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Tampa Bay Water ordered to pay engineering firm $20 million over reservoir suit

The company that designed Tampa Bay Water's cracked reservoir deserves $9.2 million in attorneys' fees and $10.8 million in expenses for defending itself against the utility's unsuccessful lawsuit, the federal judge overseeing the case ruled.

U.S. District Judge James Whittemore called the fees "extraordinary" but explained in his 38-page ruling, "This was no ordinary engineering malpractice case."

In fact, he noted in his Friday ruling, some testimony suggested it might be "the largest engineering professional liability case, in terms of damages sought, ever tried to a jury." The utility's board has already voted to appeal the ruling.

After cracks developed in the walls of the 15.5-billion gallon C.W. Bill Young Reservoir in rural Hillsborough County, Tampa Bay Water sued all the companies involved in its construction. Each company settled, except for the reservoir's designer, HDR Engineering.

Tampa Bay Water initially demanded $225 million from Omaha, Neb.-based HDR, but by the time the case reached the jury, the utility was seeking only $73 million.

Before the case went to trial, the utility rejected a settlement of $30 million, contending that amount was too low and would require ratepayers to bear too much of a burden for fixing the cracks.

Three years of litigation and a five-week trial ended in April when the jury, after deliberating about four hours, ruled that HDR was not liable for any of the damage.

Tampa Bay Water has appealed the verdict and will include its appeal of the attorneys' fees and costs in that, Tampa Bay Water general manager Gerald Seeber said. Given appellate courts' speed, he said, he expects a ruling in late 2013 or early 2014.

If the appellate court doesn't overturn the jury's verdict, the estimated $122 million cost of fixing the reservoir will be paid for by ratepayers in Pinellas, Pasco and Hillsborough counties, plus whatever state and federal grants the utility can line up, said Seeber, who labeled the judge's award "ridiculously high."

He said the utility has enough cash in reserve to cover the legal costs should it lose the appeal.

"We will not need to increase our fees to pay for this," he said.

Wayne Mason, the lead attorney for HDR, said, "I think the court obviously made a very reasoned decision after carefully considering all the evidence."

The reservoir — the largest in Florida — opened in June 2005 as a place to store water skimmed from the Alafia River, Hillsborough River and Tampa Bypass Canal. The reservoir's walls consist of an earthen embankment as wide as a football field at its base, averaging about 50 feet high. An impermeable membrane buried in the embankment prevents leaks.

The embankment's top layer, a mixture of soil and concrete to prevent erosion, is where cracks were discovered in December 2006. Some cracks were up to 400 feet long and up to 15 ½ inches deep. Workers patched the cracks, but the patches didn't last.

The cracks have now shown up along two-thirds of the embankment, attorneys told jurors during closing arguments.

Last year, Tampa Bay Water hired Kiewit Infrastructure South to repair the reservoir and also boost its capacity by 3 billion gallons for $162 million.

However, after the trial ended, state officials warned that they were unlikely to approve expanding the reservoir because they feared the additional weight would prove too much for the ground, particularly if pumping by neighboring farmers during a freeze caused more sinkholes.

So Tampa Bay Water scaled back the contract to $122 million to cover only a repair job, now scheduled to begin next year.

The utility has already begun draining the reservoir, using up about 40 million gallons of water a day.

The reservoir is down to about 2.9 billion gallons, Seeber said.

Craig Pittman can be reached at craig@tampabay.com

Tampa Bay Water ordered to pay engineering firm $20 million over reservoir suit 11/05/12 [Last modified: Monday, November 5, 2012 10:28pm]
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