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Meltech Corporation v. Austin Mohawk & Co., Inc.

United States District Court, Fourth Circuit

July 1, 2013

MELTECH CORPORATION, Plaintiff,
v.
AUSTIN MOHAWK & CO., INC., and BEECHGROVE CONSTRUCTION, INC., Defendants/Third Party Plaintiffs,
v.
ROBERT WHITE CONSTRUCTION, Third Party Defendant.

MEMORANDUM OPINION

ALEXANDER WILLIAMS, Jr., District Judge.

Pending before the Court are Third Party Defendant Robert White Construction (Robert White)'s Motion for Partial Summary Judgment, Doc. No. 53, Defendants and Third Party Plaintiffs Austin Mohawk & Co., Inc. (Austin Mohawk) and Beechgrove Construction, Inc. (Beechgrove)'s Motion for Summary Judgment, Doc. No. 54, and Plaintiff Meltech Corporation (Meltech)'s Cross-Motion for Summary Judgment, Doc. No. 55. The Court has reviewed the motion papers and exhibits and concludes that no hearing is necessary. See Loc. R. 105.6 (D. Md. 2011). For the following reasons, the Court will grant summary judgment to Meltech on its breach of contract and indemnification claims against Beechgrove. Summary judgment will be granted to Beechgrove on Meltech's negligence and negligent misrepresentation claims. Austin Mohawk is entitled to summary judgment on all claims against it and will be dismissed from this action. Summary judgment will be granted to Beechgrove on its contractual indemnification claim against Robert White, and Beechgrove will be entitled to recover all sums for which it may be adjudged liable to Meltech. Beechgrove will also be entitled to recover from Robert White pre-judgment interest and reasonable attorneys' fees and costs in defending the action brought against it by Meltech. Finally, Meltech's Motion to Strike the affidavit of Terry Lane, Doc. No. 64, will be denied as moot, Austin Mohawk and Beechgrove's Motion to Strike Meltech's request for summary judgment on its claim for direct damages, Doc. No. 65, will be granted, and Robert White's Motion to Strike Meltech's request for summary judgment on its claim for direct damages, Doc. No. 66, will be granted.

I. FACTUAL AND PROCEDURAL HISTORY

This case arises out of a construction site accident on August 31, 2009, when a steel beam fell and killed Ronald Halferty, an employee of Robert White Construction (Robert White).

Plaintiff Meltech Corporation (Meltech) was a general contractor to the Naval Facilities Engineering Command (NAVFAC)[1] to build two guard stations-Webster Gate and Pax Gate One-at the Naval Air Station Patuxent River. Meltech entered into two subcontracts with Defendants and Third Party Plaintiffs Austin Mohawk & Co., Inc. (Austin Mohawk) and Beechgrove Construction, Inc. (Beechgrove). Although they are independent companies, Austin Mohawk and Beechgrove have some of the same corporate officers and generally work in tandem, Austin Mohawk as the supplier of canopies and Beechgrove as the installer.

The Beechgrove subcontract provided that Beechgrove would install the steel canopy of the Pax Gate One guard station. Specifically, Beechgrove "agree[d] to commence [its] work herein described upon notification by [Meltech], and to perform and complete such work... of [Meltech] in accordance with [Meltech]'s schedule. This shall include all work necessary or incidental to complete the Single Bottom Flat Deck Canopy." It also stated, under "Name(s) of any immediate subcontractors, if any, " "To Be Determined. To be assigned 2 weeks before scheduled installation."

The Austin Mohawk subcontract provided that Austin Mohawk was responsible for the supply and delivery of materials, as it specified "Deliver Only. Offload and Install by Beechgrove Construction, Inc." It further specified that Austin Mohawk would not be doing any on site work. Both the Beechgrove and Austin Mohawk subcontracts contained an identical indemnification provision, which provided:

To the fullest extent permitted by law, [Austin Mohawk/Beechgrove] shall indemnify and hold harmless [Department of the Navy], and [Meltech] from all damages, losses, or expenses, including attorney fees from any claims or damages for bodily injury, sickness, disease or death, or from claims for damages to tangible property, other than the work itself. This indemnification shall extend to all claims resulting from performance of this Subcontract and shall apply only to the extent that the claim or loss is caused in part or whole by any negligent act or omission of [Austin Mohawk/Beechgrove] or any of its agents, employee(s) or Subcontractors. This indemnity shall be effective regardless of whether the claim or loss is caused in some part by a party to be indemnified.

When Beechgrove was awarded the subcontract by Meltech, it developed a lift plan for installation of the canopy at Webster Gate. The lift plan was subsequently revised by Meltech based in part on Navy requirements; for example, Meltech determined that a lull would have to be used for the lift rather than a crane. Ultimately, the revised lift plan for Webster Gate was adopted for Pax Gate One, with variations to account for the differences in material size. None of the lift plans explicitly mentioned the use of padding or softeners in the sling that would be attached to the lull and lift the steel materials.

On August 25, 2009, Beechgrove entered into a subcontract with Robert White for the installation of the canopy at Pax Gate 1. Specifically, the Robert White subcontract provided that "[r]esponsibility for all aspects of the installation shall be solely that of [Robert White], including, but not limited to, the provision of transportation to the job site, furnishing of all tools and equipment necessary to perform the installation services, and the provision of all necessary skilled labor, all of which shall be provided at [Robert White]'s expense." Furthermore, Robert White agreed "to indemnify and hold harmless [Beechgrove] for any act, or failure to act, of [Robert White] in connection with this Agreement that may cause [Beechgrove] to suffer damages as a result thereof." The parties also agreed that Robert White "is and shall remain an independent contractor in the performance of services hereunder."

At the time of execution of the Robert White subcontract and through the day of the accident, Tom Peters was Beechgrove's only employee. On the morning of August 25, 2009, six days before the accident and the same day Beechgrove subcontracted with Robert White, Peters notified Meltech via e-mail that it had a subcontractor for installation of the canopy. Peters supplied, and Meltech confirmed receipt of, security clearance forms for various employees of Robert White.

On August 31, 2009, the night of the accident, no Beechgrove or Austin Mohawk employees were present at the construction site. Those present included James McTernan of Meltech, in his capacity as Site Safety and Health Officer, and Robert White, Jr. of Robert White Construction. Three lifts were to be performed in the erection of the steel canopy, the last of which resulted in the beam falling on Mr. Halferty. Employees of Robert White Construction supplied and selected the sling that would be used in the lifts, failed to inspect the sling, and attached it to the lull without padding or softeners. Robert White, Jr. was operating the lull and lifting the steel beam when the sling to which the beam was secured failed and the beam fell. White acknowledged that he alone determined how the beam would be lifted and that no one else had any input on this part of the project. White also acknowledged that he was the last person who could have prevented the accident.

As a result of the accident, the Department of the Navy issued a stop work order on September 1, 2009. An investigation by the Occupational Safety and Health Administration (OSHA) was initiated and on September 21, 2009, as part of that investigation, OSHA cited White for using a defective sling and for failure to use padding or softeners in the sling. Specifically, the OSHA report noted that "the eyes of the sling were not protected from sharp edges on the tine of the fork truck, " and that during hoisting of the steel beam, "one of the synthetic sling eyes broke causing the beam to fall and crush a worker." OSHA also concluded:

There was obvious and existing and new damage to the synthetic sling as observed by the CSHO. CSHO learned from the employee operating a tag line for the beam that when the beam reached near the top of the column it began to sway left and right. This sway could have caused the eyes of the sling to work back and forth on the edge of the fork truck tine, which caused the eye to tear/rip. There were cuts in the eye of the sling, in the same location that the break occurred [sic] on the other eye. This would have increased the risk of sling failure. The break on the eye of the sling was measured and it was the exact width dimension of the tine on the fork truck. The other eye on the sling has damage on the inside of the eye as the dimension of the tine on the fork truck.

The OSHA report further stated:

Employer Knowledge: The owner of the company [White] was acting as crew leader and owned all the slings that were located on his truck. The owner told a laborer to fetch a sling from the truck and use it to rig the steel beam. The owner was operating the fork truck that was used to lift the beam into place.
Comments (Employer, Employee, Closing Conference): The owner stated he had never used padding or a softener for slings.
...
It is industry practice to install padding/softeners on sharp edges for materials that going [sic] to be lifted by slings.

Meltech asserts four causes of action against Defendants Austin Mohawk and Beechgrove: breach of contract, negligent misrepresentation, negligence, and indemnification. Meltech claims that it is entitled to damages of $15, 000, 000, including both direct losses and lost profits. Austin Mohawk and Beechgrove filed a Third Party Complaint against Robert White, claiming that they are entitled to recover indemnity for any sums which may be awarded in favor of Meltech in its claims against Austin Mohawk and Beechgrove. Meltech moves for summary judgment as to liability for all of its claims against Austin Mohawk and Beechgrove. Austin Mohawk and Beechgrove move for summary judgment on Meltech's claims against them, as well as for their claims for indemnity against Robert White to the extent they are held liable to Meltech. Robert White also moves for summary judgment on Austin Mohawk and Beechgrove's indemnity claims against it.

II. STANDARD OF REVIEW

Summary judgment is only appropriate "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986). The Court must "draw all justifiable inferences in favor of the nonmoving party, including questions of credibility and of the weight to be accorded to particular evidence." Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 520 (1991) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)). In ruling on a motion for summary judgment, "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge...." Okoli v. City of Balt., 648 F.3d 216, 231 (4th Cir. 2011) (quoting Anderson, 477 U.S. at 255).

To defeat a motion for summary judgment, the nonmoving party must come forward with affidavits or other similar evidence to show that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A disputed fact presents a genuine issue "if, after reviewing the record as a whole... a reasonable jury could return a verdict for [the non-moving party]." Evans v. Techs. Applications & Serv. Co., 80 F.3d 954, 959 (4th Cir. 1996) (citing Anderson, 477 U.S. at 248). Although the Court should believe the evidence of the nonmoving party and draw all justifiable inferences in his favor, a nonmoving party cannot create a genuine dispute of material fact "through mere speculation or the building of one inference upon another." Beale v. ...


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