$30-Million Verdict Against Tutor-Saliba Is Overturned

A state Court of Appeal has overturned a $30-million verdict against public works giant Tutor-Saliba, ruling that the builder did not receive a fair trial in its long-running dispute with the Metropolitan Transportation Authority over subway construction costs.

A three-judge panel, in an opinion issued Tuesday, said Los Angeles County Superior Court Judge Joseph Kalin had abused his discretion by cutting short the firm’s presentation of evidence in a 2001 trial.

The appellate court sent the case back to the Superior Court for what it acknowledged would be an expensive retrial.

“Now we have an opportunity for our real claims to be heard,” said Ronald N. Tutor, the firm’s owner. “We expect to go back to trial and get a fair trial and win a great deal of money” which he contends his company is still due.

Steve Carnevale, the MTA’s chief counsel, said that agency officials were considering an appeal to the state Supreme Court but regarded that as a longshot. “The plan is to retry the case,” he said.

Tutor initiated the litigation in 1995, contending that the MTA owed Tutor-Saliba $16 million for unanticipated expenses incurred while building Red Line subway stations along Wilshire Boulevard.

Four years later, as the case neared trial, the MTA countersued, contending that Tutor’s firm, which was the low bidder for the stations, submitted false claims in pursuit of extra payments.

Jurors never got a clear opportunity to decide who was right.

Instead, during the trial, Kalin punished Tutor-Saliba in the harshest possible way for what he said were repeated failures to share documents with the MTA in the discovery process.

“There has been intentional withholding, concealment and destruction of documents by [Tutor-Saliba] and its attorneys,” Kalin observed at the time.

Tutor says he intentionally hid or destroyed nothing.

But Kalin imposed “terminating sanctions,” ruling that Tutor-Saliba could no longer contend that the MTA owed it money and that jurors had to assume that Tutor-Saliba owed the MTA. The only question Kalin left for jurors was how much.

The judge tied Tutor-Saliba’s hands further by ruling that the firm could no longer use documents to try to persuade jurors that damages should be limited. The jurors ultimately imposed damages of $30 million against Tutor-Saliba.

In a 31-page opinion, the appellate panel found unanimously that Kalin’s sanctions were too severe for Tutor-Saliba’s offenses and deprived the firm of its right to a fair trial.

The panel, consisting of Justices Dennis Perluss, Earl Johnson and Fred Woods, overturned both the $30-million verdict against Tutor-Saliba and an order that the firm pay another $30 million in attorneys’ fees and costs, mostly to a group of outside lawyers that the MTA hired to press its case.

The panel also found that Kalin had abused his discretion in imposing some discovery sanctions on Tutor’s lawyers at the firm Castle & Lax. Kalin declined to comment through a spokesman, saying he could not speak about a pending case.

The $30-million verdict returned against Tutor-Saliba at the end of the 2001 trial made it difficult for the firm to get more work from the city of Los Angeles. That changed after James K. Hahn was elected mayor with Tutor’s support. Hahn appointees and advisors cleared roadblocks to hiring the firm.

In early 2003, Tutor-Saliba won low-bid contracts to build a $36.5-million high school in the San Fernando Valley, a $33-million park-and-ride facility at Van Nuys Airport and an $18-million sewer plant.

Last summer, Los Angeles officials threatened to remove Tutor-Saliba from the park-and-ride project over alleged construction defects.

The Van Nuys FlyAway is partly open. City officials thanked Tutor-Saliba at its dedication.

“I said at the time it was all hysteria,” Ron Tutor said, adding that the FlyAway project is safe, “without even a question of a doubt.”