wolfeblog

While the court ruled on the easy motions late Friday, there are some big issues to decide now.  Wolfeboro continues to press their total-loss theory and all but cemented it in with Friday’s ruling excluding for the third time the slope stabilization remedial plan and related wetland erosion control plans.  My understanding is the only way that stuff gets in now is if someone from Wolfeboro or one of their experts slips up and mentions it during testimony.

The remaining issues that will determine how this goes are:

Whether WPs affirmative defense of mitigation is allowed.  That’s where WP says that Wolfeboro frustrated their attempts to bring experts on-board early to ascertain the situation and implement remediation measures like slope stabilization.  Wolfeboro’s argument seems to be that WP didn’t really press for early mitigation, and that because the site is fundamentally flawed it wouldn’t have worked anyway.  I think WP wants a Jury to hear their evidence and decide for themselves.

Another issue is whether the court will allow WP to argue a comparative fault defense.  That’s where WP tries to make the case that Wolfeboro contributed to the problems by overloading the RIBs during startup and apportion part of any damages to each side.  Wolfeboro argues in their objection that they didn’t overload the RIBs and that WP hasn’t provided adequate proof.   We’ll see about that one.

During the start-up, the correspondence shows that Wolfeboro loaded the RIBs to excess throughout the first three weeks, against the recommendation of WP.  The way it was justified was by exploiting a loophole in the interpretation of the permit by pumping 100 gallons a day for a week so those days wouldn’t be counted as no flow days.  I guess you can game the system, but you can’t fool mother nature.  She knew that the flows exceeded the capacity of the system and the result was slope failure.  After the “corrective week”, it looks like Wolfeboro went back at it even harder.  I’ll be curious to see if the judge doesn’t think this is something the jury should consider.

Another big issue still hanging is the damages portion.  While Wolfeboro removed Mr. Forzley from the witness list, the question of whether his testimony in the form of the $10+ million damages estimate in F&O’s expert report will be allowed to be entered.  WP has argued that the value of the report is outweighed by the prejudicial effect the estimate would have on a jury.  More so now that WP cannot even cross examine Mr. Forzley concerning that estimate.

I suspect the judge will order that all references to the damages be removed and the rest of the report admitted.  Mr. Forzley is listed as one of the authors and stated in his deposition that he edited the entire document.  My impression is that his function was to insert the phrase “due to WP’s negligent conduct” at every opportunity.  He certainly used it to excess in his deposition.

Regarding that deposition.  While Mr. Forzley was enthusiastic in pressing that “negligent conduct” theme at his deposition, Mr. Corkum was methodical in pushing back.  “How do you know that?”.  “Did you read the report?”  “Have you looked at Mr. Schwalbaum’s explanation of that?”.  Remarkably, Mr. Forzley’s opinions didn’t seem to be based on those items that might be brought into evidence.  It almost seems as if his whole opinion, not just his damage estimate, had been spoon-fed to him.

I wonder if he was removed from the witness list because his opinions couldn’t be supported by the facts, or if he subsequently took Mr. Corkum’s suggestion and actually read the other side of the story and lost his enthusiasm.

The court is moving through this stuff and has already issued some rulings.

• WPs motions to strike the Gross Negligence claim and Breach of Warranty were ruled moot and the claims were stricken as requested by Wolfeboro.
• WP’s motion to preclude evidence of unactionable claims was denied.  This was WPs attempt to remove the RSA 358-A fraud complaint.  As expected, this was denied and a Procedural Order was issued stating that the RSA358-A claim will be submitted to the Jury for advisory findings.  The parties were instructed to prepare proposed jury instructions relating to that claim.
• Wolfeboro’s motion to preclude WPs experts from offering opinions not contained in their timely reports was granted.  So for the third time, the remedial plan is out.
• Lastly, Wolfeboro has added Daniel Miville Deschenes, a litigation partner in their Concord office.

I expect the remaining motions will be considered early next week to clear the decks for the trial.

As of Midnight on the 27th, Wolfeboro had not produced the bulk of their objections.  This morning, they were available on the court’s electronic filing website.  There must be some latency in the system.

So here are the raw filings:

125 Wolfe objection to WP motion to exclude evidence of damages
126 Wolfe objection to WP motion to preclude untimely evidence of betterment damages
127 Wolf objection to WP motion to preclude evidence of unactionable claims
128 Wolf objection to WP motion to preclude untimely disclosed documents
129 Wolfeboro objection to WP motion to strike untimely facts, experts, and reports
130 Wolfeboro objection to WP motion to preclude spec evidence supporting total loss

After skimming through these, let me first take a cheap shot at the expense of our attorneys.  We are no doubt well past the $1 million mark in fees to these high powered lawyers, so I want to call your attention to filing #126 Wolfe objection to WP motion to preclude untimely evidence of betterment damages.

Note here the subject of the motion they are objecting to.  “untimely evidence”.  Now if you read the first page where they begin their arguments with the “factual background”, you might notice that they reference documents (Exhibit #2) produced on April 9, 2014.  They follow that with a reference to (Exhibit#3) produced on Feb 12, 2014. Basically they are arguing the correct timing of their document production and they have the year wrong.

Moving on to substance.

While the volume of these objections may suggest that Wolfeboro is on solid ground in resisting the motions of WP, buried within is a major shift in the disposition of the case.

Wolfeboro has conceded one of the primary objections of WP.  They have removed Mr. Phillip Forzley from their expert witness list.  Basically, Mr. Forzley was the towns expert testifying to the damages suffered by the town.  You may recall this was covered in the blog a few days ago.

So that kind of leaves a big hole in the case.  Without proving damages, it’s hard to press this case.  The solution offered is to have Dave Ford testify as to the damages.  This is a major change, because Mr. Forzley was offered  as an “expert” witness, and Mr. Ford will be testifying as a “fact” witness.  There is a distinct difference between the two.

Moreover, it’s not clear at this point that the court will allow a non-expert to testify as to the damages, for several reasons:

First, the damages are based on the town’s total-loss theory, which as I understand it can only be supported by expert testimony.  It would be difficult, for instance, for WP to explore any deviation from total-loss with Mr. Ford as he’s not qualified to offer any opinion on that.

Second, the original $10+ million damage estimate was put forth by Mr. Forzley in the original H&A expert report.  The WP motion questioned it’s admissibility claiming, more or less, that the estimate was actually produced by Mr. Ford.  Since then, the town changed their claim via an amended interrogatory, supplying a new $8+ estimate that Mr. Forzley said in his deposition was his product.  So where WP had moved to strike Mr. Forzley testifying as an expert to Mr. Ford’s estimate of damages, presumably now Mr. Ford will be testifying as a fact witness as to Mr. Forzley’s revised estimate of damages.  Makes my head hurt.

So score three major wins for WP before the judge even rules:

• They objected to, and Wolfeboro retracted, claims of Gross Negligence.
• They objected to, and Wolfeboro retracted, claims of Breach of Warranty.
• They objected to, and Wolfeboro has retracted, the testimony of their expert Mr. Forzley.

You could add that WP has objected to Wolfeboro’s lack of proof that the site cannot be fixed and Wolfeboro has been busy in the middle of winter digging test holes at the site and using the information to convince NHDEP (so far unsuccessfully)  that our site is hopelessly in violation of the permit so they can use that to support their case.

That’s right, while our Selectmen were writing to us in the Newspaper that the case was solid and WP was desperate, they were exaggerating the damages claim by a million dollars, doing excavation tests at the site in the middle of winter and working NHDES in an effort to produce needed support for their total-loss position.

More to come….

We probably wont get a barrage of objections to motions until late today, so for those of you who seem to be following the day to day, and there seem to be a lot of you, I’m going to go a little deeper into the remediation plan.

I know there is a lot of controversy over whether this plan will work, and I don’t have the answer to that.  Last night I read the deposition of John DeGenova  from Haley and Aldrich.  He is the geotechnical engineer with 27 years experience, lives in Chester NH, and works in Concord.

Many may find this it a boring read, but let me say that you can get the jist of it in about five minutes.  I found his testimony to be quite straightforward and solid.  He is very good at describing exactly what slope stability is all about, providing practical examples of everyday applications, and specifically talking about the problems at Wolfeboro’s RIB site.

He talks about there being an index that indicates the relative stability of a slope.  He describes the scientific methodologies that have been developed to calculate the index, and describes the various considerations that go into deciding what is an acceptable index for a particular application.  If an apartment building sits on the edge of the slope, then a relatively high value would be needed because lives are at stake (think about the recent mudslide out west).  In other situations, it might not matter at all if the slope gives way a little.

One of the major applications to this discipline is embankments along roadways, particularly supporting overpass ramps.  You often see those slopes that have been stabilized with stone.  That’s some of the stuff Mr. DeGenova has done.  All in all, I was impressed with his direct and clear descriptions of the general problem and how his profession deals with it.

Ms. Cull, our attorney that was conducting the deposition, was thorough in testing his role in the Wolfeboro matter.  She pressed him to be sure that he understood the line between what he has attested to in the admissible expert report, and the work that he did subsequently to study and design the measures described in the slope stability report.  At one point he remarked that was “off the table”.

We’ll see where this goes, but the impression that I got after reading all of the deposition, was that Mr. DeGenova was competent at what he does and sincere in his opinion that the slopes could be repaired to withstand 600,000 gpd.  Is there any guaranty?  No, there is only the reliance in this established methodology being applied by a seemingly competent geotechnical engineer.

If Wolfeboro gets a payday from this, and after they’ve paid off the million in attorney’s fees and roughly $6 million in loans outstanding, I’ll be curious to see if they suddenly find this $1-2 million fix is a worthwhile gamble.  Apparently NHDES thinks it’s worth pursuing.

Wolfeboro also has filed a number of pretrial motions to exclude various theories of defense and specific testimony from WPs expert witnesses.  As you might expect, they take a completely different view of the situation.

Wolfeboro has filed five pretrial motions:

The first is a motion in limine to preclude late expert opinions.  This motion relates to Wolfeboro’s ongoing efforts to exclude the Haley and Aldrich Slope Stabilization Plan.  WPs experts have maintained from the beginning that the site can be repaired, but did not provide any specific plan in their initial expert testimony.  Subsequently, they produced a plan that was reviewed and recommended by NHDES. Unfortunately for them, the plan was produced in August 2013, after the deadline for supplementing expert testimony, and is now inadmissible.

WP has tried on numerous occasions to introduce this report so as to put some meat on the bones of their expert’s opinions.  This motion in limine asks the court to formally instruct WP not to attempt to reference the remedial plan. Absent a specific plan, Wolfeboro is in a better position to advance their total-loss theory.

The second is a motion to exclude R Moore from testimony that the site can be repaired. Here Wolfeboro argues that WP’s expert, Mr. Moore, has not met the standard required for expert testimony regarding scientific facts.  Mr. Moore, in his expert report, stated that he believes the site could be restored to 600,000 gpd but does not offer any specific plan to do so. In his deposition he describes a slope stabilization technique that is very similar to the Haley and Aldrich slope stabilization plan, but admits that it is a theory or concept and not a specific plan.

The third motion to strike WP affirmative defense of mitigation  asks the court to prohibit WP from arguing that Wolfeboro’s failure to follow the recommendations of WP during the two years following the initial failures contributed to any damages suffered by the town.  WP has advanced the theory, through its experts Haley and Aldrich, that the town should have followed their recommendations to investigate and possibly repair problems at the site.  Wolfeboro is arguing that WPs expert is a hydrogeologist and not a geotechnical engineer and unqualified to offer that opinion.  Moreover, they say that the HA expert hasn’t offered the required scientific proof that early mitigation would have made any difference.

A fourth motion to strike wp affirmative defense pertaining to comparative fault.  Asks the court to strike four comparative fault defenses that they described in their answer to the complaint.  There are several issues here but the overwhelming issue at hand is WPs claim that the Town “overloaded” the RIB during startup and contributed to the problems, thus, Wolfeboro bears some of the fault for any damages.  Under this theory, any damages proved would be apportioned to the parties according to the comparative fault that they are responsible for.

Wolfeboro is arguing that there was no overloading during startup.  Moreover, they assert that WP has failed to provide any evidence that excessive start-up flows were the cause of the soil piping and slope failures.  They say that WPs “experts” are not qualified to offer that opinion and ask that the court exclude the comparative fault defense.

This is a complicated issue.  There is a question of interpretation of the actual permitted flow rates.  There is a question of the accuracy of the measured flow rates during startup.  There is a controversy about what WP actually recommended and/or agreed to, and there is a fundamental disagreement as to whether the site was ever capable of handling any significant flow without suffering breakout and damage.

The last motion to exclude HA experts is further impeaches the qualifications of the two Haley and Aldrich experts and asks that the court exclude their testimony concerning the standard of care for engineers and their opinion concerning the alleged overloading during RIB start-up.  Wolfeboro argues that these guys are not engineers and therefore are not qualified to testify as to the proper standard of care required of engineers.

They go on to say that in their depositions, they admit that they are not knowledgeable in the proper start-up procedures for a RIB and are only speculating when they assert that a gradual start-up would have been appropriate.

Obviously, both sides have done their best to eviscerate their opponents case, and we haven’t even seen the objections and replies to objections.  None of it changes my impression that the whole thing boils down to the basic issue of whether the site can be fixed.  Wolfeboro decided early on that they don’t want to try to fix it. They want the court to declare it a total loss and make WP pay them every dollar that has ever been spent on it.

If you’ve been following along, you might be starting to realize that the truth has diverged from reality.  I’m not saying that either side is lying, I’m saying that I’m learning that because of the way the legal system works, deadlines are established and the truth is defined by the subset of facts admitted into evidence at a particular point in time. Meanwhile both sides have developed meaningful information that may be excluded on procedural grounds and/or as a result of these motions.

WP has developed potentially inadmissible meaningful evidence that there are acceptable remediation measures that can be employed.  Wolfeboro has developed potentially inadmissible evidence of their damages claims that are needed to support their case.

Tomorrow the other shoe drops when both sides must file their objections to these motions.

If you’ve been following along with the RIB lawsuit events, you know that this is the crux of the matter.  Is it possible, as WP maintains, to fix the RIB site and get a reasonable service life from it, or is a hopelessly failed facility that is one step away from being shut down as the town contends? Obviously there’s a lot of information that we don’t have, and there is some amount of speculation attached to either position.

The town has refused to entertain the notion of spending any money to fix the RIB site.  Shortly after start-up, after the initial slope failures, WP’s modelling subcontractor said that more monitoring wells were needed to understand what was happening.  That wasn’t done, so we went for a couple of years speculating about the problems.

In late 2011, WP hired SW Cole to do a geotechnical  survey of the site.  In other words, to definitively figure out what the problems are.  They did indeed install some new monitoring wells, and revisited the past and present data from the present wells.  They reviewed the soil sampling records from those wells and they arrived at the conclusion that the site could support 340,000 gallons per day.  We got a new five year permit based on those findings.  They also recommended that remedial measures be implemented.

Among the recommended remedial measures were some siphon wells to relieve the head (pressure)  at some of the worse breakouts.  They also recommended some form of slope stabilization. Apparently, slope stabilization isn’t a unique concept in the engineering world.  One other application that has been mentioned is the backside of earthen dams.  There are established and effective techniques that have been developed to stabilize leaking earthen dams and stop soil piping from causing them to fail.  Apparently that’s pretty much what needs to be done to the steeper slopes on our RIB hill.

As I get it, WP had offered to design, or pay for someone else to design, such a stabilization system.  Unfortunately, they wanted the town to pay for the actual work.  The estimate was in the 1-2 million range.  The Selectmen wanted no part of going back to the voters for more RIB money.  And so the stalemate began.

When I first heard this story, my reaction was that WP should pay for the whole thing –  design, construction, the works.  Since then, I’ve had a closer look at their position.  I’m in no way advocating for them, but before you can decide you have to hear and understand both sides.

My impression of WP’s position is that they were hired to find a solution to the town’s critical problem in 2006 when a NHDES Administrative Order had been issued to halt all expansion of the town’s sewer capability.  No new construction.  This was back in the golden age before the real estate market collapsed, and it was a huge problem.

So WP looked at the possible solutions and came up with four.  Expand the spray fields, develop the e-snow system that one of our Selectmen was pushing, connect to the interceptor on the other side of the lake, or build a rapid infiltration system (RIB).  In the end, it came down to economics.  The RIB was millions of dollars less than any of the alternatives.

In hindsight, we now find that the best site we could come up with had steep slopes and failed.  We can go around as to whether WP should have known that.  Lets say they should have.  What is the remedy?

WP says that if they had known the slopes would fail, they would have recommended stabilizing them.  In other words, they are saying that they would not have recommended against building the RIB, only that it would have cost more.  But it would still have been millions less than next best alternative.  They believe the town would have still chosen the RIB, because it appears to them that the town’s decision was based primarily on cost.

So their position seems to be that they screwed up in not putting slope stability into the original design, and they are willing to do that.  The town, they say, should pay for it because they would have had to do so in the first place.   At this point, it isn’t about whether we agree with them.  It’s about whether a jury would.

Last year WP had their expert witnesses, Haley and Aldrich, actually design some of the needed slope stabilization.  They brought it to the NHDES and asked them if it was feasible.  NHDES responded by saying that it was and that the town should do it.  NHDES also went on to point out that the RIB problems go beyond the slope failures, and that there are issues with wetland erosion.   WP hired a wetland expert who has offered the opinion that the wetland problems can be mitigated with relatively inexpensive, accepted practices.

Why would NHDES recommend a multi-million dollar stabilization plan that would take a year or more to complete if they agreed with the town’s position that the site is completely failed and must be abandoned?

Wolfeboro’s strategy has been to block WP from introducing the remediation plan from the trial.  That may work, but in the end what are we going to do about our original problem?

WP makes the point that three engineering firms have done real studies and arrived at the same conclusion:  That remediation measures should be pursued.  Notwithstanding that one of them is Wright-Pierce and the others were hired by them, these are professional engineering firms with many people involved.  Are they all in on the conspiracy to hide a huge unsolvable problem?

Contrast that with Wolfeboro’s hired guns – Fuss & O’Niell.  According to WP, aside from a couple of site visits to look around, they have never done any actual engineering there.  They are essentially saying what the town pays them to say, but offer little more than their opinion.

I don’t know if the site can be fixed to do 600,000 gallons per day.  I think it can be made to service the town’s need for the foreseeable future, after all, it has been servicing our needs, along with limited spraying, for the past five years.  The whole issue with the 600,000 gallons per day appears to be based on the original idea that the treatment plant capacity is 600,000 gpd  and the site should be able to handle the output of the plant.  But we have a 90 million gallon storage pond that has been used for decades to even-out the seasonal demand and allow the town to dispose of it’s effluent at a steady reduced rate.

WP seems to be saying that while they targeted a solution that could handle the town’s peak output, with the storage pond as a buffer, the RIB facility can be made to handle the town’s needs.  That, they say, is what the original problem was and what they were hired to do.  Long before the RIB was ever started up, WP was saying that the best way to handle the town’s peak flow issues was to buffer the demand using the storage pond.

I don’t know how this is going to turn out.  Wolfeboro could certainly outmaneuver WP in a trial and get a big settlement.  My concern is that as I look more and more at the publicly available information, I wonder if we are on the right side of this.

Is it true, for instance, that we are exposed to the potential for a lawsuit for damaging neighboring property?  What is that exposure?  What is that property worth?  Should the town be trying to buy that property and suing WP for the cost to do that?  Will winning this suit do anything to eliminate that threat?

While the state has a responsibility to enforce the groundwater regulations, those regulations exist, after all, to benefit the people who live here.  Wolfeboro’s wastewater system, while it may be contributing to the negative impact that civilization has on the Winnipesaukee watershed through it’s effluent disposal, also contributes a huge positive impact in the reduction of nutrients from what would otherwise be hundreds of waterfront septic systems.  In addition, how does the public benefit from having a hospital, schools, and commerce within the watershed area without a sewer system?  It’s not just a Wolfeboro problem, it’s a regional problem.

I didn’t just come up with that rationalization.  I got it several years ago from one of the prominent NHDES officials while standing around during a tour of the RIB site.  I don’t think it’s realistic to argue that the state is going to slap Wolfeboro with $2,000 per hour fines.  More likely we will get another Administrative Order halting connections and ordering action.  We need to stop the finger pointing and hyperbole and work something out.

The recent motions by Wright-Pierce in the RIB lawsuit calls into question the validity of the $10,326,883 damages claimed by Wolfeboro.  That is the amount of damages claimed by our experts, Fuss & O’Neill, in their initial expert report dated October 19, 2012.  Here’s the breakdown:

1. $1,283,893 Site Investigation/Evaluation of Disposal Alternatives
2. $1,218,391 Land Purchase/Easements
3. $1,012,588 Design and Permitting Costs
4. $2,840,089 Construction Costs
5. $386,428 Expenses to Remediate and Address Site Failures
6. $319,680 Operational Costs
7. $3,273,564 Borrowing Costs

That adds up to $10,334,633 – $7,750 more than the total stated in the same report, but lets not sweat the small stuff, apparently it’s par for this course.

WP argues the damage estimate was solely the product of Mr. Phillip Forzley at F&O.  They then go on to question his sources and methods.  According to the motion filed and the transcript of his deposition, he got most of those figures directly from Dave Ford in the form of spreadsheets that Dave gave him.  When compiling the report, he did not ask for or examine the underlying invoices or attempt to reconcile them with actual project related activities.

One principle that WP bases it’s objections on is that these damages are being presented by a guy who claims to be an expert at what he is testifying to.  WP says that he is just an engineer and is only doing some arithmetic in adding up what the Town gave him as applicable costs.  Basically, it is the Town who determined that these were damages and not the so called expert.  He admits that he didn’t reject any of the items given to him by the Town.

Further, WP says the guy isn’t an expert anyway.  He has no training or experience in calculating damages and didn’t consult with any other experts, such as a real-estate appraiser, in compiling his damage opinion.

In the deposition, Mr. Forzley states that subsequent to the original report, he asked the Town for the detailed invoices and tried to corroborate the original figures.  He was unsuccessful, and said he produced a new estimate of $8,876,055.12.  Apparently the report containing the new estimate was issued after the date for supplementing expert testimony.  WP will probably object to being asked to defend against a new complex estimate at this late date, especially since it is based on old information that has been in existence for years.

The fundamental methodology used in the damage calculation is based on his opinion that the RIB site is a total-loss, and therefore everything that has ever been spent on it is a recoverable damage.  WP has filed three motions in disagreement.

The first is a motion to preclude total loss theory.   They claim that the Town has not produced sufficient evidence that the site is a total loss and that they have not investigated any of the suggested methods of remediation.  That’s a whole other discussion dealing with the so called remediation plan and the Town’s currently successful efforts to suppress it.

The second is a motion to exclude evidence of damages  claiming that Mr. Forzley  is not an expert and that he didn’t use the required reliable methodology.

The third  motion to preclude evidence of betterment damages asks that the damages be viewed using the principle of “betterment” which says basically that you cannot be made more than whole.  That you cannot get the use of something and then be reimbursed for it as well.  Automobile casualty is based on this principle.  When you “total” your car, you get a settlement for the present value, not what you paid for it.  The use you got prior to the loss is a betterment that you received.

WP argues that a RIB has a useful life of 20 years, and that by the time our current permit expires in 2017, we will have enjoyed the benefit of it’s use for 8 years, or 40% of it’s useful life.  So they apply that fraction to the construction and operation damages claimed.

Mr. Forzley also believes the land is a total loss, because it has “no value to the town”.  WP argues that the value to the town is irrelevant.  The land has some current market value, and if it’s not worth anything to the town, the town can sell it.  The town’s loss (or profit) would be the difference between what they paid and what they sell it for.  Consider that the town sold it for what they paid.  Is the town entitled to a $1.2 million windfall?  WP says that as a matter of law the town is not.  WP made the point that with the new road,  the land might be of interest as a sand and gravel site.  In any event, Mr. Forzley did not explore the residual value with a real-estate expert.  This seems to be a good example of why you want someone familiar with the principles of damage estimating.

They go on to say that $1,283,893 Site Investigation/Evaluation of Disposal Alternatives was a project unrelated to the RIB site, has little to do with the design and performance of the RIB site, and isn’t an actual damage.

Lastly, they say that the $3,273,564 in borrowing costs is not recoverable under New Hampshire law, and even if it were, hasn’t been described in sufficient detail to adequately present any defense.

Bottom line is that they feel that the damages claimed should be about $3 million and have asked that the Town’s expert witness not be allowed to testify about the damages because he is not an expert and because the details of his opinion were not supported by timely documentation.

I’ll be curious to see how this one goes.  It’s would be hard for Wolfeboro to press this case without being able to discuss the amount of the resulting damages.  Maybe the judge will decide to just let the guy take the stand and let WP’s attorneys rip him apart in front of the jury.  My concern is that if these issues are matters of law as WP contends, a ruling in Wolfeboro’s favor might become a valid basis for an appeal.  So even if the Town wins, it can look forward to another year or two of legal fees and wastewater limbo while an appeal slogs through the system.

I have to wonder why our attorneys didn’t do a better job of presenting the damage case.

Last night, I spent a few hours reading over the dozen or so new motions that were just filed along with the pre-trial documents such as proposed jury instructions and witness lists.  The twists and turns of this lawsuit are every bit as interesting as a John Grisham novel.

I don’t know how these motions will play out over the next week when the parties file their respective objections with counterarguments, but if this were a heavyweight bout, I’d be inclined to score this round to Wright Pierce.

Let’s look at the counts of the amended complaint that Wolfeboro filed:

1. Professional Negligence
2. Gross Negligence
3. Breach of Contract
4. Negligent Misrepresentation
5. Breach of Warranty
6. Violation of RSA 358-A (fraud)
7. Fraudulent Misrepresentation

Quite a shopping list, but really it all boils down to the same issue.  Wolfeboro built a RIB that doesn’t work to their satisfaction.  Wright-Pierce has now filed a slew of motions to eliminate or suppress Wolfeboro’s evidence and expert testimony regarding many of these claims.

My first reaction to the sheer volume was that this is just standard procedure in the run-up to a major trial.  Throw everything against the wall and see what sticks.  But judging by Wolfeboro’s reaction, there appears to be validity to their claims.

Take for instance their motion to eliminate count 2 – Gross Negligence.  Wright-Pierce has simply argued that there is no statute in New Hampshire that defines Gross Negligence.  Moreover they cite a Supreme Court decision where someone else tried it and were told as much.  Guess what, Wolfeboro just withdrew that count.

Count 5 – Breach of Warranty is another example.  Wright-Pierce submits all of the contracts and asks “Where is the warranty?”  Moreover, they say that Wolfeboro hasn’t produced any evidence whatsoever to support this claim.  Wolfeboro just withdrew that count as well.

Counts 6 and 7 – dealing with fraud and the consumer protection act.  This is the one that opens the door to treble damages.  WP is now saying that there has been no evidence offered to satisfy the statutory elements of this charge.  In any event, it appears that Wolfeboro has agreed to let the Judge decide whether to rule on this himself or give it to the Jury to decide.  That doesn’t shout confidence.

But the thing about these motions that impressed me the most was WPs assertion that Wolfeboro had not produced evidence to support what is otherwise only the conjecture of it’s experts.  From stuff like where their experts get the amounts claimed in their damage numbers (“From a spreadsheet that Dave Ford gave me”) to how they know the site can’t be fixed, to how they know the RIB is a total loss.

Those are serious questions, and they go to the heart of the remainder of the complaint.  So you might think it’s all just a show and that the town really did present that evidence.  It doesn’t appear that’s the case.

Apparently, as these deficiencies were brought to light, the town came to the realization that this might be true.  In January and February of this year, the town scrambled to put together thousands of pages of documentation to address these shortcomings.

Wright-Pierce has moved, and in my opinion rightfully so, that these documents are well past the deadline for supplementing expert testimony and are therefore inadmissible.

There’s a lot more.  Questions about the validity of the damage claims, and the notion of betterment which takes into account the 20 year life expectancy of the RIB site and the fact that Wolfeboro has had the use of the RIB site since 2009 and is permitted through 2017.

I’ll be presenting more detail on some of these topics and keeping an eye on what develops.   Last night, there was a non-public session of the BOS.  Are they starting to consider settlement?  They’ve come this far, will WP even be open to settlement before these motions are ruled on?  Stay tuned.

This week saw a couple of events related to the RIB lawsuit.  As expected, the court granted Wolfeboro it’s costs in defending a motion to compel Wolfeboro to allow a site visit by Wright Pierce’s wetlands expert.  Wright Pierce had put forth several arguments in objecting to the motion, but the court only saw merit in a trivial argument concerning the amount of time spent by one of the attorneys in a phone call.  Wolfeboro gets $4,637.50 for their trouble.

In an unrelated matter, both parties agreed to extend the deadlines for submitting pre-trial documents.  The old deadline of March 13 has been extended to next Tuesday  the 18th.  The reason given was that several depositions were incomplete due to weather related issues.

We have no way of knowing if there is any settlement activity.  My sense is that there is not any at this time.

The latest standoff in the RIB lawsuit concerns who is going to pick up the tab for a court appearance in early February.  WP filed a motion to compel the town to allow their wetlands expert to examine the RIB site.  Wolfeboro refused, and they argued it before the Judge.  WP lost and Wolfeboro asked to be awarded their  attorney’s fees in defending against the motion.  WP has  objected.

Right after the hearing, Mr. Ford told me that the town had been awarded costs.  The next day the order was posted.  In the order denying motion to compel, the court said that the town’s outstanding request for fees must be submitted as a motion, and cited the applicable rules. In their letter to us, the Selectmen interpret this procedural direction as an “invitation to file for costs”.

The money on the table is an arguable $4,000 and change.  The town has had to prepare the motion for costs and will probably now file a response to WP’s objection.

Just under seven weeks to the trial.

Today, the court finally ruled on Wright-Pierce’s motion to reconsider the court’s refusal to extend the period to supplement expert testimony. That’s a mouthful, but what it boils down to is that Wright Pierce’s experts, Haley and Aldrich, inc., had developed a remedial plan for the RIB site that they claimed could make Wolfeboro whole by restoring the site to the originally permitted capacity.  The court has struck the plan from the record and will not allow Wright Pierce to introduce any expert testimony about it.

That’s a big deal for the Wolfeboro team, and may well represent a turning point in the disposition of the defense and open the door for a large settlement.

In reading the order, it looks as though Wright Pierce’s attorneys have been incredibly inept at advancing their case.  In the court’s explanation, it cites repeated instances of where their motions and arguments were filed too late or as new arguments where only rebuttals are allowed.

The court also takes issue with the fact that Wright Pierce didn’t produce the remediation plan until five months after the deadline for supplementation of expert testimony.

At this point, Wolfeboro has said they will not mediate, and wants a large settlement of everything the town has spent.  I think that’s somewhere in the $7 million range.  Absent the fraud and treble-damage amendment, Wright-Pierce would have had nothing to lose but attorney’s fees in going to trial over that.  At this point, it’s hard to say exactly what will happen.  If I were Wright Pierce or their insurance company, I’d look at this ruling and wonder if I’m getting my money’s worth from my attorneys.

The last big event was the motion to amend the lawsuit to include allegations of fraud.  This was a big deal for Wolfeboro because it upped the ante considerably by opening the door for treble damages.  With a claim of $10 million in damages, the theoretical potential is now $30 million.  Whether that’s realistic, or WP can pay it, or whether it’s enough to cause the suit to languish in an eternity of appeals are other questions, but the bottom line is that it probably was intended to scare WP into settling on Wolfeboro’s terms.

It doesn’t appear to have had that effect.  As part of the order allowing the amended complaint, the judge said that additional time for discovery may be necessary and that the parties can ask for it.  In their objection to the amendment, WP had said that additional expert testimony would be needed to defend, and the order says they can ask for that too before the end of the discovery period.  WP did ask for it – just before the end of the discovery period.  The judge allowed the discovery but not the new expert testimony.  And that’s the big issue on the table now.

The town maintains that the RIB site is completely failed, and must be replaced with some alternate effluent disposal capability.  That justifies asking for everything that we have ever spent on it.  WP maintains that the site can be repaired, and even says it can handle the originally permitted 600,000 gallons per day.  That’s a pretty big difference of opinion, and opinion is what the expert witnesses bring to the table.  WP’s experts, Haley and Aldrich, Inc., in their original testimony, opined that the site could be fixed.  Wolfeboro and their experts have said that it can’t be fixed, and have said that the approach suggested by WP cannot be permitted.

So WP had their experts produce a more detailed description of their proposed Remediation Plan  and convinced Wolfeboro to bring it to NHDES for review.  Big surprise, NHDES, in a letter,  said that the slope stabilization part of the plan was OK by them, and recommended that it be done.

They did however, say that impacts to the wetlands were an ongoing problem and that any solution had to address that as well.  So WP hired a wetlands expert to take a look,  Unfortunately, Wolfeboro won’t allow him to look at the site.  Not to be deterred, WP had him assess the portion of the impacted wetlands in Tuftonboro, and examine photographs and topographic maps of the Wolfeboro side.  He produced a report in which he offers the opinion that the channelization issues in the wetlands can be mitigated and potentially reversed by felling trees to “rough up” the terrain.  He says this is a common practice called “chop and drop” used to control erosion and has been permitted in other wetlands in NH and elsewhere.

According to WP’s latest motion for leave to file reply to objection  of their motion to extend the time to supplement expert testimony, Wolfeboro doesn’t want any part of it.  They also say that Wolfeboro won’t consider mediation.

I have no idea if what WP is proposing would actually work, but it looks as if they are determined to pursue it.  NHDES seems to at least take their approach seriously, although they offer no opinion on any potential capacity impact.  More importantly, they say that while initial permitting is based on expected performance, ongoing permitting will be based on actual performance.

So Wolfeboro is not interested in repairing the site, and is doing everything they can to keep that prospect out of any trial by resisting the inclusion of additional expert testimony.  Presumably, the town would take the proceeds of any award and use it to pursue some alternate effluent disposal strategy.  But the reality is that even at current levels, the RIB site, along with seasonal spray field operation, is just about adequate for our needs.  It’s not inconceivable that the town would get a new engineer after the trial and actually implement some of these “fixes” to the RIB site to allow 300,000 gpd or more and just live with it.

So it all hinges on whether the judge grants this motion to effectively allow WP to make their plan to fix the site part of their defense.  My guess is that it will not be allowed, and that will become the basis of an appeal.  Once again, the lawyers can’t lose.

I see that the Grunter has published the URL for this blog as part of their coverage of the last Selectman’s meeting.  For anyone looking to read the arbitration/mediation mia-culpa, you can find it here.  But hopefully there will be a few new readers finding their way here, and rather than look at the sideshow, maybe you want to take a few minutes to catch up on what the lawsuit is all about.

The best place to start is by listening to Dave Ford’s explanation at a Selectmen’s meeting on April 17th of this year. Click here, and then either wait for Ethan to finish or space in 6:30 to get to Dave Ford.  If you are interested in forming an opinion about this lawsuit, you owe it to yourself to listen to Dave’s side of this.

At that time, we had spent $400,000 and had a war chest with another $300,000 left in it.  The town expected to go to trial at the end of the year, and thought they had plenty of money to see it through to a conclusion.

Then, a few weeks later, Wolfeboro asked to file an amended complaint to include allegations of fraud and to request treble damages.  That was like starting a whole new lawsuit.  The issues in the original suit were pretty straightforward.  Now the town was saying that the WP engineers and their consultants knew that the thing wouldn’t work as far back as 2007, and hid that fact from the town so that they could collect more fees, and so they could brag about building the largest rib in the country.

They lost me there. I can’t feature being a supporter of that tactic. You can click “RIB Lawsuit” at the top of the right margin and get all of the posts in this blog relating to the lawsuit.  It reads bottom (oldest) to top.  You can wade through my obviously biased commentary and read the actual court filings for yourself.  They are surprisingly easy to read and follow.

So today Wolfeboro filed their objection  to WP’s motion to continue and extend deadlines.  They’re not opposed to extending the deadlines for discovery and the trial, after all, it’s critical that some of this work be moved to the next fiscal year where we will have another half-million for their fees. Continue reading →