Claim at Issue:
Damage to a joint railroad bridge located in Ohio resulting from the improper design of a public improvements project in addition to improper construction means and methods being used by the contractors on site. The bridge supports tracks for both Norfolk Southern and CSX Transportation, Inc. The cost to remediate the damage was in excess of $10,000,000.00. We filed suit in federal court in Ohio on behalf of both railroads against the entities responsible for the project and the railroads' insurer for failing to make payment under applicable Railroad Protective Liability policies.
Key Legal or Factual Issues:
The first bridge pier began to experience settlement in April of 2015. Subsequently, a second pier began to experience similar settlement. Prior to the settlement, excavation work had been performed around the 100 year old bridge piers by contractors working on a city sponsored project which added greenspace to the banks of the river. This was achieved by narrowing and, in some instances, deepening the riverbed.
The early indications were that the contractors excavated around the bridge's piers but failed to install scour protection as called for in the design plans. We submitted a claim on behalf of the railroads under their respective RPL policies, which the insurer, failed to pay. We later learned that the insurer was sharing information provided by the railroads in support of their insurance claims to the general contractor responsible for construction of the project and who the insurance company also happened to insure as well.
In order to pursue recovery, we filed suit against the various entities involved in the project as well as the insurer for bad faith insurance practices for delaying a determination on the claim for months, and failing to pay the claim. Initial discovery revealed that there was no consensus as to what caused the piers to sink. Given the complexity of the issues, we engaged a forensic structural engineer to perform a failure analysis, a geotechnical engineer to identify the geotechnical cause of the settlement and a hydrodynamic/scour engineer to assess scour conditions.
Nearly fifty depositions were taken and over 200,000 documents were produced during discovery. We filed multiple motions seeking to compel documents that CIC and other parties withheld on privilege grounds, which were granted. Using the information obtained during discovery and working with our experts, we were able to determine that the probable cause of the damage to the bridge was both improper means and methods used by the construction company and defective plans that used the wrong elevations associated with the pier foundations. This resulted in designs that required the contractors to dig below the piers removing critical lateral support.
With respect to the insurer, we aggressively pursued discovery and identified numerous instances of the insurance company failing to properly process the railroads' claims. Some challenges to recovery were that the RPL policies had a cap of $7 million and CIC's internal documents valued the damage to the bridge at $6.8 million, and other parties valued the damage at between $3 and $5 million. Despite all of this, bolstered by the bad faith claims, we were able to secure a recovery from the insurer over $7,600,000. We then focused on a recovery from the engineering team engaged by the rail carriers to review and approve the design plans, and to protect railroad interests. These efforts led to the recovery of an additional $1,700,000. The total recovery to our railroad clients exceeded $9,000,000 (over a 90% recovery).