5/5/2015 5:29:51 PM

15CV11521

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IN THE CIRCUIT COURT OF THE STATE OF OREGON

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FOR THE COUNTY OF LANE

Case No.

EUGENE WATER AND ELECTRIC

7 BOARD, an Oregon Municipal corporation,
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Plaintiff,

COMPLAINT
(Breach of Contract; Negligence)

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vs.
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DEMAND FOR JURY TRIAL

MWH AMERICAS, INC., a foreign

11 corporation; and ADVANCED AMERICAN
12 CONSTRUCTION, INC., an Oregon
corporation,
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Defendants.
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Amount of Prayer: $5,000,000

Fee Authority: ORS 21.160(1)(d)

For its Complaint against Defendants MWH Americas, Inc. and Advanced American

16 Construction, Inc., Plaintiff Eugene Water and Electric Board alleges as follows:
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PARTIES

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1.

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Plaintiff Eugene Water and Electric Board (Plaintiff or EWEB) is an Oregon

20 municipal corporation formed pursuant to the City Charter of the City of Eugene and the laws of
21 the State of Oregon, with its principal place of business in Lane County, Oregon. EWEB was
22 founded in 1911 and provides electricity and water to more than 86,000 homes, businesses,
23 schools, and other customers in the City of Eugene.
2.

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Defendant MWH Americas, Inc. (Defendant or MWH) is a corporation organized

26 under the laws of California.

Page 1 COMPLAINT
CABLE HUSTON LLP
1001 SW FIFTH AVENUE, SUITE 2000
PORTLAND, OREGON 97204
TELEPHONE: (503) 224-3092; FACSIMILE: (503) 224-3176

3.

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Defendant Advanced American Construction, Inc. (Defendant or Advanced

3 American) is a corporation organized under the laws of Oregon.

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4.
As more fully described below, this action concerns the faulty design and supply of a

6 hydraulic motor hoist drive system at EWEBs Leaburg Dam Facility on the McKenzie River.
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GENERAL ALLEGATIONS

5.

EWEB owns and operates the Leaburg-Walterville Hydroelectric Project, which consists

10 of two hydroelectric developments located on the McKenzie River in Lane County, Oregon. The
11 facilities generate electric power for the citizens of Eugene and Lane County. Leaburg Dam,
12 which was built in 1929, restrains and diverts the McKenzie into the Leaburg Canal at an
13 elevation higher than the natural level of the river, from which the water then flows through
14 power plant turbines generating electricity.
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6.
The Leaburg Dam consists of three roll gates, each of which is 102 feet wide. Four

17 vertical concrete piers separate and provide bookends for the roll gates. Three of the piers each
18 have a motor hoist housed on top of it, which drives a large chain that raises and lowers each roll
19 gate up a geared slot in the side of the pier, as shown in the photo below:
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Page 2 COMPLAINT
CABLE HUSTON LLP
1001 SW FIFTH AVENUE, SUITE 2000
PORTLAND, OREGON 97204
TELEPHONE: (503) 224-3092; FACSIMILE: (503) 224-3176

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7.

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Beginning in 1997, EWEB determined that its electric generation needs required an

14 increase in the elevation of the lake level behind the Leaburg Dam. As part of the process for
15 licensing the water profile with the Federal Energy Regulatory Commission, EWEB sought
16 engineering expertise regarding the increased load on the Leaburg Dam.
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8.

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In December of 1998, EWEB entered a Business Services Agreement with MWH

19 (MWH Contract, including subsequent amendments), by which MWH agreed to act as

20 Engineer for improvements to the Leaburg-Walterville Hydroelectric Project related to raising
21 water levels.
9.

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According to MWHs analysis, the raise in water level required reinforcing the Leaburg

24 Dam and replacing the motor hoists for its three roll gates. For nearly seventy-five years, the
25 Leaburg roll gate hoists had been driven by three electric motor-driven multi-gear mechanical
26 reduction hoist systems (Electric Motor Systems), none of which had ever failed.
Page 3 COMPLAINT
CABLE HUSTON LLP
1001 SW FIFTH AVENUE, SUITE 2000
PORTLAND, OREGON 97204
TELEPHONE: (503) 224-3092; FACSIMILE: (503) 224-3176

10.

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MWH evaluated two potential systems for the hoist: a mechanical type system similar to

3 the existing mid-1920s Electric Motor Systems; and a hydraulic-type system with hydraulic
4 motor and power unit (Hydraulic Motor Systems). Ultimately, MWH strongly preferred and
5 recommended that EWEB install hydraulic motors to hoist the retrofitted Leaburg Dam roll
6 gates.
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11.
After a bidding process facilitated by MWH, EWEB selected Advanced American to act

9 as the prime contractor for the Leaburg Dam improvements. Pursuant to the January 8, 2003
10 Request for Proposal and Advanced American bid (the Advanced American Contract),
11 Advanced American was responsible for supplying the hydraulic motor hoist systems for each of
12 the three roll gates.
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12.
Advanced American subcontracted with MacTaggart Scott to manufacture the three

15 hydraulic motors. In its effort to meet the criteria listed in the MWH specifications for the
16 hydraulic motor hoists, MacTaggart Scott modified its standard motor design. The Advanced
17 American Contract provides that Advanced American is responsible for all damage to property
18 arising from any act, omission or neglect of Advanced American or its Subcontractors.
13.

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On September 5, 2006, EWEB accepted in writing the construction, alteration or repair of

21 the improvements to the Leaburg Dam as being complete on June 21, 2006. The general life
22 expectancy for large mechanical applications like the Leaburg Dam installation is fifty years.
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14.
On January 19, 2012, roughly six years into the life of the newly refurbished Leaburg

25 Dam, the Roll Gate #2 hoist system failed. The gate operators lost control of the gate while
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Page 4 COMPLAINT
CABLE HUSTON LLP
1001 SW FIFTH AVENUE, SUITE 2000
PORTLAND, OREGON 97204
TELEPHONE: (503) 224-3092; FACSIMILE: (503) 224-3176

1 closing it from an almost full-open position. The gate initially became non-responsive,
2 shuddered massively, produced a loud boom, and collapsed into the gate well.
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EWEB disassembled and analyzed the hydraulic motor for Roll Gate #2 and found that

5 its central rotor had split along its diameter. EWEB hired a firm to conduct forensic analysis of
6 the broken motor components to determine the cause. While the rotor broke across certain
7 imperfections in the metal suggesting that specific rotor had unique flaws, causal analysis of the
8 failure proved inconclusive.
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On December 23, 2014, roughly eight years into the life of the newly refurbished

11 Leaburg Dam, the Roll Gate #1 hoist system failed. At about 10:20 AM, EWEB operators lost
12 control of the gate while closing it. The gate initially became non-responsive, shuddered
13 massively, produced a loud boom, and collapsed into the gate well, causing structural damage to
14 the gate.
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17.
EWEB disassembled and analyzed the hydraulic motor on Roll Gate #1 and found that 12

17 of the 18 lobes around the central rotors circumference (essentially, the teeth of the rotor) had
18 been sheared off.
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18.
Only after the December 23, 2014 failure of Roll Gate #1 did EWEB discover that the

21 hydraulic motor hoists incorporated into the MWH design and supplied and installed by
22 Advanced American were part of a systemic design error.
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19.

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The hydraulic motor hoists recommended by MWH and supplied and installed by

25 Advanced American cannot safely and reliably drive the roughly 200,000 pound roll gates on the
26 Leaburg Dam facility without catastrophic failure.
Page 5 COMPLAINT
CABLE HUSTON LLP
1001 SW FIFTH AVENUE, SUITE 2000
PORTLAND, OREGON 97204
TELEPHONE: (503) 224-3092; FACSIMILE: (503) 224-3176

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From mid-2014 and through January 2015, EWEB replaced Roll Gate #2 with an Electric

3 Motor System.
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21.
In response to the catastrophic failure of Roll Gate #1 on December of 2014, EWEBs

6 regulator has ordered that EWEB replace Roll Gate #1, as well as Roll Gate #3, with Electric
7 Motor Systems as a dam safety measure.
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22.
The cost for redesigning the motor hoist systems for all three roll gates, purchasing

10 components, demolition of the faulty motor hoist systems, repair of the damaged gates, and
11 construction is not yet known, but will be proven at trial and will be no less than $5 million
12 dollars.
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FIRST CLAIM FOR RELIEF

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(Breach of Contract against MWH)

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EWEB re-alleges and incorporates by reference herein paragraphs 1 through 22 above as

17 if fully set forth herein.

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24.

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Under the MWH Contract, MWH was responsibleas project Engineerfor the

20 preparation of design drawings and specifications, technical review and recommendations,

21 overseeing equipment checkout, system startup testing, and commissioning activities.
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MWH was responsible, under the MWH Contract, for evaluating the load and duty

24 presented by the roll gates in its engineering design for the roll gate hoist systems, including
25 reviewing the viability of the hydraulic motor for that hoisting application.
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Page 6 COMPLAINT
CABLE HUSTON LLP
1001 SW FIFTH AVENUE, SUITE 2000
PORTLAND, OREGON 97204
TELEPHONE: (503) 224-3092; FACSIMILE: (503) 224-3176

26.

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MWH was responsible, under the MWH Contract, for delivering specifications for a

3 working hoist system appropriate for application to the reinforced Leaburg Dam gates.
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27.

MWH had an obligation under the MWH Contract to adhere to applicable professional

6 and ethical standards and . . . perform all work in a manner consistent with generally accepted
7 skill and care in the types of work undertaken.
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28.

MWH breached the MWH Contract by designing a hoist system that was insufficient for

10 the application presented by the reinforced Leaburg Dam gates. The defective design resulted in
11 operational conditions that overwhelmed the hoist system after only a few years of operation.
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As a direct result of the foregoing breaches, EWEB has incurred and continues to incur
direct damages in an amount to be proven at trial, but currently estimated at no less than $5
million dollars.

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SECOND CLAIM FOR RELIEF

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(Negligence against MWH)

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30.
EWEB re-alleges and incorporates by reference herein paragraphs 1 through 29 above as

20 if fully set forth herein.

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31.
MWH knew that EWEB was relying on it to design a hoist system that was sufficient for

23 the application presented by the reinforced Leaburg Dam gates. It was reasonably foreseeable to
24 MWH that any failure to do so on its part would cause harm to EWEB.
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Page 7 COMPLAINT
CABLE HUSTON LLP
1001 SW FIFTH AVENUE, SUITE 2000
PORTLAND, OREGON 97204
TELEPHONE: (503) 224-3092; FACSIMILE: (503) 224-3176

32.

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As EWEBs project Engineer, MWH owed a special duty to EWEB to, among other

3 things, provide engineering expertise in the design of the hoist system and review of the hoist
4 system as built.
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33.
MWH failed to perform all work in a manner consistent with generally accepted skill and

7 care in the design of the hoist system and in the review of the hoist system as built. The
8 catastrophic failures of the roll gates would not have occurred but for this negligent conduct.
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34.
As a direct result of MWHs negligence, EWEB has incurred and will continue to incur

11 damages in the form of property damage resulting from the catastrophic failure of the hoist
12 system, structural damage to the roll gate following its uncontrolled fall into the gate well, lost
13 productivity, costs of redesigning the hoist systems for all three roll gates, purchasing
14 components, demolition of the faulty hoist systems, construction costs, and other costs and
15 expenses in an amount to be proven at trial currently estimated at no less than $5 million dollars.
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THIRD CLAIM FOR RELIEF

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(Breach of Contract against Advanced American)

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35.
EWEB re-alleges and incorporates by reference herein paragraphs 1 through 34 above as

20 if fully set forth herein.

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36.
Under the Advanced American Contract, Advanced American was responsibleas the

23 Prime Contractorfor constructing an operating roll gate facility, including supplying the
24 hydraulic motors for each of the three roll gates.
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Page 8 COMPLAINT
CABLE HUSTON LLP
1001 SW FIFTH AVENUE, SUITE 2000
PORTLAND, OREGON 97204
TELEPHONE: (503) 224-3092; FACSIMILE: (503) 224-3176

37.

Advanced American was responsible, under the Advanced American Contract, for

3 replacement of the existing electric motor, all gear reducers and associated accessories with a
4 new hydraulic motor complete with all associated accessories . . . required for successful
5 operation of the spillway roller gate chain hoist designed for specified torque and speed.
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38.
Advanced American was responsible, under the Advanced American Contract, for all

8 damage to property . . . that may be caused by, or result from . . . any act, omission or neglect of
9 [Advanced American, or] its Subcontractors.
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Advanced American had an obligation under the Advanced American Contract to

12 indemnify . . . and hold harmless EWEB against all liabilities, damages, losses, claims,
13 expenses (including reasonable attorney fees), demands and actions of any nature whatsoever
14 which arise out of, result from or are related to the carrying out of work to be performed under
15 this contract, [including] the negligent acts or omissions of the Contractor, a subcontractor or
16 anyone directly or indirectly employed by them.
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40.
Advanced American breached the Advanced American Contract by supplying a hoist

19 system that was insufficient for the application presented by the reinforced Leaburg Dam gates.
20 The provision of an inappropriate hoist system resulted in operational conditions that
21 overwhelmed the hoist system after only a few years of operation.
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41.
As a direct result of the foregoing breaches, EWEB has incurred and continues to incur

24 direct damages in an amount to be proven at trial currently estimated at no less than $5 million
25 dollars.
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Page 9 COMPLAINT
CABLE HUSTON LLP
1001 SW FIFTH AVENUE, SUITE 2000
PORTLAND, OREGON 97204
TELEPHONE: (503) 224-3092; FACSIMILE: (503) 224-3176

FOURTH CLAIM FOR RELIEF

(Negligence against Advanced American)

42.

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EWEB re-alleges and incorporates by reference herein paragraphs 1 through 41 above as

5 if fully set forth herein.

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43.
Advanced American knew that EWEB was relying on it to supply a hoist system that was

8 sufficient for the application presented by the reinforced Leaburg Dam gates. It was reasonably
9 foreseeable to Advanced American that any failure to do so on its part would cause harm to
10 EWEB.
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44.
Advanced American failed to exercise reasonable care in supplying a hoist system that

13 was sufficient for the application presented by the reinforced Leaburg Dam gates. The
14 catastrophic failures of the roll gates would not have occurred but for this negligent conduct.
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45.
As a direct result of Advanced Americans negligence, EWEB has incurred and will
continue to incur damages in the form of property damage resulting from the catastrophic failure
of the hoist system, structural damage to the roll gate following its uncontrolled fall into the gate
well, lost productivity, costs of redesigning the hoist systems for all three roll gates, purchasing
components, demolition of the faulty hoist systems, construction costs, and other costs and
expenses in an amount to be proven at trial currently estimated at no less than $5 million dollars.

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PRAYER FOR RELIEF

WHEREFORE, Eugene Water and Electric Board prays for judgment and relief against
Defendants, and each of them, as follows:
1.

For monetary damages to be proven at trial, but currently estimated at no less than

$5 million dollars;

Page 10 COMPLAINT
CABLE HUSTON LLP
1001 SW FIFTH AVENUE, SUITE 2000
PORTLAND, OREGON 97204
TELEPHONE: (503) 224-3092; FACSIMILE: (503) 224-3176

2.

For reasonable attorney fees;

3.

For costs and disbursements; and

4.

For such other relief as the Court deems just, proper, and equitable.

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DATED: May 5, 2015.

CABLE HUSTON LLP

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s/ Casey M. Nokes
G. Kevin Kiely, OSB No. 833950
gkkiely@cablehuston.com
Casey M. Nokes, OSB No. 076641
cnokes@cablehuston.com
1001 SW Fifth Avenue, Suite 2000
Portland, OR 97204
(503) 224-3092 Telephone
(503) 224-3176 Facsimile

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Of Attorneys for Plaintiff Eugene Water and

Electric Board

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Page 11 COMPLAINT
CABLE HUSTON LLP
1001 SW FIFTH AVENUE, SUITE 2000
PORTLAND, OREGON 97204
TELEPHONE: (503) 224-3092; FACSIMILE: (503) 224-3176