Massachusets Bay Transportation Authority v. United States

Massachusetts Bay Transportation Authority (MBTA) appeals from rulings after trial by the United States Court of Federal Claims that MBTA has no entitlement to recover damages on any of its claims against the United States for alleged breaches of contract, with the exception of damages calculated as the cost to replace wooden floors with new wooden floors in the Headhouse of the railroad station renovated under the contract. Based on a web of agreements between MBTA and the Federal Railroad Administration (FRA), entered in connection with the renovation and improvement of the historic South Station in Boston, the Court of Federal Claims concluded that: (1) MBTA was not entitled to any damages for FRA’s failure to secure insurance endorsements for MBTA’s benefit; (2) MBTA was entitled to recover only the amount it would have cost to replace the Headhouse wooden floors with new wooden floors meeting minimum building code requirements; and (3) MBTA was not entitled to recover any damages for FRA’s failure to pursue contractual rights against architectural and engineering firms in connection with design flaws that required rebuilding of certain terrazzo floors.

Because this court agrees that MBTA is entitled to recover only the amount it would have cost to replace the Headhouse floors with new wooden floors meeting minimum building code requirements, not the cost of the concrete floors actually installed, this court affirms the judgment with respect to that conclusion. The Court of Federal Claims erred, however, in concluding that FRA’s obligation under section 222(c) of the Boston South Station Transportation Center Project Cooperative Construction Agreement is excused under the doctrine of impossibility, and that MBTA is not entitled to any damages for FRA’s failure to secure insurance endorsements. In addition, the Court of Federal Claims erred in finding that MBTA’s terrazzo floor claim is barred by the applicable statute of limitations, and that MBTA did not give the written notice regarding this claim required under the agreement between the parties.