Pacific Boring, Inc. v. Staheli Trenchless Consultants, Inc.
708 F. App'x 324
9th Cir.2017Background
- PBI contracted to perform pipe boring work; STC and Kimberlie Staheli Louch (Staheli) provided design/consulting services and plans.
- PBI alleged professional negligence and negligent misrepresentation based on design defects, construction delays, cost overruns, and site conditions (flowing soils).
- A prior Washington state court proceeding litigated related issues; that court dismissed PBI’s claims (the record reflects reasons given on the record).
- In federal court, STC and Staheli moved for summary judgment; PBI cross-moved on partial issue preclusion and maintained its tort claims.
- The district court granted summary judgment to STC and Staheli on professional negligence and negligent misrepresentation claims and denied PBI’s cross-motion on preclusion issues; the Ninth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PBI can recover economic losses in tort for negligent design | PBI: design negligence caused delays and cost overruns entitling tort recovery | STC/Staheli: Washington law bars tort recovery for purely economic design-related harms | Held: No tort recovery; Berschauer/Phillips bars economic-loss tort claims against design professionals |
| Whether state-court rulings are issue-preclusive in federal action | PBI: state proceeding lacked finality and preclusion would be unjust | STC/Staheli: state proceeding was final and procedurally fair, so preclusion applies | Held: State proceeding was final under Washington’s pragmatic test and preclusion would not be unjust; district court properly denied PBI’s cross-motion (i.e., no relief) |
| Whether Staheli’s alleged misrepresentations proximately caused PBI’s losses | PBI: Staheli’s false statements/omissions caused PBI’s injuries | STC/Staheli: PBI assumed contractual duties (dewater, alternative methods) and its breaches, not Staheli’s statements, legally caused the losses | Held: No proximate cause; PBI’s contractual choices and failure to give timely differing-site-condition notice were the legal causes of its injuries |
Key Cases Cited
- Berschauer/Phillips Constr. Co. v. Seattle Sch. Dist. No. 1, 881 P.2d 986 (Wash. 1994) (design professionals not liable in tort for purely economic losses due to negligent plans)
- Affiliated FM Ins. Co. v. LTK Consulting Servs., Inc., 243 P.3d 521 (Wash. 2010) (engineer may be liable in tort when negligent design causes physical injury to persons or property)
- Schooley v. Pinch’s Deli Mkt., Inc., 951 P.2d 749 (Wash. 1998) (legal causation: attenuated connections do not support liability)
- Cunningham v. State, 811 P.2d 225 (Wash. Ct. App. 1991) (pragmatic test for finality in issue-preclusion analysis)
- Thompson v. Dep’t of Licensing, 982 P.2d 601 (Wash. 1999) (procedural fairness governs injustice inquiry for issue preclusion)