ML20072H740
| ML20072H740 | |
| Person / Time | |
|---|---|
| Site: | Crane  |
| Issue date: | 04/23/1981 |
| From: | Haimowitz M GENERAL PUBLIC UTILITIES CORP. |
| To: | |
| References | |
| TASK-04, TASK-4, TASK-GB NUDOCS 8306290708 | |
| Download: ML20072H740 (94) | |
Text
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,2 S O U Tit E RN DISTRICT Ol' NEW Y OIM k
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GENERAL PUBLIC UTILITIES CORPORATION, JERSEY CENTRAL POWER & LIGHT COMPANY, METROPOLITAN EDISON COMPANY and PENNSYLVANIA ELECTRIC COMPANY, Plaintiffs, CIVIL ACTION Q
- NO. 80 CIV.
-against-1683 (R.O.)
THE BABCOCK & WILCOX COMPANY and J.
RAY McDERMOTT &
CO.,
INC.,
Defendants.
_______________________________________x Continue d deposition of the Plaintiff, GENERAL PUBLIC UTILITIES CORPORATION, by MILTON HAIMOWITZ, taken by Defendants, pursuant to adjournment, at the offices of Davis Polk &
t I
Wardwc11, Esgs., One Chase Manhattan Plaza, New York, New York, on Thursday, April 23, 1981, at 10:10 o' clock in the forenoon, before Charles shapiro, a Certified Shorthand Reporter and Notary Public within and for the State of New York.
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DOYLE REPORTING. INC.
CERT!Ir!ED STEN oTYPE REPORTERS "3
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A p p e,a r a n e e s-i
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KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, ESQS.
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Attorneys for Plaintiffs 4
425 Park Avenue New York, New York 5.
By:
DAVID KLINGSBERG, ESQ.
6
-and-PATRICIA HENNESSY, ESQ.,
7 of Counsel 8
9 DAVIS POLK & WARDWELL, ESQS.'
10 Attorneys for De fendants One Chase Manhattan Plaza 11 New York, New York 10005 12 By:
ROBERT F.
- WISE, JR.,
ESQ.
-and-13 RICHARD FU, ESQ.,
of Counsel 15 Its ;
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M I LTO N H A I M OW I TZ, having been k/
3 previously duly sworn, was examined and 4
testified further as follows:
i 5
EXAMINATION (continued) 6 MR. WISE:
Off the record.
7 (Discussion off the record.)
L 8
BY MR. WISE:
I 1 9
Q Mr. Haimowitz, when we broke off 10 yesterday, we were discussing Defendants' 11 Exhibit 21, which is-a draft of a contract between 12 GPU Service and the operating companies on the one 13 hand and Gilbert Associates on the other, and
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14 specifically, we were looking at Article XXIV of 15 that agreement and subsection B of that article 16 which relates to " Limitation of Liability; 17 Indemnity."
- 18 I have just a few follow-up questions 19 on that and then we will move on to something 20 else.
21 Do you recall discussing that
. 9 22 Particular clause, subsection B of Article XXIV, 23 with anyone representing Gilbert Associates during
- 24 the negotiations (handing)?
-()
25 A
I don't remember if-that specific clause was
1 nu Am...' t.
,.s discussed.
I 3
(~)>
(_
3 Q
Did you discuss it with anyone within 4
the GPU System?
5 A
Yes.
6 Q
With whom did you discuss it?
7 A
I believe I discussed the provision with l
8 Metropolitan Edison.
8 9
Q Who at Metropolitan Edison?
10 A
I believe it was John Mazella.
i 11 Q
What did you say to him and what he 12 say to you about that clause?
13 A
I mentioned that it was an onerous provision
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14 and if possible we should do our best to delete 15 it from the draft contract and it was of such --
16 this plus the other provisions that we found i
17 objectionable we re such that we felt that if 18 necessary, we should not enter into a master 19 services agreement and continue to do the' work 20 under old existing contracts.
31 Q
What, if anything, did he say to you 22 on this subject?
23 A
I believe he concurred.
[-
24 Q
Do you know whether he'had-any I
25 discussions with anyone representing Gilbert Q
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3 2
Associates concerning this clause?-
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- A I can't answer.
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4 Q
He never reported anything to-you --
5.
A.
No.
6 Q
-- is that correct?
7 MR. WISE:
Let me ask to have marked 8
as Defendants' Exhibit 24 for identification r
'9 a document that is entitled " Standard 10 consulting Agreement, GPU Service 11 Corporation."
12 (Document entitled " Standard 13 Consulting Agreement, GPU Service
()
14 Corporation, was marked as Defendants' 13 Exhibit 24 for identification, as of this 16 date.)
17 Q
Mr. Haimowitz, have you ever seen 18 Defendants' -Exhibit 24 marked for identification 19 before today (handing)?
20 A
Yes..
21 Q
What is it?
- D' 22 A
It appears to be a draft copy of a standard 23 consulting agreement with s set of proposed terms
- 24 and. conditions.
i 1
25 Q
Do you know who authored this document?
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?
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A Yes.
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Q Who?
4 A
Myself, Fred Glickman primarily.
5 Q
When was it prepared?
6 A
I believo in 1975 or
'76.
7 Q
Were you asked to begin work on this
- I 8
by someone?
9 A
I may have been.
I don't recall.
- 4 10 Q
What is your recollection of how this 11 came into being?
12 A
We had been doing much work with small 13 consulting firms, various tasks of a limited nature 14 on a limited basis, and we believed that there 15 should be a set or a standard format for these 16 small consulting firms when they would undertake 17 their services on our behalf.
18 Q
You say "we believed."
19 Whom are you including in that?
20 A
Fred Glickman.
21 Q
And anyone else?
i 22 A
I don't recall.
23 Q
Who did the first draft of this 34 document?
fA-)-
25 A
I don't remember.
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1 1161 mo w I tr iv2 3
Q Did you do any drafts of this r%
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d cument?
3 4
A I believe I may have.
5
'Q Were there any documents that you 6
looked at in connection with your work on this 7
draft?--
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A I may have.
I don't recall.
J 9
Q Was any effort made, to your knowledge, I
10
_ in connection with the preparation of this draft to 11 review existing agreements between GPU or its 12 operating companies and various contractors?
13 A
I don't recall.
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14 Q
To your knowledge, were there any 15 other scandard agreements prepared within GPU 16 service?
17 A
There may have been some drafts prepared.
18 Q
With respect to what types of 19 contracts were such drafts prepared?
20 A
I believe we prepared drafts of contracts i
with construction managers, draft contracts with n
dBP 22 architect engineers, draft contracts for 23 construction type services and draft contracts
' 24 for owner-furnished equipment.
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25 Q
Did you work on the' drafts-for each e
y..
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itaimowAta
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- 2 of those different types of contracts you have
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3 just mentioned?
3 _
4 A
I believe so.
5 Q
who else worked on the drafts?
6' A
I believe I received some help from Ed
- [
7 Murtagh.
{j.
- 8 Q
Who is Mr. Murtagh?
9 A
Ed Murtagh is a me mb e r o f the Materials 10 Management Depa r tmen t in Parsippany.
11 Q
When did he join GPU Service?
12 A
I believe late in 1975 13 Q
Is he a lawyer?
I'[
(s 14 A
I don't know.
15 Q
Did he work for you?
16 A
No.
17 Q
Who was his superior?
18 A
. Fred Glickman.
19 Q-was there anyone else who helped in 20 the preparation of the drafts?
J 21 A
I don't-recall.
22 Q
What happened to the drafts after they 23 had been prepared?
24 A
We solicited opinions from our counterparts
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25 at the operating' companies for suggested
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modifications, additions or alterations.
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3 Q
Did you receive comments from those 4
people?
5 A
No.
6 Q
Did you ever do anything to follow up
.i 7
to determine why comments had not been received?
8 A
I don't specifically remember following up.
9 Q
what happened with respect to the 10 drafts after they had been sent to the operating 11 companies for comments, if anything?
12 A
Nothing.
13 Q
so that to the best of your knowledge, f
14 that was the end of it?
You sent them out to the 15 operating companies and nothing further has been 16 done since that took place?
17 A
To the best of my knowledge, nothing further 18 has been done.
19 Q
Are copies of those draft contracts 20 maintained at Parsippany, to your knowledge?
21 A
I believe so.
9 22 Q
Do you have copies of them in.your 23 files?
24 A
I don't know.
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- 25 Q
Who would have copies of them, to the T
T-
1 Haimowitu 155 l
5 9
best of your knowledge?
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3 A
They would be in the files of the Materials i
4 Management Department.
5 Q
Do you know whethar those files have 6
been searched in connection eith this litigation?
7 A
I believe so.
8 Q
Do you know whether any of those drafts 9
contained clauses relating to insurance?
10 A
I don't remember.
11 Q
Do you know whether any of them J
12 contained clauses relating to consequential 13 damages?
O
(_j 14 A
I'm not sure.
1 15 Q
Do you know whether any of those 16 contracts contained clauses relating to 17 indemnification?
18 A
I'm not sure.
19 MR. WISE:
'Mr. Klingsberg, we have gone 20 through the materials from the contract 21 production that was made here in New York
- G 22 at your offices and I believe we have also 23 gone ~ through the material from Parsippany 24 at the time that it was produced to us on I
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MR. PU:
That's correct.
3 MR. WISE:
We have not seen any of 4
these draft contracts and obviously would 5
like to have them in order to examine 6
these witnesses.
7 I would appreciate if you could check I
8 on why they weren ' t produced at some time.
9 MR. KLINGSBERG:
I will check on 10 whether they were produced.
11 MR. WISE:
All right.
12 MR. KLINGSBERG:
And if not, why not.
13 BY MR. WISE:
/^
- (_N) 14 Q
In the preparation of any of the 15 draft standard contracts, was there consideration 16 given to the special problems that might be 17 raised by contracts for nuclear facilities?
18 A
They may have but I don't recall if there 19 was any special consideration given to contracts
(
20 for nuclear stations.
21 Q-Do you have any recollection as to 22 whether clauses were included in the draft
'23 standard contracts which clauses were to-be used 24 for nuclear facilities?
D 25 A
I have no recollection.
a J.
I
1-Haimow.itz 157 2
Q Would you take a look at page 6 of t3 p
- V
~3 Exhibit 24.
4 Will you take a moment and read 5
Article IX, which is titled "Warrenties/
6 Inde mni fica ti on s, " and Article X on the following 7
page, which is titled " Consequential Damages."
I 8
Have you had an opportunity to review 9-those two clauses?
g 10 A
Yes.
11 Q
Did you participate in the drafting 12 of those particular two clauses?
13 A
I believe so.
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14 Q
Did the definition of consequential 15 damages as defined in Article _X reflect your 16 understanding of what consequential damages 17 includes?
18 MR. KLINGSBERG:
Well, for what 19 purpose?
1 20 MR. WISE:
His general understanding 9
21 at the time.
22 MR. KLINGSBERG:
I will object to the 23 form of the question..
24 Q
Do you understand the question,
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25 Mr. Haimowitz?
1 naimowitz
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2 A
No.
-()
3 Q
Did you at the time that this draft 4
standard contract was being prepared have any 5
understanding of what the term " consequential 6
damages" meant?
7 A
I believe so.
8 Q
My question now is:
Does Article X 9
as it is written here conform to that i
j 10 understanding that you had?
11 A
It conforms to my understanding.
12 Q
Does Article X conform to your 13 understanding of consequential damages today?
( ))
14 MR. KLINGSBERG:
Well, now wait a 15 second.
16 All right, I will allow the question.
17 MR. WISE:
Perhaps the reporter could 18 read the question back.
19 (The reporter read back the last 20 question.)
21 THE WITNESS:
Could I have the previous G
22 question and answer read, please.
23 (The reporter read back from the 24 record as requested.).
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25 MR. KLINGSBERG:
Well, I will object to t) e
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the grounds that I think that 3
I want to 4
frame the objection in such a way that I 5
am not accused of making an improper 6
statement on the record, but it just seems
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to me if you look at the clauses that are 8
involved, there is a kind of definition of
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consequential damages i'n the context of
.f 10 these clauses, it is n.ot a definition like 11 a dictionary definition, so I think to 12 a certain extent the question is misleading.
13 You can answer it if you can.
14 I suggest you read the document 15 carefully'.
16 off the record.
17 (Discussion off the record.)
18 TIIE WITNESS:
Could you repeat the 19 question, please.
20 (The reporter read back the pending 21 question.)
22 A
I believe there is no dif feren ce in my 23_
understanding of consequential damages then or 24 "0"*
Y3 25 Q
So that the record is clear then,'
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1 Itaamow t ta
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this article, to the extent it' defines consequen tia l
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3 damages, provides a definition with which you 4
agree today?
5 A
No.
I said that in my mind the term 6
consequential damages as-used herein is clear.
.t 7
Q Do you today have an understanding of i
8 the meaning of_the term consequential damages?
9 A
Yes.
i' 10 Q
Does the definition that is contained 11 in Article X conform to your understanding today?
~
12 A
My understanding of the term consequential 13 damages is the same as it was then when the (f
14 provision was drafted and it is the same now.
15 Q
In your understanding, does Article X 16 contain a definition of consequential damages?
17 A
It contains a definition that I can set 18 forth.
19 Q
I'm sorry, I misunderstand your 20 answer.
21 A
It is clear to me what the term was 22 intended to -- to be used as a de fini tion,
j 23 MR. WISE:
I'm sorry, could I have 24 that read back.-
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!!aihtow i t-4 I t-1 2
answer.)
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A (c ntinuing) It is clear to me that the 4
term, as defined, carries forth the intentions 5
of what consequential damages, to my mind, are.
6 Q
Both then and now?
7 A
Yes.
8 Q
Mr. Haimowitz, when was the first time 9
you ever had any contact with anyone from B&W?
10 A
It may have been late '75 or early
'76.
11 Q
In what connection did you have 12 contact with somebody from B&W?
13 A
Can I modify that original answer?
h>
14 Q
Sure.
15 A
I just remembered something.
16 Could you ask the question about the first 17 time contact, I believe?
l l
18 Q
I don't know that I would get the I
1 19 question the same way.
Why don't you just go 20 ahead and make a statement as to what you recall.
21 A
My first contact with B&W took place my g
22 second week at GPU in January 1975.
l 23 l
Q What happened then?
24 A
Members of the B&W Construction Department gg 25 involved with furnishing a boiler for the
I 1
Haimowitz 102 2
Homer City station appeared and I attended a 4
ks-,3 3
meeting in which a claim that B&W had was 4
discussed.
5 Q
Homer City is a fossil plant, 6
as I understand it?
7 A
Homer City Unit No. 3 is a fossil
.j 8
plant.
i 9
Q When was the next time that you had 10 any contact with anyone from B&W7 11 A
I remember some communication with B&W 12 in very late '75 or early
'76.
13 Q
What happened at that time?
)(
14 A
I believe th at a I was made aware of a 15 claim by B&W for additional moneys for a supposed 16 delay in the NSSS contract, the TMI-2, 17-Q How were you made aware of this?
18 A
I think I was given a copy of a claim that 19 B&W had sent to our Project Manager.
20 Q
What did you do about it?
9 21 A
I reviewed the claim to de te rmine its 22 validity.
23 Q
Did you reach any conclusions after I
24 reviewing the claim?
(~h-25 A
Initially, I believed that the claim was A_/
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invalid in its entirety and recommended rm
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3 rejection.
4 Q
To whom did you make such a 5
recommendation?
6 A
To the Project Manageri the Manager of 7
Projects, and I think Fred Glickman.
8 Q
What happened next with respect to
'I g
that claim?
10 A
After consultation with Fred Glickman and 11 others, we sought an interpretation from GPU's 12 counsel regarding the position that I had 13 generated based upon my interpretation of the mI'-)
14 claim.
15 Q
How had you interpreted the claim?
16 A
I thought that the delay, which was the 17 basis of the B&W claim, was invalid under a 18 provision of the contract entitled " Excusable 19 Delay."
20 Q
What contract are you referring to?
21 A
I'm referring to the -- what we called 22 the 1967 contract with B&W and NSSS for TMI-2.
23 Q
IIad you had an opportunity to read 24
- that agreement?
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25 l A
I read portions of that agreement.
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Q From whom did you obtain it?
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3 A
I believe I obtained a copy of that contract
.4 from our project files.
6 5
Q Did you review any other files in 6
connection with your review on this claim?
7 A
I don't remember.
k 8
Q Do you recall whether there were any 9
notes or memoranda contemporaneous with the i
10 contract or its negotiat on which you saw at that 11 time?
12 A
I have no recall of any such documents or 13 memoranda.
14 Q
Did you ask anyone if any memoranda 15 or notes had been prepared at or about the time 16 of the negotiation and execution of the 1967 17 contract which might reflect on those negotiations 18 or the meaning of the terms?
19 A
I don't remember asking anybody for 20 documents which led to the negotiations of that 4
21 contract.
22 Q
Did anyone ever mention to you that 23 such documents existed?
24 A
I don't remember.
W,)
25 Q
Has anyone ever-cited such documents
1 naimowitn loS h
2 to you in the course of any discussions?
(,3
/
A I do n t believe so, 3
f 4
Q Has anyone ever mentioned in your 5
presence that someone ought to look for those 6
documents to see if any exist?
7 A
They may have but I have no recollection of L;
8 any.
9 g
Do you know whether anyone has ever 10 undertaken to look for such documents?
11 A
They may have but I have no recollection of
(
12
- that, l
13 Q
Have you under any ci rcumstances seen
<n()
g4 any writings other than the contract itself which 15 relate to it and were made contemporaneous with the 16 negotiation and execution of the agreement?
17 A
I may have but I can't recall ever seeing l
18 any.
19 Q
Did you have any writings to work with 20 in f rming your interpretation other than the i
9 21 contract itself?
22 A
I believe that the only document utilized 23 was the contract itself.
24 Q
Did you have any discussions with
()
25 anyone who was'~present during the negotiation or U
+
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2 execution of the 1967 contract in connection with A( A 3
your review?
4 A
I don't believe so.
5 Q
Do you know which persons at GPU or 6
Met Ed or JCP&L were involved in the negotiation it 7
and execution of the 1967 contract?
4 8
A I believe that the execution of the con' tract g
was made by somebody from Jersey Central.
That's i
10 all I can answer of anything with respect to the 11 negotiation or whatever else you asked.
12 Q
Execution I believe was the other word.
13 A
Execution I know was a Jersey Central thing.
14 Q
As of today, have you aver had any 15 discussions with any person concerning the 16 negotiation of the 1967 contract with B&W7 17 A
I may have but I don't remember any incident 18 or specific incident.
19 Q
And you do n ' t remember any specific 20 person?
1 21 A
I don't remember.
22 Q
What happened af ter you received advice j
l 23 from counsel?
l 24
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.A We'took -- we in the Contracts Department'and
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GPU project personnel took another look at the
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3 provision.
4 Q
Did you receive written advice from 5
counsel?
6 A
I don't believe so.
7 0
.After you took another look at.the 8
provision, what did you do next?
9 A
We felt that the claim could not be
- i s
10 rejected in its entirety but felt that there was 11 a basis for negotiation.
12 Q
What was your reason for feeling that 13 the claim could not be rejected in its entirety?
O(/
14 MR. KLING3 BERG:
Well, other than 15 advice of counsel, I take it?
16 MR. WISE:
Well, I don't want to ask 17 him what the advice of counsel was.
I am 18 now asking him what the business position 19 of the company was as they negotiated 20 with B&W.
I think I am entitled to inquire 9
21 into that.
I won't ask him what the basis 22 of his opinion was and I have stayed away 23 from trying to ask him what the difference 24 between counsel's opinion and his opinion was
[)
25 so we can avoid.that problem.
I think I am i
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entitled to find out what the position of
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3 GPU was during these negotiations.
4 MR. KLINGSBERG:
O.
K.
i" 5
THE WITNESS:
Could you have the 6
question repeated.
7 (The reporter read back the question 8
as requested.)
9-
'MA.
KLINGSBERG:
Well, that is x
10 different'from what was the position of GPU 11 with regard to 12
\\MR. WISE:
I will take your counsel's 13 4
suggestion and rephrase my question.
~/
14 BY MR. WISE:
4 15 Q
What position did GPU take with 16
' respectJto'the excusable delay provision?
17 A
Ths' provision taken, that the excusable
~
18 delay 1would not, not serve as a total sort of 19 disclaimer of the entire claim.
20 Q
what I am now.trying to determine, lll 21 without asking you what advice of counsel you may 22 have received, is how you interpreted-the clause, 23 l
1 and by "you" I mean-from the GPU Service side, s
24 putting aside how your counsel may have interpreted f()
25 it,' hup what interpretation were you following
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that led you to the belief that the claim could
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not be rejected?
I don't want to know whether it 4
was the same or different from whatever your 5
counsel may have told you.
6 A
Facts were given to me by the Project 7
Manager and I may even have been shown j
8 correspondence which showed that GPU Service 9
Company did in fact delay B&W for some portion i
3 10 of time.
further negotiations h
,t 11 Q
Were there with 12 B&W on this claim?
13 A
Yes.
f O,Q 14 Q
Who conducted those negotiations on 15 behalf or GPU?
16 A
I was present at some negotiations, Fred 17 Glickman may have been present at ~aome of the 18 negotiations.
O 19 Q
Who was in charge'of running the l
20 negotiations from GPU's side,,1f anyone?
i og A
I don't believe I can chaAacterize h
as
~
r, 22 anyone running the negotiationsb I believe a 1
q gi 23 better characterization would have.been a team O
24 approach.
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25 Q
In any event, you were on tiie team 4
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is that true?
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A I believe that's a fair statement.
,1-t 9 [,. 4 Q
Who negotiated'on behalf of B&W7
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,5 A
I remember Grant Ward, who I believe was 6 6 a Senior Project Manager,'I remember Lee Pletke
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,7, being present at the meetings, I remember
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was 1
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~8 Gooden,Grayoof the New York sales office being s
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g present at some mee tings, I remember Gerry White, s.
1 10 also in the sales capacity, being present at 11 some of the meetings, and I.also remember at one i
12 of the meetings a Manager of Projects of B&W, 13 and'I believe his name was Stewart.
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14 j
Q Was GPU represented at any of the e
negobiations by'outside i
15 counsel?
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1 16
' ' Ji i ' No.
4
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Q What was the resolution of the claim?
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18 Aj There was no resolution of the claim.
t
- 19 Q
What happened?
3 g
20 A
The parties never reached a total g
21
' understanding or an' agreement on the value of the 3
< 's 1 22 claim,:the length of delay or certain other a-J
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23
. factors that we were not able to resolve.
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What were'the other factors?
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I remember'that at all times during the u
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b l-Halmowitz 171 l
[
2 negotiations we expressly reserved any rights or
, (_/
3 remedies that we may have but that any dollar 4
settlement would terminate completely all B&W 5
claims, disputes it has or which it may have under 6
the contract.
That is one of the issues I 7
remember.
8 Q
Were there others?
i 9
A I remember one other issue and that is the t
10 licensing activities that B&W alleged would have 11 to be performed and how they would be reimbursed i
12 for such licensing activities and at what point 13 would the reimbursement take place.
()
14 Q
Did B&W object to a settlement of 15 the delay claim which would terminate its rights 16 to present other claims?
17 A
I don't think so.
18 Q
You mentioned that one of the other 19 factors involved in the parties' failure to ever 20 reach a total understanding was that GPUSC 21 wanted the total dollar settlement to clean up 22 all claims; is that correct?
Am I correct in 23 that understanding?
24 A
I believe so, yes.
Your understanding is C
25 correct.
9,3 e
n w
.e a
1 lia imow i ta 72
{
2 Q
My question now is:
How did that
'(_-
3 factor contribute to the parties' failure to 4
conclude an agreement?
Was it because there were 5
other claims or was it because you weren't able 6
to reach an agreement on the value of such other 7
claims or in what way did that factor contribute 8
to the inability to conclude a final agreement?
9 A
That factor did not contribute to the i
10 inability to reach a final agreement.
11 To the best of my knowledge, it was B&W's 12 reluctance to allow GPUSC to reserve all of its 13 rights and remedies that it has under the
[f )
14 existing contract or which it may have.
15 Q
You mentioned licensing activities.
16 What was involved with respect to the 17 dispute between the parties on that issue?
18 A
As I recall, B&W took a position and sought 19 reimbursement for certain licensing activities 20 that it alleged were performed at a time subsequent 21 to when B&W perceived the contract to have been 22 completed and also wanted to keep open any 23 additional licensing activities that it had to i
24 I
perform until the contract would be completed.
i
' "_T%)
25 Q
What'was GPU's position on that issue?
S g
1 liaimowitz 173 h
2 A
We believed that many of the tasks which
(,
(_)
3 B&W alleges increased its costs were contract 4
requirements, remained contract requirements 5
and should not be reimbursed.
6 Q
And by " contract requirements," you 7
are referring to the 1967 agreement?
l 8
A I am referring to the 1967 agreement.
4 9
Q You used the language "many of the 10 tasks."
were some of the tasks that you 11 recognized B&W was entitled to reimbursement for?
12 A
I believe a number of tasks were deemed as 13 out of scope, I think the term was "out of scope"
. r3
! /
14 or "out'of time frame."
15 Q
What is meant by "out of scope" or IG by "out of time frame"?
17 A
By "out of time frame," which is a more 18 appropriate term, it is because of a delay certain 19 new licensing requirements allegedly became due 20 or mandated and those particular tasks, which are 21 a direct cause of the delay, which put the 22 requirements in a different time frame, could be 23 de e me d as a cost to B&W attributed to the delay.
24 Q
Did GPU ever reach any dollar value of
/~}
25 the amount which it believed B&W was entitled to 1
us i
t
I liaimow i c z 174
{
2 as excess costs for delay or whatever term is
(_7)
/
3 the appropriate one?
4 A
I don't believe GPU reached that decision, 5
but I believe that in the negotiations I was 6
prepared to summarize a dollar settlement which 7
could then be presented to management for review 8
and approval but would also include the so-called 9
agreements that we felt would have to be 10 incorporated as part of that settlement.
11 Q
what was the dollar amount you were 12 prepared to recommend?
13 A
I don't recall.
- ( )
14 Q
Do you have any rough estimate?
15 A
Approximately a million dollars.
16 Q
Do you know what the total amount of l'7 the claim was by B&W7 18 A
The claim that was under negotiation I 19 believe approached $2 million.
-20 Q
Do you know whether B&W was ever paid
- g' 21 any part of the claim?
22 A
I have no knowledge of whether they have 23 been paid.
24 Q
The negotiations broke off before you-r~') -
25 made a' recommendation to management; is that true?
V:
y-
1 Haimowitz r 7' s
M 2
A That is correct.
()
3 Q
Have you ever seen a copy of B&W's 4
answer and countorclaim in this lawsuit?
5 A
I have.
G Q
Have you reviewed the counterclaim?
7 A
I have seen the counterclaim.
' I 8
Q Have you done anything other than 9
simply read it through?
10 A
I believe so.
11 Q
What have you done?
12 MR. KLINGSBERG:
I think I am going 13 to exclude consultation with counsel from 14 that.
15 MR. WISE:
Yes, I will exclude iti consultation.
17 A
The answer is no.
18 Q
Have you examined any records with 19 respect to that counterclaim?
20 i A
No.
h 21,
Q Have you consulted with anyone other I
22 I than your lawyers with respect to that
$1 counterclaim?
21 A
No.
25 Q
At the time of the negotiations, who e
--.3
- f g
flaimo w i tz 17'i i
3 was the most knowledgeable person at GPU Service l
([)
3 r Met Ed or JCP&L, whichever was the relevant company, with respect to the-facts underlying 5
B&W's claim?
And if it is not one person, you g
can name more than one.
7 A
May I assume we are talking about the
!j g
counterclaim?
g Q
Yes.
10 A
Of the 1967 NSSS contract?
gt Q
That's correct.
12 THE WITNESS:
May I have the question
.13 read back, please.
r~V) g.:
(The reporter read back the last 15 question.)
16 A
In my mind, the most knowledgeable-man 17 with respect to the facts surrounding that claim 13 is Dick Heward.
i 19 Q
Are you familiar with a Mr. Barton?
20 A
Yes.
I h
21 Q
Was he involved in these discussions?.
j 5
33 A
To the best of my knowledge, John Barton was
{
l t
I 23 never involved in any negotiations with'B&W with i
24 respect to its claim.
5 MR. KLINGSBERG:
Off.the-record.
2
(~h V
n t
p
-+
-%.-.r
--e m-.--
-v..-w--e..
- + - -
I l!
I Ilaimowitz
- 77 k'
2 (Discussion off the record.)
3 f(j MR. WISE:
Why don't we take a break i
now.
5 (whereupon, a recess was taken.)
g MR. KLINGSBERG:
Off the record.
7 (Discussion off the record.)
ff 3
MR. WISE:
Where were we?
9 (The reporter read back the last 10 question and answer.)
gg BY MR. WISE:
12 Q
Leaving for the moment the subject of B&W's claim, which we have just been discussing, g3
(}
whe? other contacts with B&W have you had?
15 A
I have had several contacts and 16 communications with respect to its contract at g-Homer City-3 for the boiler and negotiations i
gg of claims relevant to that contract, I have had l
contacts with B&W for the post accident Master gg i
Services Agreement for TMI-2, and I have recently 20 had a communication with B&W for the purposes of
{
gg 22 entering into a new Master Services Agreement 23 for all nuclear plants operated by GPU.
r 34 Q
Were you involved in negotiating any (JT
.)5 c ntracts with B&W relating to TMI prior to the h;
!i it" l
s
I HaimOwitz 17P 4
-2 accident?
(')\\ -
(_
3 A
I don't believe so.
4 Q
Do you recall ever seeing or being 5
informed of an agreement between Metropolitan G
Edison and B&W for long-term training services 7
entered into sometime in 1975?
8 THE WITNESS:
Could you repeat that i
9 question, please.
10 (The reporter read back the last 11 question.)
12 A
Yes.
13 Q
What do,you recall about that?
)
14 MR. KLINGSBERG:
Can I have the 15 question before that, please, before that 16 was repeated.
4 17 (The reporter read back from the 18 record as requested.)
19 THE WITNESS:
Will you please repeat 20 the pending quection.
h 21 (The reporter read back the pending fl question.)
22 na-23 ji A
I recall being shown a copy of that contract i
r I,
24 ji by counsel.
[
("h 25 Q
was that after the accident?
U l
4 ji -
)
! I
- - ~
-w e
1 Ilaimowitz
'9 i
2 A
Yes.
( )
3 Q
Had you ever seen it before that time?
3 A
I don't recall having seen that contract 5
before being shown by counsel.
6 g
Lid you know it existed before counsel 7
showed it to you?
' ii 8
A I don't believe I knew it existed.
i 9
Q Do you recall being involved in the i
10 negotiation of a Master Services Agreement between 11 Met Ed and B&W sometime in 19777 12 A
I do not believe I took any part in such 13 negotiations.
()
13 Q
Do you recall having that agreement or 15 any drafts of that agreement submitted to you for ti; your review?
17 A
Yes.
18 Q
Who submitted them'to you?
19 A
I believe that agreement was submitted to 20 GPU Service Company for review by a member of lh 21 Met Ed's Contracts Department.
)
Q Do you know his name?
23 l A
I believe his name was Pete Betz.
g.3 Q
Who is Mr. Betz?
A Pete Bets is a member of the Contracts g5
,-r-w g
1 IIaimowitz i; '
i 2
Department at Met Ed.
()
3 Q
Who was his superior, or who was his 4
superior at the time, I should say?
5 A
I think John Mazella.
G Q
Was the 1977 contract required to be 7
submitted to you for your review under LOSA?
t i'
8 A
No.
9 Q
co you have any knowledge as to why 10 it was submitted to you?
11 A
I believe as a courtesy and probably for 12 solicitation of some comments.
13 Q
What did you do when you received a
()
14 copy of that draft?
15 A
I think a review was made of the draft.
I Iti Q
Was that review made by you?
17 A
I believe so.
18 Q
What form was the draft in when you 19 receive d it, that is to say, was it a proposal from d
20 B&W or had it been negotiated and retyped?
At t
lh 21 what stage of the drafting process did you first 22 W see a 4
copy of the proposed agreement?
11 l
A I don't know at what stage that contract t
2; draft was submitted.
/N 25 i
tg, Q
Do you recall whether or not it was l-
+
,-,r r--
,,w
i Haimowitz
'1 I
a 2
still in the B&W proposal form?
rn
(,)
3 A
I'm not sure.
4 Q
Are you familiar with B&W proposal 5
form?
6 A
No.
7 Q
Have you ever seen proposals 8
s'ibmitted by B&W on B&W form paper that includes 9
a B&W proposal number on it in the bottom left-10 hand corner?
11 A
I may have but I'm not sure.
12 Q
You are not familiar with that 13 particular form, format that B&W uses?
()
14 A
I may have seen it but I'm not sure.
15 Q
In any event, you don't recall today 16 whether or not when you first saw the 1977 17 proposed agreement it was in that form or some 18 other form?
19 A
I don't recall, i
20 I MR. WISE:
I will ask to have marked 21 as De fendants ' Exhibit 25 for identification 22 a memorandum dated August 16, 1977 concerning i
23 l a proposal for a Master Services Contracts
(
21 the memorandum appears to be from Mr.
- f^T ~
25..
Haimowitz addressed to Mr. Betz.
V i
1
- l cw
5' 1
Haimowitz iT2 I
e 2
(Memorandum to Mr. Peter Betz from
(
3 Mr. Haimowitz, dated August 16, 1977 was t
3 marked as Defendants' Exhibit 25 for 4
5 i de n ti fica t ion, as of this date.)
G Q
Mr. Haimowitz, are you familiar with 4;
7 Exhibit 25 (handing)?
8 A
What do you mean, " familiar"?
9 Q
Have you ever seen it.before?
10 A
Yes.
11 Q
Did you prepare that memorandum?
l 12 A
I believe so.
13 Q
Was it prepared in response to your 14 review of the B&W proposed contract for a 4
15 Master Services Concract?
n; A
Yes.
17 Q
Did you prepare any other memoranda 18 to the best of your recollection concerning your 19 l
comments on th at proposed contract?
i 20 A
I don't recall of any others.
-l h The 21 Q _
memorandum opens by saying, "We 1
.on have reviewed."
l I
g3 To whom does'the "we" refer?
i 3
A Myself.
/~T 25 Q
Did anyone else at GPU Service review U
m e-
1 Haimowitz
'l 2
that contract, to the best of your knowledge?
O 3
A I don't believe so.
j 4
Q Did you have any oral discussions 5
with Mr. Betz or anyone else at Metropolitan G
Edison concerning your comments on the Master 4 :
7 Services contract?
8 8
A I may have but I don't recall any.
9 Q
At the end of the memorandum you sent 10 carbon copies to Mr. Glickman, Mr. Hulsebus and Mr.
11 Mazella.
12 What was your reason for doing that?
13 A
I sont a copy to Fred because I did work 14 for Fred and I felt if a review was being made 15 of a proposed contract he may want to see the 16 comments that we have made.
17 I sent a copy to Mazella because I believo 18 I have testified that Pete Betz worked for Mazella 19 then.
20 !
I don't remember why I.sent a copy to P
21 Hulsebus except that he was the acting or the I
22 Director of Materials Management at that time.
b
~
il Q
Do you have any independent recollection I
24.
l at this time of the 1977 Master services Contract?
f i
25 [
MR. KLINGSBERG:
What do you mean, the i
e
g 0
i.i' l'
1 Haimowitz iF 1 t:
2 provisions of it?
3 MR. WISE:
Yes.
4 g
In other words, do you recall anything, 5
does anything stand out in your mind about that 6
contract, terms, provisions, questions, comments 7
you had or wculd we need to refresh your 8
recollection with writings in order for you to 9
be able to remember it?
10 A
If you are going to ask me any questions on 11 this particular contract, I would hope that a copy 12 would be made available to me.
13 Q
We will certainly do that.
All I want N
g,)-
14 to know for the moment is whether you have any l
15 independent recollection of the agreement aside 16 from whatever documents we may have that may help 17 you.
18 MR. KLINGSBERG:
I will object to the I
19 I form of the question.
20 The witness can answer but I think it l
lll 21 is a little unfair to ask one about a whole i
i 22 agreement without asking some particular l
23 h question about it.
I mean, does he remember 21 what about it?
How many pages it was, what
(}
25 the color of the type was?
I mean there i
l:
l 1
IIaimowit
'5 4
-i 2
should be some more particularized question
- Ot (J
3 before you are going to assume that he has 4
or he doesn't have a recollection on a 5
Particular thing.
6 MR. WISE:
I am not directing it to a 7
Particular thing.
8 MR. KLINGSBERG:
That's 9
MR. WISE:
What I am curious about at 10 this point is if I hadn't told him about this 11 1977 agreement and so on, whether he would 12 remember anything about it.
l3 MR. KLINGSBERG:
Well, that's n
(_)
14 hypothetical.
Who knows?
15 MR. WISE:
All I am trying to get at 16 this point, Mr. Klingsberg, is whether or 17 not he has any recollections of his review 18 of that agreement, what form the agreement 19 took and so on.
20 MR. KLINGSBERG:
That is a lot of l
lll 21 different questions.
I mean I think if you I
22 want to know his recollection about a i
t 23 particular thing, you ought to ask him about 2
the particular thing and he will tell you
{
25 l
if he recalls or he doesn't, but to just ask W
w
i 1
Haimowitz
.C~
a
}
2 a broad-base quettion, do you remember
-^
k_)x 3
anything about a contract I don't think 4
is particularly fair.
5 MR. WISE:
I will say I don't find that 4
6 objectionable.
7 MR. KLINGSBERG:
You may answer the 8
question.
i i
9 THE WITNESS:
Will you repeat the 10 question.
11 (The reporter read back the question 12 as requested.)
13 A
I really don' t know how to answer that 14 question.
15 Q
All right.
It;
}
Would you look at the first page of i
17 the memorandum and the bottom line.
You make a 18 re fe ren ce to "our usual Termination for Default 19 provision."
20 To what were you referring in that lh 21 clause?
i 22 A
I believe I was referring to the fact that I
i 23 each of our operating companies and the Service 2:
Company used the provision in any contract which
[')h.
43 would enable an operating company or the Service x
i 9
~
r m,
e w
w
i' 1
Haimowitz
- ) A k
i 2
Company to terminate a contract for default in O
a the eve e er e verzorme ce.
4 (Continued on page 187.)
5 6
7 8
9 10 11 12 13 O
V 14 15 Iti 17 18 19 i l
i i
f 20 e
21 e
- 1
- a lI
,\\
24 25
.t
!~
i!
r 1
hd1 1
Ita lmo wi t :.
'87 i
2 Q
Was that clause contained in any e-1_mj 3
larger body of terms and conditions?
m 4
A I don't believe so.
5 g
Were there other types of provisions 6
that were, quote, usual, close quoto, within the 1
7 system?
8 A
I believe so.
9 Q
Where were they collected?
i 10 MR. KLINGSBERG:
If anyplace.
11 MR. WISE:
If anyplace.
12 A
I don't believe they were collected.
I believe,l 13 though, that at maetingc that I have discussed in
()
14 some decall yesterday, where terms and conditions 15 were discussed at these particular meetings, we,as Id as group, agreed that our contracts would contain 17 a termination for convenience provision, a
18 termination for default provision, in 19 cost-reimbursable contracts an audit provision and 1
t' 20 a suspension of work provision, and other l
21 provisions that we thought should be in contracts
~22 that we enter into.
f I
23 Q
Mr. Haimowitz, were there any 24 boiler plate or standard contract terms that'were 1.
f3 25 in use at GPU Service or the. operating. companies j.
's.-
I I
I
_l
,m.
=,
-7
1 l
I 2
1 Haimowitz
' E '3 1
i fi 2-during the period 1975 through '797
., fM
(,)
3 A
To the best of my knowledge, there were no 4
standard terms and conditions used at GPU Service 5
Company for any of its major procurements for the G
period of 1975 through '79 with the exception of 7
the standard consultant agreement for those small
.i i
8 type consultants that would enter into contracts
'k 9
with GPUSC.
10 During that time I reviewed many 11 contracts from the operating companies.
I do not 12 believe that Met Ed utilized a standard set of 13 terms and conditions.
I do not believe that em
(
14 Jersey Central utilized a standard set of terms 15 and conditions.
I believe that Penelec made a 16 general set of terms and conditions for 17 construction.
18 Q
What respone,.if anything, did you 19 get to your memorandum which is Exhibit 25?
20 A
To the best of my knowledge, I don't I
i h
i 21 remember any response.
b f
22 [
Q What involvement, if any, did you t
23
'have in the negotiation or execution of the 24 Master Services Contract after Exhibit 25 was
-l
)
25 prepared and sent?
' 'A O
i i
-3 I
Hainowitz
'89 i-ll j
2 A
I don't believe I had any involvement in O
3 thos,e negotiations.
I Q
Did you have any further discussions -
5 wita Mr. Betz or Mr. Mazella or anyone in their 6
office concerning that contract?
7 A-I may have, but I don't remember any.
. }
8 Q
Have you ever met John Mullin, s
1 i
9 M-u-1-1-i-n, of B&W7 10 A
I have no recollection of that name.-
11 Q
Have you ever attended a meeting 12 with Mr. Mullin, sat across the table from him, I
l and spo' ken with' him?
's 13
(\\
. don't remember.
11
'A I
15 Q'
Do you know'a man named Fritzen?
l 16 A
I heard that name.
17 Q
Do you know who he works for?
18 A'
I belie've he works for Met Ed as an 19 engineer.
I w
20 Q
Have.you ever met him?
4 s
j 9
s 21 A
I don't bel'ieve I have ever met him.
l l
l
-22 i
Q Have.you ever met a Mr. Lewis of i
23 B&W?'
.J s
'J.I A
I don't recall meeting a man by the name
()
25 of Mr.. Lewis.
4 Ll lJ I
-w
-n--
r
l I'
4' 1
Haimowitz 190 l
,1
=
i g
Q Do you remember a meeting with i
3 anybody, whether it be Mr. Mullin or Mr. Lewis a
4 or some other person from B&W's Contracts 5
Department, in connection with the 1977 Master 6
services contract?
I 7
A To the best of my knowledge, I never met
.i 8
with anybody from B&W regarding this Master 9
Service Contract for TMI Unit 1.
10 Q
Have you ever met with Mr. Mullin or 11 Mr. Lewis or anybody else from the Contracts 12 Department with respect to any contracting matter 13 other than the claims negotiation which you
()
g4 tdstified to this morning, and other than any 15 Post-accident negotiations you may have had?
11; A
I have no recollection of ever hearing the 17 name Mullin before and/or ever meeting Lewis.
18 Q
Do you know a Mr. Taynton, i
19.
T-a-y-n-t-o-n, of B&W?
i I
i 20 l
A I do not know that name.
21 Q
Have you ever met a Mr. Schmidt?
22 MR. PU:
I believe his first name is s
4 23 Karl.
f s
I 24 A
I have no knowledge of ever meeting that l
{}
25 gentleman.
4 i
k 1
l
5 I
liaimowite
.91 1
4 -
a I
4 2
Q Do you know what happened to the
- (~ }
3 proposal for a aster ervices ontract after 4
your memorandum?
5 A
No.
6 Q
Do you know whether it was ever 7
signed?
l
+ }
8 A
I believe it was signed.
O Q
How did you find that out?
10 A
In deposition preparation.
11 Q
But before you got involved in this 12 lawsuit, did you have any knowledge that that 13 contract was signed and in effcet?
(-}
14 A
I may have, but I can't think of no reason --
- (/
l 15 I can think of no instance where I can definitively lli stato that I know that contract was signed.
17 Q
Do-you recall ever reviewing any other 18 master services agreements between B&W and any of 19 I{I the operating subsidiaries prior to the accident 20 l
at Three Mile Island?
J 21 A
I may have, but I don't remember any.
22 l Q
Were you involved in the negotiation
- l 23 I
of a fuel reload contract for TMI-1?
l 24 l
A I may have, but I don't know.
-25 Q
Are.you familiar with when that O
i x) :
i p
w g-r--
6 I
flaimowit?
' 'J "
I' l
j 2
contract was negotiated and executed?
3 A
No.
4 Q_
Are you today aware of any other 5
Master Services Contracts entered into between G
B&W and GPU or any of its operating subsidiaries 7
prior to the accident?
I am speaking of other than
,j 8
the 1977 contract that we have been discussing.
!I 9
THE WITNESS:
Could you repeat that 10 question, please7 11 (Record read) 12 A
I may be, but I don't recall any.
13 Q
Do you know whether there was a
(-'
14 Master S ervices Contract between BGW and Met Ed l
13 in 1973 with respect to TMI-17 Ili A
I believe so.
17 Q
Was there also a Master Services 18 Contract for THI-2 entered into in 1974?
19 A
I believe so.
i I
b' 20 Q
Did you at some time have an 21 opportunity to see those agreements?
l 22 A
I believe so, i
si 23 '
Q-In what connection did you come across
'24 I
j them?
I l
25 I
.A During the deposition preparation.
('i s-i t
i
.l ' l 1
m
.......,--m
...-.. - - _......... _ - _ _ _ _.. ~. _.
l 1
I i^
7 1
Liaicauwlt r su3
\\
J 1
2 Q
Do you recall whether you had ever 3
seen them before that time?
w 4
A I had no knowledge of seeing those documents i
j.
5 before' that' time.
7 6
MR. WISE:
Off the record.
7 (Discussion off the record.)
4 j{
8 (Luncheon recess:
12:30 p.m.)
i;.
9 4
a
.10 1'
11 m.,.
t 12 1
1 13 4
p I
15 i
lii i
17 i
18 10 i
t 20 e-
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t 1
22 l
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l 8
1 s.,
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7 i
2 A FT E RN OON S E S S I O N e
(
3 (Time noted:
2:01 p.m.)
4 M I LTON HA I MOW I T Z,
resumed.
5 MR. WISE:
Off the record.
6 (Discussion off the record.)
'l 7
MR. WISE:
Let us go back on the O
ris co rd.
0 During the luncheon break, we have had 10 delivered here a copy of a letter from Mr.
4 11 Hulsebus to Babcock & Wilcox dated May 25, 12 1979.
The particular copy that we have is a l
13 telecopy and it has some handwriting at the I'%
14 top with Mr. Klingsberg name on it, which V
15 wss put on there only for the purposes of lei getting the telecopy delivered and I don't 17 believe it was on the original.
18 I would like to have this document
.10 marked as Defendants' Exhibit next in order.
l t
20 (Telecopy of a latter dated May 25, I
21 1979 from Mr. Hulsebus to Babcock & Wilcox, g
l bearing some handwriting at the top with Mr.
22 23 Klingsberg name on it for delivery purposes 24 was marked Defendants' Exhibit No. 26 for 25 identification as of this date.)
^
V q
k i
n.<
7 e.r m
u v
9 1
N llalmowi t z' i ts '.
i i
2 MR.,KLINGSBERG:
I will just stato 3
for the record that the admissibility of i.
4 teitiher this ' document or any further o
5 questioning relating to the subject of this s
i 6
dceument ic something on which we agree we l!
7 can reserve objection for trial.
{.
~ 8 MR. WISE:- That is correct, Mr.
- t i'-
9 Klingsberg.
You might preserve whatever
'l 10 objections you have to this document or any
{#'
11 further questions or any questions during the 12 course of this examination with the exception 4
13 of objections going.to form.
14 EXAMINATION (CONTINUED) 15 BY MR. WISE:
lli Q
Mr. Hairowitz, have you seen Exhibit 17 26 prior to today?
3 18 (Handing document to the witness) 19 A
Yes.
l f1' i
t
- 20 Q
When did you first see that document?
lj' 21 A
I believe at the time that the document was I
22 sent to B&W.
i
.i
- l...
4
-23 Q
Did you have any discussions =with
-I 24 l
anyone concerning the subject of that' letter?
25 l
A Yes.
(
f
. +.
o 4
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.)
i 3.!
i
.10 l
lia iuow1 L a w
1:
i
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1, i.
2 Q
With whom did 'you have discussions?
t' D.
f "U
3 A
With counsel.
\\JJ f
I 6
s 4
Q Did you participate in the drafting 5
of that letter?.
s i
G A
I don't recall, g,
[
!n, 7
Q Do you know'twho drafted it?
(J 1
\\
1 8
- A I believe so.
/
+,/
9 Q
Who drafted it?
'I s
_t, 10 A
I believe it was generated by couns'eD.
m.
Y '
=
11 Q
Are you referring to someone at i
12 Berlack, Isreals?
1 g
p'
/'
13 A
I believe it was drafted by Josse Meer.
14 Q
Did you ome to any undor's,tanding by 15 whatever means as to the'iintent behind thtt r
't T
16 letter?
j '! 4 t
,e t
4 a
17 MR. KLINGSBERG " Well, I w'ill ask the 6
/
~+
t 18 witness not to disclose the conten tb o f an 'y".
'N 19 legal advice he received.from: counsel.'
3 T
j~
f 20 1
Q Can you answer..itho'. question with the y
s 21 qualification your counsel'has' put g
f.
on it?
22 i
A I think so.
t i
23
'Q Did'you?c
\\
+
i 24 A
I came to a conclusion.
/-
25 _ [
Q O.K.
a l
,,v i
ai s.
o f(
y t
.+
i
,,, 1 1
't Ha;uowitz
>/
~
l a p.
3
,Did-you ever have any discussions e
('-}-
N N,
i 3
with any person at B&W concerning the subject of t
,5 p
^4 that letter?
- ] 5 A
Yes.
6 Q
With whom did you have discussions?
- i
'i f
A With Mr. George Kulynych.
e
,r
- j
'3(*
8 Q
When did you have discussions with 1
{
e
,9 him about'that? \\
i.
g 10 A
During the' negotiations of the post-accident g,.
11 Master Services Agreement.
12 Q
When did'the subject first come up
{
'O 13 with him? I j
= g s.
' d 11 A
Durinq the negotiations.
15 Ql
How did it come
', vl.
up?
f Wt A
I remember raising it and insisting that any
, r
17 centract that we enter into would be subject to 4
7, h
2
~t 18 the provisions as set forth in this May 25th, 1979 7
t-I!)
letter.
i 2
t Q
Did you discuss with him what those
.J, 0 e
3 8.
j t
i 21 provisions were?.
J' l
~
22 -l A
I believe he was aware of it.
_2, Q
Well', my question is, did you. discuss 1
-r 8
- /
i -
- 1
'/
that with him, specifically?
s
- z A
I don't remember any -- discussing anything
.er
{
3 (y e i
i t Y
t e
I.
i,
i
' 12 '
1 H aitnow i t z 198 l
i I
?
3 specifically with him.
G Q
D yu remember anything that he said 3
3 to you or you said to him concerning the subject 5
of this letter?
6 A
To the best of my knowledge, I believe in 7
discussing this letter, I made him aware of my
.i 8
opinion that this letter and the contents of this 9
letter would serve to exclude any of the Master 10 Services Agreement and the negotiations from gg any subsequent rights that GPU or Jersey Central g3 or Metropolitan Edison or Pennsylvania Electric 13 Company or subrogation rights of their insurers Ok/
g,g would serve as a barrier.
15 MR. KLINGSBERG:
Subsequent rights, y;
you said?
Do you want to read that back?
17 THE WITNESS:
What I can you read 13 back the question -- my answer, I'm sorry.
19 (Record read)
I i
A That is a totally garbled answer.
20 21 Q
Feel free to make a statement.
33 A
I will modify it.
i 33 j!
I believe I'made Mr. Kulynych aware of my I
i 34 opinion that the provisions in this letter would
'( )
~
25 exclude negotiations conducted with B&W for a j
I i
'l H
13 1
!!a imo w i t l '> ' '
2 Master Services Agreement from use in those O
3 negotiations and the results of those negotiations 4
and the task orders released thereunder and the 5
payments made would be excluded from any potential 6
actions or litigation that we may potentially have.
I 7
Q Did you mention to Mr. Kulynych that i
8 GPU had litigation under consideration?
s 9
A No.
10 Q
Did Mr. Kulynych say anything to you?
11 A
I don't remember.
12 Q
Did he indicate that he had seen this I
13 letter?
U 14-A Yes.
\\
15 I Q
Was there any other discussion between l
16 B&W representatives and GPU representatives that 17 you e(ther participated in or heard about concerning 18 the subject of this letter?
19 A
Yes.
I, 20 Q
What other information do you have on 21 that?
22 A
I believe I informed people at TMI-2, those
.23 e that would issue the task releases, that before the i
24 issuance of any task release that these words should i
I 4
I).
25 be incorporated in their entirety'on the release or l
1 i
4 1
w w,-
v ~
v q
t
.I
,14-I Halmowitz JOS i
i l
b 2
the releases themselves.
3 Q
Do those words reflect your 4
understanding of what was agreed with B& W7 5
A These words, as I interpreted them, and I G
am of the opinion precluded the utilization of 7
any of the negotiations with the Master S ervices 8
Agreement as used by B&W in any -- any matter or
- I 9
action'that GPU'or its operating companies would j
10 proceed with.
11 Q
What I am asking you now is, is that 12 your interpretation of those words, or is that an l
13 additional agreement that you understood was'made
.(
14 orally?
15 A
No, this is my interpretation.
It has been 16 my interpretation.
17 Q
So that your testimony is whatever is 18 said in that letter was in effect the agreement?
19 A-I was led-to believe or I had reason to j
20 believe that what was caid-in this letter and as.
I lll 21 I interpreted that was understood by my 1
22-counterparts at B&W.
i e'
Z1 Q
What led you to believe that your 24
-counterparts'at B&W understood.that?
o
(_)
25 A
I think in oral discussions with George j
i l-3 t
7 r
r w
-w w
-v
15 1
Haimowitz
'r1 i
l..
2 Kulynych, I had always made any potential agreement 3
. contingent upon this particular letter (indicating) 3 and during that those particular negotiations, I 5
am of the opinion I led him to understand what my G
interpretation of that letter was.
7 Q
Do you know whether he ever agreed 8
with that interpretation?
9 A
I would like to assume he did.
4 10 Q
Well, putting aside what you would 11 like to assume, did he ever say anything to you 12 which you can now testify to to indicate that he 13 agreed with the interpretation that you were 14 placing upon that language?
i 15 A
To the best of my knowledge, I believe that it; he knew my interpretation of this particular 17 letter and that he concurred.
18 Q
Can you remember a specific 19 conversation or is that just a general impression i
20 l that you have at thic point?
(
lk 21 A
This is a general impression that I have.
22 Q
I asked you a moment ago about any l
23 other information that you have, either conversations,
24 that you participated in or things that you heard 25 about from others concerning discussions between i
i
, +.
o ne-w
16 1
Ita l mo w i t ;.
202 J
2 B&W representatives and GPU representatives on the
,O
' ll 3
subject covered by this letter, you indicated that 1
i 4
you did have discussions with certain people within 5
GPU concerning the preparation of task orders.
G Is there anything else that you can
-j 7
recall in'the way of discussions between B&W 8
personnel and GPU personnel on the subject of this 9
letter?
't 10 A
No, I can't recall any other.
11 MR. KLINGSBERG:
Off the record.
12 (Discussion off the record.)
13 MR. WISE:
While we were off the I4 record, we have had a discus = ion concerning 15 the effect of Exhibit 26 and whether or not 16 there are subsequent agreements with respect 17 to the propriety of discovery into 18 post-accident negotiations and contracts.
19 Counsel for GPU'has stated that there i
l 20 j
may well be such additional' agreements on I
21 behalf o f B&W, our current information is f
22 that there were no agreements at least up I
23 i
to the time that this lawsuit was commenced 24 in March 1980, the questions th;t I would
.()
25 propose to go into at this time relate to l
li
- ~ '
1
-l ti 17 1
Halmowitz
- 2 U 3 l
(
li i
2' negotiations and discussions that occurred f~'i A/
3 during the summer and fall of 1979 well before 4
any agreement that may have been entered into 5
after the beginning of the litigation.
6 It is the position of B&W that Exhibit k
7 26 does not preclude an examination into the I
i 8
negotiations and surrounding matters D
concerning. post-accident contracts at least 10 up to the time that the litigation was 11 commenced, and it is on the basis of th.at that 12 I proposed to go ahead with this line of 13 questioning.
14 I will say that I have delayed L5 commencing this line of examination since IG yesterday afternoon while an attempt was 17 made to consider this matter further and to 18 attempt to locate any relevant agreements or 19 letters.
l' i
20 To this point this afternoon, the only l
g 21 thing that we have is Exhibit 26, so on that i
22 basis I will propose to go ahead.
{
i 23 MR. KLINGSBERG:
We do have one other j
t 24 letter which you may have a copy of, dated
( -)
f 25 October 1,
1979, and as I stated before, off g
f I
i
,-e y-,
l f
18 I
lia liio wi t z
<, 0 4
.l; I:
1
,<i i -
2-the' record.
I.think there'is still a
'.p-3 subsequent letter which we are endeavoring O'
4 to find a copy of, and I am reserving our 4
5 rights until I.see all the letters of i.
4 6-whether or not there is anything which l
- 4 t
7 precludes either examination or use of the 8
information elicited in the area which you l
D_
are discussing.
- t 10 There is some handwriting on this 11 document, so I think I better find out whose 12 it is before I give it to you, but this 13 essentially repeats the language of Map
+
14
-- 25th from Mr. Haimowitz't'o Mr.
Pletke of 15 Babcock, and says:
" Enclosed please find lli three copies of the subject' agreement for a
17 your review and execution, which.has been-(
' 18 backdated to provide an effectivendate of-19 March 28, 1979," and then skips down, "Wa l
- also affirm our. mutual understanding that 20
~
i g
. 21 neither execution of this contract nor task 22 orders performed,; opinions made thereunder i
i-23 shall waive any rights of GPU or the
,)
24 i
subrogation rights, if any,.of their-j
)
25
. insurers with respect to the equipment, A
r d
i,
,.,--.-----i,.,,v-r+
E~,.E--.r+
,e----,
a
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- v a
y
19
-1 Haimowit:
'! 0 5 I
4 I
2 materials and scrvice within B&W's scope of O
i
~
3 supply and furnished by B&W pursuant to the 4
contract for nuclear equipment and services 5
effective as of July 31, 1967, et cetera."
6 So that is essentially similar language to 1
i 7
what was in the May 25th letter that you l
i 5
8 marked (indicating).
9 MR. WISE:
I have not seen the October 10 1,
1979 letter, but given what you have read 11 I.do not believe it would alter our position 12
~
that the agreement both in the May 25th 13 letter and the portion that you read from the 14 October 1 letter referred only to waiver of I
15 whatever rights may have existed under the iti pre-accident contracts and did not constitute 17 an agreement to prevent or prohibit discovery 4
18 and whatever evidentiary use might be made of I'
19 matters relating to post-accident negotiations.
20 il
'et me ask to have marked as Y
llh 21 Defendants' Exhibit next in order a copy of 1
22 a letter dated October 25, 1979 from Mr.
23 Haimowitz addressed to Mr. Muir of B&W, and attached to the one-page' letter is a copy of
(
24
' q) 25
'a Master Services Contract between B&W and
~
a P
!i i l
'* l
\\
2 0._
l Haimowit 106 2
GPU Service Corp.
The contract appears to O
s i
^~'
3 have been executed on behalf of both parties.
l The signature for GPU Service Corporation I
5 appears to be that of Mr. Haimowitz, and 6
for Babcock & Wilcox appears to be that of 7
Mr. Nilson.
8 (Copy of a letter dated October 25, 9
1979 from Mr. Haimowitz to Mr. Muir of B&W, 10 with an attachment thereto entitled " Master 11 Services Contract Between GPU Service 12 Corporation And The Babcock & Wilcox Company, 13 Nuclear Power Coneration Division, Lynchburg, 14 Virginia," executed by Mr. Haimowitz of GPU i
15 and Mr. Nilson of B&W, was marked Defendants' lli Exhibit No. 27 for identification as of this 17 date.)
18 (Handing document to the witness) j 19 f BY MR. WISE:
i i
1 20 l Q
Mr. Haimowitz, are you familiar with i
i lgg 21 Exhibit 277 1
22 :
A What do.you mean by " familiar"?
i b
23 Il i
Q I'm sorry.
You seem to have trouble i
)
24 with that particular term I'use.
Of )'
25 $
Let me put it to you this way:
Have s-(.
(
I n
U
. I l
c i-21 1
Haimowitz d/
i I;
i:
I 9-you ever seen it before?
, v'N -
t-
- \\_)
3 A
Yes.
4 Q
Is Exhibit 27 at the top a copy of f
5.
a letter that you wrote to Mr. Muir?
6 A
Yes.
,[
7 Q
Would you look at the signature page 1
- 1 I
I l1
.8 on the-contract which appears several pages in from
.i 9
the back and tell us if that is your signature on 10 behalf of GPU Service. Corporation?
It A
Yes.
12 Q
Who negotiated the Master Services i
i<
la Contract'which is attached to Exhibit 27?
{'
]
14 A
I was the negotiator for GPU and George l
b 15 Kulynych and some others were the negotiators for IG B&W.
I
+
1 t'
17 Q
When did you have your first meeting 18 with anybody from B&W -concerning the negotiation i
19-of this contract?
Y 20 A
I seem to remember early May 1979.
-21 Q
What happened at that time?
22 A
B&W had been performing services during the 1
23 l'
period of March 28th at the commencement of the i
i 24 incident, and we had ru) vehicle'by which B&W could i.
i
/~g l
[
I 5
g_)
25 be reimbursed; and, consequently, B&W requested a i
l
,t i
i 3
=
s-.a y
- +~c.--
e-,,
+n w
i
-i 22 i
Haimowitz.
l' i
1.
2' service type of agreement be arranged to cover i
/
3-these I think they are called emergency services.
I A
4 Q
Did B&W submit a proposal for this i
f, contract?-
i Li 6
A I believe so.
- i,.-
[{
7 Q
Did you review that proposal?
- t il 8
A I believe so.
9 Q
Did you have any-comments with 10 respect to it?
1.
4 Many comments.
12 Q
What did you do about those comments?
13 A
To the best of my knowledge, we relayed those
)
14 comments to B&W and sought to make changes in 15 various articles.
IG Q
Did you do that by way of a writing?
17 A
I believe by writing and by oral.
4 16 Q
When was the oral instance?
19 A
In numerous conversations with B&W during 20 that particular period of time.
i
-21 Q
Were these on the telephone or i
22 face to face?
I 23 MR. WISE:
Off the record.
l 4
i 24 (Discussion off the record.)
I f]
)
(Recess)
~
25 i
-m-w e-me
- 23 i
Haimowitz
- U9 I
I t
2 A
In addition to having transmitted, I think
/~s-
' \\)
3 by memo, certain of the comments, there were also
?
l-numerous telephone conversations and, I believe, 5
face-to-face meetings.
- l 6
Q Were your telephone conversations with l
i 7
Mr. Kulynych?
8 A
With Mr. Kulynych, I believe Mr. Pletke.
l 9
Q Did you ever have any conversations i
10 with anyone at B&W who represented himself to be a 11 lawyer?
.12 A
Yes.
I 13 Q
Who did you have such conversations 14 with?
15 A
I believe Mr. Muir.
IG Q
Did you ever meet Mr. Muir in a 17 face-to-face negotiation?
18 A
No.
19 MR. KLINGSBERG:
Off the record.
20 (Discunnion.off the record.)
i 21 BY MR. WISE:
22 Q
Did you make any attempt to review I
23 any prior contracts between B&W and GPU or any of 1
I 6
24 the operating companies in connection with your
( ).
25 work on the proposed Master Services Agreement i
A l!
24 i
Haimowitz 410 l
f!
'l s.
2 after the accident?
A
j 3
A I believe so.
Q' What B&W contracts did you look at?
3 i
b-5 A
I don't remember.
6 Q
Do you recall whether you looked at
'I 7
the 1977 Master Services Contract?
i 8
A I don't remember.
i 9
Q Did you look at the 1973 or 1974 10 Master Services Contracts?
11 A
No.
12 Q
Did you look at the 1975 Long-Term 13 Training Contract?
O t.;
A No.
15 Q
Did you look at the 1967 Base NSSS 16 Contract?
17 A
No.
18 Q
You are not able to recall what i
19 contracts you did look at?
l i
20 A
That is correct.
{
21 Q
Let me ask you to turn to page 9 j
22 of the Master Services Agreement and look at Section i
l 2;3 11 which is labeled " Limitation of Liability," and 2-1 I would like-you to look at Section 11.1.
~ f.
([]
j Do you remember seein, enat at ene time 2 2.s i
i i
m y,
- -. - - ~,
y
1 25'-
1 liaimowitz i6 IL 1-2 A
Yes.
- {]-
9
' N/
3 Q
In fact, do you remember reviewing each of the provisions in this agreement so we
-5 can save time?
6 A
Yes.
'I 7
Q Did you understand at the time this
[ f-8 contract: was executed what was meant by Section
- )'
9 11.17 10 MR. KLINGSBERG:
What was meant by 11 whom?
12 MR. WISE:
What was meant by the 13 agreement.
Did he have an understanding as r
13 to what it meant.
15 MR. KLINGSBERG:
All right, fine.
16 Q
Did you have an understanding what that' l
meant?
17 18 A
I believe I knew what I thought that meant.
19 Q
Did you have any discussions with I
20 anyone from B&W concerning the meaning of Section 21
-11 1?
22 A
-I believe-so.
l 1
23 i
Q With whom did you have such' i
i 24 discussions?
():
25 i
A With one of the three parties'that I i
i l-y,. -
n N, - -
26 i
Haimowitr 12 J,
N 5
4 i
2 discussed these provisions with
',r$
j
'. (-)
3 Q
What did you say to him and what did 1
4 he say to you about it?
5 A
I believe I proposed' revised writing and I 6
think I submitted that in writing under a proposed
'i 7
draft which had modifications (indicating).
8 Q
What modifications did you propose?
9 MR..KLINGSBERG:
Well, I think if he 10 submitted something in writing that we ought 11 to see the writing, 12 MR. WISE:
We don't have it because you 13 haven't producer.
.t to uc.
14 MR. KLINGSBERG:
He caid he submitted 15 it.
16 MR. WISE:
It was not produced from 17 files.
It may be that B&W has it in its 18-files.
I don't have it here.
So I would l
19 like to proceed with the best of his f
20 recollection at this point.
I won't hold him 21 to something that may be in a writing.
l 22 BY MR. WISE:
23 i
Q Do you remember what it is you proposed f
24 be changed in 11.17
'l
('l 25 A
It would be very useful if that, you know, the i
i L/
l1' l
oI l
e 27 1
IIaimowite
'11 i
I
!~
2 modifications were there.
3 Q
Do you have any recollection at this 1
point of what you proposed _to be changed?
5 A
I would hope that I would have excluded 6
MR. KLINGSBERG:
Wait a second.
Don't
- l-
!\\
say what you " hope".Either you have or don't il 8
have a recollection.
9 A
It would just be...
10 Q
Do you know what anyone from B&W said 11 in response to your proposal?
I 12 A
Yes.
13 Q
What did they say?
}
11 A
I believe every attempt to modify most of l
15 the terms and conditions were rejected in their j
16 entirety.
17 Q
Was any reason given by the B&W 18 representatives for.their rejection?
I 19 A
I was led to believe by the B&W representatives
{
that this was the contract, this was under which 20 21 they would operate and outside of some economic 22 considerations I don't believe we received one i
i proposed change in any of the ones that we i
23 i
t 21 l
submitted including the one on invoicing.
l i
(
25
[
Q Limiting ourselves for the moment to
.I a
e e
w,
e v 1 r
r w
-y-
i 20 l-Halaowitz 214 i
i 6
2 Section 11.1, do you recall what your objection
/^\\
3 was to the language that B&W proposed, which, I 4
take it, is the language that ultimately went into 5
the contract which you have before you?
~
G A
It would be extremely helpful if we could 7
review the draft comments that we furnished to I
l 8
B&W.
9 Q
Unfortunately, Mr. Haimowitz, we 10 don't have those draft comments here.
11 THE WITNESS:. Do you want me to 12 MR. WISE:
Just a minute.
We may.
13 Off the record.
l l3
\\/
14 (Discussion off the record.)
2 I
15 BY MR. WISE:
j lti Q
What I was explaining, Mr. Haimowitz, 17 is that we don't have-the comments here, and I 18 don't believe the intent or purpose of my questions 19 is to test your recollection with respect to specific l l
l 20 j comments that you may have made and what specific 31 words you wanted changed._
22 My question-now is, in-general, do you 23 l
have any recollection of what it was you found 24 objectionable about Section 11.1 at the time?
f l' 23-A I believe that I would have found objectionable !
x-
}
i f
+
1 m
yr
l
-t 29-1 Haiuowitz s) 1j.
2 then the same things I testified previously to
~!
i-m.
I T>+
3 what I would find objectionable into a B&W clause 4
of this nature (indicating).
I certainly would 5
attempt to have in line 2, at least, "(including G
negligence and strict liability). "
I have never 7
taken a position that any of these limitation of 4
.k 8
liability reasons are totally valid; and, as I d
9 stated before, the term "special, incidental, or 13 10 consequential loss or damage of any nature" seems 11 too fuzzy to be included in a limitation of 12 liability.
13 Q
Is the problem that it seems to be
)
14 too fuzzy or too broad?
15 A
I think this limitation of liability, as 1G written, is as broad as possible.
It covers almost 17 everything I could think of,,and I don't think I l8 could accept a provision like that unless an effort 19 in good faith is made totally on our part to i
20 i
modify these provisions and only as a last resort, I
21 a' management decision in raouired whether to go 22 ahead with such a provision.
l 1
23 Q
Would you~1ook now at the following
- ' l 24 page?
i l
25 MR. KLINGSBERG:
Have you had a chance L.
f i
1 1 1
I!
- i
~ l 1
.......=--..... -. -
-I
- 1
-'30 i
Haimowitz.
.? 16 s
+:
I 2
to review the provision-that you are talking 3
about?. Did you read it?
+
it 4
'THE WITNESS:
Not.as carefully and as l.
5 and as. diligently as I would or could had the il G
time been different.-
L; t t:
'f 7
(continued on next page) 15 d
t' i
10 11 12 13 g4 15 16 17
~18 19 20 j.
22 ll i
i 23 l 1
4 i
i 25 l
Ii.;
i l
.(
m
- l.
I natwowica 24?
2 Q
Well, would any of your answers 1 f-)s.
(.
3 change if you had more time to read this?
I mean I
4 do you feel that you are less confident of any of 5
the answers to the questions that I specifically 6
posed because you haven't had enough time to read j
7 this paragraph?
t
' 'L j-8 A
No, but I may be more specific in thinking 9
of what to delete or attempted to delete in i
10 negotiations.
11 Q
Going to the next page, would you 12 read section 12.1 which appears on that page.
13 A
I have read 12.1.
()
14 Q
I would like to direct your 15 attention to the first paragraph in 12.1 16 Did you understand that paragraph 17 sat the time this agreement was negotiated and 18 executed?
19 A
I believe so.
20 Q
Do you understand it today?
l 21 A
I believe so.
e 22 Q
In your understanding,in the event 4
23 that-B&W through its negligence were to cause 24 damage to property owned by GPU or one of the
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3 recover for that damage under the first paragraph?
4 MR. KLINGSBERG:
.I object to the f
5 question on the grounds that you are asking 6
for a legal conclusion.
4 7
Q You may answer the question.
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8 THE WITNESS:
Would you repeat the 1
'l 9
question.
i 10 (Record was read back.)
11 MR. KLINGSEERG:
I wonder how you 12 could explain to me how this differs from 13 the objection that you made during the A
',)
14 Womack deposition, page 135, where you
(
15 objected to a question and directed the-16 witness not to answer on the grounds that, 17 "You are asking legal questions that 18 are more, appropriately addressed to the 19 District Court."
20
}t R. WISE:- I think that the question' 21 I was objecting to there was a legal 22 question, that Mr. Womack was not the 23 appropriate corporate official to respond 24 to it.
I
-l')N 25 l The question I am now asking is 3
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trying to find out what was'in the mind e
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at the time this legal document was-
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l-10 entered into and naturally his understanding 11 and the understanding of the parties may 12
' be extremely relevant here on the question 13 of interpretation of this document. 14 I would be happy to agree with ' 15 you that the contracts stand on their 16 face and that no testimony concerning 17 intent would be admitted in this case and 18 we will submit these contracts to' Judge 19 Owen the way they are but I doubt 1very 20 much I would get.that agreement from'you 21 so ILthink that I :am entitled toogo into- _ ID the. intent. of Mri.Haimowitz'or whoever-22 23 the appropriate official representing GPU 24 was at'the time concerning what was meant . f- - 25 in these contracts. A., - =* e w - mea W y-p.s y e w-W '-.f e
I sia. o.u s : a s 2 I don't know how else to do it () 3 except ask the man who signed it. 4 MR. KLINGSBERG: But I don't think i. 5 what you are saying now is your question. 6 I think you asked just a flat-out legal .i j 7 question, you didn't ask him what was your i 8 understanding at the time this contract was I 9 entered into, if anything, in regard to 10 the question, et cetera; you just asked 11 him a straight-out legal question. 12 MR. WISE: I will rephrase it. o 13 I don't remember what I said but rather 14 than vaste time arguing about it, I will s 15 put it to him again. 16 Q Mr. Haimowitz, my next question goes 17 to your understanding at the time you entered into 18 this contract. 19 Do you understand that? 20 A Yes. 21 Q Was it your understanding that 22 under the first paragraph of Section 12.1, B&W would be liable to GPU for damage to GPU's property 23 24 in the event it caused.that damage prior to r" 25 completion of the work under any individual task \\-]> L -t
n_ 1 l j l li a t rao s L t.c .Jl .l 1 2 order under this agreement and B&W was negligent r.\\/ 3 and it was not caused by a nuclear incident as 4 defined in the paragraph? 1 5 MR. KLINGSBERG: Are you limiting 6 as you had your previous question to work a .i-7 done under this contract? 8 MR. WISE: Yes. t 9 Tile WITNESS: I am going to have t 10 to ask you to repeat it, 11 MR. WISE: Mr. Reporter, will you 12 please read that back slowly. 13 (Record was read back.) Di (> 14 MR. KLINGSBERG: Whan you say "first 15 paragraph," you mean starting with the words 16 "For work performed".down to where it says 17 "as amended" before the lines-are skipped? 18 MR. WISE: That's correct. 19 MR. KLINGSBERG: Take your time 20 and read the whole thing. 21 A I don't remember what I thoughtaat that. 22 Particular time and that's ^ and that's as 23 truthful as I could be. 24 Q Am I correct that reading this p) (, 25 does not refresh your recollection in any way as -- l
1 1. m... I i i s' 2 to what you thought at that time? I () A That is correct. 3 t 4 Q Do you remember any conversations 5 with anyone concerning the meaning of Section 6 12.1, the first paragraph? 'i
- i 7
A I may have but I don't recall.
- j 8
Q Do you have any notes or writings l 9 of any kind that would refresh your recoll'ection i 10 concerning whether you had any discussions with 11 anyone about the meaning of the first paragraph 1 12 of Section 12.17 13 A I may but I don't, you know, specifically Ptj 14 know. 15 Q Do you have any recollection of any i 16 discussion concerning the omission of the term 17 " property damage" from the exclusion which appears 18 at the end of the paragraph beginning with five 19 lines up-from the bottom,'"Provided such bodily '20 injury," and then goes on to the end of the og paragraph?' 22 MR. KLINGSBERG: Can,I have that.\\ j \\+ 23 question back, please. 24 (Record was read back.) I['N 25 MR. KLINGSBERG: I'm sorry,_could x,) - r N., 1 (,( ,'A ~
- \\,
s 7 l' H a i nauw i t :- '23 i i 2 you explain what you mean by " omission"? i 3 MR. WISE: Well, the beginning of 4 o a 4 the paragraph speaks about "all losses, 5 claims, damages or liabilities arising out 4 j 6 of or based.on bodily injury."
- j 7
MR. KLINGSBERG: Right. lf 8 MR. WISE: And later on there is i, 9 an exclusion for nuclear incidents at the 10 bottom of the paragraph which also is 11 limited to bodily injury, property damage 12 is not mentioned in the first paragraph. 13 MR. KLINGSBERG: Right. 11 MR. WISE: And my question now, l 15 perhaps it'can be it is more easily IG put to address it to the entire first 17 paragraph rather than just the last 18 section. 19 Q Do you havo any recollection as to ~ 20 why there is no mention of' property damage'in 21 the first paragraph of Section 12.1? 22 A I can'only hazard-a guess, which I1 don't 23 want to do. So the answer is I don't have a t, his ' time, 24 recollection t t (~)% .25' Q j Looking at the remaining two 1 1 v i ,w
- WE
s - j ^ 1 h.. :a.vl L.. 4 1 2 Paragraphs in Soetion 12.1, do you have anj -j s racc11ection today of what your ander4 tan' ding Eas 3 4 at the time that you negotiated and.'execu.ted .y l 5 this contract, your understanding of those"two I > / 6 paragraphs? ^ ij 8 /t { r } t 7 A The second paragraph yoitId appear an f, i t .i I 4 8 attempt ) g 1 4 ,i. 9 Q. My question is, fir.st, do you have ~, r 1 i i 10 an understanding, dd you have a reco11.helon /- 11 today of your understanding at the time? I am 12 not asking you to. interpret them today. 's z., 13 A oh. It would be unfair. I don't reniemb er ,/ I t ( ,' O 14 my recollections then. / u y 15 Q Do you have any recollection of t ^ / { 16 any conversations with anybody from B&W-e 17 concerning what w3s meant by thosi clauses? .f;y T: f s + 18 A I may have but.I can ' t jemamber the / / > 1 n the p#a // l 19 conversations but, again,.I be'lieve ro: used .) 1 20 changes did appear in,a y-in communication,s with-h i 91 them. ~ J -) 9 i s I \\- ~ tv ) i t- , 3: r, ~ ~ x n.n s' 22 .Q Did they, accept.any",of your //,. e-f,. A u. J gr 23 proposed changes? '.< 4 f. 24 A To the.'best.,of-my know1'dge,: there wa$d: ??7 e ~ .,I. .7).W is .h ~ ..e 3 25 no cha.sge at all by;B&W-in the entire' fyr y- [4-U .{ d. l /_ -f, ,. r., .t
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~, 1-b...o w t u: 2 indemnification provision. gvd.k 3 Q Do you recall today what the basis 3 4 of your objection was to the indemnification 4.s 1 '( '. 5 provision as proposed by B&W7 .( 6 A It seemed to me a very broad attempt at ) :!, . h? .v e + 7 an indemnification which certainly would be s i' / r i s (drI '/ 8 somethirig that an owner may be deemed to assume '4
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[J) f g* additional. responsibilities or risks. ^ 2; g Q+ / + i ' >g n.) l0 g Did you understand this section to y p /) ,11 to apply to property owned by GPU? ) lf o 12 MR. KLINGSBERG Wait a second now. .#./ )'. t ,lk -Q, Which gection are we talking about? 3,9 4. s ..{ ' MR. WISE: Section 12.1
- /
/t 1:15 MR. KLINGSBERG: The whole provision? ICE.e I MR. WISE: That's right. / / r. .[ Id MR. KLINGSBERG: Well, I mean -- ,~ ~ 1T Y Q Did you understand this section or . g'[i d / A / ) ( l 19 ,any part of it to apply to property owned by GN [vh 5
- . g 20 MR. KLINGSBERG:
Or any part of it. / s ~1 o.K. 9 .ih .y(f 22 A I don't remember at that point in time.what .a (h,,,rb L 23 -I thought. ~) E,p. .9 yJJ 24 MR. KLINGSBERG: We haven't had a -?,, r-j;j . f. ~ 3 '25 legitimate break but we have had a lot of ,9,. '..h 3 % l x . Nby. k +, .c .m,.. . cl;, L a
- /; >, ;
4 }- it.. ;r s, - t L.- ,, o 2 interruptions. ] .( ) MR. WISE Let's take a break here. 3 4 (Recess taken.) 5 MR. WISE: Where did we stop? 6 (Record was read back.) i .j BY MR. WISE: 8 Q Looking at the following page, 'l 9 page 11 of the agreement, Section 12.2 la labeled
- i 10
" Indemnity - Trainees." g1 Do you recall whether you had any s 12 discussions with anyone from B&W concerning g3 Section 12.2 or any part of it? () g4 A I may have but I don't recall anything 15 specific. 16 Q Do you recall today what your 17 understanding was then of the meaning,of Section 18 12.27 19 THE WITNESS: Would you repeat the 20 question, please. ~g (Record was read back.) 9 lh 22 A I can only recall that at the time of 23 the review of that section as in the previous 24 section,.that it seemed like an attempt by B&W i. 25 for a very broad indemnification provision. ~' .p
I liaimow i t 7 ~I' 2 Q Is that the extent of your /~'s \\_) 3 recollection today of what you understood then l 4 was meant by Section 12.27 5 A Yes. 6 Q Can you recall any discussions with .I 7 anyone concerning the meaning of Section 12.2? l 8 A I may have but I don't recall. 9 Q Would you next look at the i 10 following page and Section 13.2. 11 MR. WISE: For the record, Section 12 13 is labeled " Insurance" and Section r 13 13.2 is titled "By Purchaser." 14 Q Let me give you my question before 15 you begin your reading so you can have it in mind 1G and you can complete your reading. 17 My question is whether you have any 18 recollection today of what your understanding then 19 was of the meaning of this clause and the other 20 question which I am going to ask you, just so that 21 you have it in mind, is whether you recall having 22 any discussions.wi~th anyone from Bsw concerning 23 the meaning of Section 13.2. 24 THE WITNESS: Can you repeat the ' (). 25 question,'please, s_ - ~ ~, ~-,
1 Ilu. siio vi i t r .. Z a s 2 (Record was read back.) 'i-rs -( 4 . s_/ 3 A I don't believe I have an accurate 4 recollection of the meaning of that clause. 5 Q My second question was do you recall G any discussions with anyone from B&W concerning 7 the meaning of section 13.27 j 8 A I may have but I can't remember. i 9 Q Were you aware in the fall.of 1979 ,*i 10 that as a result of the accident at Three Mile 11 Islan/., substantial sume would be required to 12 decontaminate TMI-27 13 A I don't think I was aware in the fall of ) 14 1979 with respect to the sums in any -- with any 15 degree of surety. 16 ' Q Did you understand at that time that 17 there would be expenses in connection with 18 decontamination of TMI-27 19 A I was aware that there would be expenses 20 in connection with the decontamination of TMI-2. i 21 l Q Were you aware of any approximate 22 range of the amount of.those expenses at that time? 23 A I may have been but I can't recollect. 24 Q Were you aware that they would be () 25 in excess of $100 million, for instance? , ~ - - v
F r L 1 !! d i m o w'i t,Z '29 2 A I can't remember, k rh \\m) 3 Q You have no recollection today as to whether in the fall of 1979 you had any feeling 5 for the size of the decontamination expenses? 6 A I don't believe I can answer the question i it. 7 with any degree of accuracy in the fall of 1979, ti ll 8 Q You were aware, in any event, that 9 there would be some expenses regardless of the
- 6 10 amount?
11 A I was made aware o{ that. 12 Q In connection with this contract, 13 did you give any consideration to who would be I) 14 responsible for decontamination c::penses in the 15 event of an accident in the future caused by B&W's 16 negligence? 17 MR. KLINGSBERG: In other words. 18 you are talking not'about the decontamination 19 that had to be done as a result of the 20 March 1979 accident, you are talking about 21 something that would be required relating g 22' to some work under this contract? 23 MR. WISE: That's correct. j!4 THE WITNESS: Can you repeat the (]j 25 question, please. w-- -y v- - - - - - ~
1 Harmoultz - 't o J I f p 2 (Record was read back.) ( h \\"# 3 MR. KLINGSBERG: When you say 1 4 " accident," you mean t 5 MR. WISE: In the event of an j 6 incident which resulted in radioactive li l1 ll 7 contamination of a GPU facility. l 8 A I may have but I can't remember. I!
- s.
9 Q Were you aware in the fall of 1979 10 that property owned by GPU was damaged in the 11 accident on March 28, 19797 l 12 A Yes. 13 Q In connection with tlais contract, O(l 14 did you give any consideration to who would be 15 responsible for property damage to GPU property 1 16 in the event of a future incident in which B&W 17 working under this contract was at fault? 18 A I may have. 19 Q Do you recall whether you did or not? 20 A I can't specifically recall that point. 21 Q You have no recollection as to any .G -22 conclusions that you may have reached on that 23 question? 24 A I don't remember. A (,) 25 Q In the-fall of 1979, were you aware W _ _ _ _ _ _ _ _ _ _ _ _ _ - - - - - - - - - - - - - - - - - - - - - ^ ' ~ ~
g .t u u.:u v i t 2 2.51 I i 4 2 that as a result of the accident at TMI-2, GI U i 3 was incurring certain additional costs for 4 replacement power, additional interest and other 5 economic and financial damages? 6 A I believe so. s 7 Q In connection with this contract, 8 did you give any consideration to whether B&W 9 would be responcible in the event of its 10 negligence leading to a future incident for that 11 type of damage, that is, increased costs of 12 replacement power, increased interest costs and 13 other such damages? (_j 14 A I believe so. 15 Q Did you reach any conclusions as 16 a result of considering that? 17 A I believe so. 18 Q What conclusion did you reach? 19 A An attempt to modify the provision in 20 here dealing with consequential damages and to 21 e exclude certain foreseeable damages from the 22 exclusion as appeared in the B&W proposed contract. 23 Q Was that because you reached the I 24 conclusion that the contract as drafted would (' 25 prevent GPU from recovering such damages from - i
4 A +- 4-- --m + a a Ema. 1'6 l lia imow.t L x 212 2 B&W? ( I 3 MR. KLINGSBERG Now, wait a second. .o -4 We are talking about a nuclear accident 4 - 5 or are you talking about a breach of - 6 warranty?
- F
. 7 MR. WISE: I am not talking about j[ 8 either, I am talking about in the event of. I!' j 9 an incident in which B&W was at fault and
- b 10 in which those types of costs resulted for
'l 11 whatever reason. 12 MR. KLINSBERG: 0.K. 13 THE WITNESS: Can we get the question i. 14' back. 15 MR. WISE: Surely. 16 (Record was read back.) 17 A I don't know if that's totally accurate. 18 I think a more accurate way of-saying it would be ' 19 it's been a position of the Contracts Department 20 that where suppliers seek. consequential. damages -- 21 exclusion from consequential damages, that we 22 would do our best to remove-from those examples 23 of what a supplier feels is a consequential 4 i 24 I damage those that we deem to be direct. j( ) 25' Q Was it your understanding tha't.the L ~ r m +t- , + -
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1 n.O u.u aic.z .,s 2 proposal submitted to you by B&W, that in the ',(n_). 3 Limitation on Liability clause, which is Section 4 11.1, in particular, that B&W had included within 5 that clause various types of costs which you 6 understood to be direct damages? h 7 A I believe in the draft proposal there are t 8 examples of damages that I deem to be of a direct t 9 nature. "i. I _10 Q Did you consider at the time that
- 11 Section 11.1 would prevent GPU from recovering 12 from B&W for the types of damages set forth in 13 that section in the event that those damages should l()-
14 be caused by a future accident which was the f a ul t. 15 of B&W7 16 THE WITNESS: Would you repeat that, 17 please. 18 (Record-was read back.) 19 A I' don't remember considering the validity 20 of the entire provision but I felt it prudent to 21 at least exclude from this particular provision 22 and use our best methods possible in negotiation 23 to exclude those damages which I think are 24 foreseeable and don't qualify as either a'special '(~) 25 or an incidental or a consequential loss or damage. u J.
8 1 Namowil' I 34 i I l 2 I don't believe I reviewed or had q '+\\/ 3 reviewed the validity of that provision which 4 is apparently what you are asking me. 5 Q Separate from the question of 6 validity, as some court of law may later 11 I! 7 determine it, did you come to any understanding lf 8 whether the clause as written would prevent GPU 1, li 9 from recovering the types of damages set forth I' 10 here in the event of an accident caused by 11 B&W occasioning thase losses? j 12 THE WITNESS: Now you had better 13 repeat that question. ! () l4 MR. WISE 0.K. 15 (Record was read back.) 1G MR. KLINGSBERG: You mean in the 17 - course of doing work under this contract? 18 MR. WISE: That's correct. 19 A I don't know if I considered what the 20 legal protections of GPU under that specific 21 clause would be. 9 i 22 I do know that I thought that the 23 provision as written by B&W was an attempt by 24 B&W to exclude many types of loss and I felt, (^T_ 25 and I will reiterate, that it would be best if we ..v
I h. uu ' u 2 could exclude certain types of loss which I ?~). ' _/ 3 believed were foreseeable and not a consequential ( 4 thing. l 5 Q Was anyone at GPU Service responsible G for examining this contract to determine the 7-exposure which GPU might have under it in the
- l
- j 8
event of a future accident? )[ 9 THE WITNESS: Can you repeat that 'i 10 question, please. 11 (Record was, read back.) 12 A I don't believe anybody was responsible 13 for making management aware of the risks it () 14 could be undertaking in the event of a future 15 accident. 16 Q Do you know whether this contract 3 17 was ever analyzed fror the point of view of what 18 exposure GPU might have under it in the event 19 of a future accident? 20 A I don't know if.anybody did an analysis 21-with respect to risk for a future accident. 22 Q You did not,in any event? ' 23 A I did not, for an accident. l 24 ~ Q I mean you did not have any 25 discussions with anyone who said they had? ~~ ,-y-g r ~
1 nulmowits l: 2 46 2 A I don't believe so.
- g/
(, 3' Q You testified before that you 4 submitted some comments to B&W and that B&W 5 generally or perhaps completely rejected those 6 comments. 7 What happened then? s j 8 A After months of negotiations and I i ' i 9 believed that there were no further concessions ' i 10 that could be achieved, I reported to management 11 the type of agreement and the few concessions that 12 we received which were of an economic nature 13 regarding rates and sought permission to make a (). 14 decision whether or not to enter into that 15 agreement. 4 16 Q What decision was reached 7 I 17 A Based upon the need of B&W and its 18 personnel, based upon the facts that work had 19 been performed for about.five months already by 20 B&W and concern that B&W may pull out its people 21 since no payments had been made, a conclusion 9 22 was reached to execute the contract as proposed 23 by B&W with the slight modifications in it. 24 Q That was done? + {^- 25 A Yes, sir. n v y -i
. ~. .--...... - - -... -. -.... _ -. -.. - - _.. -.. _. ~ _ ~... -. -. _. -. 1 h a t u.u c L e is] I: i l' 2 MR. WISE: Off the record. I 3 (Discussion off the record.) 7:
- i.
4 (Time noted: 4:22 o' clock p.m.) W 5 v F-6 ki j{ 7 Milton Haimowitz 14 !a. t il 8 Subscribed and sworn to before me .\\ V. I4 iI 9 this day of 1981. 'l il i' 10 i 4 11 4 1 12 13 i 14 e ~ t 15 1-4 i 16 t 1 i t '17 18 i i 19 f" 20 s t -,4 22 i l 24 ff 25 i g.. t> r l' i k I ! w...-.. .. - - -.. ~. ,.. ~,
lal 21 1 !! CERTIFICATE o . f-)s l A STATE OF NEW YORK ) ~ s 3
- ss.:
COUNTY OF NEW YORK ) .I, CliARLES SHAPIRo, C.S.R. and , a Notary l f l Public of the State of New York, do hereby 6 I y certify that the continued deposition of I MILTON II AIMoWITZ Was taken before - t 8 ' I me on Thursday, April 23, 1981 consisting 9 of pages 146 through 237 1 l I further certify that the witness had been previously sworn and that the within transcript is a true record of said testimony; l 13 i O/) That I am not connected by blood or e. 14 marriage with any of the said parties nor to, 4 interested directly or indirectly in the matter in controversy, nor am I in the employ of-any 1_4 + of the counsel. IN WITNESS WHEREOF, I have hereunto set my 10 hand this 13 day of April 1981. 20 I [3 C2.A Sk CHARLES SHAP o, C.S.R. u. () 25 e f' w + i +-
I N D E X i,) ~ WITNESS PAGE Milton Haimowitz 148 E :: H I B I T S DEFENDANTS' FOR IDENT. 24 Document entitled " Standard Consulting Agreement, GPU Service Corporation" 150 25 Memorandum to Mr. Peter Betz from Mr. Haimowitz dated August 16, 1977 182 26 Telecopy of letter dated f) May 25, 1979 from Mr. Hulsebus to Babcock & Wilcox bearing nandwriting on top with I Mr. Klingsberg's name on it for delivery purposes 194 27 copy of letter dated October 25, 1979 from Mr. Haimowitz to Mr. Muir of Babcock & Wilcox with attachment entitled " Master Services Contract between GPU Service Corporation and The Babcock & Wilcox Company, Nuclear Power Generation Division, Lynchburg, Virginia" executed by Mr. Haimowitz of GPU and Mr. Nilson of B&W 206 j-j'}}