19-099.00 Meridian Construction/Piersol Construction: Council Chambers East Wall 11-09/
ER 408 DISPUTE RESOLUTION AGREEMENT
I. RECITALS
LI City of Spokane Valley ("Owner") is a code City of the State of Washington and
owner of the real property and all improvements thereon known as the Spokane Valley New City
Hall,located at 10210 East Sprague Avenue, Spokane Valley, WA 99206 ("Project").
1.2 Meridian Construction, Inc., ("Contractor") entered into an AIA Standard Form
Agreement Between Owner and Contractor ("Prime Contract") for the construction of the
Project.
1.3 Contractor entered into a "Subcontract Agreement" with Piersol Construction,
Inc., ("Subcontractor") for all work necessary or incidental to complete the Earthwork,
Excavation and Utilities for the Project("Subcontractor's Scope of Work").
1.4 The term "Parties" or "Party" shall refer to the Owner, Contractor and
Subcontractor,both collectively and/or individually, depending on the context.
1.5 The Owner asserts construction defect claims against the Contractor arising out of
the conditions with respect to the soil settlement underneath the footings for the northeast wall of
the Project("Owner's Claims"). Owner submitted a"Notice of Claim"to Contractor pursuant to
the terms and procedures set forth in the Prime Contract.
1.6 Contractor alleges that some or all of the defect claims asserted by Owner against
Contractor may be due to design issues, and/or the responsibility of Subcontractor pursuant to
the Subcontract Agreement and the Subcontractor's Scope of Work. Contractor has notified
Subcontractor of Subcontractor's potential responsibility regarding Owner's Claims
("Contractor's Claims").
1.7 The contracts amongst the Parties require the Parties to first mediate any disputes
prior to formal dispute resolution. Therefore, pursuant to the contracts and otherwise, the Parties
enter into this agreement pursuant to the terms and conditions set forth herein.
IL PURPOSE OF AGREEMENT
2.1 The purpose of this ER 408 Dispute Resolution Agreement ("Agreement") is: (1)
to engage in an investigation of the alleged defective work, materials, and resultant property
damage at the Project for the purpose of formulating an agreed-upon scope of repair and cost of
repair; (2) to defer the high costs of formal litigation and discovery while the parties are
participating in the process described in this Agreement; (3) to allow a free exchange of
information and documents between the parties and their retained experts without the constraints
of formal discovery and litigation; and (4) to reach a reasonable settlement of the Owner's
Claims and Contractor's Claims through good faith negotiations and, if necessary,mediation.
2.2 The Parties desire to reach a reasonable settlement resolving all of the Owner's
Claims and Contractor's Clams regarding the Project. Participation in this Agreement, however,
does not contractually or legally bind any Party to a particular solution. Moreover, participation
in this Agreement does not represent an admission by the Contractor or Subcontractor to any
allegations and claims made in the Notice of Claim.
III. THE AGREEMENT
3.1 ER 408. Unless expressly stated otherwise, all communications including but not
limited to: emails, letters, reports, faxes, or other materials prepared or exchanged by or between
the Parties, their experts, or other parties in conjunction with the requirements, negotiations, and
mediation called for in this Agreement shall be protected by ER 408, RCW 7.07 et seq., and
RCW 5.60.070 (hereinafter referred to collectively as "ER 408 Documents"), and may not be
used in any trial, arbitration, motion hearing, deposition, other discovery, or any other legal
proceeding in this matter. However, except as provided by this Agreement. neither the Parties,
nor their experts shall be barred from discovering or making use of the facts, test results, reports,
photographs, and other documentation obtained in the development of the Parties' respective
scopes of repair or estimates in subsequent formal dispute resolution, so long as the Party or
expert does not reference this Agreement and/or any other ER 408 Documents. In this regard,the
Parties agree that they may not cross-examine or impeach any witness or expert regarding this
Agreement and/or any other ER 408 Documents or otherwise reference this Agreement and/or
any other ER 408 Documents in the examination of a fact or expert witness.
3,2 Agreement to Forebear Filing. During the effective period of this Agreement,
the Parties shall not cause to be filed, commenced, served, or otherwise initiated any claim,
arbitration, complaint, cross-claim, third-party complaint, or other cause of action against the
other that is in any way related to the claims discussed above.
3.3 Mediation. If necessary, the Parties shall cooperate to select a mediator. The
Parties shall participate in mediation with such mediator,as provided below.
3,4 Release of Bonds. Performance, Payment and Retainage Bonds were issued for
the Project. The Parties agree that the Bonds may now be released, including a release of the
final retainage amounts to the subcontractors for the Project, including but not limited to
Subcontractor, and that the release of the Bonds pursuant to this Agreement, including but not
limited to the Performance and Retainage Bonds, shall not constitute a release, waiver or
relinquishment of any of Owner's Claims or Contractor's Claims, nor shall the release of the
Bonds constitute a release, waiver or relinquishment of any other past, present or future claims
by the Parties arising out of or related to the Project, Prime Contract and/or Subcontract
Agreement.
3.4 Document Production. Without waiving the protections of ER 408, ER 411, and
other applicable evidentiary protections,the Parties agree to provide each other with access to or
production of all of the documents for the Project within each of the Parties' custody or control,
upon request, with all costs of copying documents to be initially borne by the requesting Party
without prejudice to any later claim for costs or fees under the Prime Contract, Subcontract
Agreement or Washington law.
3.4.1 Each of the Parties will provide the other Party with access to Expert
Work Product prepared pursuant to this Agreement. "Expert Work Product" shall include
the reports, testing results, and photographs generated by or on behalf of the Party's
expert(s), in addition to product data relied on by such expert(s) in forming opinions in
reports, and any reports issued by any expert's sub-consultant(s),but shall not include any
privileged material, which shall be referenced in a privilege log produced by the Party
retaining such Expert. The Party retaining an expert shall produce the Expert Work
Product described above within 30 days of the execution of this Agreement and shall
supplement the production of same within seven days after production of any of the
documents required of that Party by paragraphs 3.6.2 and 3.6.3, below.
3.4.2 The Parties reserve the right to designate any of the experts retained by
either of them as a consulting witness(es) who will not testify at trial or arbitration. The
Parties agree that production of expert opinions,materials,photographs and/or documents
pursuant to this Agreement, or other expert participation prior to the institution of
litigation or pursuant to this Agreement, shall not operate as a waiver of such right. The
Parties shall not have the right to discover or make use of opinions or materials generated
by experts who are later designated as consultants.
3,4.3 Each Party shall produce a privilege log with regard to any documents,
materials or photographs withheld from production on the basis of privilege.
3.5 Investigation and Scopes of Repair.
3.5.1 No later than 15 days after this Agreement is executed by all Parties, the
Parties' experts shall meet, in person and at a mutually agreed time and location, to
discuss the Project and to formulate a plan for the exchange of any and all Project
documents, as well as any follow-up inspections necessary in order for Owner's experts
to prepare plans, drawings and specifications for the scope of repairs regarding Owner's
Claims.
3.5.2 Any requested follow-up inspection pursuant to Paragraph 3.5.1 above
shall be completed within 15 days after the expert meeting. The Parties and their experts
shall also use their best efforts to provide access to or produce any requested documents
by no later than 10 days after the expert meeting. All investigations shall be conducted in
a customary manner and shall be reasonably tailored to ascertain the issues or
information sought, as discussed during the expert meeting. Unless otherwise agreed
during the course of this process, the Parties are responsible for initial payment of their
own experts' fees and costs. However, this section shall not be construed to affect any
Party's ultimate claim for costs or fees under the Prime Contract, Subcontract Agreement
or Washington law.
3.5,3 No later than 45 days after this Agreement is executed by the Parties, the
Owner's experts shall provide their plans, drawings and specifications with respect to the
proposed scope of repairs directly to the other Parties' experts.
3.5.4 No later than 15 days after Owner's experts provide their plans, drawings
and specifications pursuant to Paragraph 3,5.3, the Parties' experts shall participate in a
Joint Telephone Conference to confer, subject to the protections of this Agreement and
ER 408, in an effort to agree on a Joint Scope of Repair. The Joint Scope of Repair shall
identify all of the repairs agreed to be necessary by the Parties and any disputed
alternatives and shall provide sufficient detail for a contractor to estimate the cost of such
repairs and alternatives. Any Joint Scope of Repair is protected by Evidence Rule 408
3.5.5 If the Parties' experts are unable to agree on a Joint Scope of Repair, then
the Contractor's experts shall produce directly to the Parties' experts their recommended
Scope of Repair within 30 days of the Joint Telephone Conference identified in
Paragraph 3.5.4 and Subcontractor's experts shall produce their Scope of Repair to the
Parties' experts within 15 days after Contractor's experts produces their Scope of Repair.
3.6 Estimates. Unless the Parties otherwise agree to rely upon a single estimate of
any Scope of Repair, Owner and Contractor shall each produce an estimate of any Joint Scope of
Repair, Joint Scope of Repair with alternatives, or its respective Scope of Repair within 30 days
of disclosure of each Party's respective Scope of Repair. Owner and Contractor's experts shall
produce any revisions to their respective estimates ("Revised Estimates") within 10 days after
any Scope of Repair is produced by the Subcontractor's experts.
3.7 Pre-Negotiation/Mediation Meeting. Within 15 days after the production of any
Revised Estimates, the Parties and their respective experts shall meet in person at a mutually
agreed time and location and attempt to resolve any remaining disputes regarding the Scopes of
Repair and Cost Estimates,
3.8 Negotiation/Mediation. Within 45 days after the Pre-Negotiation/Mediation
Meeting, the Patties shall endeavor to directly negotiate a resolution of Owner's Claims and
Contractor's Claims, which shall include a negotiation of the Parties' claims for expert and
attorneys' fees and costs. If the Parties do not resolve all claims on or before the expiration of the
45-day period, the Parties shall participate in a mediation with the selected mediator on the
mediator's earliest available date and agreed to by the Parties. The mediator's fee shall be divided
equally between the Parties.
3 9 Modification of Deadlines. This Agreement is intended to remain in effect until
a Notice of Termination is issued by any of the Parties, The Parties may extend any of the
deadlines herein by mutual agreement in writing. If a dispute arises regarding the terms and
conditions of this Agreement, but the Parties do not wish to terminate the Agreement, the Parties
agree that the mediator shall be sole arbiter of any disagreement. Moreover, the mediator, in
his/her own discretion, shall be empowered to extend any deadlines contained in this Agreement
up to 30 days.
3.10 Termination.
3.10.1 If the Parties are unable to resolve all of Owner's and Contractor's Claims,
including claims for expert and attorneys' fees and costs, as set forth in this Agreement,
then immediately upon completion of the mediation or upon delivery of written Notice
Of Termination of this Agreement, the Parties may proceed with formal
litigation/arbitration, as provided pursuant to the Prime Contract and Subcontract
Agreement.
3.10.2 This Agreement is terminable at will by any Party, with or without cause,
upon the issuance of written Notice of Termination. Notice shall be delivered to the
Parties' respective counsel and notification by either letter or email correspondence shall
suffice.
3.10.3 The protections of this Agreement, ER 408 Documents, as well as the full
protections of ER 408, RCW 7.07 et seq. and RCW 5.60.070, shall continue to apply in
the event that this Agreement is terminated.
3.11 This Agreement shall inure to the benefit of and be binding upon the Parties and
their respective heirs, successors and assigns.
3.12 This Agreement shall be construed in accordance with the laws of the State of
Washington.
3.13 The Parties declare that this Agreement has been mutually negotiated and drafted,
and shall not be construed against any Party to this Agreement.
3.14 This Agreement shall become effective immediately following execution by all of
the Parties. Further,this Agreement may be signed in counterpart copies and shall be effective
where each Party hereto has signed at least one copy. An assembled set of such counterpart
copies shall have the same force and effect as an original. Facsimile or electronically transmitted
(PDF) signature shall be binding as an original.
[SIGNATURE PAGES FOLLOW BELOW]
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