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Civista Health Inc. v. Gilbane Building Co.

United States District Court, Fourth Circuit

July 1, 2013

CIVISTA HEALTH INC., et al., Plaintiffs,
v.
GILBANE BUILDING COMPANY, et al., Defendants.

MEMORANDUM OPINION

ALEXANDER WILLIAMS, Jr., District Judge.

Pending before the Court is Defendant Gilbane Building Company's Motion for Summary Judgment, Doc. No. 30, Plaintiffs' Rule 56(d) Motion, Doc. No. 32, and Gilbane's Motion for Leave to File Surreply, Doc. No. 41. For the reasons discussed below, Gilbane's Motion for Summary Judgment will be GRANTED, Plaintiffs' Rule 56(d) Motion will be DENIED, and Gilbane's Motion for Leave to File Surreply will be DENIED AS MOOT.

I. FACTUAL AND PROCEDURAL HISTORY

Plaintiffs filed this action on January 28, 2013, based on damages sustained to their La Plata, Maryland property as a result of an earthquake and hurricane that struck the Washington, D.C. region in August 2011. Doc. No. 1. Defendants are Gilbane Building Company (Gilbane), which completed an Addition to the property in 2007, and Plaintiffs' insurer, Travelers Property Casualty Company of America. Plaintiffs generally allege that Gilbane's construction of the Addition was defective and originally stated claims for breach of contract, negligence, breach of express and implied warranties, and declaratory judgment against Gilbane.

On April 1, 2013, Gilbane moved for summary judgment on all claims against it. Gilbane relied on the accrual clause in its construction contract with Plaintiffs, which provided the following: "As to acts or failures to act occurring prior to the relevant date of substantial completion any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than that date of substantial completion." Doc. No. 30-3 ¶ 13.7.1.1. It is not disputed that construction of the Addition was completed in 2007.

On April 16, 2013, Plaintiffs filed a motion for leave to file a First Amended Complaint against Defendants, which added a count for Fraud/Misrepresentation. See Doc. No. 31. The crux of the fraud/misrepresentation claim is that Gilbane misrepresented to Plaintiffs its competence to complete the Addition in compliance with all relevant building and fire codes. Plaintiffs allege that the State Fire Marshal found numerous defects in the structure in 2012 and that notwithstanding the obvious defects discovered by the Fire Marshal, Gilbane issued certificates of substantial and final completion without noting the defects, and Plaintiffs paid Gilbane based on these certificates. Defendants, including Gilbane, did not oppose Plaintiffs' Motion for Leave to Amend, Doc. No. 35, and the Court granted the Motion for Leave on May 29, 2013, Doc. No. 44. However, Gilbane also moves for summary judgment on Plaintiffs' fraud/misrepresentation claim for the same reasons it does so on the breach of contract, breach of warranty, negligence, and declaratory judgment claims. See Doc. No. 35 ¶ 2.

On April 18, 2013, Plaintiffs filed a Rule 56(d) Motion, which requested that the Court deny Gilbane's Motion for Summary Judgment or, in the alternative, defer the time for filing an opposition until completion of discovery. Doc. No. 32. Plaintiffs argued in their Rule 56(d) Motion that the accrual clause should not be enforced if it violates public policy, is unreasonable, or where there is evidence or allegations of fraud. Plaintiffs asserted that it is not possible to fully and fairly address the issues of policy, reasonableness, and fraud and misrepresentation without a full evidentiary record. They cited the 2012 findings of the State Fire Marshal who discovered numerous fire code violations on the construction areas at issue. Plaintiffs alleged that these violations, which included numerous penetrations in the fire and infectious disease barriers, were overlooked, ignored, or hidden when Gilbane closed the areas and issued their certificates of substantial and final completion. See Doc. No. 31-1 ¶¶ 41-45; Doc. No. 32-1. In their reply brief, Plaintiffs also cite several "Above Ceiling Inspection" reports suggesting that Gilbane was aware of certain deficiencies relating to the fire and disease barriers in 2005 and 2006. See Doc. Nos. 37-1, 37-2.

In their Rule 56(d) Motion and attached affidavit, Plaintiffs sought discovery on the following issues: (1) whether the fire code violations escaped the notice of Gilbane; (2) whether Gilbane knew or should have known of the threats to public and patient health and safety;

(3) whether Gilbane competently chose subcontractors and/or supervised their personnel, which may have bearing on whether Gilbane fraudulently induced Plaintiffs to enter the contract;

(4) the accuracy, validity, and bona fides of the certificates of substantial and final completion; and (5) the nature and extent of Gilbane's and its subcontractors' communications and interactions with inspectors visiting the site, including anyone who had a role in fire code inspections. Doc. No. 32-1 ¶¶ 7-8, 10-11. Plaintiffs also sought discovery on what effect may be given to the red-lined contract document attached to Gilbane's Motion for Summary Judgment. See Doc. No. 32-1 ¶ 9.

The Court held a telephonic conference with the parties on May 29, 2013 to discuss the pending motions. Counsel for Plaintiffs argued that there was a genuine issue of material fact as to what terms were agreed upon by the parties given multiple versions of the contract that it had in its possession, including versions that did not include the accrual clause. The Court granted Plaintiffs ten days to file supplemental briefing and exhibits in support of their Rule 56(d) Motion, and granted Defendants ten days to file responsive briefing, if they chose to do so. Doc. No. 44.

In its supplemental brief, Plaintiffs concede that the parties' agreement contained the accrual clause. Doc. No. 46 at 1. Plaintiffs therefore withdraw their request for additional discovery on the issue of whether the accrual clause was included in the parties' agreement. Id. at 1-2. Now, Plaintiffs oppose enforcement of the accrual clause on the grounds that (1) it is inconsistent with other contractual provisions and (2) Gilbane should be estopped from enforcing the provision due to its concealment of certain material facts. Gilbane filed responsive briefing on June 21, 2013. All pending motions are therefore fully briefed and ripe for the Court's consideration.

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 ...


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