Pinellas County v. Interpace (41 Fla. Supp. 2d 65, 1990)

OPINION OF THE COURT

FRED BRYSON, Circuit Judge.

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND FINAL JUDGMENT FOR PLAINTIFF, PINELLAS COUNTY

THIS CAUSE is before the Court for determination upon Plaintiff, PINELLAS COUNTY’S, First Amended Complaint claiming that a thirteen and one-half mile segment of its major water transmission main made of 54-inch and 60-inch diameter prestressed concrete pipe is defective and should be replaced. The prestressed concrete pipe was manufactured during 1977 and 1978 by a nationally known pipe manufacturer known as Interpace Corporation. On May 3, 1985 Interpace Corporation changed its name to Madison Management Group, Inc. In July of 1987, Clevepak Corporation merged with Madison Management Group, Inc. Therefore, the Defendant, MADISON MANAGEMENT GROUP, INC., is properly before the Court as a successor to INTERPACE CORPORATION and throughout the remainder of these Findings will be referred to as “INTERFACE”.

In March of 1975 Pinellas County executed an agreement with a consulting engineering firm known as Black, Crow and Eidsness, Inc. to design the pipeline, select the pipeline’s route, draw all contracts necessary to the letting of bids including contracts with the pipe manufacturer, test the materials which were to be used in the manufacturing of the prestressed pipe, and to sufficiently inspect the pipe as it was being manufactured and after installation. The engineer’s main charge was to protect Pinellas County against improper manufacturing and installation of the pipeline. After the pipeline’s construction, Black, Crow & Eidsness, Inc. (BC&E) changed its name to CH2M Hill Southeast, Inc. Throughout the remainder of these Findings the Defendant engineer will be referred to as “CH2M Hill”.

In sum, the individual pieces of prestressed concrete pipe, both 54-inch and 60-inch in diameter, were to be manufactured by Interpace at its Lacooochee plant located in Lacoochee, Pasco County, Florida, who would in turn deliver the pipe to Suwanee Transfer and Storage, Inc. for hauling to the laying site to be installed by another contractor known as Bumby & Stimpson, Inc. CH2M Hill’s contractual obligation was to design the pipeline, review and approve the plans and specifications submitted by Interpace for the construction of the pipe, review certain component part tests which were to be submitted by the manufacturer, Interpace, draw the contract between Pinellas County and Interpace, and to certify to Pinellas County that the pipeline had been constructed according to the plans and specifications. There are other contractual duties assumed by CH2M Hill which will be referred to in these Findings which bear upon the question of breach of contract and negligence of CH2M Hill.

The Court started hearing testimony in the case on January 17, 1989, with testimony having been concluded on January 24, 1990. There have been 131 days of trial during the time. The case is purported to be one of the longest if not the longest case ever heard in Florida. There have been 1,567 exhibits admitted into evidence.

As trier of the facts, the Court has been required to learn and apply a substantial number of engineering and water production disciplines including metallurgy, wire making and drawing, the manufacture of large diameter prestress pipe, pipeline design, pipeline testing, the mathematical formulas associated with pipeline manufacture and design, hydraulics, structures, petrographies (the study of concrete and mortar), chemistry (as applied to groundwater, metallurgy and petrographics), corrosion, principles of water supply to a large populated county, statistics and population forecasting, computer programs depicting a water supply system, and interpretation and application of the national standard for manufacturing prestressed pipe known as AWWA C301-72 and various American standards testing metallurgical standards applicable in the case such as ASTM A227-71 and ASTM A648-73.

The County has sued the manufacturer Interpace upon several legal theories for providing to Pinellas County a prestressed concrete pipeline which does not have the specified operating pressure of 150 psi and surge pressure of 210 psi, and which is otherwise claimed defective in not complying with the specifications for manufacture of the pipe. Punitive damages are also sought from Interpace based upon the theories of fraud, strict liability in tort, and willful and wanton misconduct. Pinellas County has also sued its engineer whose duty was to protect the County has also sued its engineer whose duty was to protect the County from the manufacturer providing pipe which failed to meet the specified and the required pressure rating and defective pipe. Damages for the cost of the replacement of the pipeline are sought from both Defendants. Pinellas County also sues CH2M Hill for the cost of coal tar epoxy coating the pipeline which the County asserts should have been included by the engineers in the specifications because of the aggressive soil and groundwater attack to which the present pipeline is being subjected. In addition, Pinellas County has sued CH2M Hill for improperly designing certain vacuum relief valves at below ground level in vaults along the pipeline, claiming it was necessary to raise the valves above ground level to present the contamination of the pipeline with groundwater which had accumulated in the vaults. The County claims that the valves would not operate properly to prevent surges in the line when filled with water. Pinellas County claims further damages for replacement of burst pipe, failed tapped pipe and leaking pipe. After serious consideration and deliberation, the Court finds fo the Plaintiff, Pinellas County, and against the Defendant on all counts.

A. CONSTRUCTION STEPS OF PRESTRESSED CONCRETE STEEL CYLINDER PIPE

There are basically two types of prestressed concrete steel cylinder pipes. Lined cylinder pipe, which Interpace designated as SP-5 pipe, and embedded cylinder pipe or SP-12 pipe. This case involves embedded cylinder or SP-12 pipe. Based upon the testimony and Interpace documents the history of performance of SP-5 pipe is material to the issues in the litigation as to P hydrostatic testing and the use of prestressed wire and outer mortar coatings because, from an engineering standpoint, the wire and mortar coating behavior is representative of what would occur in an embedded cylinder pipe due to the similarity of the manufacturing processes. In the manufacture of embedded cylinder pipe the first step is to manufacture and then hydrostatically test the steel cylinder with joint rings attached. The testing is to insure that the cylinder is water tight. Then the cylinder is encased in concrete by vertical casting and mechanical vibration to construct an inner and outer core on both sides of the cylinder. After proper water or steam curing, the wire reinforcement is wound, under tension, in a layer around the outside of the outer concrete core containing the cylinder which is known as “prestressing”. After prestressing the exterior coating of the pipe is applied. The exterior coating may be of premixed mortar or concrete. If the exterior coating is specified to be that of concrete then a concrete outer core is cast into place over the prestressing wire. If premixed mortar coating is applied then the mortar coating is placed by the impact method onto the wire. In addition, if mortar coating is used as the exterior coating then a layer of “slurry” which consists of cement and water is applied to the core just ahead of the mortar coating. The purpose of the slurry is to protect the wire and get under the haunches of the wire and where the wire comes in contact with the outer core. When properly applied, cement slurry will fill in the areas under the wire and in the haunches of the wire to provide an “alkaline environment” having a high pH which will prevent the prestressing wire from corroding. When concrete coating is used the national standard does not require the application of a cement slurry; since the concrete if properly vibrated will filled in the areas where the wire touches the core and in the haunches of the wire. Whether mortar coating or concrete coating is used the national standards require that the outer coating be “a dense, durable encasement”. The outer coating is then cured for a specified length of time and is then ready as a “joint” of pipe to be placed in a pipeline.

Lined cylinder pipe is constructed similar to that of embedded cylinder pipe with the exception that there is no outer concrete core and the steel prestressing wire is wrapped directly onto the cylinder.

Therefore, viewing the component parts of an embedded cylinder pipe, which is the subject of this litigation, from inside out you have: an inside core; cylinder; outer core; prestress wire; slurry; mortar coating. There are many details of each step of manufacture which have not been described which will be referred to by the Court in this judgment when the evidence concerning the manufacture of each step or component part is discussed.

In manufacturing joints of pipe for a pipeline, the manufacturer according to specifications and a laying schedule will construct what is known as “beveled pipe” and “specials”. “Beveled pipe” is pipe which is not straight but forms a portion of a large curve in the pipeline so that in configuration the pipeline may be designed to bend and take on new direction. “Specials” are prestressed concrete pipe which are tailor-made for a particular turn or other unusual direction which the pipeline is required to take. “Specials” are one of a kind pieces of pipe and are made by a separate department in the prestressing plant.

In viewing the construction process it is apparent that once a prestress pipe has been constructed there is no way to determine whether the component parts of the pipe have been constructed according to specifications or the national standard AWWA C301-72. Only cracking of the mortar coating, hollows or voids in the mortar coating or bent bell or spigot ends or things of this kind may be observed. The uniform evidence is that all such obvious defects were remedied before the pipeline was accepted, tested, and put into operation. Therefore, all material defects of a prestressed pipe are latent in nature and cannot be determined to exist without destruction of the pipe itself. This is one of the primary reasons why the engineer, CH2M Hill, was contractually bound to inspect the pipe as manufactured and to “judge the performance” of Interpace for compliance with the specifications and to certify to Pinellas County completion of the pipeline according to the plans, specifications, and standards. Regrettably, CH2M Hill did not attempt to comply with this duty nor did it have trained personnel who sent to the plant who were qualified, by their own admission, to detect the defective manufacture of the pipe. Therefore, the Court finds that all defects found in the excavated pipe were latent in nature and unknown to both the County or its engineers.

Basically there have been five (5) types of evidence presented for the Court’s consideration. The Court has actually physically examined numerous wire specimens from 27 Pinellas County pipes and tests and/ or photographs from all of the 33 pipes removed from the pipeline for study. Detailed pipe summaries of the defects found in each pipe have been considered. Numerous other mortar and concrete samples from most of the pipe exhumed from the pipeline in question have also been examined. Numerous boxes of parts of the exhumed pipe have been supplemented by well over 1,000 photographs of all excavated pipe. This physical examination of actually what each part of the pipe looked like when first exhumed and the pipe was delaminated has been the most persuasive to the Court in coming to a decision. When viewed in the light of a literal interpretation of the specifications and standards one can visually determine that the major components of the pipeline have not been manufactured according to the agreed specifications and standards and are well on their way to failure. In view of the fact that the pipeline and each individual pipe should last over one hundred (100) years or indefinitely according to Interpace’s own literature, the Court has become convinced that the pipeline must be replaced. The pipeline must be reliable and dependable in order to properly serve the function for which the prestressed pipe was intended.

The Court has heard from former workers who actually participated in the construction of the component parts of the Pinellas County pipe whose testimony confirms the defects which the Court has visually observed in the actual portions of the excavated pipe examined and photographed.

Interpace did not properly develop or draw Interpace Class IV wire placed on all of Pinellas County’s pipe. The wire is fraught with brittleness, seams and defects caused by use of improper rod, drawing equipment, and metallurgical techniques. These problems were well known to Interpace during the period of 1972 through 1975 before the Pinellas County pipe was ever manufactured commencing in 1977. In fact, there was no effective quality control at either the Solon Wire Mill or the Lacoochee plant. Eyewitnesses to such improper manufactured wire and pipe specifically testified to improper manufacturing techniques. The head of quality control at Lacoochee testified that quality control reports were falsified during the entire time he was at Lacoochee from 1974 to 1979. This occurred during the time the Pinellas County pipe was being manufactured. The Court has viewed numerous defects in the pipes exhumed. No two pipes are the same. Each pipe has numerous defects which could only be attributed to the lack of quality control both at the wire mill and at Lacoochee. Neither Interpace nor CH2M Hill has called any workman at either plant to repudiate such testimony. The proof of lack of quality control virtually stands unrebutted in the record.

Former engineers and hired metallurgists of Interpace have also testified against Interpace to the effect that the component parts of the pipe and the pipe as a whole is improperly manufactured. Neither Interpace nor CH2M Hill called at trial as a live witness any former engineer of Interpace familiar with the manufacturing process of Interpace prestressed pipe. Mr. Robert E. Bald, Former Chief Engineer and Vice President of Technology who was present in court, representing Interpace at the opening statements in this case, was chiefly responsible for the defective manufacture of Interpace pipe. The testimony and documentation shows that Mr. Bald orchestrated many of the defects built into the Pinellas County pipe. Mr. Bald was not personally called by Interpace to defend the pipe despite the fact that he obviously was available to be called as an expert witness. His testimony was in part submitted by deposition by both the Plaintiff and Interpace. He failed, however, to address the charges made against him. The failure to call as live witnesses Mr. Bid and other expert engineers whose names repeatedly appear on the documents and to answer Pinellas County’s claims that the pipe was made in a defective manner is construed against Interpace and CH2M Hill by the Court. See Lineham v Everett, 338 So.2d 1294 (Fla. 1st DCA 1976); Tri-State System, Inc. v Department of Transportation, 500 So.2d 212 (Fla. 1st DCA 1986); Buckrem v State, 355 So.2d 111 (Fla. 1978).

Pinellas County subpoenaed volumes of Interpace files which involved a number of documents written by Interpace engineers and personnel during the critical times of the middle to late 1960’s and throughout the 1970’s and into the 1980’s. This documentary evidence is viewed by the Court as tantamount to an admission of liability or guilt. The defective nature of the wire at the Solon Wire Mill and in the manufacturing plants, the over drawing or over heating of the wire in manufacturing, and the entire list of defective and splits in the wire made at the Solon plant are simply admitted. Knowledge that the Lacoochee aggregate did not meet AWWA standards is shown to have occurred long before the Pinellas County pipe was manufactured. The lowering of the modulus of elasticity due to the improper use of aggregate at Lacoochee resulting in a lower pressure rating of Lacoochee pipe is also well documented. In a documented dated February 3, 1981, who professes the opinion that all pipe made at Lacoochee are lower in strength than designed because of the use of bad aggregate, an Interpace engineer wrote on a note attached to his report “I suggest this report be given limited circulation due to the potentially damaging nature of its contents”. There are other documents which support the Court’s ruling that Interpace deliberately and improperly manufactured its prestressed pipe, including the Pinellas County pipe in question, to gain more profits, cut costs, and remove the safety factor from a number of the pipes’ component parts. In fact, the Interpace salesman, who was assigned to the Pinellas County area at the time of the manufacture of the pipe in question, so testified.

The final category of witnesses are those who were not regular employees of Interpace but have various expertise in the manufacture of prestressed wire and/or the manufacture of prestressed pipe. The plaintiff, Pinellas County, has called numerous experts while the defense has chosen to call a “select few”. Their testimony on the major subjects of the defectiveness of the component parts such as, metallurgy, petrographies, pipe design, pipe testing, prestress pipe manufacture, and the interpretation of the applicable engineering standards are hopelessly in conflict. As trier of the facts the Court finds that the testimony of Pinellas County experts far out weighs those produced by the defense. The County has produced volumes of engineering reports in all fields with photographic and actual pipe samples to support its contention that the pipeline is totally defective. Each claim made by an expert witness is carefully and meticulously documented. The only report introduced into evidence by the Defendants is one from Inter-pace’s expert which came in the form of a petrographic report produced by Interpace’s petrographer at the insistence of Pinellas County as part of the consideration to allow a petrographic examination of pipe samples to be undertaken during trial. The Court does not the testimony and analysis by Jerrell Thomas, on the question of the alleged life of the pipeline. A sufficient number of pipe to characterize the entire pipeline was tested by Construction Technology Laboratories, Inc. (hereafter CTL) which was formerly a division of the Portland Cement Association. The five (5) volumes of the engineering report of CTL on the testing and examination of the pipe and the numerous meticulous metallurgical reports and analysis of metallurgists Gould and Lewis are most persuasive and are found to reconcile the conflicts in expert testimony against Interpace and for Pinellas County.

Based upon these four (4) categories of evidence, the Court finds that Pinellas County has proven its case by the overwhelming weight of the evidence and certainly by its greater weight.

A substantial amount of evidence, including documentary evidence, has been admitted without objection. The Court has carefully reviewed the evidence which was admitted over objection of the Defendants. In the Court’s mind, even excluding the evidence objected to, there is more than enough evidence for the Court to find for the Plaintiff, Pinellas County, and that Pinellas County should prevail in view of the greater weight of the evidence in its favor. See Parks v Zitnik, 453 So.2d 434 (Fla. 2d DCA 1984); Capitoli v State, 175 So.2d 210 (Fla. 2d DCA 1965).

Because of the protracted and serious nature of this litigation, the Court will specifically rule upon all claims or counts made by Pinellas County. However, the Court is of the opinion that as to recovery for damages for the replacement of the pipeline it is sufficient to find that both Defendants clearly by the greater weight of the evidence breached their contracts resulting in the County’s being entitled to replacement damages. There must be competent substantial evidence before the Court for the Court to lawfully make its findings of fact. See e.q. Malver v Sheffield Industries, Inc., 502 So.2d 75 (Fla. 3d DCA 1987); Clegg v Chipola Aviation, Inc., 458 So.2d 1186 (Fla. 2d DCA 1984); Poller v First Virginia Mortgage and Real Estate Investment Trust, 471 So.2d 104 (Fla. 3d DCA 1985). The record is so replete with facts and inferences which support the Court’s ruling, that it is not possible to cite all of the testimony which has led the Court to find for Pinellas County. However, the Court will cite specific areas of the testimony or proper inferences therefrom upon which the Court in part has relied to render its judgment with the understanding that in the Court’s mind there are many more facts and many more exhibits which in and of themselves would be sufficient to constitute competent substantial evidence to support the Court’s judgment.

I. FINDINGS OF FACTS

A. THE IMPORTANCE AND LOCATION OF THE PIPELINE

Pinellas County imports a substantial portion of its water supply from neighboring counties. The County is a member of the West Coast Regional Water Supply Authority whose task is to implement a regional water supply concept whereby the Authority would supply water to its municipal and county members in Hillsborough County, Tampa, Pasco County, City of St. Petersubrg, and Pinellas County. The Water Authority operates a wellfield known as the Cross Bar Ranch Wellfield located in Pasco County. Water from this wellfield is transmitted through a 60-inch diameter transmission line sought to the Cypress Creek Pump Station. The Cypress Creek Pump Station and wells are also owned by the Water Authority. Water from both the Cross Bar Ranch and Cypress Creek Wellfields are transmitted from the Cypress Creek Pump Sttion sought through an 84-inch diameter prestressed concrete pipeline, which in turn reduces to a 66-inch diameter line. In turn, a 42 and 54-inch diameter transmission line are connected to the main 66-inch line at the Pasco-Pinellas County line. The 42-inch transmission main is intertied to the main 54-inch line by a 24-inch in diameter main, and also to a main at the Keller Pump Station. The 54-inch transmission main discharges into a 60-inch transmission line that runs further south. This interconnection was constructed to give flexibility in operating the water system to the Pinellas County water director and can be closed sending all water coming from the 84-inch and 66-inch diameter transmission lines south through the 54 and 60-inch transmission lines to the 580 North Booster Station. Water is supplied to Pasco County through a main 30-inch’s in diameter at U.S. 19 at the Pasco/Pinellas county line. Thus, the 60-inch diameter transmission line begins at the “interconnection” from the 42-inch and 54-inch main and runs sough to the North (State Road 580) Boster Station located just north of the juncture of State Road 580 and U.S. Highway 19. There are bypass facilities at the North Booster Station which would permit all water flowing from the 60-inch transmission line, to bypass completely the 580 booster pumping facilities. There are other transmission lines which run from the Eldridge-Wilde Wellfield and into the North Booster Station which are minimally related to these proceedings. For a complete pictorial understanding of the transmission system, see Exhibit “A” to this judgment which is consistent with Exhibit 12 in evidence.

When the Pinellas County Water System is viewed as a whole, the transmission line which is the subject of the litigation is the most critical section of the Pinellas County Water System. It transmits water from all three major wellfields. The line is so critical to the adequate supply of water to the Pinellas County population that the line cannot be taken out of service except under extreme emergencies and then for only a very short period of time. The volume of water needed on a daily basis by Pinellas County cannot be met without the line being in service, especially during peak demand days and dry seasons. Elimination of the use of the line for any unreasonable or substantial period of time would cause a water emergency, water crisis and at least water rationing. These facts were well known to both CH2M Hill and Interpace at the time the lines were designed and manufactured. Therefore, both Interpace and CH2M Hill knew the critical nature of the line and that the pipeline had to be constructed without material defects in the pipe. Both Defendants knew or should have known by the nature and location of the pipeline that each pipe had to be dependable and reliable much like the wing of an airplane.

Even worse is the potential of “backflow”. “Backflow” occurs when the water system is not able to supply the required water to a given area thereby causing a negative pressure to occur in the water distribution lines. This negative pressure draws water into the water distribution lines and ultimately into the water transmission lines and contamination from septic tanks, toilets, and other pollution, etc. occurs. “Backflow” creates a substantial health hazard. When “backflow” occurs the lines must be flushed, disinfected and sampled before potable water can again be supplied to the public. In view of the substantial increase in water maximum day demands in Pinellas County from 100,000,000 MGD in 1987 to a projected 200,000,000 MGD by the year 2020, any failure or blowout of the pipeline in question could and probably would cause a catastrophe. Under such a threat it is clear that the public interest requires that the line in question be dependable and reliable. Replacement of such a critical pipeline is in the mind of the trier of fact the only plausible solution.

B. THE LONGEVITY OF A PROPERLY MANUFACTURED PRESTRESSED CONCRETE PIPELINE

The longevity of a properly manufactured pipe is applicable only in the context of the state of decay which the pipe is experiencing because of progressive corrosion mechanisms on the prestress wire. These corrosive mechanisms are ongoing and continuing in the pipeline. The issue is not material on the question of whether the pipe was properly manufactured so that it can be used at the specified pressure of 150 psi working pressure and 210 psi surge pressure. In this context, the pipeline must be replaced because the pipe was not made to the specifications of 150 psi working pressure and 210 psi surge. For this reason alone the County did not get what it bargained for even if there was no ongoing corrosion in the pipeline.

The Court must make a factual determination of how long Pinellas County could reasonably expect the pipeline in question to last if properly manufactured and used without surging the line beyond its design limits. The best reasonable engineering evidence shows that a prestressed pipe should last more than 100 years or indefinitely. Interpace itself in a technical article written by Shaw who was the General Manager of Research and Development in 1965 published in Civil Engineering, this statement:

The high capital investment involved in major pipeline systems demands that they be constructed of materials with maximum economic life. Reinforced and prestressed concrete have achieved increasing popularity as pipeline materials because of their demonstrated consistent longevity; steel encased in concrete will be protected and will preserve its structural integrity for centuries.**

(Plaintiff’s Exhibit 17A in evidence)

The article concludes that prestressed pipe will have a very long life generally in excess of 100 years when buried in a natural occurring soil environment. Interpace’s Vice President of Technology and former Chief Engineer, Bob Bald, testified properly manufactured prestressed pipe should last “indeñnitely’. Expert engineers agree. The salesman for Interpace prior to the letting of bids for the 60 and 54-inch project represented to Pinellas County and to CH2M Hill in brochures that Interpace pipe should last 100 years. Advertisements of Interpace placed in Civil Engineering — ASCE and Journal American Water Works Association solicited engineers to specify Interpace prestressed concrete pipe because it would last as long as the Roman aqueducts.

Cores from other prestressed pipe in the ground for many years which are not manufactured with Interpace Class IV wires have been examined and have been clean and totally free of rust. Yet Pinellas County pipe has substantial rust on prestressed wire on every pipe examined. The Court believes the engineering experts who are of the opinion that the life span of prestressed concrete pipe is conservatively well over 100 years. After considering all opinions and qualifications of the engineers and especially the materials which are required to be used in making the component parts of the pipe, Pinellas County should well have assumed it was purchasing pipe which would last more than a century and probably indefinitely barring any unusual circumstances. The greater weight of the evidence shows that from a serviceability and reliability standpoint the fine has already failed. All or a substantial number of pipe will prematurely burst if the line was continued to be used without replacement. Each pipe excavated is in a far greater state of decay than would be the case is the pipe were properly manufactured.

The position taken by CH2M Hill engineers that the pipeline should only last from 20 to 50 years is without engineering credibility. The engineer, CH2M Hill, never advised Pinellas County of the estimated 50 year life. The Court believes the testimony of the former Water Director for Pinellas County who was in charge at the time the line was designed to the effect that he understood there was no limit as to how long the pipe would last and had he been told that the pipe would only last for 50 years he would not have agreed to constructing the line with prestressed concrete pipe because of the lines’ importance and because of its strategic location.

Just after the Pinellas County pipeline had been constructed, the president of Interpace made a startling admission against interest by directing his second in command to “destroy all documents stating the Interpace pipe would last 100 years or more”. (See Exhibit 24) The Court views this exhibit like any other normal trier of fact and completely construes this admission against Interpace. Through this document, Interpace has admitted that it found out that it was not properly manufacturing its pipe and had not constructed the Pinellas County pipe properly and for that matter all of its other pipe and that these pipes and the pipelines would not last 100 years or more as claimed by Interpace to Pinellas County officials and the engineering public long prior to the construction of the Pinellas County pipeline.

II. A CHRONOLOGICAL OVERVIEW OF THE CASE

A. INTERPACE’S QUALITY AND COST REDUCTION PROGRAMS

In the mid 1960’s Interpace embarked upon a program of reducing and substantially cutting the quality and quantity of materials used in the manufacture of its prestress pipe. A cement reduction program was initiated which would have the effect of reducing the mortar coating and concrete’s ability to produce a high “pH” environment to protect the prestressed wire. Other reductions were accomplished through thinner rod, wire, and steel cylinders because Interpace was trying to make more money. Principle among the quality reductions was the manufacture by Interpace, at its own wire mill located in Solon, Ohio, a higher strength wire to be wrapped on its prestressed pipe. The higher the strength of the wire the less wraps per foot that were required in the manufacture of a single pipe. Substantial cost savings were achieved by this method with the result of a substantial increase in profits. Prestress wire is divided into classes of wire in pounds per square inch (psi) according to the following Table:

Class 8-gauge 6-gauge

0.1620 inch diameter 0.1920 inch diameter

Class I 200,000 TO 230,000 psi 192.000 TO 221,000 psi

Class II 231,000 TO 261,000 psi 222.000 TO 251,000 psi

Class III 262,000 TO 292,000 psi 252.000 to 281,000 psi

“Interpace , Class IV” 293,000 TO 323,000 psi 282.000 to 311,000 psi

Wire classes are made into either 6 or 8-gauge wire. The gauge refers to the diameter of the wire. 8-gauge wire has higher tensile strength than 6-gauge wire particularly in the “CÍass IV” size and thus was more attractive to Interpace because less steel was involved. The Pinellas County pipe is all made of Class IV 8-gauge wire.

B. INTERPACE CLASS TV WIRE

In 1968, Interpace was using Class II wire to manufacture prestress pipe. At that time (1968) Interpace started developing or inventing Class III wire and also what is known as “Interpace Class IV wire”. No national metallurgical standard or standards for making prestressed pipe refer to a Class IV wire. “Interpace Class IV wire” was not properly developed or tested before its use by Interpace in the latter part of 1972. In fact, there is overwhelming evidence that not only was the wire not properly developed but that Interpace started having substantial problems with “Interpace Class IV wire” from the very beginning. The wire contained numerous defects which included seams, splits, and was very brittle. Breakage of the wire during pipe prestressing at Interpace plants was a common event, despite the fact that the wire is wrapped at only 755 of its ultimate tensile strength, yet Interpace persisted in manufacturing the defective “Interpace Class IV” wire.

Prior to development of “Interpace Class IV wire” Interpace attempted to have its Class IV wire sanctioned through recognition in a national standard. Interpace through its wire mill manager, Rod Walter, appeared before the American Standard Testing Materials (ASTM) Committee which was drafting a national standard exclusively for use in the manufacture of prestressed concrete pipe. The committee which was composed of national and international metallurgists, including representatives from U.S. Steel and Bethlehem Steel, flatly rejected the invitation to include Class IV wire in the proposed standard on the basis that it was not believed that at those tensile strengths the wire would have good ductility. Thereafter, the Committee adopted ASTM A648 in 1972 which permitted the use of up to Class III wire on prestressed concrete pipe. While Class III wire as stated in the standard has no tensile strength upper limit the standard is properly interpreted as limiting the use of Class III wire within the recognized 30,000 psi groupings for classes of wire. Defendants’ experts’ interpretation that such a standard would permit Class IV wire is without merit. In addition, ASTM — A648 was not a proper standard under which the wire in this case could have been manufactured according to the Court’s interpretation and reading of the specifications. Class IV was not permitted to be used under the standard. In 1973 Mr. Walter, representing Interpace, again appeared before the ASTM Committee in an attempt to have Class IV wire written into the standard. Again, the Committee unanimously rejected Interpace’s request. It is not controverted in the record that U. S. Steel attempted to make Class IV wire between 1966 and 1970 for Interpace and failed. U.S. Steel wanted the business so badly that it placed its Chief Metallurgist, John Occasione, in charge of the wire’s development. A production plant was selected but after many tries, U.S. Steel concluded that it could not “consistently” produce a quality Class IV wire. Bethlehem Steel tried to produce Class IV wire for Price Brothers, a competitor of Interpace, in 1975. Price Brothers complained that Interpace had a competitive advantage in producing the chapter high strength wire and wanted to start using Class IV wire on its prestressed concrete pipe. Bethlehem made some wire and sent it to Price Brothers only to have Price Brothers reject the wire and return it to the plant. The chief metallurgist for Bethlehem Steel for 23 years testified that quality Class IV wire could not be consistently made. In sum, despite knowledge that Class IV wire was inherently defective, Interpace manufactured Pinellas County’s pipeline using “Interpace Class IV wire”. Interpace was forced to abandon production and use of Class IV wire in 1980 after Pinellas County’s pipeline had been installed, was in operation and the first rupture had occurred. The reasons for discontinuing production of the wire were those as enumerated in Plaintiff’s Exhibit 309 in evidence showing that the wire could not be manufactured with the type of rod and machinery and wire drawing technology known to Interpace together with the occurrence of many pipe breaks throughout the United States in which Class IV wire was used in the failed pipe. Interpace said that the wire did not meet its internal standards. Interpace’s own chief engineer in 1975, after a portion of a pipeline in Center, North Dakota failed, reasoned that Class IV wire was defective and should not be used. The chief engineer wrote a letter to the Vice President of Technology, Mr. Bald, recommending that the wire not be used in the future. Mr. Bald brought him the letter and told him to tear it up as he didn’t want such a letter to be in the company’s files. The letter was tom up. The wire was continued to be produced and was exclusively used on the pipeline in question.

C. FURTHER COST REDUCTIONS

Another attempt to cost reduction involved the fine and coarse aggregate used at Interpace’s Lacoochee plant in Pasco County, Florida. The Lacoochee plant was started in 1973 for the purpose of constructing for Pinellas County the 84-inch transmission line from Cypress Creek to the Pinellas-Pasco County line. Pinellas County later transferred full ownership to the West Coast Regional Water Supply Authority of the 84-inch and 66-inch lines in 1976. Interpace management knew from the very outset that the Brooksville limestone aggregate slated to be used would not meet AWWA C301 standards. The aggregate was used anyway. The end result of the use of the improper aggregate is to make the prestressed pipe weaker with a lesser pressure rating than assumed in design or as specified. The only other alternative to the Brooksville aggregate was a Vulcan limestone from Alabama which, if used, would have meet AWWA standards. Interpace selected the cheaper Brooksville aggregate from which all of the 60-inch and 54-inch diameter transmission main, which is the subject of this litigation, was made. Tests done by Pinellas County consultants confirm that most, if not all, pipe in the line was not manufactured to the specific pressure rating of 150 psi working pressure — 210 surge. The history of Lacoochee aggregate not meeting the national standards from the time the plant first opened was admitted by Interpace engineers in 1973 and 1974. One of Interpace’s test engineers, when reviewing the history of Lacoochee aggregate, concluded in effect that all prior pipe manufactured at Lacoochee was defective and had a low modulus of elasticity, which resulted in a weaker pipe or pipe which would not meet the specified pressure ratings. Further specific findings of fact will be made by the Court later as to the Lacoochee aggregate and its use.

D. PINELLAS COUNTY CONTRACTS WITH CH2M HILL AND LETS OUT BIDS FOR ITS 60-INCH AND 54-INCH DIAMETER PIPELINE

In March of 1975, Pinellas County entered into an engineering consulting agreement with CH2M Hill to provide: the preparation of a complete basis for the design of the 54-inch and 60-inch diameter transmission main; consultation and advice as to laboratory testing and inspection of samples or materials; preparation and furnishing of all necessary contracts, specifications, schedules of quantities and estimates of cost; the visitation of the pipe manufacturing construction site on an average basis of four (4) visits per month in order to protect the County against defects and deficiencies in the work of the manufacturer; the approval of shop drawings; the judging of the manufacturing performance of making the prestressed pipe according to specifications; the recommendation of final acceptance of the pipeline after its completion; etc., etc. Contractually the engineer, CH2M Hill, was obligated to act as Pinellas County’s representative.

CH2M Hill prepared the plans and specifications and bid documents for the pipeline in 1976. Only two pipe manufacturers bid on the project. Price Brothers bid was $6,113,024.00 while Interpace bid $4,446,337.00. CH2M Hill did not inquire or make any determination as to why the bids were so far apart.

Since Interpace was the successful bidder, CH2M Hill drafted the contract between Interpace and Pinellas County. While CH2M Hill is not a signatory on the contract, numerous duties of the “engineer” “acting for the owner” are specifically enumerated in the Intepace-Pinellas County contract. These duties include: approval or disapproval of materials to be delivered; the right of the engineer to reject unsuitable pipe; the acceptance by the engineer of minor imperfect materials; and receipt and approval of all tests of component materials furnished by Interpace showing compliance with specifications. The engineer, CH2M Hill, was given the right to inspect the manufacturing process and the component materials used in the pipe manufacture. Interpace was required to furnish at its expense to the engineer “all reasonable facilities, labor and materials deemed necessary by the engineer for conducting such inspections and tests”.

A substantial controversy arose during pretrial hearings and trial as to whether the engineer, CH2M Hill, was contractually bound by the language and duties it had been paid to draft for Pinellas County. CH2M Hill contends that originally when it executed its consulting engineering contract with Pinellas County in 1975 it did not know, nor was it contemplated, that Pinellas County would elect to contract directly with the pipe manufacturer or other contractors, and that, therefore, the duties granted to the “engineer” in the Interpace-Pinellas County contract are not the obligations of CH2M Hill. The Interpace contract clearly defines the “engineer” as CH2M Hill (BC&E) and refers to Pinellas County as the “owner”. The engineer for CH2M Hill who drafted the document contended that he had made a mistake in not utilizing “resident engineer” rather than “engineer” in certain sections of the Interpace contract. The Court finds this contention to be without merit. However, the engineer acknowledged that most of the responsibilities of the engineer were assumed by CH2M Hill as the pipeline was constructed. CH2M Hill’s engineer, Mr. Henderson, quarrels mainly with the interpretation of the wording of the Interpace contract. CH2M Hill called an expert who interpreted the clauses in both the contracts between Interpace and Pinellas County, and CH2M Hill and Pinellas County, in favor of the engineer. Pinellas County called experts that contend that the duties enumerated in both contracts should be read together and construed against CH2M Hill.

The Court finds that the contract between Pinellas County and CH2M Hill, and the contract between Pinellas County and Interpace, should and must be read together (in pari materia) to determine the duties owed to Pinellas County and contractually assumed by CH2M Hill. Standard Newspapers, Inc. v Woods, 110 So.2d 397 (Fla. 1959). See also Section VIII(A) at page 133, footnote 836, of this Court’s findings.

See Editor’s Note 1 hereinabove. To rule otherwise would not only be contrary to law but would conflict with the surrounding facts and circumstances found by the Court to have existed at the time CH2M Hill drew the Interpace contract. Mr. Henderson stated that he was aware of the provisions of the contract between Pinellas County and CH2M Hill of March 1975 when he drafted the contract between Pinellas County and Interpace. No amendment to the contract between CH2M Hill and Pinellas County was sought in view of the contract terms agreed upon between Interpace and Pinellas County. Therefore, any engineering duty written into the Interpace contract not originally assumed by CH2M Hill in its contract with Pinellas County was assumed by the engineer at the time of the execution of the Interpace contract. If such an interpretation was not placed upon such documents the Interpace contract would have become unworkable.

It is academic that where there are two possible interpretations of a contract or provision of a contract, the provision or contract must be construed against the drafter or author. Sol Walker & Co. v Seaboard Coast Line Railroad Co., 362 So.2d 45 (Fla. 2d DCA 1978); Bouden v Walker, 266 So.2d 353 (Fla. 2d DCA 1972); Alleghany Mutual Casualty Co. v State, 176 So.2d 362 (Fla. 2d DCA 1965). Since CH2M Hill was paid to draw the contract between Pinellas County and Interpace, and also drew the contract between Pinellas County and CH2M Hill, the duties assigned to the “engineer” CH2M Hill in the Interpace contract require the broadest interpretation and are legally the duties of the Defendant engineer in the project.

The Court has also viewed the contracts separately and finds that the duties assumed by CH2M Hill in its original contract fit “hand and glove” with those delegated to the engineer in the contract between Interpace and Pinellas County. The Interpace contract serves to explain and clarify the true intent of the contracting parties. In construing the contracts together, the Court has arrived at a reasonable interpretation of the documents. Bay Management, Inc. v Beau Monde, Inc., 366 So.2d 788 (Fla. 2d DCA 1978). The converse would be unreasonable and inconsistent with the engineering charge assumed by CH2M Hill to “protect the county”.

E. THE SPECIFICATIONS

The specifications as interpreted by the Court as the trier of fact called for the prestressed concrete pressure pipe to be manufactured by Interpace pursuant to the national standard AWWA C301-72 as amended as of 1976. Through the many months of testimony the Court has become intimately familiar with the applicable provisions of this standard. The pipe was required by the clear English language in the specification to be designed and manufactured at 150 pounds per square inch (psi) design (operating) pressure and 210 psi transient (operating plus surge) pressure. During trial, counsel for Interpace agreed with this finding as to the obligation of Interpace to manufacture a pipe which had an operating pressure of 150 psi and a transient pressure of 210 psi. Operating pressure is defined by AWWA C301-72 in Section 1.2.7 and 1.2.10 to be the “design pressure”. The “design pressure” is the maximum sustained hydrostatic pressure to which the pipe is to be subjected or the “operating pressure”. This means that Pinellas County bought and paid for pipe which was expected to be safely operated at 150 psi.

A surge in a pipeline is known as a transient pressure. Several conditions such as a pump voltage outage at one of the pumping stations, can occur or combine to create a wave effect in the pipeline that can cause severe damage to the line if the pipe is not properly designed. The pipe in question was supposed to be manufactured to withstand a maximum transient pressure of 210 psi.

When a prestressed pipe is placed in the ground under pressure it is subjected to both external and internal pressures. The 3-edge bearing equivalent of the earthload (W) provides the external pressure while the internal pressure is provided by the design pressure (P). The specifications called for the pipe in question to be designed pursuant to the requirements of Appendix A of AWWA C301-72. By this requirement being precisely specified in the specifications, Interpace was required to manufacture each of its pipe so that, if tested, the pipe would fall on or above the design curve of Appendix A. In order to manufacture a pipe meeting the design curve, Interpace was required to manufacture the pipe with all material properties; wire area, tension, and spacing under which the wire is wound; and appropriate core thickness so that the pipes provided pressure and earthload carrying capacity would fall on or above the curve of the Appendix A parabola. Whether a pipe meets the design criteria of the earthload may be determined by a three-edge bearing test which simulates the earthload on the pipe. Pressure-strain tests determine the adequacy of the pipe in response to internal pressure. Three-edge bearing tests determine the adequacy of the pipe in response to external load. Appendix A defines the cubic parabola design curve based on P , as the internal pressure required to overcome all compression in the core concrete exclusive of the effect of external load and W , 90% of the three-edge bearing load producing incipient cracking in the core. P is the most important consideration in determining whether the pipe was manufactured according to Appendix A. Each of the pipe tested by CTL for Pinellas County fell below the cubic parabola and had an internal pressure design of less than the specified 150 psi “design” or working pressure and 210 psi working plus surge (transient pressure).

Other specifications require: a concrete (not mortar) coating %ths inch thick “at all points”; test reports of all steel, wire and concrete used by the manufacturer were to be submitted to CH2M Hill for analysis pursuant to the requirements of Section 1.9 of AWWA C30172; and an affidavit from Interpace at the completion of the job attesting to the fact that the pipe was constructed in accordance with AWWA C301-72.

The outer coating of the pipe was not made of concrete but mortar coating. In many instances, the mortar coating on the pipe excavated and examined was not a minimum of %ths of an inch at all points. No tests on steel or concrete were ever submitted by Interpace pursuant to the specifications. CH2M Hill did not require submittal of the tests on the wire or concrete to it as the consulting engineer. Had such tests been submitted it would have been determined that both the steel wire (Interpace Class IV wire) and the core concrete were defective. CH2M Hill certified the job as complete and the pipe constructed according to the contract documents, specifications and AWWA C301-72. The pipe delivered to Pinellas County by Interpace did not meet the requirements of the specifications or the national standard, AWWA C301-72.

F. PINELLAS COUNTY PIPE FAILURES

The pipeline was manufactured and installed between March of 1977 and October of 1978. During construction of the pipe, employees from CH2M Hill visited the manufacturing site at Lacoochee but did not attempt to determine if the pipe was being properly manufactured. On October 2, 1978 the pipeline was placed into service. On November 13, 1979 a section of the 60-inch pipe exploded creating a giant hole in the pipeline and causing other property damage of $53,331.51. According to the greater weight of the evidence, this rupture was the first factual indication to Pinellas County that the line may be defective. The burst pipe was removed from the line and sent to Interpace for examination. The remnants of the pipe were later returned to Pinellas County by Interpace. This pipe burst caused Pinellas County to embark upon an extensive investigation as to the cause for the failure and the condition of the entire line. During a pressure test on December 11, 1980 of a section of the line another 60-inch pipe burst in the area of Pinellas County’s Eldridge-Wilde Wellfield at a pressure less than 150 psi. The consultants for the County continued their investigation and on November 1, 1983 the Pinellas County Board of County Commissioners determined that not only were the two pipe failures caused by improper manufacturing materials and techniques but that the entire pipeline was defective and should be replaced. In March of 1987 a third pipe started leaking and threatening to burst where the 60-inch pipe had been tapped to serve the City of Oldsmar. The cause of the pipe failure was an eccentrically positioned or “out-of-round” cylinder which when tapped caused the inner core to spall off exposing the cylinder to the water in the pipeline which in turn rusted out the cylinder causing the pipe to leak. The “out-of-round” cylinder required the replacement of the pipe. Proper pipe manufacturing techniques and production of pipe in a workmanlike manner pursuant to Section 1.8 of AWWA C301-72 requires that the cylinder be cast between the inner and outer core in a concentric position so that the pipe may be tapped even while in service. As in-service tap is known as a “hot tap” while a tap made when water is not being transmitted in the pipe is known as a “cold tap”. Section 3.6.10 of AWWA C301-72, in effect, requires each cylinder to be cast “in-round” so that the pipe may be “cold” or “hot” tapped anywhere along the pipeline. During trial another tap failed on the 60-inch line in the area of of Countryside Boulevard and St. George Drive on May 29, 1989 for the identical reasons as the Oldsmar tap failure. Both failures were due to Interpace’s failure to properly manufacture the pipe. Based upon this evidence and the testimony of one of Interpace’s engineers who did quality audits on the Lacoochee plant during the time the pipeline in question was being constructed, that the method of production at Lacoochee caused many pipe to be manufactured which were not “in-round”. Therefore, the Court concludes that many of the pipe in the pipeline in question are not “in-round” and the pipeline may not be safely and properly tapped anywhere along the line. This means that the major transmission line of Pinellas County which transcends the County from its northern end to State Road 580 may not be safely tapped to supply water to newly developed areas as Pinellas County grows. The inability to safely and properly tap the transmission line constitutes yet another and separate reason for replacing the entire pipeline.

Another pipe started leaking during trial on July 18, 1989. The cause of the leak was the faulty casting of a cast iron manhole in one of the 60-inch pipes. This faulty casting was clearly a manufacturing defect which should have been discovered by Interpace and corrected before the pipe was delivered.

Between May 1981 and September 24, 1981, Pinellas County consulting engineers uncovered and examined 10-Vi pipe. Between July 8, 1983 and March 12, 1987 Pinellas County consulting engineers uncovered and examined 72 pipes, of which 25 pipe were totally or partially dismembered, including coating removal and the pipe examined and photographed. The “Interpace Class IV” prestress wire was subjected to extensive metallurgical examination and testing. The Court has reviewed the photographs of each pipe and actual samples of the component parts of each pipe, including wire from each pipe, and has further reviewed the detailed engineering summary of all of the defects found by the engineers in the excavated pipes. The Court finds that all of the defects noted in the summaries and metallurgical examination by Gould and Lewis did in fact exist and was caused by Interpace’s failure to manufacture the component parts of each pipe according to the specifications and applicable standards.

Of the 31 pipe, six 60-inch pipe were removed from the pipeline and examined and tested at CTL Laboratories in May and June of 1984, and in March of 1985. Also two 54-inch pipe were excavated and tested at CTL Laboratories in late 1985. Metallurgical examination of the wire and cylinders were conducted. CTL has produced five (5) volumes of a report on the extensive investigation of these pipes. The Court has reviewed the extensive reports and reviewed the photographs of each pipe and the component parts of each pipe examined at CTL, together with an independent metallurgical analysis report of the wire by Gould and Lewis. The Court has also reviewed actual wire tests from the CTL tested pipe. The Court adopts the analysis, findings, and facts stated in both the CTL reports and the Gould & Lewis reports as true. The defects reported in the reports of the pipe and component parts as stated are true. Interpace’s failure to manufacture the component parts of each pipe according to the specifications and applicable standards caused the defects as specifically noted in the respective reports.

Ill FINDING OF FACT INVOLVING EACH COMPONENT PART OF THE PIPE

A. THE DEFECTS FOUND IN THE EXCAVATED AND STRIPPED PIPE BY CTL AND CONSULTING ENGINEERS

There are certain common defects which without doubt exist in all pipe in the pipeline. These defects are: a porous, weak, and layered mortar coating which was not properly mixed and is not dense or durable as required by Section 3.9.2 of AWWA C301-72; overdrawn or over-heated “Interpace Class IV wire” which is brittle, has serious seams, and is highly subject to corrosion and hydrogen embrittlement; carbonated outer core surface which was caused by improper exposure to C02 from the water used in curing at the Lacoochee plant or from being left in the open air too long, which has a pH of approximately 8 instead of a pH of 12.5, which causes the wire to rust in the area where the wire touches the core; the absence of an effective slurry which was not applied at all or at best was not uniformly or properly applied to the core or wire thereby promoting corrosion; a concrete core which has a lower modulus of elasticity than assumed in design which in turn produces a lower working pressure pipe; and presence of fine and coarse aggregates which do not comply with the requirements of AWWA C301-72, which also contributes to a lower working pressure and surge pressure than specified or assumed in design.

Random defects which were found on some pipe but not all are: (1) Wire ultimate tensile strength measured, analyzed; (2) wire torsion (failed 7 criteria); (3) wire diameters less than .1600"; (4) wire seams (splitting); (5) wire corrosion present; (6) coating thickness less than (7) zone of high permeability, wire level (8) void beneath wire haunches; (9) limestone dust in core concrete; (10) carbonated core concrete; (11) core thickness variation; (12) P test failed; (13) three-edge bearing test failed; (14) low cement content, coating; (15) contamination in core or coating; (16) delamination and cracking of coating; (17) insufficient curing time; (18) poor quality patches, corroded wire; (19) blue-gray oxide in wire.

Since there are at least five major manufacturing defects which are found in all pipe in the pipeline, there exists a substantial basis to completely replace the fine. The County was entitled to a pipeline constructed of pipe which meets the specifications and nothing less. With these number of uniform defects the line has been rendered unreliable, unpredicatable, and untrustworthy. As far as serviceability is concerned the line has already failed. Such a pipeline cannot be maintained by piecemeal maintenance or a “band-aid” approach as suggested by Defendants. The Court will make specific findings as to the major uniform defects in the pipe and some of the random defects which require further findings of fact to be made.

B. THE DEFECTIVE MORTAR COATING FOUND ON EVERY PIPE

Under Section 3.0 of AWWA C301-71 the outer covering or coating of the prestressed pipe may be specified as mortar or concrete. The specifications in this case called for concrete