126932, *8-9. 71  CERTIFICATE OF SERVICE I hereby certify that on the 12th day of June, 2015, a copy of the foregoing instrument was served upon the following counsel by electronically filing with the Clerk of Court using the TexFile electronic filing system which will send notification of such filing to the following and via e-mail: David E. Keltner Marie R. Yeates State Bar No. 11249500 State Bar No. 22150700 david.keltner@kellyhart.com myeates@velaw.com Marianne Auld Catherine B. Smith State Bar No. 01429910 State Bar No. 03319970 marianne.auld@kellyhart.com csmith@velaw.com KELLY HART & HALLMAN LLP VINSON & ELKINS L.L.P. 201 Main Street, Suite 2500 1001 Fannin, Suite 2500 Fort Worth, Texas 76102 Houston, Texas 77002 David H. Brown Michael A. Heidler State Bar No. 03109200 State Bar No. 24059921 dbrown@bkllp.com mheidler@velaw.com BROWN & KORNEGAY LLP VINSON & ELKINS L.L.P. 2777 Allen Parkway, Suite 977 2801 Via Fortuna, Suite 100 Houston, Texas 77019 Austin, Texas 78746 Karen L.T. White Bill Sims State Bar No. 20274500 State Bar No. 18429500 karen@kltwpc.com bsims@velaw.com KAREN L.T. WHITE, P.C. VINSON & ELKINS L.L.P. 2777 Allen Parkway, Suite 977 2001 Ross Avenue, Suite 3700 Houston, Texas 77019 Dallas, Texas 75201 Attorneys for Respondent, The Port of Houston Authority of Harris County, Texas 72 Joe F. Canterbury, Jr. Michael Keeley State Bar No. 03761000 State Bar No. 11157800 jcanterbury@canterburylaw.com michael.keeley@strasburger.com CANTERBURY ELDER GOOCH STRASBURGER & PRICE, LLP SURRATT SHAPIRO & STEIN 901 Main Street, Suite 4400 Occidental Tower Dallas, Texas 75202 5005 LBJ Freeway, Suite 1000 Attorney for Amicus Curiae Zurich Dallas, Texas 75244 Surety Attorneys for Amicus Curiae Associated General Contractors of Texas, Inc. /s/ Jennifer Horan Greer Jennifer Horan Greer 73  CERTIFICATE OF COMPLIANCE Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), I certify that this brief contains 15,000 words. This word count excludes the words excluded from the word count pursuant to Texas Rule of Appellate Procedure 9.4(i)(l). This is a computer-generated document created in Microsoft Word, using 14-point typeface for all text, except for footnotes, which are in 12-point typeface. In making this certificate of compliance, I am relying on the word count provided by the software used to prepare the document. /s/ Jennifer Horan Greer Jennifer Horan Greer 74  APPENDIX TO ZACHRY CONSTRUCTION CORPORATION'S SUPPLEMENTAL BRIEF OF APPELLEE Clerk's Record 1. Final Judgment dated April 28, 2010 (CR62:18163-68) 2. Port of Houston Authority of Harris County v. Zachry Construction Corporation, 377 S.W.3d 841 (Tex. App.—Houston [14th Dist.] 2012), rev’d, 449 S.W.3d 98 (Tex. 2014). 3. Zachry Construction Corporation v. Port of Houston Authority of Harris County, 449 S.W.3d 98 (Tex. 2014). 4. Charge of the Court and Verdict dated January 14, 2010 (CR59:17386-409) 5. Order on Zachry's 11 Part Motion for Pretrial Determination of Issues of Law (Rule 166(g) Motion) dated October 5, 2009 (CR46:13296-309) 6. Order Granting in Part and Denying in Part Plaintiff's Motion to Strike the Port's Offset and Withholding Defenses dated October 16, 2009 (CR51:14948-52) 7. Order on PHA's Request that the Court Reconsider Its November 12, 2009 Open- the-Door Ruling Regarding the Port's Actual Harms (1SCR6:1112-17) 8. Plaintiff's Fourth Amended Petition and First Amended Answer to PHA's Counterclaim for Attorneys' Fees (CR29:08131-48) 9. Third Amended Original Answer and Counterclaim for Attorneys' Fees (CR45:13008-35) 10. Excerpts from The Port of Houston Authority's Second Amended Response to Plaintiff's Request for Disclosure (CR46:13036-77) 11. The Port of Houston Authority's Objections and Responses to Zachry's Fourth Set of Interrogatories and Fourth Request for Production (CR46:13105-16) 12. Defendant Port of Houston Authority’s Proposed Draft Jury Charge filed September 9, 2007 (CR43:12401-20) Exhibits 13. Contract, General Conditions (DX1-1.0177-235) 1 14. Contract, Technical Specifications, Section 02161 Trench Excavation and Shoring Safety Plan (DX1-1.0324-29) 15. Contract, Technical Specifications, Section 01500 Temporary Facilities and Controls (DX1-1.0271-82) 16. Contract, Special Conditions, §12 (DX1-1.0244) 17. Contract, Addendum No. 8 (DX1-1.0021) 18. Email from Thiess to Anderson dated August 1, 2004 (PX84) 19. Acceptance for Records of Main Freeze Wall Plan (PX88) 20. Transcript of April 5, 2005 Meeting (PX8) 21. April 13, 2005 Proposal for Wharf Extension (PX9) 22. May 18, 2009 Proposal for Wharf Extension (PX179) 23. July 11, 2005 Proposal for Wharf Extension and Ditch K (PX219) 24. Request for Port Commission Action for Execution of Change Order 4 Signed by Port Facilities Director James Jackson and Chief Engineer Steve DeWolf with origination date of July 18, 2005 (PX224) 25. September 9, 2005 Frozen Cutoff Wall Design (PX10) 26. Transcript of September 13, 2005 Weekly Construction Coordination Meeting (PX274) 27. Email string between Andy Thiess and Jeff Ely and others dated September 14, 2005 (PX11) 28. Memorandum dated September 14, 2005 from Port Facilities Director Jackson to Port Executive Director Kornegay recommending approval of Change Order 4 (PX3) 29. McQueen email to Thiess dated September 15, 2005 (PX280) 30. Change Order 4 (PX12) 2 31. Mageau Report on Effect of Freezing and Thawing of Cutoff Wall on Drilled Shafts dated September 28, 2005 (PX14) 32. McQueen email to Ely dated October 10, 2005 (PX1) 33. The Port's October 11, 2005 Response to Zachry's September 9, 2005 Frozen Cutoff Wall Design (PX266) 34. Transcript of October 11, 2005 Weekly Construction Coordination Meeting (PX314) 35. Thiess email to Ely dated November 13, 2005 (PX2) 36. Email string between McQueen, Thiess, Ely, and others dated March 21, 22, and 28, 2007 (PX504) 37. Management Services Agreement (PX643) 38. Pass-through Agreement (PX642) 39. Excerpts from Construction Management Agreement (PX57.0001-10, 57.0033) Reporter's Record 40. Court’s Ruling on Directed Verdict (71:8-15) 41. Objections to the Charge (71:15-73) Statutes 42. Texas Local Government Code §271.151 through §271.160 (Vernon 2005) 43. Texas Civil Practices and Remedies Code §16.071 3  TAB 1 Final Judgment dated April 28, 2010 (CR62:18163-68)  • • P--6 9A DCtZ·I) CAUSE NO. 2006-72970 ZACHRY CONSTRUCTlON 1\ 'S IN THE DISTR1CT COURT OF CORPORATION nlk/a Zachry Industrial, ~ ~~\) Inc. § § V. ~ \\ HARRTS COUNTY, TEXAS ~ \O(e~:~; \P~ § PORT OF HOUSTON ~ , %t\)\\\ ~?\\ . li AUTHORITY OF HARRIS 1\ li COUNTY, TEXAS s 151~ 1 JUDICIAL DISTRICT 1"\1(\e·. FINAL JUDGMENT On October 20, 2009, this case was called for trial. Plaintiff Zachry Construction ' . Corporation, now known as Zachry IndustriaL Inc., appeared through its representatives and through its attorneys and announced ready for trial. Defendant, Port of Houston Authority of Harris County, Texas, appeared through its representatives and through its attorneys and announced ready for trial. After the jury was impaneled and sworn, it heard the evidence and arguments of counsel. After the close of the defendant's cast und the clost! of ull evidence. Zachry Construction Corporation moved fo r a directed vcn.lict. The Court or:Jlly b'TOnted a directed verd ict on certain issues, as stated in open court on January 14, 2009. The Charge of the Court was then submitted to the jury, and in response, the jury made tindings that the Court received, filed, and entered of record. The questions submitted to the jury and the jury's findings arc attached as Exhibit A to Zachry's Motion for Judgment and Mt..,tion to Disregard Jury Findings or for JNOV with Respect to Certain Jury Findings and im:orporat~d by retcrcnce. After the verdict, Zachry Constructilm Corporation filed its Motion for Judgment and Motion to Disregard Jury Findings or for JNOV with Respect to Certain Jury Findings, speci ficall y asking the Court to disregard th~ jury's answers to Question Nos. 12.A. and 13. !Si·€2  • • Zachry later filed its Supplemental Motion for Judgment and to Disregard Certain Jury Findings, specifically asking the Court to also disregard the jury's answers to Question Nos. 4 and 9, and to disregard Question No. 5 as a basis for reducing Zachry's damages. While the parties have extensively briefed myriad issues after the jury rendered its verdict. the Court wishes to write briefly on the cent ral issue on which Defendant Port of . Houston Authority seems to havt focused, so\'creign immunity: The Court has carefully considered the authority that the parti es presented (m this issue. The Court is not persuaded that Texas Jaw precludes an award to Plaintiff Zachry Construction Corporation for the damages found by the jury. The Court has read and considered. among many other cases, Tooke v. City of Mexia, 197 S.W.3d 325 (Tex.. 2006), McKinney & Moore, Inc. \'. City of Longview, No. 14-08- 00628-CV, 2009 WL 4577348 (Tex. App. ··-Houston ll4'h Dist.] Dec.' 8, 2009, pet. fi led), and . - Ciry of 1/ousron v. Southern Electri<.: Sen·ices, 273 S. W.3d 739 (Tex.. App.- Houston [I 51 Dist.] 2008, pet. denied). . The last case, Sourhern Electric. providcs guidance for the Court. The Court understands - that the case involved a plt:a to the jurisdiction. id. at 744. and that the current matter docs not. Nevertheless, the court in Sorahern Electric was still squarely tuced with the question of whether a pleading of damages that were not c: (2) For an appeal to the Court of Appeals with respect to Zachry's claim for the Port's failure, if any, to comply with Change Order 4 and/or §5.1 0 of the Contract. Answer: _!1_ OJ (200 · 00 22  • • (3) For an appeal to the Supreme Court of Texas with respect to Zachry's claim for the Port's failure, if any, to comply with Change Order 4 and/or §5.1 0 of the Contract. Answer: I J:)., ~Q.(JD 7 (B) Attorney's Fees as to Zachry's Claim for Withholding the $2.36 million as liquidated damages and the $600,000 for dredging. (1) For preparation and trial with respect to Zachry's claims for the Port's failure, if any, to comply with the Contract by withholding, from the Port's payments on amounts invoiced by Zachry, the $2.36 million withheld as liquidated damages and the $600,000 withheld for dredging. Answer: ~ fJ01:JSO . 00 (2) For an appeal to the Court of Appeals with respect to Zachry's claims for the Port's failure, if any, to comply with the Contract by withholding, from the Port's payments on amounts invoiced by Zachry, the $2.36 million withheld as liquidated damages and the $600,000 withheld for dredging. Answer: t 3 7.5D, oO (3) For an appeal to the Supreme Court of Texas with respect to Zachry's claims for the Port's failure, if any, to comply with the Contract by withholding, from the Port's payments on amounts invoiced by Zachry, the $2.36 million withheld as liquidated damages and the $600,000 withheld for dredging. Answer: i I, ~ f::D' ()0 23  • Certificate • W Cr. the. jury~ have answered. the abev6 and. foregoing· questions-as- herein- ·indicated, and- herewith return same into court as our verdict. (To be signed by those rendering the verdict if the jury is not unanimous.) Jurors' Signatures Jurors' Printed Names ~ \:>o~ro'd%., Chad TSeicrttS trt;s.J?) riA; (!. r;(o,rx:JQ.-/I C4 ris L 'Je5/- U( 24  TAB 5 Order on Zachry's 11 Part Motion for Pretrial Determination of Issues of Law (Rule 166(g) Motion) dated October 5, 2009 (CR46:13296-309)  P-14 ENTZ CAUSE NO. 2006-72970 ZACHRY CONSTRUCTION § IN THE DISTRICT COURT OF CORPORATION § § HARRIS COt:NTY, TEXAS Y. § § .PORT OF HOVSTON AliTHORJTY § OF HARRIS COUNTY, TEXAS § 151sr .JCDICIAL DISTRICT ORDER 0~ ZACHRY'S 11 PART MOTION FOR PRETRIAL DETERMINATION OF ISSUES OF LAW Came on for considl.!ration Zachry Construction Corporation's (Zachry) 11 Part 1\'lo!ion Cur Prdrii11 Dctcrmimtion of Issues of Lm. The Court. haYing considered the :-.1otion. Defendant Port or Houston Authority's (Pili\ l Respllnse. Zachry· s Reply. and PH/\ 's Sur-Reply. as v;cll as various follow-up kttcr briefs. is of the opinion that Zachry's Motion should be GRANTED IN PART and DEJ'\lJ::D IN PART. ]SSU\.! ] : The C0urt hclieves it has an understanding ofthis issue having heard the arguments lll' cnunsel at thl:.' Friday. September 11. 2009 hearing. Separate and apart !"rom the allegation that thl.:' PliA breached the main contract's section 5.10 (means and methods)./.achry c\lntcnds that Change Order 4 ( hL'rcin:llter ··CO-f') gave it a contractuul right to. in general. usc the trccze cutoff wall construction method. Zachry then contends that PH/\ breached C04 by lall'r rejecting /achry' s use of the freeze cuto±hvall construction method. The Court li nds that within the documents that comprise the C04 contract. there is an ambiguity as to \\hat is meant by the term "constructi0n methods" in paragraph 1. and .. similar methods'' in puragraph 9 ofthe ··scope. Time and Price Modifieutions tn Specifications und Proposar· inwrporuted into C04. I herd~lre. the Court DENIES Pl:1intiff Zadu-y"s t'vlotinn as t\l !ssw: 1 without prejuJi~:c. :1nJ as of this writing. intends to submit the issue to the jury. FILED Loren Jackson District Clerk ocr- 5 zoog Time~' tounty J.'~J13hL._, £J; Har e,..a.s By -'>.o,-4L....::_:: .-c_==:------- Oepuly  Issue 2: By this issue, Plaintiff asks the Court for a pretrial determination that there was no fruuduknt inducement. The Court hereby GRANTS rhis n:quest in purl and DENIES in part. The Courtiinds that is able to dctL·rmine as a matter of lmv that PH A's agent CH2M Ilill had the September 9. 2009 frozen cutoff wall design in hand for at least two \Vecks before Pl li\ signL·d CO..J.. The Court hereby GRAJ'\TS a pretrial dekrmination ONLY that then: was no fraudulent inducement as to the September 9. 2009 rrozen cutoff wall design by Plaintiff Zachry. 1 The Court hereby DENIES the remainder of the request for prdrial determination as to lraudulcnt inducement by Plaintiff Zachry (including. but not limited to. alleged misrepresentations about Zachry's ability to certain meet time deadlines). JSSUL' J: By this issue. Zachry asks lor a pretrial determination as a matter of law that "'[ nlo pwvision in the contract gives the port a right to reject or to require revision and resuhmittal or the contractor" s means und methods." This is an exceedingly broad request by Zachry that could render mcaningless severn! provisions of the contract that may he read to limit Zachry's ~..:hoices of means and methods. at least in part. PH/\ ·s response on page 40 asks the Court to find tlwt "'the Port had the express right under the Contract to issue the ·rcYise and resubmit' response.'" PHA 's point seems to be that it was free to ask Zachry to revise and rcsLtbmit. but it did not order Zachry to do so nnd had no po\ver to do so. and thcrelorc it could not han: breached the contract by simply asking. nicely, that Zachry do SLl. The Court stated at the hearing on friday. September 11. 2009. that it did not find this Iinc tlr argument try PHA '- 0 pL'rsuasive . .tvloreover. this line or argument seems to bc consistent with. and l\OT contrary to. 1 The Court Jo.:s not b<:lieve its findings in lssut:s I and::: arc inconsistent. Issue 1 asked abLlUl a pretrial determin::nion of whL·thcr. as a matter of law. CO~ gave Plaintirr Zachry the unambiguous right to employ the frozen cuto!T Wf. ( 'n .. 2t)R S.\V. 273. 27CJ (Tex. Comm·n A.pp. 1CJ27). In its briding anJ at the September II, 2009 h~::.1ring. PI I/\ argued that the Du\'il' ( 'o. case is neither on point IK'r controlling because it applies to a situation wh~:r~: the contractor could bL· required to perform c changes in the \\'ork, and the owner could unilaterally determine any ad.ju~tment in the contract price to account for such changes. Jn contm:-;1. in this case, PHA argues, the provision is merely :.1notice pro\·ision. not a unilateral change in the scope or quantity oJ'work provision. ;z:  The Court did not articulut~ this w~ll at the S~ptcmher 11. 2009 h~aring, but upon further ret1e~tion and re-n:ading of the Daris Cu. case. it now understands the point that PIIA was making: PH;\\; point is thut the Davis Co. case's "radicul change'' issue did not have to do vvith whether a contractual notice period applied to a radical change in th~ scope of the \Vork, but ruther. vvhethcr the radical change could h~ unilaterally imposed in the scope ol"th~ work with littk or no change in the amount of' the C\H11p~nsation. That is. the Duris C'o. case. according to PHA. only stands lor the proposition that an owner cannot impose radically mon: work upon the contractor for the same price. but rath~r. such unilateral prerogative clauses only apply to minor chang1..'S to the scope or amount of work. That. argues PI l1\. distinguishes Dul'is C'o. !"rom thi::; case. The Court does not see it that way. The Court still Jinds Dm·is Co. to be applicable to this case because the clause at issue here. section 5.42. is a roundabout way of getting to the same place. PllA argues that s~ction 5.42 is different than th~ facts of Doris Co. as section 5.42 only allows ti.!r an ~:quitablc adjustment irthcrc is a change order, which. by ddl.nitit!n, must he agreed to by /.achry. That is to say. in the second paragraph of section 5.42. the cbusc states that if Zachry gin:s the notice reg11rding the perceived change to the contract. the Chief" Engineer or PHA \vill conduct un investigation and determine whether the change will necessitate a modilicution t1.1 the contract. und if so, whether to go forward. ft: and only if, the Chicl'Engine~:.T determines that it is a change that will require u modilication. and decides to go forward, then the Chief' Engineer \Viii (perhaps) issue a construction ch~mgc Jirecti\'e. or recommend to the c Commission w1 equit11hlc adjustment to the Contract Price as applicable. I lowcvcr, iithe Chid Engin~~r detem1ines thllt thL' contractor is wrong and the change pcrc~iwd by the contractor is not actually a chang~ requiring modi ticution. the Chief [ngi neer then will contact the contr::1ctor and ''the determination by the Chief Engineer in such respect shall be final and conclusive." ln z  other words. in th~ end. it is a unilateral d~krminution by PHA wheth~::r a change. large or small. is a ch~mge requiring modi lication to the wntract. PHi\ 's argument that a change to th~ contract price n::quirL'S a changL' L)rdcr that is, hy de!initinn. agreed to by /:1chry bas little meaning if it is the PHA 's Chief Engineer that retains sole decision-making authority ov~:r \vhether a change p~rceivcd by Zachry requin:s a moditication to the contract price in the tirst pbce. That is why the Coun believes that the Dm·is Co. case is. i r not controlling. at least persuasive. analogous authority here. i\ section like section 5.42 can only apply to non-radical changes. otherwise. just as in the Da1·is C'o. case, it \VOtild allow the owner to unilaterally change th~ scope of the work in signiticm1t ways without atlording any rights to the contractor.-' further. the Court continues to find that ~:vcn ir section 5.42 applies to this cas~:. it is void under fe:-:as Civil Practice and Remedies Code section 16.071. PIIA argues strenuously that th~: Court errone-ously applied section 16.071 to this section and that the Texas Suprcm~ Court"s decision in .lmcricun ..Jirlinu.\ l:.'mpluyeus Federal Credil Union\' ..\!arlin. :29 S.W.Jd 86.97-98 (TL·x. 2000) dictates thut section 5.4:2 is not void. The Court had previously read and carefully· ~onsidcrc-d the Americun Airlines case in reaching its earlier decision thut sec-tion 16.071 applie-d to make- section 5.4:2 void. Th~ Court has now re-read the decision and still believes that that case is not cLmtrolling here. First, in Aml.:'rit:an Airlines, the Courl wus interpreting: the Uniform Commen:inl Code. anJ in petrticular. section 4.406(J) \\hic-h requires a custnmc-r who rccei\es a statement and believes u payment \vas not authorized to nutil'y the betnk "promptly ... Thus. there \\US a separut~ statutory policy requiring noti~c being giv~:n L'!Tec-t and a statutory· prohibition on recovery. Indeed. the Supreme Court held that becaust: notice was untimely, the claimant's recovery for This raises anoth\.'r point. WhetlH:r or not Dm·is Cu. applies or contruls section 5.-+2. Z::.~chr:-- has arg.w.:d that it is m>L interpreting PHi\ 's alleg\.'d rejection of the l"rlv:en cutoff wall methodology as u "change." Rath\.'r, it is interpreting. the alleged rejection us a breach of the contract. l3ecause the Court tinds section 5.42 inapplicable and ;z: void. the Court makes no ruling. on this issut:. (, unauthorized payments was harred by UCC section 4.-1-06. American .-lirlines, 29 S.W.3d at 9X. The Court slated that st>ction 16.071 on its t;Ke did not nppJy because the notice requirt>ment \.vas not a requirement to give notice for a claim for damages. Likewise. in Community Bank & Trust. S.S.B. \'. Fleck. 107 S.W.3d 541. 542 (Tex. 2002) the Supreme Court reaffirmed its holding in Ami.!rimn Air/if1(:s. It noted tbut under Texas Business and CommcrCL' Code section 4. 103( a) a bunk and its customers may agree to u specific. shorter. re::~sonablc period within \Yhich a customer must giw not icc or unauthorized payments. Jd. The Court reitcrutcd that section 16.07 I did not apply to bank deposit agreements because the notice was nol notice l)l. a claim lor damages. but rather. notic.: ol' the unmllhoriZL'U transactions. !d. In contrast. in this case. then: is clearly a clause in section 5.42 that requires notice or an interrrctation of the contract that the contractor bclicved to be a change in the contract. That section states that '·[a]ny notice not timely made by the Contractor shull he deemed a wai\·cr by the Contractor of its right to assert a claim in respect or such interpretation:· It is not analogous to the Americun Airlines or Fleck cases cited abuve. As a practical matter. \vhat this clnuse says is that Pili\ can totally rewrite the requirements of the contract anJ i!" Zachry docs not like it, 7.achry has lo gi-vc notice of its disappwval within 5 days. ~mJ the failure to do that under the langunge quot.:d above bars their clnim. Thal is not practically different than saying that PI!/\ can hreach the contract and Zachry would have to gi vc notice of lhL· breach vvi thin fiv-e days. That is precisely bow PI !A is treating sectinn 5.42: as u Jcl'ense to 7.achry·s claim th:1t the rejection of the frozen cutoll'waJI design was a bre<1ch. It is. to the Court, a distinction without <.1 di rrerencc. :v1orec)\'cr. the clause docs not rcr a pretrial dctermin listed in footnotl' 29 on page 27 of Zachry·s Motion appear tube puffer:-· and potenrially. therefore. not actionable. N-=vertheless. without mon: context. it is difficult lL' determine \\·hether they rise to the level of being at:tionabk. and the Court will. fcnse(s) for PH/\ as a result or PH/\· s dection. Zachry argues that PI IA is not entitled to he excused from performance. and that by deciding to go l"l1mard with the contract after the alleged breach(cs) by Zachry. it may not now assert its prior material hreach ddi;nse. Thus. argues Zachry. "in order to ;1\·ail itself of this prior material breach dcfcnsL' und excuse its O\\ n nonperformance. the Port nei..'Jcd to haw terminated the Contract J.i'ti.:r any such alleged breach hy Zachry." \\iithnut penning a treatise. the Court \\ill attempt to reconcik thL· two concL·pts \'ery briclly based upon its reading of the authorities citL'd by the parties. /\t first. the two concepts :seem somewhat contr:..~dictury. hut this is hO\v the C oun understands them: In J.ung !I-!and Sarings Honk. FSB \'.U.S. 503 F.Jd 1234. 1253-54 (Fed. Cir. 2007), the Court stated. ·'lw]e have held that through its continued pcrrormancc Df the contracl. ra non-breaching party I rmay w::~ive] any c!aim t"l1r prior material breach." (citing Barron Bannhures. inc. \'. l/niled .\'!ales. 366 F.3d 1360. 1383 (fl'd. Cir 2004)). Hut. in Gu/)ta 1'. r:a.1'1L'rn idaho Tumor institute. inc.. 140 S.\\'.3J 747.757 n. 7 (Tex. !\pp--llou~tnn [14 111 Dist.j2004. pet. denied). the court noted that "! tl he election atrects only whether the non-bre::~ching party itsel r is then required to perrnrm t'ully." (citing Chillunlns. Co v. f>ale & Pule Fn~crs .. inc.. e, and the contract in Nexstar even though in Nexstar the contract used the term "additional compensatory and consequential damages." 1lwugh unstated in this case, the language in section 5.06 permits the exact same approach by PJ-IA. The Court grants Zachry's request in Issue II as a matter of law, and hereby ORDERS that the liquidated damages clause in section 5.06 is unenforceable as a matter of law. All other relief specifically requested in Zachry's Motion for Pretrial Determination of Issues of Law and not specifically granted herein is hereby DENTED. c Signed thi.s _-_5__ day of October, 2009. Judge Mike Engelhart 14  TAB 6 Order Granting in Part and Denying in Part Plaintiff's Motion to Strike the Port's Offset and Withholding Defenses dated October 16, 2009 (CR51:14948-52)  P-5 STPLZ CALISE NO. 2006-72970 ZACHRY CONSTRUCTIO!'\ § I~ THE DISTRICT COURT OF COHPORATJON § § HARRlS COtJNTY, TEXAS v. § § PORT OF HOUSTO~ AUTHORITY § . FILED Loren Jackson OF HARRIS COl.JNTY, TEXAS § lSl sT JllOICIAL DISTRICT District Cieri<. OCT 16 2009 ORDER GRANTlNG fN PART AND OENYlNC IN PART . 9 . (~. PLAINTIFF'S MOTION TO STRIKE PLAII';TJFF'S MOTIO!Ql · -k~~~=----­ TO STRJKE THE PORT'S OFFSET AND WITHHOLDI~G DEFIS ' Came on for consideration Plaintiff Zachry Construction Corporation ·s (Zachry) \11otion to Strike the Port's Ofl"set and Withholding Defenses. The Court, having considered Zachry's Motion. PI I/\· s Response. PHA ·s suppleme-ntal hricf and Zachry· s response to that supplemental brkr. as \veil as the arguments of counsel. is of the opinion that Zachry's Motion should be GRANTED 1!': PART and DENIED Jl'>! PART. The Court will not go into thl? timeline of \.!Vents. as those arc spelled out in minuh: dctai·l in the p:mies· briefs on this issue. The (Llllrt will only generally note that. in sum. PHA only li<;;ted A~Y amounts (other than the S600.000.00 dredging issw:) of its i.ICtual damages that it pruposetl to serve as an onset in lmc July 2009. ll owcver. the legal theory under which those quanti 1ies were I is ted was ON I. Y the proportionality l)f its Iiquidated damages ollset daim to actual damages. Additionally. PHA had timely disclosed $600.000.00 in actual damages much earlier as part of an Ol'fset claim pertaining to ccnain dreJg.ing costs. To this day. PHA has not enunciatl.!d in any discovery fl'sponse any legal thevry that it was Sl'l?king to dcCcnsivcly offset or recoup /\NY actual damages othc.:r than the S600,000.00 amount. /.achry nlkgedly on ly karned of PI I/\ 's apparent attempt to inject first s;g million and then $10.5 million in actual damages (as opposed to liquidated damages) as a Jefensiw daim for otrset inl\.)rmatly. und nul through any supplcmcntati<.m nf di:-;c\1\"cry. such as a supplement to a n:quest l~)r disclosure und~r Ruk 194.::?.(c). The Court stated at a hearing that th~.: surprisl.! to Za(;hry was not that PHA was seeking an onset. hut that it was seeking to oll'sct a long list of it~.:mizcd actual damagc:s ns opposed to liquidated damages . It is important tn note. again. that in quantit~· ing its "harms·· in July 2009. PHA \\'U:i not :::wting. that it would t:d;ing, to rcc(wcr those quantities for those specific cat~.:gorics of hgories and 4ll only r~asonahly promptly after they discovered the necessity lor such a respon:>e. That is. PI I/\ argues that they did not know of the need to enunciate that they would be seeking actual damages as an offset. nor the amount or those actual damuges because of this Court's denial of Zachry's Motion for Summary .Judgment in March 2009. Further. in light of that denial. PitA conll.:nds that it did not know that its liquidatl!d damages claim \\Ould be eliminated until Ortohcr 5. '2009 when this Court struck their liquidatctl damages clause as in\'alid. The Court has largely dealt with these arguments above. but will reiterate: The riling of the Motion for Summary Judgment, at the latest. put PH/\ on notice that its liquidnted tlamng~:s clause in the contruct was not ironclad. ThL· tiling of the (essentially) r~newcd motion w eliminate the liquidated uamag.~~ claim tlll or about July 31. '2009 should have <.:aused PHA to umemlthcir discovery responses to spt.:cititally cnu.n<.:ime an :Jctual damages ofrset claim. ar least as an alternati\'e. Pll/\'s cont~:nrion that they basically disclosed this theory of offset 1actual damag~s) in .July :2009 is ju.st not faetu:JIIy or kgally correct P1 IJ\ disclosed a qunnlily of actual damages in late July ~009 !hat they were !'JOT going tP submit to the jury as an offset. They never haw disclos~d :.1 deft:nsivc claim fur oft~~~ oftlwsl.' actual damages w date. The hottnm line is that w inj~ct .S 10.5 million in actual damages tor ot1sc-ttlr recoupm~nl well after all discovery deadline!> hav~: pass..:d \\.llUid dri.lrnatically change rh~ landscape l)fwhm promises to he u lengthy and Clllllplicated tria!. It is not fair co ask either side t0 ~ngage in \\'hat the Court pl.!rcei\'I:'S would bl! ext~nsivc discoYery (including document production. depositions. : Agilin. n ~pt:dlic cluim fur nctual damages ilS on offset or recoupment hils. to datt'. only infornmlly hccn made. and nQt spt:cificolly pkad or pres~ntcd in a suppknu:ntcd di!>clnsurc rl·~ponsc. and potL'ntially adoitionul ~xpert witn~sses) on the evidentiary bases tor the amounts sought to bt: orfset by PH/\. The results or that dist:overy ·will not be known until long atkr voir dire and opening stakments. and the trial Court will ntH allL'W that much lluiJity anti uncertainty intL' this triul. It is therefore OR.DfRED that. with the cx<.:eption of the $600.000.00 umount for the dredging matter. the S1 million or so for the fender n:furbbhing. and the $25.000.00 or so lor the dearing and grubbing. PHA"s otl->et '"harms" or categories. a!i \veil us tht..: amounts or those alkgcd offsets are hcrehy FXCJ.UDED from th~ trial ol.this tause. And. as with any other claims. the Court does not hereby Jccidc that !iaid daims wilL in fact. end up being submitted to th~ jury- -just that PHA may put on evidence of them. It is further ORDER ED that PI It\ will immediately supplement its pleadings and discovery responses to the extent tbat it has not Jisclosed an actual-dumagcs defensive theory of olrsct nr recoupment. It is further ORDERED that i'.achry will promptly propL'!:ie to tht> Court rcasonabk discoYI.!ry that it wishes to <.:onduct nn these tht'orics and umounts ofoiTsd or recoupment. _ 6_ da~· of October, 2009. Signed this __1 Jm r:_ {/l/i/v' Judge :-.'like Engelhart  TAB 7 Order on PHA's Request that the Court Reconsider Its November 12, 2009 Open-the-Door Ruling Regarding the Port's Actual Harms (1SCR6:1112-17)  • CAUSE NO. 2006-72970 • FLk!ARE~~ DfBirlcl Clertt DEC 11 Z009 ~ ZACHRY CONSTRUCTION CORPORATION § § IN THE~ § HARRIS~O~AS v. § § PORT OF HOUSTON AUTHORITY § OF HARRIS COUNTY, TEXAS § JSJST JUDICIAL DISTRICT ORDER ON PHA'S REQUEST THAT THE COURT RECONSIDER ITS NOVEMBER 12, 2009 OPEN-THE-DOOR RULING REGARDING THE PORT'S ACTUAL HARMS Came on for consideration Defendant PHA 's Request that the Court Reconsider its November 12, 2009 Open-the-Door Ruling Regarding the Port's Actual Ham1s. The Court. having considered PHA 's Request. Plaintiffs December 10, 2009 Response, as well as PHA's Supplement to its Request and the arguments of counsel, is of the opinion that PHA 's Request should be DEN JED . The issue in this Request is the application ofTe)tas Rule of Evidence 107. Underlying the request, generally speaking, is the following aspect of this trial. Under prior rulings by this Court, Zachry hus to prove one or more common law exceptions to the no damages for delay . clause contained in the Wharf and Dredge contract made the basis of this suit in order to defeat that clause. One of those common law exceptions is referred to loosely in this record as the "bad faith exception,'' and Zachry contends that a certain promise that PHA 's Mark Vincent allegedly made in an internal PHA e-mail, and which PitA then allegedly breached, is evidence ofbad \() ...... 0 faith on PllA 's part. The promise, according to Zachry. was essentially that, as of May 2005. PI JA would not charge liquidated damages ifPHA suffered no actual losses or harms by the time the Chinese crane ship--scheduled tor first February 2006 and later May 2006--arrivcd. In contrast, PH A e<:mtends that if any such promise was made. it related not to the date tor the Chinese crane ship's arrival. but to a broader, more onerous Milestone A deadline, and cv E ::I 0 0 Cl "0 v t.= •t: v () : 01112  • • potentially, the fi nal completion deadline. That is. PHA 's position is that if any "promise" was made regarding liquidated damages, it was thot no LOs would he charged if PI lA sutlered no actual damages or harms 1hrouglz the Milestone A deadline or, possibly. the eventual fina l completion date of January 2009. It was not, PHA argues (if any promise was made), limited to the date of arrival of the Chinese crane ship arrival. Thus, PHA 's position is that the discussion by Zachry of the alleged "promise" not to charge liquidated damages at all, coupled w ith ( I) the Andy Anderson April and May 2005 letters which mention the final completion deadl ine, as well as the "milestone'' deadl ine, and (2) Mr. Abiasi's recent testimony about ships routinely docking at the wharf during 2006 and 2007 (and possibly later), have opened the door to the introduction of evi dence by PHA of all of the alleged "harms" (actual expenses and losses) allegedly suffered by PH A. T his discussion, PHA contends, is necessary to rebut Zachry's bad fa ith aq,rumcnt by showing that, in fact, there 1\'ere actual ham1s suffered by PHA. Therefore~ the arbrumcnt continues, even if thejury believes that the promise related to the crane ship arrival or the Milestone A deadline (which PHA argues is a much later date), PHA did in fact suffer actual harms. Thus, PH A contends, they did not hreach any alleged promise because they indeed lzad actual harms. Indeed, they argue, if there was any promise, they lived up to it. Texas Rule of Evidence I 07 - Rule of Optional Completeness Under the case law pertaining to TRE 107. the Court believes that the door was opened as to the discussion of actual harms up to the date of the May IS, 1006 letter in which PH A communicated that it would charge liquidated damages. It is logical to conclude that it was on 0 \0 00 that date, at the very latest, that PHA decided it would charge liquidated damages, and at that 0\ 0 ; therefore, under either version of the all eged promise (whether it wa<; the date of the Chinese ;..; u .D E crane ship arrival. or the date of Milestone A completion), it had suffered actual harms at that :::s z cu E :::s u 0 Cl -o 2 0 t;:; '€ <3 ~ 01113  • • time, or reasonably anticipated such actual harms to necessarily flow from the alleged delay. Otherwise, it would not have decided to charge liquidated damages at that time in light of either alleged version of the alleged promise (if there was uny promise at all). Given this, the Court believes that the discussion of (I) the Andy Anderson letters of the Spring of2005. and (2) Mr. Vincent's e-mail as the basis of the alleged promise not to charge liquidated damages, and (3) Mr. Abiasi's discussion of the ships arriving rc&'Ularly after the Chinese crane ship· .s arrival, is the same subject matter as PI!A· s alleged hann.s that were both actually incurred, and reasonably expected to be incurred as of the date it sent the May 15. 2006 letter charging liquidated damages. See, Williams \'. State, No. 12-01-0020 1-CR, 2003 WL 356010, •s (Tex. App.-Tyler February 19. 2003, pet. ref d) (not designated for publication). The Court also bcliev<...'S that the discussion of the promise and the other ships· arrival uftcr the Chinese crane ship's arrival could have leH the jury with the misimpression that PHA suffered no ac:wal harms that underlie their decision to charge liquidated damages on or about May 15. 2006. !d. Thus, the test under TRE I 07 would seem to he .satisfied. 1 1t is important to note that in response to the Court's earlier "open-the-door" oral ruling, in which the Court stated that Zachry had opened the dollr allowing PHA to discuss evidence of "any harms that occurred up to the date of the crane ship arrival," PHA stated that it had no dollar amounts of any harms it had actuall y sutlcrcd as of the date that the Chinese crane ship had arrived. Very recently, however, PHA hegan to ar&'UC that while it had not suffered out of 1 fun hcr. thflugh PHA 's counsel has pointed out thai this rea:>oning docs not seem 10 underpin C3Sl' law pertaining to TRE 107 (but rather, it applies to case law regarding trial by cons~nt). it is worth noting that the eviden~e of the: :;hips r~gularly arriving at th~ wharf during the ongoing con!'truction that Zachry adduced through Mr. Abiasi is rdcvant to rebut PI! A's allegation that Zachry took far too long to complete its work. Zachry says th!! cvidem:~ of ships arriving during construction, and Zachry's accommodation of those arriving ships. explains some llr ollllf the delays. Thus, 10 be fair, the cvidcnvc was aT!,'Uably not adduced Ill show that Pl lA sufTcrcd no hanns because ships could arri\'C at the wharf. Rather, it was adduced, in Zachry'!\ view, to c.1tplain the delays of which it was accused hy PllA. So therefore, argues Zachry. it did not really OJXn the door because the cvidc:ncc: has rt:le\o·anc<: 10 somtthing other than PHA 's alleged ha rms. PHA nonetheless argues that it do'ion. =01114  • • pocket losses or harms as of the date of the Chinese crane ship's arrival, it knew at that time that it would necessarily suffer actual harms that would actually be incurred after that date. Why PHA did not ask tor clarification of the Court's oral ruling to determine whether anticipated harms ofwhicb it was aware as ofthc ~ate of the Chinese crane ship arrival date were included in that ruling is unclear. Nevertheless, it is possible there is evidence of reasonably anticipated actual harms of which PHA was aware as of the May 15, 2006 letter charging liquidated damages. The Court has not heard this evidence as of the date ofthis Order. To be clear, however, the Court believes that the door has only been opened to a dc1,rree. It has onJy been opened to the extent that, if the Court were to allow the evidence to come in, it would only do so to the point where PHA could discuss discrete categories of actual harms. However, the Court would not al low PHA to discuss the specitic dollar amounts or quantities of those alleged harms. Eliciting evidence of the types or categories or actual harms, the Court believes. would allow PHA to correct any misimprcssion held by the jury that PHA suffered no actual harms which would underlie or support its May 15, 2006 decision to charge liquidated dum ages. There is no need to go the additional step of discussing the actual amounts of those alleged harms. Texas Rule of Evidence 403 Now, despite having opened the door to the discussion of the actual harms either actually incurred as of the date of the May 15, 2006 liquidated damages letter, or those reasonably anticipated as of that date which necessarily would have flowed from the alleged delays up to that date, the Court believes the evidence should nevertheless be excluded under Texas Rule of 0 \0 00 Evidence 403. Zachry has also expressly objected to this evidence on Rule 403 grounds. 0\ 0 ~ First, the Court~ at the outset of the. trial. ruled that other than 3 specitic categories of ;_: Q) .D E actual harms, because of late or no-supplementation of discovery, PITA would not be permitted ~ ;z: cQ) E ~ 0 0 a 4 13 t.:: ·t: Q) u : Ol111~  • • to discuss 8 to 10 million dollars worth of alleged actual harms. Without modifying that ruling, the main rcas~m for that decision was that the Court did not want to-at the last minute-- fundamentally alter the nature of the trial by adding many days or weeks of testimony about whether those alleged harms were actually suffered, and in what amounts. Moreover, the Court did not want to disrupt the trial by having the parties have to undertake substantial amounts of discovery in the middle of what already promised to be a lengthy trial. At bottom. it would have been unfair to inject all of that evidence of about $1 0 million worth of an offset claim by PHA into the trial at the last moment. The Court does not believe that there is any basis to change that ruling. Second, undc=r Rule 403 , the Court believes that any probative value of injecting al l of the evidence of alleged hanns into the trial would be substantially outweighed by the danger of (I) unfair prejudice to Zachry, and (2) considerations of undue delay. In particular, not only would it take a lot of time for the information to be elicited in the tirst place from a PHA witness. it would necessarily require a lengthy cross-examination. That cross-examination could very quickly devolve into a lcnhrthy battle over not only the nature of the alleged harms, but their cause and quantitication. As stated above, the reason this information was kept out in the first place was because of dcticicncics in PI iA 's discovery responses. For Zachry to then have to cross-examine on this issue when it has not had a chance w conduct discovery ot' any significance on these issues would certainly be highly prejudicial. And, all of this testimony would take a lot of time·- we are now in the 8111 week of testimony in this trial as of this writing. Texas Rule of Evidence I 07 is subject to Rule 403. Walters\'. State, 247 S.W.3d 204. ~ 218 (Tex. Crim. App. 2007); Whipple v. State. 28 1 S. WJd 482, 500 (Tex. App.- ·EI Paso 2008. pet. rcrd). 5 : 0\1118  • • Jt is therefore ORDERED, ADJUDGED and DECREED that PHA's Request that the Court Reconsider its November 12, 2009 Open-the-Door Ruling Regarding the Port's Actual Harms is hereby DENIED. Signed this 11 day of December, 2009. ;//#/j/;/o/'/ Judge Mike Engelhart '0 .....0 '0 Cl) co "' 0.. 0 '0 co a- -....,...,. 0 ~ Cl) .£:) E :;) z E Cl) E :;) u ~ 0 ' Q "0 6 Cl) c 'E Cl) u :01117  TAB 8 Plaintiff's Fourth Amended Petition and First Amended Answer to PHA's Counterclaim for Attorneys' Fees (CR29:08131-48)  CAUSE N0,-2006·'7?970;. L I ,. , :_t \, ., ~ . ' + ..... - , .: ZACHRY CONSTRUCTION § ~. fN THE DISTRICT COURT OF CORPORA.TION n!k/a Zachry Industrial, § Inc. ' § ' ( •-.;· § VS, § HARRIS COUNTY, T EX A S § PORT OF HOUSTON § AUTHORITY OF HARRIS § COUNtY, TEXAS § 15lST JUDICIAL DISTRICT PLAINTIFF'S li'OURTH AMENDED PETITION AND FIRST AMENDED ANSWER TO PHA'S COUNTERCLAIM FOR ATTORNEYS' FEES TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW ZACHRY CONSTRUCTION CORPORATION n/k/a Zachry Industrial, Inc. ("Zachry"), Plaintiff herein, and flies this its Fourth Amended Petition and First Amended Answer against the PORT OF HOUSTON AUTl-lORITY OP HARIUS COUNTY, TEXAS ("PHA''), and in support thereof would show the Court the following: I. Discoverv Control Plan Zachry intends to conduct Level III discovery ln this case pursuant to Texas Rule of Civil Procedure 190.4. Plaintiff demands a trial by jury, and has tendered the requisite fee to tbe Clerk of this Court. H. Parties 1. Plaintiff Zachry is a DelmvaJe corporation, ·with its principal place of business in San Antonio, Bexar County, Texas. 2. Def'endant PHA is a Texas novigation district established under i\rticle XVI, Section 59 of the Texas Constitution, with its prim:,ipal place of business in Houston, Harris County, Texas. Defendant PHA has appeared .in this lawsuit and may be served through its 1 counsel of recordt David H. Brcrwn, Brown & Kornegay LLP, 2777 Allen Parkway, Stlite 977, Houston, Texas 17019;. Karen T. White, Vinson & Elkins, L.L.P., 1001 Fannin, Suite 2500, Houston, Texas 77002~· .L Clark Martin, Kelly Hmt & Hallman, l 000 Louisiana, Suite 4700, Houston, Texas 77002; and Lawrence J. Fossi, Fossi & Jewell LLP. 4203 Yoakum Blvd, Suite 100, Houston, Texas 17006. III. Venue 3. Venue is proper in this Court as Harris County is the county "in which all or substantial part of the events ... giving rise to (this] claim occutred.'' TEX. Ctv. PRAC. &REM. Cor>t~ ANN. § 15.002(a)(l). Venue is also proper as Harris County is the county of PHA's "principal office in this state.'' TEX. CIV. PRAC. & REM. CODE ANN. § 15,002(a)(3). Finally, venue is proper in this Court because Harris County is the county in which the parties have "contracted in writing to perform. an oblfgation,H expressly naming Harris County in that 'Nriting. Tt::X. C!v, PRAC. & REM. CODE ANN. § 15,035(a). !V. Jurisdiction 4. Jurisdiction is proper in this Court as the amount in controversy is in excess of the minimal judsdictional requirements of this Court. Further, this Conrl has personal jurisdictitm over Defendant as it is a Texas navigation district located in Harris County. Texas. 5. This court has jurisdiction over this suit against PHA because the Texas legislature has waived sovereign immunity from suit \vhh respect to breach of contract claim!l against navigation districts such as PHA. TEx. Lac, Gov;T CODE ANN. § 271.151, et seq. Further, it is well settled that when the State or a political subdivision contracts with private citizens~ as PHA has done, it waives sovereign immunity from liability. See Tooke v, Ciiy of 2 lvfexlat 197 S.W.3d 32:5,332 (Tex. 2006); Gen. Servs. Comm 'n v, Little~1ex. Insulation Co., Inc.• 39 S. \VJd 591, 594 (Tex. 2001). Tl1is suit involves claims for PHA's breach of a written contract within the Textis Legislature 1 s express waiver of sovereign immunity. TEX. Loc. Gov'T CODE ANN. § 271.1 Bayport Phase l A Wharf and Dredging Contract (H\l·/h.arf and Dredge Contract").1 Based on !he facts alleged below, Zachry seeks to recover damages under §§ 27L153(a)(1) and (a)(2) of the Texas Local Government Code. Accordingly, PHA may not assert sovereign immuni.ty from suit or from liability with respect to the claims asserted herein. 6. On or about June 1, 2004, af\er soliciting proposals and awarding the project to Zachry, PHA and Zachry executed the \Vharf and Dredge Contract Pursuant to the written \Vharf and Dredge Contract, Zachry was to construct a J 660...:foot wharf facility in Pasadena, Tt:xas. Under the original terms of the Wharf and Dr<:dge Contruct, construction \Vas to be completed by June 1, 2006, ln addition, by February l, 2006, Zachry wa.') to meet an intertm deadline by which a portion of the wharf PHA had designated {"Milestone A") would be sufficiently completed supposedly to allow the delivery of certain large ship~teH;hore cranes that \Vere to be delivered by ship from China. 7. Shortly thereafter, Zachry began construction of the wharf: At the outset~ and as PHA understood before it awarded Zachry the contract) Zachry's chosen construction methodology and construction plans involved the construction of a temporary frozen shoring 1 Because the Wharf and Dredge Contract is too volurninous to physically attach to this petition, Zachry hereby expressly incorporates by reference the copy of the Wharf and Dredge Contract filed hy Defendant PHA as .Exh.ibit B to its Plea to the Jurisdiction and to Hs First Special Exceptions. 3 wall {a "'freeze wall'') al until after PHA had rejected the frozen cutoff walL Moreover, nothing in GeoTest's report would support a rejection of the frozen cutoff wall. 1n addition, PHA's own Chief Engineer, who had the ultimate responsibility at PHA for resolving all engineering questions on the project, admitted that PHA did not have enough infom1ation to judge whether or not the freeze wall violated the standard of care. He also admitted that no one at PHA had concluded that there would be an adverse impact or that the cutoff wall design in any way violated the standard of care. Further demonstrating the Port's bad faith, arbitrary, and capricious conduct regarding the rejection, Zachry's freeze wan experts~ GeoEngineers, provided additional research demonstrating that there was no adverse affec.t to freezing the :soil around the drilled shafts. Consistent with the freeze \Vall expert's opinions at the time, PllA's Construction Manager, CH2MHILL, provided the frozen cutoff wall design to its own in-bouse geoteclmicaJ engineering experts, who returned comments confirming that the proposed frozen cutoff \Vall design did not pose any issue. PHA's own expert .in this lawsuit has likewise testified that the frozen cutoff wall was a viable and safe design and that he had no basis to believe it would have any negative impact on the structure. 13. Another example of the Port's bad faith, arbitrary~ and. capricious conduct is the fact that PHA expressly charged and designated its Construction Manager, CH2MHILL, to act on its behalf on this critical cutoff wall issue despite the fact that PHA knew and understood that CH2MH1LL had a poor record and was HI-equipped to deal with such an issue. Indeed, PHA had previously admitted that CH2MHLL responded to project and design issues in a ''CYA"' mode rather than appropriately addressing the issues. This CYA approach was evidenced again when even after identifying any issues concerning freezing as geotedmical h1 nature, even after 7 i. receiving CH2MHILL's senior geotechnical engineering experts' opinions stating they did not see a problem, and even after receiving Zachry's freeze waH expert's follow~up analysis re~ confinning there was not a problem CH2MH1LL·-PHA 's designated agent on this cutoff wall issue--communicated several problems from a "structural engineering perspective," none of which were viable concerns, none of which were assessed prior to the Port's rejection> and all of which were simply designed to divert any potential liability from CH2MHfLL. On October lO~espite the unanimous approval from freeze wall experts on both. sides and notwithstanding the fact th<\t PHA had not even hired its own geotechnical engineer to look at this issue (much less nx:cived the result of any such review), PHA rejected the fq.:cze, walL 14. PHA 's reJection of the frozen cutoff wall constituted a breach of both Change Order 4 and the General Conditions of the Wharf & Dredge Contract. 6 Notwithstanding PHNs "'bail and switch" tac:tics·-including PHA 1 s delay in approving Change Order Number 4 and subsequent improper r~jection of the frozen cutoff wall methodology stated 1n Change Order Number 4--PHA remarkably continued to insist that Zachry complete the expanded project vtithin the parameters set forth in Change Order Number 4. 15. Moreover, when it executed Change Order 4, PHI\. had no present intent to> perform its requirement that Zachry be permitted the right to use the frozen cutoff wall. Texas law clearly provides that when one enters into an agreement that it has no present intent to perfonn, this constitutes fraud. Here, on September 27, 2005 PHA executed a contract that pe1mitted Zachry to use the frozen cutoff waiL PHA induced Zachry to agree this contract at a 6 Alternatively, to the extent PHA contends that it only require<;l Zachry to ''revise and resubmit" its frozen cutoff\vall design, such conduct also constituted a breach of Change Order 8 price and schedule based on a particular frozen cutoff wall design. PHA then rejected the very desig11 that formed the basis for the contract only days after signing the agreement because it never intended to allmv Zadrry to use the fi•ozen cutoff wall. To this day PHA denies that it ever 7 intended to approve Zachry's use the frozen cutoffv•tall \Vhen executing Change Order 4. 16, Zachry, unable to implement the agreed-upon frozen cutoff wall construction method due to PHA 's conduct, found itself short on thne because the work needed to be completed under the freeze. \vall approach 1 the Port had precluded the use of that approach, and there was a crane ship that was to arrive frnm China in the near f\rture. Thus, after a review of the alternative proposed solutions) Zachry ultimately decided it would have to forego the entire freeze-wall construction method in order to prepare the wharf in a rnanner that would allow the Chinese crane ships to dock and unload. Zachry therefore was forced in large part to complete. the wharf using unanticipated "'wet'' excavation techniques. hl doing so, Zachry incurred substantial additional costs. The completion of interim Milestone A and the entire project was delayed as a result, as well. 17. Even though the delays were caused by PHA's breach of the Wharf ar1d Dredge Contract, PHA has withheld and threatens to further withhold liquidated daxnages based on an unenforceable penalty provision in the contract. First, because the purported liquidated damages provision attempts to enforce liquidated damages vvhilc simultaneously allowing (and, indeed calling tor) the recovery of actual damages, it is void as a matter of Texas law. Second, the liquidated damages provision is unenforceable because PHA suffered no harm. Third, the Number 4 and the General Conditions of the Contract i PHA's bad-faith, fraudulent; arbitrary, and capricious conduct tKtively interfered with 9 liquidated damages provision is unenforceable because Zachry's compliance with the contractual deadlines \Vas precluded by PHA's own errors and misconduct. 18. By its conduct, PITA has breached the Wharf and Dredge Contract in several respects. Jn particular by precluding Zachry lrom implementing its frozen cutoff wall constntction methodology and ultimately the entire freeze wall construction methodology, PHA has breached Change Order 4 and Section 5. l 0 of the Wharf and Dredge Contract. See Change Order Number 4 to Wharf and Dredge Contract; Wharf and Dredge Contract 11 5.10. PHA has furthet breached the Wharf and Dredge Contract by \vrongful!y witltholding as "liquidated damages'' sltms nthenvise due Zachry under the Wl1r1rf & Dredge Coutntct pursuant to an unenforceable penalty clause and for time overruns that were themselves caused by PHA's conduct. See Wharf and Dredge Contract, 1j 5.05, ~. 5.06, Addendum No.8 (lll·15) (purporting to provide PHA the right to recover liquidated damag.es as a dttmage "f1oor," while also purporting to allow recovery of actual damages if they exceed the liq\tidated~damages amount). PHA is obligated to pay Zachry the Contract price. PHA is wrongfuLly withholding sums as purported liquidated dan1ag• $2,360,000, (3) damages in the amount of approxhnately $6()0,000 that has been wrongfully withheld by PHA as a purported ''offset,n and (4) damages for the remainder of the Contract Price, which the Port has refused to pay. Zachry is also entitled to interest as allowed by laYv, including pre~ and post.:jud:;,rn1<:mt interest. 23. ln regards to the fitsi category ofdamages listed above, Zachry has designated an expert witness, Oary W. Draper, to analyze and report on matters pertaining to the amount of of rern.edies, waiver, estoppel, and ratification. Zachry denies that it breached the \Vharf & Dredge Contract. ln the alternative, to the extent PHA alleges that Zachry committed any material breach of the Wharf & Dredge Contract1 J)HA has deprived itself of the defense of prior material breach because it elected to treat the Wharf & Dredge Contract as continuing and, in additiont insisted that Zachry perfonn the \Vharf & Dredging Contract. 11 Because construction of the \Vharffacility is ongoing Zachry's total damages are 1 13 Zachry's economic darnagcs and the method by which those damages have been calculated. The amount and manner in which these damages have been calculated arc set forth in Mr. Draper's report This category of Claimed damages by Zachry concerns the damages directly flowing from O\Vner~caused delays and hindrances resulting from the Port's breach. Alternative!)\ it includes dtm1ages flc.1wing from the additional work that Zachry \Vas directed to perfom1 by the Port. This additional work was Zachry having to construct the wharf in the wet rather than in the dry after the Port rejected the cutoff walL This category of damages is recoverable under both § 271.153(a)(l) and (a)(2) of the Texas Local Govemmem Code. 24. As to the remaining categories of damages, they ktre recoverable under § 271.15J(a)(l) of the Texas Local Government Code as amounts due and ovved to Zachry under the Contract. VH, Ccncrtd 1)enhd 25. Pursuant to Hule 92 of the Texas Rules of Civil Procedure, Zachry generally denies PfLf\.}s_ allegations; including \vithout limitation PHA 's Counterclaim for Attomeys' Fees. vrn. Defenses 26. All prior and subsequent paragraphs are incorporated by reference. 27. To the extent PHA alleges in its Second Amended Answer and Counterclaim that. it cm1 avoid liability based on the defenses listed therein, PHA is not entitled to avoid its liability for breach of contract due to the doctrine of estoppeL 28. To the extent PHA alleges in its Second Amended Answer and Counterclaim that it can avoid liability based on the defenses listed therein} PHA is not entitled !o avoid its liability estimated and remain subject 10 change. l4 for breach of contract due tO the doctrine of ratification. 29, To tl1e extent PHA alleges in its Second Amended Answer and Counterclaim that it can avoid liability based on the defenses listed therein, PHA is not entitled to avoid its liability for breaeh of contract due to the doctrine of waiver. 30. To the extent PHA alleges in its Second Amended Answer and Counterclaim that it can avoid li'ibility based on the defenses listed therein, PHA is not entitled to avoid its liability tbr breath of contract due m its election ofre.medles. 31. To the extent PHA alleges in its Second Amended Answer and Counterclai.m thm it can avoid liability based on the defenses listed therein~ PBA is not entitled to avoid its liability ibr breaeh of contract due to the doctrine oftmclean hands. 32. To the extenl PHA alleges in its Second Amended Answer and Counterclaim that it can ttVoid liability basod on the d~f<:mses lisled therc.in, PHA is not entitled to avoid its liability for breach of contract due to the doctrine ofquasi~estoppel. 33. To the extent PHA alleges in its Second Amended Answer and Counterclaim thar h can avoid liability based on the defenses listed therein} PHA is not entitled to avoid its liability for breach of contract as a result of PHA's ovln negUgent misrepresentations, fraudulent inducement, fraudt bad~fahh, ~rbitrary and capricious acts, and active interference with :respect to Zachry's work. 34. to the extent PHA alleges .in Hs Second Amended Answer and Counterclaim th~tt it can avoid liability based em lhe defenses listed therein. PHA is not entitled to avoid its liability for breach of contract because any alleged notice provision in the Contract is inapplicable to Zachry's claims, and even if such a provision was applicable~ any such provision would be vojd 15 under Section 16.07l(a) of the Civil Practice and Remedies Code. See TEX. CIV. PMC. & REM. CODE A1'-!'N. § l6.07l(n) (''[a) contract stipulation that requires a claimant to give notice of a claim for damages as a condition precedent to the right to sue on the contract is not valid unless the stipulation is reasonabk A stipulation that requires notification within less than 90 days is void,") 35. Zachry denies that it made any misrepresentation to PHA. 1n the alternative, to the extent PHA alleges Zachry falsely represented any matter (either aftirmatively or by non- disclosure), any such delense is barred by PHA's actual kJloWledge offalsily; 36. To the extent PHA alleges in its Second Amended I\nswer and Counterclaim that it is entitled to recover Its attomeys' fees, recovery is barred by the doctrine of ripeness. 12 37. To the extent PHA alleges in its Second Amended Answer and Counterclaim that it is entitled to recover its attorneys~ fees, recover)' is burred because the fees PHA seeks to recover are excessive, not reasonable, and unnecessary. IX. Praver 38. Zachry, after f·ull trial on the tnerits before a jury of its peers, requests u. final judgment against Defendant as follows: a. Darn ages as al1owed by law and to the extent proven at lrial, which exceed the minimum jurisdictional requirements of this Court; b. Interest as provided by law, including pre- and post~judgment interest; c. Costs of suit; and 12 Because PHA ~s counterclaim for attorneys' fees is not ripe, Zachry specifically reserves the right to allege offsetting counterclaims for which PHA's sovereign immunity has been waived. See Reata Consrruction Corp. v. Ci(vofDallas~ 197 S.W.3d 371 (Tex.2006). 16 d. Such other and further relief to which Zachry may be justly entitled. Respectfully submitted, ~ By:~-~-·--···~·_,__ Robin C, Gibbs Texas Bar No. 07853000 Brandon T. Allen Texas Bar No. 24009353 Sydney G. Ballesteros Texas Bar No, 24036180 Michael R. Absme1er Texas BarNo. 24050195 1100 Louisiana, Suite 5300 Houston, Texas 77002 Telephone: 713/650~8805 Tele.copier: 713/750..0903 ATTORNEYS F'OR l'LAINTlF'F ZACHRY CONSTRUCTfON CORP, 17  CERTIFICATE OF SERVI<:;'E 1 certify that a copy of the foregoing instrument has been served upon all counsel of record on this: 28th day of Apri12009, in the manner so stated: Via electronic mall Karen T. White Seth A. Russell Vinson & Elkins, L.L.P. 100 I Fannin, Suite 2500 Houston, Texas 77002 Via electroulc mail David H. Brown Brown & Kornegay LLP 2777 Allen Piirkway, Suite 977 Houston. Texas 770 I9 Vit1 electrtmfc mail J. Clark ivlartin Kelly Hurl & Hallman 1000 Louisiana, Suite 4700 Houston, Texas 77002 Tlia electnmla mail Lawrence J. Fossi Fossi & Je\vell LLP 4203 Yoakum, Suite 100 Hpuston 1 Texas 77006 ~~-~~~-­ Brandon T. Allen 18  TAB 9 Third Amended Original Answer and Counterclaim for Attorneys' Fees (CR45:13008-35)  CAUSE NO, 2006-72970 ZACHRY CONSTRUCTION !N THE DISTRICT COURT OF § CORPORATION, § § § § v. § HARRIS COUNTY, T EX A S § , THE PORT OF HOUSTON AtJTHORITY § § Defendant. § !51ST JUDICIAL DISTRICT THIRD AMENDED ORIGINAL ANSWER ANO COUNTERCLAIMFORATTOltNEYS' FEES TO THE HONORAB'LE JlJDGE OF SAID COURT: COrv18S NOW The Port of HbustO!l Authority of Harris County. Texas (the "Port Authority' 1 or "Port''); Defendant, and, subject to its Plea to lhe Jurisdiction, files: it<: Third Amended Otl&inal Answer and Counterclaim for Attorneys• Fees, and respect.fully shows the Court as follows: IMMUNITY l. 111e Port Authority is a political subdivision of the .State ofTexus and i::~ therefore prote.cfed by the sovet'eign or governmental imn1unity doctrine. The Pmt Authority is immune ti·om suit und from liability for all causes of action and damages except as wovided by Subchapter I r>fChaptcr 271 ofthe Texas Local Oovcmmenl Code. GENJf,Rt'\L DENIAL 2. Pursuant to Rule 92 of the Texas R11lcs of Civil Procedure, the P()).'t Authority. Zachry assured tho Port Authority thatthe Port could rely on Zachry as a team player~ and that Zachry would work with the Port in a struightl'orward manner and not engage in any "claims game." 8. Regrettably, all of these representations, on which the Port Authority relied, proved to be untruE~; At the time~ however, persuaded by these representations, the Port Authority entered into negotiations with Zachry which culminated in the Phase !A Wharf and Dredging Contract dated Jm1e J, 2004 (the ".(;Qptract"). Early In !he Project and in response to the Port Authority's concerns regarding freez;ing the soil, Zachry a1>surcd the Port that the fh:ezing would remain far enough awuy from lhe piers that it \Vould not compromise the \vharf's structural integrity. The Port Aulhodty's concern was well justified; the drllled piers' abillty to bear weight comes mostly from "skin friction" at the itttorface of the soil and pier down the length of tim pier~ Freezing tl1e earth near the piers could decrease their load-bearing capacity. In addition, the expanded volume of the soil from fn:>eidng could even move, bend, or bret~k the piers. Zachry, which had a contractual duty to protect the cmnpletcd portions of the wharf s!ruch1rc while it wus prosecuting its work, promised thut it would maintain at least nine feet btSlWt1Cn the frozen soil amlthl;l:;urface of the piers. \1. The Contract Included two crucial deadlines n.nd stipuli:lled !hat time was of the essem~e regarding perforrnance of the Work, The iin~t was Pobmary l, 2006 (u date defined in tho Contract as thn "Milestone A" date)~ by which Zachry agreed to have one portion of the wharf fully completed, Tile Port Authority needed that portion of U1e wharf completed by the Milestone A dnte so that four huge cran<'.S, which were being fabdcated in China and wert} to ardve ln Houston by ship, could be de!lvered and assembled, and rben the cnme operators tndned on the crnncs, in time tbr the completion of the remainder of the wlmrf. The se(.:ond was the ''I1inal Conlplction" date of June I, 2006. by which the wharf fnoilities nnd dredging work were to be completely finished, 10. At the outset, Zachry fell behind schedule. Among other things, il was late in mobilizing its on-site work force, submitting its concrcle mix formu!atlon 1 and preparing its ccmcrele butch plant Th~;t ::;tart of both ctmcrclc work and the freeze wall inslallt~tion were significantly delayed. Further, there was a series of blunders involving the freeze walL Most or the blunders have their origin in the character and decisions of Zachry's construction manager, Harold (Andy) Anderson. IL Anderson wa~ not even a Zachry employee when the Contract was signed. Znt;hry hired him several weeks later, nftcr a short and hasty search. Although the freeze wall 4 wus a cen!tn'!)lece of Zachry~s constmction phm, Anderson did not want to use it Rather than immediately lnoving forwnrd with the freeze waH, he spem months fi:ultlessly searching for an nltcmative1 putting the freeze wan behind schedule. He even delayed entering into a subcontract with the freeze wall subcontractor whom Zachry had chosen "" RKK SoilFreeze Technologies ("RKK"). lnde<:xl 1 Za<~hry .fitially signed the RKK subcontract) and thus freed RKK lo submit a fi·cezc wall design, only after the date on which Znchty had l>larmed to hove the freeze wall completely installed, 12. Anderson compounded his mistakes and delays by compromising Zachry's ability to properly pcrfonn the freeze wall .installation. F'or example, RKK had spent a substantial amo1n'tt of time working with Fanner Foundation, Zachry's drilling Stlboontractor which was to install both the J)iers and the freeze pipes, to assurttthat Fanner Foundation was acquainted witl1 the ptt.>eise teehniqua't and tolerunces necessary in plndne, and installing freeze pipes. After all this prepumtion work1 Anderson gave the tusk of installing tho freeze pipe to another, cheaper subf being unable to satisfy the Mile.'itone A obligation (but having failed to so advise the Port Authority), Anderson began planning to use a "cut·off \VIlli" running perpendicular from the frliez() wall to the land, Under his plan, Zachry would attempt to divid\fi the pmjeGt in two,. If would first excavate beneath the wharf on one side of the cut-off walt, and n:tter so excavating would breach the main freeze wall on i'hat side so the ship carrying the cranes COtt!d dock and unload. Tl1cn 1 Zachry would excavate on the: other side of the cut-off wall to complete the remnimler ofit!l work. 14. Several weeks after Zachry determined that it likely would need a cut~offwall, the Port Authority advised Zachry that the Pm·t was considering extending the w1mrf's length by 332 foot Zachry appreciated that the extension would not m.erely be u v.alunble piece of work~ but also would offer an opportunfty tu hlivc the Port Authority pay for whatever cut~off wall Zachr)' ultimately would build. Zacl)ry urged the Port Authority not to J)Ut the wharf extension oul Lor proposals by other conlracwrs, but instead to add the worl<' lo Zaclu·y's Contract. Although it knJ.>':J)luin why he was abandoning H fi·eeze wall in vvhich Zachry ttlre.ady had invested some $9 million. He reported to hJs m1pervisors that chitters .needed to cool the brine that would cin~uLa1e through the freeze pipes had been "commandeered" hy FEMA in consequence ofHunicum~s Rita and Katrina. He then attempted to {jnlist RKK in this fraud, mging RKK to report a clliller shmtage so Anderson could Jbrward the false report to the Port Authority. Anderson threatened RKK with financial harm if 9 attempt to Zachry*s management. Zachry's management, however, never bothered to investi.gate this shocking report. To the contrary, Zachry's management continued to rely on Anderson for information about wbat was happening at the l3aypolt job site. 26, Appreciating that his lie about commandeered chillers would not find support, Anderson modified tl1e lie by reporting to Zachry management tbat some chillers were available, but not enough to operate the freeze wall adequate1y1 and in consequence the fi·eezing would take much longer thnn planned. 27. Anderson also invented n second lie tn Zachry mtmagement: that sheet pile required ibr the alternative cut-off wall de;Jign was unavailable, and would remain unavailable for months. Anderson lold this He desnite knowing that the sheet. pile was available for i:n.unedinte delivery from !ievernl different suppliers; RKK had oonfinned this fuct to Anderson. zs. In making the decision to abandon the freeze wall, Zachry had not prepared any cost or Cllf:,rincerlng analysis to determine whether its revised conslruclion plan, which Zachry has somethncs referred lo as "Ptan H,jj wus sensible or, indeed, even feasible. h had not evaluated whether il1l estimated excavation rales or o!htlf production rat(}s were realistic. It had not determined how it would excavate bem7nth the wharf deck. It had not dctem1ined how deeply it could snfely excavate with an unfi·ozen berm. H hod not addressed the problems created by u,roundwater infiltration. It had$ in short, nq reliable way of evaluating the time required fbr, tlm costs entailed by, or tl1e risks and benefils of Plan B, and no rcHable way of c.ompadng the time, costs, risks, and benetits of Plana with those of the freeze walL 29. Representatives of Zachry nml the Port Authority had n series of meetings and phone conversations in October, Novernber, nm1 December of 2005 to discuss the scheduling !Q issues. Zut1hry told the Port that it had detem1ined to abandon the main freeze wan because it was out of time to implement the freeze wall and stilt meet the contractually required completion dates for Milestone A and Final Completion. Zachry told the Port Authority that more water was flowing fhnn tl1e land side than Zachry had anticipated and that it could not freeze the soil quieldy enough, Zachry suid its schedules show~d thttt abandoning the freeze Viall and proceeding instead \\1th Plan 13 ·-working in the dry behind a n\>tv11~ozen berm to a certfti n depth and lh~m working ln the wet thet'eailcr •w would result iu the earliest practicable achievement of the Miles.tnne A and Final Completion dates. 30. At no point during any of the many rneetings or convenmtions .in late 2005 did Z.n:chty ever sta.tc or even suggest, as it much later would clairn ln this lawsuit~ that its decision to abandon tho freeze Wti!l \VM connected with any supposed 1'rejection" of the draft cut:..offwall design, as Zachry now ctairns in this lawsuit .Zachry made no sucl1 rmggestion because the tnodificalions thnt the Pott Authority requested to the submittal of the draft design played no role in Znchry;s decision to abandon the frcczo Wtill. :l l. Bad Zachry asserted in any of the coiwersations in late :wos, a.'! it later would in this lawsuit, that it was abandoning the ti:ee%e wall as a result of the Port Authority•s i'evise and resubmit rc._<;ponse to the dmfl cut~off waH design submittal, that abandonment .of the freeze wall \vas going to del11y Zachry's completkm of the project and increase Zachry's cost tb complefe1 and thut the Port was somehow responsible for the resulliog delay and increased costs to Zachry, then there is no doubt that the entire tenol' of those cmwersnHonN would have chtmgcd~ and that the Ptwt Authority promptly would have, at a minimum. instructed Zachry to delete the '''harf' exlensitm from the scope of ils work under the Contract  32. Zachry's planning, estimating1 and execution have proved to be no better since it abandoned the fi·eeze waH tl1au before it did so. Through no fault of the Port Authority! Zacluy failed to execute the work in accordance with any of the numerous schedules it prepared for complc!lng the project using the Plan B construction method. Zacht'y did not dec!u:ro final completion of its work until January of2009. 33. Unbeknownst to the Port Authority, the "Zachry" entity with \Yhich the Port Authority contractt1d apparently Cklased perfom1ing the Work on the Contract. Instead. Zacluy ch1mged its nmne and Zachry's parent company created a new comp!l.nY to assume Zachry's " name - lhc name Zachry Constmction Corporation. In lnte 2007 r Zachry asked the Pmt Authority for its oonsent to an assignment of the Contract The Port Authority responded that it would consent to the assignment upon satisfttction by Z11chry of several reasonable conditions. Zachry di.d nm agree to or satisfy the conditions. In fact, Zachry ignmed the Por! Authority's response. Instead of respondit1g to the Port Authority or satisfying the conditions, on infbrmntkm and belief., on January 1, 2008 and without knowledge of the Port Authority, the nmv company apparently began pertbrming Zac1ny's CJbligutions ~mdcr tl1e Contract. Zachry assigned its obligations under the Contract to the new company in breach o:f Section 3.13, apparently ceased to employ OJHiite supervision in breacll of Section 5J 61 and apparently ceased self- peribrming the Work and engaged a subc~)ntractor not disclosed to the Port Authority in breach oJ Scclion 5.11 of the General Conditions. 34. Apparently, the new company (which did uot have u contract wit11 the Port i.f"". Authority but had assumed the name of Znchry) with Zachry's knowledge and at Zachry's instruction submitted invoices for Work and signed releases to induce the Port Authority to make payment. Zachry thereafter represented to the Port Authority that the claims in this titigntion 12 w<:r(: Zachry's claims and that all cost.'l which it sought as damages were incurred by Zachry, Even Zachry's damages documentation- disclosed to the Port Authority only after order of the Cow·t -· states that all costs were incurred by Zachry. They were not 35. OnAprl127, 2009, Zachry entered Into agrecntents with the new company.-. buck dnting the effective dates of the agreements to Jmtuuxy l} 2008 - in which the new company agreed to perform the Work f(H' no payment t1·om Zachry1 other than wlmt the Port Authority paid to Zuchry. Tn tho event the payments from the Port Authority wen:: leas thun the amounts incurred by the new com puny, the tR~w company agreed that Zachry had no liability to th~; new oompatly. Zachry abo gnmtctl the new company (which l!ud no contract with the Port Amhorl!y) the right to pursue und control this liiigation, all in the namo of Zaobry. 3(:). ]'he Port Authority pleads the 1b!lowing defenses to Zachry's pleaded causes of actions and to Zachry's purported defenses to dtlfttnseN enrlier pled by the Port Authority: 37. Zachry is not entitled to recovery against the Port Authority for brem..:b of the Con!rnct bcctwsr> the Pori Authority acted in acwrdmme with the Contract provisions, including, bul not limited to the 1ight to withhold pn}•mentlt (Secliorm 6.05, 6. '! 1, S.OS, and 5.06 of the Oermral Cnnclit.ianR) 1 the right of the C~1lcf Engineer to demand a recovery plan (Section 5.09 of the General Conditions), the right. to review nnd respond to submittals (Section 5.22 of the Ocneral Conditions)) ihe right to require schedules, reports and other additional information (Section 5.25 of the General Conditions), and ln the event it has an instruction contnuy to the Contract, the right to chtmge tlte Con!rnct (Sections SAl and 5A2 ofthc General Conditions). 38. Zachry's allegations do not constitute a breach of any of the provisions of the Conll'acr by the Port Authority; 11u~ Port Authority's request that Zachry mitigate the risks to the Port Authority drilled shafts by revising and resubmitting the September 9, 2005 draft cutoffwaU design wa<> not a breach of Section 5.1 0 of the Contract or of Change Order 4; the Port Authority's withholding of liquidated damages was not a breach of the Contract; and the Port Authority's payment ofZachry'lllnvoices~ \Vhich Zachry characterizes as "falling to pay Zachry the money that it was pmiodicnlly entitled to be p!lid under the Contmc! as it has come due," was nota breach of the Contract. 39. Zachry is not entitled to recover u·om the Port Authority based on any alleged breach by the Porl Authority ofthe Contract because Zachry has not complied with all conditions prccudcnl It! its alleged right lo recover for such alleged breaches, :such as Zachry's failure to provide notice of such tlahns within the time, in the fonn, or to the person required by the Cnntract; including but not limited to the notice required by Sections 5.08, 5.18, and 5.42 of the C3onera.l Conditions. Zachry did not timely provide notice as required by the Contract with respect t' entirely~ requires that any such provMon be severoo fh.Jm the Contract, the balance of (he Contract enfbn::ed, and the stricken provision refom1ed and replaced with a valid pnwlsion. Spcciflca!ly, Section 3,12 provides that the }m re<::overing for lhe losses and damages that Zachry alleges. Sornc ofthcsc risk-allocating contractual provisions that bar ZaeJwy,s recovery include, but are not limited to: 16 a, Assumption of the riRk by Zachry for any lack of completeness ht the Wharf and Dredging Contnwt Documents, including the Drawings and the Specifications, an,d the risk of those documents not being sutnckmtly detailed and comprehensive, Contract, Oeneml Contiitions § 2.06. Zachry failed to timely raise v.ny cm1cems with the Contract Documents and cannot now oomptain about their comlition. b. A no-dnmages-for~delay or hindrant~e provision. Con!ract1 General Conditions § 5.{}7, Zaclwy cannot recover damages assuciated with delt\y in the Project or hindrance or its perfommnce. This provision precludes Zachry's asserted "exceptions}' o. No cnt!tlciw;mt to an Increase in the Conttact Price except undet limited circumstances. Contract, General Conditions §§ SA 1, 5.42, $.43 1 5.49 and 5.50. Zuchry did not thnely and properly assert a clulrn under any of those ptovisions. d. A specific and limited force majeure provision. Contract, General Conditions § US. No cntillemcnt to an extension of time except when the: circumstance conslHutcs art event of Force Majeure and ls on the critical path. Contract, Gcncrn.l Condilions § 5.08, Zachry has not established an event of.Force Majeut·e entitling It to uny additional tlmc. !.;, Tho det!nition of ConctuTentDeluy. Contract~ General Conditions § 1,08. No entitlcrn:ent to lU1 extension of t!me if tbere Is also an event of Concumm.t Delay. Contract} General Comliliom; § 5.08(b)(6), Zuchry caused Concurrent Delays 1llrLlter preventing it trout being entitled to tm extension of time.  f Waiver of claims for an extension of time by failure to timely and properly file a request for time extension. Contract, General Conditions § 5.08. Zachry £.13led to timely or properly seek any extensions oftirne. g. Waiver of claims for changed conditions or contract interpretations that are not timely and properly asserted, Contract~ General Conditions § 5.42. Zachry failed to timely or properly assert any claim for changed conditions or contract interpretations constituting a change to the Contract. The Port Authority has not modified or waived uny of these provisions 1md is not estopped from relying .on any ofU1ese provisions. Contract, G{meml Conditions§§ 3.09 and5.52. 42. Zachry is not entitled to recover from the Port Authority based on any alleged breach by the Port Authority of the Contract because Zachry foiled to meet the Standard of Care required in Section 1,37 of the Oe:neral Conditi:ons of the Wharf and Dredging Contact, which provides that Zachry shall use 11• • • , [its] best .skill and attention, ln a good and workmanlike manner and in the best and most expeditious and economical manner consistent with the interests of tl1e Port Authority, shall exercise the degree of care, sklll and diligence ln the perfom:mnce of the Work in accordance with an.d consistent with industry standards fm· similar circumstancos, shall utilize its best skill, efforts and judgment in :furthering the interests of Pmt Authority; and shall Lltmish eff1denl business administration nnd supervision." 43. Zachry is nol entitled to recover any damage..~ from the .Port Authority as a result of the Port Authority's alleged breach of the Contract because Zachry tailed to comply with its affirmative contractual obligation under the Contract to timely and accurately provide contractually required information to the t>o1t Authmity, including but not limited to, the l& infornmtionrequircd by Sections 1.37, 5.03 and 5.04 of the General Conditions, the progress of the work, und the Schedules for compl\lting the Work, 44. Zachry fs not entitled to recover from the Port Authority based on any alleged breach by the Port Authority of the Contract because Zachry is barred by the "first breach" doctrine because Zachry first materially brcuchcd the Contract, including but not lhnited to Sections 5.03, 5.04, 5.09, 5.10 (including 1.37), 5.14 and 5.22 ofthe General Conditions of the Conl'mct. 45, The Pmi Authority denic..(J that any oral statement purporting to change or modify the Contract Documonts is binding on eithe;· the Port Authority or Zachry. The Pori. Authority denies that any written statement purporting to change or modify the Co.ntrnct Documents; other Uum om; from the Chief Engineer that oompHcs with the express J)rovisions fur change in the Contract DucumentS1 is binding on either the Port Authority or Zachry. 46, The PurL Authority denies that Change Ordet' 4 includes as a term that a cutt>ff wall mw1t be used by Znchry to pctforrn its Work, and denies that Change Ordm· 4 ittclndes rmy torrn tlmt some pa11icular design of a cutoff waH must he mmd by Zachry to portbrm its Work. Zachry is not entitled to recover fi·om the Port Authority bused on uny alleged breach by the Port Authori!y of the Contract, as amended by Change Oi'det 4, as a result of troy 1nodifieation to Zachry's September 9, 200.5 draft cutoff wall design requested by the Port Authority. 47. Zachry is not entitled to recovc~· from the Port Autlwdty based nn any alleged breach by the Port Authority of !he Contract b<.~<.~ause Zachry did not pelform lts obligations under the Contract :in a timely fashion. Zachry d:ld not complete the applicable portions of the Work by Milestone A or the FiriHI Complulion dates required by the Contract Zachry did not timely and properly request extensions oftime of such dates. J9  48. Zachry is m:H entitled to recover an)' damages fi·om the Port Au01ority as a re$ult of tlle Port Authority's alleged breach of the Contract because Zachry failed to properly mitigate its alLeged damages. 49, Zachry is not entitled to recover any damages from the Port Authority as a result of the Port Authority's alleged breach. of the Cmltrnctbecuuse Zachry owed thort Authodly, Zachry had a duty to disclose the fucts lo tlm Port Authority; but \Vas delih~rately ~iilenr when 1t had n duty to speak. Zachry concealed such material infonnation, knmving that the Port Authority was ignorant of the facts and did not have unequal opportunlty to discover the facts, in order tn induce the Port Autlmrity to take a<.:tions (such as entering i.nto Change Order 4) or rcftain from taking actions (:mch as desisting Jrum either terminating the Contnwt or deleting the wharf extension from the scope of Zachry's work umlcr the Contract). In taking or refraining ii·om taking such actions, the Port Authority was !ndtJced by such concealment. The Pori Authority relied on Zachry's non~ dim::losurei and was injured as a result of acting without kn.owleuge of the tlnd!sc1oscd facts. Such behavim· by Zachry constit~ltcs fraud by .non·disclosm:e, and is a cotttpletc defense ru1d bnr to Zrmhry's claims in thts lawstlit. 52. Alternatively~ Zachry is not entitled to recov0r O:om the Port A\Jtliority based on any alltlgcd hreach by the Port Authortty of the Contmet bccnuse of Zachry's negligent misrepresentations. 53. Zachry is not entitled to tecover fHJm the Port Authority based on any ~I!egcd breach by !he Fort Anthorily of the Contract boomme Change Order 4 is an accord and satisf~mtlon of any "claims'> that Zachry had at that time that Change Order 4 was executed, AU prior Hclain1s'1 of Zachry were merged i.nto 1 sub:mx:m.:d by, and extinguished through Change Order4. 2!  54. Zachry is not entitled to recover from the Port Authority based on any alleged bretteh by !he Poti Authorily of the Contract because the damages sought b)' Zachry arc consequential damagewand thus barred by stat\tte and by principles of governmental irnmunily. 55. Zachry is not entitled lo recover fi•om the Port Authority based on tmy alleged brench by the Port Authority of the Contract because Zachry ratified the P01t A uthodty 1s alleged adio11s und inactions. 56. Zachry ls nol entitled to recover from the PQrt Authority ba.<;ed on any ailegcd hreuch by the Pmt Authority of the Conlrac! because Zachry waived the complaints it makes in this action and any right that il may have had to lodge a clain1 for the Port Authority's alleged breach of' the Contract 57. Zachry is not entitled to recover from the Port Authority based on any alleged breach by the Port Authority ofthe Contractbecause Zachry is equitably estopped from lodging any such claim for alleged }:treach of Contract. 58. Zachry is not entilled to recover irom the Port Aut110rity 1)ased on any alleged breach by the Port Authority of the Contract because Zachry is barred by its own inequitable conduct and acts of eoercion that threaten the larger public interest. 59. Zachry is not entitled to recQver from the Pott Authority based 0~1 nny allege.d breach by the Port Authority of the Contwct because Zachry i!l btm·ed by the doctrines of promissory t~»toppel and quasi-estoppel based on Zachry's aotion~ and inactit>ns. N N 60. Znchry is not tmtitled to. recover from the Port Authority based nn nny alleged breach hy the Port Authority of the Contract because Zuchry's claims arc bun-cd by the defense of release. 22  61. Zachry is not entitled to rec.over from the Port Authority bused on any alleged breach by the Pmt Authority ofthe Contract because Zachry's claims are barred by the defense ofpnyment Tho account describing and itemizing the payments made by the Port Authority on the Conlract (the breach of which forms the basis of Zachry's clnirn) is attached to this pleading, lnbelcd Exhibit A, ~md incorporated herein by reference, 62. Zachry ls not entitled to recover from the Porr Au1horily based on any alleged breach by the Port Authority of the Contract because ZHchry's ulnims arc barred by the defens-e 63, Zachry is not entitled to recover frorn. the Pori Authority based on any alleged broach by the, Port Authority of the Contract bconusc Zachry acted as a volunteer, voluntarily changing its position, not due to tiny forw or ather condnct by the Port Authority~ 64, Zachry is not entitled to recover fl'Om the Pmt Authority based on any afleged breach by tho Port Authority ofthe Contract becrmse Zn:chrts cl.aims lll'e burred by the defenso · of unclean hands. 65, Zachry is not entitled to recort Authority based on any alleged breach by the .Port Authorily of the Contract because Zachry's claims lite barred by Zachry's own bad fnith conduct, arbitrary and capl'icious acts and omlssitms, and condm;:( lacking auy reasonable basis, 66. Zachry is not entitled to r~Jcovc:r from the Port Authority because any dnmages of l.achry were cuus~d or C{mtributed to by its own breach of duty; fault, or misconduct, M the breach ofduty~ fault, or misconductof others tb1· whom Zachry il:l rcspunsible iu law. 67. Zachry is not entitled t(l recover fi:mn the Pmi Aulllority by virtue nf Zachry's treatment ofthe Contrm.:l as continuing and, in addition, Insisting that the l'ort Authority perform 23 the Contract, precluding any cf.aim by Zachry of any defense of prim· material breach, under the doctrine of election of remedies. 68. Zachry is not entitled to recover frnm the Port Authority by reason of Zachry's conduct that nctivcly interfered with (a) the wurk of Zrwhrts subcontraGlors, and (b) the Pod Anlhority's rights under U1e Contract, including Zachry's obligation to provide accurate and timely inforrnation, as mquireu by the Contract. 69, The Port Authority denies thnt it made any misrepresentations to Zachry. ln tbe allernutivc, to the extent that Zachry alleges the Pori Authority falsely represe11ted any mutter (either affirmatively or by non~disclosurc), any such defense is barred by Zachry's actual knowledge of faJslty. 70, Zachry is not entitled to recover from the Port Authority on the basis of any allt.1ged ~'pu~>S-through" claim. The aUeged injured party (a Zachry "aftl!iate" now known as Zachry Construction Corporation) did not exist at the time of the atleged breach by the Port" Authority ami was not injured by any action or inaction ofthe Port Authority, Further, there is no claim the nlleged h\iured party is entitled to assert against Zachry or for whfch Zachry Is llnbll;) thut forms the bnsis of the "posJHhrough" claint 71. Zacbry is not entitled to recover from the Port Authority on the basis of any alleged "pas:-Hhrong:h'' claim becrxusc Zachry assigned its obligations under the Contract to the "uffiliutc'1 in violation of Sections 3.13, Zachry and/or Zachry's parent company tm.tl...'· 74. The Port Aulhorily respectfully rese1·ves the right to file un mnJ.?nded answer in t11is Cause in the manner authorized by the Texas Rules of Civil Procedure, 75, COMES NOW the Port Authority and rcspectfillly Hsscrts this counterclaim fbr attorneys1 fees pursuant to Section 3J 0 of the General Conditions of the Contract, for which a filing fee has been tendered. JURY DElVIAND 76. T!w Polt Au!ltority hereby demands a trial by jury, PRAYER WHEREFORE; PREMISES CONSfDHRED, The Port of Houston Authority of Harris County; Texas, Defendant, prnys that tho Courl enter judgment that Plaintiff take nothing, that Plaintiff's claims be dismissed with prejudice; and that Defendant be granted judgment for its attorneys' fees and costs of court further, to the extent that the Court domrrnines that any provision of the Contrnct is urmnforccuble as written, Defendant prays that the Court reform such provision in accordance with the Contraol, and that Defendant be graute,d all other and fUJ1hcr relief: nt law or in equity1 to which Defendant may show itself enti lled.  Respectfully submitted, A~--~~~~ David H. Brown Of Counsel: 8rown & Kornegay. LLP J. Clark Martin Texas Bar No. 03109200 Texas Bar No. 13090000 2777 Allen Parkway, Suite 977 Kelly Hmt & Hallman Houston, Texas 77019 lOOO Louisiana1 Suite 4700 713.528.3703 phone Houston, Texas 77002 713.528.3701 fax Tel: 713.654.4600 Email: dbrown@bkJlp.com Fl1x: 713.521.5925 Email: clark.martin@khh.cnm Co .. Cm:Jnse1: Karen 1'. \\'bite Texns Bar No. 20274500 Set11 A. Russell Tex1ts BarNo. 24027943 VINSON &ELKINS L.L.P. 2500 First City Tower 1001 Fannin St. Houston, Tex~u; 77002 Phone: 713.7$8.2388 Fax: 713.615.5902 Email; kwhite@velmv.com Lawrence J. Fossi Texas BarNo. 07280650 FOSS I & JEWELL LLP 4203 Yoakum Blvd N 100 Houston 1 Tt!xas 71006 Ph N ":""J C:f) 'ti$ c. "'' t- t- ~· ''"' ~ t: t.> ~ § 28 - z ~ § <..> c Ci -::;1 ":) L":: ·~ v :!.  TAB 10 Excerpts from The Port of Houston Authority's Second Amended Response to Plaintiff's Request for Disclosure (CR46:13036-77)  Flied 09 Septemb&r 30 P4:05 Loren JackSon ~ District Olerk Harris county E0101J015531241 By! Wanda Chambers ZACHRY CONSTRUCTION § In tllo Disltict Cot1rt of CORPORATION, § § Phdxlliff § § v. § Harris County1 Texas § § TBEPORTOFHOUSTON AUTHORITY § § Dofendt1nt § 151st Judicial District 'rlill PORT OF ROUS'fON AUTfl.OlU'fY'S SECOND AMENDED RESPONS'E'l'O PLAINTIFF'S lU~QUltST l.i'OR DISCLOSURE To: Zachry Construction Corporation By rmd through lts attorney of record Robin C. Gibbs} Esq. Gibbs & f:ln1ns1 LL:P 1100 Louisiana, Strite 5300 Houston1 Texas 17002 C01v1J:SS NOW, THE PORT OF HOUSTON AUTHORITY '(the uPort Aut1tority")1 Defendant in the above styled tmd m1n1hered cnusct and pursount to Tnx. R. CIV. P. 194 files this its Second A1mmded Response to Platntlff'r.• Requestfor Disclosure, {a) The correct nam.es of the parties to the lawsuit, The correct name of Defendant Is Port ofHot1ston. Authotity ofii.m:ds CNtnty, Te~t.as, Dcfoodaut undersluuds that tlvJ correct na.rne of Plulnt:iff is now Znclu-y Industrial, Tnc.• fnn.nerly ktlow.t1 as Zachry* Conslrtmtion. Cm-pomtion.. 1t appears that the entity formerly 1mown as Zacht-y ConRtmction. Corporation engaged in tnu1sactions such that it no longer perfrmned the Work undet the Phase 1A Whruf und Dredging Conlrnct, witront the prior knowledge of EXHIBIT POOT Attl'fi(HU'l'f'l) SftOONi> AMKNDEU R~l'ONSl~ ro ZAClUW1S RltQt.IJU;l'f l!Oll. J>tSCJ:o~Ul\t~ Defendant and ill breach, of the Contract. Defendant has tlot had an opportunity to conduct discovery on this issue} and has only limited knowledge of the ti'ausactiorls. Defendant has no contract with the new entity that apparently is now lmoW'li as Zachry Conslrnctio:n Corporation. No entity has a right to mak--e claim against Defendan~ or to prosecute tbis lawsuit against Defendant, other !:han the emtlty with wh!eh Defendant originally contracted. None, except that Defendant maintains that tho entity against which it originally counterclaimed remains a party to this lawsuit and ia responsible for Defendant's attorneys' fees. (c) The legal theories and, in general, tho factual basis ofthe_Defemlaot's claims or defenses. !~..Qnse: The Port Authority's legat lheorios am pleaded in it~ 1'htrd Armuuletl Original Answer, as follows: The Pmi Authority is a political subdivision of the State of' Texas and in tllerefore protected by tho sovereign or goverruuentul immunity doctrine. 'the Port Authority is immune from suil tmd from llabUity for all em1sos of notion and damages except as provided by Subchap(et I ofClmptet· 271 ofthe Texas Local Government Code. Zachry is not entitled ttl recovery against the Port Authority for bxooch of the Contract because the Port Authority acted in accordance with tlio Contract provisions, inchtdingt lmt not limited to tho right to withhold payments (Sections 6.05t 6.17) 5.05, aud 5.06 of the General Conditions), the right of the Chief Engineer to dm:mmd n re0overy plan (Section 5.09 of the General Conditions)1 tho right tn review und respond to submittals (Section 5.22 of the General Conditions)) the dght to rcquiro schedules, reports and other additional information (Section 5.25 l'OR'l' AlJTllORIT\'tS SUCONii AMENDE\) Rl{.'ll'ONSWfO UctiRY'$R'I1:Qtll!lS'1' lISCLO$VRI!  ot' the General Conditions), and in tlte event it ha.~ an instruction contrary to the Contract, t11~) right to j}hangc the Cont:ra<:t (Sections 5.41 amd 5.42 of the General Conditions). Zachry's allegations do not constitute ll breach of any of tho provisions of the Contract by the Port Authority, The Port Authority's re,quost that Zachry mitigate the risks to the Port Aui:11ority drilled slu1fts by revising and re&'Ubmitling the Septembet 9~ 2005 dtaft cutoff wall desigi:I was riot n bxeach of Section 5,10 c>f tho Contractor ofthe Contract o1· of Chnnge Order 4; the Port AutlmrityJs withholding Dlliquidated damages was not a breach of the Contract; and tht~ Zacl1ry llle U'JOney that it was periodically entitled to be paid undcnhe Contract as itlms eome duet was not a hxeach of tho Contract. Zachry is not entitled to recu\ier iro.m tho Port Authorityhased ori any u11eged breach by the Port Authority of the Contract bt'ls request that Zachry mitigate the risks to tne Port Authority drilled shafts by 1·evising and .resubmitting the Soptomber 91 2005 dr<1ft cutoff waU design constituted a breach of Section 5.10 of the Gen~&nd Conditions {)t the Contract; [b) that tho Port Authority's request tbat Zoohry mitigate the I'isks to the Poxt j !'I \r) Authority ddtlcd slmfls by revising and rcsub:nrltting the September 9, 2005 d:ndl cutoff \vall t"" r~ f.., ·"1' ""1' design constituted a bteach of Chang(') Order 4; [c) thut the Port Authority's \v:ithholding of t ,_C E ,. liquidated damages <.~n.stitutcd a breach of the Conf.tact; [d] that the Port Antlunity1s instructicm i POR'i' AUTii0Rl'I'Y1S !{ltCONl'l 1\!\'lli:NDF:o iHtSl'ONSE '1'0 u.cmw's REQUESTFon mscr,osunu; in uccordance ·with Section 5.0.9 of the General Conditions of the Contruot explain to the Port Authority how Zachry intended to complete the Project within tho Contract Tbne or other exercise of the Port Authority's right under tl1e Contract constituted a broach; or [e) that the Pmt . . Authority breached the Contract, Section 6.02~ 6.05 or 6.17 of the General Conditions, or some unidentified provision of the Contract in its payment of or failure to pay Zachry's invoices; in whole or in part or within any particulm· thnet including any breach which Zachry chm·acterizes as "failing oo pay Zauhcy the money that it was J)Ctiodically entitled to be paid under the Contract us it hac; come due," Each of the :requir~rnents in the Contract that Zachry timely a:ud properly 11rescnt lts claims f<1r more money Dr more time is both (l) a substantive contractual condition proocdcnt to Zaclny' s right to recover money or additional time with respect to the Contract, 1md (2) judsdictional under the Texas Constltutio11; stall.Jtcs1 and cornm Zachry agreed to a Milestone A date and a Final Completion date. Zachry agt'ood to liquidat<."..d damages in the event it fhilcd to meet these dates~ Zachry failed to meet the 1\1itestone A date and tho F1nal Completion date. Jn additio~ Zachry failed to properly petfo:tm Work and the Pott Autlu;rity bud to J>tty unrJther contractor to correct ot mitigate harm caused by Zachrfs defective Work. The Pm·t Authodty>s withholding of moniGs fron1 :payments to Zachry is :-.upported by t:nforceah1e provisimm of the Contract> including tl1e dght to withhold payments (Sooti.on 6.05 of the General Conditious), the right of offSet (Section 6.17 of the General Conditions), tbe right to liquldutoo dm11agcs (Section 5.05 oflhe General Conditions); the right to actual damages in lieu of liquidated damages (Section 5.06 of the General Conditions), and tho Specification mu:l Ptoposal (seliing ftnih the ctmcept of reduction of the contract pdce for late performance). The liquidated damages witbhekl we~t~e a reasmmble forecast of just con1pensation because !:he Contract provided for liqttidatcd druuages in 1ieu of actual damages und because the Port Authority sustained actttal damages ill .an amount that was not disproportioxl!lte to the 1iq11k1ated •n II'\ '- 0 II'\ ::.. ~(). Zachry is uol entitled to recover any damages fi:om the Port Authority as a l'Cst:Ut of the t:l. j !"'I It') Port At1U10rity's alleged breach of the Contract because Zachry is 1.-nu:red by the oxprcss, r- 1> ""' f.'!") entbrceablc provisions of the Contract n·om recovering for the losses and damages that Zachry -;:!' st:::1 :;:: ·~ '" :; §'"' POI\T AtrfJlo!U'I'Y'S Bli:CONI) MmNOEIJ Rll1Sl'ONSI£ 'fO iJ 0 ZACHRY'S 1mQUES1' FOR rHSCLO!ltJRE 0 1l u:: 'B '\) (.) alleges, Sonm of these rlsk.-allocatitlg contractual provisions that bar Zachry's recovery include, but are not limited to: ~ Asswnption' of the risk by Zachry for any lack of oompleteness in the Wharf and Dredging Cont111ct Documents, including the Drawings and the Speci'fications~ and !he rlsk of those documents not being sufficiently detailed and oomp:rehausive. Cnnh·act1 Genetal Crmditions § ~t06. Znoluy failed to timely mise nny com:ems with the Contract Documents and cannot now complain about their condition. § 5.07. Zacbzy cannot reoover damages associated with do1ay in the Project or hindrru1e~~ of its perfo:rn.umoo. This provision precludes Zachry's assorted ~ No entitlement to an increase in tho Contract Prico exoopt undm· llmite General Conditions § 1.08. No entitlement to an extension of tlmo if theYe is also an event of Concurrent Delay. Contract, General Conditions§ 5.08(b)(6), 7-nchry caused Concurrent Delays further preventing it fro~n being entitled to au extension of time. PORT AU'J'UOJUTY' SSJWOND AMENDED lUt:Sl'ONSE TO 74\.CIIRY1S REQIIRST ~tor~ Ll!SCLOSUltll;  I} Waiver of claims for an extension of time by failure to thtl<>ly nnd properly file It reqm;st fbr tune extension, Crmtract1 General Conditions § 5.08, Zaohry failed to timely or J!topedy seek any extensions of tim~. ~ Waiver of claims fbr changed oonditiuns or contract interpretations that ru·e not timely rmd properly assorted. Contract) General Condittons § 5.42. Zachry failed to timely ot properly assert at1y claim fhr changed conditions or conu·act interpretations constituting n change to the Contract. The Port Authority has not modified or waived any of theso provisions and is uo1 estopped from reiying on any of these provisiooo.. Zachry is not entitled to recover from the Port Authority based on any al.leged breach by the Port Authority ofthe Contract because Zachry failed to meet the Standard of Cnre reqt1ired in Section 1.37 of the Genctal Conditions of~1e Contact~ wh~c11 provides that Znc1rry shall 11se ..... c [its} be.st skill and attention, in a good ttml workrmmlike manner and in the be.st and most expeditious and eoonon:dcal manner consi&'tent with the interests o~ th~ Port Au.thorlty, shall exercise the degree of care~ sknl and diligence in the performance t>f the Work it;~ n.coordance with and consistent with industry standttrds for sim.ilar citcurustauce~ort Autho:rit:ts alleged breach of the Contract bootmse Zachry failed to oori1JJ1y with. its affirmative conh'I\CL\tfll obligation under tl1e Contract to tlm PAG~7  information required by Sections 1.31, 5.03 and 5.04 ·of the General Conditiom>t 1he progress of the work, and tho Schedules for completing tho Work. Zachry is not e~titled to recover fi:om the Port Authority bused on any n11eged breaoh by the J>ort Authority of the Contract because Zachry is barred by the "fu:st breach'' doctrine because Zachry first materiallybr(,lac1ted the Cortlract~ including but not limited to Sections 5.03, 5.04,5,09 1 5.10 (including 1,37), .5.14 and 5.22 of the G·cncrat Conditions of the Contract. Tht;J Port Authority denies that any nrul statement purporting to change or modifY the Contract Documents is binding on either the Port Authority or Zrtchry. The Port Authority denies that any written stntement pilflJOrting to clumge or modify the Contract Dom1mc;-.nts$ otnel' than one from the Chief Engineer that complies ·with the expre{ls provisions for change in the Contmct Docun\ents) is binding on either the Port Authority or Zachry. 'l'he Port Authority dooics thai Change Orde~ 4 iuclttdes as a term that a cutoff wuli must be used lJy Zachry to perfMm its Work, and deuies that Chnngc Order 4 includes any term that sou1c purticulru: design of a cutoff wall must be used by Zachry to perform i~ Work. Zachry is not etltillcd to recover from the Port Autllodty based on tuly alleged breach by U1t~l'ort Authority of tlH> Contract, as nmcmled by Change Order 4) us u result of any modification to Zachry's September 9, 2005 draft cutoffwall design requested by the Port Authority. l.achxy is .11ol entitled to recover fh>m the Pmt Authoril;,Y based on any alleged breach by th~; Port Authority of tho Contmct l>ecause Zachry did not perform its obligations under the Contract in a timely fashion. Zachry did not complete the applicable l)Ortions of the Work by ..-. N I Milestone A or the Pina1 Complelion dates rcq\1ired by the Contrnct. Zachry did not tlmely and properly request extensions oftlme of such clato1:. l'ORT AU'J'!IOIU1'Y 1S SECOND AM.ENTJED llliSl'ONSB1'0 ZACHIW 1S REQUF})'Tll'OR ))]SCf,OSUR'll- PAGlt8  Zachry is not entitl<~d to recover any damages from the Port Authority a.~ a result of the Port Authorlty's alleged breach of the Contract because Zachry failed to properly mitigate its Zachry is not .z:ntrtled to recover any damages fipru the Port Authority as a result of the llott Authority's aJleged breach of the Contract because Z~chry owed the Port Authodty a duty of full disclosure under the law) which duty tlf fttll disclosure was breached by Zachey, Zuohcy is not entitled to recover rmy damages from the Po.ct Authority t\S a n~sult of tho Port Authority's a!legt~ breach of the Contract. bccuuac Z-achry oomnuttcd fraud and fraud in tile i:nduccmont. In cnrmection with entering into the Contract, and ut various time.~ during tho :pe:rfmmunoo of ita work \lllder the O::JlJlraot, including dtiring negotiation of Change Order 4l and during its :mootmgs and cmiver{;utions with the Port Authority abo11t schedll1iug in late 2005, Zachry made reprosenhtii(JnS ;.tension from the acope of Zachry's work under the Contract). ln taking o:r reti:ainiug :fi:om taking such actions, the Pmt Atlthorily wa.dty relied on Zaclu:y's non~ disclosure, nnd was h\iured as a result of a.ct!ng without knowledge of the undisclosed faots. Such behavior by Zachry c011stitntcs fraud by non~disclmmr~, nnd is a complete defense and b~t to Zachry's claims in this lawsuit Alttimativc:lyr Zachry is not entitled to recover Jhnn the Port Authority bused on uuy alleged breach by tl:l.e Port Authority of the Contract he¢auso of Zacbrts negligent rnisreprescntntions. Zachry is not entitled to rcm:rvcr ti·om the Port Authority based on any ul h)ged hreacl1 hy the Port A1.1thorlty of the Contract because Change Order 4 is an accord and satisfaction of any "claims)! that Zacl1ry lutd at that tiine that Change Order 4 was executed. AU prior "claimsll of j N ..,.., Zucluy wer0 merged into1 subsumed by1 tmd exti11guished through Change Order 4. l'Olti AU'fllO!U'I'Y 1SSffiCONOAMI£Nllg!) RESl'ONI>ltTO ZACJIRY'S lU!:QUES'r FOR nlSCLOSURE PAGI!.lU  Zachxy is not entitle-d to recover from the Pm:t AttthOlity based on any alleged breach by the Jtort Authority of the Contract because the damages sougbt by Zachry at'e consequential daroag1.-.s and thus barred by statute and by principles of govemmenta! immunity. Zachry 'is not entitled to recover from the Pm·t Authority based on any alleged breach by the 1)01t Autbority ofthe Contract because Zachry ratified the Port Authorlty~s alleged actions aoif inactions. Zachry iu not entitled to recover from the Port Authority based on any alleged breach by the Port Authority of the Ctmtract becmum Zachry waived the complaints it makes in th1s acGon and any right that it may have llad to lodge a clmm for the Port Authority's alleged breach nf the Contract, Zachry is nol entitled to recover from th('< Port Authority ba.'Jcd on HtlJ aUugcd breach by tht) Port Authority of tho Contract because Znchry is equitably estopped from. lodgi11g any such claim for alleged breach of Contract. Zachry is nr>t entitled to recover from the Port Authority based on tmy nllegcd breach by the Port Authority of the Co.ntract becautte Zachry Is bam;:d by its own. inequitable conduct und Zachry is uot eutitl.cd to rectWt1X fron1 the Port Authority based on &t\Y alleged breach by the .Port Authority of the Contract because Zachry is ban·ed by the doctrines of promissory Zachry is not entitled to recover from the l'ort Authority based on any alleged breach hy t11c Port A:uthorlty of the Conlract because Zachry's claims are ba:n:ed by tht' defense ofrcleasc. Zachry is not entitled to recover fwm the Port Authorlty based on any alleged brcfich by the Port Authority of the Contract beuatme Zachry's claims are barred by tlw dcfunsc ofpaYJ:Ue:J:lt, i>Oltl' AtJ't'HORtl'Y)S S&COND t\l\1-&NDEO RESl'ONS!t ·ro ZACHR\'1SlUtQUFSl' FOR l'nS(;!,QSI)lm  Tho accmml des<.:ribing and itemizing the payments made by the Porl Authority on th<~ Contrdct (the breach of which ibm1s the basis of Zachry's cluim) is attached to this pleading, labeled Exhibit A, and incorporated herein by reference, Zachry is not entitled to recover fxom the Port Authority based on any alleged bread1 by the Port Authority of the Contract because Zachry's claims are ban:ed by the defense of c>ffset Zachry is not entitled to recover fi:om the Pott Authority based on any alleged breach by the Port: AuthorHy of the Cont1'act because Zachry acted as a volunteer, voluntarily changing itH position) not due to any forcn or other conduct by the Port Authority, Znchry is not cnlitled L\l recover from tho Port Antborlty ba:;od un any alleged brcauh by lhe Pent Authority of Llm Contract bcoaxisc Zachry's c~ain1s are burred by tl\e defcmse of1melean hands. Zttchry is not ootitled to recover from the Port Authority based m1 any nllegcd breach by dte Port A:utltority of tl1<~ Contract becrmse Zachrfs claims ate burred by Zaohry1s owu bud faith condnc£1 arbitrary and ¢npdclous acts and omissions, and conduct lacking any rea~onable basis. Zachry is not 011titlcd tQ recover from tho Port Atti:hority because any damages of Zachry were caused or contdbut~d to by its oWJl breach o)" duty, Ih-ult, or misconduct, m; the breach of dtrty, fault, or misconduct of others for whom Zachry is responsible in law. Zacllry is not entitled to recover from the Port Authority by virtue of Zachry's trC".atmcnt of 1ho Contract as continuing and) in addition, insi~fng tl1at tho Port Authority pedbrm tho Contract, precluding any claim by Zachry of any defense of pdor matetinl brcftoh, under tho ' t'l \(\ doctrine of cl ection of remcdie.s. Zachry is not entitled to recovor from tho Port Authority by reason of Zachry's conduct thut U!.\tivoly intt:n:fotcd with (a) th" wot'k of Zachry's subcontractors1 and (b) the Port Authority's PORT AUT!lORlTY'S SECONJ) AMENOKO Rm:roNSft TO ZM.!Illt\')S lt!Ul'O,!!;S'l' !ttss-throughll claim, The alleged injured party (a Zachry "a:fi.iliate" now known as Zachry Consirnotion Cm1xn:atio.n) did not exist at the iimf> of the alloged breach by the :Port Autlmrlty ami was not injured by any actton or tnaction of tht: .Poli. Authority. !further, there is no claim the alleged injured l'art)' is entitled to assert against Znohry or for which Zachry is liable that forms the basis .of the. ''11ass~tlmmgh:" clait'li. ?;uchry is not ~:;ntitled to recover from th($ Pmi Authority on fu0c basis "f any alleged control of Zuohry in violation of 3.15> Zachry ceased to employ on~slte &"rrporvision in violation of 5.16, ltnd Zachry ceased self~performing any of the Work and engaged a subcontractor not disclosed to tho Port Authority in violation of Section 5.11 of the General Conditions. Alteruatively1 the Pmi Aulhority's .imrrmnity ~om suit and liabHity precludes Zachry from rocovoring damages for or on behalf of any other party or entity, including without limitation those Zachry seeks pursuant to its 1)elatedly disclosed and J)led •ro:;dmately 7,000 feet of wharf~ 380 acres of contnh1Ct: yu.rdsl multiple gate facilities nnd other irtft1tstructure and improvemeots1 including a ct·uiso tenuinal. The pl'ecise nature of' each phase an.d the tixning ofits construction depend upon a vnriety of factors, including availability of ftmds, envh·mlmental pcnnitting limitations, md the cl1anging demands of the Port Authority's cmtomt'!~. Phuso lA was the initia1 phasB for Bayport. The Plmso lA wharf was originnlly 1,660 linear feet. A 332~foot extension of the dock was latcl' added by Chat1go Ord<:it' No.4. In 2003, tho Pori Authority requested Competitive Scaled Proposals for its Phase lA \V:hnrf a:mJ Dredging Contract c·contractH). Zachry decided to I>tlfSUC tho work for its owu business pttrposest in an effort to move into a .n0w line p f work, mi!nely, lht7 marine construction business. Zac1n·y :mbmitted a response nnd actively sought the Contract from tho l1 ort Authority. In seeking the Contract, Zachry mnde many nmi varied repre~;~eutnliEl1 REIH'ONS!~TO /',ACl\ltY'S lmQtr~l' ltOJA D!SCLOSUlUl everything necessury to emmre that the Bnypott facility was constructed properly. Zachry promised th0 Port Authority that, HYour Vision is Om· Pnrposen; tT011osal) Zachry's p:roposal was selected as the preferred proposal and the proce-ss of negotiating a specific contract began. As a result of these negotiations, under the Contract, Zachry agreed to contractual provisions that assigned the dsk and responsibility for loss resulting from events and probLems that :might ruise during Zacl1rts work on Project. In effect, Zachry agreed that it could handle ru1d wot1ld boar tl1oso dsks. Zachry conveyed that the HZacley way" of doing business vrould minirulzc the possibility oftlmt risks might occ-ur. Modifications cont~ined specifically negotinted provision!.> providing additional benefits to Zachry for particular risks assumed by Zuchryt such ns au il1crcase of $2A million ovcrZucllry's ori&ri.nally proposed Contract Prl Ai'rlKN.Ol,:U !U!Sl'ONS!<;'I'O ZACHRY)S RKQU!!:S'f li'OR l){SCLOSUR!i: PAGElS economical manner consistent with the interests ofthe Port Authority, and would utilize its best skill. efforts and j\idgment in furthering the interests of Port Authority. This promise and the other '¥arious promifleil made by Zachry to the Port A11thorlty in order to obtain the \Vharf and Dredging Contract created a special contractual relatlonsh.ip, giving rise to a duty to disclose owed by Zachry to the Port Authority, (:liven this l'eiation.ship, Zachry's duties to tho Port Authority htoluded a duty of honesty, candor a:nd disclosure of matcdai f:aots, inchtdi.ng facts as to schedule mtd Zachry,s intent and hclictsr as respects matters impacting the Port Authoritts int tltoots. <~AreaN' by an interim Milestone Date ofFohmary lJ 2006 in order to aceommodate the axrlval of the four Chinese container eranes and to provide sufl1cicnt tin1c for the Port Authority to attendant cran~relatod. tflsks so that the wharf <:Vork by the tirne~ the ortme siJip l'ORT AUTfl~)ftl'!'Y'S SECOND AMEN.OltD RltSI:ONMit TO ucnRl''s llliQOteSl' 11oR nv>cr.osum~ arrived or else Zachry would lnter find itself working in tho wet. Ktihn represented to the Port Authority that Zachry \Vould achieve this objective. Ku..hn also was aware of the Port Authorityts concerns that Zaohry''s chosen soH freeze method of construction might place tl)e Port Authority's drilled shafts at risk and agreed that Zachry would address that concern. Before Zachry and the Port Authority signed the Contrnct1 KUhn convinced the Port Authority to lllso award the Phase 1A Contninm' Yard Contract to Zachry. This fnct so impressed ZachryJs San Antonio mamrgemeut that Zachry decided to remove Kuhn from l1is position of Project Mmmgor or Sponsor for the Contract and tl1e Container Yard Contract, hri.ng him back to San Antonio and Hssign him a business development role. Zachry conc~alcd thi.s decision from the Port Authority for weeks. In removing Kuhn ns Project Manager or Sponsor1 Zt~,chry removed n por,son wlio dirct:tly participated in per~::uading the Port Authority of Zachry's ability to perform tho Contract, who Zachcy tontoo uslmvlng the background and experience necessary to manage a project of this Zucbry's decisiotl to remove Kuhn loft tbe Contract without a Project Manager or conunittcd Sponaor. Zachry made this decision solely for its ow11 benefit, knowing th~tt there wns no other qmilifioo person within the entire ZachJy orgnnizat1ou who was uva11ub1<;l to perform the duties of Project Manager. Zachry was forced to quickly find a replacement for Ktilm. Zachry hire I'ORT AU'I'UflRI'rY'i! SltCOND AMENDED RESPONSE 'PO Z4CIID X'S REQUES'l' FOR DlSCl.OSUm£  supporting l:llld mentorhlg the small business suhcoatmotots. Anderson's !)Osition was that, if he had his wayt most ofthe subcontractors would be fired and Zachry would self~pcrform the Work. Anderson did not belio\'o in open lines of communicnttion and dialogue with the Port Authority. Anderson told his subcontrnctors that they were prohibited fh1m tfill'Jng to !he Port Authodty. Anderson did not believe in fostering a working relationship with the Port Attthority, Anderson considered the Port Authority and !he Consttootion Manager, CH2M Bill, to be 11Je "enemy." Anderson told his staff that he "wanted to sec all ofthe heads of tl1e Port's employees on stakes lining Port Road." Andt->rllon instructed his ~taff and snbcon.tractors to "cmsl1 the Port.t> Anderson beHoved in ''playing the claims gam.e." When Anderson lC!lmcd of the promises that Zachry lmd mude to the l)ort Authority to got t11c Ckmtmct, Anderson ridiculed Kulm for :making Voldemort," tho man in the Hurry Pottt.w stories who is so evil that his mmm cannot be spoken ulou:d, Anderson was :not truthfuL Virtually utt of this was conoouloo from thr> Port Allthority by Zachry, Althcmgh Anderson was the wi'ong choice for the position ofl1rojcot Marmgor1 Zachry put him in cha.t'ge of the Contract and left him in churgo and large1ytmsupcrviscd for eighteen months. The person at Zaelu)l who was Anderson's direct rcport1 Greg 1v!cVey1 did little to supervise or ooutrol Anderson. Fred Lucck1 to whom McVey reported, was 1axgoly uniuvolved. It was only at the insistence of the Port Authority that Anderson \vas <:rvontually removed from {j Oil t11o Projeet, after the harm that he caused became apparent. Ntwcrthcless) Zachry resisted &: ' (">-,l removing Andenmn from the Project, and although Zucht)l later told Anderson to quit or he if'; !'-< r·~ ·-r f>r'f would be fired. and told McVey that ho too Heeded to leave as Zachry hod lost faith in hun, "T t .c .,. ::: . Zachry}s corporate attitude even today prevents Zaclu:y from admitting that it mado a mistake in .f. E 0 E PORT AUTUORI'f\'~S Sll:CONU J\1\ the Port A11U1ority does uot bave the rig11t to select or prescribe Zachry's meth• and claimed it was entitled to an extension of the Co11trnct Time ~ even though :it was clear the anticipated concxct\3 material shortages v1ere not an event that would entitle Zac.hcy to PORT AUTHORITY'SSftCONll AMltl\'DED Rl!Sl'ONSU TO ZACIIRY)S REQlJES'I' I•'OR DISCLOSURE t'AGJ~23 an extension of the Contract Time. The nstmction of the wharf deck in the areas of !:lu:-.sc driltoo shafts until the repair work was completed. Zachry's work on the under-side of the deck itself \Vas defective in many urea~. /.(lchry engaged in tmdenleck patohiug to ropuir drilled shaft:.s1 bullnoses and voids tmder the devk, thereby limiting and delaying underdeck excavation. Zachry began cotrecting th1s defective work in, Jattl 2.005 and the repairs continued for 1nonths. All of tb:is repair work delayod and ldmlcnx:l Zaolwy' ~ txnderdeck excavation. l.achty wn.~ iate in providing required submitlais to tlJe Port AuUmrity for :review by the l'm:t Authority and its ccmsultants. Even whtm Zachry provided the submittalsl many of the stthmittals were iuoomplete or defective. This failure by Zachry caused delays in Zachry's: work Zachry mude the decision1 in. order to snve mo.noy, that it would retain its soil fr{leze subcontractor, RKK SoiiFxeeze, only to :fh:eze llt'ound three sides of th(l excavation area.. Zachry decided that it would selr~perfbtm the cutoff of the water flowing fi'Om the fourth side, that is, the land side. But Zachry took no action to deterrnin~ how much water: was flowing from the land siUc into the excnvatlon area. By early 2005, lLT(J{ Soi1Freeze and its consulhmt, GooEngincern, ·wore warning Zachry that Zachry must determine the amount of water that was flowing n·oru the land side into the excavation area and figure-out how to control it But Zachry did not do l!O until early November, 2005. ahnost ten mon1hs later. •'Ott'!' AU'!'llOIU'l'Y'S SECONI> AMf£1\DED RESl'ONSlt 1'0 ZACIJRY,S REQUF.S1' 1101\ lHSCLO.\iUHl': PAGEZ4  For almost n year, Zachry's dredge work- nn important component of its Work- was little to nonvcxistcnt. Zachry itself was not cnpubl~ of performing tl1e needoo dredging, so it 8!3bcontraoted that work to Continental Dredging, Continental Dredging's equipment was frequently broke doW!i, a11d 1 as a result1 dredglng fell far behind scbedu'Je, Zacluy eventually terminated Continental Dredgin& commandeered its: equipment) and filed in a ltlwsuit agalm;t Continental Dredging. Znchry titiled Lo timely implement its chosen means and methods ofltsing a freeze wull to oons!Tuct a frozen berm that tvou!d allow Zachry to \1\tcavate in the dry. Zaclu:y delayed until Febmary 24) 2005 to even sign its Stibc 70% of the l}ceze pipe failed und had to be replaced, It was not until mid to late October~ 2005, that Zachry comvlcted the task of removing and replacing the defective pipe. Moreover, although RKK insistod'timt before any part of the freeze wall was activated, Zachry must voucl1 fhr the p:t·opcr installation of U1e freeze pipe, Zachry insisted that RKK certify to the proper installation, Appnrently~ neither wo1.1ld certii)', As u result of these and oU1er omissions and failures, whic1l delayed Zachris work, Zachry fell so far 1'ehind sohcdttlc that it was too li1te for Zacluy both to tttiHze llie freeze wall and meet U1e interim milestone date tor Area A. As the result of its own errors and mistakes, Zachry made the decision to abandon the fteeze >vall, exoovate to the extent possible "in lhe dry," and then excavate in the wet. Zachry terminated RKK SoilFrc.mze's contract, and gave false oxplanations for this decish:m, Zachry e~1gaged in rut m'bi.tral:ion, a 1>rivate lawsuit, \Vith RKK SoilFreeze. at one point threatening the Pxesid~~nt of RKK Soil Freeze that Zachry would Zachl:y attempte<1 to conceal from tbc Pmt Authority the trutl1 as to Zachry's schednle problem$, m1~ what wa. AMY.N!)EO RESf!QNSg'l'o ~ACilRY'SlUtQUlli>l' !>'OR DfSCLOSURE 2006. At thatthno, Zachry conceived the idea of dividing the work into two compcments througb ~ gootoobruC~tl. engineer, OeoEngincers, about clestgnjng such a cutoff \'i.1all for Zachry, which would be paid fbr by Zachry as part of its oonstruction means and methods. Zachry instructed RKK SoilFroeze and GeoEngineers notto discuss the-se issues witl1 the Port Authority. Under the Contract 11s asvanled 1 the dock component oi'was comprised off'iVort Authority to award Zachry a change order that would result in the Port Authority paying $13 Million fbr a: cut-off. v,trul that Zachry needed .in any evoot> whefuer or not tho S<:lction 6 extension was udded to the Contract 11m.~, behind schedule to u. degl'ee uriknown to the ]>ort Authority, Zachry affranatively sought out the dock extension, and continued to mim:epresent thr<1ugh its schedule updat~ fhe true status and likely Mtlestmie A and final completion dnies ofthaProject. l'OHT t\O'JUORITV'S S!GCOND Al\11i)N.IiBD RI~Sl'ONSE TO U..C.IDU';S UEQtJV.'H'ltOR })li)Cl,OSURit  In ti1is time frame, Andy Anderson told RKK SoilFrecze and GeoEngineors to dt;)vclop a concept for a cutoff wall. Eventually, they developed lleveral <;.onccpts. Ouc concept was a b~lw~n the sheet pil~ walls, wilh. the frooz:ing surrotmding one pier on Row 13, Both RKK SoilFrooze and GeoEngineers told Zachry thnt the Pol:! Authority would have ccmoexn nbout any use of Ute soil ii·ceze methodology ncar t11e Port Authority's drilled shafts. TbnJ.:orn for fue Port Authority. Z.achzy told them to proceed with the 8-foot vtide sheet pile; frozen wall concept and that Zachry "would n.m it down the Port Authority's throat.>t Zachry instructed RKK. SoilFreeze and Goo Engineers not to discuss these i:;sues wltb the Port Authority or its consultants. As of AprilS; 2005, RKK SoilFl'oo~e and GcoEngineers had not created a design for tho proposed cutoff wall. GeoEngineers had no4 at that time, yetputchased fuo soflwure tlntt would allow it to develop the design. GcoEnginccrs had not determined how the cut-off waH would be installed or lnter removed. Indeed, at this time GeoBngi:neers had not concluded that a cutoff wall -would even work. Nonetheless) on April 51 200.5, AJlderson appeared at a Construction Coordination meeting and, without any prior urmouncementr minimized th(:l :pot1:'ntial impact oftt- cutoff wa1l concept ibr which Zachry then had no de.'lign. Anderson sketched on a white board, and :promptly erased, what Zncl1ry has since disingenuously culled the "exact design" or the "very desigtl" fbr the cut offwul11 when in fact Znchl:>; did not submit n draft de.<>ign until some five months later, AndersM represented to the Port Authority's consultants in. nttct1dance that nrrooLJngwas not an issue" nnd that 40 to 50 feet of the Row B piling would be unaffected 1'lythe freezing, This turned out to be inacv"tll:atc, glvG.n tho content ofthc subsequent cuHltt wall draft design. Zachry mado these statements in rut e:f:1brt to induce the Port AuU~otity to proceed with a I'Otl:f A\Y!'liQltlT\''S SltCONU AMENDED IU:Ult'ONSE 'l'O ZACIDn:')S ltEQ'UES'l' FOR l>lSCLOStiRll: chango order fol' tlt(} $13 Million dock extension. Zachry kn.ew that, if it told llte Port Aufhorlt:y the truth, it would not be awarded the 332•dock extension. On AprU 13, 2-005, Zachry submitted a price quote to the l1 or~ Authority for the oonstructiou of the l32~feet of wharf' t11at would comprise Section 6. In !:hat price quote, Zachry represented to the J>on Authority that "a freezewall ""' cutoff wall" would be used that would encompass only one ( 1) piling on row t•B" out of the lmnilreds of piers under the wharf deck, Zaclrr.is 1n'ice quote provided no other written detail about its preliminary> conceptual cutoff wall conoopt, and, if ihe cutoff wall bon~ nny ~·elatiouship to the preliminary ''-whiteboardcd" engineering and constructahlllty issues that would be dctalh:.d for the tlJ'Bt time only some five months lnle:r .in Zachry's September 12, 2005 submittal of a draft cutoff wul1 design. ln tmy event, at tht) Hme of the price quote, the Port Authority's consultants thought that Zachry might be able to n1itigatc the freezing rlsk tojust one ofthe piers. as long as whatxwcr fom1al submittal Zachry evennmUy provided for a cutoff wall design was acct'Ptable, ln tlH~ April 5, 2005 asked .for tho trnt~H.TI'Y'l) SECOND AMENDE» R!lSP()NSR TQ l;ACHIW'Sltll:QtiWJ'fliOR UlSCLOSUlU~ PAGE 29 representations to fue Port Authority was that Zachry wquld perform its existing work and the change order work such that Zachry would achieve an "uninterrupted flow ofwork,u After suln:nitting jts Aprill3, 2005 price proposal) Zachry stopped work on a cutoff wall dcsigt11 even tl1ough Zachry needed to use a outoffwnll whether or 11ot it was awarded the dock ext~ns:ion. A competent contractor would ha:v~ proceeded to develop a cutoff wall de.sign, timely provided the design to l11e Port A11fuority and its consultants, and worke(t through the any concerns of the Po1't Authodty or its consultants to arrive at a solntion. Zauhry now makes the specious clai111 that the Port AuiliorJty had tm obligation, after the April 5, 2005 meeting to; [1] stoll the constrnction process and, spend hundreds ofthousauds of dollars re-designing tho Port Authority's facilities in order to make the design of the facility comport with Z~td11y's potentiul method~ and means of cnn~iruction; ~md [2] spend the time nnd money to ret~in commttants to revi(;lW the preliminary~ white-boarded concept. Howe'Ver; under the Contract, Zachry had the obligation to utilize methods and means of constl·uction that comported wilh tho Pmt Authority's design 1 not the other way aro1mcl. Moteover, if Zncbry wished to seek a c1:iangein the Port Authority's desigtt> e,g., lengt1teuing the drilled shafts, it was Zachry's <>hligation to submit the pro1x'sed change to the Pol't Authority~ which Zachry did not do. Zachry n1ak('.S this false claim to conceal the fact that Zaclny misrepresontcd Uw facts to ilie Port Authority during the April 5, 2005 meeting about a proposed C\ltof:f wall, 1md the fact that Zachry wrongfillly delayed action to develop the cutoff \Vall design tor the Port Authority to review, Throughout tlte period of time extending from late April through mid-August of 2005, Zachry repeatedly represented to the Port Authorily that the design for a proposed cutoff wall PORT AUTtmttrn''S SECOND AIVlENOlW Rl!Sl'ONSE TO ZACUltY 18 fU:QIJl!:S'r .li'OH DISCLOSUJU1  Wt:IS in progress. Jn fact, during this sru.nc timeframe, Zucl1ry had not authorized RKK. SoiJFreeze and Goo Engineers to proceed \vith the creation of a de-sign. OnMay 181 2005> Zachry submitted a revised quote to the Port Authority of$12,572>000 tor the 3321 dock extension, Once again, ln spite of the many uncertainties and unknowns surrounding Zachry's use of the fh:eze\vail and, Ha freezewall- cut off wall/' Zachry expressly represented to the Port Authority tlntt Zachry would achieve .mi "nu1nte1'mpted work 1Jrocess." Ouce ag<•i:u.. Z\ichry expressly Jepresented to lhe Port Authority thut Zachry wonld utilize Zachry's ''cu.u.ent constmction method.'' Once ngain~ Zachry expxessly represented to the Port Authority that "a frew;,;ewal!- cutoff wall'' would encomp.ass only one "B'' ro1v pier. Zaduy did not articulate any schedule concerns~ or impose any time limit on the Port Authority's uc.ceptanoo of the quote, and provided no ftl\i:her detail as to the ·prelitninru:y~ conceptual. ru1d unsubnlitted On Jt!ly ll) 2005, Zachry sent a letter to the Port Atttholity iu which Zachry for the first time oftbred cerLain important clarifications and additions to i.he change o:rdcr being negotiated. Zaclu:y>s !otter oruitted menticm of the still W.1S\ibrnitted 11desig,rt" for Pa freezeM'IU ~ cut off wallt Z."tdtry stated that pricing wus based on HZCC having a Wol'king design ~md dr&wiugs for drill shafts no la.ter thtm A11gu.st 12, 2005'; and nzcC having a workiug design and dtawiugs fo1' tho Wharf Deck no later than November 25, 2005, 11 Prev:Jously1 .Zachry :hud not assorted any such conditions. In its July 11, 2005 letler~ Zachry sitp..ply stated ib.at if tho Port Authority met r.J t;[} ., tbe two mile.qtones enum<'rated above; then Zachry would meet fue modified date ofFebmary 15, £" ' 01 2006 for the area required for Milestone A and that Znchry would meet the final cornpletion date •t; ('-> I" ,.., ·~ of June l, 2006 fbr 1h.e original 1,660 f~et of wharf (i.e., Sections 1~5) and the nevt final ~ completion date of July 15, 20()() fhr the 332 feet of wharf (i.e., Seotion 6), Zachry e);:pressed no PORT AUTUOlU1Y'S SECOND AfliillN()ED MSI'ONSI£ TO ZACJI:RYt$ ttEQUES'l' FOn DISCLOt5Ull.B PAGE31 other schedul~ or timing cooce.rns. The Poit Authol'ity met the two deadlines expressed by Zachry in its July 11, 2005letter. On July 25) 2005, the Port Authority Commission approved Change Order No. 4, and on Augnst 8, 2005, the Port Authority sent a leiter to Zuchry stating) "This letter is to serve notice to ZCC ofPBA's intent to proceed with this change at the agreed upon cost and scope of work., The next day, Zachry commenced perfimning the work tmder.· Change Ordel' No. 4- and the Pol't Authority becan1e obligated, as Zachry's management uuderstoo~ to pay Zachry for that work. The ·Pott Authority noted tbat the Change Order had been approved by t1m Port Authority Commission in the nmount of $12,962}800 1 that the Change Order wm1ld be in Zachry's S~u1 Antonio office lJY AuguRt 1.01 2005 for execution, and that the Change Order i.%s baing expedited by the Pmt Authority, On Aug·ust 91 20'05 lhc Port Authority scn:t Change Order No. 4 to Zachry1s San Antonio office. Zachry•s belate~ madc·tor~litigation contention thnt the Port Authority took an unreasonably long time to decide to award the change order Worlc to Zachry under Change Order No. '4 is fa1so. In Jeality, ihc;Y amount of thne required to enter into Change Order No. 4 was reasonable. Th.erc were xnany dis(,"Ussiom.; bctweel). representatives of the Port Authority and Zachry concerning the logistics of the proposed Change Ol'der. The extension (i. (<,,.Section 6) was not ever1 desig!:wd when Zachry mtd the Port Authority began discussion of the proposed Change Order, and Zachry was a\Vai·e of this fact. lJ,ort Authority Commission approval was req\lirr.d to proceed with the design for the new Seviion 6 and then SectiOJl 6 had to be desigLted. The Port Authority and Zachry then ncected to negotiate the tenns of a Change Order and1 if agTe~mcnt wus reached~ tho llort Authority Gomm.isslon would then need to approve the. Chango Order. PORT AUTliORlT\'}S S!CCOND AMI~NDEP RI!SPONSJ!: 'l'Q 'l'.iACilltY'S lmQUES'J' FOR !llSCLOStfltE  ' ' Zaclu·yts April 13 t 2005 pdcc quote was just that - a price quote, wl1iclt the Port Authority hud no obligation to accept. If Zachry thought it took too long to agree upon tem1S for a change order1 Zaohry had no obligation to accept the change by signing and binding itself to C!:nlilge Order No. 4, But Zachry did so, foreclosing any such complaint On August 29, 2005, Zachry finally signed Change Order No, 4 ami its attendant Scope, Tune and Price Modifications, Zachry signed Change Order No, 4 and the Scope, Time and Price Modific-ations without a.ny reservations of rights, Without any cmiditions or lin1.itations of any typo) and \vith complete knowlooge of tho Length of time it took to flualiz.e Change Order No. 4, and vlith CZltnplete knowledge of all of the events and actions that \Voutd be teqnirort of Zachry by Chango Order No. 4 and the ncco1np!lllying St::ope, Time and Price Modificalion.et Change Ordel' No. 4, (J1' as a tC.'Rtlt of Hie changes req).lked of Zachry to perform flm change spccifitJd hy Change Order No, 4~ or changes in the mctl10ds that Zachry contemplated with respect to its original work l.ltldcr the Contract as a result ofthe wodc agreed to in Cbaugc Order No. 4, were subsumed and pxecludcd by Change Order No. 4 and the accompanyittg Scope, Time and Price Modificatioos. Dm'ing t:he negotiations for Change Order No. 4, Zachry lmew Umt it conlcluut Hchieve tht1 dates it was ugre~£lng to in Change Order No, 4, namely; completion of Area A by February this Information fi:om the Port Authorityt internally discussing when to come cle!lll yvith the Port Authority~ but umvilling to speak tmtlrt'ully until it kiie\v 1vhether t11c Port Authority would award Zachry moro work. Had the Port Authority !mown the truth, it would not have entered Change Order No. 4, In fact, Zachry misrepresented to the Port Authority during the l!OR'r Atrl'!l0tU'l'Y1S SUCONl> AM.Ki'~S}~ TO ZAcr!JlV1S ltEQUKST FO!t msCLOSUl~E negotiations what Zachry could accomplish. Zachry did so to induce the Port Authority into granting the change order work to Zachry, so that Zachry would be paid $12,9 Million fur a task that Zachry needed anyway. rt was not until September 121 2005 ~ aftor the Port Commission approved the awurd of the Change Otder W~rk to Zachry, after the Port Authority issued ita letter for Zachry to proceed vvi.th the Work, n·fter Zachry in fuct commenced the Work, and after Zachry executed Changtl Order No. 4- that Zachty first submitted any details of a draft design fbr a cut~off wall to the Port· Authority's Construction 1v1ana,gcr, CH2M Hill. This was GcoBnginoors' Sc.,"}Jlcmbcr 9, 2005 draft c~toffwall design. Za.cluy pleads that the design that Zachry submitted to the Port Authority on September 12) 2005 wus "consistent with its prim· description of the frozen cutoff wa1V; This assertion is false. In comparison to the dr~:~ft. design S\tb;rnitted on Scptcmbt\l'12t Zachry's prior explanation to the Port Authority as to the cut..ot't' wall was misleading, Specifically, the September 2005 submittal showed a nortb!sonth cutoff wall that laterally froze far n1ore than the one ''Bn l'OW pier tmd fi'OZe to sigtliflcantly greater depths than had been represented by Zachry in connection witl1 negotiating Chrmge Order No. 4. Znchty's September 12, 2005. submittal rcqt1ired free:r.ing the soil around up to 23 oftho \"'' J:fQR ))JSCLOSUHE PAGE34  The Port Authority's Constructio.n Mm:mger on Sc1ptember 14~ 2005 fonvaYded the J subn1ittal to Jefl' Ely of CH2M Hill to cormnence review of Zachry1 s draft cutoff waH design, Shortly thereafter, Hmrleane Rita threatened the City of Houston and the Project site, resulting in a 9-dny extension of time later being granted to Zachry. On September 28) 2005, Zachry's frozen soil wall designer, OeoEngineers, submitted a supplemental ri1omorandm:n containing Incorreet assumptions, thus heightening CH2MHi11 til concerll as to whether Zachry's draft crutoff wall design placed the Purt Authority's drilled shn:fts at risk. On October 31 2005 ·~more than a wGl?k before thel'm:t Authority's October 11m "revise and restibtnit" response to Zachry's sttbmittal of the draft cut~offwatl .design -w Znchry disclosed it:; inability to mee~ its Bmwlin11 Schedule, Specifically} Zaclny projected mittf>inrt fhe Milestone A date by 35 days, despite havh1g agreed to the February IS, 2006 Milestone A date only a monU1 b<:fore~ when Zachry signoo the Change Otder; In its pleadings, Zachry clmracletizeB the Port Authority's October 1111\ respQns0 that Port Authority's wharf: us (ibait and switch.n By this accusation, Zachry accuses the Poxt Authority of conduct committed in fact by Zachry. Thus, as patt of Zachry's Hbuit-mul-:swiich" strategy, nftet Zachry knew the Port Authority was bound to inw Zachry almost $13 Million for ~/!\ Chunge Order 4. Zachry submitted its so-called ' 1August* pxogress schedule s!~owing that Zachry lr":,i '- q \(", could not complete Area A tmtil March 22, 2006, 35 dttys aft0r the February 15, 2006 date f"\ 1;.J (II) tJ Zachry had corrn:nittcd to meet in order to obtain the dock cxtensiotL lfZacbry hud disclosed c. • 0! \(\ during ncg{)tiation ofChunge Order No, 4 that it intended to freeze th0 soil ru'Ound multiple piers r::::· 'T closer and at great0r depths than Zachry had represented in connection with negotiating Change '"k:" 'if Q ii i ., "* 8 E :s l'QRT AUTtlORlT)! 18 Sr~CONO <\i\i' J:IOit l)lSC!.OSUltli:  Zachry knew at the time it decided to abandon the .fretr.te wall that the changes to the draft c:uto:ff wall design needed to mitigate the risks to the Port Autl1ority's drilled shafts could have been a.coompHsh6d relatively quickly and simply. Also1 Zachry could have ofiered an explenation as to how Zachry's draft cutoff wall design 1vould protect the drilled. shafts. Zuolll:y did not attempt to implement either an available alternative cut~off wall design or to provide an (~xphmotion aiiempti:ng to Justify tho Soptrtmher 12111 design. As a result of tho Port Authority's October 14, 2005 reqt1est fbr a recovery plan~ Zachry tor the fir~t time attempt11d to prepare realistic schedules, Tlmse schedules) printed out by Zachry on or around October :31 and Nlwember l, 2005, almwed thatif7.achry continued to use learned that t1l.tl delivery of the crru.1o ship oould not be delayed thut long, Zachry also loomed Umt the Port Authority cxpectt'rl Zachry to constn1ot thl':l faclHty tllat Zacllry bad to agreed to construct, that li'l, that the Port Authority was not going to accept a dock as tu whfoh Zachry performed only pa.rt of the agreed work by l>erfor.tning only part of the agreed excavation. Also; in this time .frmm~, Zucluy's efforts to rocrce its subcontractors to mako false statements about the unavailability of obillers, in order to obtain un extension of the Contmct Tim.e, had failed. At the same timJ31 Zachry learneq it would take longer to f~eeze.down and then thaw tho main freeze wall than Zachry had u,ss~l.t1e Zachry did not state that Zaciu·yts decision to abandon. use of !he main Ih::c-.cc wall was caused by the actions or inaelions of the llort Authority. Znehry's hybrid CO!:tSlrnction method (Ptun B) wns :not properly engineered or scheduled. In fact> Phm 13 did not work within the time frames represented by Zacbzy. When Zachry 1s altern..~tive lllan l3 tumed out to require more time und expense than Zachry hoped, Zachry sought to bltune the Port A1tlhority for the resulting cost overrun. At vnrious times in its Work under tho Contra<:11 Zachry proposed changes to the Plans and SpeoH1cationR that were not ibr the Port Authority's advantage tmd prcscnl:ed risk to the f,acility but wore tor Zachry's own benoflt ~~ in order to make Zachry's \Vork easier> m· to reduce tho scope of tho Work; or to reduce. the cost to Zachry of the Work. Some of the changes would have resulted in tlw Port Authority receiving Less Mdcr t:ltc Contract than Zachry lmd agreed io l'OR1' AUTHOlUTY'SI:!ECONO AMRNDliD rutSPONS!i:TO MC~RY'SlU~Q~IJ£-~'1' FOR DlSCWSURR provide. These proposed changes were not for the 'benefit of the Port A'nthoti.ty. The Poxt Authority expended substantial time and effort analyzing some of these proposed changes in an ' oftbrt to respond in a reasonable way. Throughout its Work under the Contract and exte,nding into October of 20061 Zachry ~JXe<:uted partiaL releases in r the Contract. The Port Authority has withheld reasonable an1ounts, calculated based upon tJu~ cost to correct the defective dredging work and its consequences fron1 payments mude tq Zachry to justly compensate the l)ort ,, Authority for actual loss suffered as a result of the defootive work. Tho Port Authority is entitled to recover attorneys• feel§ incun:cd in defending against Plaintiff's claims. The Port Authority hm1 produced docttm(mts showing its aHorneys' ibes accrue<:! through March. 20091 and has designated an exp0rt who has submittetl reports regarding ~\lOR'!' AOTllOllfl'X'S St<:COND AMENDlm RESl!ONSE TO Y.AClill\' 1j,HUCQUEf:iTFOlt l>ISCWSOR'lt  l . the Port Authority's a.ttorneys' fees. The fnll amount of the Port Authority's attorneys 1 fees wilJ not be know until ihe trial of.this :matte-1·is near conclusion. (e) 11xe nmne, addnbss1 altd telephone number of persons having knowledge of relevant fucts 1 and a brief statement of enoh identified person's cormeGtion with U1e case. Response: Advanced Technology Science Englneedng Research eATSER") 1150 Richorest Dr. Houston, Texas 77060 Phone: (281) 999·9961 McKinney, Gary- Lead Inspector CenterPoint Energy Galveston, 'l'exas l)none: (409) 765-4086 Cell Phone: (281) 382-8578 Maxwell, Mike - CenterPoint emvloyee with whom Zachty communicated regarding electrical reqtlirements for freezewa!I. Mr. Maxwell may be contacted through CenterPoint's attorney> Ms. Judy Liu> at (713) 207~5465. · Cl~T?)Vl H1H 7600 WostTidwe11 Road Suite 600 Houst-on, TX 77040 Phone: (713) 462~0161 Fax: (713) 462-0J 65 Bycre> Ron - E11ginecri:ng Doslgu Mru1agerl formerly with CH2M Hill, now believed to be with 1V1offatt & Nichol in Vancouver Curtiss, Srevc ·- Co!)struqtion Manager, ibrmody with CH2M Bill, :now believed to be with Parsons Brinkerhoff in Virginia Ely, Jeff·- F.ngtueering Ptojeot Manager JoJ:mson, Bob- Program Manuger, formerly with CH2M Hill, now believed to be with Klotz Sethness, Doug --Program Mru1ager l•Olt'l' AU'l'HO!UTI''S SECOND t\.MENlli;)) RESPONSE 1'0 ZACHRY'S REQt.lf:~l' XtOll. DISCLOSU!tE PAGl?,4l  TAB 11 The Port of Houston Authority's Objections and Responses to Zachry's Fourth Set of Interrogatories and Fourth Request for Production (CR46:13105-16)  CAUSE NO. 2006-72970 ZACHRY CONSTRUCTION § IN THE DISTRICt' COURT OF CORPORATION, § § Plaintiff § § ~ § HARRIS COUNTY, TEXAS § § THE PORT OF HOUSTON AUJHORITY § § Defendant § 151 ST JUDICIAL DISTRICT T UE PORT OF HOUSTON AUTHORITY'S OBJECTIONS Ai~ D R ESPONSES TO ZACHRY'S FOURT II SET OF INTERROGATORIES AND FOURTH REQUEST FOR PRODUCTION TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW, Defendant, The Port of Houston Authority (the "Port of Houston"), and respectfully serves its Objections und l{esponses to the Fourth Set of Interrogatories t to install fenders: estimated as $478,450.00 • l'ailure to complete clearing and grubbing on the South side of Port Road: $25,200.00 (to be deducted from amounts due Zachry per agreement with Zachry) • Deficient crane rail installation: inspection cost S7,460.00; future cost unknown at this time • Defective striping: approximately $180,000.00 o Deficient dust plan: approximately $10,000.00 • Cost for Work outside of normal hours: at least $73,536.22 C'l • Investigate means of removing soil from under wbatf deck: at least $24,900.00 'roject and the Container Yard C'l project. A portion, which can be detennined from the documents produced in discovery, is associated with the Zachry caused delay on the Phase l A Wharf & Dredging Project. Zachry also caused the Port of Houston's engineering department to expend ao additional approximately 3,299 man hours on the Phase lA Wharf & Dredging Project from August 2006 through Junuary 2009, which represents an expense to the Port of Houston of $220,044.98. Other Port of Houston personnel were required to expend additional time on the Phase I A \Vharf & Dredging Project as well, but do not keep track of their time, so a readily quantifiable amount representing the additional increased expense to the Port of Houston on the Phase lA Wharf & Uredging for their time is not cummtly available. 5  In addition to the additional expense incurred on the Phase 1A Wharf & Dredging Project for extended personnel time, the time spent by the Port of Houston personnel on the Phase l A Wharf & Dredging Project during this time period would have been spent on other projects, resulting in additional losses to the Port of Houston. These losses of are difficult to quantify. Zachry's failure to timely complete the Work of the on the Phase lA Wharf & Dredging Project precluded Porl of Houston customers from using the Bayport Tenninal Complex as soon as they otherwise could have. The steamship lines that moved from Barbours Cut Terminal to Bayport collectively increased container volume from 77,586 vessel lifts in 2006 to 102,413 vessel lifls in 2007 (an increase of 32%). At the same time, steamship lines remaining at Barbours Cul Tenninal filled the void left by the relocation of can·iers to Bayport, and Barbours Cut Terminal <:ontainerizt::d cargo still incn::ttsed by 3% over the previous year. The Port of Houston believes that the same full capacity use would have occurred if the wharf had opened on time in July 2006. Thus, the Port of Houston lost over six months of cargo resulting in an estimated $620,000 decrease in revenue as a result of late completion of the entirety of the work. In addition, when the first customer began using Bayport, the customer leased a portion of the container yard. The Port of Houston believes that it would have leased tht:: container yard earlier had the project been completed on time in July 2006, resulting in a loss of lease revenue of $210,000. BC(;ause Zachry did not complete the dredging in a timely manner using mechanical means, Zachry was allO\'led to utilize hydraulic dredging in the fall of 2006, after the project completion deadline, to complete the dredging so that the Port of Houston could utilize the facility upon Zachry's sufficient completion of a portion of the wharf (albeit still incomplete). The estimated h :;I, t": c.. v-. v-, 1- 1- "' r'": "'<:; ..c z ~ :::; I1 c ~ -o ·-;:; :.;, 0 i:~i 1:--'  STATE OF TEXAS COUNTY OF HARRIS Before me the undersigned Notary Public, personally appeared Mark E. Vincent, who, being first duly sworn, did state that be is authorized to sign these Objectious and Responses to Zachry's Fourth Set of Interrogatories on behalf of the Port of Houston Authority, that he has read the foregoing answers to the Interrogatories and that the facts stated therein are based upon tlle information reasonably available to him or obtained from persons thought to be knowledgeable with respect thereto, and are true and correct to the best of his knowledge, information and belief. Mark E. Vincent Sworn to and subscribed before me this ~ay of July, 2009. e ROSA L. VILlELA Notary Publ!o, Sll!IB of Taus ~ Commlaslon Expire• FEBRUARY 20 2012 C"l C"l  TAB 12 Defendant Port of Houston Authority’s Proposed Draft Jury Charge filed September 9, 2007 (CR43:12401-20)  Filed 09 September 17 A 11 :52 Loren Jackson - District Clerk Harris County ED101J015517175 By: Wanda Chambers CACSE NO. 2006-72970 ZACHRY CO);STRLCT!O); I"\" THE DISTRICT COCRT OF CORPORATIO'-:. Plaintiff v. HARRIS COl0:TY. TEXAS THE PORT OF HOCSTO?\ AUTHORITY. Defendant 151 ST JUDICIAL DISTRICT DEFENDANT PORT OF HOUSTON AUTHORITY'S PROPOSED DRAFT JURY CHARGE C0\1ES :\OW. Defendant THE PORT OF HOUSTO:\ AL.THOR!T'{ (the "Pon Authority"). and files its preliminary proposed draft charge of the Court. A copy of the Port Authority's preliminary draft charge is attached hereto. The Pon Authority e:\pressly reserves the right to change. revise. add to. and:or delete instructions and/or questions as it may deem appropriate. \lorecl\er. by submitting this preliminary draft charge. the Port Authl)rity i:; nQt admitting that the attached questions and 1or instructions should be submitted to the jury and is not admitting that there is any evidence to support the submission of the attached questions and 1or instructions to the jury. The Pon Authority expressly reserves the right to assert any objections and to make any requests (including. without limitation. no evidence objections) to the charge submitted to the jury by the Court.  Respectfully submitted. VI-:\SO~ & ELKI?\S L.L.P. is! \Iarie R. '{ eates Of Counsel: .\larie R. Yeates .1. Clark :Vlartin Texas Bar No. 22150700 Texas Bar No. 13090000 Karen T. \\l1ite 1'-ELL Y HART & HALL\'lAN Texas Bar No. 20274500 1000 Louisiana. Suite 4 700 Bill Sims Houston. Texas 77002-6760 Texas Bar No. 18429500 Phone: 713.654.4600 Seth A. Russell Fax: 713 .52!.5925 Texas Bar No. 24027943 E-.\lail: clark. martin/a khh.com 2500 First City Tower 1001 Fannin St. Hougon.Texas77002 Phone: 713.758.2388 Fax: 713.615.5902 Email: k''hite avel:m .com bsims avdaw.com srussell avela\\ .com Lawrence J. Fossi Texas Bar No. 07280650 Fossi & Je,vell LLP 4203 Yoakum Blvd .. Suite 100 Houston. Texas 77006 Phone: 713.529.4000 Fax: 713.529.4094 E-mail: lt I. 2008: Answcr:S- - - - - - - (iiJ Sustained on or after January I. 2008: AnS\\er:S- - - - - - (b) the amount owed. if any. to Zachr) tor change orders or additional \\Ork Zachry is directed to perform by the Pon in connection '' ith the Contract. (i) Sustained betore Januar) I. 2008: Ans\Yer:S- - - - - - - (iiJ Sustained on or after January I. 2008: Answer:S- - - - - - Ifyou anS\\ered with any amount in Question No. 4(a)(i). 4(a)(ii). 4(b)(i) and/or -1-(b)(ii). then answer the corresponding subpart in the tollowing Question. Otherwise. do not answer the following Question. Question :\o. 5 \Vhat percentage of the damages. if any. t\.!und by you in Quest ion -:\ o. -1-( a)( i). -1-( a)( ii ). ..J.(b)(i) anctor -1-(b)(ii) above \\ere delay or hindrance damages? AnS\\er each subpart below '' ith a percentage fl-om 0°/o to I 00%. Do not divide l 00°'o among the tour subparts below. but rather anS\\er each subpm1 separately by considering a percentage up to and including I 00% for each subpart. The sum of the answers to the four subparts below may not total more than 400%. (a) the balance due and owed by the Port. if any. including any amount owed as compensation tor increased cost to pertorm the work as a direct result of owner-caused de lays (il Sustained betore January I. 2008: Answer: _ _ _ _ _ % as to delay or hindrance damages ( ii) Sustained on or after January 1. 2008: Answer: _ _ _ _ _ ~/o as to delay or hindrance damages (b) the amount owed. if any. tor change orders or additional work Zachry is directed to pert\xrfl by the Port in connection'' ith the Contract. ( i) Sustained before January I. 2008: AnS\Yer: _ _ _ _ _ % as to delay or hindrance damages (ii) Sustained on or after January 1. 2008: Answer: _____ ~/o as to delay or hindrance damages  Question No. 6 Did the Port fail to comply with the Contract by withholding, fi·om amounts invoiced by Zachry. any of the tollcm ing'? In answering this Question. consider all the provisions ofthe Contract. Ans\\·er "Yes" or "1\o" for each ofthe tollo\ving: (a) amounts withheld that the Pon labeled on the Estimates tor Contract Payment as 5600.000 offset Answer: _ _ _ _ _ _ __ (b) amounts withheld that the Port labeled on the Estimates tor Contract Payment as "] iq u idated damages" Ans\\ er: - - - - - - - - - - If your answer to Question No. 6(a) and/or Question No. 6(b) is "Yes ... then answer the corresponding subpart of to !lowing Question. Othem ise. do not answer the fo !lowing Question. Question :-Jo. 7 \Vas the Port's failure to comply excused'? A. Conditions precedent Failure to comply by the Port is excused by Zachry's previous failure. if any. to satisfy a condition precedent to its right to recovery pursuant to the agreement. ··c ond it ions precedent" are acts or events that are to occur after the contract is made and that must occur bef()re there is a right to immediate performance and bet(Jre there can be a breach of contractual duty. (a) Answer "Yes" or ·":\o .. as to the ta i lure to comply. if any. that you I'Clund in Quest ion 6( b) Answer: _ _ _ _ __ B. w·aiver Failure to comply b) the Port is excused if compliance\\ as '' aived by Zachry. Waiver i~ an intent ion a I surrender of a known right or intent ion a I conduct inconsistent '' ith claiming the right. (a) Answer "Yes" or "i\o" .. as to the failure to comply. if any. that you found in Question 6(a) Ans\ver· _ _ __ (b) AnS\Yer "Yes" or ""\'o" as to the tailure to comply. if any. that you tound in Question 6(b) Answer: _ _ _ _ __ C. Prior material breach Failure to comply by the Port is excused by Zachry's pre\ ious tailure. if any. to comply \\ ith a material obligation of the Contract. (a) Ans,,er "Yes" or ":-Ju" .. as to the failure to comply. if any. that you tc1und in Question 6(a) Answer: - - - - (b) A.J1S\\er "Yes" or ":-Jo" .. as to the failure to comply. if any. that you found in Question 6(b) Answer: _ _ __ D. Release Failure to comply by the Po11 is excused if Zachry released the claims asserted by it 111 this lawsuit against the Port. (a) Ans\ver ..'{es .. or ..:-.:o·· ··as to the failure to comply. if any. that you found in Question 6(a) Ans\Yer: - - - - - (b) Answer .. Yes .. or ...'\o .. ··as to the tailure to comply. if any. that you tound in Question 6(b) Answer: - - - - - E. Payment Failure to comply by the Port is excused if the Port paid Zachry all ofthe amounts due and owed under the Contract. (a) AnS\\er .. Yes" or ··:\o .. as to the tailure to comply. if any. that you t"l1und in Question 6(a) AnS\\er: - - - - - - (b) Answer ··Yes .. or ..1\o .. as to the failure to comply. if any. that you touncl in Question 6(b) Answer: - - - - - :i 1 Ifyou ans\vered Question No. 6(a) and/or Question :-.:o. 6(b) ·'Yes:· and answered "-:\o" to any corresponding subpart of Question No. 7. then answer the corresponding part of the tollo\\·ing question. Otherwise do not anS\\er the foliO\ving question. Question '\'o. 8 What sum of money. if any. paid no\v in cash. would t'i:tirly and reasonably compensate Zachry tor its damages. if any. that resulted fi·om such failure to comply? Consider only the balance clue and owed by the Port, if any. under the Contract. Do not add any amount tor interest on damages. if any. Do not include in your answer any amount that you find that Zachry could have avo idee! by the exercise ofreasonable care. Answer in dollars and cems. if any. lor each ofthe tollo,ving: (a) amounts \Vithheld that the Port labeled on the Estimates tor Contract Payment as S600,000 offset (b) amounts \\·ithhe ld that the Port Iabe led on the Estimates for Contract Payment as "liquidated damages" Al1S\\ er:S ------------------  Question ~o. 9 What is a reasonable fee for the necessary services of the Port's attorneys. stated in do liars and cents? Consider the following factors in determining the reasonableness of an attorney· s fees award: <~> the time and labor involved. the novelty and difficulty ofthe questions involved. and the skill required to perform the legal services properly: <~> the likelihood that the acceptance of the particular employment \\ill preclude other employment by the la\vyer: e the t'ee customarily charged in the locality tor similar legal services: <~> the amount involved and the results obtained: <~> the time limitations imposed by the client or the circumstances: <~> the nature and length of the professional relationship'' ith the client: <~> the experience. reputation. and ability of the lawyer or lawyers pertorming the services: and <~> ''hether the tee is fixed or contingent on results obtained or uncertaint) of collection befbre the legal sen kes have been rendered. Ans\ver \\ ith an amount\\ ith respect to each of the t\Jllo\\ ing: (a) For preparation and trial with respect to the tailure to comply. if any. inquired about in Question :\o. 1 Answer: S- - - - - - - (b) For preparation and trial with respect to the failure to comply. if any. inquired about in Question ~o. 6 Answer: (c) For an appeal to the Coun ofA.ppeals V\ith respect to the failure to comply. ifany. inquired about in Question \:o. I AnS\\er: s_______ ( cl) For an appeal to the Court of Appeals '' ith respect to the failure to comply. if an). inquired about in Question :\o. 6 Answer: S- - - - - - - (e) For an appeal to the Supreme Court ofT exas \\ ith respect to the tailure to comply. if any. inquired about in Question :\o. I Answer: S (f) For an appeal to the Supreme Court of Texas \\·ith respect to the failure to comply. if any. inquired about in Question No.6 Answer: S- - - - - - -  TAB 13 Contract, General Conditions (DX1-1.0177-235)  \ ~/I.I ( PORT OF HOUSTON AUTHORITY GENERAL CONDITIONS FOR CONSTRUCTION WORK ON PORT PROPERTY TABLE OF CONTENTS SECTION 1. DEFINITIONS OF TERMS 1.01 Addenda 1.02 Applicable Law 1.03 BldlProposal 1.04 BidfProposal Documents 1.05 Bonds 1.06 Change Orders 1.07 Chief Engineer 1.08 Concurrent Delay 1.09 Construction Change Directive 1.10 Contract Documents 1.11 Contract Price ) 1.12 Contract TIme 1.13 Contractor 1.14 Design Consultant 1.15 Drawings .. 1.16 Environmental Laws 1.17 EqUIpment and Materials 1.18 Force Majeure 1.19 Governmental Authority 1.20 Hams County Auditor 1.21 Hazardous Substances 1.22 Inspectors 1.23 Insurance Certificates 1.24 Modlficatron General Conditions • (Rev'd November 1, 2002) VIII· i . vii OX 0001-1.0177  1.25 Own Forces 1.26 Port of Houston Authority 1.27 Port of Houston Authority Commission or Commission 1.28 Port Authority Indemnitees 1.29 Product Data 1.30 Project. 1.31 Purchase Orders 1.32 Purchasing Manager 1.33 Request for Information or RFI 1.34 Samples 1.35 Shop Drawings 1.36 Specifications 1.37 Standard of Care 1.38 Subcontractors 1.39 Submittals 1.40 Supplier ) 1.41 Taxes 1.42 Work SECTION 2. CONT~CT DOCUMENTS 2.01 Intent of Drawings ar:!d Specifications • 2.02 Precedence of Contract Documents 2.03 Interpretation of Contract Documents 2.04 Reference Specifications 2.05 Special Conditions 2.06 Examination of Drawings, Specifications, Special Conditions and Site of Work 2.07 Subsurface Data and BidlProposal Quantities 2.08 Supporting Documents - Performance & Payment Bonds 2.09 Harris County Auditor's Approval General Conditions (Rev'd November 1, 2002) VIII - jj - vii OX 0001-1.0178  2.10 Pon of Houston Authority Purchase Order SECTION 3. GENERAL PROVISIONS 3.01 Tax Exemption 3.02 Conflicts of Interest "- 3.03 Prevailing Wage Scale 3.04 Assignment of Antitrust Causes of Action 3.05 Small Business Development Program 3.06 Contractor's Insurance Requirements 3.07 Proof of Insurance By Contractor 3.08 Indemnification By Contractor 3.09 No Estoppel or Waiver 3.10 Recovery of Attorney's Fees 3.11 Contractor's Qualifications 3.12 Severability 3.13 Successors and Assigns 3.14 No Third Party Beneficiaries 3.15 Change of Control 3.16 Governing Law SECTION 4. REGULATORY AND SAFETY REQ.UlREMENTS 4.01 Laws to be Observed .- - 4.02 Code Regulations. 4.03 Permits and Licenses 4.04 Barncades, Warning lights and Warnmg Signs 4.05 Sanitary Facilities 4.06 Site Health and Safety Coordinator 4.07 Health and Safety 4.08 Accident Reportmg 4.09 Fill Material Polley General Conditions (Rev'd November 1, 2002) VIII - iii - vii OX 0001-1.0179  4.10 Spill Prevention Plan 4.11 Cultural Resources 4.12 Use of Explosives 4.13 Burning 4.14 Permit for Welding and Cutting 4.15 Interference with Port Operations and Navigation 4.16 Misplaced Materials 4.17 Work On or Around Port Authority Grain Elevators 4.18 Work On or Around Railroad Tracks 4.19 Discovery of Hazardous Substances 420 Disposal of Excavated Materials and Certain Other Waste 4.21 Characterization of Waste Materials 4.22 Environmental Management System SECTION 5. PROSECUTION OF THE PROJECT 5.01 Commencement of Work 5.02 Start Date for Field Work 5.03 Planning of Work and Progress Schedule 5.04 Submittal of Updated Progress Schedule 5.05 Time of Completion and liquidated Damages 5.06 Actual Damages in Lieu of Liquid~ted Damages 5.07 No Delay Damages 5.08 Time Extensions 5.09 Lack of Satisfactory Progress 5.10 Independent Contractor 5.11 Subcontractors and Material Suppliers 5.12 Port as Third Party Beneficiary of Subcontra~ts 5.13 Port and Surety as Assignees of Subcontracts 5.14 Cooperation with the Port Authority and Others General Conditions (Rev'd November 1, 2002) VIII - iv - vii OX 0001-1.0180  ~ ( ,:r/ 5.15 lines and Grades 5.16 Contractor's Superintendent 5.17 Contractor's Local Office 5,18 Noltce 5.19 Character and ConduCt of Workmen 5,20 Drawings and Specifications Furnished by the Port Authority 5.21 Requests for Information 5.22 Submittals 10 be Furnished by the Contractor after Award 5.23 As-Built Drawings 5.24 Progress Photographs 5.25 Additional Schedules and Reports 5.26 Matenal Storage 5.27 Material Furnished by the Port Authority 5.26 Tools and Equipment Furnished by the Contractor 5.29 Water for Construction ) 5.30 Electrical Connections 5.31 Contractor's Field Office 5.32 Field Office for Port Authority Personnel 5.33 Contractor's Obhgation to Maintain a Clean Work Site " 5.34 Material Testing ., - 5.35 Inspection Required at Stages of Work. 5.36 Discovery of Latent Defective Work. 5.37 T est Cuts by the Port Authority 5.38 Costs of Inspections by the Port Authority 5.39 Inspection Outside of Working Day 5.40 Substandard Material or Workmanship " . 5.41 Changes or Modifications 5.42 Claims for Changed Conditions or Contract Interpretations General Conditions (Rev'd November 1. 2002) VIII- v - vii OX 0001-1.0181  5.43 Calculations of Costs of Changes or Modifications ') ; 5.44 Limitations on the Costs of Changes or Modifications 5.45 Intellectual Property Rights 5.46 Partial Utilization by the Port Authority 5.47 Termination for Convenience of the Port of Houston Authority 5.48 Termination for Cause 5.49 Right of Port Authority to Suspend the Work 5.50 Right of Port AuthOrity to Accelerate Work 5.51 Protection against Claims of Subcontractors, Laborers, Materialmen and Furnishers of Machinery, Equipment and Supplies 5.52 AlIegatioM of Change or Waiver of Contract Terms 5.53 Warranty 5.54 Progress Meetings 5.55 Dispute Resolution. Subrnfssion to Jurisdiction, Waiver of Right to Remove and Venue SECTION 6. PAYMENT 6.01 Schedule of Costs ) 6.02 Progress Payments 6.03 Inspector's Approval of Billings 6.04 Nonpayment for Unincorporated Material 6.05 Right to'Withhold 6.06 . Overp~yment for Defective or Over Estimated Work 6.07 Contractor's Submittal of Affidavit 6.08 Supporting Documents for Progress Payments 6.09 Final Inspection by the Contractor 6.10 Final Inspection by the Port Authority 6.11 A Finding of Incomplete Work 6.12 Conditions to Final Payment 6.13 Payment and Retainage General Conditions (Rev'd November 1, 2002) VIII - vi - vii OX 0001-1.0182  ,.J \y 6.14 Title to Work 615 Payment Not Waiver or Acceptance of Work 6.16 Right to Audit 6.17 Offset -. General Conditions • (Rev'd November 1, 2002) VIII - vii - vii OX 0001-1.0183  1/ GENERAL CONOmONS FOR CONSTRUCTION WORK ON PORT AUTHORITY PROPERTY SECTION 1. DEFINITIONS OF TERMS Whenever in these General Conditions and in the other Contract Documents, the following terms are used. the intent and meaning shall be interpreted as set out below. 1.01 Addenda: Documents issued by the Port Authority after the initial BidfProposal Documents have been issued to bidders/proposers and prior to the acceptance of bids/proposals, which documents are part of the BidlProposal Documents. 1.02 Applicable Law: Any and all federal, state and local statutes, laws, rules, regulations, ordinances, codes and rules of common law pertaining to the Contractor's services, the site, the Contractor's employees and Subcontractor's employees and/or the Work, including, without limitation (i) Environmental Laws, (ii) those pertaining to equal opportunity, affirmative action and discrimination, and (iii) those pertaining to health or safety, including without limitation, the Occupational Safety and Health Act of 1970 (84 U.S. Statutes 1590) as amended and any applicable state programs, rules and regulations approved or provided thereunder. 1.03 Bid/Proposal: The Contractor's bid/proposal submitted in connection with the Work, as such bid/proposal may be modified and agreed to or ordered by the Port. - 1.04 Bid/Proposal Documents: Those documents issued by the Port Authority soliciting bids/proposals, as applicable, including any Addenda and the documents submitted by the Contractor which comprise the Contractor's BidJProposal. 1.05 Bonds: The performance and payment bonds that the Contractor is required to furnish to the Port pursuant to Section 2.08. - 1.06 Change Orders: A modification of or change to the Contract Documents agreed to and executed by the Port Authority and Contractor after Contract execution and in accordance with the Contract Documents to revise, add to, or delete from the Work or to adjust the Contract Price or Contract Time . 1.07 Chief Engineer. The Chief Engineer is an employee of the Port of Houston Authority. The only person in the Port of Houston Authonty Engineering Department with authority to resolve engineering questions or problems, agree to modifications or changes, and to - re'Sollie' olsputes Involving Contracts or Bid/Proposals Originating from the Port of Houston AuthOrity Engineering Department, where the Port of Houston Authority is specrflcally gillen such authority in this Contract, IS the Chief Engineer. No other General Conditions (Rev'd November 1, 2002) VIII - 1 - 52 OX 0001-1.0184 employee of the Port of Houston Authority Engineering Department has such authority. Any such resolutions must be in writing and signed by the Chief Engineer. . '. 1.08 Concurrent Delay: Delays caused in whole or in part. or contributed to by any primary. concurrent or contributorily negligent acts or omissions by the Contractor. its Subcontractors or Suppliers. or which arise from any other failures by Contractor or its Subcontractors or Suppliers to perform their respective obligations in accordance with the Contract Documents. This limitation shall apply EVEN IF THE PORT AUTHORITY OR ANY OF THE PORT AUTHORITY"S OTHER CONTRACTORS OR ANY OTHER PERSONS OR ENTITIES FOR WHOM THE PORT AUTHORITY IS RESPONSIBLE ARE CONCURRENTLY OR CONTRIBUTORILY NEGl:IGENT WITH RESPECT TO ITS OR THEIR OWN ACTS OR OMISSIONS. 1.09 Construction Change Directive: A document issued by the Chief Engineer directing the Con,tractor to make a minor change in the Work, which change shall not require any modification of the Contr~ct Price. 1.10 Contract Documents: The Contract Documents are composed of the Contract agreement signed by the Port Authority and Contractor. Addenda (if any), Contractor's Bid/Proposal (including documentation accompanying the BidJProposal and any post-Bid/Proposal documentation submitted and agreed to by the Port Authority prior to commencement of Work}. the Bonds. Insurance CertifICates. these" General Conditions. Special Conditions. Specifications and Drawings. the Purchase Order. and Modifications. The Contrad Documents form the Contract. This Contract represents the entire and integrated agreement between, the parties hereto and supersedes aI/ prior negotiations, representations or agreements, either written or oral. The Contract Documents shall not be construed to create any contractual relationship of any kind between the Port Authority and any Subcontractor or Supplier or between any persons or entities other than the Port Authority and Contractor. 1.11 Contract Price: The amount set forth in the Contract agreement, as such amount may be modified by Change Order. which the Contractor is entitled to receive for full and complete performance of the Work in accordance with the Contract Documents. 1.12 Contract Time: The time period set forth in the Contract for the Contractor to finally complete the Work. The Contract Time may be expressed in number of calendar days or number of working days or by reference to the date of completion. If the Contract Time is measured by calendar days. each and every calendar day shall be counted against the Contract Time. If the Contract Time is measured by working days, Saturdays, Sundays. AG.C. holidays and approved time extensions shall not be counted against the Contract Time. 1.13 Contractor. Contractor means the independent contractor which is. named in the Contract agreement and is responsible for the construction of the Work. The Contractor is an independent contractor and not an employee or agent of the Port Authority. • .'.. .' . General Conditions (Rev'd November 1. 2002) VIII- 2 - 52 OX 0001-1.0185  1.14 Design Consultant: Design Consul1ant means an independent architect or engineer with responsibility for design of the Work. The Design Consultant is an independent contractor and not an employee or agent of the Port AuthOrity. 1.15 Drawings: The graphic and pictorial portions of the Contract Documents showing the design. location and dimensions of the WOrk. which Contrad Documents may indude without limitation elevations, sections. details. schedules or diagrams. 1.16 Environmental Laws: Any and all applicable federal, state or local statutes, laws, rules, regulations, ordinances, codes and rules of common law now in effect (including any amendments now in effect) and any current judicial or administrative interpretation thereof, including any judicial or adll,linistrative order, consent decree, or judgment. relating to the environment, Hazardous Substances or exposure to Hazardous Substances, including without limitation the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601, et seq.; The Hazardous Materials Transportation Act. 49 U.S.C. §§ 1801. et seq.; The Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901, et seq.; the Federal Water Pollution Control Act. 33 U.S.C. §§ 1201, et seq.; the Toxic Substances Control Act. 15 U.S.C. §§ 2601, et seq.: the Clean Air Act. 42 U.S.C. §§ 7401, et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 3808, et seq. 1.17 Equipment and Materials: The equipment and materials to be supplied by the Contractor, its Subcontractors and Suppliers and to be incorporated into or otherwise used in connection with the Work .... f 1.18 Force Majeure: Fire, flood, act of God, earthquakes, epidemic, war, riot, civil disturbance, sabotage, terrorism or - judicial restraint, but only to the extent such event (i) is beyond the control of and cannot be reasonably anticipated by or the effects alleviated by the Contractor and (ii) prevents the performance of the Work. Events not specifically listed herein shall not constitute events of Force Majeure. By way of example only, weather which is not abnprmat, even if such weather Could not be reasonably anticipated and even if such weather prevents the performance of the Work, shall not be an event of Force Majeure. 1.19 Govemmental Authority: Governmental Authority means (a) the United States of America or any foreign country, (b) any state. county. municipality or other governmental subdivision within the United States of America or any foreign country, and (el any court or any governmental department, commiSSIon, board, bureau, agency or other instrumentality of the United States of America or any foreign country, or of any ·state. county, municipality or other govemmental subdivision within the United States of America or any foreign country. 1.20 Harris County Auditor: The auditing official of Harris County. ,,_, • r General Conditions (Rev'd November 1,2002) Vllt - 3 - 52 OX 0001-1.0186 1.21 Hazardous Substances: ~) (i) Any hazardous materials, hazardous wastes, hazardous substances, solid waste and toxic substances as those or simdar terms are defined under any Environmental Laws; (ii) Any asbestos or any material which contains any hydrated mineral silicate, including chrysolite, amosite. crocidolite, tremolite, anthophylite andlor actinolite, whether friable or non-friable; (iii) Any poIychlorinated-biphenyis (-PCBs·), or PCB-containing materials, or fluids; (iv) Radon; (v) Any other hazardous, radioactive, toxic or noxious substance, material, pollutant, or solid, liquid or gaseous waste; (vi) Any pollutant or contaminant (including petroleum, petroleum hydrocarbons, petroleum products, crude oil or any fractions thereof, any oil or gas exploration or production waste, any natural gas, synthetic gas or any mixture thereof) which in its condition, Concentration or area of release could have a significant effect on human health, the environment, or natural resources; (vii) Any substance that, whether by its nature or its use, is subject to regulation under any Environmental Law or with respect to which any Environmental Law or Governmental Authority requires environmental investigation, monitoring or remediation; and (viii) Any underground storage tanks, as defined in 42 U.S.C. Section a99-1(1)(A)(I) (including those defined by Section 9001(1) of the 1984 Hazardous and Solid Waste AmendmenIs Ie the Resource Conservation and Recovery Act. 42 U.S.C. Section 6901 et seq.; the Texas Water Code Annotated Section 26.344; and Title 30 of the Texas Administrative Code Sections 334.3 and 334.4}, whether empty, filled or partially filled with any substance. 1.22 Inspectors: The individuals assigned 'by the Chief Engineer (which individuals may be third party contractors) to make detailed inspections of any or all portions of the Work and materials or equipment involved in the Contract are the Inspectors. Inspectors tlave no aulhority to change any of the terms and conditions of the Contract. This authority is reserved for1he Chief.~gineer alone. 1.23 Insurance Certificates: The insurance certificates that the Contractor is required to furnish to the Port pursuant to the Contract Documents. . 1.24 Modification: A ModifICation is (1) a written amendment to the Contract Signed by both the-Contractor and the Port, (2) a Change Order, (3) a Construction Change Directive, or (4) a written interpretation of the Contract Documents issued by the Chief Engineer. 1.25 Own Forces: Actual field labor performed at the site by employees of the Contractor under the immediate supervision of Contractor's field superintendent. By way of example only, the follOWing is not War!< performed by Contractor's Own Forces: General Conditions (Rev'd November 1,2002) VIII- 4- 52 OX 0001-1.0187  ~ a. Work performed by Subcontractors or contract laborers; or b. Work performed in the Contractor's office or anywhere other than in the field at the site, even if performed by the Contractor's employees. 1.26 Port of Houston Authority: The Port of Houston Authority of Harris County. Texas is a political subdivision of the State of Texas and a body politic. The terms Port of Houston Authority. Port Authority. Port of Houston. PHA and Port are synonymous with the Port of Houston Authority of Harris County, Texas. The Port is independent and not a part of the government of Harris County. Texas or the City of Houston. 1.27 Port of Houston Authority Commission or Commission: The Port of Houston AuthOrity is governed by the Commission which meets monthly and is comprised of a chairman and six commissioners. The Commission is ,the ultimate governing authority of all Port of Houston operations. The Contractor is hereby advised that approval by the Commission is required for certain matters. 1.28 Port Authority Ir~demnitees: The Port of Houston Authority and its Commissioners. directors. officers. agents and employees. 1.29 Product Data: Manufacturers' standard schematic drawings. catalog sheets, brochures. diagrams. schedules. performance charts. illustrations, Material Safety Data Sheets (MSDS) or any other descriptive items. ) 1.30 Project: ,/ The total Port construction project of which the Work performed under the Contract Documents may ~ the whole or a part and which may iJ'!CIude alnStnJction by the Port Authority or by separate contractors. 1.31 Purchase Orders: A written and fu!ly-~ecuted purchase order covering the WorK and issued to the Contractor in accordance with the Contract Documents. 1.32 Purchasin, Manager: The purchasing manager of the Port of Houston Authority. 1.33 Request for Information or RFI: A written request from the Contractor to the Chier Engineer requesting information in respect of or an interpretation of a requirement or provision of the Contract Documents. Neither an RFI nor a response to an RFI is a Contract Document. 1.34 Samples: Physical examples which illustrate Materials. EqUipment or workmanship and establish standards by which the Work will be judged. General Conditions (Rev'd November 1, 2002) VIII· 5 - 52 OX 0001-1.0188  1.35 Shop Drawings: Drawings, diagrams, schedules and other data specially provided for the Work. by the Contractor, its Subcontractors or Suppliers to illustrate how certain specific Work components fit together and will be located in relation to each other. 1.36 Specifications: The SpecifICations are that portion of the Contract Documents consisting of the written requirements for Materials, Equipment, construction systems, standards and workmanship for the Work and performance of related services. Specifications may be separate or set forth on the Drawings, or both. 1.37 Standard of Care: The requirement that the Contractor shall supervise and direct the Work., using the Contractor's best skill and attention, in a good and workmanlike manner and in the best and most expeditious and economical manner consistent with the interests of the Port Authority, shall exercise the degree of care, skill and diligence in the performance of the Work in accordanCe with and consistent with industry standards for similar circumstances, shall utilize its best skill, efforts and judgment in furthering the interests of Port Authority, and shall fumish efficient business administration and supervision. 1,38 Subcontractors: Any person having a direct or indirect contract with the Conlractor, at any tier, for design or engineering, or for the supply and erection of Equipment or Materials, or for the performance of a portion of the Work. in each case forming part of the Work. No Subcontractor shall have any beneficial interest in or be a third party beneficiary to any Port Authority contrad (including without limitation this Contrad). 1.39 Submittals: Shop Drawings, Product Data. Samples and other information provided by the Contractor for approval of proposed Equipment, Materials. means or methods. Submittals are not Contract Documents. - 1.40 Supplier: A person having a direct or indirect contract with the Contractor, at any tier, only for the supply of Equipment or Materials forming part of the Work. . 1.41 ~: All taxes, duties. fees or other charges levied or imposed by any country, state or any political subdivision thereof. includIng but not limited to income, capital. sales, excise and use taxes, customs duties, stamp duties, fees or charges. levies in respect of social welfare. health, workers' compensation, ,pension, unemployment or other similar insurances or programs, whether imposed by withholdings or otherwise, and except as otherwise expressly provided, whether existing at the date -of ffiis Contract or created and imposed at a later date. . ,', General Conditions (Rev'd November 1,2002) VIII· 6 - 52 / OX 0001-1.0189 1.42 lY2!!: The construction and services required by the Contract Documents, whether commenced or not, or completed or partially completed, and all labor, Materials, Equipment and services provided or to be provided by the Contractor to fulfill the Contractor's obligations pursuant to the Contract Documents. The Work may constitute the whole or a part of the Project. END OF GENERAL CONDITIONS SECTION 1 General Conditions (Rev'd November 1,2002) VIII-7-52 OX 0001-1.0190  ~ SECTION 2. CONTRACT DOCUMENTS 2.01 Intent of Drawinas and Soecifications: The intent of the Contract Documents is to include all items necessary for the proper execution and completion of the Work. These General Conditions, in conjunction with the other Contract Documents, all of which constitute a part of this Contract, are each intended to be cooperative; a provision occurring in one is as binding as though occurring in all, and when read together are intended to describe and provide for a finishett piece of work, complete in every detail. Work not covered in the Contract Documents will be required to the extent it is consistent therewith and is reasonably inferable therefrom as being necessary to produce the intended results consistent with the scope of Work as expressed in the Contracf Documents. The organization of the specifications into divisions, sections and articles, and the arrangement of the Drawings shall not control the Contractor in dividing llie Work among Subcontractors or in establishing the extent of Work to be performed by any trade. Unless otherwise stated or defined in the Contract Documents, words that have well-known technical or construction industry meanings are used in the Contract Documents in accordance with such recognized meanings. 2.02 Precedence of Contract Documents: (a) If there is an irreconcilable conflict between Contract Documents, the document highest in precedence shall control, but except in such event and to avoid such conflict, every construction of provisions shall be that each is in aid to, or supplementary to or complementary of, each other provision, to control and secure for the Port Authority the completion of the entire Work in an expeditious, orderly and coordinated manner. The precedence, from highest to lowest, shall be in 1he following order: 1. Permits for the Work from Governmental Authorities as may be required by law; 2. Special Conditions; 3. General Conditions; 4. Specifications; 5. Drawings. Change Orders and approved revisions to Drawings or other Contract Documents shall take precedence over ltems"2 through 5 above. Detailed Drawings shall take precedence over general Drawings. (b) Should there be <;In irreconcilable conflict of terms within the Drawings or within the Specifications, the Contractor shall be obligated to provide the most e)(pensive combination of quality and quantity of Work indicated. The Chief Engineer win clarify the Project requirements in the event of an above mentioned conflict that affects the Contractor. In general, 1. figures take precedence over scale measurements; 2. large scale details take precedence over smaller scale details; 3. architectural Drawings take precedence in regard to dimensions, when in conflict with mechanical and structural Drawings, except f9f th.e,size of the structural members; 4. specifically titled Drawings and sections of the Specifications take precedence over indication of the item in a collateral way; General Conditions (Rev'd November 1, 2002) VIII- 8 - 52 OX 0001-1.0191  5. existing conditions take precedence over Drawings and Specifications for dimensions_ 2.03 Interpretation of Contract Documents: The Port Authority and Contractor recognize the possibility that errors, omissions and discrepancies exist in the Contract Documents. Before starting each portion of the Work. the Contractor shall carefully study and compare the various Drawings and other Contract Documents relating to that portion of the Work. as well as the information furnished by the Port Authority, shall take field measurements of any existing conditions related to that portion of the Work and shall observe any conditions at the site affecting such Work_ Any errors, omissions or inconsistencies discovered by the Contractor shall be reported promptly to the Port Authority as an RFI in such form as the Port Authority may require. Any such problem in the Contract Documents not brought to the attention of the Chief Engineer prior to Contractor's submission of its BidlProposal will be resolved by the Chief Engineer in a manner solely within the discretion of the Chief Engineer. Any such resolution shall not give rise to any claim for additional compensation or claim for damages by the Contractor. In the execution of the Work. the Drawings shall be accurately followed to scale giving preference in all cases to figured dimensions over scale measurements and to details over general Drawings. Where any discrepancy occurs between figured dimensions and scale or between details and genera! Drawings, the Contractor shall provide notice of such discrepancy in an RFI. which RFI shall set forth the facts constituting such discrepancy in a degree of detail acceptable to the Port. to the Inspector who shall provide explanation and instructions as to which is to govern before the Contractor proceeds with.the Work at issue_ In the event there is a Design Consultant for the Project, the Contractor shall send the RFI to the Design Consultant. with a copy of the transmittal letter to the Inspector and the Chief Engineer. Departure from the Contract Documents in the execution of the Wor1c without the Chief Engineer's prior written order or consent will be at the Contractor's sale risk and expense and the Contractor will be responsible for all costs attributable thereto. including without limitation all costs associated with design ) professionals. and liable for all damages caused thereby. " The Contractor shall not take advantage of any error or omission in the Contract Documents. Instructions suitable to the Chief Engineer will be given by the Chief Engineer to the Contractor when such error or omission is discovered by the Chief Engineer or when reasonably requested of the Chief Engineer by the Contractor. At all times, the Contractor shall retain the duty- to detect or discover any errors and omissions and make appropriate request in respect thereof. If the Contractor performs any Work when it knew or shol!Sid have known it involves an error. inconsistency or omission in the Contract Documents without submitting such request to the Port Authority and receiving a written order or consent to proceed, the C9n~~Qr shall be responsible for'all costs attributable to such performance, including without limitation all cos&. assoc!.~ted with design profeSSionals, and liable for ~II damages caused thereby. All Materials to be incorporated in the finished Work shall be new, of the highest quality and of the best grade of standard manufacture. When more than one Material, brand or process is specified for a particular item of Work, the choice shall be the Contractor's. The final selection of color and- pattem shall be made from the range available within the choice selected by the Contractor, unless the item is specified to match a specifIC color or sample fumished. Where Materials or Equipment are specified by brand name, trade name, or manufacturer, only products of those named manufacturers are acceptable unless equal Materials or -Equipment of. other manufacturers are approved in writing by the Chief Engineer ~ submittal of Bids/Proposals. The Contractor shall not be allowed to ~lIPply equal or alternative Materials or Equipment.not so approved. The judgment of the equality af"M-aterials, Equipment or products rests _solely with the Chief Engineer, and its decision shall be final. Specified architectural, construction or equipment details may not be regularly included as part of the named manufacturer's standard items or Equipment, but shall be provided by the manufacturer as required for the Project or the proper functioning of General Conditions (Rev'd November 1, 2002) VIII- 9 - 52 OX 0001-1.0192  the Equipment.' Indicated and specified performance and Mater1aI' requirements are minimum, and are required in addition to standard performance and accessories provided by the manufacturer: 2.04 Reference Specifications: (a) The following codes, standards, pamphlets and specifications are hereby incorporated into this Contract by reference as if each were set forth in full herein. except to the extent otherwise set forth in Section 2.04{bl. AAMA Architectural Aluminum Manufacturers Association. AAN American AsSociation of Nurserymen. AAR Association of American Railroads. AASHTO American Association of State Highway and Transportation Officials. ACI American Concrete Institute AFBMA Anti-Friction Bearing Manufacturers Association, Inc. AGe Associated General Contractors of America. AlA American Institute of Architects. h AISC American Institute of Sleel Construction. AISI American Iron and Sleellnstitute. ANSI American National Standards Institute. " API American Petroleum Institute. AREA American Railway Engineering Association. ASCE American Society of eM! Engineers. ASHRAE American Society of Heating, Refrigeration and Air Conditioning Engineers. ASME American Society of Mechanical Engineers. ASTM American Society for Testing and Materials. AWWA American Water Works AsSOciation. AWS American Welding Society. CI Gast Iron Pipe Insti1ute. CS Commercial Standards. FS Federal SP,eCiflC3tions. IEEE Institute of Electrical and Electronic Engineers. ISA Instrument Society of America. MBMA Metal Building Manufacturerll Association. NBS -National Bureau of Standards.' NEC National Ele,gtrical Code. NEMA, _ National Electrical Manufacturers Association . NFPA . Nationa.! Fire Protection Association. NBFU National Board of Fire Underwriters. OSHA Occupational Safety and Health Administration. SAE Society of Automotive Engineers. SSPC Steel Structures Painting CounciL TxDOT Texas Department ofTransportation. Ul Underwriters laboratories. Tnese and all other specifications of trade associations, technical societieS. or of manufacturers, refer 10 the latest edition of each which is effective on the date.of "Invitation to BIdders" or on the date of ·'nvitation to Proposers: Manufacturers' specifications ard recommendations shall be cor:tstrued to mean those printed on container labels or in published mamlals,'6atalogues, or instruction sheets. (b) The codes, standards, pamphlets, specifications and recommendations set forth above shall not apply to the extent: General, Conditions (Rev'd November 1,2002) VIII- 10 - 52 OX 0001-1.0193  ",) 1. that they provide requirements less stringent than those set forth in the Contract Documents, the requirements of which apply as minimums only. For the avoidance of doubt, such codes, standards, pamphlets, specifications and recommendations do not supersede more stringent requirements set forth in the Contract Documents; 2. that they include exclusions, limitations or waivers that are inconsistent with the Contract Documents. 2.()S Special Conditions: Should any construction, work or condition which is not covered by these General Conditions be anticipated on any proposed WorK, Special Conditions for such Work wDi be attached to and shall be a part of the Contract. 2.06 Examination of Drawings, Specifications, Special Conditions and Site of Work: In entering into the Contract. the Contractor represents and warrants that it has and shall be deemed to have carefully examined and inspected the site and its surroundings and satisfied itself as to the condition of all circumstances affecting the site and the Work., including without limitation the location and nature of the Work, nature of the geotechnical conditions, ground and subsoil, the form and nature of the site, the subsurface conditions of the site (both man made and natural), the location and character of existing or adjacent work or structures, the Contract Documents, the extent and nature of the Work and Materials necessary for carrying out and completing the Work., the ·general character and accessibility of the site, Applicable Law (including without limitation labor laws), any accommodations the Contractor may require, other general and local conditions which might affect the Work or performance of the Work, and in general all risks and contingencies influencing or affecting the Work, and, subject to the right set forth below to rely upon specified Port Authority supplied information, that the Contractor has assumed the risk of such conditions and will, regardless of such conditions, the expense, or difficulty of performing the ) Work, fully complete the Work for the stated Contract Price without further recourse to the Port Authority. The Contractor fully accepts any lack of completeness of the Contract Documents, including the Drawings and Specifications, and verifieS that such documents were suffiCiently detailed and Comprehensive to enable Contractor to have reliably estimated and established the Contract Price and to perform the Work within the Contract Time. The Contractor shaD not be entitled to any extensions of the Contract Time or to any adjustment of the Contract Price on grounds that .!t misinterpreted or misunderstood any matter assumed by the Contractor pursuant to this Section 2.06, nor shalt it be released from any of the risks accepted or obligations undertaken -by-it under the Contract Documents, or on the grounds that it did not or could not reasonably have foreseen any matter which affects the execution of the Work.. . The Port Authority makes no representation or warranty, and hereby disclaims any such warranty, that any information provided to the Contractor by or on behalf of the Port Authority in connection with the Work is accurate, correct, complete, fit for its intended purpose or can be used without infringing any patent, copyright, trademark, trade secret or other intellectual property rights of third parties under any intellectual property rights of the world. Notwithstanding the foregoing. in instances in which tRe Port Authority has supplied the Contractor with geotechnical reports or in which the Specia! Conditions specify that the Contractor is entitled to rely upon other infonnation provided by the Porr Auttioniy: the Contractor is entitled to rely upon such information in submittIng its bid and performing the Work except to the extent that the Contractor knows or should know in the exercise of ils Standard of Care that such information is inadequate, Insufficient or incorrect. General Conditions (Rev'd November 1, 2002) VIII· 11 - 52 OX 0001-1.0194 2.07 Subsurface Data and Bid/Proposal Quantities: The quantities shown on the Specifications and other Bid/Proposal Documents are estimates and are for comparison of Bids/Proposals only, and while such quantities are believed to be reasonably accurate, the Port Authority does not guarantee their accuracy. The Contractor must make its own lake-off and base its price or prices on the results thereof. No Change Order shall be issued on account of any excess or deficiency with respect 10 such information whether absolute or relative in relation to quantities stated in the Specification or other BidJProposal Documents. Without limiting the foregoing, any information given in regard to soil data, subsurface data, test borings, and similar conditions is to be considered approximate. 2.08 Supporting Documents - Performance & Payment Bonds: Unless otherwise provided in the Special Conditions, each Contract at its inception shall be covered by a performance bond and a payment bond, each for 100% of the value of the Contract Bonds must be furnished with the executed Contract The cost of such bonds shall be bome by the Contractor and shall be prorated over an units of the Work. No lump sum payment will be made for such costs by the Port Authority. Front end loading to recover such costs will not be allowed. Such bonds must be furnished on the Port Authority forms. No other forms are acceptable. Such bonds must remain in full force for one year after final acceptance of the completed WOt1<. and cover aJI obr.gations: of the Cdntractor . during such one year period, specifICally including all warranty obligations of the Contractor. Performance and payment bonds must meet a\l criteria of Texas law and both must be executed by the same corporate surety which shall be (i) duly authorized and admitted to do business in the State of Texas, (ii) licensed by the State of Texas to issue surety bonds and (iii) listed in the current issue of the Federal Register Department of the Treasury list. Moreover. such surety must show adequate bonding capacity for the .,, size of the proposed Project. The Port AUthority will not accept bonds from surplus lines or Texas Uoyds Plan insurance companies. The Port Authority shall be the sale judge of the validity and adequacy of any bonds submitted. 2.09 Harris County Auditor's Approval: No Contract shall become effective or bindmg .upon the Port of Houston Authority until the Harris County Auditor, the appropnate financial officer for the Port Authority, certifieS that funds are or will be available to meet the Contract pay requirements when due. 2.10 Port of Houston Authority Purchase Order: The PurchaSing Manager shall prepare a Purchase Order on the form prescribed by the Port and mail or otherwise deliver the same along with one fully eKecuted copy of all other Contract Documents to the Contractor. The Contractor's authorization to begin Work under the Contract Documeots is subject to the Port iSSUing a fully executed Purchase Order. If Contractor begins work prior to Issuance of a fully executed Purchase Order, it does so at its own risk and agrees to assume all responsibility therefor, to bear all costs attributable thereto, including without limitation all costs associated with design profeSSionals, and to be liable for all damages caused thereby. END OF GENERAL CONDlilONS SECTION 2 General Conditions (Rev'd November 1,2002) VIII· 12 - 52 OX 0001-1.0195  ~ I <:/ SECnON 3. GENERAL PROVISIONS 3.01 Tax Exemption: The Port of Houston Authority, being a political subdivision of the State of Texas, is exempt from all sales taxes on material purchased in Texas and incorporated into a Project. The Contractor and any Subcontractor or Supplier must have or obtain all necessarY permits and certificates to purchase and fumish all material incorporated into the Project on a tax free basis. 3.02 Conflicts of Interest: The Contractor and its officers, directors, shareholders, members, partners, employees or agents are positively forbidden from giving or lending money, or any other thing of value, to the Pbrt Authority, any Port Authority Commissioner, or to any Port officer, director, employee or agent or to any member of the family of any of the foregoing. Should any of the above enumerated persons connected witIJ the Port Authority have a direct or indirect monetary interest in the Contractor's company or parent 'Company, then such person must disclose in writing the nature and extent of such interest to the Port Authority with any Bid/Proposal submitted. 3.03 Prevailing Wage Scale: All onsite employees and employer's delivery persons shall be paid no less than the wages shown and, where shown, fringe benefits shown on the Port Authority's Prevailing Wage Rate schedute,.a copy of which is included in the Contract Documents. See such schedule for further details. However, where there is a contract between the employer and his employees or their respective representatives goveming fringe benefItS, the fringe benefits shall be'paid in accordance with such contract. Contractor should be aware that Texas Government Code Chapter 2258, Prevailing Wage Rates, provides, among other things, that 1. If the Contractor or a Subcontractor violates this law by underpayment of wages, the Contractor must pay to the Port Authority $60.00 for each worker employed for each calendar clay or partof the day that the worker is paid less than the wage rates required by the this Contract.. This money becomes the property of the· Port Authority. 2. The Contractor and each of its Suhcontractors lT1ust keep a record showing: (a) the name ard oc:a&pation or each worker employed by the Contractor or Subcontractor in t~e construction of the Project; and (b) the actual per diem wages paid to each worker. These records must be open to inspection by the Port Authority at aU reason~~le hours. 3. Within 30 days of receipt of a complaint, the Port AuthOrity shall make a determination whether good cause exists to believe that the Contractor or Subcontractor has committed a violation of the law. If good cause is found to exist that a violation has been committed, the law requires the Port Authority to retain any amounts due under the Contract pending a final determination. 4. If the Contractor or Subcontractor and the affected worker(s) do not reach agreement within 14 days of notice of the Port Authority's determrnation, the issues must be submitted to binding arbitration in accordance with the Texas General Arbitration Act. Genera! Conditions (Rev'd November 1,2002) VIII· 13 - 52 OX 0001-1.0196  5. Any awards made by the arbi.trator in favor of the worker(s) shan be paid out of the Contractor's funds held by the Port Authority. If the amounts held by the Port Authority are insufficient, the worker has a right of action against the Contractor or Subcontractor and the surety of the Contractor or Subcontractor to recover the amount owed, reasonable attorney's fees and court costs. 6. The Port Authority is not a party to the arbitration proceedings. 7. No officer, agent or employee of the Port Authority is liable in a civif action for any act or omission implementing or enforcing the applicable law unless the action is made in bad faith. B. The Contractor is entiUed to rely on a certificate by a Subcontractor as to the payment of all sums due to those working for and under that Subcontractor until the contrary has been determined. 3.04 A.ssignment of A.ntitrust Causes of Action: By submitting a Bid/Proposal or entering into a Contract with the Port Authority, the Contractor offers and agrees to assign to the Port Authority all causes of action it may have under the Antitrust Laws of Texas andlor Antitrust Laws of the United States. Such assignments shall be made and become effective when the Port Authority tenders final payment to the Contractor without any further action or acknowledgement by the parties. 3.05 Small Business Development Program: The Port Authority has a Small Business Development Program which was created to help implement the Port Authority's objectives of promoting economic development and business opportunities for all sectors of the local economy. Contractor is required to use good..faith efforts to U$E! certified small business participation goals. Contractor shall provide information regarding its small business .participation in the form and at the times requested by the Port Authority. The Small Business Development Program is administered by its Policies and Procedures (most recent version). Contractor should be aware of the contents of the Small Business Development Program Policy and Procedures. Specifically, Contractor should know that its failure to adhere to the requirements of the Small Business O&velopment Program may result in a default and termination of the contract. In additional to other provisiOns of the Small Business Development Program, Contractor should be expressly aware of the oblig~tions to: 1. adhere to Port of Houston AuthOrity's Non-Discrimination Mandate: 2. submit uWization reports to the Port of Houston Authority on small busines.s participation; 3. make good-faith efforts to meet a contract small business partiCipation goal or to maintain small business participation; and 4. adhere to the dispute resolution mechanisms of·the Small Business Development Program. General Conditions (Rev'd November 1, 2002) VIII· 14 - 52 OX 0001-1.0197 3.06 Contractor's Insurance Requirements· The Contractor shall. at all times during the performance of Work under this Contract and though the expiration of the warranty period set forth in Section 5.53. provide and require all Subcontractors to provide insurance coverage with companies lawfully authorized to do business in Texas and acceptable to the Port Authority, which coverage will protect the Contractor from claims set forth below which may arise out of or result from the Contractor's operations under the Contract Documents and for which the Contractor may be legally liable, whether such operations are by the Contractor or a Subcontractor or by anyone directly or in directly employed by any of them, or by anyone for whose acts any of them may be liable, and meeting not less than the minimum requirements shown below. Such insurance is to be provided at the sale cost of the Contractor and all Subcontractors. Any additional coverage in kind or limits will be sel out in the Special Conditions. Kinds of Claims: 1. claims under workers' or workmen's compensation, disability benefit and other similar employee benefit acts which are applicable to the Contractor'S Work. to be performed; 2. claims for damages because of bodily injury, occupational sickness or disease, or death of the Contractor's employees; 3. claims for damages because of bodily injury, sickness or disease, or death of any person other than the Contractor's employees; 4. claims for damages insured by usual personal injury liability coverage which are sustained (1) by a person as a result of an offense direcUy or indirectly related to employment of such person by the Contractor, or (2) by another person; 5. claims for damages, other than to the Contractors Work itself, because of injury to or destruction of tangible property, including loss of use resulting therefrom; 6. claims for damage~ because of bodily injury, death of a person or property damage arising out of ownership, maintenance or use of a motor vehicle; and 7. claims involving contractual liability insurance applicable to the Contractor's indemnification obligations under the Contract Documents. Minimum Insurance Requirements Kinds of Insurance: Limits of Liabili~: A. Workers' Compensation Statutory Texas Operations Employer's Liability Accident $500,000 Each Accident Disease $500,000 Each Employee . DIsease $500,000 Policy Limit 8. U. S. Longshoremen and Statutory General Conditions (Rev'd November 1, 2002) VIII - 15 - 52 OX 0001-1.0198  Kinds of Insurance: Limits of Liability Harbor Workers Act (if exposure exists) C. Commercial General Liability $2,000,000 General Including, but not limited to: Aggregate 1. premises/operations $2,000,000 Products/ 2. independent contractors' Completed Operations protective Aggregate 3. products and completed $1,000,000 Each Occurrence operations $1,000,000 Personal and 4. personal injury liability with Advertising Injury employment exclusion deleted $50,000 Fire Damage 5. contractual Uability 6. owned, non-owned and hired motor vehicles D. Business Automobile $1,000,000 Combined Liability including All Owned, Single Limit Per Hired and Non-owned Occurrence Automobiles. E. Umbrella Uability $2,000,000 Per OccurrenCe $2,000,000 Aggregate Bodily Injury and Property Damage F. Builder's Risk The initial Contract Price and any On an all risk policy fOnT! covering, without limitation, perDs of fire subsequent modifications thereto for the entire Work and materials stored at the site, ) and extended coverage and physical loss stored offsite or being shipped to the site. or damage, including without duplication on a replacement cost basis without of coverage, theft, flood, vandalism. voluntary dedl,Jclibles. malicious mischief, collapse, falsework, temporary buildings and debris removal including demolition occasioned by enforcement of any Applicable Laws, and covering reasonable compensation for the Port Authority's' and D~sign Consultant's services and reasonable expenses of the Port Authority and Design Consultant which are required as a result of such loss. 3.07 Proof of Insurance By Contractor: The Contractor shall furnish, along with the executed Contract and prior to any equipment or personnel being brought on to the site, fully executed insu~nce forms approved by the Port of Houston Authority, which executed forms shall provide fOf thirty ·(30) days written notice to the Port Authority concerning any change. alteration, cancellation, non-renewal or expiration in coverage contained in the policies or evidenced by such forms. General Conditions (Rev'd November 1, 2002) VIII -16 - 52 OX 0001-1.0199  The Port Authority Indemnitees shall be additional insureds under each policy except the Worker's Compensation policy and builders risk policy. Builder's risk shall include the Port Authority as an additional named insured. All policies must provide for waiver of all subrogation rights against the Port of Houston Authority. Contractor hereby waives all claims it may have against the Port to the extent any of such claims are covered by insurance required to be furnished by Contractor or any Subcontractors hereunder, and EVEN IF SUCH CLAIMS ARISE OUT OF. RELATE TO OR ARE BASED UPON THE PORT'S OWN NEGLIGENCE OR OTHER FAULT. Upon request. certified copies of original policies shall be furnished to the Port Authority. If the Contractor fails to purchase and maintain insurance required under the Contract Documents, the Port Authority may, but is no! obligated to, purchase such insurance on behalf of the Contractor and shall be entitled, at the Port Authority's election, to offset the costs thereof from amounts due Contractor or to reimbursement by the Contractor upon demand. When any required insurance, due to the attainment of a normal expiration date or renewal date, shall expire. the Contractor shall, prior to such expiration, supply the Port Authority with certificates of insurance and amendatory riders or endorsements that clearly evidence the continuation of all coverage in the same manner, limits of protection, and scope of coverage as is required by the Contract Documents. Any renewal or replacement policies shall be in form and substance satisfactory to the Port Authority and written by carriers acceptable to the Port Authority. If any policy required to be purchased pursuant to the Contract Documents is subject to a deductible, self-insured retention or similar self-insurance mechanism which limits or otherwise reduces coverage, the deductible, self-insured retention or similar self-insurance mechanism shall be the sole responsibility of the Contractor in the event of any loss. 3.0B Indemnification Bv Contractor: To the maximum extent all~ed by law, the Contractor shall indemnify and hold harmless Port ~Authority Indemnitees, from and against any and all claims, demands, suits, causes of action, settlements, liabilities, costs, expenses, fines, and judgments (including, without limitation, reasonable and necessary court costs, experts' fees and attorney's, fees) (collectively, "Losses·), whether arising in equity, at common law. or·by statute, including without limitation the Texas Deceptive Trade Practices Act (as amended) or similar statute of ottter jurisdictions, or under the law of contracts, torts· (including. without limitation, .n~gl.i9..ence and strict liability withoUt regard to fault) or property, of every kind or character (including, without lim~ation, claims for property damage, personal injUry (including without Irmitation emotional distress), and economic lass), arising in favor of or brought by any of the Contractor's employees, agents, Subcontractors, Suppliers or representatives. or by any governmental agency or any other third party, based upon, in connection with, relating to or arising out of the Work, the Contractor's failure to comply with the Contract Documents, or the Contractor's actions or inactIons under.the Contract Documents, including without limitation any failure to pay taxes or failure to comply WIth any Applicable Laws, and EVEN IF ANY SUCH LOSSES ARE DUE IN PART TO ANY PORT AUTHORITY INDEMNITEES' CONCURRENT (BUT NOT SOLE) NEGLIGENCE OR OTHER FAULT, BREACH OF CONTRACT OR WARRANTY, VIOLATION OF STATUTE, OR STRICT L1ABIUTY WITHOUT REGARD TO FAULT; provided, however that Contractor's obligation under this Section 3.08 SHALL NOT extend to the percentage of damages caused by the Port's own negligence p~ other fault. breach or contract or warranty, violation of statute, or stnct liability without regard fa fauit. . General Conditions (Rev'd November 1, 2002) VIII-17 - 52 OX 0001-1.0200  The indemnification obligation of this Section 3.08 shall apply regardless of the amount of insurance coverage held by the Contractor, including without limitation any such coverage under any worker's compensation act. disabUity act, or other act or law which would limit the amount or type of damages, compensation, or benefits payable by or for the Contractor, and shall not be limited by any insurance carried or provided by the Contractor in accordance with the Contract Documents or otherwise. 3.09 No Estoppel or Waiver. The Contractor agrees that the Port Authority shall not be precluded or estopped by any action taken or thing done, written or oral, including, but not limited to, inspections made, payments made. or final completion of the Work, from showing that the true and correct amount and character of the work done and materials or equipment furnished by the Contractor do not in fact conform to the Specifications or other Contract Documents. The Contractor also agrees that the Port Authority shall not be precluded or estopped because of any action taken or not taken, from demanding and recovering from the Contractor any damages resulting therefrom or from the Contractor's other failure to comply with the Contract Documents. Furthermore, no action or failure to act by the Port Authority shall constitute a waiver of any right or duty afforded to the Port Authority under the Contract or otherwise by law, nor shall any such action or failure to ad constitute approval of or acquiescence in any breach thereunder, except as may be specifically agreed to in a writing signed by the Chief Engineer. 3.16 Recovery of Attorney's Fees: If Contractor brings any claim against the Port Authority and Contractor does- not prevail with respect to such claim, Contractor shall be liable for all attorneys fees incurred by Ihe Port Authority as a result of such claim. 3.11 Contractor's Qualifications: . In entering into this Contract. Contractor represents and warrants that it has sufficient ability, ~experience and personnel to perfOf'!Tl the Work defined herein and that the representative of Contractor executing this Contract is duly authorized to do so. 3.12 Severability: The invalidity, illegality, or un~nforceability of any portion, clause or provision of this Contract. or the occurrence -Q( any'. ~vent rendering any portioh. clause or provision of this Contract void, shall in no way affect the validity or-enforcj3ability of any other portion, clause or provision of this Contract Any invalid, illegal, unenforceable or void portion, clause or provision shall be deemed severed from this Contract and the balance of this Contract shall be construed and enforced as if this Contract did not contain the particular portion, dause or provision held to be invalid, illegal, unenforceable or void. The parties further agree to reform this Contract to replace any stricken portion, clause or pr~vision with a valid portion, clause or provision that comes as dose as possible to the intent of the stricken portion, clause or provision. This Section 3.12 shall not prevent the entire Contract from being void should a portion, clause or provision which is the essence of this Contract be determined to be invalid, illegal. unenforceable or void. 3.13 Successors and "Assigns: (a) The Port and Contractor respectively bind themselves, their partners, successors, assigns and legal representatives to the other party hereto and to partners, successors, assigns and General Conditions (Rev'd November 1,2002) VIII- 18 - 52 OX 0001-1.0201  ·0 legal representatives of such other party in respect of all covenants. agreements and obligations contained in the Contract Documents. (b) Contractor shall not assign any rights or obligations under or interest in the Contract Documents without the prior written consent of the Executive Director of the Port or his designee. The Port may assign its rights and obligations under and interest in the Contract Documents in whole or in part without the consent of Contractor. 3.14 No Third Party Beneficiaries: Except as expressly provided herein. none of the provisions of this Contract is intended for the benefit of any other party except for the parties hereto. 3.15 Change of Control: Contractor and any party which holds an equity or voting interest in Contractor shall not sell, assign, convey, encumber or otherwise transfer more than twenty-five percent (25%) of the equity or voting interest. whether it be in the form of stock, partnership interests. membership interests or other unit of ownerShip, in Contractor without the express prior written consent of the Port. 3.16 Governing Law: This Contract, its interpretation and any disputes relating to, arising out of or connected with this Contract, shall be governed by the laws of the State of Texas. without regard to its conflict of law provisions. END OF GENERAL CONOmONS SECTION 3 General Conditions (Rev'd November 1, 2002) VIII-19 - 52 OX 0001-1.0202 SECTION 4. REGULATORY AND SAFETY REQUIREMENTS 4.01 Laws to be Observed: The Contractor is deemed to have made himself fammar with and at all times shall observe and comply with all Applicable Laws, and shall, in accordance with Section 3.08, indemnify and save harmless the Port of Houston Authority, and its Commissioners, officers, employees and agents against any claim, demand, suit, cause of action, liatiility, cost, expense, fine, settlement or judgment arising from the violation of, or failure by Contractor its Subcontractors, Suppliers or any of its or their employees, agents or representatives to comp!y with any such Applicable Laws. 4.02 Code Regulations: Where the requirements of the local building code or other Applicable Laws conflict with the Contract Documents and such requirements are mandatory or more restrictive, such requirements shall be followed to the same extent as if specifically set out herein in fuQ. If the Contractor observes that any Contract Document fails in any respect to conform with Applicable Laws, Contractor shall immediately notify the Port Authority by written RFI and identify any such failures before proceeding with any part of the Work affected thereby. In the event a Design Consultant is utilized for the Project, the Contractor shall send such RFI to the Design Consultant, with a copy of the transmittal letter to the Inspector and Chief Engineer.. If the Contractor performs Work that it knows or reasonably should have known to be contrary to or In conflict with Applicable Laws, the Contractor shaD assume full responsibility for such Work and shall bear all costs attributable thereto, including without limitation all costs associated with design profeSsionals, and shall be liable for all damages caused thereby. Provisions of the Contract Documents which are more stringent than the minimum requirements of such codes, regulations or Applicable Laws shall be followed, and no requirements of the Contract Documents may be modified or voided because any such requirements are not specifically required by such codes, regulations or Applicable Laws. 4.03 Permits and Licenses: The Contractor shall procure all permits and licenses, pay all charges and fees, and give all notices necessary and inCidental to the prosecution of the Work. This requirement shall not pertain to permits required by the United States Army Corp of Engineers, which permits will be obtained by the Port of Houston Authority. 4.04 Barricades, Warning Lights -and Warning Signs: The Contractor shall be solely responsible for furnishing, erecting and maintaining suitable barricades, warning signs, flares, barriers, cones, lights, flags, Signals, flagmen and any and all other safety devices which are or may become necessary to adequately protect the Work. Contractor's workers and all other parties coming onto the site. Upon completion of the Work, all such safety devices and evidence thereof shall be immediately removed. 4.05 Sanitary Facilities: ." . The Contractor shall provide sanitary facilities for use of the workmen, and shall maintain such facilities in a clean and sanitary condition until the expiration or termination of the Contract, at which time they shall be immediately removed. General Conditions (Rev'd November 1, 2002) VIII- 20 - 52 OX 0001-1.0203  4.06 ~ Site Health and Safety Coordinator: v The Contractor shall designate a qualified Site Health and Safety Coordinator (the ·SHSC") to ensure that all Applicable Laws pertaining to health and safety are complied with and all health and safety requirements are implemented. The SHSC shall have the authority to terminate work when any such work or condition affecting such work or the Project is found to be unsafe. The name and qtJalifications of the SHSC shall be furnished to the Chief Engineer for review prior to commencement of Work. 4.07 Health and Safety: The Contractor shall submit five (5) copies of a health and safety plan for the Work to the Chief Engineer for review at least forty-eight (48) hours prior to commencing performance of any Work at the site. Prior 10 beginning any field work at the site, such plan shall be certified, by signature of the SHSC, that it complies with applicable portions of OSHA standards 29 CFR 1910 and 29 CFR 1926. Such plan shall provide, at a minimum, for safe working practices, medical surveillance. engineering safeguards, personnel protective equipment. training. safe operating procedures, emergency planning. reporting and sanitation. Notwithstanding the Chief Engineer's review of the health ~,nd safety plan, the Contractor. and not the Port Authority. shall be responsible for and have control over ensuring the safety of its personnel and its Subcontractors, agents. representatives and any other person who visits the site in connection with the Work. 4.08 Accident Reporting: The Contractor shall immediately report to the Port Authority's Police Department at telephone number (713) 670-2647 and the Chief Inspector of the Port Authority any jobsite accident, injury, illness, or environmental release. The Contractor shall submit to the Chief Inspector of the Port Authority as soon as possible but no later than two (2) working days thereafter, a fuU written report giving the date, time, location, description (in a degree of detail acceptable to the Chief Engineer). and personnel involved. Such report shall be Signed by Contractor's designated SHSC. ) 4.09 Fill Material Policy: _ The Port of Houston Authority. has adopted a policy ~ing the acceptance of fill material to be incorporated into the Port Authority's construction Projects. Material governed by this policy shall include soil. sand for cement stabilized sand and concrete. road base materials, sub-ballast for railroad construction, and any other materials brought onto Port A!Jthority property for construction purposes. It is the intent of this policy tQ.- ensure that only clean uncontaminated materials will be placed on Port Authority property and any materials pl~ced on Port Authority property shall be subject to removal by the Contractor at its S~E!. e1'Qense if found-not to be in complianCe with the requirements outlined herein. Testing to determine the suitability_of materials to be used on Port Authority property shall be performed by a testing laboratory employed by and paid by the Port of Houston Authority. The following tests shall be performed: A. Total Metals: Total metals by volume shall not exceed "background" levels for the following metals as measured by EPA Test Method 601017000 series. The assocIated required method detection limits for each metal, as listed below, must be met by the laboratory. General Conditions (Rev'd November 1,2002) VIII· 21 - 52 OX 0001-1.0204  \. / jL METAL DETECTION METAL DETECTION . '" LIMIT (mglkg) LIMIT (mglkg) Antimony 0.5 lead 0.1 Arsenic 0.5 Mercury 0.1 Barium 0.5 Nickel 0.1 Beryllium 0.1 Selenium 0.5 Cadmium 0.1 Silver 0.1 Chromium 0.5 Thallium 0.5 Copper 0.1 Zinc 0.5 B. Total Petroleum Hydrocarbons: TPH shall not exceed the Tier 1 Residential Standards defined on any of the reported fractions as determined by Texas Test Method 1005. C. Reuse of Soils with Concentration above Background: If the concentration of naturally occurring metals exceeds determined background levels set forth above or TPH·is detected. the soils are then considered as reused as defined in the Texas Risk Rectuction Program (30 TAe 350.36). The relocation of soils containing chemicals of concern for reuse purposes must comply with the foUowing requirements: 1. Soil must be sampled for volatile organic compounds (EPA Method 8260b). Semivolatile Qf,9HORlNG S_-\FEn- PLA.)"! SECTIOI\' 02161 TRENCH EXCA \'ATION AND SHORING SAFETY PLA~ PART 1 GENERAL 1.1 SECTION INCLUDES Subject to the General and Special Conditions, this Section includes the furnishing of a Trench Excavation and Shoring Safety Plan, including detailed plans and specifications for a trench safety system and requirements for a safety program for the trench system (including a plan for ingress and egress of the trenches, manholes and structures), to be incorporated into the bid documents and the Construction Contract, and all labor and materials for installation, inspection, and maintenance of trench safety system. B. Application For any trench excavation at a depth of 5 feet or greater, provide a trench safety system. Trench safety system is not required when (a) CO!\.'TRACTOR's geotechnical engineer detennines that the trench excavation is to be made in stable rock; or (b) excavations are less than five (5) feet in depth and examination of the ground by a competent person on behalf of the CONTRACTOR provides no indication that a cave-in should be expected. TTench safety system to be in ) accordance with details shown on CONTRACTOR's Trench Excavation and ! Shoring Safety Plan. c. Modifications _ All modifications to the COl'lJRACTOR'S Trench Excavation and Shoring Safetv.... Plan or the detailed plans and specifications necessitated by the site conditions, CONTRACTOR'S trench construction means, methods, techniques or procedures and CONTRACTQR'S equipment to be used in construction of jlrojict facili~ies to be submitted to the Chief Engineer. All such modifications to be signed and sealed by a Registered Professional Engineer licensed in the State of Texas and a statement provided stating that the modified plan and/or the modified detailed plans and specifications for the trench safety system are deSigned in compliance with the Contractor's Standard of Care and is in confonnance with appropriate OSHA standards. Such modifications to CONTRACTOR'S plan and/or the CONTRACTOR'S detailed plans and specifications for the trench safety system to thereafter be incorporated into the Construction Contract. ... ~" • r • Ilf07/02 C70-1A-SOI-O-02161 - 1 OX 0001-1.0324 PORT OF HOUSTON Ap-rl-iORITY 11::...... t1N~\ .... L ~rr:.Ll["l'-rt 1 iv,'" BAYPORT TERMINI\.. \...._ )FLEX-PHASE lA - . - '. )~XCA V ATION AND ~vRING SAfETY PL>\N. 1.2 REFERENCES The publications listed below fonn a part of this specification to the extent referenced. The publications are referred to in the text by basic designation only. AMERICAN SOCIETY OF TESTING AND MATERIALS (ASTM) , ASTM A36/A36M 1997 Standard Specification for Carbon Structural Steel ASTM AJ07 1997 Revision A-Standard Specification for Carbon Steel Bolts and Studs, 60,000 psi Tensile Strength ASTM AJ28/A328M 1996 (REV) Standard Specification for Steel Sheet Piling ASTM A5721A572M 1997 Standard Specification for High-Strength Low-Alloy Columbium-Vanadium Steels of Structural Quality ASTM A588/A588M 1997 Standard Specification for High-Strength Low-Alloy Structural Steel With 50 ksi (345 MPa) Minimum Yield Point to 04 in. (100 mm) thick ASTM A690/A690M 1994 Standard Specification for High-Strength Low-Alloy Steel H-Pipes and Sheet Piling for Use in Marine Envirorunents AMERiCAN WELDING SOCIETi. INC. (AWS) AWS Dl.I 1998 Structural We1ding Code - Steel OCCUP A TION SAFETY AND HEALTH ADMINISTRATION (OSHA) 29 CFR Part 1926 1993 (Revised as of July 1, 1996 or latest Edition or revision to) Subpart P Excavations and Applicable Subparts 1.3 SUBMI'T'fALS The successful Contractor to submit its Proposed Trench Excavation and Shoring Safety Plan after the Award of the Contract. The plan to incorporate detailed PLANS and Specifications for a trench safety system confonning to OSHA standarc\s that accounts for project site conditions, CONTRACTOR's trench construction means, methods, techniques or procedures, the relationship of spoil to edge of trench, and CONTRACTOR's equipment to be used in construction ofproject facilities requiring trench systern(s), CONTRACTOR to provide a statement signed and sealed by a Registered Professional Engineer licensed iI\ the State of Texas statmg that the Trench Excavation and Shoring Safety Plan and the~detafled plans and specifications for the trench safety system are designed In compliance with the Contractor's Standard of Care 11107/02 C70-IA-SOI-O-02161 - 2 OX 0001-1.0325  rVI\...J VrnVU':'lVl'V" ....... JlDVIU1 I 1.t:.\.....!7"---~1L-J"'\.. ..... ....,.1 J...,.\...-1.l 1'-",.,1. ............ 1 " - BAYPORT TERMIN~, _.()1PLEX PHASE lA Tf(' )H EXCAVATION AND .:?HORING SAFETY PLA..l'o.! and is in confonnance with appropriate OSHA standards. CON'TRACTOR's plan and the detailed PLANS and SPECIFICATIONS for the trench safety system to be incorporated into the bid documents and the Construction ContracL 1.4 QUALITY ASSURANCE Trench safety systems to be accomplished in accordance with the detailed Speciflcations set out in the provisions 29 CFR, Part 1926, Subpart P. Legislation that has been enacted by the Texas Legislature [(H.B. No. 1569)) with regard to Trench Safety Systems, is also hereby incorporated, by reference, into these SpecificatiQns_ PART 2 PRODUCTS 2.1 MATERIALS AND/OR EQUIPMEl'-TT A. Materials 1. Timber Trench sheeting materials to be full size. a minimum of2 inches in thickness, solid and sound, free from weakening defects such as loose ]mots and splits. 2. Sheet Piling Steel sheet piling to conform to one or more of ASTM A328!328M. ASTM A572/A572MI ASTM A690/690M material requirements. ) 3. Steel for stringers (waIes) and cross braces to confonn to ASTM A588. 4. Steel trench Boxes to be constructed of steel conforming to ASTM A36/A36M. Connecting bolts to conform to ASTM A307. Welds to confomi to the requirements of AWS D 1.l. 5. Miscellaneous Materials: Miscellaneous materials to be utilized to conform to applicable ASTM standards. PART 3 EXECUTION -: 3.1 GENERAL Trench safety system to be constructed, installed, and maintained in accordance with the Trench Excavation and Shoring Safety Plan as outlined in Paragraph 3 ..5A.ofthis Section. 3.2 ERECTIONfINSTALLATION/APPLlCATION AND/OR CONSTRUCTION -A. Timber Sheeting Timber sheeting and size of uprights-, stringers (wales), and cross bracing to be installed in accordance with the CONTRACTOR'S plan. Place cross braces in true horizontal position, spaced vertically, and secured to prevent slidmg, falling, 11107/02 C70-1A-SOI-0-0216J - 3 OX 0001-1.0326 PORT OF HOUSTON Al'~T,ORITY 1 r..Lnl"11" ""\L..:>r L\.......ll J'-I""l." J.'-J'l .. ..., BAYP-O.RT IERM.INA ~ 7LEX PHASE lA . •'. :XCAVATIOl\ AND 'duRING SAFETY PLAN or kickouts. Cross braces to be placed at each end of stringers (wales), in addition to other locations required. Cross braces and stringers (wales) to be placed at / splices of uprights, in addition to other locations required. B. Steel Sheet Piling Steel sheet piling of equal or greater strength may be used in lieu of timber trench shoring shown in the OSHA tables (proposed standards). Drive steel sheet piling to at least minimum depth below trench bottom as recommended by CONTRACTOR'S Registered Professional Engineer providing design. Place cross braces in true horizontal position, spaced vertically and secured to prevent sliding, falling, or kickouts. Cross braces to be placed at each end of stringers (wales), in addition to other locations required. C. Trench Boxes Portable trench box may be used in lieu of timber trench shoring shown in the OSHA tables and to be designed to provide equal or greater protection than timber trench shoring shown in the OSHA tables. In cases where top of portable trench box will be below top of trench, the trench must be sloped to the maximum allowable slope for the soil conditions existing on the Project. In areas where a sloped trench will affect the integrity of existing structures, CONTRACTOR to protect structures prior to sloping trench. D. Trench Jacks ) When trench jacks arc used for cross bracing and/or stringers (wales), the trench jacks to provide protection greater than or equal to the timber cross bracing shown in the OSHA tables {proposed standards}. Trenchjacks to be placed at each end of stringers (wales) in addition to other locations required. 3.3 REPAIRJRESTORATION Bed and·backfill pipe to a point at'least one (1) foot above top of pipe or other embedded items prior to removal of any portion of trench safety system. Bedding and backfill to be in accordance with other applicable SPECIFICATION Sections. Backfilling and removal of trench supports to be in accordance with CONTRACTOR'S Trench Excavation and Shoring Safety Plan. Removal of trench safety system to be accomplished in such a manner to cause no damage to pipe or other embedded items. Remove no braces or trench supports until all personnel have evacuated the trench. Backfill trench to within 5 feet of natural grOUD? prior to removal of entire trench safety system. 11/07/02 C70-1A-SOJ-0-0216J - 4 OX 0001-1.0327 .POKI OF HOUSTON/ BAYPORT TERMINA... V ~THORlTY LEX PHASE lA l.t:.c~r-. ,AL ::.Yt:.Ur ILA 1 JUN~ T fiEXCAVATlON AND dORING SAFETY PLAN 3.4 FIELD QUALITI' CONTROL A Supervision Provide competent supervisory personnel at each trench while work is in progress to ensure CONTRACTOR'S methods, procedures, equipment, and materials pertaining to the "Safety systems in this Section are sufficient to meet requirements of OSHA Standards. B. Inspection CONTRACTOR to make daily inspection of trench safety system to ensure that the system meets OSHA requirements. Daily inspection to be made by competent or personnel. If evidence of possible cave - ins slides is apparent, all work in the trench is to cease until necessary precautions have been taken to safeguard personnel entering trench. CONTRACTOR to maintain permanent record of daily inspections. 3.5 PROTECT10N A. Maintenance of Safety System The safety system to be maintained in the condition as shown on the Trench Excavation and Shoring Safety Plan as designed by the CONTRACTOR's Registered Professional ENGINEER. The CONTRACTOR to take all necessary precaution to ensure the safety systems are not damaged during their use. If at any time during its use a safety system is damaged, personnel to be immediately removed from the trench excavation area and the safety system repaired. The CONTRACTOR is to take all necessary precautions to ensure no loads, except those_provided for in the plan., are imposed upon the trench safety system. 3.6 MEASUREMENT AND PAYMENT A. - -Measurement Measure "Trench Safety System" by linear foot of trench protected. Shoring of trench at manholes and other line structures to be included in the lineal foot cost. B. Payment Pay for "Trench Safety System" measured as stated and as shown on Proposal. Payment to be full compensation for all work described herein. There will be no increase in the Contract price because of the incorporation of CONTRACTOR'S Trench Excavation and Shoring Safet¥ Plan or CONTRACTOR'S detailed plans and specifications for the trench safety system into the proposal documents and the Construction Contract. There will be no increase in the Contract price because 11107/01 C70-IA-SOJ-O-02161 - 5 OX 0001-1.0328 PORT OF HOUSTON Arp--1,ORITY L cL.t1NH >\'L ;::,rCA._J.r lL-M.' H_I> h ... BAYPORTTERMINk \...JLEXP-HASE lA . . .-', ::XCAYATIONAND ~uRING SAfETY PLAN of modifications to Cm·rrRACTOR'S plan and/or the CONTRACTOR'5 detail plans and specifications for the trench safety system, whether or not the result of unforeseen or differing site or soil condltions_ C. Pay for "Design of Trench Excavation and Shonng Safety Plan" by lump sum as shown on Proposal. Payment to be full compensation for all professIOnal services relating to the'EONTRACTOR's Trench Safety System. END OF SECTION 11/07/02 C70-1A-SOI-O-02161 - 6 OX 0001-1.0329  TAB 15 Contract, Technical Specifications, Section 01500 Temporary Facilities and Controls (DX1-1.0271-82)  t'UX.! Ul" HU U ~! VI' . . ·p HU.K.J l Y - I t:.y ' )\..,AL :::.t't:.\..,lrll...h !lUI'-.::. BAYPORT !ERMIN. (/iPLEXPHASE lA ( . ,MPORARY fACILITIES / AND COl\'TROLS SECTION 01500 TEMPORARY FACILITIES AND COI':TROLS PART 1 GENERAL 1.1 SUMMARY A. Subject to the General and Special Conditions, tlUs Section describes temporary facilities and necessary controls for the project including utilities, • telecommumcations, sanitary facilities, field office, storage sheds and building, safety requirements, first aid equipment, fire protection, security measures, protection of the Work and property, access roads and parking, environmental controls, disposal of trash, debris, and excavated material, pest and rodent control, _ water runoff and erosion controL B. The facilities and controls specified in this section are considered minimum for the Project. The CONTRACTOR may provide additional facilities and controls for the proper execution of the Work and to meet CONTRACTOR'S responsibilities for protect.ion of persons and property. · 12 CONTRACTOR'S RESPONSIBILITY Comply with applicable requirements specified in other sections of the Specifications. ) l. Maintain and operate temporary facilities and systems to assure continuous service. 2. Modify _and extend systems as Work progress requires. 3. Completely remove temporary materials and equipment when their use is no longer required. 4. Restore existing facilities·used for temporary services to specified or to original ~?ndition. 1.3 TEMPORARY. UTILITIES A. Obtaining T ernporary Service. 1. Make arrangements with utility service companies for t~porary services. 2. Abide by rules and regulations of the utility service companies or authorities having jurisdiction. 3. Be responsible for utility service costs Wltil the Work is substantially complete. Included are fuel, power, light, beat, and other utility services necessary for execution, completion ~ t~ting, and initial operation of the Work. · •· 11 /07/02 C70- l A-SO1-0-01500- 1 ox 0001-1 .0271 PORT OF HOUSTON A'- ORITY 1J:::.LHN- '\.L ::>r.C'I...lri\..M.IAV1'"-' BAYPORTTERMIN~ ~LEX PHASE lA ORARY FACILITIES L ~D CO~'TROLS B. Water ' I 1. Provide water required for and in connection with Work to be perfonned and for specified tests of piping, equipment, devices, or for other use as required for proper completion of the Work. 2. Provide and maintain an adequate supply of potable water for domestic consumption by the CONtRACTOR petsonnel and Port of Houston Authority (Port Authority) and its representatives. C. Telecommunications 1. Provide emergency telephone service at the CONTRACTOR'S office for use by CONTRACTOR personnel and others performing work or furnishing services at the site. 2. Provide field office telephone system with number of incoming lines, equal to that specified for telephone type described in Part 1.4.C.8 and one separate line for fax machine, described in Part 1.4.0.14. Provide five, separate Tl lines for computer modem connections and electronic data information (EDI) communications; one line for each of the closed offices and two lines, one each, in the main reception and conference room areas. Provide all appropriate jacks, wiring and equipment, IUJUired for a complete telecommunications (voice, fax and EDI) system. Cost for local calls and other project-related calls made by such individuals and their representatives shall be paid for by the CONTRACfOR. D. Sanitary Facilities ) L Provide and maintain sanitary facilities, in compliance with state and local health authorities, for persons on the job site. 2. Enforce the use of sanitary facilities by constOlction personnel at the job site. Such facilities shaH be enclosed. Pit-type toilets will not be permitted. No discharge will be allowed from these facilities. Collect and ·. store sewage and waste so as not to cause a nuisance or health problem; hav.e sewer and waste hauled off-site and properly disposed, in accordance with applicable regulations. 3. Locate toilets near the Work site and secluded from view insofar as possible. Keep toilets clean and supplied throughout the course of the Work. l I /07/02 C70- IA-SOI-0-0t500-2 ox 0001-1 .0272  ruK J Ut" t1U U::> 1 UN' '\J I.HUK.J I Y ! l:l(' ' ~'-..AL ::>t'J:.'-..U' J\...A I JU!'\':> BAYJ?ORT TERMIN~ o-eLEX PHASE lA ( ).1PORARY FACILITIES · 7 AND C~'TROLS 1.4 FIELD OFFJCE A. Furnish and Locate I. Furnish, install, and maintain a fteld office for the exclusive use of the Port Authority. Provide main reception area, conference room (12'x10') for project meetings and three separate closed offices (8'xJO' each) for the Chief Engineer, Construction Manager and Inspector. Locate the office near the Site or in a place approved by the Chief Engineer. Office to be leveled, blocked, tied down, skirted and relocated, if necessary. Off ice to be provided on proper foundations. Provide proper surface water drainage and connections to all utility services. Raise grade under field office, as necessary, to an elevation adequate to avoid flooding. 2. Provide office space ready for occupancy ten (I 0) days after date fixed in Notice to Proceed Office to remain on the site for a minimum of 30 working days after the final acceptance of the Project Work. 3. Provide a minimum of 100 square feet of hard stand, all weather field office entrance and parking area to accommodate parking for 10 vehicles. Provide a hard stand, all weather wal.lcway from parking area to field office trailer. B. Minimum Construction } 1. Completely weather-tight with insulated roof and walls. 2. Exterior finish and interior finish acceptable to Chief Engineer. 3. Stairs or walkway with handrail and entrance platform (4' x 4') with a mud scraper ~~ door 4. Resilient floor covering 5. Screened windows with an area equal to approximately 10 percent of floor .. area sufficient for light, view. and ventilation. Provide windows with operable sash. Provide blinds or drapes on all windows. 6. Provide two secure. lockable exterior doors with dead bolt cylinder locks, keyed_alike. Provide six sets of keys. C. Mimmum Services I. Security bars on doors and windows 2. Exterior light at entrance 3. Interior fluorescent, 110 volt lighting of 50 foot-candles at desktop height 4. Electric automatic heating to maintain 65°F in winter 5. Electric automatic cooling to maintain 75°F in summer 6. Electric power service 11/07/02 C70- l A-SO 1-0-01500-3 ox 0001-1.0273 PORT OF HOU STON A l ' 'ORITY r BAYPORT TERMINA~ _"PLEX PHASE IA / ORARY FACILITIES AND COt..'TROLS 7. Minimum of two duplex ,I I 0 volt electric wall outlets in each closed ·. office space and four duple:·. I I 0 volt electric wall o ut) ets ir. each common area space. 8. Six telephones with intercom line, three incoming/outgoing lines. touch- tone, conference speaker and 12-foot coiled handset cord. One telephone v.rill be located in each closed office area; and one telephone:, each, in the: main reception and conference room areas. One telephone instrument v.ill be kept, as a spare, in case of installed equipment breakdown. 9. - Bottled water service with cooler capable of producing hot and cold water 10. Separate sanitary facilities with one water closet and one-lavatory and medicine cabinet 11. Plumbing and sewers as required, protected from freezing D. Minimum Furnishings I. Six, steel 5-drawer desks, 30 inches by 60 inches with desk surface located 29 inches from floor 2. Six, five castor base; adjustable seat height; adjustable, height and angle, locking seat back; adjustable arms; swivel desk chairs 3. One drafting table., three feet by six feet. witlnwo drafting stools and light 4. Three plan racks with racks to hold eight racks of drawings 5. Nine, locking, 4-drawer steel, legal file cabinets 6. Book shelving or three bookcases with a minimwn of 45 feet of shelf space 7. Six waste baskets 8. Two tack board, 30 inches by 36 inches 9. Two carbon dioxide (1 0 pound) fire extinguishers 10. Identifying exterior sign acceptable to Chief Engineer 11. Two first-aid kit 12. Six (6) protective belm~ts (hard hats) for ~e by Port Authority and visitors 13. Conference table. 36 inches by 96 inches and I 0 steel folding chairs 14, Fax maclllne with connecting cables 15. Paper cup dispenser with cups 16. Two paper towel dispenser with towels 17. Telephone answering machine with cormecting cables 18. Duplicator, dry type, self-feeding; capable of providing 8 Yl by 11 inch, 8 Yl by 14 inch and II by 17 inch copies; collating I0 mutilple copies; reduction and enlargement capabilities; including maintenance service agreement for project duration L9 Two clothes racks 20. Other furnishings at CONT~CTOR ' s option . , 1110- 02 C70- lA-SOl -0 -0 I 500-4 ox 0001 -1.0274 rvt.\.! vr nvv.:>JVI' · BAYPORTTERMINA aLEX · •nu.JUJ t PHASE I A lJ.:.\..v· '"'--"-1- ). 1 .J o.,JI j1PORARY FACILITIES AND COl'o.'TROLS .LA.....U !~r'\.Jo •"-'•'...> E. Mamtenance I. Schedule continuous maintenance of office, walkways, and services. Office to be cleaned not less than once per week. 2. Provide soap, paper towels, cleansers, janitorial service and appunenances. 3. Immediately repair any damage, leaks, or defective service. F. Provide adequate space for one set of Contract Documents in the office for ready reference. 1.5 STORAGE SHEDS AND BUILDINGS A. As may be necessary provide adequately ventilated, watertight storage facilities with floor above ground level for materials and equipment susceptible to weather damage. ' B. Storage of materials not susceptible to weather damage may be on blocks off the ground. C. Store materials in a neat and orderly manner. Place materials and equipment to permit easy access for identification, inspection. and inventory. D. Fill and grade site for temporary strucrures to provide drainage away from temporary and existing buildings. 1.6 SAFETY REQUIREMENTS A. Submit and follow a safety program. B. Conduct operations in strict accord with applicable federal, state and local safety codes and st.a.twes and with good construction practice. The CONTRACTOR is fully ~ponsible and obligated to establish and maintain procedures for safety of all work, persomu:_l,. and equipment involved in the Project. c. Observe and c;omply with all applicable law governing health and safety including without limitation the Texas Worker's Health and Safety Act (Ch.4ll of the Texas Labor Code) and with all safety and health standards promulgated by Secretary of Labor under Section 107 of Contract Work Hours and Standards Act, published in 29 CFR Part 1926 and adopted by Secretary of Labor ORARY FACILITIES AND CONTROLS 3. Notify the Chief Engineer and provide to ChiefEngineer copies of written consent from proper parties before entering or occupying with workers, tools, materials or equipment, privately owned land except on easements provided for construction. 4. Assume full responsibility for the preservation of public and private property on or adjacent to the site. If any direct or indirect damage is done by, orbn account of, any act, omission, neglect, or misconduct in execution of the Work by the CONTRACTOR. it is to be restored by the CONTRACTOR to a condition equal to or better than that existing before the damage was done. B. Tree, Plant, and Wetland Protection. Conform to requirements specified in Section 01015 Contractor Use ofFacilities. C. Protection of Existing Structures 1. Underground Structures: a Underground structures are defined to include, but not be limited to, sewer, water, gas, and other piping; and manholes, chambers, electrical and signal conduits, tunnels, and other existing subsurface installations located within or adjac.cnt. to the limits of the Wort. b. Known underground structures, including water, sewer, electric, and telephone service connections are shown on the Drawings. This infoanation is only approximately shown for the assistance of the CONTRACTOR, and is not guaranteed to be correct or complete. c. Explore ahead of trenching and excavation work and uncover obstructing underground structures sufficiently to determine their location, to prevent damage to them, and to prevent interruption of utility services. Restore to original condition damages to underground struc;ture at no additional cost to the Port Authority. d. Necessary changes in location of the Work may be made by the Chief Engine~r to avoid unanticipated underground structures. e. lfperrnanent relocation of an underground structure or other subsurface installation is required and n ot otherwise provided for in the Contract Documents, the Chief Engineer will direct the CONTRACTOR in writing to perform the Work, which is to be paid for under the provisions for changes in the Contract Price as described in Section VIII - General Conditions.· 2. Surface Structures: Surface stru.ctures are defined as existing buildings, structures and other constructed installations abo-ie the ground surface. Included with such structures are their foundations or any extension below the surface. Surface structures include, but are not limited to buildings, tanks, walls, 11 /07/02 C70- l A-SOI-0-01500-8 ox 0001-1 .0278  rur..1 vr nuu.)JVJ,.,---_,JnVl'UJ 1 BAYPORT TERMINt. i fLEX PHASE I A bridges, roads, dams, channels, open drainage, piping, p~les , v.."ires, posts, signs, markers, curbs, walks, guard cables, fencing, and other facilities that are visible above the ground surface. 3. Protection of Underground and Surfac.e Structures: a. Sup_port in place and protect from direct or indirect damage underground and surface strucrures located within or adjacent to the limits of the Work. Install such supports carefully and as required by the party owning or controlling such structure. b. Before installing structure supports, CONTRACTOR·shall satisfy the Chief Engineer that the methods and procedures to be used have been approved by the owner of the structure. Avoid moving, or in any way changing, the property of public utilities or private service corpofations without prior written consent from a responsible official authorized by that service or public utility to give such consent. Representatives of these utilities reserve the right to enter within the limits of this project for the purpose of maintaining their properties, or of making such changes or repairs to their propeny that may be considered necessary by performance of this Contract. c. Notify the owners and/or operators of utilities and pipelines of the narure of construction operations to be perfonned and the date or ·. dates on which those operations will be performed. When construction operations are required in the immediate vicinity of existing structures, pipelines, or utilities, give a minimum of 5 working days advance notice. Probe and flag the location of underground utilities prior to commencement of excavation. Keep nags in place until construction operations reach and uncover the utility. d. CONTRACTOR ass-umes risks attending the presence or proximity of underground and surface structures within or adjacent to the limits to tlfe Work, including but..not limited to, damage and expense for direct or indirect injury caused by this Work to any strucrure. ·Immediately repair damage caused, to the satisfaction of the owner of the damaged structure. · D. Protection oflnstalled Products. 1. Provide protection of installed products to prevent damage from subsequent operations. Remove protection facilities when no longer needed, prior to completion of Wotk. 2. Control traffic to prevent damage to ~utpment, materials, and surfaces. .. •• • • # 11/07/02 C70-1 A-SO 1-0-01500-9 ox 0001-1 .0279 PORT OF HOUSTON AT- · 'iORlTY - BAYPORT TERMIN~- )PLEX PHASE lA ORARY FACILITIES AND CONTROLS 1.12 ROADS AND PAR.K.ING ) A. Designate temporary parking areas to accommodate construction personneL When site space is not adequate, provide additional off-site parking. Locate as approved through the submittal process. B. Minimize use by construction traffic of ex..isting streets and drivev>'ays. 1.13 ENVIRONMEI\'TAL CONTROLS A. Provide and maintain methods, equipment, and temporary construction as necessary for controls over environmental conditions at the construction site and adjacent areas. B. Comply with statutes, regulations, and ordinances which relate to the proposed Work for the prevention of environmental pollution and preservation of natural resources, including but not limited to the [National Environmental Policy Act of 1969, PL91-190, Executive Order 11514.) C. The Port Authority recognizes that construction of projects should have minimum impact to the surrounding environment. The CONTRACTOR shall adopt construction procedures that do not cause WliJCCessary excavation and ftlling of the terrain, indisc:riminate destruction of vegetation, air or stream pollution, nor the harassment or destruction of wildlife. 'I D. Recognize and adhere .to the environmental requirements of the ProjecL I Disturbed areas sh.all be strictly limited to boundaries established by the Contract Documents. Particularly avoid pollution of on-site streams, sewers, wells, or other water sources. E. Burning of rubbish, debris, or waste materials is not permitted. 1.14 POLLUTION CONTROL A. Provide methods, means, and facilities required to prevent contamination of soil, water or atmosphere by discharge of noxious substances from construction operations. B. Provide equipment and personnel to perfonn emergency measures required to contain any spillage, and to remove contaminated soils or liquids. Excavate and dispose of any contaminated earth off-site and replace with suitable compacted fill and topsoil. C. Take special measures to prevent harmful-substances from entering public waters. Prevent disposal of wastes, effluents, chemicals, or other such substances 11/07/02 C70- 1A-S01-0·0l500- l 0 ox 0001-1.0280 PORT OF HOUSTON r·';HORJT\' l 1:.~7 - ~1'\..1... ::>r .C.\..-.t.r ''-'"', ''-'·'J BAYPORTTERMINk. OLEXPHASE !A )PORARY FACILITIES C:7 AND C~TROLS adjacent to streams, or in sanitary or storm sewers. Limit discharge of suspended solid from Disposal Area to 300 mg/L maximum. D. Provide systems for control of atmospheric pollutants. 1. Prevent toxic concentrations of chemicals. 2. Prevent hinmful dispersal of pollutants into the atmosphere. E. Use equipment during construction that conforms to current federal , state, and local laws and regulations. 1.15 NOISE CO'l\'TROL A. Provide vehicles, equipment, and construction activities that minimize noise to the greatest degree practicable. Noise levels shal!'conform to the latest OSHA standards and applicable regulations and in no case will noise levels be permitted which interfere with the operations of the Port Authority or create a nuisance in the surrounding residential neigbborhoQds. B. Conduct construction operations during working hours, in accordance with the General Conditions, except as approved by Chief Engineer. C. Select construction equipment to operate with minimum noise and vibration. If in the opinion of the ChiefEngineer, objectional noise or vibration is produced by equipment, rectify such conditions without additional cost to the Port Authority. The Sound Power Level (PWL) of any equipment shall not exceed 85 db A (re: I 0-12 watts) measured 5 feet from the piece of equipment, or the levels prescribed by local regulations, whichever is lower. Explicit equipment noise requirements are specified v..-iih equipment specifications. 1.16 DUST CONTROL Control objectionable dust caased by operation of vehicles and equipment. Apply water or use other-methods, su&ject to approval through the submittal process, which will control the amount of dust generated. Comply with requirements specified in Section 0I532-Gene-ral Source Controls. 1.17 WATER RUNOFF AND EROSION CONTROL A. Where required, the CONTRACTOR is to comply with the National Pollutant D1scharge Ehmination System (NPDES} permit as stated in the [Federal Register, Vol 57, No. 175.] . .. 11 /07/02 C70· I A-SUI-0-0 1500-11 ox 0001-1 .0281 r vl'l. • vr nvu.:> t vt-. ~· ·• flVIU. 1 J 'C.'-nJ.,.Y '\.....1"\L... ..>r L"-U &\...on 1 l Vt."'..:J BAYPORT TERMINi~ ·' fLEX PHASE lA · -, =>QRARY FACILITIES --._.;, AND CONTROLS B. In addition to the NPDES requirements, the CO?-.'TRACTOR is to: ) 1. Provide methods to control Sl.uface water, runoff, subsurface water, and water from excavations and structures to prevent damage to the Work. the site, or adjoining properties. 2. Control fill. grading, and ditching to direct water away from excavations, pits, tunnels, a.11d other construction areas; and to direct drainage to proper runoff courses so as to prevent any erosion, sedimentation, or damage. 3. Provide, operate, and maintain equipment and facilities of adequate size to control surface water. 4. Dispose of drainage water in a manner to prevent flooding, erosion, or other damage to any portion of the site or to adjoining areas and in confollllance with environmental requirements. 5. Retain existing drainage patterns external to the construction site by constructing temporary earth berms. sedimentation basins, retaining areas, and temporary ground cover as needed to control conditions. 6. Plan and execute construction and earth work by methods to control surface drainage from cuts and fills, and from borrow and waste disposal areas, to prevent erosion and sedimentation. a. Keep to a minimum the area ofba:re soil exposed at ooe time. b. Provide temporary control measures, such as berms, dikes, and drains. 7. Construct fills and waste areas by selective pLacement to eliminate surface silts or clays, which will erode.. 8. Inspect earthwork periodically to detect any evidence of the start of erosion. Apply corrective measures as required to control erosion. 1.18 PAYMENT No separate payment for the work specified in this section. Such work to be considered incidental, and payment will be included as part of the appropriate lump sum and/or unit prices specified in the Proposal. PART2 PRODUCTS- (NOT USED) PART3 EXECUTION- (NOT USED) END OF SECTION 11/07/02 C70-l A-SO 1-0-0 1500·1 2 ox 0001-1 .0282  TAB 16 Contract, Special Conditions, §12 (DX1-1.0244) Bayport Tenninal Complex rc::ul ucu y ....... - .... - - Phase:1A Wh2Ft and D~ \ . rya- Sheet Title , U-105 8" Potable Waterline Plan -5 ) U-106 Typical Wharf Section with Potable Waterline Details U-107 Potable Water Delails 12. Construction Manager: (a) Independent Contractor: The Project will be administered by a Construction Manager. The Port of Houston Authority has hired CH2M HILL as the Construction Manager for this Project. The Construction Manager is an independent contractor, and I)ot an agent or employee, of the Port. Accordingly, the Construction Manager cannot, among other things, enter into agreements on behalf of, make agreements on behalf of, or bind the Port. The CH2M Hill representative shall be: Stephen A. Curtis, P.E. (b) Inspector: The Construction Manager shall be the Inspector for the Work and have all authority delegated to the Inspector by the Contract Documents. ' (c) Paper Flow: One of the duties of the Construction Manager is to coordinate all paper flow for the Project. Accordingly, all paper work (including, but not limited to, Submittals, RFls, and Change Order documentation) required to be submitted by the Contractor to the Chief Engineer, other Port employees or to the Design Consultant pursuant to the Contract Documents shall be submitted to the Construction Manager, attention of the CH2M Hill individual designated above~ for distribution to the Chief Engineer, other.Port employee. and Design Consultant, as appropriate. The Contractor shall submit the appropriate number at originals and copies of the paper work to the Construction Manager, with copies of transmittal letters directly to the Chief Engineer and other required individuals. Responses from the Chief Engineer, other Port employees, and Design Consultant will be provided to the Construction Manager who, in tum, will distribute the responses to the Contractor and other appropriate individuals. The Contractor shot.dd take into account in scheduling the Work the role of the Construction Manager and the time required for the paper to flow through the Construction Manager. ) ,_ Notwithstanding the foregoing, any notices to the Port Police or Coast Guard (including, but not limited to, reports pursuant to General Conditions Sections 4.08, 4.10, 4.14, and 4.19) shall be made directly to the designated individuals as set forth in the General Conditions, with a copy to the Construction Manager. (d) Chief Engineer and Changes: The Construction Manager does not have the authority of the Chief Engineer. For example, the ConStruction MaRager has no authority to resolve disputes, issue Construction Change Directives: orch~mge any of the terms and conditions of the Contract, including. without limilation, issuing Modifications or ruling on or granting time extensions or Change Orders. The Construction Manager wilt make recommendations to the Chief Engineer, when requested, regarding any disputes. changes or Modifications. (e) Responses to RFls: The Construction Manager shall review RFls and. In instances in which the response to the RFI does not require a response from the Design Consultant or a Modification of any Contract Documents, respond directly to RFls. The authority of the Construction Manager to respond to RFls shall specifICally include RFls regarding discrepancies, errors, conflicts or omissions in the Contract Documents and shall specifically include the authority to otherwise clarify the Contract Documents and to make decisions regarding issues which arise in the field, in each instance so long as such responses, clarifications and decisions do not Involve a Modification in the Contract Documents . ... ,',. The authority of the Design Consultant to respond to RFls and submittals IS as set forth ;n the General Conditions. Such responses shall be made through the Construction Manager. Special Conditions (rev'd August 1, 2002) X-60f9 OX 0001-1.0244  TAB 17 Contract, Addendum No. 8 (DX1-1.0021) Bayport Terminal Complex Addendum No.8 Phase 1A Wharf and Dredging Co: '-.. / (, (Revised June 6, 2003) D. SMALL BUSrNESS PARlleIPATION: Small business participation for purposes of this Contract is defined as the dollar amount of the Contract, which will be performed by one or more, approved or certified small businesses. A small business for purposes of this Contract is a firm for which the gross revenues or number of employees averaged over the past three (3) years, inclusive of any affiliates as defined by 13 United States Code of Federal Regulations Section 121.103, does not exceed the size standards as defined pursuant to Section 3 of the Small Business Act (15 U.S. Code, Chapter 14A) and for which the net worth of each owner does not exceed $750,000, excluding residence and the value of the small business. Please check the appropriate statement(s): 1. _ I certify that _-::-::--_-:-:~_---:_ _- _ - - - is a small business as defined above. (Name of Proposer) 2. . / I certify that the subcontractors shown on the sub-contract sheet above as certified small businesses will perform work on this contract for $ "'2...'1....1 536. 00 0 (dollar amount of the Contract which will be performed) of the tolal contract price, or ''3+ % of the contract work. 3. _ I certify that (name of Proposer) has made a good-faith effort to use certified small businesses for this contract and has been unable to do so. E. PERSONAL PROPERTY: The above TOTAL AMOUNT PROPOSED contains $ II~ I~ 1...,;7 00 worth of tangible personal. property which is authorized by law to be purchased tax free and which wi be incorporated into the completed project. F. CERTIFICATION OF PROPOSAL: The above TOTAL AMOUNT PROPOSED price shall remain firm for One Hundred Fifty (150) calendar days after the Proposal opening date. The undersigned agrees, if awarded the Contract, to begin the Work within ten (10) working days after issuance of a fully executed Purchase Order by the Port Authority, and to complete such Work within Seven Hundred and Thirty (730) calendar days after receipt of the Port Authority's purchase order; and further agrees that, should the undersigned fail'to complete the Work within the agreed time, the Contract Price will be reduced by Five Thousand Dollars ($5,000.00) for each and every CALENDAR day thereafter until completion of the Work. See Sections 5.05 and 5.06 of the General Conditions. The undersigned further agrees to meet the completion milestones specified in Section 10 of the Special Conditions on or before the time indicated, and should the undersigned fail to complete the Work within the agreed time the Contract Price will be reduced by the following amounts: Area "A": Twenty Thousand Dollars ($20,000.00) for each and every CALENDAR day thereafter until completion of the Work in Area "A". Area "1": Four Thousand Dollars ($4.000.00) for each and every CALENDAR day thereafter until completion of the Work in Area "1". Area "2": Six Thousand Dollars ($6,OOO.OO) tOf each and every CALENDAR day thereafter unit completion of the Work in Area "2". The reductions in the Contract Price set forth in paragraph 2 and 3 above shall be assessed independently of one another and shall be additive. . The undersigned deposits with this proposal a Cashier's Check or Certified Check, or a Bid/Proposal Bond on the Port Authority's form executed by a responsible corporate surety authorized to do business in Texas, In the amount of Five Percent (57.) of the Greatest Dollars ($ 57. ) in accordance wilh the Instructions to proposers. Cashiers or Certified Check must be drawn on a bank that is a member of the Federal Deposit Insurance Corporation mount Bid by Principal Specifications and Proposal (rev'd December 1,2002) 11/ - 15 OX 0001-1.0021  TAB 18 Email from Thiess to Anderson dated August 1, 2004 (PX84)  c • ·. f Larry Applegate ': From: Andrew. Thiess@CH2M.com Sent: Sunday, August 01, 2004 5:45AM To: ANDERSONHE@zachry.com Subject: Freeze Wall Tech Memo 003 - Freeze Wal Andy, I have brought this issue up to Gary Kuhn but have not received a response, ?nd so I will for"1ard it to you now that you are on board. . . Regarding the free:z.e walL ~~e have no requirement for a submittal as it was not anticipated by the designer~. However, the Port and the engineering team are very concerned about the freeze wall and the question has come up what ~ind of submittal we should ask for, if any, and .-whet her we should revie1~ the design, et<.:. Gary Kuhn and the freeze wall, guys, when they 1~ere here, indicat,ed that they hac! expect;ed to provide a detailed submittal any\~ay._ Attached is a document that outlines the ltta"y I "Jould like to approach the freeze wall submittal. Please review and let me know if you have any -concerns with this approach. In particular, note that the signature of a Texas PE would be ~equired . 1 have discussed this with the Port and they believe this requirement cannot be avoided. Please let me kno1i if you think the approach or the- ·Texa·s PE signature will be a problem. Note that this doc"ument is only a draft-- for your revie~ ano not ah official directive at this time. Andrew W. Thiess, PE, PMP CH2M HILL 7600 W. Tidwell 3d.~ Suite ~00 Houston, TX 77040-5719 . Tel: (713) 462- 0161 Direct: "(713) .4 62- 0169, ext' 311- Fax (713) 462- 0165 Mob le: (832) 250- 2999 ath ess0ch2m.com . ·' ·-. .. No. 2006-72970 ZCC EXHIBIT RKK 00031 4 84 0084.0001  .. '· ·~ .4/Lfl 4-.t~~SoA./ .- ;:J;?DjJ3i(j' !JJ.?N-~dc J • ' l3i5M :10 ~ ·- 13v!71~~-::b PlAr-f~ :::r01iJJ GJ../?5/:;o - Issues/Concerns Pertaining to Freeze Wall Technology Responses from GeoEngineers, Inc. (GEl) and RKK-SoilFreeze Technologies, LLC (RKK). 1) Recognizing the large clay su·aturns that exist in the soil, particularly at the toe of the wall, raises concern due to the lack of water in clay soils. How will this be dealt with? Clay actually has more moisture in its pore spaces than does sand. Because the water is held very tightly, clay may appear to have Jess moistqre, but the water content tests verify that it bas more than enough to freeze solid. We plan to do our own testing of samples .. from the new borings to verify frozen strength ancl freezing parameters, but the dat::r · available thus far indicates that freezing should be no problem at this site give,, the : ·· conservative assumptions underlying the preliminary SoiiFreeze wall design. _{GEl/ . . . 2) In the case of storms/h~rricanes, explain how the stmctural integrity will be . maintained? One issue is the integrity of the SoilFreeze w~U during a large stonn or hun-icane. The frozen wall will"actuaJiy be embedded within the unfrozen fill that Zachry will .plilce in.· ·... the water soon. 'There will be a20 to 30 foot wide buffer of unfrozen soil between the· frozeri waJI and the water. The height of this new fill has not yet been determined. · . · However, based on recent discussion in Houston, it appears that a height of 4 to 6 feet ;_ .: · . above nonnal sea level ':"ill be adequate for most stonns. The wall itself should be qui(e ·. :1dequatel y protected from water action. (GEl) ,£ · ' lT:\C4? :,......_5· .J./1-TF 11968 'La Porte, TX 77572' (281) 474-3176' (281) 474-4925. fax' www.zachry.com ZCC-34-D50410 0009.0001  TAB 22 May 18, 2009 Proposal for Wharf Extension (PX179) _ e :,'" ,~. .... , Ij ZACHRY May 18,2005 Port of Houston Authority Correspondence # 723405008 Mark Vincent, P.E. Bayport Project Engineer P.O. Box 2562 Houston Texas, 77252-2562 Re Contract: Bayport Terminal Complex Phase lA Wharf and Dredging Contract Subject: Price Quote - 330 foot Wharf and Dredging Extension Dear Mark, As per your request we have reviewed our offer for the 330 foot Wharf extension, Zachry Construction Corporation would like to thank you for the opportunity to review our quote for this additional work, however after our review we have concluded that the original offer is our best price. Lump Sum Price $12,572,000.00 ** ** Price is based on: • Current design • Uninterrupted work process • Current construction methods • Delivery of the gantry cranes at the west end of the wharf • Use of a freeze wall - cut off wall, encompassing one (1) "B" row piling • No outfall structure is included • Wet Dredging will be at a unit price based on 80,000 cubic yards, actual yardage will be determined by pre-dredge survey and adjusted at $8.89 per cubic yard • Wet Dredge Placement will be based on 80,000 cubic yards, actual yardage will be determined by pre dredge survey and adjusted at $4.50 per cubic yard Should the POH approve the use of the Geostar Fabri-form revetment system for the entire wharf length (1990 If) a deduction of $592,281.00 for the entire wharflength (l9901f) can be taken, for an adjusted lump sum price of$11,979,719.00 If you have any Questions please do not hesitate to contact me. \~( \ .i., \._-----====-:> ~'Anderson Project Manager No. 2006·72970 Cc: File, Fred Lueck, Greg McVey ZCC EXHIBIT 179 Zachry Construction Corporation P.O. Box 1968 -La Porte, TX 77572· (281) 474-3176· (281) 474-4925, fax· www.zachry.com ZCC23 000488 0179.0001  TAB 23 July 11, 2005 Proposal for Wharf Extension and Ditch K (PX219)  ·.ifA\ July II, 2005 ZACHRY. .- -....... aOp y . . . .' Port of Houston Authority Jim McQueen, P.E. Bayport Project Engineer . P_0. Box 2562 Houston Texas, 77252-2562 Re Contract: Bayport Terminal Complex Phase lA Wharfand Dredging Contract ., Subject: 332 foot Extension and Ditch "K" Dear Mr. McQueen, ..' .Based on our meeting of July 8, 2005 the following additions and clarifications are ~fferedtothe pending change order for the 332 foot extension and Ditch UK". • The total linear feet of drill shafts in the 332 foot extension shall not exceed 2] ,266.50_ • Any additional length of drill shaft in excess of21,266.5 shall be billed at a rate of$82.00 per liner foot. • Any reduction in the total length of drill shafts less than 21,266.5 shall be a credit to POHA at a rate.of $43.00 per linear foot. • . Price is based on ZCC having a working design and drawings for drill shafts no later that 8/12/05•. • Price is based on ZCC having a working design and drawings for the Wharf Deck no later. than 11/25/05. • The contract completion deadline for the Bayport Terminal Complex Phase IA Wharf and Dredging Contract shall be extended to 8/15/06. • Price is based on a drill shaft design diameter no greater than 36"; any increase in the design diameter over 36" will be subject to a re-quote. • zce's quoted price for the 332 foot extension shall be increased $5,506.00 to cover the . construction of a temporary drainage swell along the south face of the extension. • ZCC'S quoted price for the 332 foot extension shall be increased $10,000.00 to cover the installation of an 8' high chain link fence along the South face of the extension.. • . The dredging quantity shall be based on I ]0,000 cubic yards. • ZCe's adjusted base price for dredging shall be $] ,446)500.00 based on a unit price of $13.15 per cubic yard on a base dredging quantity of 110,000 cubic yards. • Any quantity dredged in excess of the base quantity of 110,000 cubic yards shall be at a rate of $13.1 ~ per cubic yard. • Any quantity dredged short of the base quantity of 110,000 cubic yards) the remaining balance of the yardage to equal 110,000 cubic yards shall be paid to zee at a rate of $0.54 per cubic yard; this equals a credit to'POHA at a rate of$12.61 per cubic yard on the under dredge quantity. P.o. BOl(1968, La POJ1e.1)( 77572' (281) 474-3176' (281)'474-4925. fax ·WW'W.zachry.com ZCC23 001492 No. 2006-72970 ZCC EXHIBIT 219 0219,0001 .' li'ZACHRY • Work hours for all associated work on Ditch "K" shall be 12 hours per day. 5 days per week • Completion time for Ditch "K" shall be 5 months from receipt of the signed change order. • All costs associated with inspectors and testing labs for the extended work hours for Ditch "K" shall be the responsibility ofPOHA. Based on the above clarifications our quote changes as follows: • Lump sum price for Ditch UK" $ 2,215,702.00 . • . Lump sum priceexcluding drill shafts and' dredging is s 9,772,447;()0 • Drill shafts add 21;266.5 liner feet at $82.00 per liner foot . $ 1,743,853.00 .. . : ~.' • Dredging add 110,000 cubic yards at $13.15 per cubic foot .$ 1,446,500.00 Total value SI5,178,502.00 . Sincerely, . ~~'k "And~ 0 ;> Project Manager . cc: Fred Lueck ; 0 •• Greg McVey File P.O. Box 1968· La Porte, TX 77572' (281) 474-3176· (261) 474-4925. fax' www.zachry.com ZCC23 001493 0219.0002  TAB 24 Request for Port Commission Action for Execution of Change Order 4 Signed by Port Facilities Director James Jackson and Chief Engineer Steve DeWolf with origination date of July 18, 2005 (PX224)  ••, •'• , , .<-•, • ' • ,. a ! R6est fo~ P_o rt Commission A.n To: Executive Director t . .·..; Subject: Category G Page Minute # ~ Execute a Change Order to Zachry Construction Award 1 of 1 Corporation for Bayport Terminal Complex Phase 1A Wharf and Dred in - Wharf Extension From (Deparbnent or Other Point of Origin): Origination Date: Ag9nda Dale: artmenl Ju 18, 2005 Ju 25. 2:;:00.::;.5=----1 Depal1ment Affected: Operations Division Dale and ":"ype of Prior Authorizing Commis!'ion Actlon: Minul.e 2004-0524-013 Award Recommendation: (Summary) Recommendallon for Authority to Execute a Change Order to Zachry Construction Corporation for Baypor1 Terminal Complex Phase 1A Wharf and Dredging in the Estimated Amount or $12,962,800 Amount of Funding: Executive Director Signature: Estimated $12,962,800 Recommendation: By Minute 2004-0524-013, the Port Commission awarded a COi'ltfac\ in the estimated amount of $62,485, 733to Zachry Construction Corporation for Bayport Tenninal Complex Phase 1A Wharf and .Dredging. The initial contract provides for a 1,660-foot wharf. Projected increases in demand ft:rr containerized cargo will require two 1,000-foot berths at terminal opening. Exte:-:ding the wharf 332 feet under the current contract is feasible and wm assure the reQuired berths are available. Construction of the extension can only be conducted within lhe schedule by the present Wharf and Dredging contractor because of construction structures currently in place which cannot be removed or relocated withou1 adversely affecting on-going wharf construction.. Additionally, the current contractor's unique method of construction is the only practicable means of achieving strict emissions requirements for this contrac1. The contractor has submitted a proposal in the estimated amount of $12,962,800 for the 332 root wharf extension. The Engineering Department and the Phase 1A Program Manager have reviewed the contraclo(s proposal and found it to be fair and reasonable. It is therefore recommended that the Por1 Commission at its July 25, 2t1()5 meeting authorize a change order in the estimated amount of $12,962.800 to the Zachry Construction Corporation contract for Bayport T enninal Complex Phase 1A Wharf and Dredging and that such action further au1horize the Executive Director to do any and alllhings in his opinion reasonable or necessary to g..:Ye effect to the foregoing. 006.016.033.Z6Z V.LM.CJL.tk PHA 0014992 ExHIBIT NO.\~~ Jo... 1q -o 7 :::J1.f No. 2006-72970 ZCC EXHIBIT 224 0224.0001 ... -: ·. :· ,·· · ·' J' • • Change Order to Zacllry ConstnJ<;tlon Corporation for- Bayport TenninaJ Complex Phase 1A Wharf and Dredging-Wharf Extension Dascription: · Staff recommends construction of a 332' wharf extension to the current contract. Additional work is necessary because of projected demand for lhe terminal and anticipated ship size requires two 1,000-berths. and the current contract provides oniy 1,660 feet of totat wharf length. Because of the current construction of the freeze _ waR and other Zachry construction processes, a wharf extension cannot feasibly be performed by another contsactor working ooncurrenUy. Additionally, Zachry's method of ronstructing the wharf in the dry significantly reduced project emissions; construction of the wharf by another contract using typical methods would not reduce emissions to a level that would enable this and subsequent contracts to proceed as scheduled. Estimated cost of the wharf extension is $'12.962,800. Engineer: DMJM-Hanis. (Non-SBE) $2,233,611 Action Requested: E5cecut~ a Change Order lo Zachry Construction Corp. Change Order Estimate: Original Contract: $62,485,733.00 Change Order No. 1: $ 3,645,320.00 (Cruise Dredging) Change Order No. 2: $ 28.111.12 (Reinforcement) Change Order No. 3: $ 154.898.82 (BuD nose) For HTK Only 006.016.038263 PHA0014993 0224.0002  TAB 25 September 9, 2005 Frozen Cutoff Wall Design (PX10) GEoENG!NEERS MEMORANDUM PLAZA600 llUILDII'G. 600 STEWART STRoiOT, SUITE 1420, S:ATTLE. WA 93101, 'rELiOPnvNE: (206) 728-26(4, FAX' (206) 728-2732 vNNI.geoengineerS.CDm To: Larry Applegate - SoilFreeze Technologies Charles Rogers Zachry Construction FROM: Daniel Mageau, P,E. - GeoEngineers DATE: September 9, 2005 FILE: 6700-014-03 SUBJECT: Houston Bayport Phase lA Wharf FROZEN SOIL SHORING Draft Cutoff Wall Design GEl Seattle: P;/6700014/02/lVlemosICU101f Wall Design.Dra11-9-905.doc INTRODUCTION The purpose ofthis memo is to present our draft design for a temporary cutoff wall near the middle ofthe Phase IA wharf for the Houston Bayport project. The cutoff wall 'will allow Zachry to complete the excavation and construction of the two-third (approximate) of the wharf so that this portion can be ready for the Port in February 2006. The remaining eastern portion, as well as the 330-foot extension, will then be completed after that time with the cutoff wall separating the east and west portions, The cutoff wall will be comprised of a combination of frozen soil and steel sheet piles to provide retention of soil and groundwater during construction and excavation. This wall will then be removed from the final grade up, in the same fashion as the primary frozen soil shoring wall that runs east-west in front of the wharf. However, the wharf deck will cover most of the cutoff wall and therefore, wall removal will need to be accomplished in water by divers after both sides are excavated out. As this design is draft and presented to the construction team for comments, some refinement of the details presented herein may be appropriate. A final version, together with a drafted set of plans will be prepared afler comments from the construction team and Port consu ltants, as appropriate: have been incorporated. CUTOFF WALL DESCRIPTION The cutoff wall 'will be located perpendicular to the wharf at drilled shaft line no. 59.5 (Station ~81+50), as shown on the attached plan, Figure 1. Zachry has left this portion of the pile caps and decking open to allow access for installing the cutoff wall. After the cutoff sheet piles and freeze pipe system are in place, Zachry will complete the closure section of tbe decking. At its deepest point near A-Line, the cutoff wall \'\1.11 need to retain soil and groundwater from the design water level elevation of +8 feet MLL W to the bottom of the excavation (-53 feet Elevation after the keyway is backfilled), for a total free-face height of 61 feet. South of A-Line, the height of the wall will reduce at a rate of2H:1V, following the final grade of the slope as shown in Figure 2. The south wall will end about 4 inches from the from the Il-line piles. The north end will be embedded WIthin the primary frozen soil shoring wall, The sheet sheets will be AZ26 steel sections driven to depths ranging from about 6 to 15 feet below the bottom of excavation (-9 to 18 feet below the bottom of final grade). The soil in between the two sheets will be frozen using primarily 2 to 3 rows of freeze pipes in the 8-foot-wide wharf area plus additional rows in the wider area between the wharf and the primary frozen soil shoring wall. A detail plan view of the sheet pile DISCLAIMER: Any electronic form, facsimile Dr hard copy of the original document (email, text. taote, and/or figure}, if provided, and any attachments are only a CODY of the original document. The original document is d b GeoEngineers, Inc. and will serve as the official document of record, lCC-40-009166 0010.0001 Memorandum to Larry Applegate(SoilFreeze) and Charles Rogers (Zachry) September 9, 2005 Page 2 sections and the freeze pipe layout for the 8-foot zone is shown in Figure 3. These freeze pipes will extend down to depths of 80 to 100 feet, as shown on Figure 2 to provide additional lateral support and to cut off groundwater within the dense sand layer encountered in borings between about 55 and 75 feet in depth. The top of the frozen ground in between the steel sheets will be at Elevation +8 feet, the same as the primary frozen soil shoring wall. The top of the steel sheets will be at Elevation +9 feet, one foot above the soil inside, to provide a buffer from waves and to contain brine manifold lines. A whaler consisting of a W12x79 section will be attached to the top of the wall. Steel Lies located just below the ground surface and spaced at 8 feet on center will be installed through the two sheets and whaler to provide a positive connection of the two sheets at the top. A detail cross section at the top of the wall is shown in Figure 4. ENGINEERING ANALYSIS One of the key elements of til is design is to limit the horizontal wall deformation, and therefore deformation of the soil retained behind it, to a small amount such that this movement will not adversely affect the structural integrity of the drilled shafts that support the wharf. 1\ second key element is to limit the growth of the frozen soil such that it does not freeze these same drilled shafts. We completed dozens of thermal and structural finite-element analyses to evaluate the expected deformation of the frozen soil/sheet pile cutoff wall. To optimize the thermal aspects, we used TEMP/W, a 2D finite element thermal model program. To evaluate the deformation of the wall under various loading conditions, we used both 2D and 3D versions of PLAXIS, a finite element soil/structure model. The 2D TEMP/Wand the 2D PLAXIS programs are discussed in more detail in our report for tile primary frozen soil shoring wall, dated February 4, 2005. The cutoff wall is a high, wide, stiff structural element that is essentially fixed at each end (the frozen soil shoring wall at the north and the slope at the south). Without the embedment at the wall ends, our 2D analyses indicate that wall horizontal movement after one side is excavated in the dry will likely be excessive. The end effects of this wall can only be evaluated using a 3D model as discussed in a subsequent section. THERMAL ANALYSES We analyzed numerous freeze pipe layouts and brine temperatures using TEMP/W to evaluate the impact on 1) the average temperature of the soil within the steel sheets and 2) the extent of frozen soil into the ground relative to the wharf piles. The two goals are opposite. Colder brine and more freeze pipes freezes the soil colder, which results in stronger and stiffer ground and very small wall movements, however, frozen soil extends outward past the sheets over 5 feet, the approximate distance to the wharf piles, after 3 or 4 months of freezing. Warmer brine and less freeze pipes and limits the extent of frozen ground so that it does not reach the existing wharf piles, however, the frozen soil is less strong and wall movements will increase. Our thermal analyses were completed to optimize the freeze system to satisfy both constraints. Our analyses indicate that the optimal layout of freeze pipes is as shown approximately on Figure 5. These results from TE\1P/W show a close-up view of an 8-fa or-wide section of wall beneath the wharf that includes seven freeze pipes, the steel sheet and one of the existing drilled shafts. The overall layout of freeze pipes is shown in Figure I and includes freeze pipe locations in the wider zone of the wall north of tile wharf. Most of the 8-foot section has 2 rows of freeze pipes spaced at ~4 feet (4. J 3 feet = I per 2 AZ26 sheets) that extend down 80 to 100 feet in depth to cut off groundwater in the dense sand and provide adequate structural stability. Five extra freeze pipes are to be installed as a third row in tbe highest P3.1.t of the wall between A and D lines. Our plan is to freeze down the soil in between the freeze pipes as quickly as practical using cold brine in all three rows of freeze pipes. After 2 months or so of freezing, the outside rows will be maintained ZCC-40-009167 0010.0002 Memorandum to Larry Applegate(SoiIFreeze) and Charles Rogers (Zachry) September 9,2005 Page 3 to about +20F while the inside row is maintained at -20F. This limits frozen soil growth to more than 1 foot from the wharf piles after 6 months of freeze, as shown in Figure 5. The extent of frozen ground is progressively less with less time of freezing. To accomplish this zoned type of freeze control, SoilFreeze will need to install two separate freezing systems for this wall. The colder freeze section will be applied to those freeze pipes encircled on Figure 1. The single black dots on Figure I represent pipes connected to a variable freeze system. The average ground temperature inside the sheet piles is maintained below 20F, even in the wanner freeze section, which is needed to provide sufficient wall stiffness and strength, discussed more in the following section. Some modification of the brine temperatures will be needed during the project, the extent of which will depend on the specific ground response to freezing. As with the primary wall, ground temperatures will be monitored throughout the process so that we can change the brine temperatures as appropriate to maintain cold temperatures inside the cutoff wall while limiting frozen soil growth outside. After the first (west) side of the wharf is excavated, the west side of the sheet pile wall will be exposed. At this time it will be necessary to spray the surface of the steel with foam insulation. Tile insulation is needed to prevent the soil inside the wall from melting when this west side is filled with water. P~SSTRUCTURALANALYSES The frozen soil temperatures obtained from TEMP/W, discussed above, were used to obtain frozen soil strength and stiffness values for use as input to PLAXlS 3D. 1110 problem is quite complex to model and required nearly 10,000 elements as illustrated in Figure 6, which represents the 3D grid for this analysis. We completed several dozen computers run varying wall geometry, frozen soil strength, sheet pile sections and other variables in order to develop a solution that results in little wall movement and moderate wall thickness and depth. We also performed a series of 2D PLAXIS analyses to evaluate the relationship between wall/soil movement and the impact on the drilled shafts. These:2D analyses indicate that up to about 2 inches of soil deflection near the piles before the onset of plastic hinging. The results of the PLAX1S J D analyses indicate the maximum horizontal wall movement will be on the order of I inch for an eight foot wide wall that utilizes AZ26 sections embedded as shown in Figure 2. This results in a factor of safety against plastic hinging of 2. This deformation estimate is considered to be a conservative estimate because we did not include the positive effect of the numerous concrete piles or the whaler on reducing soil movement in our modeling. Based on these analyses, it is our opinion that the cutoff wall should retain soil and groundwater after excavation on one side is completed with little wall movement which should not impact the existing wharf piles. The cutoff wall is located in between pile rows 59 and 60, which are 20.5 feet apart. The steel sheets will be located about 5 feet from the wharf piles along these rows. Line B has additional piles so that one of Line B piles is located within the cutoff wall, as seen on Figure 1. To reduce the impact of the cutoff wall on this one pile, we have included a 42" to 48" diameter casing to be installed around the Line B pile before the start of freezing. The purpose of the casing is to protect the Line B pile as the wall moves during excavation. If it was embedded in frozen soil, the very rigid cutoff wall movement may exert undue forces on this pile. The collar will extend to the bottom of the excavation. The annulus between the pile and the casing will be cleaned out by Zachry and air will remain in the annulus throughout the life of the cutoff walL As the cutoff wall moves laterally the estimated 1 inch during excavation, the Line B pile will remain vertical and untouched by the wall within the zone above the excavation depth. lCC-40-009168 0010.0003 Memorandum to Larry Applegate(SoilFreeze) and Charles Rogers (Zachry) September 9, 2005 Page 4 Attachments: Figure 1 - Plan View of Cutoff Wall Figure 2 - Section View of Cutoff Wall Figure 3 - Detail of Freeze Pipes and Sheet Pile Wan Figure 4 - Section Detail near Top of Cutoff Wall Figure 5 - Typical results from TElvlP/W Analyses Figure 6 - Grid of PLA...XlS 3-D Model ZCC-40-009169 0010.0004 ZCC-40-009170 0010.0005  ,} I \;f, 0-, ... ..--@ .~ ~ I /' ~!G " " '.:~ Ii -'" \I;' .,.;< ;:t> ~ili '~ ,', " .. "p vU. "J e, .d J!lJ '~I " ,~' --8 ; !~ :J~ I, 2), ,~ ZCC-40-009171 0010.0006  11_18"'P 42 c/ts/,u!S It ...,.... . . ..,..,. :z,. ;hI,;""'; ~ "",:cu t..pri -AI,{,.I 5?1f/J ytiI.J orv a)rPo5 e» 51E!R.... .s/?2::-~ It7'71f'----z C~'<.'V"' c /L// ./ V-J/2,;( 7 'j r;/ l/ ~r~-"""'.~--'/ [NQ.Pt:.l.' C!?Jc.pJP S U/..-"iJ· ( C (Ej,..·. r g'r7) l J!4'jtf TiJ f' /J,Vj) STE'2::.'L ;/?£) o0171J/ly ?J/ m 77/"-C"l\'f)Ff) L y.j[).:. 77.::"," .7.::"'.1 Ni"I7J' .7Z> ?(c",P.c-7c/.)C" /:'!:,5!s·;-'''''::'.Ii bf I-.MI'/f). s: C ,I} ze, / fl:: 2 I GEoENGINEERS Earth Scifnce;. 1e:hn:llcgy .1iJ lCC-40-009173 0010.0008  20 21 22 23 24 25 26 27 28 10 11 12 13 14 15 16 17 16 '·9 (ft) HOUSTON BAYPORT PHASE IA - CUTOFF WALL Description: Houston Wharf - Frozen Soil Wall Comments: 6700-014-01 FROZEN SOIL GROWTH AFTER 6 MONTHS OF FREEZING File Name: Houston-Divider Wall -Frost Penetration-3 Rows.taz 3 Rows of Freeze Pipes Last Saved Date: 9/9/2005 Last Saved Time: 2:56:00 PM Inside Row Kept @-20F and 2 Outside Rows at +20F after 2 months 1\ <; Analysis Type: Transient Analysis View: 2-D ~ ~ ~~ N o o ltl j" oI o o Y) o to o ~ ...>. "--l .p. o o o o CD  PLAXI~ / Foundation C C/7J)Fr:' W #u, ?R/,ffl~Y ?£0Zc'P../ 'SOIL. 04z.<:... ut/Ftlae-N So /c. ;VD1t!./if!./ C /j/1,dA/E2... DatOllIled Mesh ~-, Extreme: total dieptecement ~4.01 "10. 3 m (dlecfacemema et trce ecslo> g ~J~ hi .....;llproJIXI ...... ~ descrlplioll Houston - Cutoff Wall - 2m ~ ~ ProJ Version 1.1.3.16 o ~ "-l Ql o o o ~ o  TAB 26 Transcript of September 13, 2005 Weekly Construction Coordination Meeting (PX274) 1 IN THE JUDICIAL DISTRICT COURT OF HARRIS COUNTY, TEXAS 2 3 ZACHRY CONSTRUCTION ) CORPORATION, ) 4 ) Plaintiff, ) 5 ) V. ) 6 ) PORT OF HOUSTON ) CAUSE NO. 7 AUTHORITY, ) 2006-72970 ) 8 Defendant. ) ) 9 ) ) 10 ) 11 12 13 14 Weekly Construction Coordination Meeting 15 Date: September 13, 2005 16 Minutes: 05:00 - 5:34 17 18 19 20 21 22 23 24 25 No. 2006·72970 ZCC EXHISIT 274  2 1 Audio Reporting Transcribed by: 2 3 JENNIFER HAYNIE ALPHA REPORTING CORPORATION 4 236 Adams A venue Memphis, Tennessee 38103 5 901.523.8974 6 7 Proper names and inaudibles or undiscemible 8 testimony was provided Andy Anderson. 9 10 11 12 ·. 13 14 15 16 17 18 19 20 21 22 23 24 25  3 1 Date: September 13, 2005 2 Minutes: 5:00- 5:34 3 (Requested portion of weekly Construction 4 Coordination Meeting.) 5 ANDY THIESS: All right. The next 6 issue the pile redesign for the cut off wall. I 7 saw that y'all put that in yesterday. So we'll 8 get that sent off to the designers. Jim, do 9 you see any issues if the designers are 10 okay with things? This isn't going to be an 11 approval type thing, it's gonoa be a-- 12 JIM MCQUEEN: No. Uh-huh. Just 13 whatever the designer wants. 14 ANDY THIESS: Okay. So that's in 15 progress. We'll leave that open. 16 (End of requested portion of Weekly Construction 17 Coordination Meeting.) 18 19 20 21 22 23 24 25  TAB 27 Email string between Andy Thiess and Jeff Ely and others dated September 14, 2005 (PX11)  From: Ely, Jeff/HOU S ent Wednesday, September 14,2005 12:26 PM .• Johnson, Robert/HOU; Emsley, Laurencefi-:IOU - <,:< ~ect FW: Sub. Item No. 00700-015.0 CutoffWall Design Bob/Laurence: Forgot to CC you on this . -----Original Message----- From: Ely, Jeff/HOU Sent: Wednesday, September 14, 2005 1:26 PM To: Thiess, Andrew/HOU Subject: RE: Sub. Item No . 00700-015.0 cutoff Wall Design Andy: We need to tal k about this a little and decide how to proceed. As we talked about last week,. thi s i s mostly a geotechnical p r oblem, so I think Geotest shoul d probably take the lead, but I'm not sure if they have any budget ava ilable. The first thing we need to do i s verify the freeze wall won't reduce the capacity of the permanent pier s .We for sure need Geotest f o r that. Jeff - ----original Message----- From: Andrew Thiess [mailto:system@const ructware.com] -~t: Wednesday, September 14, 2005 10:06 AM : · ·. Ely, Jeff/HOU · -::' ....>ject: sub. Item No. 00700- 015.0 Cutoff Wall Design Jeff, Please review and coordinate response to this submi ttal. We may not need to approve this, but we need due diligence to identify and communicate any technical issues we may have. Due f rom designers Sep 28. No. 2006-72970 ZCC EXHIBIT 11 ~ ExHIBIT NO. / f!Cf 11-o'--o?:rH CH2MHILL034723 0011.0001  TAB 28 Memorandum dated September 14, 2005 from Port Facilities Director Jackson to Port Executive Director Kornegay recommending approval of Change Order 4 (PX3)  .·· ... ...... . . . .. . ,• .. - ... ~- ,•· ... --:---... ( ( INTER-OFFICE MEMORANDUM Date: September 14.2005 File: 2004..0187 To: Mr. H. T. Kornegay From: James B. Jackson Subject: Recommendation for Approval of Change Order No. 4 in the Estimated Amount of $12,962,800 to Zachry Construction Corporation for Bayport Terminal Complex Phase 1A Wharf and Dredging By Minute 2004-0524- 13. the Port Commission awarded a contract in the estimated amount of $62.485.733 to Zachry Construction Corporation (ZCC) for Bayport Terminal Complex Phase 1A Wharf and Dredging. The initial contract provides for a 1,660-foQt wharf. Projected increases in demand for containerized cargo will require two 1,000-foot berths at terminal opening. Extending the wharf 332 feet under tpe current contract is feasible and wilt·assure the require From: James McQueen Cc: 'Robert.Johnson@CH2M.com' Bee: Received Date: 2005-09-15 06:42:00 CST Subject: ZCC SCHEDULE ZCC will be paid for july even though they show late and not in accordance w/Extension Agreement. Our management is afraid ZCC will back out of the extension agreement. Do as you do on any schedule you do not agree with Andy. No. 2006-72970 ZCC EXHIBIT 280 P - El e 0 060 33 0280.0001  TAB 30 Change Order 4 (PX12) County Auditor's Fonn 5107 Harris County, Texas (Rev. 2191) Port of Houston Authority Change Order No. ~ Increase: X Decrease: No Change: To: Zachry Construction Corporation Contract No. : 2004-0187 Address: 527 Logwood San Anlonlo, TX 78221-1738 Dale: Subject : PrDject - BavoDrt Tenninal CDmplex Phase 1A Wharf and Dredging Contracl Gendemen: The change set cut below was not contemplated in the subject contract dated 512412004 • but is necessary tor the orderly completion of the prDject. You are authorized to proceed with the modification on the basis of payment below. Description of Change: ConstruCl a 332' wharf extension to the previously specified 1.660' Wharf. in accordance with the attached Scope. TIme and Price ModlficatiDns. Original Contract Amount: $62,485.733.00 (Est.) Basis of Payment: PreviOUS Change Orders : $3.683,331.12 (Est.) Item Unit Unit Price Quantity Total Perform the above described additional war!.s-_ Eng . _ . secretary - ~1 : Eng~. . _ Bobby Kt~g .' . ~y/l}r Eng. Bobby King Eng. J. B. Jackson ~~/~i.:-.~_.~r:-;-' J. B. JackBo_n _ _~ Eng. Bobby King (IF OVER $10,000, MUST GO TO EXECUTIVE} 1/10/05 2ng. 9/7/95. Exec. Eng. Bobby King 1,/J7jO[ Eng . Bobby King Auditor Dick Rhoads .*1)Jr Audil:or Dick Rhoads Eng. Bobby King '1/J7J(]) Eng. S. H. DeWolf C:mtractor e 005.010.019068 PHA0012046  INTER-OFFICE MEMORANDUM Date: September14.2005 File: 2004-0187 To: Mr. H. T. Kornegay From: James B. Jackson Subject: Recommendation for Approval of Change Order No. 4 in the Estimated Amount of $12,962,800 to Zachry Construction Corporation for Bayport Terminal Complex Phase 1A Wharf and Dredging . By Minute 2004-0524-13, the Port Commission awarded a contract in the estimated amount of $62,485,733 to Zachry Construction Corporation (ZCC) for Bayport Terminal Complex Phase 1A Wharf and Dredging. The initial contract provides for a 1,660-foot wharf. Projected increases in demand for containerized cargo will require two 1·,OOO-foot berths at terminal opening. Extending the wharf 332 feet under the current contract is feasible and will assure the required berths are available. Construction of the extension can only be conducted within the schedule by the present Wharf and Dredging contractor because of construction structures currently in place which cannot be removed or relocated without adversely affecting ongoing wharf construction. Additionally, the current contractor's unique method of construction is the only practicable means of achieving strict emissions requirements for this contract. The contractor has submitted a proposal in the estimated amount of $12,962,800 forthe 332-foot wharf extension. The Engineering Department and the Phase 1A Program Manager have reviewed the contractor's proposal and found it to be fair and reasonable. By Minute 2005-0725-18, the Port Commission authorized the issuance of a change order in the estimated amount of $12,962,800 to Zachry Construction Corporation for the above described changes. Accordingly, please sign the attached change order and return it to the Engineering Department for further handling. JBJ/SHD/MV: ~ Attachment C: Mr. Andrew Thless, P.E. - CH2M HILL, Inc. Mr. Forbes Baker Mr. James Turner Mr. Mark Vincent, P.E. Mr. Jim McQueen, P.E. 005.010.019069 PHA0012047 0012.0003  SCOPE, TIME,AND PRICE MODIFICATIONS TO SPECIFICATIONS AND PROPOSAL Bayport Phase 1A Wharf and Dredging Contract PORT OF HOUSTON AUTHORITY P. O. Box 2562 Houston, Texas 77252-2562 Pursuant to Texas Education Code § 44.039 (t), options for a scope or time modification and any price change associated with the modification were discussed by the PHA and Contractor. As a result of negotiation, the following scope. time. and price modifications were made to Proposer's Specifications and Proposal dated April 13, 2005, as amended by Proposals for 330 feet Wharf Extension and as further amended by Proposer's Supplemental Proposal dated July 11, 2005 except Ditch K construction will not be part of this agreemenl 1. Contractor shall construct 332 linear feet of Wharf utilizing the same construction methods outlined in the original 1,660 linear feet of wharf, for a total price of $12,962,800. 2. The Proposal price includes incorporation of change orders. RFl's to the original 1,660 linear feet of wharf incorporated through July 25, 2005. 3. PHA will furnish pile depths not later than August 12,2005. PHA shall furnish remaining wharf design documents by November 25, 2005. 4. Change order includes construction of an additional 332 linear feet of chain link fencing with three-strand anti-climb bars installed and, a drainage swell at the East end of the wharf extension to connect 10 the existing drainage, for an inclusive cost not to exceed $15.500. 5. The basis of drilled shaft construction is 21,266.5 linear feet of drilled shafts at a unit cost of $82/LF for a total cost not to exceed $1,743,853, included in the change order price. Adjustments to shaft length will be made at a rate-of $82 per linear foot of increased shaft length or cost reduction of $43 per linear foot of shaft length reduction. 6. The 332-feel Wharf Exlension Construction and all other components of the contract shall be completed by July 15. 2006. The interim completion date to accommodate the ship-to-shore crane arrival, as per the original contract is revised to February 15, 2006. and the length of wharf available at that time is changed to 850 linear feet, along with associated dredging to receive the crane transport vessel. The February 15, 2005 milestone completion date requires that the permanent power components as described in the contract documents be provided for the Ship to Shore Cranes. The original 1660 linear feet of wharf main deck and drilled piers shall be completed by June 1,2006. 7. The contractor's proposal originally assumed only 80,000 cubic yards of dredge malerial. The dredge quantity was revised from 80,000 to 110,000 cubic yards based upon actual survey. The Contractor will dredge and place 110,000 cubic yards of material in designated disposal areas at a rate of $13.15/cubic yard. for an increase of $1,446.500 inclusive in the change order price. Any quantity dredged short of the base quantity of 110,000 cubic yards, the remaining balance of the yardage to equal 110,000 cubic yards shall be paid to ZCC at a rate of $ 0.54 per cubic yard. this equals a credit to POHA at a rate of $12.61 per cubic yard on Ihe under dredge quantity. Any quantity dredged in excess of 110,000 cubic yards will be paid at the unit rate of $13.15/ cy_ 8. The contractor will pay for all Construction Management Services to support the contractors work on the wharf extension change outside the work days as defined in General Condition 5.03. 9. The Contractor shall construct the 332-feel wharf extension using similar methods employed in the original contract with the effect of minimizing General Conformity emissions. Contractor shall be constrained to the General Conformity emissions, as documented by the PHA Emissions Calculator, as follows: Quarterly Summary Emissions (tons) Scope, TIme, and Price Modifications to Specifications and Proposal (August 1, 2002) 005.010.019070 PHA0012048 0012.0004  Q1 Q2 Q3 Q4 Q5 Q6 Q1 Q8 Q9 0.00 2.25 3.27 4.88 2.17 3.03 2.73 2.73 1.71 _edging hart Construction 0.03 0.13 0.19 0.49 0.63 0.63 0.63 0.63 0.44 Backlands 0.00 0.09 1.15 0.00 0.00 0.00 0.00 0.00 0.00 Total 0.03 2.41 4.61 5.31 2.BO 3.66 3.36 3.36 2.15 Rolling 4 otrs 0.03 2.50 7.11 12.46 15.25 16.44 15.19 13.18 12.53 Annual Summary (tons per year) Project Year Dredging Wharf Backlands Total Year 1 10.40 0.84 1.24 12.48 Year 2 10.66 2.52 0.00 13.18 Year 3 1.71 0.44 0.00 2.15 Year 4 0.00 0.00 0.00 0.00 Year 5 0.00 0.00 0.00 0.00 Year 6 0.00 0.00 0.00 0.00 Year 7 0.00 0.00 0.00 0.00 Year 8 0.00 0.00 0.00 0.00 10. The all contract provisions and instructions remain in effect except as changed herein. Vice president Typed Title of Signator 08/29/05 Date If Proposer is a Corporation: Jaclyn M. Golson. Assistant Secretary Typed Name of Corporate Secretary Scope, Time, and Price Modifications to Specifications and Proposal (August 1, 2002) 005.010.019071 PHA0012049 0012.0005  If Proposer is not a Corporation: N/A Signature of Witness N/A Typed Name of Witness APPROVED AS TO FORM: PortAuthorityCounsel Scope. Time. and Price Modifications to Specifications and Proposal (August 1. 2002) 005.010.019072 PHA0012050 0012.0006  TAB 31 Mageau Report on Effect of Freezing and Thawing of Cutoff Wall on Drilled Shafts dated September 28, 2005 (PX14)  ~ .. ' MEMORANDUM ··.-: .. .·. PlAV-600Eili!LDING, tiOOSTcWNIT S'lllan', SUITE'1420, SEA'Jli.E, WA 98101, H l.E'Pt Date: Tue, 8 Dec 2009 07:38:23 -0600 To: Lawrence Fossi; Scott D. Morgan; Mike Absmeier; Sims,Bill; Gray, Holly Cc: Robin C. Gibbs; zzz_Brandon Allen; mgreer@trialgraphix.com 2 Subject: RE: One more Larry, There are two animations in Abiassi's demonstratives that I emailed you . We will provide you those on a disc this morning. -----Original Message----- From: Lawrence Fossi [mailto:lfossi@fossijewell.com] Sent: Tuesday, December 08, 2009 7:21AM To: Scott D. Morgan; Mike Absmeier; Sims, Bill; Gray, Holly Cc: Robin C. Gibbs; zzz_Brandon Allen; Sydney Ballesteros; mgreer@trialgraphix.com Subject: RE: One more Scott, I'm in overwhelm with all the new stuff. print hard copies if you would & bring to court & we'll let you know. are there movies in the Abiassi stuff, or just hard prints? also, need a response on DX 590-594 From: Scott D. Morgan [mailto:smorgan@gibbsbruns.com] Sent: Tuesday, December 08, 2009 7:12AM To: Mike Absmeier; Sims, Bill; Lawrence Fossi; Gray, Holly Cc: Robin C. Gibbs; zzz_Brandon Allen; Sydney Ballesteros; mgreer@trialgraphix.com Subject: RE: One more -----Original Message----- From: Mike Absmeier Sent: Monday, December 07, 2009 5:44 PM To: Sims, Bill; 'Lawrence Fossi' Cc: Robin C. Gibbs; zzz_Brandon Allen; Sydney Ballesteros; Scott D. Morgan Subject: One more Bill/Larry, We would also propose adding Depo Ex. 115 as a new trial exhibit (I don't believe it's currently in evidence). This would be PX 937. Any objection? Thanks, Mike 3  TAB 33 The Port's October 11, 2005 Response to Zachry's September 9, 2005 Frozen Cutoff Wall Design (PX266)  Submittal Item Project [C70-1A-D01] -Bayport View Date 4/28/2006 Ph. lA- Wharf and Dredging Wharf and C70-1A-D01 Dredging Nathelyne A. Kennedy & Assoc. 6100 Hillcroft Suite 710 Submittal Houston, TX 77081 Item No. 00700-015 Phone: (713) 988-0145 General Information Item No. 00700-015 Revision 0 Package No. 00700.0 Rev. Description Cutoff Wall Design CSI Code 00700 - General Conditions Submitting Company Zachry Construction Corporation Reference No. Copies Required Status Returned Item Type Responsible David Griffin (Zachry Construction Corporation) 'Team Member · Item Notes During the proposal for the 332ft wharf extension, the cutoff wall concept was presented as affecting one "B" row pile that would have to be encased in steel to prevent movement of the pile. ZCC's submittal for the cutoff wall, however, indicates freezing of soil as close as one foot from as many as 14 piles, which is inside the zone of soil that has structural impact on the friction resistance of the piles. However, preliminary Indications are that the design may have an indeterminate affect on a significant number of nearby shafts which may present unacceptable risk to the Port of Houston. Contractor must present alternative cutoff wall design, such as a cellular sheet pile wall or grout wall, that provides the desired cutoff effect with.less risk to the structural integrity of the wharf. Or the contractor may present the Port of Houston with an altemate means of mitigating risk to the structural integrity of the wharf. Primary Revise and Resubmit Response Submission Notes Dates Material Required Lead Time (days} Required on Site Approved Required Review Time (days) 20 Submittal Required By Submission Due Linked Documents Document Type Document Description Date Doc C70-1A-D01-01636 9/12/2005 No. 2006-72970 ZCC EXHIBIT ZCC-EXP-0000073 266 0266.0001 Distribution Recipient Company Method Date Charles Rogers Zachry Construction Corporation Email: rogersc@zachry.com 10/11/2005 David Griffin Zachry Construction Corporation Email : griffindg@zachry.com 10/11/2005 David Griffin Zachry Construction Corporation Message 10/11/2005 Jeff Ely CH2M HILL Email: jelyl@ch2m.com 9/14/2005 Jeff Ely CH2M HI LL Message 9/14/2005 Rich Kl assen Zachry Construction Corporation Message 10/11/2005 Rich Klassen Zachry Construction Corporation Email: andersonhe@zachry.com 10/11/2005 ZCC-EXP-0000074 0266.0002  TAB 34 Transcript of October 11, 2005 Weekly Construction Coordination Meeting (PX314) 1 IN THE JUDICIAL DISTRICT COURT OF HARRIS COUNTY, TEXAS 2 3 ZACHRY CONSTRUCTION ) CORPORATION, ) 4 ) Plaintiff, ) 5 ) V. ) 6 ) PORT OF HOUSTON ) CAUSE NO. 7 AUTHORITY, ) 2006-72970 ) 8 Defendant. ) ) 9 ) ) 10 ) 11 12 13 14 Weekly Construction Coordination Meeting 15 Date: October 11, 2005 16 Minutes: 08:40- 13:29 17 18 19 20 21 22 23 24 25 No. 2006-72970 ZCC EXHIBIT 314  2 1 Audio Reporting Transcribed by: 2 3 JENNIFER HAYNIE ALPHA REPORTING CORPORATION 4 236 Adams Avenue Memphis, Tennessee 38103 5 901.523.8974 6 7 Proper names and inaudibles or undiscernible 8 testimony was provided Andy Anderson. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 .;: ~· ·:,'..  3 1 Date: October 11, 2005 2 Minutes: 8:40 - 13:29 3 (Requested portion of Weekly Construction 4 Coordination Meeting.) 5 ANDY THIESS: Then the pile :· 6 redesign for the cut off wall. Here we go. You 7 got it. Gave you a response. You have it in 8 yourhand. 9 ANDY ANDERSON: Yeah. Now, the 10 answer to this it says that the contractor -- 11 first of aU, this says "no, resubmit. 11 All 12 right. There's a number of avenues to go here. 13 Number one, they ask for an alternative cutoff 14 such as a ceUular sheet pile wall. There is a 15 cellular sheet pile wall between the freeze pipe 16 and the piles. That's the cut off wall. That's 17 the structure. 18 ANDY THIESS: I understand. 19 ANDY ANDERSON: I don't think they 20 understand. 21 ANDYTHIESS: No. Theyunderstand. 22 ANDY ANDERSON: Well, then what are they 23 talking about? The freeze pipes are contained 24 within the sheet pile wall. 25 ANDY THIESS: They're talking about 4 1 a cellular meaning like a honeycomb structure. 2 Some sort of structural sheet pile wall. 3 ANDY ANDERSON: Okay. Now, we get 4 it. 5 JOHN GLASGOW: Then we don't have to 6 freeze it. 7 ANDYTHIESS: Correct. 8 JIM MCQUEEN: Yeah. Yeah. That's 9 the concem. 10 ANDY THIESS: Or slurry or soil 11 cement or any other -- any other method of 12 putting in this wall that is not such a high 13 risk to the structure. 14 JOHN GLASGOW: DanMageau was 15 supposed to be here today, right? 16 CHARLES RODGERS: Tomorrow. 17 JOHN GLASGOW Tomorrow. And Corey 18 was going to bring that up with him and see if it 19 willfly. 20 ANDY ANDERSON: We will look at it, but two things. 21 Number one, if we want to accept the 22 risk. It's not -- it's not a submittal. It 23 is for information purposes only, okay, and 24 number two, our price is predicated on current 25 construction methods and that was clearly  5 1 defined. Now, chances are based on the price 2 of this goddamn cut off wall you know, we can design 3 something and stay within the parameters of what 4 we got. 5 ANDY THIESS: That's all the Port's 6 asking for. 7 ANDY ANDERSON: And we will look at that, 8 and we need to look at it very, very quickly. 9 ANDY THIESS: But I think ify'all 10 design something alternate, if it can be done, 11 it will be real easy-- 12 JIM MCQUEEN: I want you to 13 understand the spirit of this whole thing is 14 that we -- the problem is that it jeopardizes 15 some footings on either side, piers on 16 either side. 17 There's a possibility of that, okay, 18 and there's a tisk. We know that you guys are 19 taking that, but we're not-- we're not 20 necessarily sure that we want you to take that. . 21 There's a lot of concern and we're not rejecting 22 it all together as we're not going to do it. 23 We're still throwing money at evaluation, but we 24 would like to know if there's another 25 alternative. 6 1 ANDY ANDERSON: We'll look at it. I 2 half way looked at a bin wall early on in this, 3 but to be quite honest with you, I looked at a 4 bin wall for replacement of the freeze wall 5 itself Not the cut off wall. The problem was 6 in the freeze wall was that the soil has no 7 abiJity to handle the stress of the bin wall. 8 It would just collapse. 9 Now, the cut off wall is something a little 10 something different, you know, and I need to 11 look at that. The problem I see with that is we 12 still have to design it so that it runs between 13 the piles and does not encase the pile row because 14 I'm worried about the lateral movement of the 15 wall when pressure is relived on one side and I 16 don't want to side load these piles. 17 At any rate, a semicircular cell 18 possibly could work. Now I have to, you fucking ruined my 19 whole a:ftemoon, now I'll have to sit down and .. . 20 .TIM MCQUEEN: Because we heard you 21 were out playing golf. 22 ANDY ANDERSON: That's tomon·ow. But 23 we'll look at it and see what we can do on it, 24 but I want to caution-- the designers need to 25 understand that this is not a submittal that  7 1 requires approval, and we are worlcing with you and 2 we'll come up with something else. 3 JIM MCQUEEN: We understand, or at 4 least I understand, and the latter part too, the 5 cost issue. 6 ANDY ANDERSON: I do not want to 7 have to have to readdress that issue. 8 JIM MCQUEEN: rm not-- no one 9 in our... but we just want you to look. 10 ANDY ANDERSON: I will look at it 11 very hard. Luckily Mageau is going to be here 12 tomorrow so we may actually be able get 13 something resolved quickly. He's going to be 14 here. 15 ANDY THIESS: All right. 16 (End of requested portion ofWeekly Construction 17 Coordination meeting.) 18 19 20 ,. 21 22 23 24 25  TAB 35 Thiess email to Ely dated November 13, 2005 (PX2) From: Thiess, Andrew/HOU Sent: Sunday, November 13, 2005 06:14 PM To: Ely, JefflHOU Subject: RE: cutoff_walUesponse.doc Jeff, For business risk purposes you might state that during negotiations for the 332 ft extension, we anticipated it being designed according to the criteria 01the original freeze wall. Based on designer input prior to design of the original freeze wall, it was expected that the cutoff wall would be designed in a way to avoid compromising any piers by freezing, except for one pier in Row B that was identified by ZCC beforehand. The original freeze wall design accomodated a 6 feet setback from the nearest piers as requested by the designers. Potential freezing of piers resulting in loss of load capacity is the basis for PHA concerns regarding the cutoff wall design. These concerns have not been adequately addressed in the cutoff wall submittal. I think it would be a good idea to include this in your memo. Zachry has implied that they believe our review and rejection of the cutoff wall design is a breach of their change order contract, as they told us there would be a cutoff wall. They believe this gives them a claim for time. We need to make the point that we anticipated it being designed according to the criteria of the original freezed wall. Otherwise we will have to state this separately in another letter. From: Ely, Jeff/HOU Sent: Friday, November 11,20052:49 PM To: James McQueen; Mark Vincent; Farhat, Jerry; Thiess, AndrewjHOU; Johnson, Robert/HOU ee: Emsley, Laurence/HOU Subject: cutofCwalLresponse.doc All: Please provide any comments by COB Monday, November 14. I will send this out first thing Tuesday. Jeff No. 2006·72970 ZCC EXHIBIT 2 1kn~ EXHIBIT NO.ll1 lo-R . . o7;:J1f CH2MHILL029619 0002.0001  TAB 36 Email string between McQueen, Thiess, Ely, and others dated March 21, 22, and 28, 2007 (PX504) - -·-··--- - - -- -·------ - - - - ---- - - - - -- - - From: James McQueen Sent: Wednesday, March 28, 2007 07:26 AM To: Andy Thiess: Ely, Jeff/HOU CC: Gene Norman Subject: RE: Phase 1A Dbl Wal I discussed w/Jeff and he daid settlement of 1" was nothing to be alarmed about. I just believe it is in PHA best interest to monitor. Jim McQueen. P.E. Project Manager Port of Houston Authority (713) 670-2837 FAX (713) 670-2837 i!Jl.£qU~e.D.@P..QQ_9.CQ.IJl First in Foreign Tonnage CONFJDENTI AL COMMUN ICATION This message and attached materials are for the use of the addressee above and may contain confidential information. Please do not disseminate, distribute, or copy this message unless you are the addressee. If you receive this message in error. please immediately notify the sender by replying to this message by phone at (7 I 3) 670-2837. Thank you. from: Andy Thiess Sent: Wednesday, March 28, 2007 8:24AM To: Jeff.Eiy@ch2m.com: James McQueen Cc: Gene Norman Subject: RE: Phase lA Obi Wal My understanding from o3rlier "affect of freeze wall discussions" was the entire wharf was anticipated to sink a bit as it initially settled. ro L..:.JA ndrew W. Thiess, PE, PMP Port of Houston Authority !:Lttg://.YVY.ffl..POrt_ol.hcu?to.n.co..m 832-250-2899 cell 713-670-2442 ore ?13-670-2448 fax athiess@poha.com The Port Defirers !he: Goods CONFIDENTIAL COMMUN!CA TION This message and attached materials are for the use of the addressee above and may contain conf•dential mformation. Please do not disseminate. distribute. or copy this message unless you are the addressee. If you rt:ceived this message- in error. please immediately notify the sender by replying to this message or by telephone at {713) 670·2442. Thank you. From: Jeff.Eiy@ch2m.com [mailto:Jeff.Eiy@ch2m.com) Sent: Thursday, March 22, 2007 2:26 PM To: James McQueen No. 2006-72970 Cc: Gene Norman; Andy Thiess ZCC EXHIBIT 504 CH2M HILL030890 .. 0504.0001 Subject: RE: Phase lA Dbl Wal Jim: Can someone give me a little more detail: I'm not quite sure where these pictures are taken. However, the doublewal settling 1" or so doesn't seem like a problem to me. jeff From: James McQueen [mailto:jmcqueen@poha.com] Sent: Wednesday, March 21, 2007 4:57 PM To: Gene Norman; Andy Thiess; Ely, Jeff/HOU Subject: FW: Phase lA Dbl Wal Gene can you mark measuring locations on the pavement and lets watch for a while. Andy I believe we need to notify ZCC but we would not want them doing anything yet until we know a little more? Jeff you have any other thoughts? Jim McQueen. P.E. Project Manager Port of Houston Authority (713) 670-2837 FAX (713) 670-2837 jmcqueen@poha.com First in Foreign Tonnage CONFIDENTIAL COMMUN1C AT10N This message and attached mate1ials are for the use of the addressee above and may contain confidential information. Please do not disseminate. distribute. or copy this message unless you are the addressee lfyou receive this message in error. please im1nediately notify the sender by replying to this message by phone at (7 13) 6 70-283 7. Thank you. -----·-·------·--··-·····- - · - - - From: Gene Norman Sent: Wednesday, March 21, 2007 1:46 PM To: James McQueen Subject: Phase lA Dbl Wal Jim, Please see attached photos. Pictures were taken between H-line fl. Dbl Wal foundation slabs. It appears to have settled in some areas as much as 1". CH2MH1LL030891 0504.0002  TAB 37 Management Services Agreement (PX643)  MANAGEMENT SERVICES AGREEMENT This Management Services Agreement ("Agreement") is entered into effective as of January 1, 2008 (the "Effective Date") by and between ZACHRY INDUSTRIAL, INC. , a Delaware corporation, formerly known as Zachry Construction Corporation ("Zachry"), and ZACHRY CONSTRUCTION CORPORATION, a Delaware corporation ("Manager"). Zachry and Manager may be referred to in this Agreement collectively as the "Parties" and individually as a "Party." RECITALS A. Prior to the Effective Date, Zachry had entered into the construction agreements and associated documentation for certain heavy construction and building construction projects, as described on Exhibit "A" attached hereto (the "Construction Contracts" or individually a "Construction Contract"). B. On the Effective Date various personnel, equipment and other assets associated with Zachry's former heavy construction division and building construction division were transferred by Zachry to Manager as part of a corporate restructuring of Zachry along industry segment lines ("Corporate Restructuring"). C. The Construction Contracts were not and have not been assigned or transferred to Manager; and Zachry remains fully liable under the Construction Contracts in accordance with their terms. D. In conjunction with the Corporate Restructuring, Manager agreed to act as manager for Zachry with respect to the administration, management and performance of the Construction Contracts, each of which were associated with heavy construction and building construction industry segments that were transferred to Manager. E. Manager is ·experienced in the business of construction management and administration, particularly with respect to the type of heavy construction contracts represented by the Construction Contracts. F. Zachry and Manager desire to memorialize the terms upon which Manager agrees to provide certain management services with respect to performing Zachry's obligations and work under the Construction Contracts. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Zachry and Manager agree as follows: No. 2006-72970 ZCC EXHIBIT 643 MANAGEMENT SERVICES AGREEMENT PAGE I ZCC-40-137656 0643.0001  ARTICLE 1 DEFINITIONS AND INTERPRETATION 1.1 Certain Defined Terms. Capitalized terms used in this Agreement without other definition herein shall have the following meanings, unless the context requires otherwise: "Governmental Authority" means any national, federal, state or local government, political subdivision, authority, agency, tribunal, court, judicial or other body, public or statutory instrumentality, officer or entity, including any environmental or zoning authority, building inspector, health or safety .inspector or fire marshal, any governmental regulatory body or commission, any arbitrator with authority to bind a party at law, or other regulatory bureau, authority, body or entity having legal jurisdiction over the matter or Person in question. "L aw" means any federal, state, local, or other constitution, charter, act, statute, law, ordinance, code, rule, or regulation, or legislative or administrative action of any Governmental Authority; or a final decree, judgment or order of a court. ·· "Person" means any natural person, firm, corporation, company, limited liability company, joint stock company, general or limited partnership, trust, incorporated or unincorporated association, joint venture, Governmental Authority or any other entity, whether acting in an individual, fiduciary or other capacity. "Reimbursable Costs" means all costs incurred by the Manager for the proper performance of the Services, including, without limitation, the verifiable actual costs of the following, to the extent allocable to the Services: · (a) wages, salaries and overheads for site personnel; (b) all out of pocket expenses paid or payable to third parties; (c) builders risk insurance costs and bond premiums; and (d) field office expenses. Wages, salaries and overheads for Manager's non-site persormel, legal costs, and other home office overhead are not Reimbursable Costs, except to the extent, and only to the extent directly relating to the Construction Contracts from and after the Effective Date and as approved by Zachry in its sole discretion. 1.2 Rules of Interpretation. The following rules of interpretation shall apply to this Agreement: (i)the terms "herein," "herewith" and "hereof' are references to this Agreement, taken as a whole; (ii) the term "includes" or "including" shall mean "including, without limitation·" ' (iii) references to a "Section " "subsection" "clause" "Article " "Exhibit" ) ) ) ) ' "Appendix" or "Schedule" mean a Section, subsection, clause, Article, Exhibit, Appendix or Schedule of this Agreement, as the case may be, unless in any such case the context requires otherwise; (iv) references to a given agreement, instrument or other document shall be a reference to that agreement, instrument or other document as modified, amended, supplemented MANAGEMENT SERVICES AGREEMENT PAGE2 ZCC-40-1 37657 0643.0002 and restated through the date as of which such reference is made; (v) references to a Law includes all amendments or modifications thereto, all rules and regulations promulgated under such Law and all administrative and judicial authority exercisable thereunder; (vi) reference to a Person include its successors and permitted assigns; and (vii) the singular shall include the plural and the masculine shall include the feminine, and vice versa. ARTICLE2 MANAGER SERVICES 2.1 Engagement and Services. Subject to the provisions hereof, Zachry hereby engages and contracts Manager to manage, supervise, administer, direct, control, and perform or cause to be performed on behalf of Zachry all of Zachry's obligations under the Construction Contracts, including the performance of work thereunder, the administration and management of all litigation, and the management and administration of claims, obligations of indemnity, and other matters arising out of the Co~struction Contracts, and to perform certain other tasks, duties or services as the Parties may from time to time agree (the "Services"). Manager hereby accepts such engagement and agrees to perform the Services in accordance with the terms and conditions of this Agreement. 2.2 Power of Attorney. The Parties acknowledge that in order to perform the Services, Manager will necessarily need to act for and on behalf of Zachry on various matters in connection with the Construction Contracts. Zachry hereby constitutes and appoints the Manager with full power of substitution as its true and lawful representative and attorney-in-fact, with full power and authority in its name, place and stead, (i) to execute, swear to, acknowledge, deliver, file and record in the appropriate public offices all releases, waivers of lien, or certificates required under such Construction Contracts; (ii) to prepare and deliver certificates or instruments required under the Construction Contracts, prepare and deliver bills to third parties, accept payments, execute amendments and change orders, give warranties and perform all other contractual obligations of Zachry in connection with such Construction Contracts; (iii) to assert any claims, or to file actions, motions, pleadings, responses to discovery, and other instruments in connection with any claims related to such Construction Contracts, and (iv) to perform any other acts that Manager deems appropriate or necessary to perform the Services. Zachry agrees and acknowledges that the acts and decisions of Manager within the scope and authority of this power of attorney and the terms of this Agreement shall bind Zachry. 2.3 Cooperation. Zachry shall fully cooperate with Manager in the performance of the Services or in exercising its power of attorney granted in Section 2.3 above, including executing such documents or instruments as Manager may reasonably request from time to time in connection with the Services and the Construction Contracts. The right to abandon, settle, compromise, waive or dismiss any right or claim under the Construction Contracts shall be shared by Zachry and Manager. 2.4 No Partnership. This Agreement creates a contract relationship between Zachry and Manager. Nothing in this Agreement shall be deemed to constitute Manager as a partner or joint venturer of Zachry or Zachry's affiliates or vice versa. MANAGEMENT SERVICES AGREEMENT PAGE3 ZCC-40-137658 0643.0003  2.5 No Assignment. Nothing in this Agreement shall be deemed to be an assignment of the Construction Contracts to Manager. Zachry is and shall remain the contractor under each of the Construction Contracts. As such, Zachry retains all rights, obligations and claims arising from or in connection with the Construction Contracts, any owner under the Construction Contracts, or any subcontractors on the projects covered by the Construction Contracts. ARTICLE3 PAYMENTS & ACCOUNTING 3 .l Payments. Manager has and will continue to incur costs on behalf of Zachry to perform the Services. As consideration to Manager for the performance of the Services hereunder, and for all costs incurred by Manager in connection therewith, Zachry agrees to pay to Manager the Reimbursable Costs. Zachry will pay-over to Manager, or Manager shall have the right to directly receive, all payments from the owners under the Construction Contracts, recoveries for claims thereunder, or other payments arising from the Construction Contracts ("Contract Payments"). The timing and schedule for any amounts due hereunder shall be as mutually· agreed by the Parties from time to time in light of the particular Services and Construction Contract. 3.2 Pavment Limitation. Notwithstanding anything in Section 3.1 to the contrary, Zachry shall have no obligation to pay or reimburse Manager for any Reimbursable Costs in excess of the Contract Payments. Therefore, if the Contract Payments received by Manager are Jess than the Reimbursable Costs, Zachry will have no liability for any such shortfall. If the Contract Payments exceed the Reimbursable Costs, the parties shall confer and agree upon a mutually satisfactory allocation of any such excess amounts between the Parties consistent with the intents and purposes of the Corporate Restructuring. 3.3 Accounting. Manager shall keep and maintain, books, records, accounts and other documents sufficient to reflect accurately and completely all Reimbursable Costs incurred pursuant to this Agreement, as well as the Contract Payments received. ARTICLE4 TERM & TERMINATION 4.1 Term. Unless earlier terminated pursuant to Section 4.2. or Section 4.3 hereof, the term of this Agreement shall commence on the Effective Date and continue for a period of five (5) years, and then month-to-month thereafter, unless terminated by either Party on not less than sixty (60) days notice. 4.2 Termination by Mutual Consent. The Parties may terminate this Agreement in its entirety, or solely with respect to the Services, at any time upon mutual written consent. 4.3 Termination bv Either Partv for Cause. Either Party (the "First Party") may by written notice to the other Party (the "Second Party") terminate this Agreement upon or after the occurrence of any of the following events: (a) In the event of the bankruptcy of the Second Party; and MANAGEMENT SERVICES AGREEMENT PAGE4 ZCC-40-137659 0643.0004  (b) In the event of a failure by the Second Party to perform its obligations under this Agreement in any material respect, if the Second Party does not cure such failure within fifteen (15) days of the date of a written notice from the First Party demanding such cure (or, if curable, within such longer period of time up to sixty (60) days as is reasonably necessary to accomplish such cure without material adverse effect on the First Party or the performance of the Services). ARTICLES LIMITATION ON LIABILITY 5.1 Standard of Care. In providing the Services, Manager shall use the same degree of care, skill and prudence customarily exercised by it for its own provision of services to itself and its affiliates (and in compliance with applicable Law) to provide, or cause to be provided, the Services. Other than as expressly set forth in this Agreement, Manager does not make any other warranty, express or implied, with respect to the Services. 5.2 No Warranties or Guarantees. Except as expressly provided in this Agreement, none of the Parties makes any warranties or g-uarantees to any other Party, express or implied, with respect to the subject matter of this Agreement, and Manager hereby expressly disclaims any implied warranty or warranties imposed by Law, including the Implied Warranties of Merchantability and Fitness for a Particular Purpose. 5.3 No Consequential Damages. In no event, whether as a result of breach of contract, breach of warranty, tort liability (including negligence), strict liability, indemnity or otherwise, shall either Party or its agents be liable to the other Party for special, indirect, punitive, exemplary or consequential damages or fiduciary liability of any nature, and each Party hereby releases the other Party and its agents therefrom. ARTICLE6 MISCELLANEOUS PROVISIONS 6.1 Joint Effort. Preparation of this Agreement ~as been a joint effort of the Parties and the resulting document shall not be construed more severely against one of the Parties than against the other. 6.2 Captions. The captions contained in this Agreement are for convenience and reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision contained herein. 6.3 Severabilitv. The invalidity of one or more phrases, sentences, clauses, Sections or Articles contained in this Agreement shall not affect the validity of the remaining portions of the Agreement so long as the material purposes of this Agreement can be determined and effectuated. 6.4 No Waiver. Any failure of either Party to enforce any of the provisions of this Agreement or to require compliance with any of its terms at any time during the pendency of this Agreement shall in no way affect the validity of this Agreement, or any part hereof, and shall not MANAGEMENT SERVICES AGREEMENT PAGES ZCC-40-137660 0643.0005 be deemed a waiver of the right of such Party thereafter to enforce any and each of such provisions. 6.5 F urther Assurances. Each Party agrees to execute and deliver all further instruments and documents, and take all further action not inconsistent with the provisions of this Agreement that may be reasonably necessary to perform the Services and to effectuate the purposes and intent of this Agreement. In order to fully realize the benefits of the Contract Payments, Zachry will assign to Manager accounts receivables under the Construction Contracts. 6.6 No Third Party Benefi ciary. This Agreement is not intended to, and does not, confer upon any Person other than the Parties any rights or remedies hereunder other than the Parties' respective affiliates. Without limiting the generality of the foregoing, nothing in this Agreement shall be construed to create any duty to, standard of care with respect to, or any liability to any Person who is not a Party to this Agreement. 6. 7 : Go'Verning Law. This Agreement shall be governed by and construed under the laws of the State ofTexas, without reference to conflicts oflaws rules. 6.8 Entire Agr eement. This Agreement sets forth the full and complete understanding of the Parties relating to the subject matter hereof as of the date hereof, and supersedes any and all negotiations, agreements, understandings and representations made or dated prior thereto with respect to such subject matter. 6.9 Amendments. No change, amendment or modification of this ·Agreement shall be valid or binding upon the Parties unless such change, amendment or modification shall be in writing and duly executed by all Parties. 6.1 0 Successors. This Agreement and the covenants and agreements herein contained shall inure to the benefit of and be binding upon the Parties hereto, their successors and assigns. 6.11 Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement. In the event that this Agr~ement is delivered by facsimile transmission or by e-mail delivery of a ".pdf' format date file, such signature shall create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf' signature page were an original thereof. {REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURES ON FOLLOWING PAGE} MANAGEMENT SERVICES AGREEMENT PAGE6 ZCC-40-137661 0643.0006  IN WITNESS WHEREOF, each of the Parties has caused this Management Services Agreement to be duly executed on this 27th day of April 2009 to be effective as of the Effective Date. ZACHRY: ZACHRY INDUSTRIAL, INC., a Delaware corporation By: Nrune:~~~~~~~~~~~~------­ Title: MANAGER: ZACHRY CONSTRUCTION CORPORATION, a Delaware corporation MANAGEMENT SERVICES AGREEMENT SIGNATURE PAGE ZCC-40~137662 0643.0007  EXHIBIT "A" CONSTRUCTION CONTRACTS 1. Contract for Bayport Terminal Complex Phase lA Wharf and Dredging Contract, dated May 24, 2005, by and' between Zachry Construction Corporation and Port of Houston Authority (File Number: 2004-0 187). 2. Contract for Bayport Terminal Complex Phase IA Container Yard, dated June 28, 2004, by and between Zachry Construction Corporation and Port of Houston Authority (File Number: 2004-0225). 3. Contract for Bayport Cruise Terminal Complex Phase 1-Site and· Utilities, dated November 28, 2005, by and between Zachry Construction Corporation and Port of Houston Authority (File Nwnber: 2~05-0394). 4. Zachry Project 5922 -Project No. 15-2897, Contract No. 5494, Harte Research Institute Building, Texas A&M University- Corpus Christi, Contract Awarded: May 14, 2003. 5. Zachry Job 7634 -- Project No. 16-2931, Contract No. 5567, Kinesiology Facilities Texas A&M International University, Contract Awarded: January 13, 2006. 6. The Comprehensive Development Agreement with an effective date of October 1, 2004, as amended, between Zachry and the Texas Department of Transportation for the development of an approximate 7.4-mile segment of State Highway 45 Southeast, a proposed controlled access transportation facility extending from Interstate Highway 35 at Farm-to-Market 1327 south of Austin to SH 130/US Highway 183 in Travis County. MANAGEMENT SERVICES AGREEMENT EXHIBIT"A" ZCC-40-137663 0643.0008  TAB 38 Pass-through Agreement (PX642)  CLAIMS PASS-THROUGH AGREEMENT This Claims Pass-Through Agreement ("Agreement") is entered into effective as of January 1, 2008 (the "Effective Date") by and between ZACHRY INDUSTRIAL, INC., a Delaware corporation, formerly known as Zachry Construction Corporation ("Zachry"), and ZACHRY CONSTRUCTION CORPORATION, a Delaware corporation ("ZCC"). Zachry and ZCC may be referred to in this Agreement collectively as the "Parties" and individually as a "Party." RECITALS A. Prior to the Effective Date, Zachry entered into a construction contract and associated documentation with the Port of Houston Authority, Harris County, Texas ("Port of Houston") for construction work related to a wharf and dredging project at the Bayport Terminal Complex, as such construction contract ·is described on Exhibit "A" attached hereto (the "Bayport Contract"). B. Zachry and ZCC entered into a Management Services Agreement, as of the Effective Date ("Management Services Agreement") pursuant to which Zachry subcontracted with ZCC to perform work and other obligations of Zachry under the Bayport Contract and other construction contracts. C. The Port of Houston has materially breached the Bayport Contract and Zachry and ZCC have each suffered damages arising from or in connection with such breach giving rise to the claims set forth in the lawsuit styled Zachry Construction Corporation n/kla Zachry Industrial, Inc. vs. Port of Houston Authority of Harris County, Texas, Cause No. 2006-72970 rr (District Court of Harris County, 15 Judicial District of Texas) (the "Claims"). D. The Port of Houston's breaches of the Bayport Contract have damaged Zachry before January 1, 2008 and have directly damaged Zachry's subcontractor, ZCC, after January 1, 2008. Zachry and ZCC agree that it is in their mutual best interests for Zachry and ZCC to pursue Claims against the Port of Houston in the name of Zachry. The Claims include those Claims of Zachry before January I, 2008 ("Zachry Claims"), as well as the damages incurred by ZCC from and after January 1, 2008, the effective date of the Management Services Agreement (the "ZCC Claims"). The parties desire, therefore, to agree upon a procedure through which they will coordinate the preparation, presentation and prosecution of the Claims against the Port of Houston. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Zachry and ZCC agree as follows: No. 2006-72970 CL.A IMS PASS-THROUGH AGREEMENT ZCC EXHIBIT ZCC-40-137664 642 0642.0001  ARTICLE 1 PASS-THROUGH AND CLAIMS PROSECUTION 1.1 Pass-Through. Zachry agrees, and acknowledges it is liable to ZCC, to present the ZCC Claims and remit any recovery from the Port of Houston to ZCC, in accordance with the terms of this Agreement. ZCC agrees that the liability of Zachry to ZCC is liquidated to the extent of the recovery against the Port of Houston for the ZCC Claims. Zachry agrees to pass any such recovery to ZCC to the extent, and only to extent, of any amount actually recovered from the Port of Houston. ZCC agrees that upon Zachry meeting such obligations it shall have no further liability to ZCC arising from the ZCC Claims. 1.2 Delegation of Prosecution. Zachry agrees that ZCC may pursue the Claims against the Port of Houston in Zachry's name. ZCC shall include in the Claims the amount of the Zachry Claims and the ZCC Claims. ZCC shall diligently pursue the Claims. ZCC shall have the responsibility for the preparation ef any claim, the presentation and prosecution of any such claim, and the conduct of any litigation. 1.3 Cooperation. Zachry shall cooperate fully with ZCC including, but not limited to, passing on the Claims to the Port of Houston and executing such documents that may be required to further the Claims; and ZCC shall cooperate fully with Zachry. Upon request, one party may review and copy or be provided at no cost a copy of any writings, letters, reports, analysis, drawings, schedules, charts, photos or any other documents relating to the Claims in the possession, custody or control of the other party. 1.4 Settlement. The right to abandon, settle, compromise or dismiss the Claims shall be shared by ZCC and Zachry. Zachry and ZCC shall each not settle the Claims without the other party's prior written approval. 1.5 Costs. All costs, fees and other expenses (including expert and attorney fees) incurred by ZCC in connection with the preparation, prosecution and litigation of the Claims shall be paid by ZCC. ZCC shall have no responsibility for any attorney fees or expenses that Zachry may elect to incur. 1.6 Witnesses and Documents. Zachry shall provide, at no cost to ZCC, Zachry employees as witnesses and their respective documents relating to the Claims. Zachry and ZCC will cooperate as fully as possible in regard to witnesses and documents. Zachry will provide any Zachry employees and witnesses, at mutually agreed times and in mutually agreed amounts oftime so as not to hinder or delay Zachry's ongoing operations. 1. 7 C laims Payment. Zachry and ZCC shall direct that any payment on the Claims shall be paid to ZCC in accordance with this Agreement. 1.8 Services Agreement. The parties expressly acknowledge that the Management Services Agreement shall remain in full force and effect except to the extent that any provisions of the Management Services Agreement are inconsistent with or superseded by the terms of this Agreement. CLAIMS PASS-THROUGH AGREEMENT PAGE2 ZCC-40-137665 0642.0002  ARTICLE2 MISCELLANEOUS PROVISIONS 2.1 Joint Effort. Preparation of this Agreement has been a joint effort of the Parties and the resulting document shall not be construed more severely against one of the Parties than against the other. 2.2 Severability. The invalidity of one or more phrases, sentences, clauses, Sections or Articles contained in this Agreement shall not affect the validity of the remaining portions of the Agreement so long as the material purposes of this Agreement can be determined and effectuated. 2.3 Further Assu rances. Each Party agrees to execute and deliver all further instruments and documents, and take all further action not inconsistent with the provisions of this Agreement that may be reasonably necessary to perform the Services and to effectuate the purposes and intent of this Agreement. 2.4 No T hird Party Beneficiary. This Agreement is not intended to, and does not, confer upon any Person other than the Parties any rights or remedies hereunder other than the Parties' respective affiliates. Without limiting the generality of the foregoing, Nothing in this Agreement shall be construed to create any duty to, standard of care with respect to, or any liability to any Person who is not a Party to this Agreement. 2.5 Governing Law. This Agreement shall be governed by and construed under the laws of the State of Texas, without reference to conflicts of laws rules. 2.6 Entire Agreement. This Agreement sets forth the full and complete understanding of the Parties relating to the subject matter hereof as of the date hereof, and supersedes any and all negotiations, agreements, understandings and representations made or dated prior thereto with respect to such subject matter. 2.7 Amendments. No change, amendment or modification of this Agreement shall be valid or binding upon the Parties unless such change, amendment or modification shall be in writing and duly executed by all Parties. 2.8 Successors. This Agreement and the covenants and agreements herein contained shall inure to the benefit of and be binding upon the Parties hereto, their successors and assigns. 2.9 Rules of Interpretation. The terms "herein," "herewith" and "hereof' are references to this Agreement, taken as a whole. The term "includes" or "including" shall mean "including, without limitation." References to a "Section," "subsection," "clause," "Article," "Exhibit," "Appendix" or "Schedule" mean a Section, subsection, clause, Article, Exhibit, Appendix or Schedule of this Agreement, as the case may be, unless in any such case the context requires otherwise. References to a given agreement, instrument or other document shall be a reference to that agreement, instrument or other document as modified, amended, supplemented and restated through the date as of which such reference is made. References to a Law includes all amendments or modifications thereto, all rules and regulations promulgated under such Law and all administrative and judicial authority exercisable thereunder. Reference to a Person CLAIMS PASS-THROUGH AGREEMENT PAGE3 ZCC-40-137666 0642.0003 include its successors and permitted assigns. The singular shall include the plural and the masculine shall include the feminine, and vice versa. References to "days" shall mean calendar days, unless the context specifies otherwise. 2.10 Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement. In tJ?.e event that this Agreement is delivered by facsimile transmission or by e-mail delivery of a ".pdf' format date file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf' signature page were an original thereof. {REMAINDER OF PAGE iNTENTIONALLY LEFT BLANK; SIGNATURES ON FOLLOWING PAGE} CLAIMS PASS- THROUGH AGREEMENT PAGE4 ZCC-40-137667 0642.0004  IN WITNESS WHEREOF, each of the Parties has caused this Claims Pass-Through Agreement to be duly executed on the 27'11 day of April 2009, to be effective as of the Effective Date. ZACHRY: ZACHRY INDUSTRIAL, INC., a Delaware corporation ZCC: ZACHRY CONSTRUCTION CORPORATION, a Delaware corporation By: ~j~ Name: Qg,y i d P.f.Clchry Title: 'Pr,.nd.e.rt± an d. Ch,·e:.£ liY,cvl1ve. d.#."ur CLAIMS PASS-THROUGH AGREEMENT SiGNATURE PAGE ZCC-40-137668 0642.0005  EXHIBIT "A" BAYPORT CONTRACT 1. Contract for Bayport Terminal Complex Phase lA Wharf and Dredging Contract, dated May 24, 2005, by and between Zachry Construction Corporation and Port of Houston Authority (File Number: 2004-0 187). CLAIMS PASS-THROUGH AGREEMENT EXH!BIT"A" ZCC-40-137669 0642.0006  TAB 39 Excerpts from Construction Management Agreement (PX57.0001-10, 57.0033)  Bayport Terminal Complex Phase lA Construction Management Plan Prepared for Port of Houston Authority Executives Offices 111 East Loop North Houston, TX 77029 June 1,2004 No. 2006-72970 ZCC EXHIBIT 57 CH2MHILL 0057.0001 BAYPORT TERMINAL COMPLEX PHASE 1ACONSTRUCTION MANAGEMENT PLAN Table of Contents 1.0 Introduction 1 1.1 Purpose 2 1.2 Project Description 2 2.0 Staffing Plan 3 2.1 Project Organization 4 2.2 Construction Manager 4 2.2.1 Construction Manager Level of Authority .4 2.3 Lead Inspector 5 2.4 Civil/Structural/Electrical Inspectors 6 2.5 Office Engineer 6 3.0 Communications Plan 7 3.1 Community Outreach 8 3.2 Complaints 8 3.3 Constructware® 8 3.4 Directory of Personnel 9 3.5 Flow of Communications 9 3.5.1 Formal Communications 9 3.5.2 Informal Communications 9 3.6 Meetings 10 3.6.1 Pre-Construction Conference 10 3.6.2 Pre-Installation Conference 12 3.6.3 Weekly Construction Coordination Meeting 13 3.6.4 Monthly Progress Review Meeting 13 3.6.5 Safety Task Assessments and Tool Box Meetings 13 3.6.6 Unscheduled Meetings 13 3.7 Notifications 13 3.8 Reporting 14 3.8.1 Weekly Progress Report.. 14 3.8.2 Monthly Progress Report 14 3.9 Stakeholder Communication 15 3.10 Third Party Communications 15 4.0 Field Work Plan 16 4.1 Administrative and Technical Support 17 4.2 Air Emissions 17 4.3 Audits 17 4.4 Claims 17 4.5 Contract Modifications 18 4.6 Daily Inspection Diaries 19 4.7 Deficient Construction Materials and Workmanship 19 4.8 Delays and Time Extensions 19 4.9 Dispute Resolution 20 4.10 Equipment and Materials 20 I 0057.0002 BAYPORT TERMINAL COMPLEX PHASE 1ACONSTRUCTION MANAGEMENT PLAN 4.11 Equipment / Material Storage 20 4.12 Equipment Start-Up and Testing 21 4.13 Field Office 21 4.14 Field Orders 21 4.15 Filing System 21 4.16 Fill Material Policy 22 4.17 Forms & Reports 22 4.18 Inspection and Testing 22 4.19 Light 22 4.20 Noise 23 4.21 Notices to be Posted by Contractor 23 4.22 Permits 23 4.23 Progress Payment Requests 23 4.24 Progress Photographs 24 4.25 Record Drawings 24 4.26 Requests for Information 25 4.27 Safety 25 4.27.1 CM Field Staff Safety 25 4.27.2 Contractor Safety 26 4.27.3 Visitor Safety 27 4.28 Schedule 27 4.28.1 Baseline Progress Schedule 27 4.28.2 Progress Schedule Updates 27 4.28.3 Phase 1A Milestone Schedule 28 4.29 Spare Parts 28 4.30 Submittals 28 4.31 Surveying Information and Support 29 4.32 Staff Training and Start-Up Support 29 4.33 Technical Specification Reference Standards 29 4.34 Visitors Log 29 4.35 Warranty / Guarantee Data 30 5.0 Quality Assurance Plan 31 5.1 Quality Assurance Procedure for Construction 32 6.0 Risk Mitigation Plan 33 6.1 Contract. 34 6.1.1 Budget 34 6.1.2 Schedule 34 6.1.3 Scope 34 6.2 Electronic Data 34 6.2.1 Assure-It Database 34 6.2.2 Constructware® 35 6.3 Environmenta1. 36 6.3.1 Air 36 6.3.2 Cultural Resources 36 II 0057.0003 BAYPORT TERMINAL COMPLEX PHASE 1ACONSTRUCTION MANAGEMENT PLAN 6.3.3 Hazardous Materials 36 6.3.4 Light 37 6.3.5 Noise 37 6.3.6 Spills 37 6.3.7 Water Quality 37 6.3.8 Wildlife 38 6.4 Facilities 38 6.4.1 Computers 38 6.4.2 Electric Carts 39 6.4.3 Field Office 39 6.4.4 Personal Digital Assistants .40 6.5 Hard-Copy Data 40 6.5.1 Final Redline As-Built Drawings, Submittals and CCD .40 6.5.2 Operation and Maintenance Manuals .40 6.5.3 Photos 41 6.5.4 Product Data and Shop Drawings .41 6.5.5 Project Vertical Files (Correspondence, Logs, etc.) .41 6.6 Human Resources 41 6.6.1 CH2M HILL Program Staff .41 6.6.2 CM Field Staff 41 6.6.3 Contractors 42 6.6.4 Designers of Record 43 6.6.5 PHA 3rd Party Inspection and Testing Firms .43 6.7 Public 44 6.7.1 Activists 44 6.7.2 Bayport Channel Users 44 6.7.3 Media 44 6.7.4 Port Road Users 44 6.7.5 Terrorism 45 6.8 Stakeholder Management 45 6.9 Unidentified Risks 45 7.0 Closeout Plan 46 7.1 Substantial Completion and Punch List.. .47 7.2 Final Completion 47 7.3 Closeout Modification 47 7.4 Final Payment Request 48 7.5 Construction Completion Report .48 7.6 Documents and Records Turnover .48 7.7 Archives 48 III 0057.0004 BAYPORT TERMINAL COMPLEX PHASE 1ACONSTRUCTION MANAGEMENT PLAN Attachments Attachment 1- Construction Management Team Organizational Chart Attachment 2 - CM Field Staff Responsibilities Matrix Attachment 3 - Workflow Charts: Change Orders, RFIs, Submittals Attachment 4 - Weekly and Monthly Progress Report Checklists Attachment 5 - CH2M HILL Construction Claims Manual Attachment 6 - Field File Numbering System and Checklist Attachment 7 - Construction Management Forms and Reports Attachment 8 - Construction Inspection Checklists Attachment 9 - CH2M HILL Bayport Phase lA Field Safety Instructions Attachment 10 - Quality Assurance Procedure for Construction IV 0057.0005 1.0 Introduction 0057.0006 BAYPORT TERMINAL COMPLEX PHASE 1A CONSTRUCTION MANAGEMENT PLAN 1.1 Purpose The purpose of this Construction Management Plan (CMP) is to provide the framework for construction management consistency, continuity, quality control, timeliness and teamwork for successful completion of Phase 1A of the Port of Houston Authority's (PHA) Bayport Terminal Complex. The CMP will outline common procedures to be utilized by the Construction Management Team (CMT), which consists of CH2M HILL Program and Construction Management (CM) staff, PHA representatives, contractors and the Designers of Record (DOR) for the Phase 1A construction contracts. The CMP will be the reference document providing continuity for all CMT members involved in Phase 1A construction. It will define the construction contracts' specific quality assurance requirements, consolidate current construction management field policy for easy reference and retrieval, and outline the relationships of the various functions to be performed by the CMT members. The CMT members will use the CMP as a guidance document to ensure Phase 1A of the Bayport terminal complex is built to the highest available standards of quality and in accordance with the general and technical provisions of each Phase 1A contract. 1.2 Project Description CH2M HILL is providing Program and Construction Management services to PHA for the initial development phase of the estimated $1.2 billion Bayport Terminal Complex. The Port of Houston is the busiest port origination/ destination on the United States Gulf. The Port is the world's sixth largest port and is the number one u.s port in foreign tonnage, transshipping more than 150 million tons of cargo annually. At ultimate build-out, the Bayport Terminal Complex will be the largest container transshipment facility in the United States and include inter-modal rail transfer facilities, cruise terminals and associated commercial developments supporting both the container and cruise terminals. CH2M HILL acts as the Port's primary contact for the initial project development phase, providing oversight, communication and coordination for multiple facility design and construction contracts. Phase lA, the initial development, consists of the design and construction of 1,660 linear feet of reinforced concrete container wharf supported by reinforced concrete drilled piers; reinforced concrete tangent bulkhead wall; access/berthing dredging and on-site disposal of dredged materials; clearing, grubbing and earthwork; heavy duty reinforced concrete and asphalt paved container handling, storage and transfer yard; signage and pavement markings; electrical substation, transmission and distribution utilities; elevated water storage tank, fire and potable water transmission and distribution lines; storm water drainage lines and storm water pollution prevention facilities; sanitary sewer, pumping station and force mains; site lighting; site security/monitoring, fire alarm/ detection, communications and electronic data utilities; temporary and Amenities buildings; and associated construction activities. 2 0057.0007  2.0 Staffing Plan 3 0057.0008 BAYPORT TERMINAL COMPLEX PHASE 1ACONSTRUCTION MANAGEMENT PLAN 2.1 Project Organization The Bayport Terminal Complex Phase 1A CMT will serve as the construction administration and management representatives for PHA. The CMT, in this role, will coordinate all construction activities and services required for the successful completion of Phase 1A construction. The on-site CM Field Staff will consist of a Construction Manager (CM), an Office Engineer, a Lead Inspector, and Civil/Structural/Electrical Inspectors. This staff will be provided by CH2M HILL and its sub-consultants. The CMT also includes PHA project management and construction administration staff; Designers of Record (DaR) for each construction contract; CH2M HILL construction administrative and technical support staff; PHA construction materials testing firms; and any other involved parties performing construction related activities and services. The CM will report directly to PHA's Bayport Project Manager, Chief Engineer, Project Engineer, and Chief Inspector as well as the CH2M HILL Program Manager (PM). The CM will coordinate and oversee the daily activities of the CM Field Staff, 3rd party testing laboratory personnel, 3rd party surveyors, 3rd party inspectors and auditors, and other CMT members involved in the construction work. The CM is directly responsible for the coordination and oversight of the CM Field Staff. The CMT organizational chart is shown on Attachment 1, "Construction Management Team Organizational Chart." The individual roles and responsibilities of the CM Field Staff are shown on Attachment 2, "CM Field Staff Responsibilities Matrix." 2.2 Construction Manager The CM shall act as the PHA's representative on site during construction of Phase 1A. The CM shall be the Inspector for the work and have all authority delegated to the Inspector by the contract documents. The CM will coordinate the activities of all contractors and DOR performing work on site during Phase 1A construction, and will be responsible for implementation of the Staffing Plan, Communications Plan, Field Work Plan, Quality Assurance Plan, Risk Mitigation Plan, and Closeout Plan as described in this CMP. 2.2.1 Construction Manager Level of Authority As an extension of the PHA staff, the CM will have all authority normally attributed to a CM acting as owner's agent (not at risk) on a construction project. The CM will have the authority to inspect, monitor and control activities on the project site as necessary to protect PHA's liability with regard to project scope, schedule, quality, security, and permit compliance, in accordance with industry-standard practice. The CM will not have any authority to make changes to any provisions of the PHA- Contractor construction contract documents in regard to costs (increase or decrease in contract price); time for completion (accelerated or extended contract completion 4 0057.0009 BAYPORT TERMINAL COMPLEX PHASE 1ACONSTRUCTION MANAGEMENT PLAN time); or quality of in-place work (lessen or increase the contract quality requirements for construction materials and/ or workmanship). The CM will have the authority to control communications and documentation contributing to the permanent project record, clarify and interpret construction contract documents, and make on-site field administrative/ engineering/ quality assurance decisions, subject to the limitations outlined above. The CM will promote harmonious communication, cooperation and coordination between all contractors and construction activities. The CM will investigate on-site field deficiencies/ discrepancies/ problems and resolve them, if no changes to the construction contract cost, time for completion and/ or construction materials and/ or workmanship are required. If the resolution of an on-site field deficiency/discrepancy/problem requires a change to the contract cost, time for completion and/ or quality of construction materials and/ or workmanship, the CM will investigate and make recommendations to the Port of Houston Authority's Chief Engineer for resolution. The CM will provide no direction related to the Contractor's construction means, methods, procedures, safety, sequencing and/ or techniques. The CM will observe and report on the Contractor's construction safety, workmanship and materials, as it relates to quality assurance and the in-place construction work being in conformance with Construction Contract Documents (CCD) (i.e., construction contract General and Special Conditions, drawings, technical specification sections and approved Contractor submittals). 2.3 Lead Inspector The Lead Inspector will be responsible for the construction documentation and quality assurance of multiple construction contracts awarded for Phase lA. The Lead Inspector will report to the CM and will oversee and direct the work efforts of the Inspectors. The Lead Inspector will be expected to maintain complete, up-to-date and detailed knowledge of all pertinent construction contract documents; administrative and technical submittals; change orders; field orders; progress schedules; drawings; plans; technical specifications; and administrative status reports. The Lead Inspector will observe and monitor the contractors' planning and execution of the work and perform quality assurance inspections of materials and workmanship to assure compliance with the CCD. The Lead Inspector will act as liaison between the contractors, Inspectors and PHA's construction inspection and materials testing personnel. The Lead Inspector will be responsible for the use and implementation of Personal Digital Assistants (PDA's) for field inspection activities; use of the proprietary Assure-It database for analysis and reporting of QA/QC data; preparation of daily, weekly, and monthly construction progress reports; making recommendations on contractors' progress payment requests and invoices; maintaining a daily log and photos of the contractors' construction activities, staffing, equipment, and materials; documenting contractor performance and safety issues; and resolving on-site construction conflicts. 5 0057.0010 BAYPORT TERMINAL COMPLEX PHASE 1ACONSTRUCTION MANAGEMENT PLAN 4.28.3 Phase 1A Milestone Schedule The CM Field Staff will create and maintain an overall Phase lA Milestone Schedule based on the Contractors' approved baseline Progress Schedules. The CM will use the contractors' accepted Progress Schedule Updates to update the Phase lA Milestone Schedule on a monthly basis, or more frequently, as requested by the PHA. 4.29 Spare Parts CM Field Staff will take possession of all spare parts to be provided by construction contractors, in accordance with the requirements of the project CCD. Contractors will tag (CH2M HILL Standard Spare Parts Identification Tag-Form No. 399) all spare parts to be turned over to the CM Field Staff. This turnover action will be documented (CH2M HILL Standard Spare Parts Transfer Form-Form No. 289) by the contractor and CM Field Staff. CM Field Staff will prepare and maintain a record (CH2M HILL Standard Spare Parts Transfer Log-Form No. 404) of all spare parts transfers. 4.30 Submittals The Contractor for each Phase lA construction contract will be responsible for developing a list of submittals required by the CCD. Submittals lists will be reviewed by the CM for completeness. A static electronic copy of each Submittal List will be posted in Constructware®. All submittals requiring action to be taken by a reviewing/ approving party will be submitted by the contractor (PHA General Conditions Section 5.20 "Submittals to be Furnished by the Contractor after Award") to the CM using Constructware®. The Contractor will be responsible for following any electronic submittal with hard copy materials, if any, sent to the appropriate party for review. The CM will distribute these submittals to the appropriate reviewing party. Once the reviewing party has reviewed, approved or indicated the actions to be taken by the contractor to obtain approval, the submittal will be returned to the contractor through the CM. The reviewing party will electronically annotate all reviewed contractor submittals, indicating action(s) to be taken by the contractor: no exception taken; make corrections noted; rejected; revise and resubmit; or submit specified item. The review notation will include places for the reviewer's electronic signature and date of signature. Informational submittals will also be submitted by the contractor through the CM in the same manner as described above. The CM Field Staff will document, distribute, file and log all submittals using Constructware®. 28 0057.0033  TAB 40 Court’s Ruling on Directed Verdict (71:8-15)  8 Plaintiff's Motion for Directed Verdict 1 denied. 2 MS. YEATES: Thank you, Your Honor. 3 THE COURT: Now, would you give me a 4 moment with respect to Zachry's motion? I just want to 5 make a couple of quick notes. 6 Okay. Ms. Greer, or Mr. Gibbs, whoever. 7 PLAINTIFF'S MOTION FOR DIRECTED VERDICT 8 MR. GIBBS: Yes, Your Honor. At this 9 time, Your Honor, the Plaintiff, Zachry Construction 10 Corporation reurges its motion for directed verdict at 11 the close of the Defendant's case and the close of all 12 the evidence. 13 We filed with you our motion on Monday, 14 January the 11th. I think we gave you a copy on 15 January the 11th. And it was filed January the 13th. 16 And we reurge that motion for instructed 17 verdict, and we also urge the argument Zachry made at 18 the hearing on January the 13th, 2009 (sic) on the 19 record, yesterday, as part of our motion for directed 20 verdict. 21 THE COURT: All right. I'd like to go 22 through the table of contents of that motion, if you 23 have a copy. 24 MR. GIBBS: We do, Your Honor. 25 THE COURT: And also ask that -- if  9 Plaintiff's Motion for Directed Verdict 1 Ms. Greer wants to -- only because we all worked on the 2 jury charge together -- and the things that I'm 3 prepared to grant with respect to your directed verdict 4 are essentially what's in the jury charge. 5 And so -- at this point, so if we could 6 go through that, point by point. And you maybe could 7 bring to the Court's attention the ones that you think 8 that are granted by virtue of the current language of 9 the jury charge. 10 MS. GREER: Do you want me to -- well, I 11 know a couple of things off the top of my head, then 12 maybe can I take half a minute to look through it? 13 THE COURT: Please. 14 MS. GREER: Okay. Your Honor, we 15 believe that you have ruled -- or we would ask you to 16 rule on directed verdict that Zachry is entitled as a 17 matter of law to recover the damages sustained by New 18 Zachry on the pass-through claim. 19 We believe that's what you've instructed 20 the jury, and we would ask you to grant our directed 21 verdict on that issue. 22 THE COURT: Okay. 23 MS. YEATES: And obviously, Your Honor, 24 we oppose that motion. 25  10 Plaintiff's Motion for Directed Verdict 1 COURT'S RULING 2 THE COURT: Very good. Okay. And I 3 have ruled on that, and I will grant that aspect of 4 your motion. 5 MS. GREER: And then, Your Honor, we've 6 also moved for directed verdict on Zachry's failure to 7 comply a claim for the Port's failure to pay $2.36 8 million in the liquidated damages. 9 We believe that you have instructed the 10 jury in -- 11 THE REPORTER: Are the mikes on? 12 MR. GREER: -- Question No. 12 that the 13 Court has determined that the Port failed to comply 14 with the contract by failing to pay Zachry $2.36 15 million that the Port has withheld of liquidated 16 damages. 17 THE COURT: Would you grab the 18 microphone, please? 19 (Discussion off the record) 20 THE REPORTER: I'm sorry, I'm having a 21 little trouble hearing you, can you speak up? 22 MR. GREER: Yes. 23 And we would ask you to grant a directed 24 verdict to Zachry on that basis. 25 THE COURT: All right. Go ahead, yes.  11 Plaintiff's Motion for Directed Verdict 1 MS. YEATES: We also oppose that motion, 2 Your Honor. 3 COURT'S RULING 4 THE COURT: Very good. What I've put in 5 the jury charge and what I'm prepared to grant is that 6 I have determined that the Port has failed to comply 7 with the contract by failing to pay Zachry $2.36 8 million that the Port withheld as liquidated damages. 9 Insofar as you have asked for that in a 10 directed verdict, I'm granting that aspect of your 11 motion. 12 MS. GREER: Okay. Thank you, 13 Your Honor. 14 I believe that's all, Your Honor. 15 THE COURT: All right. I was -- so if 16 you would look at the table of contents with me for a 17 moment. I was looking at -- in the table of contents 18 Roman numeral -- Page Number Roman Numeral II, where 19 you have Roman Numeral V -- 5, where it says, Zachry is 20 entitled to a directed verdict on its right to recover 21 damages sustained by New Zachry. 22 Is that covered by what I've previously 23 set? 24 MS. GREER: Yes, Your Honor, that is the 25 portion of the directed verdict motion starts on Page  12 Plaintiff's Motion for Directed Verdict 1 69, that is the portion, that part, Part 5, Roman V is 2 the part that we believe that you have granted a 3 directed verdict motion on in the jury charge, and we 4 ask that you confirm that you granted directed verdict 5 on the arguments made therein. 6 THE COURT: All right. It goes on to 7 say in subparts A -- in Subpart A of that -- in the 8 table of contents or in the motion, The direct verdict 9 is proper because the Port has met the burden to prove 10 that Zachry is not liable to New Zachry and has -- and 11 has not met that burden -- excuse me, because the Port 12 has the burden of proof that Zachry is not liable to 13 New Zachry and has not met that burden. 14 I guess my ruling is as a matter of law 15 that I find that the -- there's a valid pass-through 16 claim and any objections or legal arguments to the 17 contrary by the Port are overruled. 18 MS. GREER: Okay. Thank you, 19 Your Honor. 20 THE COURT: Does that satisfy what 21 you're asking for? 22 MS. GREER: Well, we're asking you to 23 rule as a matter of law that New Zachry, 24 notwithstanding the Port's arguments to the contrary, 25 has the right to -- that Zachry, notwithstanding the  13 Plaintiff's Motion for Directed Verdict 1 Port's arguments to the contrary, has the right to 2 recover New Zachry's damages as a matter of law in this 3 lawsuit. 4 THE COURT: Right. I think that's what 5 I've granted. I will grant that part of your motion. 6 MS. GREER: Thank you, Your Honor. 7 THE COURT: And I know the Port is 8 opposed to that. 9 MS. YEATES: (Moving head up and down) 10 THE COURT: And I've granted with 11 respect -- I indicated with respect to Roman Numeral VI 12 on Page Roman Numeral III with respect to the $2.36 13 million, and you've moved with respect to the clearing 14 and grubbing, and I'm not speaking for the Port, but 15 it's my understanding that the Port has essentially 16 abandoned that claim in that there was not evidence 17 that the 25,000 or so for clearing and grubbing has 18 been paid? 19 MS. YEATES: That's correct, Your Honor. 20 THE COURT: All right. So I'm granting 21 that part of Zachry's motion. 22 The Port, in our charge conference, we 23 talked about the defense of both release and waiver, 24 and it's my understanding that the Port's contention 25 has been that the waiver argument, not the affirmative  14 Plaintiff's Motion for Directed Verdict 1 defensive waiver but with respect to I guess the 2 liquidated damages claim? 3 MS. YEATES: Right, Your Honor. With 4 respect to the liquidated damages, we took away or out 5 of the charge, Your Honor took it out, and we're only 6 arguing release. 7 THE COURT: All right. So I guess I 8 will grant a directed verdict then with respect to the 9 waiver aspect of the release argument? 10 MS. GREER: If they're going to abandon 11 it, I think that's sufficient. But -- 12 THE COURT: Are you -- do you want to 13 abandon it on the record or what? 14 MS. YEATES: No, Your Honor. The point 15 was that we wanted the charge to be submitted as 16 release as opposed to release and waiver. And that's 17 what Your Honor has done with respect to the liquidated 18 damages. 19 MS. GREER: My understanding was that 20 they aren't seeking submission of waiver because it 21 brought (inaudible) -- well, I'm not going to 22 characterize why they're doing it, but that they are 23 not asking you to submit it is my understanding. 24 MS. YEATES: Your Honor, I won't be 25 objecting or requesting waiver instruction with respect 26 to liquidated damages.  15 Defendant's Objections to the Court's Charge 1 COURT'S RULING 2 THE COURT: All right. Then I will make 3 no ruling. 4 And I believe, unless you would bring my 5 attention to anything else that we've spoken about with 6 respect to the jury charge, the rest of the motion for 7 directed verdict will be denied. 8 MS. GREER: It is all I can think of 9 right now, Your Honor. 10 THE COURT: Keep your voice up, please. 11 MS. GREER: That's all I can think of 12 right now, Your Honor. 13 MS. YEATES: Your Honor, I think we're 14 ready to do the charge objections. 15 THE COURT: Okay. Let's hear the charge 16 objections. 17 (At the bench, on the record) 18 DEFENDANT'S OBJECTIONS TO THE COURT'S CHARGE 19 MS. YEATES: Your Honor, the Defendant 20 makes its objections to the Court's charge in the 21 presence of the Court and opposing counsel and the 22 court reporter and before the charge has been read to 23 the jury. 24 After we finish making our objections, 25 Your Honor, we get a ruling, then we'll be tendering  TAB 41 Objections to the Charge (71:15-73)  15 Defendant's Objections to the Court's Charge 1 COURT'S RULING 2 THE COURT: All right. Then I will make 3 no ruling. 4 And I believe, unless you would bring my 5 attention to anything else that we've spoken about with 6 respect to the jury charge, the rest of the motion for 7 directed verdict will be denied. 8 MS. GREER: It is all I can think of 9 right now, Your Honor. 10 THE COURT: Keep your voice up, please. 11 MS. GREER: That's all I can think of 12 right now, Your Honor. 13 MS. YEATES: Your Honor, I think we're 14 ready to do the charge objections. 15 THE COURT: Okay. Let's hear the charge 16 objections. 17 (At the bench, on the record) 18 DEFENDANT'S OBJECTIONS TO THE COURT'S CHARGE 19 MS. YEATES: Your Honor, the Defendant 20 makes its objections to the Court's charge in the 21 presence of the Court and opposing counsel and the 22 court reporter and before the charge has been read to 23 the jury. 24 After we finish making our objections, 25 Your Honor, we get a ruling, then we'll be tendering  16 Defendant's Objections to the Court's Charge 1 requested instructions to the Court for the Court's 2 consideration. 3 THE COURT: Yes, ma'am. 4 MS. YEATES: Our first objection is to 5 the agency instructions and the preliminary 6 instructions in the charge, Your Honor. Because those 7 instructions we believe erroneously include the 8 apparent authority theory. 9 As Your Honor knows, we believe there's 10 no pleading to support the apparent authority theory 11 and there's been no trial by consent and there's no 12 trial amendment. So we believe that theory should not 13 be in the charge and we object to including it in the 14 charge. 15 Your Honor, I'll ask you to rule on all 16 of them at the end, Your Honor. 17 THE COURT: Oh, all right. 18 MS. YEATES: We believe the apparent 19 authority in the charge is erroneous as a matter of 20 law, Your Honor, because with respect to CH2M Hill's 21 actual authority, Zachry was undisputedly on notice of 22 the limitations of that actual authority. 23 And under Douglass versus Panama, that 24 means the apparent authority theory cannot apply in 25 this case.  17 Defendant's Objections to the Court's Charge 1 We also object to instructing the jury 2 on apparent authority because the Port is a public 3 entity that can only contract -- 4 THE COURT: Slow down a little bit. 5 MS. YEATES: Can only contract in 6 writing and therefore apparent authority cannot apply 7 as a matter of law. I believe you've heard all these. 8 Furthermore, Your Honor, inclusion of 9 the apparent authority theory will improperly allow the 10 jury to believe that CH2M Hill -- 11 THE COURT: Ms. Yeates, you got to slow 12 down just a little. 13 MS. YEATES: Okay. Well, I'm sorry, 14 Your Honor, my team is anxious. 15 Inclusion of the apparent authority 16 theory in the charge will improperly allow the jury to 17 believe that CH2M Hill could have apparent authority 18 based on some conduct by the Port that held CH2M Hill 19 out as the Port's agent. 20 In order, you see, Your Honor, to allow 21 -- so that Zachry can argue that they could recover 22 additional work directed by the Port, which is the 23 Texas 271 -- Section 271 of the government code 24 standard. 25 THE COURT: Local government code,  18 Defendant's Objections to the Court's Charge 1 right? 2 MS. YEATES: Right, Your Honor. And I'm 3 bringing that to the Court's attention because that 4 demonstrates the harmful error in including apparent 5 authority instruction in the charge. 6 THE COURT: Yes. 7 MS. YEATES: We also object, Your Honor, 8 to the instruction concerning the imputation of 9 knowledge, which is included in the Court's agency 10 instructions. 11 That's the instruction that starts, A 12 party's knowledge includes facts known to the party, 13 etcetera. The PJC authorizes no such instructions. As 14 Your Honor knows, we found no Texas case that 15 authorizes such an instruction, and so we object to 16 including it in the charge. 17 Your Honor, we also object to the 18 absence from the charge of an instruction that an agent 19 can be an agent for a party for one purpose but not 20 other purposes. 21 That instruction is supported by the law 22 and the evidence. We don't believe it's submitted by 23 implication from other instructions. And the addition 24 of that instruction is necessary in order for the 25 Court's instructions on agency to be substantially  19 Defendant's Objections to the Court's Charge 1 correct. 2 Because in this case, a central fact 3 issue presented is whether CH2M Hill was the Port's 4 agent for certain purposes but not the Port's agent for 5 other purposes. In order properly to answer the 6 question, we believe the jury needs this instruction. 7 At the conclusion of our objections, the 8 Port will tender Defendant's Requested Instruction No. 9 1, which would state that that other party may be 10 authorized to act on behalf of a party for some 11 purposes, while not being authorized to act on behalf 12 of that party for other purposes. 13 And the Port objects to the omission 14 from the Court's charge of that instruction. 15 The Port also objects to the omission 16 from the charge, Your Honor, of an instruction charging 17 the jury that in this case, authority for another to 18 act for the Port can arise only from a written 19 agreement made by the Port that allows the other party 20 to act on behalf of and for the benefit of the Port. 21 And again, our argument there, 22 Your Honor, is that the Port can only contract in 23 writing, and therefore it could only can have an agent 24 by writing. 25 The Port will be tendering Defendant's  20 Defendant's Objections to the Court's Charge 1 Requested Instruction No. 2, which will state in this 2 case, authority for another to act for the Port can 3 arise only from a written agreement made by the Port 4 that allows the other party to act on behalf and for 5 the benefit of the Port. 6 Furthermore, the Port objects to the 7 inclusion in the charge of apparent authority because 8 as a matter of law that theory cannot apply to the Port 9 given the Port's status as a governmental entity with 10 governmental immunity, and so we object on that basis 11 too, Your Honor. 12 Moving to the definition of New Zachry, 13 Your Honor, that's in there because of Your Honor's 14 pass-through ruling. 15 And obviously, we object to the ruling, 16 Your Honor, and to -- well, I'll be objecting to those 17 parts of the charge that go to the ruling because we 18 believe that New Zachry is not the Plaintiff in the 19 case and that Zachry does not have a valid pass-through 20 claim for all the reasons that we argued in our motion 21 to strike, which Your Honor overruled. 22 And principally, Your Honor, you'll 23 remember that's because New Zachry was created and 24 retained by Zachry to be the subcontractor only after 25 the breach occurred and therefore the Port's breach  21 Defendant's Objections to the Court's Charge 1 could not have caused the damages to New Zachry in this 2 context. 3 So we object to the New Zachry 4 definition, and we'll be objecting to the other 5 instructions on that basis. 6 Your Honor, in your instructions, you 7 instruct multiple times concerning ambiguity and trade 8 custom. We've talked about that. 9 It's our belief that those instructions, 10 because they appear multiple times in the charge, 11 should be in the preliminary instructions one time in 12 the front of the charge. 13 I'm particularly concerned about this 14 with respect to trade/usage because it's our position 15 that there is no evidence to raise a fact issue on the 16 legal standard from when a trade custom or usage 17 arises. 18 And that by instructing the jury 19 multiple times on that, the Judge -- the Court 20 improperly comments on the weight of the evidence by 21 nudging or telling the jury that the Court thinks, 22 Well, there must be a trade custom or usage because I'm 23 asking about it several times in the charge. 24 And we believe that because the trade 25 custom or usage relates to the ambiguity instruction,  22 Defendant's Objections to the Court's Charge 1 the proper thing to do would be to take the ambiguity 2 instruction and trade custom and usage and put them 3 both in the front of the charge. 4 THE COURT: Slow down. If you want this 5 on the record, you've got to slow down. 6 MS. YEATES: Okay. 7 And if you put it in the front of the 8 charge, Your Honor, you would lead the instruction by 9 saying, In answering questions that require you to 10 decide the meaning of an agreement, you must decide the 11 meaning by determining the intent of the parties at the 12 time of the agreement, and then continue with the 13 Court's instructions on ambiguity. 14 Your Honor, the Port further objects to 15 the inclusion instruction in the charge on trade custom 16 and usage because, as I've stated, Your Honor, there's 17 no evidence to raise an issue on that. 18 Your Honor, I've talked about the 19 ordering of the questions in the charge and we object 20 to the fact that the charge does not have the excuse 21 questions in each cluster following liability. 22 We think that's the appropriate, proper 23 way to do it and we object to not doing it that way, 24 Your Honor. 25 On Question No. 1, I think our only  23 Defendant's Objections to the Court's Charge 1 objection there at this point is that the Port is 2 charging the jury as to what the jury may consider in 3 deciding Question No. 1, and that's the ambiguity 4 instruction. And again, we think that should be in the 5 front of the charge. 6 Your Honor, moving to Question No. 2 -- 7 oh, I'm sorry, also on Question No. 1, the Court 8 instructs the jury not to consider Section 5.10 with 9 respect to breach of 5.10. And the Port objects to the 10 Court giving that instruction. 11 THE COURT: I thought we -- didn't we 12 change that? 13 MS. YEATES: No. It's limited to 14 breach, Your Honor. But remember my position was it 15 shouldn't be in there at all. 16 That's Ms. Greer's concern that there 17 could be an irreconcilable conflict between the two 18 findings. 19 THE COURT: How -- did we change the 20 wording of that though? What question is it? 21 MS. YEATES: It's Question 1. 22 MS. GREER: 1. 23 I think what you had in the draft last 24 night was, In answering this question only, you're not 25 being asked to decide whether the Port failed to comply  24 Defendant's Objections to the Court's Charge 1 with Section 5.10 of the contract. 2 MS. YEATES: And, you know, 3 Your Honor -- 4 THE COURT: Question 1? 5 MS. YEATES: Right. Well, that's 6 just -- 7 THE COURT: Oh, yeah. Yeah. 8 MS. YEATES: -- Ms. Greer's concern 9 about irreconcilable findings, Your Honor. 10 But we believe the instruction will 11 mislead and confuse the jury into believing that the 12 jury cannot consider Section 5.10 in determining 13 whether the Port failed to comply with Change Order 4. 14 And we believe that's error, Your Honor, 15 erroneous because Change Order 4 incorporates the rest 16 of the contract to the extent the rest of the contract 17 is not in conflict with Change Order 4. 18 Therefore, at the conclusion of these 19 objections -- well, we object to having the instruction 20 in there at all. 21 But at the inclusion of the objections, 22 we'll be requesting Defendant's Requested Question No. 23 3, which states, However, you may consider Section 5.10 24 in determining whether the Port failed to comply with 25 Change Order 4. You may consider it in deciding  25 Defendant's Objections to the Court's Charge 1 Question 1. 2 And we think if you're going to give 3 that instruction that's in the charge, Your Honor, that 4 this additional instruction would also be required. 5 And again, this is something we 6 discussed last night. 7 MS. GREER: Our response would be a 8 comment on the weight of the evidence. 9 MS. YEATES: Right. 10 THE COURT: What? 11 MS. GREER: Our response to that 12 argument was that it would be a comment on the weight 13 of the evidence designed to nudge the jury. 14 And in fact, it would tell the jury to 15 adopt the position that Section 2.02, Precedence 16 Provision, as a matter of law does not cause Change 17 Order 4 to trump the general conditions and the 18 technical specifications, 5.10, all those. 19 MS. YEATES: And of course, our 20 position, Your Honor, is if we're going to point the 21 jury in the instruction you're giving and tell them not 22 to consider whether 5.10 is breached, that that leads 23 the jury to believe they're not supposed to look at 24 5.10. 25 THE COURT: I understand.  26 Defendant's Objections to the Court's Charge 1 MS. YEATES: Okay. 2 Your Honor, on the next instruction I 3 would like to go to under Question 1 is the instruction 4 that states, Furthermore, in answering this question 5 only, you are instructed that nothing in Section 5.41 6 gave the Port the right to issue its revise and 7 resubmit. 8 We believe this instruction is erroneous 9 because it's based on an incorrect construction and 10 interpretation of the contract. 11 It's not -- we don't believe it's a 12 proper -- restatement of what the Court's ruling was 13 intended to go to with respect to your ruling on the 14 meaning of 5.41. 15 And we thought the Court's ruling was 16 going to the point that Zachry was not required to 17 obtain a written change directive or change order in 18 order to recover. And so we believe this instruction 19 goes beyond what we thought the point of the Court's 20 pretrial ruling was. 21 Furthermore, we believe it's erroneous 22 as a matter of law as explained in all our previous 23 objections to the Court's instructions concerning 5.41. 24 And the Court's instruction is based on 25 the erroneous application, we believe, of the so-called  27 Defendant's Objections to the Court's Charge 1 radical change doctrine, and on the Shintech and 2 Columbia Gas line of cases. 3 And we believe those are inapplicable 4 here because Section 3.09 of the contract, you'll 5 recall, provides that no action or failure to act by 6 the Port can constitute a waiver of a right of the Port 7 under the contract. 8 Moreover, here, the Port didn't 9 relinquish its contractual procedural rights under 10 Section 5.41 even in the event of a breach because the 11 Port's procedural rights under 5.41 go directly to the 12 breach issue, and that's the legal rationale of the 13 Technip case that we've discussed. 14 I believe you've heard these arguments, 15 Your Honor. 16 Also, under the Texas Water Code and 17 other provisions of Texas law, the Port is statutorily 18 prohibited from making any binding contract that's not 19 in writing. And that's exactly what Section 4.1 (sic) 20 is going to when it says, If a contractor is going to 21 do additional work, he has to get a written change 22 order. 23 MS. GREER: That's -- 24 THE COURT: 4.1 or 5.41? 25 MS. YEATES: I'm sorry, 5.41. I  28 Defendant's Objections to the Court's Charge 1 apologize, Your Honor. 2 THE COURT: I just wanted your record to 3 be clear. 4 MS. YEATES: Thank you, Your Honor. 5 Furthermore, the Court's instruction is 6 erroneous as a matter of law because the Port has 7 governmental immunity, which is waived only to the 8 extent permitted by Chapter 271 of the Texas Local 9 Government Code. 10 And we believe Section 5.41 goes 11 directly to whether the amount sought by Zachry comes 12 within that waiver of immunity. The Shintech and 13 Columbia Gas line of cases are not attempting to deal 14 with the situation of governmental immunity. 15 Even if the radical change doctrine or 16 the Shintech line of law applied, they would not make 17 Section 5.41 relevant to whether the Port had the right 18 to revise and resubmit. 19 We believe Section 5.41 does not go to 20 that issue, and that is why we believe the instruction 21 given in connection with Question No. 1 is erroneous as 22 a matter of law. 23 And -- now, Your Honor, it also, the 24 instruction on 5.41 also, we believe, constitutes an 25 impermissible comment --  29 Defendant's Objections to the Court's Charge 1 THE COURT: Slow down. 2 MS. YEATES: And impermissible comment 3 on the weight of the evidence serving to tilt or nudge 4 the jury to find in Zachry's favor. And the 5 instruction, we believe, is not correct or helpful to 6 the jury. 7 Your Honor, I would now like to, with 8 respect to Question 1, simply reurge our matter of law 9 arguments that we believe we've made to you previously 10 on why the Port believes that it is correct as a matter 11 of law that Change Order 1 didn't -- Change Order 4 did 12 not entitle Zachry to use the frozen cutoff wall. 13 And we've argued all those things, 14 Your Honor, in opposition to the Port's Rule 166(g) 15 motion, and so I'm not going to repeat them here. It's 16 just a law argument. 17 Your Honor, on Question No. 2, we again, 18 have the instruction on ambiguity and trade/usage. 19 And again, we object to including it multiple times in 20 the charge. 21 The Port objects to the instruction 22 under Question No. 2 telling the jury that it may 23 decide the meaning of Section 5.10 and 5.22 by 24 considering trade usage or custom. 25 Your Honor, as you know, there's -- the  30 Defendant's Objections to the Court's Charge 1 PJC says it's not even clear, it's an appropriate 2 instruction in the charge. And most importantly, 3 Zachry has not adduced evidence to meet the legal 4 standard to raise a fact issue on whether there's any 5 trade custom or usage. So we would object on that 6 basis. 7 We further object to this instruction 8 concerning 5.41 given in connection with Question 2. 9 We believe it's based on an incorrect construction and 10 interpretation of the contract. And therefore, is not 11 a proper restatement of the Court's prior rulings with 12 regard to Section 5.41. 13 We continue to assert all the 14 objections, Your Honor, that we've made during trial to 15 Your Honor's instructions with respect to Section 5.41. 16 Two hours of sleep last night. 17 MS. GREER: Quit bragging. 18 (Laughing) 19 MS. YEATES: And so I'm not going to 20 repeat all of our arguments that I just made a minute 21 ago about why the Shintech line doesn't support the 22 ruling or why the radical change doctrine doesn't the 23 ruling. I won't repeat any of that. 24 And we believe again, that this 25 instruction would be an impermissible and harmful  31 Defendant's Objections to the Court's Charge 1 comment on the weight, serving to tilt or nudge the 2 jury to find in favor of Zachry. 3 And then I would like to go on now to 4 Question No. 3 on the statutory measure of damages, we 5 agree that Your Honor's instruction is correct, that 6 that is the statutory measure. 7 Our objection here is we believe 8 Zachry's adduced no proof of amounts due and owing 9 under the contract. That's our argument. 10 And therefore, I want to assert it here 11 that we think it's error to ask Question No. 3 because 12 we believe Zachry has no evidence to raise a fact issue 13 that would allow the submission of the statutory 14 measure of damages. 15 Your Honor, we also with respect to the 16 statutory measure of damages, Subpart B in the 17 instruction under Question No. 3, the Port objects 18 because, among other reasons, outside of the written 19 executed change order, the Port cannot direct work for 20 Zachry -- cannot direct Zachry to do additional work. 21 And there is no evidence that Zachry was 22 directed by the Port to do additional work. And 23 therefore, we object to the submission of the second 24 prong of Section 271 because we think there's no 25 evidence to raise the issue and there's no evidence of  32 Defendant's Objections to the Court's Charge 1 a written executed change order. 2 Your Honor, now we come to the 3 pass-through instructions and I'm not going to repeat 4 all the arguments we made before, Your Honor, but 5 obviously, we believe the pass-through instruction, 6 which is the instruction under Question 3, telling the 7 jury that they should include reimbursable costs 8 incurred by New Zachry. 9 We believe that instruction is improper 10 because we don't think there is a valid -- legally 11 valid, pass-through claim in this case for all the 12 reasons we stated in our motion to strike the 13 pass-through claim. 14 Your Honor, we also object to the way -- 15 telling the jury in the pass-through instruction that 16 the jury should include reimbursable costs. 17 We believe that that's an impermissible 18 comment on the weight, nudging the jury to find for 19 Zachry and we think it should say the jury may include 20 reimbursable costs. 21 To make the instruction correct, the 22 Court would need to add the following sentence at the 23 end of the instruction. 24 THE COURT: This is question? 25 MS. YEATES: This is Question 3, the  33 Defendant's Objections to the Court's Charge 1 pass-through instruction. 2 THE COURT: Okay. Let me get there. 3 MS. YEATES: The instruction that we 4 think would have to be added is, You may include such 5 reimbursable costs only to the extent that Zachry 6 agreed, in the management service agreement, to pay New 7 Zachry such reimbursable costs. 8 At the conclusion of the objections, 9 Your Honor, I'll request that instruction as 10 Defendant's Requested Instruction No. 4. 11 And we believe omitting that instruction 12 makes the pass-through instruction legally defective 13 and erroneous as a matter of law because the 14 fundamental premise of a pass-through claim is that the 15 Plaintiff asserting the claim has to prove the 16 liability of that Plaintiff contractor to the 17 subcontractor. 18 And we believe that's what our requested 19 instruction goes to. 20 Your Honor, you have instructions on 21 Section 5.41, 5.42 and 5.52 and that's under Question 3 22 and that's the instruction which begins, You are 23 instructed that Zachry was not required to take certain 24 actions. 25 We believe the instruction is incorrect  34 Defendant's Objections to the Court's Charge 1 as a matter of law. I'm going to separately object to 2 this on 5.40 -- as to the extent it goes to 5.41, on 3 the one hand, 5.52, on the other hand and 5.42, on the 4 other hand. 5 The Port continues to assert and does 6 not waive all the objections that we've previously 7 raised to the Court's instructions concerning -- given 8 to the jury already -- concerning 5.41. 9 And for all the reasons I've already 10 articulated, Your Honor, concerning how the radical 11 change doctrine doesn't apply, Shintech line of cases 12 doesn't apply, all those arguments I've already made as 13 to why we believe Your Honor's ruling on Section 5.41 14 is in error, we believe all those reasons make the 15 instructions with respect to this instruction also in 16 error. 17 And we believe the instructions and 18 impermissible comment on the weight of the evidence, 19 the effect would be to tilt or nudge the jury to find 20 for Zachry. 21 The Court's instruction concerning 5.41 22 not requiring a written change order is particularly 23 harmful to the Port because the measure of damages in 24 the charge allows the jury to recover for additional 25 work that Zachry was directed to perform.  35 Defendant's Objections to the Court's Charge 1 And under Section 5.41 the requirement 2 of a written change order before the contractor is 3 entitled to be paid for additional work is precisely 4 what Section 5.41 is designed to require. And so that 5 is why we believe the instruction and the Court's 6 ruling with respect to 5.41 is harmful error in the 7 case. 8 And we also believe Your Honor's already 9 charged the jury with respect to what they should 10 consider on 5.41 and that they should not be charged in 11 this instruction again. 12 Your Honor, with respect to your 13 instruction on 5.52, here under Question 3, it applies 14 5.52 to the extent 5.52 makes requirements consistent 15 with Section 5.41. 16 And so, therefore, we would just say all 17 of the same objections that we asserted against the 18 instruction on 5.41 also apply with respect to 5.42 19 (sic). 20 And now that takes me to the objections 21 with respect to the instruction on Section 5.42. And 22 the Port objects to those instructions because again, 23 Your Honor, we believe the Court's ruling on Section 24 5.42 is erroneous as a matter of law. 25 We've already explained that we think  36 Defendant's Objections to the Court's Charge 1 the radical change doctrine doesn't apply to 5.42. And 2 we believe that 5.42 is not invalid under Section 3 16.071 of the Remedies Code because it's not the kind 4 of notice provision that comes within that section 5 under the American Airlines case. And nor does 6 Shintech or Columbia Gas line of cases make 5.42 7 inapplicable in this case. 8 So we, for all the reasons we previously 9 have asserted in our objections to Your Honor's 10 instructions given to the jury on Section 5.42, we 11 object to this instruction on 5.42 included in the 12 Court's charge under Question No. 3. 13 Your Honor, your -- the sentence that 14 you have in the instruction that says, You are 15 instructed that the jury may consider Sections 5.41, 16 5.42 and 5.52 with respect to assessing a party's state 17 of mind, we believe that that instruction repeats what 18 Your Honor has said during trial. 19 To the extent the instruction has been 20 expanded to include 5.52, we would just assert against 21 that instruction, Your Honor, all of the objections 22 that we previously have made to Your Honor's 23 instruction given during trial with respect to the 24 instruction. 25 However -- I think I know where Jenny is  37 Defendant's Objections to the Court's Charge 1 going -- we believe the instruction needs to be in the 2 charge because of the Court's previous instruction 3 given on these provisions under Question 3. 4 And having decided to instruct the jury 5 under Question 3 with respect to what 5.41, 5.42 and 6 5.52 do not require Zachry to do to recover damages. 7 We do believe it's necessary at this point for 8 Your Honor to repeat the instruction. 9 My problem is, the instruction that Your 10 Honor has given earlier, we objected to because we 11 think it's based on an erroneous ruling -- reading and 12 interpretation and error of law as to those sections -- 13 MS. GREER: You're saying you only 14 requested that instruction about state of mind because 15 the Judge is putting in the first instruction -- 16 MS. YEATES: Right. Right. It's 17 necessary in the charge because of the first 18 instruction. 19 MS. GREER: Okay. 20 MS. YEATES: Your Honor, on the NDFD 21 exceptions, no damages for delay exceptions, 22 Your Honor, we object to submitting to the jury the 23 instructions concerning those exceptions to the no 24 damages for delay or hindrance provision. 25 Specifically, those are the instructions  38 Defendant's Objections to the Court's Charge 1 concerning arbitrary and capricious conduct, bad faith, 2 etcetera. Your Honor, Texas doesn't recognize these 3 common law exceptions, and we believe that even if 4 Texas did recognize those exceptions, the language of 5 this particular Section 5.07, no damages for delay 6 clause would preclude application of those exceptions. 7 And there is no evidence and no legally 8 insufficient evidence of damages resulting from a delay 9 or hindrance that could of possibly have been caused by 10 any conduct, egregious conduct of the Port constituting 11 arbitrary and capricious conduct, bad faith, active 12 interference or fraud as defined in the Court's charge 13 under Question No. 3. 14 Also, Your Honor, and I mentioned this 15 to you in the informal charge conference, Your Honor, 16 we object to the instruction concerning the no damages 17 for delay provision, Section 5.07 because that 18 instruction omits the requirement that the Port -- any 19 egregious conduct of the Port, arbitrary and 20 capricious, bad faith, active interference or fraud, 21 that that conduct must be the sole cause of any delay 22 or hindrance damages. 23 A major fact issue in this case is who 24 caused Zachry to be delayed so behind schedule? If -- 25 we believe, under the law, Your Honor, if the delay was  39 Defendant's Objections to the Court's Charge 1 also caused by Zachry, then that delay, even if 2 contributed to by the Port's alleged egregious conduct, 3 cannot constitute an exception to the no damages for 4 delay or hindrance provision. 5 We believe the Court's instructions are 6 defective because they incorrectly omit the sole cause 7 requirement. 8 To correct that omission, the language 9 in the Court's instruction under Question 3 should be 10 modified so that the language refers to a delay or 11 hindrance that was solely the result of the Port's 12 actions, if any, that constituted arbitrary and 13 capricious conduct, etcetera. 14 And we object to the omission of the 15 word solely in the Court's instruction under Question 16 No. 3. 17 Your Honor, with respect to the active 18 interference definition in Question No. 3, the Port 19 objects to that instruction defining active 20 interference because the instruction omits the words 21 taken to before the words unreasonably interfere. 22 We believe the instruction should 23 properly be worded, Active interference means 24 affirmative, willful action taken to unreasonably 25 interfere.  40 Defendant's Objections to the Court's Charge 1 We believe those words are necessary 2 because to constitute active interference, a party has 3 to intend to interfere. 4 MS. GREER: Wait a second. I thought 5 you agreed that it would be to interfere if you got the 6 second sentence of that instruction. That it would be 7 that unreasonably interferes -- let me get back to my 8 question. 9 I thought the agreement was that you 10 would not object to active interference means 11 affirmative, willful action that unreasonably 12 interferes with the other party's compliance with the 13 contract. You would agree to that, if the Judge 14 submitted active interference requires more than a 15 simple mistake, error in judgment, lack of total 16 effort, or lack of complete diligence. 17 MS. YEATES: Your Honor, the first 18 sentence, as stated, allows an act that we didn't 19 intend to be interference to constitute interference 20 without scienter intention, and so I have to object to 21 that. I can't let that -- no, I object to that. 22 Your Honor, the fraud definition 23 includes recklessness in Question No. 3. Your Honor, 24 we talked about this in our informal charge conference. 25 Our position is that under Texas law  41 Defendant's Objections to the Court's Charge 1 from the Texas Supreme Court, fraud, as a promise with 2 no intent to perform, can only be intentional fraud; 3 and therefore, we believe it's error to include the 4 reckless fraud instruction in that question. 5 Now, we turn to Question No. 4, and, 6 Your Honor, we asked for this question, we believe it 7 should be in the charge under Casteel. I'm just 8 pointing out that the only reason we asked for it is 9 because Your Honor is allowing Zachry to submit the 10 pass-through damages. 11 And I don't want my failure to object to 12 that question to somehow waive my argument that we 13 believe there's no valid pass-through claim in that 14 case. 15 Similarly, Your Honor, with respect to 16 the break out question, I believe I just talked about 17 the pass-through, that's actually break out question -- 18 it's Question No. 5. But I have a similar point to 19 make on Question No. 4, the break out question for 20 delay or hindrance. 21 We asked for that question but I don't 22 want -- we need it because Your Honor has included 23 delay or hindrance in the damages, but obviously, we 24 don't waive our position that delay or hindrance 25 damages are just not recoverable as a matter of law by  42 Defendant's Objections to the Court's Charge 1 asking Your Honor to give the break out instruction 2 that -- that breaks out under Casteel the dollars that 3 represent the delay or hindrance damages. 4 Your Honor, I now want to turn to 5 Question No. 6, Subsection D, the release instruction, 6 which again includes the ambiguity and trade custom or 7 usage. 8 Again, we object to repeating these 9 instructions over and over again in the charge. And 10 particularly with respect to the releases, Your Honor, 11 that we do not believe there's any evidence to raise 12 the legal standard for what constitutes a trade custom 13 or industry usage. And we believe it's an improper 14 comment on the weight of the evidence. 15 With respect to Question No. 8, which is 16 Zachry's counter-defenses, Your Honor, we talked about 17 this last night. We believe that the waiver 18 instruction, because this is waiver of fraud, should 19 require an additional instruction that would say, With 20 respect to fraud, waiver requires full knowledge of the 21 fraud, and all material facts, and must be made with 22 the intention, clearly manifested, of abiding by the 23 contract and waiving all right to assert deception. 24 And so we'll be requesting that, 25 Your Honor, as Requested Instruction No. 5. Because we  43 Defendant's Objections to the Court's Charge 1 believe that's necessary to make the definition correct 2 with respect to waiver of fraud. 3 On quasi-estoppel the Port objects to 4 Question No. 8 to the extent that it inquires whether 5 the Port is barred from asserting fraud in the 6 inducement because of quasi-estoppel. 7 We believe as a matter of law, the 8 doctrine of quasi-estoppel does not apply to bar the 9 defense of fraudulent inducement. It cannot be, as a 10 matter of law, that it's unconscionable for a party to 11 assert that it was defrauded. 12 The Port further objects to the 13 instruction on quasi-estoppel given in connection with 14 Question 8 because it fails to tell the jury that the 15 party to be estopped must have taken its previous 16 position with full knowledge of the fraud and all 17 material facts. 18 We'll be tendering Defendant's Requested 19 Instruction No. 6, which would state that with respect 20 to the fraud, the prior position previously taken by 21 the party to be estopped must have been taken with full 22 knowledge of the fraud and all material facts and must 23 have been taken with the intention, clearly manifested, 24 of abiding by the contract and not asserting the other 25 party's deception.  44 Defendant's Objections to the Court's Charge 1 And we object to the omission of this 2 sentence from the instruction on quasi-estoppel. 3 Finally, Your Honor, with respect to 4 ratification in the charge, the instruction concerning 5 ratification in Question 8 states -- refers to the 6 Port. 7 With respect to the counter-defense, the 8 Port is not making an affirmative claim for fraud. And 9 so at the end of that instruction on ratification it 10 currently says, All right to recover for the deception, 11 and what we were doing is asserting a defense. 12 And so we think it should say, All right 13 to assert the deception, and not all right to recover 14 for the deception since we're not seeking to recover 15 for the deception. 16 MS. GREER: Your Honor, we would need to 17 change that because Ms. Yeates dictated that 18 instruction to you yesterday for what would be an 19 appropriate instruction for ratification, so we would 20 agree that that should go in there then -- 21 MS. YEATES: And I apologize for this, 22 Your Honor, we caught this in the middle of the night 23 last night. And I think -- 24 THE COURT: So which question? 25 MS. GREER: Question No. 8.  45 Defendant's Objections to the Court's Charge 1 MS. YEATES: Question 8, ratification, 2 Subsection C. We believe it should say, All right to 3 assert the deception, not all right to recover for the 4 deception. 5 And I'm nearly finished, Your Honor. 6 THE COURT: Wait. Waiving all right to 7 assert? 8 MS. YEATES: Assert the deception. 9 THE COURT: Assert the thought? 10 MS. YEATES: Assert the deception. 11 THE COURT: Okay. 12 MS. YEATES: Your Honor, the Port 13 further objects to the instruction concerning 14 quasi-estoppel because we believe it's wrong and that 15 if fails to tell the jury -- I did that? Okay. 16 And then on Question No. 9 -- oh, we did 17 that already. 18 Your Honor, on Question No. 11 in the 19 Court's charge, the excuse question, we've objected to 20 instructing multiple times in the charge on ambiguity 21 and trade custom, so we object again here to that. 22 And the Port -- now, I want to turn to 23 Question No. 12. The question that tells the jury -- 24 oh, this is the instruction in the Court's charge and 25 Your Honor's directed verdict that the Court has  46 Defendant's Objections to the Court's Charge 1 determined that the Port failed to comply with the 2 contract by failing to pay. 3 And I just want to make the point there, 4 Your Honor, that obviously, we disagree with the 5 Court's ruling that you made on Sections 5.05 and 5.06. 6 And so we have to object to that instruction, and we do 7 object. 8 MS. GREER: My understanding is you 9 don't object to the fact that he is giving the 10 instruction, only to the fact -- 11 MS. YEATES: I object to the ruling 12 giving rise to the instruction -- 13 MS. GREER: Exactly. 14 MS. YEATES: -- and the instruction 15 wouldn't be in the charge but for the ruling. And but 16 for that ruling, Your Honor, we would be submitting -- 17 Your Honor would be submitting in the charge failure to 18 comply questions and damages questions. 19 MS. GREER: But given his ruling, it's 20 an appropriate way to open the -- the excuse question. 21 MS. YEATES: Okay. Your Honor, the Port 22 objects -- 23 MS. GREER: Is that correct? 24 MS. YEATES: Your Honor -- Jenny, I'm 25 not required to stipulate what you want me to say.  47 Defendant's Objections to the Court's Charge 1 The Port objects to instructing the jury 2 -- I didn't object on that basis, you're okay. 3 The Port objects to instructing the jury 4 in connection with Question 12 on trade custom and 5 usage for the same reasons I've said, Your Honor -- 6 THE COURT: Slow down. 7 MS. YEATES: -- and so I won't repeat 8 them. The repetition objection and the no evidence to 9 raise trade custom. 10 Your Honor, can I get a ruling on all of 11 my objections, are they all overruled? 12 COURT'S RULING 13 THE COURT: Yes. 14 MS. YEATES: Thank you, Your Honor. 15 And at the conclusion of the objections, 16 I now need to request and hand to Your Honor 17 Defendant's Requested No. 1 -- Defendant's Requested 18 Instructions No. 1, 2, 3, 4, and 5 and 6. All of which 19 we discussed in our objections, Your Honor. 20 And I tender them to Your Honor for 21 ruling and ask Your Honor, If you are going to refuse 22 them, Your Honor, if you would mark them refused and 23 sign each copy for me? 24 THE COURT: Okay. I am refusing these 25  48 Plaintiff's Objections to the Court's Charge 1 instructions. I am marking them refused and signing 2 them and they will be made part of the record. 3 MS. YEATES: Okay. And, Your Honor, 4 could we be permitted to take them to the clerk to be 5 filed or would you get them . . . 6 THE COURT: She was here. I will hand 7 them to Veronica, our clerk, as soon as she comes back 8 and I will ask her to file them and also I will ask her 9 to give copies to both sides. 10 MS. YEATES: Thank you, Your Honor. 11 MS. GREER: Your Honor, may I speak? 12 THE COURT: Yes. 13 Oh, Carolyn, do you need a break? You 14 okay? 15 THE REPORTER: No, I'm fine. 16 THE COURT: Okay. Just go slow. 17 PLAINTIFF'S OBJECTIONS TO THE COURT'S CHARGE 18 MS. GREER: Your Honor, Zachry 19 Construction Corporation -- 20 THE COURT: Wait. I tell you what, move 21 this way and speak louder, please. 22 MS. YEATES: Here, let's change places. 23 MS. GREER: Your Honor, Zachry 24 Construction Corporation, in the presence of the Court, 25 opposing counsel and before the jury charge has been  49 Plaintiff's Objections to the Court's Charge 1 read to the jury, presents the following objections to 2 the Court's charge. 3 First, in the admonitory instructions, 4 Zachry is entitled to instruction that states, A 5 party's knowledge includes knowledge of facts that the 6 party acting with the other party's authority has 7 reason to know and that are material to the duties of 8 the party acting with the other party's authority. 9 This is from the Restatement of Third of 10 agency, Section 5.03. And the Williams versus Jennings 11 case, 755 S.W.2d 874, 883, that's Houston. 1988, writ 12 denied. 13 Zachry will separately request its 14 Proposed Issue No. 1 on this issue. 15 With respect to Question No. 1 16 pertaining to Change Order 4, Zachry would object that 17 Change Order 4 unambiguously includes an agreement that 18 Zachry could use the frozen cutoff wall design embodied 19 in the September 9, 2005 design. 20 Accordingly, the issue of the proper 21 interpretation of Change Order 4 should not be 22 submitted to the jury, instead the jury should be 23 instructed as to its meaning. 24 Specifically, the jury should be 25 instructed in the Court's Question No. 1, You are  50 Plaintiff's Objections to the Court's Charge 1 instructed that Change Order 4 includes an agreement 2 that Zachry could use the frozen cutoff wall design 3 embodied in the September 9, 2005 design. 4 Zachry will separately request its 5 Proposed Issue No. 2 on the proper interpretation of 6 Change Order 4. 7 Furthermore, if the Court does not 8 instruct the jury that Change Order 4 includes an 9 agreement that Zachry could use the frozen cutoff wall 10 design embodied in the September 9, 2005 design, then 11 the jury should be instructed that if they agree with 12 that interpretation, then the general conditions and 13 technical specifications give the Port no right to 14 issue its October 11, 2009 (sic) response. 15 As a matter of law, if the jury finds 16 that the Port agreed in Change Order 4 that Zachry 17 could use the frozen cutoff wall design embodied in the 18 September 9, 2005 design, then under the order of 19 precedence provision of the contract, change orders 20 take precedence over general conditions and technical 21 specifications. That's General Conditions Section 22 2.02(a). 23 The general conditions therefore could 24 not give the Port the right to issue the October 11, 25 2005 response with respect to a design that it had  51 Plaintiff's Objections to the Court's Charge 1 already agreed to in Change Order 4. 2 The Port (sic) should therefore instruct 3 the jury, If you find that Change Order 4 included in 4 agreement that Zachry could use the frozen cutoff wall 5 design embodied in the September 9, 2005 design, then 6 in answering this question only, you are instructed 7 that nothing in the general conditions or the technical 8 specifications of the contract including but not 9 limited to General Conditions Section 5.22, 5.41, 5.42 10 and 5.52, gave the Port the right to issue its October 11 11, 2005 response to the September 9, 2005 frozen 12 cutoff wall design. 13 Zachry will separately request its 14 Proposed Issue No. 3 on this issue. 15 Alternatively, Zachry would be entitled, 16 consistent with this Court's prior rulings concerning 17 the exclusion of Section 5.42 and 5.52 as well as their 18 inapplicability on their face as a matter of law, to 19 create a right in the Port to issue the October 11, 20 2009 (sic) response. 21 Zachry would be entitled to an 22 instruction that adds Section 5.42 and 5.52 to the 23 instruction that the Court is already giving the jury, 24 such that the instruction would now say, In answering 25 this question, you are instructed that nothing in  52 Plaintiff's Objections to the Court's Charge 1 Section 5.41, 5.42 or 5.52 gave the Port the right to 2 issue its October 11, 2005 response to the September 9, 3 2005 frozen cutoff wall design. 4 Zachry objects to the absence of this 5 instruction, and will tender a proposed instruction 6 separately. It will be Proposed Issue No. 4. 7 Although Zachry has proposed that the 8 prior instructions be included in the Court's Question 9 No. 1, because that is how the Court has stated it will 10 submit Change Order 4 issues. 11 Zachry believes the issues of the proper 12 interpretation of Change Order 4 and the failure to 13 comply with Change Order 4 should be submitted 14 separately, rather than in one question as submitted by 15 the Court, for the reasons discussed below. 16 Doing so would simplify the issues and 17 make clear to the jury that there are two separate 18 questions, interpretation and breach, that the jury 19 should answer. 20 Zachry will separately tender a proposed 21 instruction on these questions. They will be Proposed 22 Instructions Nos. 5 and 6. 23 Furthermore, combining the 24 interpretation and failure to comply issues into one 25 question obscures the basis for the jury's answers.  53 Plaintiff's Objections to the Court's Charge 1 That is, Zachry contends that the unambiguous language 2 of Change Order 4 includes an agreement that Zachry 3 could use the frozen cutoff wall design embodied in the 4 September 9, 2005 design. 5 Zachry has also proven as a matter of 6 law that the Port breached its agreement that Zachry 7 could use the frozen cutoff wall design embodied in the 8 September 9, 2005 design. 9 And so the issue of whether the Port 10 failed to comply with Change Order 4 should not be 11 submitted either. 12 If the jury answers no to the Court's 13 Question No. 1, the Court of Appeals will not be able 14 to determine whether one, the jury rejected Zachry's 15 interpretation but found that the Port did not breach 16 Change Order 4, or two, accepted Zachry's 17 interpretation but found that the Port did not breach 18 Change Order 4. 19 By combining an invalid question, the 20 interpretation of Change Order 4, which should be 21 decided as a matter of law by the Court, with a 22 separate question, whether that agreement was breached, 23 which also should be decided as a matter of law by the 24 Court, the charge obscures the basis for the jury's 25 decision, thus preventing the appellate court from  54 Plaintiff's Objections to the Court's Charge 1 determining whether the jury based its verdict on an 2 improperly submitted ground. 3 This is the Crown Life versus Casteel 4 case, 22 S.W.3d 378, pinpoint 390. Under Casteel, when 5 there is uncertainty as to the legal or evidentiary 6 validity of a jury issue, the issue should be submitted 7 separately. 8 That's Casteel and also Harris County 9 versus Smith, 96 S.W.3d 230, pinpoint 236. Where the 10 Court said, And in a case such as this one, asking the 11 jury to record its verdict as to each element of 12 damages when there is doubt as to the legal sufficiency 13 of the evidence will permit the losing party to 14 preserve error without complicating the charge or the 15 jury's deliberation. 16 Now, moving to Question No. 2 regarding 17 breach of Section 5.10. As a matter of law, nothing in 18 the unambiguous language of Section 5.10 gave the Port 19 the right to issue its October 11, 2005 response. 20 The jury should therefore be instructed 21 in Question No. 2 that nothing in Section 5.10 gave the 22 Port the right to issue its October 11, 2005 response. 23 The jury should not be instructed to determine the 24 meaning of Section 5.10. 25 Zachry will separately request its  55 Plaintiff's Objections to the Court's Charge 1 Proposed Issue No. 7 on this issue. 2 As a matter of law, nothing in the 3 unambiguous language of Section 5.22 gave the Port the 4 right to issue its October 11, 2005 response. 5 The jury should therefore be instructed 6 in Question No. 2 that nothing in Section 5.22 gave the 7 Port the right to issue its October 11, 2005 response. 8 The jury should not be instructed to determine the 9 meaning of Section 5.22. 10 Zachry will separately request its 11 Proposed Issue No. 8 on this issue. 12 The burden of proof with respect to the 13 Port's right to issue its October 11, 2005 response 14 under Section 5.22 is erroneously placed on Zachry. 15 Section 5.22 is an affirmative defense 16 in which the Port bears the burden of proof. 17 THE COURT: Slow down. 18 MS. GREER: Sorry. 19 Texas law is clear that, quote -- 20 THE COURT: Not that slow. 21 MS. GREER: Huh? 22 THE COURT: Not that slow. 23 MS. GREER: Okay. I'm running out of 24 steam. 25 Quote, the burden of proving the  56 Plaintiff's Objections to the Court's Charge 1 happening of a contingency which, by the terms of the 2 contract, would discharge the party from liability or 3 any default or refusal to perform on the Plaintiff that 4 would excuse the performance of the Defendant, is on 5 the party who seeks to avoid the contract or excuse a 6 failure to perform it on that ground. 7 That's the Howell versus Kelly case from 8 the 1st Court of Appeals in Houston, 534 S.W.2d 737, 9 pinpoint 739 to Page 740. 10 And then from the 14th Court of Appeals 11 case, the Johnson versus McKinney American, Inc. -- 12 I'll give you this. 13 9 S.W.3d 271, Page 280. The jury charge 14 erroneously places the burden on Zachry to disprove the 15 Port's right to issue its October 11, 2005 revise and 16 resubmit under Section 5.22. 17 The Section 5.22 should be submitted as 18 an excuse question, placing the burden of proof on the 19 Port. 20 Alternatively, if the Court refuses to 21 ask about Section 5.22 separately from Section 5.10, as 22 in the Court's charge, the placement of the burden on 23 the Port should be accomplished by instruction. 24 In Question No. 2, Zachry is entitled, 25 consistent with the Court's prior rulings concerning  57 Plaintiff's Objections to the Court's Charge 1 the exclusion of Section 5.42 and Section 5.52, as well 2 as their inapplicability on their face as a matter of 3 law to create a right in the Port to issue the October 4 11, 2009 (sic) response. 5 Zachry is entitled to an instruction 6 that adds Section 5.42 and 5.52 to the instructions the 7 Court is already giving the jury. Such that it would 8 say, In answering this question, you're instructed that 9 nothing in Section 5.41, 5.42 or 5.52 gave the Port the 10 right to issue its October 11, 2005 response to the 11 September 9, 2005 frozen cutoff wall design. 12 Zachry objects to the absence of this 13 instruction, and Zachry will separately request its 14 Proposed Issue No. 9 on this issue. 15 Furthermore, the issue of Section 5.10 16 and Section 5.22 should be submitted separately. By 17 combining the Port's affirmative defense under Section 18 5.22 as Zachry's affirmative claim under Section 5.10, 19 the jury charge obscures the basis for the jury's 20 answer. 21 Zachry has strong arguments as to why as 22 a matter of law the unambiguous language of Section 23 5.10 and Section 5.22 gave the Port no right to issue 24 its revise and resubmit response. 25 As well as why the Port's October 11,  58 Plaintiff's Objections to the Court's Charge 1 2005 -- 9 -- 5, 2005 response violated Section 5.10 and 2 Section 5.22 as a matter of law. And the contract. 3 Because Zachry's claim for breach of 4 Section 5.10 is combined with the Port's affirmative 5 defense under Section 5.22, and because the question of 6 the proper interpretation and breach of these clauses 7 is part of a single question, the charge obscures the 8 basis for the jury's decision. 9 Thus preventing the appellate court from 10 determining whether the jury based its verdict on an 11 improperly submitted ground. This is again, the 12 Casteel case I cited earlier and Harris County versus 13 Smith. 14 It will be difficult to show on appeal, 15 if the jury answers no to Question No. 3 -- Question 16 No. 2, whether it did so based on its interpretation of 17 Section 5.10 or 5.22 or whether it believed there was a 18 right to revise -- issue a revise and resubmit, but 19 that it was not shown that the Port had no reasonable 20 basis on which to exercise that right. 21 Question No. 3, damages for breach of 22 contract with respect to the frozen cutoff wall breach. 23 Zachry objects to the instruction that you may consider 24 amounts, if any, owed as compensation for increased 25 cost to perform the work as a direct result of  59 Plaintiff's Objections to the Court's Charge 1 Port-caused delays, if any. 2 Only if you find that such increased 3 costs were a natural, probable and foreseeable 4 consequence of the Port's failure to comply, if any. 5 The Port has never cited a single case for the 6 proposition that these damages are consequential 7 damages, and the sovereign immunity statute itself in 8 no way supports this proposition. 9 The element of damages itself in 10 Question No. 3, which is taken from the sovereign 11 immunity statute, Section 271.153, provides that the 12 increased cost to perform the work must be a direct 13 result of Port-caused delays, which shows they must be 14 direct rather than consequential. 15 Moreover, damages resulting from 16 owner-caused delays are necessarily those which 17 naturally and necessarily flow from a wrongful act and 18 are presumed to have been foreseen or contemplated by 19 the party as a consequence of his wrongful act, and 20 thus are not consequential damages. 21 That's the Anderson Development Corp. 22 case versus Coastal States Crude Gathering, 543 S.W.2d 23 402, pinpoint 404 to 405. 24 Zachry objects to the instruction that 25 you are instructed that you may only consider 5.41,  60 Plaintiff's Objections to the Court's Charge 1 5.42 and 5.52 to the extent it imposes requirements 2 consistent with Section 5.41 only in assessing a 3 party's state of mind. 4 This instruction is an instruction that 5 was originally made as a limiting instruction to limit 6 the scope of the admissibility of evidence of these 7 clauses. The purpose of the jury charge is to inform 8 the jury of the controlling law. 9 As the pattern jury charge makes clear, 10 the Court must instruct the jury as to its resolution 11 of the meaning of any disputed contract provisions. 12 This is Texas Pattern Jury Charge Section 101.7 in the 13 comments. 14 Nothing authorizes the Court to point 15 out the significance of a particular type of evidence 16 in the jury charge. 17 By giving this instruction, the Court 18 comments on the weight of the evidence and nudges the 19 jury towards the Port's theory. 20 In other words, by giving this 21 instruction, the Court embraces the Port's theory that 22 these clauses can somehow be relevant to Zachry's, or 23 for that matter, the Port's state of mind after the 24 rejection of the frozen cutoff wall occurred on October 25 11, 2009 (sic).  61 Plaintiff's Objections to the Court's Charge 1 Even though the Court has held that 2 these provisions are inapplicable to bar Zachry's 3 damage claim. 4 The Court suggests to the jury that 5 these provisions are relevant to the party's state of 6 mind and cause undue attention to the Port's theory of 7 the case. 8 Furthermore, the instruction is 9 erroneous. The Port's or Zachry's subjective state of 10 mind is irrelevant where, as here, the Court has 11 construed these clauses as a matter of law. 12 Parole evidence of the party's belief 13 about the meaning of the clauses should not be admitted 14 to vary the Court's construction of these clauses. The 15 instruction simply allows the Port to evade the Court's 16 legal rulings about the inapplicability of these 17 clauses. 18 Zachry objects to the inclusion in the 19 definition of active interference of the sentence, 20 Active interference requires more than a simple 21 mistake, error in judgment, lack of total effort or 22 lack of complete diligence. 23 This instruction is repetitive of the 24 first sentence, which states that active interference 25 means affirmative, willful action that unreasonably  62 Plaintiff's Objections to the Court's Charge 1 interferes with the other party's compliance with the 2 contract. 3 The second sentence adds nothing as all 4 these matters are covered by the definition of active 5 interference in the first sentence. The addition of 6 the second sentence simply emphasizes the Port's 7 claimed theory of the case to the jury, and is 8 therefore a comment on the weight of the evidence and a 9 nudging instruction designed to encourage the jury to 10 adopt the Port's view of the facts. 11 Under Texas charge practice, the charge 12 may not define a term like active interference in more 13 general terms and then list specific examples of what 14 the Port believes to be active interference. This is 15 akin to marshaling one's evidence in the jury charge. 16 Zachary objects to the inclusion of the 17 Port's mitigation defense as well. As the Texas 18 Supreme Court has held, under mitigation principles, 19 the long-standing law of this state requires a claimant 20 to mitigate damages if it can do so with trifling 21 expense or reasonable exertions. 22 That's the Gunn Infiniti versus O'Byrne 23 case, 996 S.W.2d 854, Page 857 for the pinpoint. 24 As a result, the jury should be 25 instructed that a party is only required to avoid  63 Plaintiff's Objections to the Court's Charge 1 damages if it can do so with trifling expense or 2 reasonable exertions. 3 Zachry will separately request its 4 Proposed Instruction No. 10 on this issue. 5 Zachry also objects to the definition of 6 bad faith. It imposes too high of a burden. Rather, 7 bad faith in the contract context is dishonesty of 8 believe or purpose. 9 This is from the Restatement Second of 10 Torts Section 205, comment d and also appears in 11 Black's Law Dictionary 8th edition, Page 149. 12 Zachry will request its Proposed 13 Instruction No. 11 on this issue. 14 Question Number 4, percentage delay and 15 hindrance damages. Zachry objects to Question No. 4, 16 which asks about the percentage of Zachry's damages 17 that were due to delay. 18 The Port has lost its argument that the 19 no damages for delay clause is a complete bar to 20 Zachry's damages. It is not entitled to a question 21 inquiring as to the amount of delay damages just in 22 case they lose at trial but win on appeal. 23 There are myriad alternative issues that 24 the parties may be curious about, that does not mean 25 they are submitted. Only issues that are raised by the  64 Plaintiff's Objections to the Court's Charge 1 written pleadings and the evidence, and that's quote, 2 are submitted. That's Texas Rule of Civil Procedure 3 278. 4 Furthermore, only controlling issues 5 that are essential to a right or action or defense are 6 submitted. That's Paul Mueller Company versus Alcon 7 Labs, 993 S.W.2d 851, Page 854. 8 A controlling issue is one that requires 9 a factual determination to render a judgment in the 10 case. And that's also supported by Rule 277, which 11 provides that the Court shall submit such instructions 12 and definitions as shall be proper to enable the jury 13 to render a verdict. Question No. 4 is not such an 14 issue. 15 Zachry also objects to Question No. 4 16 because it refers to delay or -- delay and hindrance 17 damages. Section 508 of the general conditions bars 18 delay or hindrance damages. 19 You know what, this is one that we might 20 want to talk about. I forgot about that. 21 So to the extent the instruction is 22 given at all, it should track Section 5.08. That is 23 also how it is referred to in Question No. 3. 24 I'm not sure if that was intentional. 25 MS. YEATES: Right. Your Honor, we  65 Plaintiff's Objections to the Court's Charge 1 would agree to change that. On Question No. 4 it 2 should say delay or hindrance damages. Could we change 3 that? 4 THE COURT: One moment. 5 All right. I am changing that to delay 6 or hindrance. Question 4. 7 Okay. How much more? 8 MS. GREER: I can talk faster. About 9 three pages. 10 THE COURT: All right. 11 MS. GREER: She had 25. 12 Okay. Question No. 5 on reimbursable 13 costs. Okay. Zachry also objects to Question No. 5, 14 which asks what amount of damages the jury found in 15 Question No. 3 were for New Zachry's reimbursable 16 costs. 17 Again, the Port's not entitled to a 18 question on this issue just in case they lose at trial 19 but win on appeal. 20 The Court has held that Zachry is 21 entitled to recover New Zachry's reimbursable costs as 22 a matter of law. Accordingly, the amount of this cost 23 is not a controlling issue that should be submitted. 24 Question No. 6, excuse for the Port's 25 failure to comply. The affidavits and partial releases  66 Plaintiff's Objections to the Court's Charge 1 of lien are unambiguously only lien releases, and so 2 Zachry objects that the issue should not be submitted 3 at all. 4 Furthermore, to the extent that the 5 Court concludes that the partial lien releases are 6 ambiguous and that there are other reasonable 7 constructions of the partial lien releases besides 8 Zachry's construction, which Zachry vigorously 9 disputes, then the interpretation of the releases the 10 Port previously advanced is at least one reasonable 11 construction. 12 And we dispute it's reasonable, but if 13 you think that there's more than our instruction, then 14 it's at least one reasonable construction. 15 In the Port Authority's motion for 16 partial summary judgment based on partial release 17 executed by Zachry, the Port sought only partial 18 summary judgment to the extent of the damages released. 19 And contended that the lien releases 20 were only partial releases of liens. If the 21 interpretation of the partial lien releases is 22 submitted to the jury at all, the jury should be given 23 the opportunity to make this finding. 24 As Question No. 6 is drafted, the jury 25 can only conclude that the release was a complete  67 Plaintiff's Objections to the Court's Charge 1 release of Zachry's claim or not a release at all. The 2 jury's improperly precluded from finding that it is a 3 partial release and the amount of damages it releases. 4 Question No. 7, Port's defense of 5 fraudulent inducement to Change Order 4. The 6 instruction regarding fraud is erroneous because it 7 fails to require that the reliance be justifiable. 8 It's the Ernst & Young versus Pacific Mutual Life case, 9 551 S.W.3d 573, 577, Texas Supreme Court. 10 The instruction regarding fraud should 11 not be submitted because there is no evidence that 12 Change Order 4 was fraudulently induced because the 13 Port knew the truth, that Zachry was behind on the 14 schedule. 15 Furthermore, because the Port knew the 16 truth, it could not have relied actually or 17 justifiably. 18 Legal bars also preclude the assertion 19 of the Port's defense of fraud, including that the Port 20 ratified the fraud, the merger clause bars any reliance 21 by the Port as a matter of law, and the election of 22 remedies doctrine bars the Defense because the Port 23 retains valuable benefits under the contract. 24 The submission of the fraud question is 25 extreme -- and we've moved for directed verdict, so you  68 Plaintiff's Objections to the Court's Charge 1 have those arguments but -- the submission of the fraud 2 question is extremely prejudicial to Zachry because its 3 mere presence in the jury charge suggests to the jury 4 that the Court believes there's some evidence that 5 Zachry committed fraud or some potential basis on which 6 the Port could -- 7 THE REPORTER: Some what? 8 MS. GREER: I'm sorry. Potential basis. 9 THE COURT: Potential basis. 10 MS. GREER: On which the Port could 11 recover for fraud against Zachry. Such a perception 12 that Zachry could be a fraudfeasor is highly damaging 13 and -- 14 THE COURT: Fraudfeasor? 15 MS. GREER: Fraudfeasor. Highly 16 damaging and an improper comment on the weight of the 17 evidence. 18 Getting close. 19 THE COURT: Is that a real word? 20 MS. GREER: Question No. 8 -- 21 (Laughing) 22 MS. GREER: Zachry's -- Question No. 8, 23 Zachry's defenses to the Port's -- 24 THE COURT: Wait. In Ms. Greer's 25 defense, she probably got about a half an hour of sleep  69 Plaintiff's Objections to the Court's Charge 1 last night. 2 MS. GREER: You nailed it. 3 Okay. Question No. 8, Zachry's defenses 4 to the Port's fraudulent inducement defense. Zachry 5 contends that the Port's fraudulent inducement defense 6 is barred as a matter of law under the election of 7 remedies doctrine and therefore should not be 8 submitted. 9 However, to the extent that the Court 10 determines that it is not an issue, that it can be 11 decided as a matter of law, then Zachry is entitled to 12 the submission of its election of remedies defense. 13 Zachry objects to its omission. 14 Zachry will separately request its 15 Proposed Instruction No. 12 on this issue. 16 Question No. 9, withholding of the 17 $600,000. The instruction regarding the withholding of 18 the $600,000 in payment from Zachry is erroneous 19 because it is incomplete. 20 The instruction fails to give the jury 21 any guidance as to the basis on which the Port was 22 purportedly entitled to withhold the $600,000. It does 23 not direct the jury to the withholding clause that the 24 question is apparently referring to, Section 6.05. 25 It does not direct the jury to the  70 Plaintiff's Objections to the Court's Charge 1 obligation under the contract that Zachry purportedly 2 breached. 3 Zachry will separately request its 4 Proposed Instruction No. 13 on this issue. 5 Question No. 9 also erroneously places 6 the burden of proof on Zachry. The burden of proving 7 withholding, like offset, is on the party asserting it. 8 That's the U.S. versus Use and Benefit 9 of D'Agostino Excavators, Inc., versus Heyward-Robinson 10 Company case that we've previously given you. 430 F2d 11 1077, 1085 to 86, out of the 2nd Circuit. 12 And by analogy, offset is an affirmative 13 defense under the Brown versus American Transfer case, 14 601 S.W.2d 931, pinpoint 936. 15 And also by analogy, proof of the right 16 to withhold liquidated damages is an affirmative 17 defense under the Borders versus KRLB case, 727 S.W.2d 18 357, Page 360 pinpoint. 19 It is a matter of avoidance under Rule 20 94. Consistent with this law, Section 6.05 21 and likewise, Section 6.7 by their plain terms impose 22 the burden of proof on the Port. 23 Indeed, Texas law provides that, as I 24 stated before under the Howell versus Kelly case and 25 the Johnson versus McKinney American case, the burden  71 Plaintiff's Objections to the Court's Charge 1 of proof on the happening of a contingency that would 2 discharge parties from liability is on the party 3 seeking to avoid liability. 4 Indeed, the Port -- I'm almost done -- 5 indeed, the Port has previously and repeatedly taken 6 the position that it has the burden of proof on 7 withholding and offset. 8 And we've cited you the places where 9 they've done that in Plaintiff Zachry Construction 10 Corporation's motion to strike the Port's 11 late-disclosed 10.5 million-dollar offset and 12 withholding defenses and to exclude any evidence in 13 support thereof at Pages 23 through 24 and Footnote 16. 14 Question No. 11, excuse for the Port's 15 failure to pay $600,000. The affidavits and partial 16 releases of lien are unambiguously only lien 17 releases -- 18 THE COURT: Slow down. Slow down. 19 MS. GREER: -- and so the issue should 20 not be submitted at all. 21 Question No. 12, failure to comply by 22 withholding the $2.36 million in liquidated damages. 23 Question No. 12.A, point, little Roman 24 II should ask the jury what sum of money, if paid now 25 in cash, would fairly and reasonably compensate the  72 Plaintiff's Objections to the Court's Charge 1 Port for its damages, if any, that resulted from 2 Zachry's failure to comply that you find answer to 3 Question No. 12.A? 4 The question should then define the 5 element of damages to be considered as the reasonable 6 and necessary cost of repairing the wharf fenders. 7 Otherwise, the jury is receiving no guidance as to what 8 it is they're supposed to determine or how they're 9 supposed to quantify damages. 10 Zachry will separately submit its 11 Proposed Instruction No. 14 on this issue. 12 Question No. 13, attorneys' fees. 13 Attorneys' fees should not be submitted at all because 14 Zachry, as a matter of law, will prevail on its breach 15 of contract claim because the releases are 16 unambiguously lien releases. 17 Accordingly, the Port at most could 18 deduct the sum for the wharf fenders, approximately, 1 19 million from the $2.36 million in damages. Although 20 Zachry disputes that they should be deducted at all. 21 Accordingly, regardless, of what happens 22 on the remaining breach of contract theories, Zachry 23 will have a net recovery on its breach of contract 24 claim, and as a matter of law, the Port cannot be the 25 prevailing party.  73 Plaintiff's Objections to the Court's Charge 1 And for the foregoing reasons, Zachry 2 objects to the Court's charge and would like a ruling 3 on our objections. 4 COURT'S RULING 5 THE COURT: Okay. Then aside from the 6 couple of small changes we made as we went, your motion 7 is denied. 8 MS. GREER: And I'm offering you the -- 9 THE COURT: Or your -- excuse me. 10 MS. GREER: -- requested instructions, 11 and if they are refused, would you mark them refused? 12 THE COURT: Yes. And I will make them 13 part of the record and ask that the clerk provide 14 copies. 15 MS. GREER: Thank you very much, 16 Your Honor. 17 MS. YEATES: Thank you, Your Honor. 18 THE COURT: And for the record, 19 according to Black's Law Dictionary fraudfeasor is in 20 fact a word. 21 MS. GREER: I've heard it before. 22 THE COURT: All right. So now we are up 23 to -- Carolyn, you probably need a break. 24 Okay. I'm going to print out the jury 25 charge then and we'll get copies made for the jury.  TAB 42 Texas Local Government Code §271.151 through §271.160 (Vernon 2005) § 271.121 PROPERTY ACQUiSITION, SALE, OR LEASE Title 8 Research References Treatises and Practice Aids Brooks, 23 Tex. Prac. Series§ 12.14A, Com- petitive Bidding-"Best Value" Bidding. [Sections 2 71.122 to 271.150 reserved for expansion] SUBCHAPTER I. ADJUDICATION OF CLAIMS ARISING UNDER WRITTEN CONTRACTS WITH LOCAL GOVERNMENTAL ENTITIES § 2 71.151. Definitions In this subchapter: (1) "Adjudication" of a claim means the bringing of a civil suit and prosecution to final judgment in county or state court and includes the bringing of an authorized arbitration proceeding and prosecution to final resolution in accordance with any mandatory procedures established in the contract subject to this subchapter for the arbitration proceedings. (2) "Contract subject to this subchapter" means a written contract stating the essential terms of the agreement for providing goods or services to the local governmental entity that is properly executed on behalf of the local governmental entity. (3) "Local governmental entity" means a political subdivision of this state, other than a county or a unit of state government, as that term is defined by Section 2260.001, Government Code, including a: (A) municipality; (B) public school district and junior college district; and (C) special-purpose district or authority, including any levee improve- ment district, drainage district, irrigation district, water improvement district, water control and improvement district, water control and preser- vation district, freshwater supply district, navigation district, conservation and reclamation district, soil conservation district, communication district, public health district, emergency service organization, and river authority. Added by Acts 2005, 79th Leg., ch. 604, § 1, eff. Sept. 1, 2005. § 271.152. Waiver ofimmunity to Suit for Certain Claims A local governmental entity that is authorized by statute or the constitution to enter into a contract and that enters into a contract subject to this subchapter waives sovereign immunity to suit for the purpose of adjudicating a claim for breach of the contract, subject to the terms and conditions of this subchapter. Added by Acts 2005, 79th Leg., ch. 604, § 1, eff. Sept. 1, 2005. 548 PURCHASING & CONTRACTING AUTHORITY § 271.153 Ch. 271 Historical and Statutory Notes Section 2 of Acts 2005, 79th Leg., ch. 604 not been waived with respect to the claim be- provides: fore the effective date of this Act. A claim that arises under a contract executed before the ef- "Sections 271.152, 271.153, and 271.154, Lo- fective date of this Act and with respect to cal Government Code, as added by this Act, which sovereign immunity has been waived is apply to a claim that arises under a contract governed by the law in effect on the date the executed before the effective date [Sept. 1, contract was executed, and the former law is 2005] of this Act only if sovereign immunity has continued in effect for that purpose." Library References Municipal Corporations 0::>254. Westlaw Topic No. 268. C.J.S. Municipal Corporations § 946. § 271.153. Limitations on Adjudication Awards (a) The total amount of money awarded in an adjudication brought against a local governmental entity for breach of a contract subject to this subchapter is limited to the following: (1) the balance due and owed by the local governmental entity under the contract as it may have been amended, including any amount owed as compensation for the increased cost to perform the work as a direct result of owner-caused delays or acceleration; (2) the amount owed for change orders or additional work the contractor is directed to perform by a local governmental entity in connection with the contract; and (3) interest as allowed by law. (b) Damages awarded in an adjudication brought against a local governmen- tal entity arising under a contract subject to this subchapter may not include: (1) consequential damages, except as expressly allowed under Subsection (a)(l ); (2) exemplary damages; or (3) damages for unabsorbed home office overhead. Added by Acts 2005, 79th Leg., ch. 604, § 1, eff. Sept. 1, 2005. Historical and Statutory Notes Section 2 of Acts 2005, 79th Leg., ch. 604 not been waived with respect to the claim be- provides: fore the effective date of this Act. A claim that arises under a contract executed before the ef- "Sections 271.152, 271.153, and 271.154, Lo- fective date of this Act and with respect to cal Government Code, as added by this Act, which sovereign immunity has been waived is apply to a claim that arises under a contract governed by the law in effect on the date the executed before the effective date [Sept. 1, contract was executed, and the former law is 2005] of this Act only if sovereign immunity has continued in effect for that purpose." Library References Municipal Corporations 0::>254. Westlaw Topic No. 268. C.J.S. Municipal Corporations § 946. 549 § 271.154 PROPERTY ACQUISITION, SALE, OR LEASE Title 8 § 2 71.15 4. Contractual Adjudication Procedures Enforceable Adjudication procedures, including requirements for serving notices or en- gaging in alternative dispute resolution proceedings before bringing a suit or an arbitration proceeding, that are stated in the contract subject to this subchapter or that are established by the local governmental entity and expressly incorpo- rated into the contract or incorporated by reference are enforceable except to the extent those procedures conflict with the terms of this subchapter. Added by Acts 2005, 79th Leg., ch. 604, § 1, eff. Sept. 1, 2005. Historical and Statutory Notes Section 2 of Acts 2005, 79th Leg., ch. 604 not been waived with respect to the claim . b.e- provides: fore the effective date of this Act. A claim that arises under a contract executed before the ef- "Sections 271.152, 271.153, and 271.154, Lo- fective date of this Act and with respect to cal Government Code, as addeci by this Act, which sovereign immunity .~s been waived is apply to a claim that arises under a contract governed by the law in effecCoii the daie-tlie executed before the effective date [Sept. 1, contract was executed, and the former law is 2005] of th.!!;.~_C:L~l}h~_if_§g"er.ejgn immunity has_ continued in effect for that purpose." Library References Municipal Corporations ~254. Westlaw Topic No. 268. C.J.S. Municipal Corporations§ 946. § 271.155. No Waiver of Other Defenses This subchapter does not waive a defense or a limitation on damages available to a party to a contract, other than a bar against suit based on sovereign immunity. Added by Acts 2005, 79th Leg., ch. 604, § 1, eff. Sept. 1, 2005. § 271.156. No Waiver oflmmunity to Suit in Federal Court This subchapter does not waive sovereign immunity to suit in federal court. Added by Acts 2005, 79th Leg., ch. 604, § 1, eff. Sept. 1, 2005. § 2 71.15 7. No Waiver of Immunity to Suit for Tort Liability This subchapter does not waive sovereign immunity to suit for a cause of action for a negligent or intentional tort. Added by Acts 2005, 79th Leg., ch. 604, § 1, eff. Sept. 1, 2005. Library References Municipal Corporations ~723. Westlaw Topic No. 268. C.J.S. Municipal Corporations §§ 661 to 663. 550 PURCHASING & CONTRACTING AUTHORITY § 271.901 Ch. 271 § 271.158. NoGrantoflmmunitytoSuit Nothing in this subchapter shall constitute a grant of immunity to suit to a local governmental entity. Added by Acts 2005, 79th Leg., ch. 604, § 1, eff. Sept. 1, 2005. § 271.159. No Recovery of Attorney's Fees Attorney's fees incurred by a local governmental entity or any other party in the adjudication of a claim by or against a local governmental entity shall not be awarded to any party in the adjudication unless the local governmental entity has entered into a written agreement that expressly authorizes the prevailing party in the adjudication to recover its reasonable and necessary attorney's fees by specific reference to this section. Added by Acts 2005, 79th Leg., ch. 604, § 1, eff. Sept. 1, 2005. Library References Municipal Corporations G:o>254. Westlaw Topic No. 268. C.J.S. Municipal Corporations§ 946. § 271.160. Joint Enterprise A contract entered into by a local government entity is not a joint enterprise for liability purposes. Added by Acts 2005, 79th Leg., ch. 604, § 1, eff. Sept. 1, 2005. [Sections 2 71.161 to 2 71.900 reserved for expansion] SUBCHAPTER Z. MISCELLANEOUS PROVISIONS § 271.901. Procedure for Awarding Contract if Municipality or District Receives Identical Bids (a) If a municipality or district is required to accept bids on a contract and receives two or more bids from responsible bidders that are identical, in nature and amount, as the lowest and best bids, the governing body of the municipality or district shall enter into a contract with only one of those bidders and must reject all other bids. (b) If only one of the bidders submitting identical bids is a resident of the municipality or district, the municipality or district must select that bidder. If two or more of the bidders submitting identical bids are residents of the municipality or district, the municipality or district must select one of those bidders by the casting of lots. In all other cases, the municipality or district must select from the identical bids by the casting of lots. (c) The casting of lots must be in a manner prescribed by the mayor of the municipality or the governing body of the district and must be conducted in the 551  TAB 43 Texas Civil Practices and Remedies Code §16.071 V.T.C.A., Civil Practice & Remedies Code § 16.071 Page 1 Effective:[See Text Amendments] Vernon's Texas Statutes and Codes Annotated Currentness Civil Practice and Remedies Code (Refs & Annos) Title 2. Trial, Judgment, and Appeal Subtitle B. Trial Matters Chapter 16. Limitations Subchapter D. Miscellaneous Provisions § 16.071. Notice Requirements (a) A contract stipulation that requires a claimant to give notice of a claim for damages as a condition precedent to the right to sue on the contract is not valid unless the stipulation is reasonable. A stipulation that requires notification within less than 90 days is void. (b) If notice is required, the claimant may notify any convenient agent of the company that requires the notice. (c) A contract stipulation between the operator of a railroad, street railway, or interurban railroad and an employee or servant of the operator is void if it requires as a condition precedent to liability: (1) the employee or servant to notify the system of a claim for damages for personal injury caused by negligence; or (2) the spouse, parent, or child of a deceased employee or servant to notify the system of a claim of death caused by negligence. (d) This section applies to a contract between a federal prime contractor and a subcontractor, except that the notice period stipulated in the subcontract may be for a period not less than the period stipulated in the prime contract, minus seven days. (e) In a suit covered by this section or Section 16.070, it is presumed that any required notice has been given unless lack of notice is specifically pleaded under oath. (f) This section does not apply to a contract relating to the sale or purchase of a business entity if a party to the contract pays or receives or is obligated to pay or receive consideration under the contract having an aggregate value of not less than $500,000. CREDIT(S) © 2013 Thomson Reuters. No Claim to Orig. US Gov. Works. V.T.C.A., Civil Practice & Remedies Code § 16.071 Page 2 Acts 1985, 69th Leg., ch. 959, § 1, eff. Sept. 1, 1985. Amended by Acts 1991, 72nd Leg., ch. 840, § 3, eff. Aug. 26, 1991. Current through Chapters effective immediately through Chapter 65 of the 2013 Regular Session of the 83rd Legis- lature (c) 2013 Thomson Reuters. No Claim to Orig. US Gov. Works. END OF DOCUMENT © 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.