City of Waco v. Kleinfelder Central, Inc.
ORDER DENYING 32 Motion to exclude; GRANTING IN PART AND DENYING IN PART 23 Motion for Summary Judgment; DENYING 25 Motion for Summary Judgment; GRANTING 25 Motion to Dismiss ; GRANTING IN PART AND DENYING IN PART 26 Motion to exclude; DENYING 27 Motion to exclude. Signed by Judge Robert Pitman. (tb)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
CITY OF WACO,
KLEINFELDER CENTRAL, INC.,
Before the Court are Defendant’s Motion for Summary Judgment (Dkt. 23), Plaintiff’s
Motion for Summary Judgment and Motion to Dismiss (Dkt. 25), the parties responses to those
motions, and Defendant Kleinfelder Central, Inc.’s reply to the City of Waco’s response. In addition,
Defendant Kleinfelder Central, Inc. (“Defendant” or “Kleinfelder”) has filed three motions
regarding evidence or expert testimony that Plaintiff City of Waco (“Plaintiff” or “the City”)
submitted with its summary judgment motion (Dkts. 26, 27, 32), the City has filed three responses to
those motions, and the Defendant has filed two replies. After reviewing each of these filings, the
relevant case law, and the record in this case, the Court issues the following order.
During the 1950s and 60s, a company called Southwest Chemical and Spraying mixed toxic
chemicals in a concrete pit in a building located on a five acre parcel of land in downtown Waco, at
the Northeast intersection of Interstate Highway 35 and Martin Luther King, Jr. Boulevard (“the
Property”). (Compl. ¶¶ 5–6, Dkt. 17; Def.’s Mot. for Summ. J. at 6, Dkt. 23). At some point, this
concrete pit cracked, allowing toxic chemicals to leach into the soil below. (Def.’s Mot. to Dismiss at
6, Dkt. 23). On September 4, 2007, the City of Waco took title to the property through a foreclosure
for unpaid property taxes, as trustee for itself, Waco Independent School District, and McLennan
County. (Compl. ¶ 7, Dkt. 17; Def.’s Mot. for Summary J. at 2, Dkt. 23).
On November 2, 2010, the City entered a Contract for Architect/Engineering Services (“the
Agreement”) with Kleinfelder for the remediation of the Property. (Pl.’s Mot. for Summ. J. at 4,
Dkt. 25; Def.’s Mot. for Summ. J. at 6, Dkt. 23). Under the Agreement, Kleinfelder was to provide
environmental services, including collecting samples from the Property to help the City determine
the extent and nature of the soil contamination, and monitoring the later remediation activities.
(Def.’s Mot. for Summ. J. at 7 & Ex. 1 at 19; Dkts. 23, 23-3). Kleinfelder’s services also included
providing analytical laboratory results to the City supporting classification of the collected soil as
Hazardous, Class 1 Non-Hazardous, and Class-2 Non-Hazardous. (Def.’s Mot. for Summ. J. at 7;
Pl.’s Mot. for Summ. J. at 4–5, Dkt. 25).
Excavation of soil from the Property began in mid-November of 2012. (Pl.’s Mot for Summ.
J. at 8; Dkt. 25). The soil was transported to a staging area at the City of Waco’s landfill, located on
Old McGregor Road. (Def.’s Mot. for Summ. J. at 7–8; Dkt. 23). Only soil classified as Class 2 NonHazardous can be disposed of at the City landfill, but sometime later it became clear that much of
the soil being moved to the staging area was either Class 1 Non-Hazardous or Hazardous. (Def.’s
Mot. for Summ. J. at 12; Dkt. 23; Pl.’s Mot. for Summ. J. at 9, Dkt. 25). Extensive cleanup of the
City landfill was required to remove any soil excavated from the Property that was not classified as
Class 2 Non-Hazardous. (Def.’s Mot. for Summ. J. at 12; Dkt. 23; Pl.’s Mot. for Summ. J. at 11–12,
The City filed suit against Kleinfelder on October 26, 2015, alleging that Kleinfelder failed to
properly perform its obligations under the Agreement, including obligations outlined in a Sampling
and Analysis Plan (“the SAP”) that the City asserts was an amendment to the Agreement, leading to
the deposit of contaminated soil at the City landfill and resulting in the additional costs of cleaning
up that contamination. The City brings claims for breach of contract and negligence against
Kleinfelder and seeks approximately $1.1 million in damages. Kleinfelder brings a counterclaim for
declaratory judgment, seeking that the Court declare that the SAP is not part of the Agreement and
that the damages sought by the City are precluded by the Agreement.
The parties have filed cross-motions for summary judgment on the pending claims. 1 In
support of its motion for summary judgment, Kleinfelder makes three primary arguments: (1) the
Agreement provides that the City has full and complete responsibility for all costs related to
handling, transportation, and disposal of contaminated materials, and thus cannot recover those
costs from Kleinfelder; (2) the Agreement allocated all damages associated with transport, handling,
management, and disposal of the contaminated materials; and (3) the City’s negligence claim is in
reality a claim for non-performance under the Agreement, and is therefore barred by Texas law.
The City, in support of its motion for summary judgment argues: (1) that it is entitled to
summary judgment on its breach of contract claim because the SAP is a valid and enforceable part
of the Agreement between the City and Kleinfelder, the City fully performed under the Agreement,
Defendant breached the Agreement by failing to perform its monitoring, sampling, and screening
duties, the City’s damages were the natural, probable, and foreseeable consequence of Kleinfelder’s
breach, and the City’s damages are general or direct damages and not precluded under the
Agreement as consequential damages; and (2) that the City is entitled to a dismissal of Kleinfelder’s
The parties each filed a response to the other’s motion for summary judgment, and
Kleinfelder also filed a reply to the City’s response to Kleinfelder’s motion for summary judgment.
In addition to addressing the arguments for summary judgment, both parties’ responses included
objections to the evidence relied on by the opposing party’s motion for summary judgment. Further,
Plaintiff did not seek summary judgment on its negligence claim. (Pl.’s Mot. for Summ. J., Dkt. 25).
Kleinfelder filed three separate motions regarding summary judgment evidence, a Motion to
Exclude Opinion Testimony of Plaintiff’s Expert Michael W. McLaughlin (Dkt. 26), a Motion to
Exclude Opinion Testimony of Plaintiff’s Expert Edward Kavaznjian, Jr. (Dkt. 27), and a Motion to
Exclude Portions of the City’s Summary Judgment Evidence (Dkt. 32).
With this as background, the Court will turn first to Defendant’s motion for summary
judgment, and then address Plaintiff’s. During this discussion, the Court will address the parties’
evidentiary objections to the extent they are relevant to the Court’s rulings on summary judgment.
II. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil Procedure
only “if the movant shows there is no genuine dispute as to any material fact and that the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A dispute is “genuine” only if the
evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 254 (1986). “A fact issue is ‘material’ if its resolution could affect the
outcome of the action.” Poole v. City of Shreveport, 691 F.3d 624, 627 (5th Cir. 2012).
The party moving for summary judgment bears the initial burden of “informing the district
court of the basis for its motion, and identifying those portions of [the record] which it believes
demonstrates the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317,
323 (1986). “[T]he moving party may [also] meet its burden by simply pointing to an absence of
evidence to support the nonmoving party’s case.” Boudreaux v. Swift Transp. Co., 402 F.3d 536, 544
(5th Cir. 2005). The burden then shifts to the nonmoving party to establish the existence of a
genuine issue for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585–87
(1986); Wise v. E.I. Dupont de Nemours & Co., 58 F.3d 193, 195 (5th Cir. 1995). “After the nonmovant has been given the opportunity to raise a genuine factual issue, if no reasonable juror could
find for the non-movant, summary judgment will be granted.” Miss. River Basin Alliance v. Westphal,
230 F.3d 170, 174 (5th Cir. 2000).
The parties may satisfy their respective burdens by tendering depositions, affidavits, and
other competent evidence. Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir. 1992). The Court will
view this evidence in the light most favorable to the non-movant, Rosado v. Deters, 5 F.3d 119, 122
(5th Cir. 1993), and should “not make credibility determinations or weigh the evidence.” Reeves v.
Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).
A. Defendant’s Motion for Summary Judgment
First, Defendant argues it is entitled to summary judgment on Plaintiff’s breach of contract
claim because the Agreement allocates responsibility for all costs the City now seeks as damages to
the City. Second, Defendant argues that it is entitled to summary judgment on Plaintiff’s negligence
claim because it is, in reality, a claim for non-performance under the Agreement, and is barred by
Texas law. The Court will address each of these arguments in turn.
1. Allocation of Liability Under the Agreement
The Agreement between the parties, signed by the City on November 2, 2010, incorporates
fully the terms and conditions attached in an attached document marked Exhibit A. (Contract for
Architect/Engineering Servs. ¶ 2.1, Dkt. 23-3). In Section 25 of Exhibit A, entitled “Warranty of
Title, Waste Ownership,” the Agreement provides:
[Kleinfelder] will not take title to any hazardous materials found at the project site.
Any risk of loss with respect to all materials shall remain with the project site owner,
who shall be considered the generator of such materials, execute all manifests as the
generator of such materials, and be liable for the arrangement, transportation,
treatment, and/or disposal of all material. All samples shall remain the property of
the City. The City shall promptly, at its cost, remove and lawfully dispose of samples,
cuttings, and hazardous materials.
(Exhibit A ¶ 25, Dkt. 23-3). The Agreement also incorporates a document entitled “Scope of
Services” as Exhibit C. (Contract for Architect/Engineering Servs. ¶ 1.1, Dkt. 23-3). Under a
portion of Exhibit C entitled “Limitations,” the Agreement provides:
During the course of the performance of Kleinfelder’s services, hazardous materials
may be discovered. Kleinfelder will assume no responsibility or liability whatsoever
for any expense, claim, loss of property value, damage, or injury that results from or
in any way connected with pre-existing hazardous materials being encountered or
present on the project site, or from the discovery of such hazardous materials.
Notwithstanding anything contained in this proposal to the contrary, Kleinfelder
shall not assume the status of an owner, operator, generator, or person who arranges
for disposal, transport, storage or treatment of hazardous materials within the
meaning of any governmental statute, regulation or order. Our Client will be solely
responsible for notifying all governmental agencies, and the public at large, of the
existence, release, treatment or disposal of any hazardous materials observed at the
project site, either before or during performance of Kleinfelder’s services.
Our Client will be responsible for all arrangements to lawfully store, treat, recycle,
dispose, or otherwise handle hazardous materials, including cuttings and samples
resulting from Kleinfelder’s services.
(Exhibit C at 5–6, Dkt. 23-3).
Defendant argues that these two provisions indicate that the City is responsible for any risk
of loss with respect to the contaminated materials, and that the City is liable for all costs related to
transportation and disposal of contaminated material from the Property. Defendant further asserts
that because all damages now sought by Plaintiff stem from the costs of removing the contaminated
soil from the City landfill, transporting, and disposing of it, Plaintiff is precluded from seeking those
damages under the Agreement.
In the alternative, Defendant argues that the damages sought by Plaintiff are consequential
damages, and that such damages are waived under the Agreement. In Section 24 of Exhibit A,
entitled “Waiver of Consequential Damages,” the Agreement provides:
Neither party shall be liable to the other for consequential damages, including but
not limited to loss of profits, loss of use, incidental, indirect, collateral, punitive,
exemplary, multiple or other special damages.
(Exhibit A ¶ 24, Dkt. 23-3).
Plaintiff responds that Defendant’s interpretation of Section 25 and the “Limitations”
language in Exhibit C would effectively act as a pre-breach release of Defendant’s failure to perform
under the Agreement and would render the Agreement illusory. According to Plaintiff, these
provisions were intended to set forth the parties’ respective liability with respect to third-parties and
to address certain regulatory liabilities of the parties. Further, Plaintiff argues that neither provision
precludes Defendant’s liability in this case. Finally, Plaintiff argues that Defendant’s only evidence in
support of its argument regarding the waiver of consequential damages is inadmissible, and that in
any event Plaintiff’s damages are direct damages, not consequential damages, and thus not subject to
the Agreement’s waiver.
Under Texas law, 2 the primary concern of the court in construing a written contract is to
determine the parties’ intentions as expressed in the document. Gonzalez v. Denning, 394 F.3d 388,
392 (5th Cir. 2004); see also Frost Nat’l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310, 311–12 (Tex.
2005). “To achieve this objective, [the] court should examine and consider the entire writing in an
effort to harmonize and give effect to all the provisions of the contract so that none will be rendered
meaningless.” Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983) (emphasis in original). The contract
should be construed “‘from a utilitarian standpoint bearing in mind the particular business activity
sought to be served’ and ‘[to]avoid when possible and proper a construction which is unreasonable,
inequitable, and oppressive.’” Frost Nat’l Bank, 165 S.W.3d at 312 (quoting Reilly v. Rangers Mgmt., Inc.,
727 S.W.2d 527, 530 (Tex. 1987)). Terms within the contract should be given their plain, ordinary
meaning unless the contract itself indicates that the parties intended for a particular term to have a
different meaning. Gonzalez, 394 F.3d at 392. “If, after the pertinent rules of construction are
applied, the contract can be given a definite or certain legal meaning, it is unambiguous” and courts
are to construe it as a matter of law. Frost Nat’l Bank, 165 S.W.3d at 312.
The parties, and the Agreement’s choice of law provision, indicate that Texas law applies in this case.
a. Section 25 and Exhibit C “Limitations”
In this case, the parties urge the Court to follow two different guiding principles in
construing Section 25 and the “Limitations” language in Exhibit C of the Agreement. Defendant
argues that here, the principle of freedom to contract should guide the Court’s reasoning. See El Paso
Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 811–12 (Tex. 2012). (“We have ‘long
recognized Texas’ strong public policy in favor of preserving the freedom of contract.’ . . . ‘Freedom
of contract allows parties to . . . allocate risk as they see fit.’”). Defendant asserts that it is ultimately
irrelevant whether or not the damages caused by the removal of Class 1 Non-Hazardous and
Hazardous soil being removed to the City landfill were Defendant’s fault or not because the parties
allocated all the risk associated with the contaminated soil to the City.
Plaintiff argues that Defendant’s interpretation would render the Agreement illusory, and
that the relevant provisions should not be construed to release Defendant from its obligations under
the Agreement. Plaintiff explains that the provisions cited by Defendant are primarily for purposes
of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(“CERCLA”). 42 U.S.C. § 9607(a). As Plaintiff notes, CERCLA was enacted by Congress “as a
broad remedial measure aimed at assuring ‘that those responsible for any damage, environmental
harm, or injury from chemical poisons bear the costs of their actions.’” Uniroyal Chem. Co. v. Deltech
Corp., 160 F.3d 238, 242 (5th Cir. 1998), as modified on reh’g (Jan. 8, 1999) (quoting S. Rep. No. 96-848,
at 13 (1980)). CERCLA imposes on those considered owners and operators of facilities containing a
hazardous substance, and those who transport hazardous substances, a wide range of damages,
including the loss of natural resources and the costs of any health assessment studies, under
CERCLA. See 42 U.S.C. § 9607(a). Plaintiff argues that Section 25 and the “Limitations” provision in
Exhibit C were intended to limit Defendant’s liability under CERCLA, noting that the language of
Exhibit C tracks approximately the language of CERCLA. 3
In addition to arguing that an alternate, reasonable interpretation exists, Plaintiff argues that
certain provisions in the Agreement would be rendered illusory using Defendant’s interpretation.
Defendant seems to admit this by essentially asserting that “It Does Not Matter” whether it was
“Kleinfelder’s Fault [or] Waco’s Fault.” (Def.’s Mot. for Summ. J. at 16–18, Dkt. 23). In other
words, Defendant suggests that even if it did breach the Agreement by failing to perform its
screening obligations, it cannot be held liable now.
Under Texas law, “when a purported bilateral contract is supported only by illusory
promises, there is no contract.” Lizalde v. Vista Quality Markets, 746 F.3d 222, 225 (5th Cir. 2014). “A
promise is illusory if it does not bind the promisor.” Westlake Petrochemicals, L.L.C. v. United Polychem,
Inc., 688 F.3d 232, 239 (5th Cir. 2012) (quoting In re 24R, Inc., 324 S.W.3d 564, 567 (Tex. 2010)).
Contracts should be interpreted to give effect to their provisions, however, rather than render them
meaningless or illusory. See J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003) (Courts
should “give effect to all the provisions of the contract so that none will be rendered meaningless.”).
Here Defendant promised, through the Agreement, to complete various services for the
Plaintiff in exchange for compensation. These services were to include soil sampling and testing,
monitoring of site remediation activities, and, if needed, perimeter air monitoring during remediation
CERLA provides that the following persons face liability under the law:
(1) the owner and operator of a vessel or a facility,
(2) any person who at the time of disposal of any hazardous substance owned or operated any facility
at which such hazardous substances were disposed of,
(3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, or
arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or
possessed by such person, by any other party or entity, at any facility or incineration vessel owned or
operated by another party or entity and containing such hazardous substances, and
(4) any person who accepts or accepted any hazardous substances for transport to disposal or
treatment facilities, incineration vessels or sites selected by such person, from which there is a release,
or a threatened release which causes the incurrence of response costs, of a hazardous substance
42 U.S.C. § 9607.
activities. (Def.’s Mot. for Summ. J. Ex. 1, Ex. C at 4, Dkt. 23-3). If Defendant could not be held
liable for a failure to perform these services, Defendant’s promises would be illusory or meaningless.
Defendant makes two main arguments in response to Plaintiff’s interpretation of the
Agreement. First, Defendant argues that the provisions at issue make clear who bears to risk of loss
for transporting and disposing of the materials. But Defendant’s argument confuses what Plaintiff
alleges Defendant is liable for—breaching the Agreement by failing to properly screen soil and
monitor remediation at the Property—with what Plaintiff alleges is the appropriate measure of
damages for Defendant’s liability—the cost Plaintiff incurred in cleaning-up the contaminated soil.
While the Agreement makes clear the Plaintiff is responsible and for all costs associated with the
contaminated soil, it does not speak to Defendant’s possible liability for their alleged breach of the
Agreement by not properly screening soil at the Property.
Second, Defendant argues that “[t]he City is an extremely sophisticated and experienced
purchaser of consulting services and, in particular, environmental consulting services,” that “[t]he
City has its own in-house legal department,” and that the City “knows how to allocate potential
liability in a contract for environmental services.” (Def.’s Reply at 4–5, Dkt. 35). But this argument
cuts both ways. If Kleinfelder and the City—both of whom are experienced in contracts of this
nature—truly intended to waive all potential liability for Kleinfelder if it failed to perform its
monitoring and screening obligations under the agreement, they certainly could have written a
contract that clearly did so.
While the Court recognizes the parties’ freedom to contract, it finds that only Plaintiff has
supplied a reasonable interpretation of the provisions at issue and that it should be adopted. For the
foregoing reasons, the Court finds that Section 25 and Exhibit C of the Agreement do not preclude
Defendant’s liability in this case, and denies Defendant’s motion for summary judgment.
b. Waiver of Consequential Damages
The Court turns next to Defendant’s argument that Plaintiff’s claims for damages are
precluded by the waiver of consequential damages at Section 24 of Exhibit A in the Agreement. The
Agreement itself does not define “consequential damages,” but does provide that consequential
damages include, but are not limited “to loss of profits, loss of use, incidental, indirect, collateral,
punitive, exemplary, multiple or other special damages.” (Exhibit A ¶ 24, Dkt. 23-3).
Under Texas common law, 4 actual damages from a breach of contract may be classified as
either “direct” or “consequential.” See Cherokee Cty. Cogeneration Partners, L.P. v. Dynegy Marketing &
Trade, 305 S.W.3d 309, 314 (Tex. App.—Houston [14th Dist.] 2009, no pet.). “Direct damages . . .
flow naturally and necessarily from a defendant’s wrongful act, [and] compensate the plaintiff for a
loss that is conclusively presumed to have been foreseen by the defendant as a usual and necessary
consequence of its wrongdoing.” Id. “By contrast, consequential damages ‘result naturally, but not
necessarily, from the defendant’s wrongful acts.’” Id. (quoting Stuart v. Bayless, 964 S.W.2d 920, 921
Defendant argues that it is entitled to summary judgment on Plaintiff’s breach of contract
claim because the damages Plaintiff complains of—the costs of removing contaminated soil from
the City landfill—are consequential, and were indirect or not forseeable as a consequence of its
wrongdoing. Defendant supplies as evidence for its motion for summary judgment the statement of
Charles Dowdell, Plaintiff’s designated expert on damages, who stated that there was “an indirect
relationship” between the breach alleged by the City and the damages sought by the City. (Dowdell
Dep. 290:5–9, Dkt. 23-7).
Because the parties did not define the term “consequential damages” within the Agreement, and the examples of
consequential damages provided in the Agreement are consistent with Texas common law, the Court will presume the
parties intended the term to have its ordinary meaning under Texas common law. See Cherokee Cty. Cogeneration Partners,
L.P. v. Dynegy Marketing & Trade, 305 S.W.3d 309, 313–14 (Tex. App.—Houston [14th Dist.] 2009, no pet.).
Plaintiff responds that this testimony is inadmissible as a matter of law under both Texas and
Federal evidentiary rules, and instead argues that the evidence demonstrates that the damages it
seeks are direct, not consequential damages. Plaintiff cites to the SAP, the Texas Commission on
Environmental Quality Response Action Plan, deposition testimony of Defendant’s Project
Manager, Winfield McAtee, and deposition testimony of Plaintiff’s experts 5 to show that the
Defendant contemplated the very harm that occurred here—contaminated soil being sent to the
wrong facility, that had to be removed later and sent to another facility.
Defendant rebuts this evidence in its reply, again citing the City’s damages expert, arguing
that if the City had complied with its obligations under the SAP by stockpiling soil at the Property
and waiting to receive test results before moving the contaminated soil to the City landfill, the
damages would have been prevented, and thus those damages were not the direct result of
In light of this competing evidence, the Court finds that a genuine issue of material fact
exists regarding whether the damages sought by the City are consequential damages, and thus
precluded under the Agreement. Because the Court cannot resolve the issue on summary judgment,
Defendant’s motion for summary judgment is denied to the extent it is based on Section 24 of
Exhibit A of the Agreement.
2. Plaintiff’s Negligence Claim
Defendant seeks dismissal of Plaintiff’s negligence claim on the basis that the Plaintiff’s tort
claim arises from a breach of contract and is thus precluded by law. The Court agrees. The Texas
Supreme Court has “repeatedly” made clear that when the injury complained of is one for economic
damages recoverable under a breach of contract claim, an action for the same injury or loss in tort is
precluded. See LAN/STV v. Martin K. Eby Const. Co., 435 S.W.3d 234, 242 n.35 (Tex. 2014).
Defendant has objected to Plaintiff’s use of one of these experts, Edward Kavaznjian, Jr. (See Motion to Exclude
Opinion Testimony of Plaintiff’s Expert Edward Kavaznjian, Jr., Dkt. 27).
Plaintiff’s argument that its claims are based on “the quality of Defendant’s performance [under the
Agreement], as opposed to the complete failure to perform,” are thus unavailing. (Pl.’s Resp. at 38,
Dkt. 30). In either case, Plaintiff seeks to recover an injury or loss that was the subject of the
Agreement itself, and its “action sounds in contract alone.” Jim Walter Homes, Inc. v. Reed, 711 S.W.2d
617, 618 (Tex. 1986). 6 The Court therefore grants Defendant’s motion for summary judgment with
respect to Plaintiff’s negligence claim.
B. Plaintiff’s Motion for Summary Judgment
Plaintiff argues that it is entitled to summary judgment on its breach of contract claim,
arguing that it is undisputed that Defendant’s breached the Agreement by failing to perform the
monitoring and sampling services they were obligated to perform under the Agreement. Plaintiff
also argues that it is entitled to summary judgment on Defendant’s declaratory judgment claim. The
Court will address each of these arguments in turn.
1. Breach of Contract
The elements of a breach of contract claim under Texas law are: “(1) the existence of a valid
contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the
defendant; and (4) damages sustained by the plaintiff as a result of the breach.” Villarreal v. Wells
Fargo Bank, N.A., 814 F.3d 763, 767 (5th Cir. 2016). “A breach occurs when a party fails to perform
a duty required by the contract.” Smith Int’l, Inc. v. Egle Grp., LLC, 490 F.3d 380, 387 (5th Cir. 2007).
The City argues that it is entitled to summary judgment on its breach of contract claim
because the SAP is a valid and enforceable part of the Agreement between the City and Kleinfelder,
the City fully performed under the Agreement, Defendant breached the Agreement by failing to
The Texas Supreme Court has limited the line of cases on which Plaintiff relies for its argument. See LAN/STV, 435
S.W.3d at 242 n.35. Notably, two of the cases on which Plaintiff relies include tort claims stemming from a harm that is
not premised on the defendant’s obligation under the contract. See Montgomery Ward & Co. v. Scharrenbeck, 204 S.W.2d
508, 510 (Tex. 1947) (defendant burned down plaintiff’s home); Chapman Custom Homes, Inc. v. Dall. Plumbing Co., 445
S.W.3d 716, 718 (Tex. 2014) (defendant flooded plaintiff’s home).
perform its monitoring, sampling, and screening duties as indicated in the SAP, and the City’s
damages were the natural, probable, and foreseeable consequence of Kleinfelder’s breach.
Defendant responds that summary judgment is precluded because genuine issues of material
fact remain regarding whether the SAP was incorporated into the Agreement, whether the City of
Waco performed its obligations under the Agreement, whether Defendant’s actions constituted a
material breach, and whether the City’s damages were the natural, probable, and foreseeable
consequences of that breach. 7
After thoroughly reviewing the factual allegations made by each party, the Court agrees with
Defendant. The parties vigorously contest many of the facts surrounding the dispute, including
whether the parties intended to incorporate the SAP into the Agreement (as part of an Amendment
executed on November 28, 2012 or otherwise), why the City decided to stage soil removed from the
Property at the City landfill, whether the City knew that a photoionization detector (“PID”) was not
being used to monitor the excavation, how a PID works, and whether Defendant was appropriately
monitoring the soil excavation for odor or for visual indications that it might be hazardous. Because
the Court finds that Plaintiff has failed to demonstrate that there is no genuine dispute as to issues
of material fact, the Court must deny Plaintiff’s motion for summary judgment with respect to the
breach of contract claim.
2. Defendant’s Declaratory Judgment Claim
Plaintiff argues that under both Texas and Fifth Circuit case law, a request for declaratory
judgment that merely restates a party’s defenses, without more, is insufficient and should be
dismissed. 8 Defendant counters that an actual controversy between the parties exists, and that its
counterclaim is sufficient to state a claim pursuant to the Declaratory Judgment Act, 28 U.S.C.
Both parties also address whether Plaintiff’s damages are precluded under the Agreement as consequential damages.
The Court has already addressed this issue in considering Defendant’s motion for summary judgment. See supra Part
8 Plaintiff has filed this part of its motion as a motion to dismiss, rather than as a motion for summary judgment.
§ 2201. Further, it argues that courts routinely allow parties to seek declaratory judgments regarding
their rights and obligations pursuant to a contract.
The Declaratory Judgment Act confers “substantial discretion” on courts “in deciding
whether to declare the rights of litigants.” Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995). While
the Court agrees with Defendant that courts are generally amenable to declaratory judgment actions
when a party seeks to obtain a declaration of its rights under contract, here such a declaration is
unnecessary because Plaintiff has already placed the issues relevant to Defendant’s counterclaim
before the Court. See Madry v. Fina Oil & Chem. Co., 44 F.3d 1004 (5th Cir. 1994) (reversing district
court’s grant of declaratory judgment because “[t]he declaratory judgment [did] not declare any
significant rights not already at issue in the contract dispute.”); see also Regus Mgmt. Grp., LLC, v. Int’l
Bus. Mach. Corp., No. CIV.A.3:07-CV-1799-B, 2008 WL 2434245, at *2 (N.D. Tex. June 17, 2008)
(“[C]ourts regularly reject declaratory judgment claims that seek resolution of matters that will
already be resolved as part of the claims in the lawsuit.”). Thus, the Court grants Plaintiff’s motion
to dismiss with respect to Defendant’s counterclaim for a declaratory judgment.
III. REMAINING EVIDENTIARY MOTIONS
Having addressed each parties’ motions for summary judgment, the Court now turns to
Defendant’s three separately filed motions regarding the summary judgment evidence—two motions
to exclude the opinion testimony of Plaintiff’s experts and one general objection and motion to
strike portions of the City’s motion for summary judgment.
A. Motions to Exclude Expert Testimony
Rule 702 of the Federal Rules of Evidence governs the admissibility of expert testimony.
This rule provides:
A witness who is qualified as an expert by knowledge, skill, experience, training, or
education may testify in the form of an opinion or otherwise if:
(a) the expert’s scientific, technical, or other specialized knowledge will help the trier
of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case.
Fed. R. Evid. 702. Rule 702 has been amended to incorporate the principles first articulated by the
Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and as well as those
enunciated in the many cases applying Daubert, including Kumho Tire Co. v. Carmichael, 526 U.S. 137,
141 (1999). See Fed. R. Evid. 702 Advisory Committee Notes.
Following Daubert and its progeny, trial courts are to act as “gatekeepers,” overseeing the
admission of scientific and nonscientific expert testimony. See Kumho Tire Co., 526 U.S. at 147. Trial
courts must make “a preliminary assessment of whether the reasoning or methodology underlying
the testimony is scientifically valid and of whether that reasoning or methodology properly can be
applied to the facts in issue.” Daubert, 509 U.S. at 592–93. In carrying out this task, district courts
have broad latitude in weighing the reliability of expert testimony for admissibility. See Kumho Tire
Co., 526 U.S. at 152 (recognizing trial court must have considerable leeway in determining
admissibility of expert testimony). The district court’s responsibility “is to make certain that an
expert, whether basing testimony upon professional studies or personal experience, employs in the
courtroom the same level of intellectual rigor that characterizes the practice of an expert in the
relevant field.” Id. The party seeking to have the district court admit expert testimony must
demonstrate that the expert’s findings and conclusions are based on the scientific method and are
reliable. See Moore v. Ashland Chem. Inc., 151 F.3d 269, 276 (5th Cir. 1998).
However, Rule 702 is not the only evidentiary barrier to the admissibility of expert
testimony—Rule 403 “permits the exclusion of relevant evidence ‘if its probative value is
substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the
jury.’” Daubert, 509 U.S. at 595 (quoting Fed. R. Evid. 403).
1. Plaintiff’s Expert Michael W. McLaughlin
Plaintiff’s Expert Michael McLaughlin’s report draws two broad conclusions. First, that the
SAP was part of the Response Action Plan (“RAP”) expressly required by the Agreement, and
second, that the screening techniques described in the SAP likely would have assisted in segregating
soils that appeared inconsistent with Class 2 Non-Hazardous waste. Defendant seeks to exclude
McLaughlin’s testimony regarding each of these conclusions.
The Court agrees with Defendant that McLaughlin should not be permitted to testify before
a jury regarding his first conclusion. The questions left to the jury with respect to whether the SAP is
incorporated into the Agreement are fact issues which largely on the parties’ intent regarding the
Agreement, the Amendment, and the SAP. While the Court acknowledges that McLaughlin, a
lawyer, has not expressly proffered legal opinions in his expert report, it also concludes that the
probative value of his testimony—which primarily turns on his view that the SAP was a fundamental
part of the RAP—is minimal. His opinions with respect to this issue are based solely on reviewing
the very same documents that the jury will have access to and his experience working on similar
projects in other states. These documents are not highly technical, and to the extent that Plaintiff
wishes to demonstrate the importance of the SAP to the RAP, it may do so with lay witnesses.
In contrast, the Court finds that the danger of unfair prejudice or confusion of the jury in
this case would be substantial if McLaughlin were allowed to testify on this issue. Legal opinions are
not the proper subject of expert testimony, see, e.g., Askanase v. Fatjo, 130 F.3d 657, 672–73 (5th Cir.
1997), and McLaughlin comes dangerously close to expressing a legal opinion when he asserts that
the SAP “was an element of” the RAP required under the Agreement. (Pl.’s Resp. to Def.’s Mot. to
Exclude McLaughlin, Ex. C at 5, Dkt. 40). Juries are very susceptible to adopting expert opinions, see
Askanase, 130 F.3d at 673, and the Court finds it likely that a jury in this case would be unduly
persuaded by McLaughlin’s testimony. The Court therefore concludes that McLaughlin’s testimony
as to the relationship between the SAP and the RAP, or whether the SAP is incorporated into the
Agreement, should be excluded under Federal Rule of Evidence 403.
The Court next turns to Defendant’s objections regarding McLaughlin’s testimony on soil
screening methods, including those referenced in the SAP. McLaughlin is a professional engineer in
Virginia and New Mexico with a degree in civil engineering. (Pl.’s Resp. to Def.’s Mot. to Exclude
McLaughlin, Ex. A at 9, Dkt. 40). His resume lists scores of different Superfund Projects, Resource
Conservation and Recovery Act Projects, Voluntary Cleanup Projects, and Environmental Due
Diligence Assignments. (Id. at 9–15). He has also written extensively about landfills and solid waste
management. (Id. at 15–16). In addition, McLaughlin’s deposition testimony demonstrates his
familiarity with different soil screening methods, including a PID and exactly how it works. (See
generally Pl.’s Resp. to Def.’s Mot. to Exclude McLaughlin, Ex. B).
McLaughlin’s report explains the results of an evaluation of the soil staged at the landfill
done by his engineering firm. (Pl.’s Resp. to Def.’s Mot. to Exclude McLaughlin, Ex. C at 5–6, Ex.
40). He explains that most of the analysis was done with a flame ionization detector (“FID”) rather
than a PID, and in his report and his deposition he explains the difference between the two devices.
(Pl.’s Resp. to Def.’s Mot. to Exclude McLaughlin, Ex. B at 57–58 & Ex. C at 5–6, Ex. 40). Within
his report, McLaughlin also explains the basis for his opinions regarding what a PID would have
detected had it been used at the Property. (Pl.’s Resp. to Def.’s Mot. to Exclude McLaughlin, Ex. C
at 6, Ex. 40).
Defendant offers several reasons to exclude McLaughlin as an expert. While many of these
arguments may weigh against certifying McLaughlin as an expert (such as that he is not a
professional engineer in Texas, and that he relies on no peer-reviewed articles for his opinions), they
do not overcome his vast knowledge and experience in soil screening, the matter on which he is
Defendant also argues that a critical conclusion made by McLaughlin—that a PID could
have been used to detect volatile organic compounds in the air at the Property that would have
indicated that the subject soil was contaminated—is unreliable. In support of this argument,
Defendant primarily points to a statement made in a report by a colleague of McLaughlin’s who
tested the subject soil. That colleague stated that while “[t]he PID was working normally [it] was not
used because it did not have sufficient power to ionize the target gases.” (McLaughlin Dep. 102:7–
23, Dkt. 26-1). It is unclear to the Court whether this is statement is based on the colleague’s
attempted used of a PID, or instead, based on the colleague’s own conclusion that a PID would be
insufficient. In either case, however, the Court concludes that this issue can be adequately addressed
on cross-examination. See Daubert, 509 U.S. at 596 (“Vigorous cross-examination, presentation of
contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate
means of attacking shaky but admissible evidence.”). Thus, for largely the reasons stated in Plaintiff’s
response, the Court denies Defendant’s motion to exclude McLaughlin’s testimony regarding soil
2. Plaintiff’s Expert Edward Kavazanjian, Jr.
Defendant also challenges the testimony of Plaintiff’s expert Edward Kavazanjian, Jr.
Kavazanjian is a “Consulting Geotechnical Engineer,” with a Ph.D. in Civil/Geotechnical
Engineering from Berkeley, a Masters in Civil/Geotechnical Engineering from MIT, and a Bachelor
of engineering from MIT. (Pl.’s Resp. to Def.’s Mot. to Exclude Kavazanjian, Ex. A at 1, Dkt. 39).
According to his curriculum vitae, he is “recognized for his work on mechanical properties of
municipal solid waste, analysis and design of waste containment systems, and geotechnical
earthquake engineering.” (Id. at 2). Kavazanjian’s curriculum vitae also includes an extensive list of
publications and speeches, primarily related to these topics. (Id. at 5–32). Further, Kavazanjian’s
deposition testimony indicates that he has used a PID and has a thorough understanding of how a
PID works. (Kavazanjian Dep. at 21–27, Dkt. 39).
Defendant makes many of the same arguments with respect to Kavazanjian as it did with
respect to McLaughlin. The Court finds that these arguments are similarly without merit with
respect to Kavazanjian. For example, Defendant argues that because Kavazanjian is specialized in
soils engineering, and is not a chemist nor an instrumentation expert, he is unqualified. However, within
the same motion, Defendant also argues Kavazanjian is not qualified because he is not a professional
engineer in Texas. (Def.’s Mot. to Exclude Kavazanjian at 1, 6). Generally, Rule 702 does not demand
that an expert has a particular set of credentials in order to testify, but that the expert’s testimony
will assist the trier of fact and is reliable. While Kavazanjian is not a chemist, an instrument expert,
nor a professional engineer in Texas, his extensive background in soils engineering and his
deposition testimony regarding soil screening and how a PID works demonstrate his qualifications
Defendant also argues that Kavazanjian’s opinions regarding the functioning and capabilities
are incorrect. It bases this argument on Kavazanjian’s failure to rely on peer-reviewed publications
for his opinion, his lack of publications on the subject, and the fact that a PID was ultimately not
used to screen the subject soil after it was thought to be contaminated. The Court concludes that
these points are insufficient to demonstrate the Kavazanjian’s opinion is unreliable. Again, to the
extent that Defendant seeks to call into question Kavazanjian’s opinions, it may do so by raising
these issues on cross-examination. See Daubert, 509 U.S. at 596. Thus, the Court denies Defendant’s
motion to exclude Kavazanjian’s testimony at trial.
B. Objections and Motion to Strike Summary Judgment Evidence
Defendant also files objections to, and moves to strike, fifty-eight different statements in the
factual background to Plaintiff’s motion for summary judgment. Defendant objects to statements in
which Plaintiff quoted from Defendant’s publically accessible website and others in which Plaintiff
quoted the SAP (Def.’s Objs. to Pl.’s Summ. J. Evid. ¶¶ 1–4, 8, Dkt. 32). Defendant also objects to
numerous other statements including those summarizing Plaintiff’s factual allegations (e.g., id. ¶ 6),
and those supported by the testimony of Plaintiff’s expert, to which Defendant has already objected
(e.g., id. ¶¶ 10–15). Defendant lists its objections without any explanation, including more than ten
objections to single sentences included in Plaintiff’s motion. The Court finds that the vast majority
of these objections are meritless. However, because the Court denies Plaintiff’s motion for summary
judgment and agrees with Defendant that genuine issues of material fact exist regarding Plaintiff’s
breach of contract claim, it concludes that Defendant’s objections to Plaintiff’s summary judgment
evidence are moot.
Based on the foregoing, the Court DENIES Defendant’s Motion for Summary Judgment
on Plaintiff’s claim for breach of contract and GRANTS Defendant’s Motion for Summary
Judgment on Plaintiff’s negligence claim (Dkt. 23). Further, the Court DENIES Plaintiff’s Motion
for Summary Judgment on its claim for breach of contract, and GRANTS Plaintiff’s Motion
Dismiss on Defendant’s claim for declaratory judgment (Dkt. 25).
In addition, the Court GRANTS in part and DENIES in part Defendant’s Motion to
Exclude Opinion Testimony of Plaintiff’s Expert Michael W. McLaughlin (Dkt. 26), DENIES
Defendant’s Motion to Exclude Opinion Testimony of Plaintiff’s Expert Edward Kavaznjian, Jr.
(Dkt. 27), and DENIES Defendant’s Motion to Exclude Portions of the City’s Summary Judgment
Evidence (Dkt. 32).
SIGNED on October 6, 2016.
UNITED STATES DISTRICT JUDGE
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