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Skanska USA Building, Inc. v. J.D. Long Masonry, Inc.

United States District Court, D. Maryland

January 13, 2017

SKANSKA USA BUILDING, INC.
v.
J.D. LONG MASONRY, INC.

          MEMORANDUM

          J. FREDERICK MOTZ, UNITED STATES DISTRICT JUDGE

         Plaintiff Skanska USA Building Inc. (“Skanska”) brings this lawsuit against defendant J.D. Long Masonry, Inc. (“Long”), seeking money damages for sums incurred and/or to be incurred by Skanska in connection with Long's alleged breach of a subcontracting agreement between the parties. Skanska asserts that Long has materially breached the parties' subcontract by failing to indemnify Skanska and pay the costs of remediation work required after several rows of brick façade fell from the face of the building on which Long had been hired to do masonry work. Now pending is Long's motion for summary judgment on issues of the statute of limitations and release/accord and satisfaction. (ECF No. 21). The motions are fully briefed and no oral argument is necessary. See Local R. 105.6. For the reasons set forth below, Long's motion for summary judgment is denied.

         BACKGROUND

         This dispute arises out of a subcontract agreement (the “Subcontract”) entered into by Skanska and Long on October 12, 2004. Skanska was hired by the National Institute of Health (NIH) as the construction manager on a project to build a new bio-medical research facility (the “Project”) on the Bayview Campus at Johns Hopkins University in Baltimore, Maryland. (ECF No. 1 ¶ 7). In October of 2004, Skanska retained Long to perform masonry work on the Project, and the parties executed an extensive subcontract (the “Subcontract”) outlining their rights and obligations. (Id. ¶ 9-10). The Subcontract provided, generally, that Long would assume all responsibility and liability for injury or damage resulting from or related to the masonry work performed and that Long would indemnify Skanska for losses or expenses incurred in connection with its performance. (Id. ¶ 12(C)-(D), Ex. A, Art. 23.1, 30.1). Additionally, the Subcontract holds Long responsible for necessary repairs or replacement of any materials at its own expense in the event that defective work is discovered within one year of the final acceptance of the Project by the architects and owner. (Id. Ex. A, Art. 21.1). On October 12, 2007, Skanska notified Long that it had received a certificate of substantial completion dated October 4, 2007, and that “service warranties/guarantees are to begin on this date.” (ECF No. 21, Ex. 2).

         While the Project received its certificate of completion, NIH had apparently noted, both over the course of construction of the Project and after it was finished, a number of structural issues with the building, including some related to the masonry work performed by Long. (See ECF No. 25 ¶ 5). While Skanska and NIH were attempting to resolve NIH's concerns and come to an agreement on final payment for Skanska and its subcontrators, Long filed a lawsuit against Skanska in the Circuit Court for the City of Baltimore, Maryland, seeking additional payments under the Subcontract. (Id. ¶ 9). In 2009, NIH engaged engineering firm Wiss, Janey, Elstner Associates, Inc. (“WJE”) to perform a visual condition assessment of various parts of the Project's outer façade, document any issues that may constitute a potential hazard to pedestrians or vehicular traffic below the affected areas, and prepare an investigative report. (See id. ¶ 5-6). WJE prepared a “Draft Report” on October 30, 2009, which documented visible evidence of exterior façade issues such as cracking, spalling, and planar displacement. (Id.).

         Additionally, in 2010, the Office of General Counsel for Health and Human Services and NIH retained Exponent, Inc. to conduct an engineering assessment of the cause of distress to the building. (Id. ¶ 7). Exponent concluded that “total and differential settlement is ongoing and is expected to occur in the future, and may occur in areas that previously did not exhibit signs of distress.” (Id. ¶ 5; see also ECF No. 21, Ex. 5).

         Both the 2009 WJE Report and the 2010 Exponent Report apparently served as the basis for ongoing mediation efforts between NIH and Skanska that had resulted from significant disagreements regarding the amounts due to Skanska on the Project and the necessary repair and remediation of issues NIH and WJE had identified. (See ECF No. 25 ¶ 8; see also ECF No. 21, ¶ 5). Skanska and NIH eventually entered into a settlement agreement which created a list of Known Facility Issues or a “warranty list” detailing various items the parties agreed would be repaired or remediated by Skanska and its subcontractors. (See ECF No. 25 ¶ 8; see also ECF No. 21, Ex. 8). The portion of the “warranty list” pertaining to the masonry work on the Project was submitted to Long, and Long performed all of the listed repairs in 2010. (See ECF No. 21 ¶ 10, Ex. 8; see also ECF No. 25 ¶ 8). On August 3, 2011, Skanska and Long entered into a Settlement Agreement and Release (the “Release”), seeking to “resolve all issues between them on the Project . . . with no admission of liability by any party.” (ECF No. 1, Ex. B, p. 5).[1]

         On April 9, 2013, approximately 20 rows of brick façade fell from an outer wall on the eighth story of the Project onto a grassy area bordering the building (the “Incident”). (See id. ¶ 13). Skanska promptly contacted Long by letter on April 19, 2013, notifying Long of the Incident and informing Long of its obligation to indemnify and hold Skanska harmless for all related claims and damages. (See id., Ex. C).

         WJE was again hired to investigate the Incident and assess the cause of the damage. (See id. ¶ 19). On April 24, 2013, Skanska informed Long of its opportunity to participate in the WJE investigation should it so choose. (See id., Ex. D). WJE issued a report on July 31, 2013, outlining its conclusions regarding the causes of the Incident and making certain recommendations for remediation and repair work to the building's structure and façade. (See id., Ex. E). The 2013 WJE report lists a number of alleged deficiencies related to Long's masonry work, including lack of horizontal soft joints, improper spacing and location of lateral veneer anchors, and inadequate bearing for the clay brick veneer on the shelf-angles. (See id., Ex. E, p. 6; see also ECF No. 21, p. 7). WJE also made a number of recommendations for repairing the damage, which included the removal and reinstallation of the brick façade above and below each floor-line shelf-angle and potentially the replacement of the brick veneer in its entirety. (See ECF No. 1, ¶ 24, Ex. E, p. 8).

         Skanska instituted temporary stabilization methods and provided a copy of the WJE report to Long. (Id. ¶ 24-25). In mid-April 2014, Skanska sent Long a letter demanding Long take responsibility for the Incident and perform the suggested repairs or, alternatively, provide Skanska with evidence that Long was not at fault for the Incident. (See id. ¶ 26, Ex. F). Long did not provide Skanska with information that was responsive to the WJE report. (See id. ¶ 27; see also ECF No. 8 ¶ 25). On May 2, 2014, Skanska sent Long another letter declaring Long in default under the Subcontract for failure to take responsibility for the Incident and perform repairs. (See ECF. No. 1 ¶ 27, Ex. G).

         In April of 2015, WJE provided a comprehensive remediation plan to Skanska and NIH, and Skanska informed Long of its intention to coordinate with NIH regarding the remediation work on the façade. (See id. ¶ 28-29, Ex. H). According to Skanska, the repair work will cost an estimated $3.5 million. (See id. ¶ 30). Skanska filed a complaint in this court on March 29, 2016, asserting one count of breach of contract against Long. On September 22, 2016, defendant Long filed a motion for summary judgment on issues of the statute of limitations and release/accord and satisfaction pursuant to Rule 56 of the Federal Rules of Civil Procedure. (ECF No. 21).

         STANDARD

         Rule 56(a) of the Federal Rules of Civil Procedure provides the “court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original). A genuine issue of material fact exists where “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. The party seeking summary judgment bears the initial burden of demonstrating the absence of a genuine dispute of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). When reviewing a motion for summary judgment, the court must take all facts and inferences in the light most favorable to the non-moving party. Scott v. Harris, 550 U.S. 372, 378 (2007).

         The party opposing summary judgment must, however, “do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); see also In re Apex Express Corp., 190 F.3d 624, 633 (4th Cir.1999). The non-movant “‘may not rest upon the mere allegations or denials of [his] pleadings, ' but rather must ‘set forth specific facts showing that there is a genuine issue for trial.'” Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003) (alteration in original) (quoting Fed.R.Civ.P. 56(e)); see also Adickes v. S. H. Kress & Co., 398 U.S. 144, 160 (1970). A court should enter summary ...


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