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1 PILLSBURY WINTHROP SHAW PITTMAN LLP n
2
6
2
JOHN
Four
R. HEISSE
Embarcadero
SBN 134964
Center, 22nd Floor
EPERIPR CO
COUNTY
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T O ALIFOR
OF RIVERSIDE
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1
zi San Francisco, CA 94111- 5998 ao
3 Telephone:
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415. 983. 1000
415. 983. 1200
MAR 02 2022 AV / o
5acsimile:
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IN
1.
co
ELAINE Y. LEE SBN 293452
co
5 725 S. Figueroa Street, 36th Floor
0 Los Angeles, CA 90017- 5524
6 Telephone: 213. 488. 7100
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213. 629. 1033
U 7Facsimile:
Attorneys for Defendants
0 8 CLARK CONSTRUCTION GROUP- CA, LP
and CARLOS GONZALEZ
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
10
YUC
COUNTY OF RIVERSIDE, PALM SPRINGS BRANCH
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T.
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NEAL ELECTRIC CORPORATION, a Case No. PSC1805941
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a California corporation,
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fliROPOSEDI JUDGMENT ON
Plaintiff, ARBITRATION AWARD
0
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VS.
6"
Dept: PS2
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CLARK CONSTRUCTION GROUP- CA, LP, a
17 California limited partnership; TRAVELER' S
a CASUALTY & SURETY COMPANY OF
AMERICA, a Connecticut corporation;
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ZURICH AMERICAN INSURANCE
03 COMPANY, an Illinois corporation; FEDERAL Case Filed: October 1, 2018
si 19
INSURANCE COMPANY, a New Jersey
corporation; FIDELITY AND DEPOSIT
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COMPANY OF MARYLAND, a Maryland
corporation; the COUNTY OF RIVERSIDE, a
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5. public entity; CARLOS GONZALEZ, an
individual; and DOES 1 through 100, inclusive,
EL
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Defendaljtc.
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aRefrtign] JUDGMENT ON ARBITRATION AWARD
4867- 7217- 5377
1 In accordance with the Court' s February 23, 2022 Minute Order: Hearing on Petition re:
2 Arbitration Award, denying the Petition to Vacate Arbitration Award and granting the Petition to
3 Confirm Arbitration Award, the Final Award issued by the Arbitration Panel in American Arbitratior.
4 Association Case No. 01- 18- 0004- 1066, Clark Construction Group- CA LP v. Neal Electric
5 Corporation, dated August 11, 2021, a copy of which is attached hereto as Exhibit 1, is hereby
6 confirmed in all respects, and it is hereby ORDERED, ADJUDGED, and DECREED as follows:
7 1. Clark Construction Group- CA, LP(" Clark") shall have and recover from Neal
8 Electric Corporation(" Neal") damages of$ 9, 295, 159;
9 2. Clark shall further have and recover from Neal prejudgment interest on the total
10 amount of the award from August 11, 2021, the date of the Final Award, through the submission of
11 this proposed judgment, calculated at the statutory rate of 10%, totaling$ 514, 417. 02. See Cal. Civ.
12 Code § 3289; Britz, Inc. v. Alfa Laval Food& Dairy Co. ( 1995) 34 Cal. App. 4th 1085, 1106- 07; and
13 3. Neal shall take nothing against Defendants Clark and Carlos Gonzalez.
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Dated: 3 2022
16 Judg6 f the Supe or Court
17
Ronald L. Johnson
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ffifiePeST91 JUDGMENT ON ARBITRATION AWARD
4867- 7217- 5377
EXHIBI' I 'A
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AMERICAN ARBITRATION ASSOCIATION
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CONSTRUCTION INDUSTRY ARBITRATION TRIBUNAL
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Case No. 01- 18- 0004- 1066
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In the Matter of the Arbitration Among:
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CLARK CONSTRUCTION GROUP- CA LP
FINAL AWARD
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Claimant and Counter-
Respondent
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and
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16 NEAL ELECTRIC CORPORATION
17 Respondent and Counter- )
Claimant
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20 WE, THE UNDERSIGNED ARBITRATORS, having been designated in accordance with
21 the arbitration agreement dated as of May 18, 2015, issue this FINAL AWARD, as follows:
22 This matter came on before us, the undersigned Arbitrators, forhearing on November 30
23 and December 1- 11,2020, and February 4 and 8- 18,2021, pursuant tothe Procedures for Large,
24 Complex Construction Disputes of the Construction Industry Arbitration Rules(" Rule" or" Rules")
25 of the American Arbitration Association (" AAA"). Appearing for Claimant and Counter-
26 Respondent Clark Construction Group- California LP (" Clark") were John R. Heisse, Deborah B.
27 Baum and Elaine Y. Lee of Pillsbury Winthrop Shaw Pittman LLP; appearing for Respondent and _
28 Counterclaimant Neal Electric Corporation(" Neal") were Jeff S.Hood, Laurence R. Phillips and
1 FINAL AWARD
1 Mike R. Nolan of Procopio Cory Hargreaves& Savitch, LLP.
2 On May 28, 2021, the Panel issued an Interim Award. Both parties subsequently served
3 requests for modification of the award under Rule R- 51. While Neal opposed Clark' s request,
4 Clark' s response to Neal' s request essentially conceded that the award should be modified as
5 requested by Neal. The Panel issued a ruling on July 2, 2021 denying Clark' s request to modify
6 the award and granting Neal' s request.
7 Sections I-VIII of the Interim Award are set forth verbatim in Sections I-VIII, below,
8 except for minor typographical corrections not affecting the merits of the award and revisions to
9 Sections VI.A.2. a. 6 and VI.A.2. d( pp. 42, 44, below) to reflectthe agreed- upon modification of the
10 Interim Award requested by Neal. As the modification affects the principal amount of damages
11 awarded, Section VII( pp. 68- 69, below) has also been modified to reflect the revised amounts.
12 The Interim Award established a schedule for the submission of briefs regarding claims for
13 attorneys' fees, costs, and interest. The last brief was received on July 16, 2021, and the hearings
14 were formally declared closed as of that date. Clark seeks attorneys' fees and various expenses.
15 There was no claim for interest. Our ruling on these claims is set forth in Section IX, below.
16 I. INTRODUCTION
17 This matter arisesout of the construction of a new county jail in Indio,CA. Clark was the
18 successful low bidder to construct the project, while Neal was chosen as Clark' s electrical
19 subcontractor. Construction began in mid-2015.
20 The project encountered difficulties from the outset. Numerous design issues were
21 discovered that substantially impacted and delayed work on the project, including that being
22 performed by Neal. The project schedule, including the completion date, was revised multiple
23 times. At the same time, the project owner, the County of Riverside(" County"), was refusing to
24 issue change orders compensating Clark and itssubcontractors for the economic impact of the
25 design issues.
26 The design issues affected the sequence and manner in which the project was built. To
n
27 meet the requirements of the changed conditions on the project, Clark required Neal to perform
28 work out of sequence and in various parts of the projectsimultaneously. In this regard,Clark raised
2 FINAL AWARD
1 concerns that Neal was not providing adequate manpower to the project and leaving available work
2 undone. Neal, for itspart, took the position thatit would only perform work that was " efficient"
3 for it to do and assertingthat the work Clark was asking it to perform was not delaying the ultimate
4 completion of the project.
5 Ultimately, in the late summer and fallof 2018, Neal chose to reduce its onsitemanpower
6 even in the face of Clark' s demands that it increase its workforcein order to complete then- available
7 work. When Neal refused to do so, Clark issued a three- day noticeto cure on September 27, 2018,
8 requiring Neal to increase its manpower or face termination. When Neal refused to do so, Clark
9 terminated Neal' s subcontract and retained another contractor to complete Neal' s scope of work.
10 This arbitration ensued.
11 II. THE PARTIES' CLAIMS
12 As set forth on p. 40 its Closing Brief, Clark seeks the following:
13 Summa of Claim Amounts Asserted b Clark
Description Claim Amount
14
Claims for Subcontractor or Vendor Costs
la Morrow Meadows Costs Invoicedto Job# 2518402 14, 490, 158
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lb less: Morrow Meadows Amounts Charged to Others $ ( 1, 179, 467
lc less: Morrow Meadows Extended GCs per TIA7 400,040
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id Additional Costs from Other Subcontractors 3, 839, 904
Subtotal:Subcontractor Claims 16, 750, 555
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2 Other Claims and Credits
18 2a Clark Management of Neal
Cost of Additional 188, 224
2b Clark Settlement with Owner for NealClaims 1, 073, 000
19 2c Advances to Neal on PotentialSettlementwith Owner S 115, 816
Subtotal:Other Claims 768, 960
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3 Contract Balance Reconciliation
21 3a less:Neal Outstanding Contract Balance( through PA 33) $( 1, 272, 216
3b less:Neal Retention Outstanding 988, 962
22 3c add: Owner Reduction to Electrical
Scope 753, 073
3d less:Credit forOwner Change Order Additions 262, 680
23 Subtotal: Contract BalanceReconciliation 1, 770, 785
Claim Amount Asserted by Clark: S 14. 210. 810
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In addition to the foregoing sum, Clark seeks a 10% markup as allowed under the
25
subcontract, bringing the total to$ 15, 631, 891. Finally, Clark asserts that it is entitled to recover an
26
additional $ 438, 686. 84 indeductive change orders, net of amounts to which itconcedes Neal is
27
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3 FINAL AWARD
1 entitled for change orders for work performed prior toNeal' s termination. This brings the total
2 amount claimed by Clark to$ 16, 070, 577.
3 Neal, on the other hand, contends that itstermination was wrongful, and that it isentitled
4 to recover the reasonable value of the work it performed prior to termination. As set forth on p. 78
5 of its Closing Brief, Neal calculates its damages as follows:
6 Unpaid balance for subcontract work completed 1, 132, 773
1, 248, 698
7 Extended general conditions
Lost productivity 3, 460, 229
8
Unpaid change orders 1, 336, 508
9
TOTAL 7, 178, 208
10
11 III. ISSUES PRESENTED
12 Fundamentally, although the testimony was lengthy and the exhibits numerous, there are
13 really only two issues to be decided:
14 First, was Clark' s termination of Neal justified under the terms of the subcontract and the
15 facts presented?
16 Second, what are the damages recoverable by each of the parties in light of our decisionon
17 the first question?
18 IV. DETAILED STATEMENT OF FACTS
19 A. The Project
20 In February 2015 the County of Riverside (" County") issued a bid package for the
21 construction of anew county jailin Indio, CA. ( Exs. 2001, 2002.) The project consisted of a new
22 516, 000 sq.ft. Type II detention center to be constructed in two phases: Phase I called for the
23 construction of a new four- level housing building consisting of two mirror- image housing units and
24 a three-level( one below grade) support building. Phase II consisted of demolition of the old jail
25 and site work. Substantial Completion of Phase I was scheduled to occur 900 calendar days from
26 the commencement of work on July 6, 2017, or by December 22, 2017. ( Id.) The project plans
27 were designed by HOK.
28
4 FINAL AWARD
1 When bids were opened, Clark was the successful bidder at a contract price of
2 $ 274, 917, 000. (Ex. 2006.) It did not self-perform any work( Gallivan, Transcript[" Tr."] 1209: 19-
3 21), instead subcontracting all construction work to subcontractors, including Neal, which was
4 responsible for theelectrical,communications( conduit infrastructureand power connections), and
5 MATV scope, and electrical work required for the electronic safety and security and fire alarm
6 systems. ( Ex. 8.) Neal' s subcontract price was$ 19, 448, 580. (
Id.)
7 B. Pre- Termination
8 The project was troubled from the outset. From the contractors' perspective, the plans were
9 replete with errors and omissions affecting their ability to construct the project as planned, and the
10 County was slow to recognize claims forthe additional costs incurred. As a resultof the design
11 deficiencies, Clark and itssubcontractors issued nearly 4, 000Requests for Information(" RFIs").
12 ( Gonzalez, Tr. 163: 15- 24.)This, in turn, affected the schedule developed by Clark, which required
13 regular revisions to reflectthe delays being incurred. (Gonzalez, Tr. 159: 4— 160: 18.)All of these
14 circumstances combined to create tensions between Clark and itssubcontractors, including Neal,
15 which felt that it was being asked to perform work out of sequence, creating inefficiencies and
16 added costs for which it was not being paid. ( See, e.g., Ballow, Tr. 2598: 4- 24;Sutherland, Tr.
17 2377: 5- 15.)
18 One of the primary causes of delay related to the design of the foundation in the basement
19 where the Support Building meets the Housing Building, known at the" G. 5" line. As explained
20 by Clark' s project executive, Carlos Gonzalez, the foundation along that line could not be built as
21 designed because itcould not accommodate the concrete, rebar, ductwork, conduits, plumbing
22 pipes and sprinkler pipes inthe space allocated to itby HOK' s design. ( Gonzalez, Tr. 159: 4—
23 160: 4.) By the end of 2016 when these conflicts were finally resolved and concrete had reached
24 the firstlevel of the Housing Building, the project was about six months behind schedule. ( Id. at
25 161: 19— 162: 7.)
26 Ultimately, in March 2017, Clark submitted a change order request to the County for costs
27 incurred due to the design errors at the G. 5 line,
including delay- relatedcosts. (COR 260, Ex. 27.)
28 COR 260 sought costs incurred by Clark and itssubcontractors due to the delays and impacts
5 FINAL AWARD
1 detailed in Time Impact Analyses(" TIAs") 1- 4 and sought a time extension of 176 days. ( Exs. 22,
2 27 at p. 23.)TIAs 1- 4 included claims for overtime and extended general conditions costs on Neal' s
3 behalf of$ 601, 253. The overtime costs included in COR 260 were based on proposed change
4 orders (" PCOs") submitted by Neal and the extended general conditions costs were based on
5 information provided by Neal' sthen- project manager, Robert Liles. ( Ex. 27 at p.975; Gallivan,
6 Tr. 1093: 7 — 1098: 2;Exs. 1027, 1029, 1031, 14.) Despite the fact that the amounts claimed on
7 Neal' s behalf in TIAs 1- 4were developed with Neal' s input, Neal refused to certify the claim
8 assembled on itsbehalf by Clark as called forby the terms of the subcontract.( See, Exs. 22, 23;
9 Gallivan, Tr. 1100: 3— 1102: 3.) However, because the County initially refused to acknowledge that
10 the problems causing the delays were unforeseeable, the County rejected COR 260 and instead
11 directed Clark to accelerate itswork to make up the losttime. ( Gonzalez, Tr. 161: 1- 22; see Ex.
12 2086.)
13 Although Clark was able torecover a portion of the delays incurred due to the G.5 issue
14 ( Gonzalez, Tr. 162: 11 — 163: 7),further delays were incurred in 2017 as a resultof problems with
15 the design of the curtain wall for the Housing Building. Normally the curtain wall would be
16 installed as the concretestructure was completed. However, the inspector for the State Fire Marshal
17 rejected the detail forthe connection of thecurtainwall to the structurebecause, in his view, it did
18 not meet the requirements for fireproofing of thespace between floors. (Id. at164: 7- 21.)Before
19 the curtainwall could be erected HOK needed multiple iterationsof a revised design to obtain the
20 Fire Marshal' s approval of a revised connection detail.( Id. at 165: 2 — 167: 19.) This, in turn,
21 resulted in an additional six months of delay to the project, pushing the completion date to the Fall
22 of 2018. ( Id. at 168: 12- 19.)
23 At the same time, Neal was encountering issues of its own. One of its responsibilities was
24 to provide input to the Building Information Modeling(" BIM") process. BIM is a computer- based
25 three- dimensional representation of the project structures to enable the various subcontractors on
26 the project to coordinate their work and insure that there are no conflicts among each
27 subcontractor' s work given the limited space for such things as electricalconduits, HVAC ducts
28 and plumbing piping. ( Id. at194: 2— 195: 6.) One of the items Neal was required to include in its
6 FINAL AWARD
1 BIM input was the location of all penetrations through the concrete slabs and walls to avoid
2 conflicts with rebar or other structural elements and to enable sleeves to be placed before the
3 concrete was poured. However, by its own admission, Neal failed to include hundreds of sleeves
4 in itsBIM input. (Ballow, Tr. 2753: 20— 2755: 24.) As a result, Neal was required to issue an RFI
5 for each missed sleeve to obtain permission from the structural engineer to core the slab, including
6 x-rays of the location to insure the core doesn' t cutinto rebar in the slab. (
Id. at 2756: 1-
providing
7 14.) In Neal' s own words, theirBIM team" screwed up" and this" error cost us a ton of time and
8 money in thefield." (Ex. 1108, p. 1.)This issue continued to require Neal to spend time and effort
9 to address the BIM errors as lateas the end of 2017. ( Id.)
10 Neal also had significant turnover of its project managers. By the time work on the project
11 reached the original Phase I Substantial Completion date( December 22, 2017), Neal had already
12 had four different project managers, of a total of five by the time it left the project in October 2018.
13 ( Gallivan, Tr. 977: 25— 978: 6; Robbins, Tr. 1370: 18- 24; Hoelscher, Tr. 1968: 17— 1969: 2; Ex. 1335
14 [ French Report], p. 14, Fig. 2.) 1
15 As the project neared the end of 2017, Neal' s parent company, Meruelo Enterprises, Inc.
16 (" Meruelo"), asked itsvice president of operations, Jaret Sutherland, to become involved in the
17 project. ( Sutherland, Tr. 2353: 7- 23.) Sutherland, who was first employed by Meruelo inJune
18 2017, acknowledged that he was hired to make Meruelo more profitable. ( Id.at 694: 24— 695: 5.)
19 Although he was never directly employed by Neal, he was the person who had ultimate decision-
20 making authority for Neal on the ECDC project. ( Id.at 694: 15- 17;695: 6- 8.)
Sutherland was aware
21 that Neal was incurring substantial costs in excess of the amounts it had budgeted for the project,
22 particularly in labor costs. (Id. at 702: 18— 704: 9; Ex. 1085.)
23 A recurring concern on Clark' s part was that Neal was not providing adequate manpower
24 to meet the project' s needs, and in particular that there was available work for Neal to perform but
25 Neal was not providing sufficient workmen to complete the available work. In early November
26 1
Clark was not without its own project management issues. It replacedits projectsuperintendent,
Chuck Palmer, at the timetheCounty demanded that Clark acceleratethe work to make time lostdue to the
27
delays caused by the design issues( see discussion above at p. 6: 7- 10), because Gonzalez felt he was skeptical
of Clark'sabilityto recovertime and was not providing adequate leadership to theprojectteam. ( Gonzalez,
28
Tr. 405: 8- 23.)
7 FINAL AWARD
1 2017, Clark and Neal began discussing the need for Neal to add additional manpower to meet the
2 project schedule. ( Ex. 40, p. 2.) By letter dated November 6, 2017, Neal proposed that its existing
3 crew of 43 electricians should begin working 10 hours a day six days a week, and an additional
4 eight hours on Sundays(" 6- 10s andan 8") for aperiod of seven weeks. ( Ex. 1112.) Neal' s proposal
5 included one additional crew to deal with " hot issues" as they may arise.( Id.) In return, Neal
6 sought of over$ 1. 6million. ( Id.) Clark' s response was swift: "Neal is required to meet
payment
7 the schedule, which— as outlined in your contract— may be adjusted over the course of the project.
8 Neal is directed to take whatever steps necessary to meet the project schedule" developed by Clark.
9 Clark' s response further noted that"there is plenty of available work for additional crews" but that
10 " Clark will not dictate your labor strategy; take whatever steps necessary to meet the project
11 schedule." ( Ex. 1501, p. 1.)
2
12 Nevertheless, the parties continued to meet to address the project's manpower needs. At a
13 meeting on December 18, 2017 at Clark' s corporate offices among various representatives of Clark
14 and Neal, an agreement was reached whereby Neal would increase its existing manpower count
15 from 73 electricians to 83 electricians for a period of 30 days. Clark agreed to work with Neal to
16 present Neal' s costs to the County incurred as a result of the schedule delays and the need for
17 additional manpower. Further, Clark agreed that costs due to Clark' s actions or inactions would be
18 equitably compensated in accordance with the parties' contract. Finally, Clark agreed to process a
19 Neal- requested change order for providing additional temporary power to the project. (Gonzalez,
20 Tr. 215: 20 — 218: 16, 219: 25 — 221: 4.) These agreements were memorialized in a letterto
21 Sutherland from Clark' sSenior Vice President, Tony Gallivan, dated the same day. ( Exs. 43, 44.3)
22 In addition to memorializing the specificagreements reached during the December 18 meeting, the
23 letter forwarded a copy of the then- current project schedule, and an excerpt of that schedule
24 showing only Neal Ex. 44;
activities. ( Gonzalez, Tr. 218: 21 — 219: 22.) Sutherland responded via
25
2
Sutherland testified that, notwithstanding
Clark' s refusal to compensate Neal for adding manpower,
26 Neal did in factadd manpower. As discussed in more detailbelow, this additionalmanpower became the
subject ofa PCO sought by Neal, PCO 85. (Sutherland,Tr. 786: 16— 787: 16.)
27 3
The letter was sent by Gallivan to Sutherland in unsigned draft form on the morning of December
19( Ex. 43),and then in final
form,signed, in theafternoonof thesame day. (Ex. 44.) (
Gallivan,Tr. 1014:19
28
1016: 12.)
8 FINAL AWARD
1 email on December 19 in which he acknowledged Gallivan' s letterand, in particular, Neal' s
2 commitment to add 10 additional men to Neal' s existing workforce. ( Ex. 1127; Sutherland, Tr.
3 783: 16— 784: 14.)
4 Gallivan' s December 18 letter made clear that Clark expected Neal to meet its
5 commitments and the potential consequences of Neal' s failure to do so, stating:
6 If Neal fails to add the committed manpower for the duration discussed or
fails to develop and deliver its plan to complete the job on or before January 15th,
7 Clark will take whatever actions it deems necessary in accordance with the
Subcontract agreement, which actions may include but not be limited to
8
supplementing or replacement of Neal Electric on the project.
9
By copy of this letter to Zurich Group, Clark is advising Neal's surety of
our concerns and the potential actions that may become necessary.
10
Ex. 44.)
11
12 Despite Neal' s commitment to add additional workers to bring its workforce to 83 men for
13 a period of 30 days, Neal failed to do so. ( Gonzalez, Tr. 225: 17— 226: 2; Gallivan, Tr. 1016: 20—
14 1018: 2; Exs.
see, e. g., 46, 51, 55, 1576.) As a consequence, on January 16, 2018, Clark sent Neal
4(
15 a 72- hour notice to cure. Ex. 51.) In the notice, Clark stated:
16
B] ecause of Neal' s non- performance, Neal is deemed to be in breach of its
Subcontract and shall be fully liable to Clark for any and all losses,damages, costs
17 and expenses incurred pursuant to Article 6( b)of the Subcontract.
18 Pursuant to Article 10 of the Subcontract, this letter servesas 72- Hour notice
for Neal to increase its resourcesimmediately, take the necessary steps to comply
19 with its requirements under the Subcontract, including satisfactorily adhere to the
Project Schedule. . .. As we have stated before, if Neal believes that it is due
20 additional compensation for theimplementation of these measures, it can request
compensation in accordance with The Contract [ sic] and Clark will support our
21 collective efforts for fair and equitable compensation. Clark continues to retain
any and allrights it may have against Neal for its failure to perform under the
22 Subcontract.
23 ( Id.)
24
25
a
As discussed below in Section V.A, the Neal subcontract provided that Clark was requiredto give
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Neal three days' writtennotice of Neal' sallegedbreach of the subcontract beforeexercising certainrights
available to itunder the subcontract.( Ex. 8,Article 10(a).) Exhibit F to the subcontract modifies the
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boilerplatelanguage in Article10( a)to requirethree working days'written notice, soreferring tosuch a
notice as a"72- hour notice" is,in some cases,a misnomer. But it does not appear that this
distinctionis
28
relevantto the issuesbefore the Panel.
9 FINAL AWARD
1 Neal' s response, by letter dated January 18,2018, essentially conceded that it had been
2 unable to increase its onsite manpower to the agreed-upon 83 men, statingthat itexperienced
3 " unanticipated absence[ s]"( Ex. 1144), a position it reiterated in its letter dated February 7, 2018,
4 which showed that it only reached 83 or more men actually working onsite on one day— January
5 12, when it reported having 84 men— in the 30-day period from December 18,2017. ( Ex. 55.)
6 Around this time,Zurich Insurance Company(" Zurich"), Neal' ssurety, 5decided to retain
7 a consultant, Tiffany Beach of The Vertex Companies (" Vertex"), to review the status of the
8 project, and talk to both parties, see where there were any kind of issues, and then report back to
9 Vertex and Zurich with regard to her initialfindings. (Beach, Tr. 3140: 10- 16.) Beach understood
10 that Clark was not satisfied with Neal' s performance and that it was her role to" ascertain what the
11 issues were as far as Neal' s completion, Neal's work, and the direction that they were being given
12 by Clark, and to see what the actual condition of the project was at the time."( Id. at3140: 25 —
13 3142: 8.) Beach understood she was to be" an independent observer, look for both parties, as well
14 as other subcontractors while I was out there, provide weekly reports, and then also any
15 recommendations to try to move the project forward and to move all parties forward on the project,"
16 and that she was not there to support either Clark or Neal. ( Id. at 3142:14— 3143: 5.)
17 As part of her duties, Beach periodically visited the site,walked the project, and issued
18 reports to Vertex and Zurich. Beach was on the project from February 2018 through October 2018,
19 when Neal was terminated. She continued to visit thesite almost weekly until the end of January
20 2019, and issued her finalreport on the project on April 10,2019. ( Exs. 2895, 2899, 2901, 2907,
21 2913, 2931; Beach, Tr. 3318: 2- 21.)
22 Throughout her tenure on the project, Beach. was criticalof both Clark and Neal. For
23 example, during her initial site visit in February 2018 she noted issues with what she described as
and perceived lack of by both Clark and Neal.(( Ex.
24 " housekeeping," safety a adequate supervision
25 2346.) She was particularly critical of the manner in which Clark was scheduling the
26
27 5
Zurich was alsoa co-suretyon Clark' s performance bond to the County. (Gonzalez, Tr. 471: 3- 18.)
Although Neal argued that Beach was retainedby Zurich both in Zurich' s capacity
as Neal' s suretyand as
28
Clark' s surety, no evidence
of this was presented.
10 FINAL AWARD
1 subcontractors' work and the lack of a resource- loaded P3 schedule. 6 (Ex. 2345, p. 2, Beach, Tr.
2 3164: 2— 3165: 2.) At this time, Clark was using a number of differentmethodologies for directing
3 the work of its subcontractors: three- week look- ahead schedules based on the P3 schedule
4 ( Gonzalez, Tr. 458: 1-16); color- coded " issue maps" identifying specific activities on the three-
5 week lookaheads in areas that were required to be addressed ( Gallivan, Tr. 1034: 3- 14);overhead
6 inspection listsidentifying scheduled inspection dates thatestablished deadlines for the related
7 work to be completed( and the"
id. at 1034: 15- 23); pull planning" process at the weekly foremen' s
8 meetings, which Vasconcelos described as follows:
9 There were] various whiteboards on the wall sorted out by week and by area so
the different areas throughout the building. What the different subcontractors
10 would do, after we had our foremen' s meeting, and reading off what he P6 schedule
was, the subcontractors would then write down their activity for that week in that
11 area. In addition to that, they would then write down their manpower on that Post-
It note.
12
It] was to validate that the subcontractors are reallyunderstanding what is being
13 asked of them, right? It is just not me telling
them and reading off a sheet of paper
and hoping that they are hearing what I'm saying, because in some cases we've all
14
been in meetings where people are talking and you kind ofjust, you know, have a
thought in your head or you may have missed something. So what thisdoes is
15