Hillside FXF, LLC, et al. v. Premier Design + Build Group, LLC, et al. (Lawyers Weekly No. 12-147-16)

Plaintiffs Hillside FXF, LLC (Hillside) and Jones Development Company, LLC (Jones) filed this action against defendants, Haley & Aldrich, Inc. (Haley), Premier Design + Build Group, LLC (Premier), and G. Lopes Construction, Inc. (Lopes) seeking to recover damages relating to the construction of a freight facility in Northborough, Massachusetts. All three defendants have moved for summary judgment. This memorandum addresses that motion brought by the defendant Haley.
The Plaintiffs’ Third Amended Complaint (the Complaint) asserts the following claims against Haley: breach of contract (Count II), gross negligence (Count VI), breach of express and implied warranties (Count VII), common law indemnity (Count VIII), reformation (Count IX), and negligent or intentional misrepresentation (Count X). Haley moves for summary judgment as to all of these counts. In the alternative, it argues that its liability must be capped pursuant to the written contracts it entered into with plaintiffs. The plaintiffs agree that summary judgment is appropriate as to Count VIII, their common law indemnity claim, but otherwise contest the
motion. This Court concludes that, with the exception of Count VIII, Haley’s motion must be Denied.
The relevant facts in the summary judgment record, viewed in the light most favorable to the plaintiffs, are as follows. Hillside and Jones, both based in Kansas City, Missouri, engage in commercial development and construction projects. On August 23, 2011, Hillside as the owner/developer and Premier as the general contractor entered into an agreement to construct a FedEx freight facility at 300 Bartlett Street, Northborough, Massachusetts (the Project). The Project’s plans required a significant amount of cut and fill and excavation work at the site to prepare for the building’s construction. The plaintiffs hired Haley to perform geotechnical consulting work as well as soil testing.
Before construction began, Haley prepared a lengthy Report that summarized the results of subsurface soil explorations and made certain recommendations as to geotechnical design and construction for the proposed facility. This Report included Haley’s analysis of soil at the Project and its moisture contents, as well as its recommendation that compacted granular fill be used at certain areas of the site where unsuitable soils were located. On June 28, 2011, Haley and Hillside entered into a written agreement (the Reliance Agreement) stating that the services performed by Haley were subject to the scope of services expressed in the Report and that Hillside could rely on the Report, subject to certain terms and conditions. This Reliance Agreement contained a limitation of remedies provision that limited Haley’s liability to $ 50,000 or the amount of Haley’s fees, whichever was greater.
On August 29, 2011, Haley entered into an agreement with Premier (the Premier Agreement) to perform geotechnical services for the Project. This Agreement noted that very
significant earthwork in “very silty glacial soil conditions” would be required in order to construct the facility. Haley agreed to a full-time, experienced field engineer to monitor the excavation of soil and observe and test the placement of compacted fill for the building, among other things. The Premier Agreement contained a provision that limited Haley’s liability to $ 500,000 or the amount of Haley’s fee, whichever was greater.
In October 2011, Haley entered into a third agreement, this time with Jones (the Jones Agreement). Plaintiffs were led to believe that this agreement was intended only to transfer the Premier Agreement to Jones (as required by FedEx) and was a mere formality. Specifically, plaintiffs alleged that Steve Kraemer with Haley told Don Tuttle of Jones that this new agreement would be the same as the Premier Agreement, and Tuttle signed it in reliance on that representation. In fact, the Jones Agreement was not the same in that it contained a different limitation of remedies provision capping Haley’s liability at $ 50,000 or the amount of its fee, whichever was greater.
Premier retained Lopes as a subcontractor to perform demolition, grading, excavation, and site grading work for the Project, and Lopes performed this work. Lopes began work at the project in September 2011. Thereafter, various individuals from Haley and the plaintiffs discussed the weather and soil conditions at the Project site via e-mail. For instance, on November 2, 2011, Kelvin Wong, a senior engineer with Haley, noted in a daily update that the project site was “still wet from recent precipitation” and that the majority of earthwork activities were suspended in order to allow the site to dry. Haley continued site monitoring in December of 2011 and January of 2012.
In February 2012, Premier (the general contractor) noticed settlement and lateral movement of the building walls and foundations. The plaintiffs hired McArdle, Gannon, &
Associates to determine what was causing the shifting and settlement and to assist in fixing it. Ultimately, it was determined that the fill work performed on the site had not been done properly. By the time that the building was stabilized and the site repaired, plaintiff Hillside had spent approximately $ 3 million in remedial work. This action ensued.
Haley argues that it is entitled to summary judgment because plaintiffs have no reasonable expectation of proving their claims for gross negligence or breach of warranty. As to the breach of contract claim, Haley contends that it is duplicative of the negligence claim and does not separately survive. In the alternative, Haley seeks a ruling from the Court that would limit its liability as set forth in the Jones Agreement. This Court concludes that there are material facts in dispute as to each of these arguments, such that summary judgment is inappropriate.
The reasons why summary judgment should be denied are fully set forth in the plaintiffs’ written Opposition at pages 7 through 20. As described therein, the summary judgment record contains sufficient evidence from which a jury could find that Haley was grossly negligent. Indeed, summary judgment is rarely appropriate in a negligence cases, where the defendant’s knowledge and state of mind are critical issues. Jupin v. Kask, 447 Mass. 141 (2006); Pratt v. Martineau, 69 Mass.App.Ct. 670, 675 (2007). This is no less true where the claim is one of gross negligence. Inferrera v. Sudbury, 31 Mass.App.Ct. 96, 103 (1991). As to the breach of contract claim, the plaintiffs have cited specific contractual provisions which they claim that Haley breached, among them a requirement that Haley performed its work in accordance with the standard of care applicable to its profession. Although that may very well overlap with the negligence claim, Massachusetts case law does not prohibit a plaintiff from relying on different
legal theories. See Arthur D. Little, Inter., Inc. v. Dooyang, Corp., 928 F.Supp. 1189, 1201-1203 (D.Mass. 1996). The summary judgment record also contains a basis from which a jury could conclude that Haley made certain warranties. Finally, as to the issue of whether the reduced limitation of liability provision is valid and applicable in this action, it will be up to a fact finder at trial to determine whether Haley procured agreement to that provision by fraud. Moreover, in the event the plaintiffs prove gross negligence, that may make this provision unenforceable. See A.J. Properties LLC v. Stanley Black & Decker, Inc. 989 F.Supp. 2d 256, 163 (D.Mass. 2013).
For all of the foregoing reasons, defendant Haley & Aldrich, Inc.’s Motion for Summary Judgment is ALLOWED as to Count VIII (common law indemnity) by agreement of the parties, and is otherwise DENIED.
Janet L. Sanders
Justice of the Superior Court
Dated: October 31, 2016

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