Preview
CAUSE 59155
ENTERPRISE PRODUCTS THE DISTRICT COURT
OPERATINGLLC,
Plaintiff,
AMEC FOSTER WHEELER USA
CORP.F/K/A FOSTER WHEELER USA HARRISCOUNTY, TEXAS
CORPORATION;AMEC FOSTER
WHEELERPLC
Defendants. JUDICIAL DISTRICT
ENTERPRISEPRODUCTS OPERATING LLC’S POSTRIAL
EVIDENTIARYROADMAP
PROPOSEDFINDINGS FACT CONCLUSIONS LAW
TABLE CONTENTS
Background .............................................................................................................................. 1
Enterprise’sClaims Against AFWUSA .............................................................................. 2
Enterprise’s Fraudulent Inducement Claim Against AFWUSA ........................................ 2
Enterprise’sBreach Contract Claim Against AFW USA ............................................. 10
Enterprise’s Negligence Claim Against AFWUSA ......................................................... 26
Enterprise’sClaims Against AFWPLC ............................................................................ 28
Enterprise’sBreach Contract Claim Against AFW PLC ............................................. 28
Enterprise’sAlter Ego Claim Against AFW PLC ............................................................ 33
Enterprise’s FraudClaim Against AFW PLC .................................................................. 36
Enterprise’s Negligent MisrepresentationClaim Against AFW PLC .............................. 39
Enterprise’s Estoppel Claim Against AFWPLC .............................................................. 40
IV. AFWUSA’S Affirmative Defenses ................................................................................... 41
PriorMaterial Breach ........................................................................................................ 41
Radical Change ................................................................................................................. 41
Statute of Frauds ............................................................................................................... 42
Waiver ............................................................................................................................... 43
AFWPLC’s Affirmative Defenses .................................................................................... 43
Statute of Frauds ............................................................................................................... 43
Unclean Hands .................................................................................................................. 44
VI. AFWUSA’s Counterclaim Against Enterprise ................................................................. 45
Summary ........................................................................................................................... 45
Conclusions of Law .......................................................................................................... 45
i
Findings Fact
VII. Enterprise’sDamages
Conclusions Law
Findings Fact
VIII. Pre and Post Judgment Interest
IX. Attorney’sFees
Plaintiff Enterprise Products Operating, submits these Draft Proposed Findings of Fact and
Conclusions of Law.
* * *
The above-captioned cause came on for trial before the Court without a jury on April 19,
Plaintiff Enterprise Products Operating, (“Enterprise”); Defendants Amec Foster
Wheeler USA Corp. (“AFW USA”) Amec Foster Wheeler plc (“AFW PLC,” collectively with
AFW USA, “AFW”); Third Party Defendants Shaw Fabrication and Manufacturing, Inc. n/k/a
CB&I Lake Charles, L.L.C., CB&I Fabrication L.L.C., and CB&I, L.L.C. (collectively, “CB&I”);
andtheir respective attorneys werepresent and announced ready.
The trial having concluded, the Court makes the following findings of fact and conclusions
of law. the extent that any finding of fact set forth herein more properly characterized a
conclusion of law or vice versa, hereby adopted such. Headings used herein are for
convenience only; the extent a finding or conclusion under a particular heading, or a particular
section, relevant conclusions made under other headings or other sections, such a finding
or conclusion should be understood also made connection with such other heading or section.
Background
Enterprise and Foster Wheeler USA Corporation executed Engineering,
Procurement and Construction Contract (the “Contract”) on July 26, 2013, which also covered
The following citations provide examples of evidentiary support for Enterprise’s Proposed
Findings of Fact and Conclusions of Law.The citations are meant provide the Court with a
high-level roadmap of testimony and exhibits that serve a reference guide for the Court’s
factfinding process.This document not intended be a marshalling of the evidence this case,
nor even a summary of the volume, types, or breadth of evidence that has been introduced over
nearlyfour months of trial. Each proposed factual finding supported by testimonyand exhibits
beyond those cited herein, and these citations should not be interpreted suggest that the
evidentiary support for any proposed factual finding accordingly limited.
work performed starting May 2013. Foster Wheeler USA Corporation later changed name
Amec Foster WheelerUSA Corporation. Pursuant the Contract,AFW USA was engineer,
procure, construct, and stall a propane dehydrogenation facility (the “PDH” engineered,
procured, constructed, andinstalled the “Project”).
November 2014, Amec plc acquired AFW USA’s parent company. Amec PLC
thenchanged name AmecFoster Wheeler plc.
cember 2015, pursuant a Transition Services Agreement, the parties agreed
that Defendants’ construction scope of work on the Project would be terminated by way of a partial
termination of the Contract. Optimized Process Designs, (“OPD”) took over e construction
scope of work.
Enterpriseterminated the remainder the Contract on September
Enterprise’sClaims Against AFWUSA
Enterprise’sFraudulent Inducement Claim Against AFW USA
Conclusions of Law
Fraud claims require proof that (1) the defendant made a material misrepresentation
(2) that was either known be false when made or was asserted without knowledge of truth,
(3) that was intended be acted upon, (4) that was relied upon, and (5) that caused injury.
E-0596 (EPC Contract); A-01003 (AFWUSA Laws).
E-2347 11/17/14 Letter from Enterprise); E-2347.0005 (11/17/14 Letter from
plc Enterprise declaring the new company would be calledAmec Foster Wheeler plc).
E-4198 (Transition Services Agreement); 6/14 Trial Tr. 271:24-272:1 (Boster testimony);
5/3 TrialTr. 16:3-17:3.
E-3710 (8/2/16 Notice of Events Default); E-3723 (9/2/16 Notice of Enterprise’s
TerminationforCause).
Zorilla Aypco Constr. , 469 S.W.3d 143, 153 (Tex. 2015).
Fraudulent inducement distinct category fraud that shares the same elements arises only
the context contract, the existence contract also essential part proof.
representation actionable false statement fact promise future performance made
with intent perform promised statement opinion that (a) based false
statement fact, (b) that the maker knows false, (c) that false and made who
has purports have special knowledge the subject matter. 10 There are two elements
11
reliance,namely actual reliance andjustifiable reliance.
Fraud occurs omission when (1) party fails disclose material fact within
the knowledge that party, the party knows that the other party ignorant the and does
have equal opportunity discover truth, (3) the party intends induce the other party
take some action failing disclose the fact, and (4) the other party suffer injury result
acting without knowledge the undisclosed fact. 12 omission may constitute fraud only
the defendant had duty disclose the information. duty disclose arises when person
voluntarily discloses partial information fails disclose the whole truth, when person
13
makes partialdisclosure and conveys falseimpression.
Anderson Durant S.W.3d(Tex. 2018).
Trenholm RatcliffS.W.2d(Tex. 1983).
Formosa Plastics Corp. USA Presidio Engineers Contractors, Inc. 960 S.W.2d
(Tex. 1998).
10
Trenholm Ratclliff 646 S.W.2d (Tex. 1983); Italian Cowboy Partners, Ltd.
PrudentialIns. Co. Am. S.W.3d(Tex. 2011).
11
Barrow ShaverRes. Carrizo Oil Gas, Inc. S.W.3d
12
Bradford Vento S.W.3d (Tex. 2001).
13
Anderson, Greenwood Co. Martin S.W.3d (Tex. App.Houston [14th
st.]pet. denied).
Information material reasonable person would attach importance and
induced the information determining whether mak transaction.
misrepresentation omission material even the plaintiff’s only inducement for
making transaction. 14
Findings Fact
Prior executing the Contract, AFW USA represented Enterprise that was
15
full EPC ompany with direct hire constructionexperience that had sufficient personnel
16
and expertise perform the PDH Project that utilizing high value engineering centers
(“HVEC”) would reduce Enterprise’s overall costs because they were able quicky staff large
number currently available engineers short frame, 17 and that had developed and
would employ construction driven approach and execution plan the PDH Project from day
14
Barrow ShaverRes. Carrizo Oil Gas, Inc. S.W.3d(Tex. 2019).
15
4/21 Trial Tr. 158:6 159:1 (Collins testimony full EPC reps with intent induce); 4/21
Trial Tr. 193:24 194:12 (Collins testimony EPC and direct hire reps with intent induce);
4/20 Tr. Transcript 174:25 175:4 (Smith testimony direct hire reps with intent induce);
(July Presentation Enterprise); (FW Sales Brochure); (FW
Proposal); 4/24 Trial Tr. 62:19 63:20 (Collins testimony confirming representation
brochure applied both lump sum and cost plus bid); 4/28 Trial Tr. 279:13 (Coscio
testimony that never said current status was FEED company and instead “said they
were fully functioning EPC”).
16
4/20 Trial Tr. 211:12 212:25 (Smith testimony bid strategy represent
resource availability); (rep Enterprise resources for two parallel PDH projects);
(bid proposal resource and capability reps); 77:3 (Palencia testimony intent
induce resourcecapabilities).
17
(rep Enterprise that would “leverage” “experience” “reduce cost through
use high value engineering center”); 0326 (rep that utilizing HVECs would reduce
Enterprise’s overall costs and directly benefit EPCO being able quickly staff large number
currently available engineers short time frame); (4/29 Trial Tr. 20:11 (Coscio
testimony that represented India resources were skilled, abundant, experienced) 22:1
(Coscio testimony that represented that India engineers would form full dedicated team).;
representation that global resources were ready mobilize day one); 4/20 Trial
Tr. 276:22 (Smith testimony that “made sure emphasize” HVEC
capabilities attempt win bidand that “global resources”included India).
one. 18 Those representations were materially false. AFW USA knew them be false, or least
had no basis for believing them be true. 19 AFW made those representations intending that
18
4/20 Trial Tr. 271:12 – 272:3 (Smith testimony intent induce with existence of a
schedule on Day 1); 4/20 Trial Tr. 255:13-21 (Smith testimony intent induce with
construction-driven schedule); E-324.0007 (Bid representing that would take a construction-
driven approach develop the overall EPC schedule); E-0333 (PDH Sales Brochure); 4/28 Trial
Tr. 298:17-21 (FW conveyed during bid phase that had a fully developed, integrated EPC
schedule that would support a construction-driven approach).
19
(a) Knowing Falsity being a full EPC company: E-0246.003 (FW internal bid phase
presentation that winning the Enterprise Project would “re-position the EPC arena the
market, going beyond our current status of technology front endeng ineering company”); 4/26
Trial Tr. 76-77 (Collins testimony discussing future build out of construction group); 5/10 Tr.
Transcript 183:13 – 184:1 (Parks testimony using Project reposition EPC, not
disclosed); 5/10 Trial Tr. 221:18-21 (Parks testimony no direct hire); E-1269 (Farmer email
“historically never are EPC” and “new role”); E-0284.0017 (FW internal presentation May
EPC track record); 4/28/2022 TrialTr. 29:19 – 30:2 (Givens testimony knew
would have difficulty executing Project); 5/12 Trial Tr. 95:18-97:8 (John Lawrence testimony
that “Foster Wheeler historically was a FEED contractor”); 6/3 Trial Tr. 260:14-261:9 (Farmer
testimony concern resulting from FW’s “inexperience with EPC projects”); E-4158 (FW Nield
Presentation stating “has not succeeded institutionalizing nor building-out EPC
capabilities”); E-1174 (Coffin Performance Review discussing attempted “transformation” into
EPC company 2013 and 2014); E-2007 (Sept. 2014 Presen tationstating PDHwas “first
time” doing “direct hire construction”); E-0284 (May 2013 Andy Allen Strategic Growth
Report).; E-4241 (Eubanks Depo) 17:19-18:3 (FW was front end technology engineering
firm that performed construction.They wanted be more of a EPC firm level the workloads.”);
E-3561 (AFWinternal PDH Lessons Learned dated 2/5/16: “Firstdirect hire construction job for
the company” and “[m]any departments were not prepared with correct staff and systems
support direct hire construction”); 4/26 Trial Tr. 17-18 (Collins testimony knowing reckless
falsity of EPC experience representations); 4/20 Trial Tr. 51-52, 205 (Collins testimony
knowing or recklessfalsity of EPCexperiencerepresentations) .
(b) owin Falsity of sufficient personnel and expertise: E-0144 (Broussard email
AFW having resource problems of bid; will be “big challenge”); E-0297 (Broussardemail
resource problems “even without the new work”); E-4225 103:5-10 (Broussard testimony
that Foster Wheeler was having difficulty finding resources before even before bidding on
Enterprise PDH); 4/21/2022 Trial Tr. 198:4- (Collins testimony resource insufficiency
being internally known risk); E-0211 (Lawrence’s March 2013 communication that Enterprise’s
staffing expectations for Foster Wheeler were “not realistic”); 5/12 Trial Tr. 113:18-114:1
(Lawrencetestimony that he would have told sales people thatstaffing expectationswere not
realistic, but they did not askhim); 5/13 Trial Tr. 9:11-18 (Lawrencetestimony pre -Contract
awareness of insufficient pipe stress engineers); 5/13 Trial Tr. 51:9-24 (Lawrence testimony
pre-Contract awareness of insufficient design technology engineers); 6/23 Trial Tr. 75:18-77:20
(Sullivan testimony FW’s pre Contract staffing/resources data); 6/23 Trial Tr. 103:14-104:19
(Sullivan testimony percentage of new hires construction); 4/27 Trial Tr. 260:2-6 (Givens
Enterprise would rely them, 20 and Enterprise actually 21 and justifiably 22 relied on these
misrepresentations executing the Contract.
testimony AFW’s pre-bid knowledge of engineering resour insufficiency); E-0284 (internal
presentation of bid recruitment necessary personnel being “unrealistic”); 4/27
Trial Tr. 233:7-234:15 (Givens testimony pre-bid concern engineering manpower
insufficiency mobilize kick off); E (Garvey email stating the “most urgent issue” “to
effectively and timely staff” the PDH project team); 4/21 Trial Tr. 198 (Collins testimony
knowing or recklessfalsity of staffing/resourcesrepresentations)
(c) Knowing Falsity HVECs India: 5/11 Trial Tr. 188:6-24, 187:11-18 (Coffin
testimony first Chennai workshare not disclosed Enterprise); 4/27 Trial Tr. 283:17-
24, 284:6-18; 285:1-4 (Givens testimony AFW’s pre-bid known risks from first workshare
with India); 5/11 Trial Tr. 183:17-25 (Coffin testimony AFW knowledge India risk impacts
cost and schedule); 4/27 Trial Tr. 240:8-16 (Givens testimony that he had never worked with
India offices and did not of others doing so); 6/23 Trial Tr. 118:1-119:3 (Sullivan testimony
FW’s quantification of risk of use of new HVECs); E-0272 (April 2013, PDH Risk Checklist
noting systems, completeness, timing and accuracy of information unknown Kolkata); E-4225
43:14-19, 175:1-9, & 42:18-24 (Broussard testimony that no one within Foster Wheeler was
responsible for determining whether India offices had adequate manpower or technical
capabilities).
(d) owing Falsity construction driven approach: 6/9 Trial Tr. 82:9 – 83:1, 92:21-
23, 111:14-18 (Bouhaine testimony that he built schedule from scratch after Project was already
underway; un-integrated PDH schedule could not be construction-driven); E-0284.0057 (internal
AFW admission of bid that had no existing construction group); 6/21 ial Tr. 35:5-
36:11 (Scholl testimony that construction-driven process could not be implemented while AFW
lacked a construction scheduling team); 4/20 Tr. (Smith knowing falsity direct hire).
20
4/20 Trial Tr. 187:22 – 188:15 (Smith testimony intent induce with India office reps);
E-0313 (AFW’s internal “Sales Strategy” presentation stating that was “perceived” the best
qualified EPC contractor who could support “potentially a 2nd PDH project,” recognized that
Enterprise was “concerned about S&B’s overall capabilities and capacity execute a project of
this magnitude,” and instructed team “emphasize FW’s resource availability, capabilities,
large project systems and experience”); 4/21 Trial Tr. 158:6-159:1 (Collins testimony that
information FW’s July 2012 presentation related FW’s “full, multidiscipline EPC services”
was intended “persuade Enterprise” select contractor); Ex. E-0631 (8/13 email
downplaying distinction between India offices EPCO views single HVEC); 4/20 TrialTr.
255:13-21 (Smith testimony that part of sales strategy was emphasizing construction-driven
schedule).
21
6/17 Trial Tr. 34:15-35:2 (Teague testimony awarding bid based AFW misreps);
5/19 Trial Tr. 207:2-19 (Hutchison testimony awarding bid based on AFW misreps); 4/29
TrialTr. 11:13-21 (Cosciotestimony awarding bid basedAFW misreps).
22
E-0034.0015, -17, -30 (FW presentation making highly detailed reps about experience and
personnel); 5/4 Tri Tr. 154:16-155:5 (Coscio testimony related prior experience with
Prior executing the Contract, AFW USA voluntarily and partially disclosed
Enterprise information about experience available resources and capabilities 23 therefore had
duty disclose all related, relevant information knew material Enterprise. AFW failed
disclose (a) that had experience EPC projects including experience
self performing (i.e. “direct hir construction work projects similar scale the PDH
executive); (AFW presentation making detailed representations diligence
meeting); 4/27 Trial Tr. 247:6 248:7 (FW made detailed representations about capabiliti
draw databases thousands people); 6/17 Trial Tr. 29:22 30:5; 30:17 31:16(Teague
testimony meeting with executives from London which executives discussed FW’s
experience, resources, and construction expertise); 4/21 Trial Tr. 158:6 159:1 (Collins testimony
that information FW’s July presentation related FW’s “full, multidiscipline EPC
services” was intended “persuade Enterprise” select contractor); 5/4 Trial Tr.
154:16 155:5 (Coscio testimony indicia reliability diligence meetings); 4/26
Trial Tr. 69:22 70:30 (Collins testimony AFW intended Enterprise rely reps AFW
“analyses” capabilities build faster than industry norm); 4/26 Trial Tr. 70:19 (Collins
testimony reps that AFW capabilities were supported “global resources”);6/17 Trial Tr.
29:22 30:5; 30:17 31:16 (Teague testimony meeting with executives from London which
executives discussed FW’s experience, resources, and construction expertise); 5/19 Trial Tr.
164:3 165:12 (Hutchison testimony Enterprise spending pre bid diligence far
exceeded normal levels); 4/28 Trial Tr. 250:2 (pre bid diligence for invitation bid used
same template and was maturity was used Fluor); 4/28 Trial Tr. 257:24 258:12,
(FW stated the real during the diligence phase that Enterprise’s pre bid P&IDs
were “in shape”); 4/28 Trial Tr. 272:13 (feedback from the real was that
they were happy with the quality the invitation bid documents); 4/28 Trial Tr. 295:5 303:3
(extensive bid phase meetings with FW); 5/19 Trial Tr. 123:2 125:11 126:20 (Hutchison
testimony dedicated diligence team); 5/19 Trial Tr. 123:23 125:10, 126:21 129:23
(Enterprise commissioned specialist report study PDH projected market, cost, and schedule);
5/19 Trial Tr. 130:3 (Enterprise due diligence meetings with PDH technology licensors);
5/19 Trial Tr. 130:23 133:3 (Enterprise diligence meeting with management); 5/19 Trial Tr.
133:4 137:3 (Enterprise diligence through commissioning Lummus feasibility study,
process flow diagrams, and equipment lists); 4/28 Trial Tr. 240:12 241:4 (S&B reviewed
Lummus feasibil studies and BEP during diligence confirm they were sufficient and
complete); 5/19 Trial Tr. 138:2 146:14, 152:14 153:12 (Enterprise conducted and vetted second
feasibilitystudy corroborate diligence findings); 5/19Trial Tr. 146:15 151:7(Enterprise
study for ROM cost estimate corroborate diligence findings); 5/19 Trial Tr. 151:8 152:13
(Enterprise study for second ROM estimate); 5/19 Trial Tr. 153:13 154:19 (Enterprise study for
third ROM estimate); 5/19 Trial Tr. 154:20 155:22 (Enterprise diligence lasted over year).
23
Seesupranotes
24 25
Project (b) that did not have sufficient qualified personnel perform the PDH Project (c)
that had never work shared with the engineering centers India that intended use
24
(Foster Wheeler “Lessons Learned” document indicating that Enterprise PDH was the
“[f]irst direct hire construction job for the company many years.”); (FW internal
bid phase presentation that winning the Enterprise Project would “re sition the EPC arena
the market, going beyond current status technology front end engineering company”);
4/26Trial Tr. (Collins testimony discussingfuture build constructiongroup); 5/10
Tr. Transcript 183:13 184:1 (Parks testimony using Project reposition EPC,
disclosed); 5/10 Trial Tr. 221:18 (Parks testimony direct hire); (Farmer email
“historically never are EPC” and “new role”); (FW internal presentation May
EPC track record); 4/28/2022Trial Tr. 29:1930:2(Givens testimony knew
would have difficulty executing Project); 5/12 Trial Tr. 95:18 97:8 (John Lawrence testimony
that “Foster Wheeler historically was FEED contractor”); 6/3 Trial Tr. 260:14 261:9 (Farmer
testimony concern resulting from FW’s “inexperience with EPC projects”); (FW Nield
Presentation stating “has succeeded institutionalizing nor building EPC
capabilities); 4168.0004 (Naylor March rategy Paper indicating “no experience”
direct hire “nor appetite”; “JV and partnering only); (Coffin Performance Review
discussing attempted “transformation” into EPC company and 2014); (Sept.
Presentation stating PDH was “first time” doing “direct hire construction”); (May
Andy Allen Strategic Growth Report); (Eubanks Depo.) 82:23 83:20
(Eubanks, head construction department, management discussions FW’s direct hire
weakness during preb phase); (Eubanks Depo.) 108:22 109:1 (Eubanks questioned
whether had organizational knowledge what took execute construction PDH scale).
25
4/28 Trial Tr. 280:8 281:4 (Coscio testimony nondisclosure staffing issues); 4/2
Trial Tr. 302:21 303:3 (Coscio testimony failed disclose that the Project would staffed
with new engineering hires); (Broussard email AFW having resource problems
bid; will “big challenge”); (Broussard email res ourceproblems “even without the
new work”); 103:5 (Broussard testimony that Foster Wheeler was having difficulty
finding resources before even before bidding Enterprise PDH); 8/14/19 Andrush Depo.
101:4 (FW would maintain staff job being bid because did have the work yet);
4/21/2022 Trial Tr. 198:4 (Collins testimony resource insufficiency being internally
known risk); (Lawrence’s March 2013 communication that Enterprise’s staffing
expectations for Foster Wheeler were “not realistic”); 5/12 Trial Tr. 113:18 114:1 (Lawrence
testimony that would have told sales people that staffing expectations were realistic,
they did ask him); 5/13 Trial Tr. 9:11 (Lawrence testimony pre Contract awareness
insufficient pipe stress engineers); 5/13 Trial Tr. 51:9 (Lawrence testimony pre Contract
awareness insufficient design technology engineers); 6/23 Trial Tr. 75:18 77:20 (Sullivan
testimony FW’s pre Contract staffing/resources data); 6/23 Trial Tr. 103:14 104:19 (Sullivan
testimony percentage new hires construction); 4/27 Trial Tr. 260:2 (Givens testimony
AFW’s pre bid knowledge engineering resource insufficiency); (internal
presentation bid recruitment necessary personnel being “unrealistic”); 4/27 Trial
Tr. 233:7 234:15(Givens testimony pre bid concern engineering manpowerinsufficiency
mobilize kick off).
26
the PDH project (d) that the two engineering centers India that AFW USA intended use
the PDH project had never work shared together, which would require currently existent
technological integration among three offices for the Project; 27 (e) that AFW USA was aware
of, and had control over, the India offices’ manpower availability staffing for the Project; 28
and that AFW USA had developed construction driven plan schedule for PDH 29 AFW
USA knew that Enterprise was unaware this information and that Enterprise did have
26
(Chennai workshared with Houston for first PDH); 2480 (7/25/13 Risk
Register noting Chennai lack familiarity with Houston standards, specifications, practices, e.g.,
ProjectWise, and Sharepoint); 5/11 Trial Tr. 188:6 187:11 (Coffin testimony first
Chennai workshare disclosed Enterprise); 4/27 Trial Tr. 283:17 284:6 285:1
(Givens testimony AFW’s pre bid known risks from first workshare with India); 5/11 Trial
Tr. 183:17 (Coffin testimony AFW knowledge India risk impacts cost schedule);
4/27 Trial Tr. 240:8 (Givens testimony that had never worked with India offices and did
others doing so); 6/23 Trial Tr. 118:1 119:3 (Sullivan testimony FW’s quantification
risk use new HVECs); (April Risk Checklist noting systems,
completeness, timing and accuracy information unknown Kolkata); 43:14
175:1 42:18 (Broussard testimony that within Foster Wheelerwas responsible for
determiningwhether Indiaoffices had adequatemanpower technical capabilities).
27
Ex. (4/14 email noting first workshare between Kolkata Chennai risked
productivity schedule impacts); Ex. (6/13 Project Planning document noting major risks
for operational issues absent technological integration offices); 5/11 Trial Tr. 187:11
188:10 (Coffin testimony disclosure Enterprise).
28
5/11/2022 Tr. Transcript 177:8 (Coffin testimony India managing own
manpower); 5/11/2022 Tr. Transcript 171:12 (Coffin testimony India deciding whom they
would staff); 5/11/2022 Tr. Transcript 172:7 (Coffin testimony India deciding whether
staff would work part full time); Ex. (Brad Broussard Depo.) 43:14 175:1
42:18 (No within AFW USA was responsible for ensuring India had sufficient manpower
evaluating technical capabilities India engineers); 5/11 Trial Tr. 187:19 188:9 (Coffin
testimony disclosure Enterprise); 4/29 Trial Tr. 20:11 (Coscio estimony that
represented India resources were skilled and abundant); 4/29 Trial Tr. 22:1 (Coscio
testimony representingthat India team would full time,dedicated PDH).
29
6/9 Trial Tr. 82:9 83:1, 92:21 111:14 (Bouhaine testimony that built schedule
from scratch after Project was already underway and that the integrated PDH schedule could
construction driven); (internal AFW admission bid that had
existing construction group)4/28 Tria Tr. 281:9 282:4, (AFW never disclosed
pre bid assessment risk “claiming environment since inception,” “significant engineering
recyclingand project slippages”).
equal opportunity discover and AFW USA failed disclose this information order
induce Enterprise execute the Contract. 30 Enterprise would not have executed the Contract had
known this information. 31
Enterprise’sBreach of ContractClaim Against AFWUSA
Conclusions of Law
The Contract unambiguously obligated AFW perform the Project accordance
with a number of standards andrequirement including:
Quality Standards: employ “sound engineering practices”; employ “sound
construction practices”; employ standard of care, skill and diligence such
would normally be provided by experienced engineer”; perform “in a
d workmanlike manner”; and “follow generally accepted industry
practices.”
Personnel Standards: employ “only personnel who are reputable, qualified,
and have established record of successful performance their respective
engineering professions and “provide sufficient numbers of qualified
personnel complete the Services accordance with the Project Execution
Plan and Schedule,” which turn established milestone dates including a target
dateformechanical completion December 2015.
30
E-0313 (AFW’sinternal “Sales Strategy”presentation stating that was “perceived” the
best qualified EPC contractor who could support “potentially a 2nd PDH project,” recognized that
Enterprise was “concerned about S&B’s overall capabilities and capacity execute a project of
this magnitude,” and instructed team “emphasize FW’s resource availability, capabilities,
large project systems and experience”); 4/21 Trial Tr. 158:6-159:1 (Collins testimony that
information FW’s July 2012 presentation related FW’s “full, multidiscipline EPC services”
was intended “persuadeEnterprise” select contractor); 4/29 TrialTr. 13:2-16:8)
(Coscio testimony AFW not disclosing staffing insufficiencies until Oct/Nov. 2013
connection with scheduling efforts); 4/29 Trial Tr. 38:5-39:23 (Coscio testimony EPCO
access beginning late May 2013 being limited one floor and no line of sight into staffing gaps
below lead level); E-0246.0003 (FW internal admission that needed PDH Project light of
“current high turnover of personnel; undisclos Enterprise); 4/29 Trial Tr. 40:7-18 (Coscio
testimony no direct access India until 1-2 engineers came Houston for training fall
‘13);Ex. E-0631 (8/13 email downplaying distinctionbetween India offices EPCO views
single EC); 4/20 Trial Tr. 255:13-21 (Smith testimony that part of sales strategy was
emphasizing construction-driven schedule).
31
See supra notes 21-22.
Timeliness Standards: “diligently perform the Services achieve
Mechanical Completion later than the [target date of] December 2015”;
and “put forth commercially reasonable best efforts perform the
Services accordance with the” hedule Exhibit which contains target
date for mechanical completion December 2015. the Court has previously
recognized, these provisions required AFW USA achieve mechanical
completionwithin reasonabletime. 32
The Court has previously uled that for breach these provisions
actionable breach contract the context the performance engineering, procurement,
and construction obligations, the conduct giving rise the breach must have been grossly
negligent. 33 Conduct grossly negligent the actor was consciously indifferent extreme
34
risk posed conduct Multiple acts ordinary negligence maycollectively constitute gross
35
negligencewhen consideredtogether.
The Contract provides for liability for indirect, special, incidental, punitive,
exemplary, and consequential damages for claims willful misconduct.Willful misconduct
occurs when actor intentionally deliberately engages improper behavior
mismanagementwithout regard forthe consequences acts omissions. 36
32
Order (2/27/21)
33
Order (4/8/21). [For the avoidance doubt, Enterprise states that disagrees with this
rulingpreserves argument the contrary.]
34
HaulInt’l, Inc. WaldripS.W.3d(Tex. 2012).
35
McPhearson Sullivan S.W.2d (Tex. 1971); Hamilton Texas Oil Gas
Corp. S.W.2d 323 (Tex. App. Paso writ ref’d n.r.e.), disapproved other
grounds Valence Op. Co. Dorsett S.W.3d (Tex. 2005); Aetna Cas. Sur. Co.
Marshall S.W.2d 896, (Tex. App.Houston [1st Dist.] 1985), aff’d S.W.2d
(Tex.1987).
36
Apache Corp. Castex Offshore, Inc. S.W.3d (Tex. App.Houston [14th
Dist.] pet. filed); see also Vac Serv. Co. Escobedo S.W.3d (Tex.
VacServ. Co. EscobedoS.W.3d(Tex. 2020).
Section the Contract unambiguously prohibited AFW from arging
Enterpriseforprofit markupother than set forth Exhibit theContract. Under Exhibit
off premises engineering work subcontractors was reimbursed cost with markup.
Anychange orders, likewise, were include any profit mark
Under Section the Contract, all work performed pursuant the work order
executed Enterprise and AFW USA May 2013 deemed have been performed pursuant
the Contr and subject standards and requirements.
Findings Fact
AFW breached the Contract’s Quality Standards throughout the Project.
Many breaches were pervasive, that they affected the entirety AFW performance,
including failure accurately schedule and plan all phases engineering, procurement, and
construction; 37 failure prioritize and complete engineering and procurement tasks order
support efficient construction schedule; 38 failure employ indust standard project
37
6/9 Trial Tr. 82:9 83:1, 90:3 93:23, (Bouhaine testimony that built schedule from
scratch after Project was already underway and that project worked from “90 day” schedules for
months); (Valencheck’s list projec controls and planning deliverables that should have
been place early 2014 were not); 4275 (Oyetunji Dep.) 162:19 164:2 (third party
scheduling consultant Oyetunji testifying that based his schedule review, the project was
operating with comprehensive plan February 2015); (Oyetunji Dep.) 167:13
168:8 (Oyetunji testifying that AFW’s schedule was sufficiently granular plan work); 6/23
Trial Tr. 143:12 144:16 (Sullivan testimony project schedule); (Canni findings
statingthat “current schedule shows almostall critical path activities “red” (late)”).
38
5/13 Trial Tr. 85:1 (Lawrence testimony: “FW engineering did want interface
with FW’s construction management the PDH Project”); 5/13 rial Tr. 85:21 86:24
(Lawrence testimony re: construction’s frustration with engineering’s lack “urgency”
pushing construction dates); (Farmer’s April complaints about lack input from
construction into engineering); 5/13 Tria Tr. 309:12 (Farmer testimony misalignment
between engineering and procurement pipe material procurement); 01446 (missing next
sequence spools pipe rack causing inefficiencies construction); (multiple
prioritizations ools late March 2015); (Canning findings stating that “[Home
Office] construction engineering/planning missing, project being driven from site without
alignment engineering and [supplychain management] delivery plans,” and“Project execution
management tools (including technical document index, construction work packages, and
functioning change and risk management program and instead employing tools with which
AFW was inexperienced and which did function properly; 39 failure properly coordinate
with and manage work performed high value engineering centers; 40 failure efficiently and
accurately manage materials, both with respect procurement and with respect site
plan broken between and C”); (Canavan findings stating that“the linkages between
schedules seem poor,” “the team working silos, with lines
communication between site and home office,” “the engineering and rocurement schedules don’t
seem support the Construction schedule,” and the construction “almost independen[t] Project
Controls Engineering procurement”); (Eubanks Depo.) 55:9 (engineering and
procurementrepeatedly not takingseriou slyconstruction’s required site dates).
39
(Identifying over errors the line list, and describing the line list
“garbage”); (January email stating that current technical document index “does
answer the mail wha needed for effectively manage the Project”); (describing
the equipment list “ass like”); 6/9/22 Trial Tr. 17:6 19:18 (Shutestimony re: lying
Enterprise about using Enterprise provided instrument index check, and the instrument index
having missing items months later); (Canning cold eye review findings stating AFW
failed employ Work Breakdown Structures (“WBS”) and Construction Work Packages
(“CWP”)); (AFW internal white paper finding AMUSE, the procurement system which
was supposed used the project, ineffective and should used major projects
like PDH which require tracking bulk materials); (Procuremen cold eye review finding
that AFW failed use AMUSE any other system track steel and pipe deliveries);
(November Component Schedule showing nearly half all equipment would received
after construction’s required site date); 6/2 Trial Tr. 138:17 140:1 (Sullivan testimony
impact having technical document index); 6/23 Trial Tr. 144:17 149:21 (Sullivan
testimony absence construction work packages); 6/23 Trial Tr. 151:17 152:8 (Sullivan
testimony change management).
40
5/13 Trial Tr. 34:24 35:3 (Lawrence testimony HVEC engineers being underutilized
despite training paid for Enterprise); 0944 (FW “screwed” because poor HVEC
coordination between process and systems); 5/13 Trial Tr. 40:21 (Lawrence testimony
absence workshare plan); (Coffin email absence Houston reps traveling India
posing risk project); 5/11 Trial Tr. 233:19 234:6 (Coffin testimony that until USA
directed India form Oversight Team, oth changes were made enhance quality control);
5/12 Vol. Trial Tr. 90:1 (no full coordinator for workshare after 12/13); 6/23 Trial Tr.
126:3 131:21 (Sullivan testimony consequences coordination with HVECs); Ex.
(Oates ema India complaints lack communication);Ex. (Kahre and Crown emails
listing issues with India, including lack defined processes); Ex. 2037 (Kahre email ISOs
revised India whilepipe fabrication, lack control point Houston).
management; 41 failure incorporate constructability insights into the design; 42 and
consistently safety program and record. 43 More fundamentally, AFW own self assessments
reveal that the quality work, throughout all phases and disciplines engineering,
procurement, construction well overall projectmanagement was substantially below
what would expected reasonably competent EPC contractor. 44 Other breaches were more
41
(AFW unaware that next sequence spools had yet arrived); (AFW
internalwhite paper findingAMUSE, the procurement system which was supposed used
the project, ineffective and should used major projec like PDH which require tracking
bulk materials); (Procurement cold eye review finding that AFW failed use AMUSE
any other system track steel and pipe deliveries); (November Component Schedule
showing nearly half all equipment would received after construction’s required site date);
(Canavan findings stating that the construction group was “having difficulty finding out
what ha[d] been delivered (in particular items they are waiting for), when will arrive” and
that AFW construction managers were “spending looking for materials, which detract[ed]
fromtheir primary function”).
42
(Springer email stating there were “no” constructability inputs); 5/5/22 Trial Tr. 118:
120:9 (Springer testimony criticizing AFW for following constructability “best
practices”); (Germany Dep.) 56:12 (Germany testifying that Foster Wheeler’s
construction group did care about engineering design issues); 2655 (Canning cold eye
review findin connection between and was broken); (Canavan cold eye review
findingthat “thelinkages between schedules seem poor” and “theteam working
silos, with lines communication between site and home office”); (AFW root
cause analysis spring failure identifying lack communication the cause for the
failure); (Eubanks Depo) 133:9 134:3 (project management was going down road
“we’ll design and build type situation”); 6/23 Trial Tr. 243 (Sullivan testimony
examples increased construction costs due lack constructability communications
between andC).
43
(February internal AFW report listing AFW’s incident rate three times
higher than target); (February 2015 internal AFW report stating that “construction
slowed/stopped unsafe acts, accidents catastrophic failures”); (Hannah Sesay
November safety report listing “red” citations which are defined “failures comply
with legal obligations and/or failure mitigate significant hazard driving performance”);
6/10/22 Trial Tr. (Ibbs testimony re: project safety, testifying that based the issue
identified AFW the Sesay report PDH “was horrible project from the safety point view”);
Ex. (Eubanks Depo.) 224:20 227:22 (FW construction group was learning
organization,lacking “real safety program”).
44
(Canavan cold eye review); (Canning cold eye review); (Ware cold
eyereview procurement); (February 2015internal project report).
localized particular types phases work, including substantially untimely desi critical
large borereactor areapipe spools,which turn led what AFWadmits wasmaterially
sequence construction work the most complex area the Project; 45 grossly mismanaged
welding program with rejection rates far excess the industry norm quality control and
46
failure maintain necessary quality related documentation failure coordinate with
including providing necessary design and prioritization information to, the pipe fabricator assure
that pipe was fabricated and delivered the order necessary support efficient installation; 47
45
6/3 Trial Tr. 301:9 302:17 (Farmer testimony need issue reactor area MTO CB&I
the end March 2014); (concern about pipe MTOs pushing past Marc
pipe stress delays); 6/3 Trial Tr. 272:7 273:13 (Farmer testimony re: excessive mistakes from
pipe stress engineers working reactor area pipe); (June plan for reactor area
construction called for pre staging large bore pipe before setting reactors and erecting steel);
(communication abandoning plan pre stage large pipe late arrival pipe);
(June CB&I had ordered large 321H material because only preliminary drawings
hadbeen issued FW) 6/7Trial Tr. 14:3 (Farmer testimony pipe stressforreactor pipe
still complete June 2014); 6/7 Trial Tr. 18:3 19:9 (Farmer testimony pipe stress changes
reactor MTO, and other errors, through the end July 2014); 02973 (pip stress changing
wall thickness riser spools July 2014); (final revision reactor MTO August
2014); (CB&I released for lar
Preview
CAUSE 59155 ENTERPRISE PRODUCTS THE DISTRICT COURT OPERATINGLLC, Plaintiff, AMEC FOSTER WHEELER USA CORP.F/K/A FOSTER WHEELER USA HARRISCOUNTY, TEXAS CORPORATION;AMEC FOSTER WHEELERPLC Defendants. JUDICIAL DISTRICT ENTERPRISEPRODUCTS OPERATING LLC’S POSTRIAL EVIDENTIARYROADMAP PROPOSEDFINDINGS FACT CONCLUSIONS LAW TABLE CONTENTS Background .............................................................................................................................. 1 Enterprise’sClaims Against AFWUSA .............................................................................. 2 Enterprise’s Fraudulent Inducement Claim Against AFWUSA ........................................ 2 Enterprise’sBreach Contract Claim Against AFW USA ............................................. 10 Enterprise’s Negligence Claim Against AFWUSA ......................................................... 26 Enterprise’sClaims Against AFWPLC ............................................................................ 28 Enterprise’sBreach Contract Claim Against AFW PLC ............................................. 28 Enterprise’sAlter Ego Claim Against AFW PLC ............................................................ 33 Enterprise’s FraudClaim Against AFW PLC .................................................................. 36 Enterprise’s Negligent MisrepresentationClaim Against AFW PLC .............................. 39 Enterprise’s Estoppel Claim Against AFWPLC .............................................................. 40 IV. AFWUSA’S Affirmative Defenses ................................................................................... 41 PriorMaterial Breach ........................................................................................................ 41 Radical Change ................................................................................................................. 41 Statute of Frauds ............................................................................................................... 42 Waiver ............................................................................................................................... 43 AFWPLC’s Affirmative Defenses .................................................................................... 43 Statute of Frauds ............................................................................................................... 43 Unclean Hands .................................................................................................................. 44 VI. AFWUSA’s Counterclaim Against Enterprise ................................................................. 45 Summary ........................................................................................................................... 45 Conclusions of Law .......................................................................................................... 45 i Findings Fact VII. Enterprise’sDamages Conclusions Law Findings Fact VIII. Pre and Post Judgment Interest IX. Attorney’sFees Plaintiff Enterprise Products Operating, submits these Draft Proposed Findings of Fact and Conclusions of Law. * * * The above-captioned cause came on for trial before the Court without a jury on April 19, Plaintiff Enterprise Products Operating, (“Enterprise”); Defendants Amec Foster Wheeler USA Corp. (“AFW USA”) Amec Foster Wheeler plc (“AFW PLC,” collectively with AFW USA, “AFW”); Third Party Defendants Shaw Fabrication and Manufacturing, Inc. n/k/a CB&I Lake Charles, L.L.C., CB&I Fabrication L.L.C., and CB&I, L.L.C. (collectively, “CB&I”); andtheir respective attorneys werepresent and announced ready. The trial having concluded, the Court makes the following findings of fact and conclusions of law. the extent that any finding of fact set forth herein more properly characterized a conclusion of law or vice versa, hereby adopted such. Headings used herein are for convenience only; the extent a finding or conclusion under a particular heading, or a particular section, relevant conclusions made under other headings or other sections, such a finding or conclusion should be understood also made connection with such other heading or section. Background Enterprise and Foster Wheeler USA Corporation executed Engineering, Procurement and Construction Contract (the “Contract”) on July 26, 2013, which also covered The following citations provide examples of evidentiary support for Enterprise’s Proposed Findings of Fact and Conclusions of Law.The citations are meant provide the Court with a high-level roadmap of testimony and exhibits that serve a reference guide for the Court’s factfinding process.This document not intended be a marshalling of the evidence this case, nor even a summary of the volume, types, or breadth of evidence that has been introduced over nearlyfour months of trial. Each proposed factual finding supported by testimonyand exhibits beyond those cited herein, and these citations should not be interpreted suggest that the evidentiary support for any proposed factual finding accordingly limited. work performed starting May 2013. Foster Wheeler USA Corporation later changed name Amec Foster WheelerUSA Corporation. Pursuant the Contract,AFW USA was engineer, procure, construct, and stall a propane dehydrogenation facility (the “PDH” engineered, procured, constructed, andinstalled the “Project”). November 2014, Amec plc acquired AFW USA’s parent company. Amec PLC thenchanged name AmecFoster Wheeler plc. cember 2015, pursuant a Transition Services Agreement, the parties agreed that Defendants’ construction scope of work on the Project would be terminated by way of a partial termination of the Contract. Optimized Process Designs, (“OPD”) took over e construction scope of work. Enterpriseterminated the remainder the Contract on September Enterprise’sClaims Against AFWUSA Enterprise’sFraudulent Inducement Claim Against AFW USA Conclusions of Law Fraud claims require proof that (1) the defendant made a material misrepresentation (2) that was either known be false when made or was asserted without knowledge of truth, (3) that was intended be acted upon, (4) that was relied upon, and (5) that caused injury. E-0596 (EPC Contract); A-01003 (AFWUSA Laws). E-2347 11/17/14 Letter from Enterprise); E-2347.0005 (11/17/14 Letter from plc Enterprise declaring the new company would be calledAmec Foster Wheeler plc). E-4198 (Transition Services Agreement); 6/14 Trial Tr. 271:24-272:1 (Boster testimony); 5/3 TrialTr. 16:3-17:3. E-3710 (8/2/16 Notice of Events Default); E-3723 (9/2/16 Notice of Enterprise’s TerminationforCause). Zorilla Aypco Constr. , 469 S.W.3d 143, 153 (Tex. 2015). Fraudulent inducement distinct category fraud that shares the same elements arises only the context contract, the existence contract also essential part proof. representation actionable false statement fact promise future performance made with intent perform promised statement opinion that (a) based false statement fact, (b) that the maker knows false, (c) that false and made who has purports have special knowledge the subject matter. 10 There are two elements 11 reliance,namely actual reliance andjustifiable reliance. Fraud occurs omission when (1) party fails disclose material fact within the knowledge that party, the party knows that the other party ignorant the and does have equal opportunity discover truth, (3) the party intends induce the other party take some action failing disclose the fact, and (4) the other party suffer injury result acting without knowledge the undisclosed fact. 12 omission may constitute fraud only the defendant had duty disclose the information. duty disclose arises when person voluntarily discloses partial information fails disclose the whole truth, when person 13 makes partialdisclosure and conveys falseimpression. Anderson Durant S.W.3d(Tex. 2018). Trenholm RatcliffS.W.2d(Tex. 1983). Formosa Plastics Corp. USA Presidio Engineers Contractors, Inc. 960 S.W.2d (Tex. 1998). 10 Trenholm Ratclliff 646 S.W.2d (Tex. 1983); Italian Cowboy Partners, Ltd. PrudentialIns. Co. Am. S.W.3d(Tex. 2011). 11 Barrow ShaverRes. Carrizo Oil Gas, Inc. S.W.3d 12 Bradford Vento S.W.3d (Tex. 2001). 13 Anderson, Greenwood Co. Martin S.W.3d (Tex. App.Houston [14th st.]pet. denied). Information material reasonable person would attach importance and induced the information determining whether mak transaction. misrepresentation omission material even the plaintiff’s only inducement for making transaction. 14 Findings Fact Prior executing the Contract, AFW USA represented Enterprise that was 15 full EPC ompany with direct hire constructionexperience that had sufficient personnel 16 and expertise perform the PDH Project that utilizing high value engineering centers (“HVEC”) would reduce Enterprise’s overall costs because they were able quicky staff large number currently available engineers short frame, 17 and that had developed and would employ construction driven approach and execution plan the PDH Project from day 14 Barrow ShaverRes. Carrizo Oil Gas, Inc. S.W.3d(Tex. 2019). 15 4/21 Trial Tr. 158:6 159:1 (Collins testimony full EPC reps with intent induce); 4/21 Trial Tr. 193:24 194:12 (Collins testimony EPC and direct hire reps with intent induce); 4/20 Tr. Transcript 174:25 175:4 (Smith testimony direct hire reps with intent induce); (July Presentation Enterprise); (FW Sales Brochure); (FW Proposal); 4/24 Trial Tr. 62:19 63:20 (Collins testimony confirming representation brochure applied both lump sum and cost plus bid); 4/28 Trial Tr. 279:13 (Coscio testimony that never said current status was FEED company and instead “said they were fully functioning EPC”). 16 4/20 Trial Tr. 211:12 212:25 (Smith testimony bid strategy represent resource availability); (rep Enterprise resources for two parallel PDH projects); (bid proposal resource and capability reps); 77:3 (Palencia testimony intent induce resourcecapabilities). 17 (rep Enterprise that would “leverage” “experience” “reduce cost through use high value engineering center”); 0326 (rep that utilizing HVECs would reduce Enterprise’s overall costs and directly benefit EPCO being able quickly staff large number currently available engineers short time frame); (4/29 Trial Tr. 20:11 (Coscio testimony that represented India resources were skilled, abundant, experienced) 22:1 (Coscio testimony that represented that India engineers would form full dedicated team).; representation that global resources were ready mobilize day one); 4/20 Trial Tr. 276:22 (Smith testimony that “made sure emphasize” HVEC capabilities attempt win bidand that “global resources”included India). one. 18 Those representations were materially false. AFW USA knew them be false, or least had no basis for believing them be true. 19 AFW made those representations intending that 18 4/20 Trial Tr. 271:12 – 272:3 (Smith testimony intent induce with existence of a schedule on Day 1); 4/20 Trial Tr. 255:13-21 (Smith testimony intent induce with construction-driven schedule); E-324.0007 (Bid representing that would take a construction- driven approach develop the overall EPC schedule); E-0333 (PDH Sales Brochure); 4/28 Trial Tr. 298:17-21 (FW conveyed during bid phase that had a fully developed, integrated EPC schedule that would support a construction-driven approach). 19 (a) Knowing Falsity being a full EPC company: E-0246.003 (FW internal bid phase presentation that winning the Enterprise Project would “re-position the EPC arena the market, going beyond our current status of technology front endeng ineering company”); 4/26 Trial Tr. 76-77 (Collins testimony discussing future build out of construction group); 5/10 Tr. Transcript 183:13 – 184:1 (Parks testimony using Project reposition EPC, not disclosed); 5/10 Trial Tr. 221:18-21 (Parks testimony no direct hire); E-1269 (Farmer email “historically never are EPC” and “new role”); E-0284.0017 (FW internal presentation May EPC track record); 4/28/2022 TrialTr. 29:19 – 30:2 (Givens testimony knew would have difficulty executing Project); 5/12 Trial Tr. 95:18-97:8 (John Lawrence testimony that “Foster Wheeler historically was a FEED contractor”); 6/3 Trial Tr. 260:14-261:9 (Farmer testimony concern resulting from FW’s “inexperience with EPC projects”); E-4158 (FW Nield Presentation stating “has not succeeded institutionalizing nor building-out EPC capabilities”); E-1174 (Coffin Performance Review discussing attempted “transformation” into EPC company 2013 and 2014); E-2007 (Sept. 2014 Presen tationstating PDHwas “first time” doing “direct hire construction”); E-0284 (May 2013 Andy Allen Strategic Growth Report).; E-4241 (Eubanks Depo) 17:19-18:3 (FW was front end technology engineering firm that performed construction.They wanted be more of a EPC firm level the workloads.”); E-3561 (AFWinternal PDH Lessons Learned dated 2/5/16: “Firstdirect hire construction job for the company” and “[m]any departments were not prepared with correct staff and systems support direct hire construction”); 4/26 Trial Tr. 17-18 (Collins testimony knowing reckless falsity of EPC experience representations); 4/20 Trial Tr. 51-52, 205 (Collins testimony knowing or recklessfalsity of EPCexperiencerepresentations) . (b) owin Falsity of sufficient personnel and expertise: E-0144 (Broussard email AFW having resource problems of bid; will be “big challenge”); E-0297 (Broussardemail resource problems “even without the new work”); E-4225 103:5-10 (Broussard testimony that Foster Wheeler was having difficulty finding resources before even before bidding on Enterprise PDH); 4/21/2022 Trial Tr. 198:4- (Collins testimony resource insufficiency being internally known risk); E-0211 (Lawrence’s March 2013 communication that Enterprise’s staffing expectations for Foster Wheeler were “not realistic”); 5/12 Trial Tr. 113:18-114:1 (Lawrencetestimony that he would have told sales people thatstaffing expectationswere not realistic, but they did not askhim); 5/13 Trial Tr. 9:11-18 (Lawrencetestimony pre -Contract awareness of insufficient pipe stress engineers); 5/13 Trial Tr. 51:9-24 (Lawrence testimony pre-Contract awareness of insufficient design technology engineers); 6/23 Trial Tr. 75:18-77:20 (Sullivan testimony FW’s pre Contract staffing/resources data); 6/23 Trial Tr. 103:14-104:19 (Sullivan testimony percentage of new hires construction); 4/27 Trial Tr. 260:2-6 (Givens Enterprise would rely them, 20 and Enterprise actually 21 and justifiably 22 relied on these misrepresentations executing the Contract. testimony AFW’s pre-bid knowledge of engineering resour insufficiency); E-0284 (internal presentation of bid recruitment necessary personnel being “unrealistic”); 4/27 Trial Tr. 233:7-234:15 (Givens testimony pre-bid concern engineering manpower insufficiency mobilize kick off); E (Garvey email stating the “most urgent issue” “to effectively and timely staff” the PDH project team); 4/21 Trial Tr. 198 (Collins testimony knowing or recklessfalsity of staffing/resourcesrepresentations) (c) Knowing Falsity HVECs India: 5/11 Trial Tr. 188:6-24, 187:11-18 (Coffin testimony first Chennai workshare not disclosed Enterprise); 4/27 Trial Tr. 283:17- 24, 284:6-18; 285:1-4 (Givens testimony AFW’s pre-bid known risks from first workshare with India); 5/11 Trial Tr. 183:17-25 (Coffin testimony AFW knowledge India risk impacts cost and schedule); 4/27 Trial Tr. 240:8-16 (Givens testimony that he had never worked with India offices and did not of others doing so); 6/23 Trial Tr. 118:1-119:3 (Sullivan testimony FW’s quantification of risk of use of new HVECs); E-0272 (April 2013, PDH Risk Checklist noting systems, completeness, timing and accuracy of information unknown Kolkata); E-4225 43:14-19, 175:1-9, & 42:18-24 (Broussard testimony that no one within Foster Wheeler was responsible for determining whether India offices had adequate manpower or technical capabilities). (d) owing Falsity construction driven approach: 6/9 Trial Tr. 82:9 – 83:1, 92:21- 23, 111:14-18 (Bouhaine testimony that he built schedule from scratch after Project was already underway; un-integrated PDH schedule could not be construction-driven); E-0284.0057 (internal AFW admission of bid that had no existing construction group); 6/21 ial Tr. 35:5- 36:11 (Scholl testimony that construction-driven process could not be implemented while AFW lacked a construction scheduling team); 4/20 Tr. (Smith knowing falsity direct hire). 20 4/20 Trial Tr. 187:22 – 188:15 (Smith testimony intent induce with India office reps); E-0313 (AFW’s internal “Sales Strategy” presentation stating that was “perceived” the best qualified EPC contractor who could support “potentially a 2nd PDH project,” recognized that Enterprise was “concerned about S&B’s overall capabilities and capacity execute a project of this magnitude,” and instructed team “emphasize FW’s resource availability, capabilities, large project systems and experience”); 4/21 Trial Tr. 158:6-159:1 (Collins testimony that information FW’s July 2012 presentation related FW’s “full, multidiscipline EPC services” was intended “persuade Enterprise” select contractor); Ex. E-0631 (8/13 email downplaying distinction between India offices EPCO views single HVEC); 4/20 TrialTr. 255:13-21 (Smith testimony that part of sales strategy was emphasizing construction-driven schedule). 21 6/17 Trial Tr. 34:15-35:2 (Teague testimony awarding bid based AFW misreps); 5/19 Trial Tr. 207:2-19 (Hutchison testimony awarding bid based on AFW misreps); 4/29 TrialTr. 11:13-21 (Cosciotestimony awarding bid basedAFW misreps). 22 E-0034.0015, -17, -30 (FW presentation making highly detailed reps about experience and personnel); 5/4 Tri Tr. 154:16-155:5 (Coscio testimony related prior experience with Prior executing the Contract, AFW USA voluntarily and partially disclosed Enterprise information about experience available resources and capabilities 23 therefore had duty disclose all related, relevant information knew material Enterprise. AFW failed disclose (a) that had experience EPC projects including experience self performing (i.e. “direct hir construction work projects similar scale the PDH executive); (AFW presentation making detailed representations diligence meeting); 4/27 Trial Tr. 247:6 248:7 (FW made detailed representations about capabiliti draw databases thousands people); 6/17 Trial Tr. 29:22 30:5; 30:17 31:16(Teague testimony meeting with executives from London which executives discussed FW’s experience, resources, and construction expertise); 4/21 Trial Tr. 158:6 159:1 (Collins testimony that information FW’s July presentation related FW’s “full, multidiscipline EPC services” was intended “persuade Enterprise” select contractor); 5/4 Trial Tr. 154:16 155:5 (Coscio testimony indicia reliability diligence meetings); 4/26 Trial Tr. 69:22 70:30 (Collins testimony AFW intended Enterprise rely reps AFW “analyses” capabilities build faster than industry norm); 4/26 Trial Tr. 70:19 (Collins testimony reps that AFW capabilities were supported “global resources”);6/17 Trial Tr. 29:22 30:5; 30:17 31:16 (Teague testimony meeting with executives from London which executives discussed FW’s experience, resources, and construction expertise); 5/19 Trial Tr. 164:3 165:12 (Hutchison testimony Enterprise spending pre bid diligence far exceeded normal levels); 4/28 Trial Tr. 250:2 (pre bid diligence for invitation bid used same template and was maturity was used Fluor); 4/28 Trial Tr. 257:24 258:12, (FW stated the real during the diligence phase that Enterprise’s pre bid P&IDs were “in shape”); 4/28 Trial Tr. 272:13 (feedback from the real was that they were happy with the quality the invitation bid documents); 4/28 Trial Tr. 295:5 303:3 (extensive bid phase meetings with FW); 5/19 Trial Tr. 123:2 125:11 126:20 (Hutchison testimony dedicated diligence team); 5/19 Trial Tr. 123:23 125:10, 126:21 129:23 (Enterprise commissioned specialist report study PDH projected market, cost, and schedule); 5/19 Trial Tr. 130:3 (Enterprise due diligence meetings with PDH technology licensors); 5/19 Trial Tr. 130:23 133:3 (Enterprise diligence meeting with management); 5/19 Trial Tr. 133:4 137:3 (Enterprise diligence through commissioning Lummus feasibility study, process flow diagrams, and equipment lists); 4/28 Trial Tr. 240:12 241:4 (S&B reviewed Lummus feasibil studies and BEP during diligence confirm they were sufficient and complete); 5/19 Trial Tr. 138:2 146:14, 152:14 153:12 (Enterprise conducted and vetted second feasibilitystudy corroborate diligence findings); 5/19Trial Tr. 146:15 151:7(Enterprise study for ROM cost estimate corroborate diligence findings); 5/19 Trial Tr. 151:8 152:13 (Enterprise study for second ROM estimate); 5/19 Trial Tr. 153:13 154:19 (Enterprise study for third ROM estimate); 5/19 Trial Tr. 154:20 155:22 (Enterprise diligence lasted over year). 23 Seesupranotes 24 25 Project (b) that did not have sufficient qualified personnel perform the PDH Project (c) that had never work shared with the engineering centers India that intended use 24 (Foster Wheeler “Lessons Learned” document indicating that Enterprise PDH was the “[f]irst direct hire construction job for the company many years.”); (FW internal bid phase presentation that winning the Enterprise Project would “re sition the EPC arena the market, going beyond current status technology front end engineering company”); 4/26Trial Tr. (Collins testimony discussingfuture build constructiongroup); 5/10 Tr. Transcript 183:13 184:1 (Parks testimony using Project reposition EPC, disclosed); 5/10 Trial Tr. 221:18 (Parks testimony direct hire); (Farmer email “historically never are EPC” and “new role”); (FW internal presentation May EPC track record); 4/28/2022Trial Tr. 29:1930:2(Givens testimony knew would have difficulty executing Project); 5/12 Trial Tr. 95:18 97:8 (John Lawrence testimony that “Foster Wheeler historically was FEED contractor”); 6/3 Trial Tr. 260:14 261:9 (Farmer testimony concern resulting from FW’s “inexperience with EPC projects”); (FW Nield Presentation stating “has succeeded institutionalizing nor building EPC capabilities); 4168.0004 (Naylor March rategy Paper indicating “no experience” direct hire “nor appetite”; “JV and partnering only); (Coffin Performance Review discussing attempted “transformation” into EPC company and 2014); (Sept. Presentation stating PDH was “first time” doing “direct hire construction”); (May Andy Allen Strategic Growth Report); (Eubanks Depo.) 82:23 83:20 (Eubanks, head construction department, management discussions FW’s direct hire weakness during preb phase); (Eubanks Depo.) 108:22 109:1 (Eubanks questioned whether had organizational knowledge what took execute construction PDH scale). 25 4/28 Trial Tr. 280:8 281:4 (Coscio testimony nondisclosure staffing issues); 4/2 Trial Tr. 302:21 303:3 (Coscio testimony failed disclose that the Project would staffed with new engineering hires); (Broussard email AFW having resource problems bid; will “big challenge”); (Broussard email res ourceproblems “even without the new work”); 103:5 (Broussard testimony that Foster Wheeler was having difficulty finding resources before even before bidding Enterprise PDH); 8/14/19 Andrush Depo. 101:4 (FW would maintain staff job being bid because did have the work yet); 4/21/2022 Trial Tr. 198:4 (Collins testimony resource insufficiency being internally known risk); (Lawrence’s March 2013 communication that Enterprise’s staffing expectations for Foster Wheeler were “not realistic”); 5/12 Trial Tr. 113:18 114:1 (Lawrence testimony that would have told sales people that staffing expectations were realistic, they did ask him); 5/13 Trial Tr. 9:11 (Lawrence testimony pre Contract awareness insufficient pipe stress engineers); 5/13 Trial Tr. 51:9 (Lawrence testimony pre Contract awareness insufficient design technology engineers); 6/23 Trial Tr. 75:18 77:20 (Sullivan testimony FW’s pre Contract staffing/resources data); 6/23 Trial Tr. 103:14 104:19 (Sullivan testimony percentage new hires construction); 4/27 Trial Tr. 260:2 (Givens testimony AFW’s pre bid knowledge engineering resource insufficiency); (internal presentation bid recruitment necessary personnel being “unrealistic”); 4/27 Trial Tr. 233:7 234:15(Givens testimony pre bid concern engineering manpowerinsufficiency mobilize kick off). 26 the PDH project (d) that the two engineering centers India that AFW USA intended use the PDH project had never work shared together, which would require currently existent technological integration among three offices for the Project; 27 (e) that AFW USA was aware of, and had control over, the India offices’ manpower availability staffing for the Project; 28 and that AFW USA had developed construction driven plan schedule for PDH 29 AFW USA knew that Enterprise was unaware this information and that Enterprise did have 26 (Chennai workshared with Houston for first PDH); 2480 (7/25/13 Risk Register noting Chennai lack familiarity with Houston standards, specifications, practices, e.g., ProjectWise, and Sharepoint); 5/11 Trial Tr. 188:6 187:11 (Coffin testimony first Chennai workshare disclosed Enterprise); 4/27 Trial Tr. 283:17 284:6 285:1 (Givens testimony AFW’s pre bid known risks from first workshare with India); 5/11 Trial Tr. 183:17 (Coffin testimony AFW knowledge India risk impacts cost schedule); 4/27 Trial Tr. 240:8 (Givens testimony that had never worked with India offices and did others doing so); 6/23 Trial Tr. 118:1 119:3 (Sullivan testimony FW’s quantification risk use new HVECs); (April Risk Checklist noting systems, completeness, timing and accuracy information unknown Kolkata); 43:14 175:1 42:18 (Broussard testimony that within Foster Wheelerwas responsible for determiningwhether Indiaoffices had adequatemanpower technical capabilities). 27 Ex. (4/14 email noting first workshare between Kolkata Chennai risked productivity schedule impacts); Ex. (6/13 Project Planning document noting major risks for operational issues absent technological integration offices); 5/11 Trial Tr. 187:11 188:10 (Coffin testimony disclosure Enterprise). 28 5/11/2022 Tr. Transcript 177:8 (Coffin testimony India managing own manpower); 5/11/2022 Tr. Transcript 171:12 (Coffin testimony India deciding whom they would staff); 5/11/2022 Tr. Transcript 172:7 (Coffin testimony India deciding whether staff would work part full time); Ex. (Brad Broussard Depo.) 43:14 175:1 42:18 (No within AFW USA was responsible for ensuring India had sufficient manpower evaluating technical capabilities India engineers); 5/11 Trial Tr. 187:19 188:9 (Coffin testimony disclosure Enterprise); 4/29 Trial Tr. 20:11 (Coscio estimony that represented India resources were skilled and abundant); 4/29 Trial Tr. 22:1 (Coscio testimony representingthat India team would full time,dedicated PDH). 29 6/9 Trial Tr. 82:9 83:1, 92:21 111:14 (Bouhaine testimony that built schedule from scratch after Project was already underway and that the integrated PDH schedule could construction driven); (internal AFW admission bid that had existing construction group)4/28 Tria Tr. 281:9 282:4, (AFW never disclosed pre bid assessment risk “claiming environment since inception,” “significant engineering recyclingand project slippages”). equal opportunity discover and AFW USA failed disclose this information order induce Enterprise execute the Contract. 30 Enterprise would not have executed the Contract had known this information. 31 Enterprise’sBreach of ContractClaim Against AFWUSA Conclusions of Law The Contract unambiguously obligated AFW perform the Project accordance with a number of standards andrequirement including: Quality Standards: employ “sound engineering practices”; employ “sound construction practices”; employ standard of care, skill and diligence such would normally be provided by experienced engineer”; perform “in a d workmanlike manner”; and “follow generally accepted industry practices.” Personnel Standards: employ “only personnel who are reputable, qualified, and have established record of successful performance their respective engineering professions and “provide sufficient numbers of qualified personnel complete the Services accordance with the Project Execution Plan and Schedule,” which turn established milestone dates including a target dateformechanical completion December 2015. 30 E-0313 (AFW’sinternal “Sales Strategy”presentation stating that was “perceived” the best qualified EPC contractor who could support “potentially a 2nd PDH project,” recognized that Enterprise was “concerned about S&B’s overall capabilities and capacity execute a project of this magnitude,” and instructed team “emphasize FW’s resource availability, capabilities, large project systems and experience”); 4/21 Trial Tr. 158:6-159:1 (Collins testimony that information FW’s July 2012 presentation related FW’s “full, multidiscipline EPC services” was intended “persuadeEnterprise” select contractor); 4/29 TrialTr. 13:2-16:8) (Coscio testimony AFW not disclosing staffing insufficiencies until Oct/Nov. 2013 connection with scheduling efforts); 4/29 Trial Tr. 38:5-39:23 (Coscio testimony EPCO access beginning late May 2013 being limited one floor and no line of sight into staffing gaps below lead level); E-0246.0003 (FW internal admission that needed PDH Project light of “current high turnover of personnel; undisclos Enterprise); 4/29 Trial Tr. 40:7-18 (Coscio testimony no direct access India until 1-2 engineers came Houston for training fall ‘13);Ex. E-0631 (8/13 email downplaying distinctionbetween India offices EPCO views single EC); 4/20 Trial Tr. 255:13-21 (Smith testimony that part of sales strategy was emphasizing construction-driven schedule). 31 See supra notes 21-22. Timeliness Standards: “diligently perform the Services achieve Mechanical Completion later than the [target date of] December 2015”; and “put forth commercially reasonable best efforts perform the Services accordance with the” hedule Exhibit which contains target date for mechanical completion December 2015. the Court has previously recognized, these provisions required AFW USA achieve mechanical completionwithin reasonabletime. 32 The Court has previously uled that for breach these provisions actionable breach contract the context the performance engineering, procurement, and construction obligations, the conduct giving rise the breach must have been grossly negligent. 33 Conduct grossly negligent the actor was consciously indifferent extreme 34 risk posed conduct Multiple acts ordinary negligence maycollectively constitute gross 35 negligencewhen consideredtogether. The Contract provides for liability for indirect, special, incidental, punitive, exemplary, and consequential damages for claims willful misconduct.Willful misconduct occurs when actor intentionally deliberately engages improper behavior mismanagementwithout regard forthe consequences acts omissions. 36 32 Order (2/27/21) 33 Order (4/8/21). [For the avoidance doubt, Enterprise states that disagrees with this rulingpreserves argument the contrary.] 34 HaulInt’l, Inc. WaldripS.W.3d(Tex. 2012). 35 McPhearson Sullivan S.W.2d (Tex. 1971); Hamilton Texas Oil Gas Corp. S.W.2d 323 (Tex. App. Paso writ ref’d n.r.e.), disapproved other grounds Valence Op. Co. Dorsett S.W.3d (Tex. 2005); Aetna Cas. Sur. Co. Marshall S.W.2d 896, (Tex. App.Houston [1st Dist.] 1985), aff’d S.W.2d (Tex.1987). 36 Apache Corp. Castex Offshore, Inc. S.W.3d (Tex. App.Houston [14th Dist.] pet. filed); see also Vac Serv. Co. Escobedo S.W.3d (Tex. VacServ. Co. EscobedoS.W.3d(Tex. 2020). Section the Contract unambiguously prohibited AFW from arging Enterpriseforprofit markupother than set forth Exhibit theContract. Under Exhibit off premises engineering work subcontractors was reimbursed cost with markup. Anychange orders, likewise, were include any profit mark Under Section the Contract, all work performed pursuant the work order executed Enterprise and AFW USA May 2013 deemed have been performed pursuant the Contr and subject standards and requirements. Findings Fact AFW breached the Contract’s Quality Standards throughout the Project. Many breaches were pervasive, that they affected the entirety AFW performance, including failure accurately schedule and plan all phases engineering, procurement, and construction; 37 failure prioritize and complete engineering and procurement tasks order support efficient construction schedule; 38 failure employ indust standard project 37 6/9 Trial Tr. 82:9 83:1, 90:3 93:23, (Bouhaine testimony that built schedule from scratch after Project was already underway and that project worked from “90 day” schedules for months); (Valencheck’s list projec controls and planning deliverables that should have been place early 2014 were not); 4275 (Oyetunji Dep.) 162:19 164:2 (third party scheduling consultant Oyetunji testifying that based his schedule review, the project was operating with comprehensive plan February 2015); (Oyetunji Dep.) 167:13 168:8 (Oyetunji testifying that AFW’s schedule was sufficiently granular plan work); 6/23 Trial Tr. 143:12 144:16 (Sullivan testimony project schedule); (Canni findings statingthat “current schedule shows almostall critical path activities “red” (late)”). 38 5/13 Trial Tr. 85:1 (Lawrence testimony: “FW engineering did want interface with FW’s construction management the PDH Project”); 5/13 rial Tr. 85:21 86:24 (Lawrence testimony re: construction’s frustration with engineering’s lack “urgency” pushing construction dates); (Farmer’s April complaints about lack input from construction into engineering); 5/13 Tria Tr. 309:12 (Farmer testimony misalignment between engineering and procurement pipe material procurement); 01446 (missing next sequence spools pipe rack causing inefficiencies construction); (multiple prioritizations ools late March 2015); (Canning findings stating that “[Home Office] construction engineering/planning missing, project being driven from site without alignment engineering and [supplychain management] delivery plans,” and“Project execution management tools (including technical document index, construction work packages, and functioning change and risk management program and instead employing tools with which AFW was inexperienced and which did function properly; 39 failure properly coordinate with and manage work performed high value engineering centers; 40 failure efficiently and accurately manage materials, both with respect procurement and with respect site plan broken between and C”); (Canavan findings stating that“the linkages between schedules seem poor,” “the team working silos, with lines communication between site and home office,” “the engineering and rocurement schedules don’t seem support the Construction schedule,” and the construction “almost independen[t] Project Controls Engineering procurement”); (Eubanks Depo.) 55:9 (engineering and procurementrepeatedly not takingseriou slyconstruction’s required site dates). 39 (Identifying over errors the line list, and describing the line list “garbage”); (January email stating that current technical document index “does answer the mail wha needed for effectively manage the Project”); (describing the equipment list “ass like”); 6/9/22 Trial Tr. 17:6 19:18 (Shutestimony re: lying Enterprise about using Enterprise provided instrument index check, and the instrument index having missing items months later); (Canning cold eye review findings stating AFW failed employ Work Breakdown Structures (“WBS”) and Construction Work Packages (“CWP”)); (AFW internal white paper finding AMUSE, the procurement system which was supposed used the project, ineffective and should used major projects like PDH which require tracking bulk materials); (Procuremen cold eye review finding that AFW failed use AMUSE any other system track steel and pipe deliveries); (November Component Schedule showing nearly half all equipment would received after construction’s required site date); 6/2 Trial Tr. 138:17 140:1 (Sullivan testimony impact having technical document index); 6/23 Trial Tr. 144:17 149:21 (Sullivan testimony absence construction work packages); 6/23 Trial Tr. 151:17 152:8 (Sullivan testimony change management). 40 5/13 Trial Tr. 34:24 35:3 (Lawrence testimony HVEC engineers being underutilized despite training paid for Enterprise); 0944 (FW “screwed” because poor HVEC coordination between process and systems); 5/13 Trial Tr. 40:21 (Lawrence testimony absence workshare plan); (Coffin email absence Houston reps traveling India posing risk project); 5/11 Trial Tr. 233:19 234:6 (Coffin testimony that until USA directed India form Oversight Team, oth changes were made enhance quality control); 5/12 Vol. Trial Tr. 90:1 (no full coordinator for workshare after 12/13); 6/23 Trial Tr. 126:3 131:21 (Sullivan testimony consequences coordination with HVECs); Ex. (Oates ema India complaints lack communication);Ex. (Kahre and Crown emails listing issues with India, including lack defined processes); Ex. 2037 (Kahre email ISOs revised India whilepipe fabrication, lack control point Houston). management; 41 failure incorporate constructability insights into the design; 42 and consistently safety program and record. 43 More fundamentally, AFW own self assessments reveal that the quality work, throughout all phases and disciplines engineering, procurement, construction well overall projectmanagement was substantially below what would expected reasonably competent EPC contractor. 44 Other breaches were more 41 (AFW unaware that next sequence spools had yet arrived); (AFW internalwhite paper findingAMUSE, the procurement system which was supposed used the project, ineffective and should used major projec like PDH which require tracking bulk materials); (Procurement cold eye review finding that AFW failed use AMUSE any other system track steel and pipe deliveries); (November Component Schedule showing nearly half all equipment would received after construction’s required site date); (Canavan findings stating that the construction group was “having difficulty finding out what ha[d] been delivered (in particular items they are waiting for), when will arrive” and that AFW construction managers were “spending looking for materials, which detract[ed] fromtheir primary function”). 42 (Springer email stating there were “no” constructability inputs); 5/5/22 Trial Tr. 118: 120:9 (Springer testimony criticizing AFW for following constructability “best practices”); (Germany Dep.) 56:12 (Germany testifying that Foster Wheeler’s construction group did care about engineering design issues); 2655 (Canning cold eye review findin connection between and was broken); (Canavan cold eye review findingthat “thelinkages between schedules seem poor” and “theteam working silos, with lines communication between site and home office”); (AFW root cause analysis spring failure identifying lack communication the cause for the failure); (Eubanks Depo) 133:9 134:3 (project management was going down road “we’ll design and build type situation”); 6/23 Trial Tr. 243 (Sullivan testimony examples increased construction costs due lack constructability communications between andC). 43 (February internal AFW report listing AFW’s incident rate three times higher than target); (February 2015 internal AFW report stating that “construction slowed/stopped unsafe acts, accidents catastrophic failures”); (Hannah Sesay November safety report listing “red” citations which are defined “failures comply with legal obligations and/or failure mitigate significant hazard driving performance”); 6/10/22 Trial Tr. (Ibbs testimony re: project safety, testifying that based the issue identified AFW the Sesay report PDH “was horrible project from the safety point view”); Ex. (Eubanks Depo.) 224:20 227:22 (FW construction group was learning organization,lacking “real safety program”). 44 (Canavan cold eye review); (Canning cold eye review); (Ware cold eyereview procurement); (February 2015internal project report). localized particular types phases work, including substantially untimely desi critical large borereactor areapipe spools,which turn led what AFWadmits wasmaterially sequence construction work the most complex area the Project; 45 grossly mismanaged welding program with rejection rates far excess the industry norm quality control and 46 failure maintain necessary quality related documentation failure coordinate with including providing necessary design and prioritization information to, the pipe fabricator assure that pipe was fabricated and delivered the order necessary support efficient installation; 47 45 6/3 Trial Tr. 301:9 302:17 (Farmer testimony need issue reactor area MTO CB&I the end March 2014); (concern about pipe MTOs pushing past Marc pipe stress delays); 6/3 Trial Tr. 272:7 273:13 (Farmer testimony re: excessive mistakes from pipe stress engineers working reactor area pipe); (June plan for reactor area construction called for pre staging large bore pipe before setting reactors and erecting steel); (communication abandoning plan pre stage large pipe late arrival pipe); (June CB&I had ordered large 321H material because only preliminary drawings hadbeen issued FW) 6/7Trial Tr. 14:3 (Farmer testimony pipe stressforreactor pipe still complete June 2014); 6/7 Trial Tr. 18:3 19:9 (Farmer testimony pipe stress changes reactor MTO, and other errors, through the end July 2014); 02973 (pip stress changing wall thickness riser spools July 2014); (final revision reactor MTO August 2014); (CB&I released for lar