Posts tagged "Premier"

Hillside FXF, LLC, et al. v. Premier Design + Build Group, LLC, et al. (Lawyers Weekly No. 12-164-16)

1
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
SUCV2013-03831-BLS2
HILLSIDE FXF, LLC & JONES DEVELOPMENT COMPANY, LLC,
Plaintiffs
vs.
PREMIER DESIGN + BUILD GROUP, LLC,
HALEY & ALDRICH, INC., & G. LOPES CONSTRUCTION, INC.,
Defendants
MEMORANDUM OF DECISION AND ORDER
ON DEFENDANT PREMIER DESIGN + BUILD GROUP, LLC’S
MOTION FOR SUMMARY JUDGMENT AGAINST
G. LOPES CONSTRUCTION, INC.
This case arises out of the construction of a FedEx facility in Northborough, Massachusetts. Plaintiffs Hillside FXF, LLC (Hillside) and Jones Development Company, LLC (Jones) filed this action against defendants G. Lopes Construction, Inc. (Lopes), Premier Design + Build Group, LLC (Premier), and Haley & Aldrich, Inc. (Haley) seeking to recover damages relating to remedial work performed after the construction. This Court has already denied motions for summary judgment made by Haley and by Premier as to plaintiffs’ claims asserted against them. Now before this Court is Premier’s Motion for Summary Judgment as to Count VII of its Cross Claim against defendant Lopes. Premier seeks a declaration from this Court that its subcontract with Lopes contains a valid and enforceable duty to indemnify and that Lopes is obligated to indemnify, defend, and hold Premier harmless from any errors or deficiencies related to the construction project. After careful review of the parties’ submissions, this Court
2
concludes that Premier’s motion must be DENIED as to Lopes’ duty to indemnify but ALLOWED as to its duty to defend.
BACKGROUND
The relevant facts in the summary judgment record, viewed in the light most favorable to the plaintiffs, are as follows. Hillside and Jones 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). Because the site was on a relatively steep slope, a significant amount of cut and fill and excavation work was required to prepare it for construction. The plaintiffs retained Premier to perform this work. Premier in turn retained Lopes as a subcontractor to perform demolition, grading, and excavation for the Project. The defendant Haley was retained by Premier to provide on-site monitoring of the earthwork.
On September 21, 2011, Lopes began removing trees at the Project site, and excavation at the site continued through the fall. Hillside authorized Premier to proceed with the foundation installation in late December 2011, and footings and foundations for the Project were installed shortly thereafter. In February 2012, it was noticed that the walls appeared to have shifted laterally. Ultimately, it was determined that the foundations had settled and that this was caused by improper fill work. There are disputes of fact as to which entity – Premier, Lopes, or Haley – either alone or in combination with each other, was responsible for the foundation’s failure. By the time the building was stabilized and the site repaired, Hillside had spent more than $ 3 million in remedial work.
Premier’s motion relies on certain provisions in two separate subcontracts it had with Lopes, one dated August 24, 2011 and the other dated March 1, 2012 (the Subcontracts). The
3
Subcontracts have two clauses in each of them which can be fairly characterized as indemnification provisions. The first (Indemnification Provision #1) is as follows:
The Subcontractor [Lopes] shall indemnify and save harmless the Owner [Hillside] and the Contractor [Premier] and their officers, agents, servants and employees, from and against any and all claims, demands, suits, proceedings, liabilities, judgments, awards, losses, damages, costs and expenses, including attorneys’ fees, on account of . . . damage to or destruction of any property, directly or indirectly arising out of, relating to or in connection with the Work, whether or not due or claimed to be due in whole or in part to the active, passive or concurrent negligence or fault of the Subcontractor . . . and whether or not such claims, demands, suits or proceedings are just, unjust, groundless, false or fraudulent; and the Subcontractor shall and does hereby assume and agrees to pay for the defense of all such claims, demands, suits and proceedings….the Subcontractor shall not be required to indemnify the Contractor, his officers, agents, servants or employees against any such damages occasioned solely by acts or omissions of the contractor other than supervisory acts or omissions of the Contractor in the work.
(Emphasis added.) The second (Indemnification Provision #2) is part of the General Conditions of the Subcontracts and provides in relevant part that:
Subcontractor shall indemnify and hold harmless PDBG . . . Owner . . . and agents and employees of any of them ( . . . “Indemnified Parties”) from and against claims, damages, losses and expenses, including, but not limited to, attorney’s fees arising out of or resulting from (i) performance or non-performance of the Work, (ii) breach of obligations of Subcontractor under the Contract Documents including, without limitation, defective Work . . ., or (v) any other act or omission with respect to the Work by Subcontractor . . . resulting in . . . injury to or destruction of property, or loss thereof.
(Emphasis added). This same provision goes on to more specifically describe the duty to defend:
Subcontractor hereby acknowledges and agrees that if any one or more claims or actions are asserted against PDBG Parties giving rise to a duty . . . [to] defend on the part of Subcontractor pursuant to this Section, PDBG Parties shall have the right to elect, in
4
PDBG Parties’ sole and absolute discretion, whether to contest any one or more of such claims or actions and Subcontractor shall be required to perform the obligations of Subcontractor set forth above regardless of whether PDBG Parties elect to contest such claim(s). If PDBG Parties elect to contest any such claim(s), PDBG Parties shall have the right to select PDBG Parties’ own counsel and control their defense and Subcontractor shall bear the cost of employing such counsel . . .
Both of Indemnification Provision #1 and Indemnification Provision #2 refer to “Work.” The General Conditions define “Work to include “all design, labor, materials, skill, equipment, taxes, services, delivery charges, supervision, administration, facilities, and field measurement necessary to produce the construction required by the Subcontract Agreement and other Contract Documents.” The term “Contract Documents” is also defined by the Subcontracts and includes the Construction Agreement between plaintiffs and Premier. Finally, the Subcontracts state that they shall be construed in accordance with Massachusetts law and their provisions “shall be interpreted where possible in a manner to sustain their legality and enforceability.”
Hillside and Jones filed this action October 28, 2013. By letter dated December 27, 2013, Premier tendered its defense and indemnification of this matter to Lopes. Counsel for Lopes requested additional information, and on February 4, 2014, Premier issued a more detailed amended tender of defense and indemnity to Lopes. Thereafter, Lopes declined to defend and indemnify Premier under the subcontracts, and Premier eventually filed a cross claim against Lopes.
DISCUSSION
This Motion raises the question of whether the two indemnifications clauses contained in the Subcontracts comply with G.L. c. 149, § 29C (Section 29C). The issue is not an easy one: as one party’s counsel remarked at the motion hearing, the clauses do not appear to have been drafted with an eye toward Section 29C. Nevertheless, the Subcontracts expressly state that their
5
provisions must be construed wherever possible in a manner that “sustains their legality and enforceability.” This Court approaches the task of resolving the question before me with that in mind.
Section 29C states:
Any provision for or in connection with a contract for construction, reconstruction, installation, alteration, remodeling, repair, demolition or maintenance work, including without limitation, excavation, backfilling or grading, on any building or structure, whether underground or above ground, or on any real property,
. . ., which requires a subcontractor to indemnify any party for injury to persons or damage to property not caused by the subcontractor or its employees, agents or subcontractors, shall be void.
In determining the validity of Indemnification Provisions #1 and #2, this Court focuses on the language of the clauses themselves rather than on the facts relating to the incident and an assessment of fault of the parties. See Herson v. New Boston Garden Corp., 40 Mass. App. Ct. 779, 786-787 (1996). That is because the purpose of such clauses is to make clear to the parties from the outset where the burden of acquiring insurance lies. Harnois v. Quannapowitt Dev., Inc., 35 Mass. App. Ct. 286, 288 (1993). “Indemnity provisions are not read with any bias in favor of the indemnitor and against the indemnitee; rather, such provisions are to be fairly and reasonably construed to ascertain the intention of the parties and to effectuate the purpose sought to be accomplished.” Urban Inv. & Dev. Co. v. Turner Constr. Co., 35 Mass. App. Ct. 100, 107 (1993).
As applied by Massachusetts courts, Section 29C voids only those contractual indemnity provisions that require indemnification for injuries not caused in any part by the subcontractor. Herson v. New Boston Garden Corporation, 40 Mass. App. Ct. at 788. As explained by the Appeals Court: “General contractors and owners are prohibited by § 29C from receiving
6
indemnity for their sole causal negligence, but § 29C does not proscribe full indemnification when the conduct of the subcontractor is only a partial cause of the injury.” Ibid. Thus, a contractual indemnity arrangement whereby the subcontractor agrees to indemnify the contractor for the entire liability when both the subcontractor and the general contractor or owner are causally negligent, is not prohibited by Section 29C. What is forbidden is shifting that liability to a subcontractor even where it plays no role in causing the damages. The question before this Court is whether the indemnification provisions here permit that shifting. This Court concludes that they do.
Indemnification Provision #1 states that Lopes is required to indemnify Premier for “damage to or destruction of any property, directly or indirectly arising out of, relating to or in connection with the Work, whether or not due or claimed to be due in whole or in part to the active, passive or concurrent negligence or fault of the Subcontractor . . . .” By its terms, this provision would require Lopes to indemnify Premier for negligently performed work even where that negligent work was not done by Lopes. In this Court’s view, this violates Section 29C. The final sentence of Indemnification Provision #1 does not cure the problem. It states that Lopes shall not be required to indemnify Premier “against any damages occasioned solely by acts or omissions of the Contractor [Premier] other than supervisory acts or omissions of the contractor in the work.” (emphasis added). In other words, Lopes is required to indemnify Premier for its supervisory acts even though Lopes did nothing to cause the injury for which damages are claimed. Again, this is a violation of the statute.
Indemnification Provision #2 also goes beyond that which is permitted by Section 29C. It requires Lopes to indemnify Premier for claims for damage “arising out of or resulting from (i) performance or non-performance of the Work . . . .” “Work” is a defined by the
7
Subcontracts: it includes all design, labor, materials, and equipment necessary to “produce the construction required by the Subcontract Agreement and other Contract Documents.” (Emphasis added). “Contract Documents” under the Subcontracts means the “Construction Contract,” which is in turn defined as the “agreement entered into by and between Owner and PDPG [Premier] referred to in the Subcontract Agreement relating to the Project.” Because this definition of “Work” necessarily encompasses work performed by others on the Project, it operates as no limitation at all on Lopes’ indemnification obligation: Lopes must indemnify Premier not only for Premier’s own actions, but for the actions of every other subcontractor Premier hired, even where Lopes played no role in the performance of that work.
Premier responds that the term “Work” must be construed in line with the overall obligation that the Subcontracts impose on Lopes. Part A of both Subcontracts defines “Work” to mean those obligations both in the Subcontract and in the Contract Documents that Lopes “agrees to perform.” Premier argues that, to the extent that the Contract Documents dictate what others are to do on the Project, then Lopes has not “agreed to perform” those other tasks and that this, as a consequence, narrows the definition of “Work” as used in the Indemnification Provisions. This is a stretch, at best, requiring the Court to put together and merge definitions from other parts of the Subcontracts in order to impose limitations that are not apparent from the plain language of the Indemnification Provisions themselves.
Even if this Court were to accept Premier’s narrower definition of “Work,” it is still not enough to save these indemnification provisions, given the second flaw in Premier’s argument. Premier argues that the requisite causal connection between Lopes’ acts and the claims for which indemnification is sought is provided by the phrase “arising out of.” Indemnification Provision #1 applies, however, not only to claims for injury “arising out of” the Work but also to claims
8
“relating to or in connection with the Work.” Thus, even with the contorted definition of “Work” that Premier urges this Court to accept, it clearly extends well beyond any “work” actually performed by Lopes. Indemnification Provision #2 is a bit more narrowly drawn, stating that the claim must arise out of or result from the “performance or nonperformance of the Work,” among other things. But it does not specify who has to have performed (or failed to perform) that “Work” in order to trigger the indemnification obligation, is thus must be read as extending to acts or omissions by others. In other words, Lopes could be required to indemnify Premier even where its acts or omissions did not play any part in causing the damage.
Although this Court agrees with Lopes that the two provisions impose indemnify obligations beyond that which is permitted by Section 29C, it does not follow that Lopes has no duty to defend. As the SJC explained in Herson v. New Boston Garden Corp., 40 Mass. App. Ct. at 786-787, the duty to defend is “ independent of and broader than the duty to indemnify” and the imposition of such a duty is not constrained by Section 29C, which makes no reference to it. As quoted above, the Subcontracts contain language requiring Lopes to defend Premier from claims or actions asserted against Premier, and to bear the cost of employing counsel if Premier chooses to contest the claims asserted against it. Lopes does not even attempt to explain in its written opposition why this language does not impose upon it a duty to defend Premier in this litigation. In any event, this Court concludes that it does.
SO ORDERED.
___________________________ Janet L. Sanders
Justice of the Superior Court
Dated: November 30, 2016
9 read more

Read more...

Posted by Massachusetts Legal Resources - December 7, 2016 at 7:34 pm

Categories: News   Tags: , , , , , , ,

Hillside FXF, LLC, et al. v. Premier Design + Build Group, LLC, et al. (Lawyers Weekly No. 12-158-16)

1
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
SUCV2013-03831-BLS2
HILLSIDE FXF, LLC & JONES DEVELOPMENT COMPANY, LLC,
Plaintiffs
vs.
PREMIER DESIGN + BUILD GROUP, LLC,
HALEY & ALDRICH, INC., & G. LOPES CONSTRUCTION, INC.,
Defendants
MEMORANDUM OF DECISION AND ORDER
ON DEFENDANT PREMIER DESIGN + BUILD GROUP, LLC’S
MOTION FOR SUMMARY JUDGMENT AGAINST HILLSIDE FXF, LLC &
JONES DEVELOPMENT COMPANY, LLC
This case arises out of the construction of a FedEx facility in Northborough, Massachusetts. Plaintiffs Hillside FXF, LLC (Hillside) and Jones Development Company, LLC (Jones) filed this action against defendants G. Lopes Construction, Inc. (Lopes), Premier Design + Build Group, LLC (Premier), and Haley & Aldrich, Inc. (Haley) seeking to recover damages relating to remedial work performed after the construction. This Court has already denied Haley’s summary judgment motion. This memorandum concerns the defendant Premier’s Motion for Summary Judgment as to plaintiffs’ claims against it. 1 Premier argues that release language in a change order bars all of the plaintiffs’ claims against it and that plaintiffs have in any event waived any claim because they failed to follow certain contractual provisions. After careful review of the summary judgment record, this Court concludes that there are questions of fact such that the Motion must be Denied.
1 Plaintiffs also filed a motion to strike three of Premier’s fact statements contained in Premier’s Superior Court Rule 9A (b) (5) statement of material facts. That motion is denied for the reasons stated in Premier’s opposition.
2
BACKGROUND
The relevant facts in the summary judgment record, viewed in the light most favorable to the plaintiffs, are as follows. Hillside and Jones 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”). Because the site was on a relatively steep slope, a significant amount of cut and fill and excavation work was required to prepare it for construction. The earthwork began in September 2011, with foundations and walls of the building installed in early 2012. Shortly thereafter, it was noticed that the walls appeared to have shifted laterally. Ultimately, it was determined that the foundations had settled and that this was caused by improper fill work. By the time the building was stabilized and the site repaired, Hillside had spent more than $ 3 million in remedial work.
Premier’s Motion is based in part on language contained in its construction contract with Hillside (the Agreement). See Exhibit C of Joint Appendix. Article 7 of the Agreement states that “[i]f, during the period of construction, the Work [as defined by the Agreement] is found to be defective or not in accordance with the Agreement Documents, contractor shall correct it with reasonable promptness after receipt of written notice from Owner to do so …. Owner shall give such notice within ten (10) business days after discovery of the condition.” Article 9 ¶ Q states that: “[s]hould either party to this Agreement suffer injury or damage…because of any act or omission of the other party…claim shall be made in writing to such other party within a reasonable time after the first observance of such injury or damage.” On March 26, 2012,
3
Premier sent the plaintiffs a written notice of soil stability issues. Four days later, on March 30, 2012, plaintiffs sent Premier a notice that these issues arose from Premier’s defective work.
The Motion also relies on a certain change order — Change Order 13 — entered into between the parties following the execution of the Agreement. The Agreement defines a change order to be “a written order to a Contractor signed by Owner issued after execution of the Agreement authorizing a change in the Work or an adjustment in the Agreement Sum or Agreement Time.” Article 6 of Agreement. Change Order 13 was one of fourteen change orders issued. It was executed on June 19, 2013, many months after Hillside had discovered the problems with the foundation. Change Order 13 stated that:
“The following changes shall be added to and become part of Item I of the Standard Contract Agreement dated August 23, 2011:
. . . Credit to contractors [sic] fee. This credit shall serve as final compensation to the Owner [Hillside] and constitutes a complete release from any and all claims against the Contractor [Premier] relating to this project. DEDUCT $ 30,000.”
See Exhibit J. Kevin Jones signed Change Order 13 on behalf of the plaintiffs.
The summary judgment record contains various e-mails and portions of deposition testimony relating to the meaning of this language. As described in one email, its purpose was to give Premier a $ 30,000 credit to help offset the costs “associated with the soils, building and undercut issues.” Alec Zocher, a Premier representative, testified that he had several conversations with Jones about Change Order 13 but couldn’t recall what was said beyond the fact that there was some negotiation as to the amount of the credit. As Jones recalls it, the discussion pertained only to the specific work that was to be performed pursuant to Change Order 13, and that, although he did not notice the release language, he would have assumed that it related only to a minor dispute between the parties regarding Premier’s ten percent fee as general contractor. Jones denies that there was any discussion about resolving the parties’ larger dispute
4
over the failure of the Project site, nor did he understand the language to constitute a release by plaintiffs of that much larger claim.
DISCUSSION
Premier makes two arguments in support of its motion for summary judgment. First, it contends that Change Order 13 is an enforceable release that bars all of the plaintiffs’ claims against Premier in this action. Second, it argues in the alternative that the plaintiffs’ contract claims against Premier are waived because plaintiffs failed to provide timely written notice of the damage to the property and of their claim that Premier’s work was defective. The Court will discuss each of these arguments in turn.
A. Change Order 13
As an initial matter, this Court concludes that Illinois law applies. See Article 12 of the Agreement (providing that Agreement to be construed in accordance with Illinois law). Under Illinois law, a release, like any contract, must be enforced as written if its terms are clear and explicit. However, in determining the meaning of those terms, Illinois courts strictly construe them against the benefitting party; to be enforceable so as to bar a claim, the release must spell out the intention of the parties with great particularity. Construction Systems, Inc. v. FagelHaber, LLC, 35 N.E.3d 1244, 1251 (Ill. App. Ct. 2015). Indeed, Illinois cases seem to suggest that the court must always take into account the circumstances surrounding the execution of a release, regardless of what the release says. Ainsworth Corp. v. Cenco, Inc., 437 N.E.2d 817, 821 (Ill. App. Ct. 1982) (“[N]o form of words, no matter how all encompassing, will foreclose scrutiny of a release . . . or prevent a reviewing court from inquiring into surrounding circumstances to ascertain whether it was fairly made and accurately reflected the intention of the parties’). Moreover, the court should avoid interpretations that lead to absurd results where a
5
contract is susceptible to more than one construction. Where one construction is “fair, customary and such as prudent men would naturally execute,” and the other is “inequitable, unusual or such as reasonable men would not be likely to enter into,” the court must prefer the former. Chicago Title & Trust Co., v. Telco Capital Corp., 685 N.E.2d 952, 955-956 (Ill.App.1997), quoted in Bank of Commerce v. Fyre Lake Ventures, LLC., 84 F.Supp. 3d 807, 823 (C.D. Ill.2015) (denying summary judgment because of factual disputes as to meaning of release).
In opposing the motion, plaintiffs contend that reading Change Order 13 to release Premier from a $ 3 million damages claim in exchange for a $ 30,000 credit would be an absurd interpretation. This Court finds this argument to be persuasive. At the very least, this Court concludes that there is are genuine disputes of fact regarding the intent of the parties such that summary judgment on this basis would be improper. As noted by the plaintiffs, there is evidence in the summary judgment record suggesting that the only dispute that was intended to be resolved by the release language in Change Order 13 concerned the dispute between the parties regarding the general contractor’s fee on certain of the remedial work. This is a plausible interpretation of the release language, since it is immediately preceded by the words “credit to contractors [sic] fee.” That the language was not intended to foreclose the much larger claims asserted in this action is further supported by the fact that it was placed in a change order. As defined by the Agreement, a change order is an order authorizing a change in the work or an adjustment to the time in which the work is to be completed or the price to be paid. Thus, plaintiffs have some justification for their position that Jones, signing on behalf of plaintiffs, could not be reasonably expected to find a release of the magnitude argued by Premier in a change order that covered a relatively insignificant amount of additional work.
6
B. Timely Notice
Premier’s second argument merits less discussion. Premier notes that the undisputed facts show that the problems in the building foundation were first observed on or around February 23, 2012, but that the plaintiffs did not issue any written notice of this defect until March 30, 2012. Premier contends that Article 9 of the Agreement required that this notice had to be given within ten days of discovery of the defect and that this delay amounted to a waiver of plaintiffs’ contractual claims. Article 9, however, says only that a claim against the liable party for injury to property must be made “within a reasonable time after the first observance of such injury or damage.” Clearly, a month is not an unreasonable time. Premier asserts that the notice had to be given within ten days, but this ten day requirement is contained in Article 7, not Article 9. Moreover, a reasonable interpretation of Article 7 is that it was to give a contractor a chance to correct its defective work before the owner corrects it and sends the contractor the bill. In any event, neither Article 7 nor Article 9 contains any waiver language.
CONCLUSION AND ORDER
For all of the foregoing reasons, Defendant Premier Design + Build Group, LLC’s Motion for Summary Judgment is DENIED.
______________________________
Janet L. Sanders
Justice of the Superior Court
Dated: November 3, 2016 read more

Read more...

Posted by Massachusetts Legal Resources - December 6, 2016 at 2:55 pm

Categories: News   Tags: , , , , , , ,

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

1
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
SUCV2013-03831-BLS2
HILLSIDE FXF, LLC & JONES DEVELOPMENT COMPANY, LLC,
Plaintiffs
vs.
PREMIER DESIGN + BUILD GROUP, LLC,
HALEY & ALDRICH, INC., & G. LOPES CONSTRUCTION, INC.,
Defendants
MEMORANDUM OF DECISION AND ORDER
ON DEFENDANT HALEY & ALDRICH, INC.’S
MOTION FOR SUMMARY JUDGMENT
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
2
motion. This Court concludes that, with the exception of Count VIII, Haley’s motion must be Denied.
BACKGROUND
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
3
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, &
4
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.
DISCUSSION
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
5
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).
CONCLUSION AND ORDER
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 read more

Read more...

Posted by Massachusetts Legal Resources - November 9, 2016 at 10:29 pm

Categories: News   Tags: , , , , , , ,

Premier Capital, LLC v. KMZ, Inc. (Lawyers Weekly No. 10-033-13)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA 02108-1750;  (617) 557-1030; SJCReporter@sjc.state.ma.us

SJC‑11136

PREMIER CAPITAL, LLC  vs.  KMZ, INC.

Hampden.     November 6, 2012.  ‑  March 7, 2013.

Present:  Ireland, C.J., Spina, Cordy, Botsford, Gants, Duffly, & Lenk, JJ.

Limitations, Statute ofNegotiable Instruments, Note.  Contract, Under seal.  Statute, Retroactive application.  Corporation, Corporate successor liability.  Uniform Commercial Code, Payment on negotiable instrument.

Civil action commenced in the Superior Court Department on July 3, 2007.

The case was heard by Constance M. Sweeney, J., on motions for summary judgment. read more

Read more...

Posted by Massachusetts Legal Resources - March 7, 2013 at 3:19 pm

Categories: News   Tags: , , , , ,