AT&T Mobility LLC v. Holaday-Parks-Fabricators, Inc., C10-468Z

Decision Date22 November 2011
Docket NumberNo. C10-468Z,C10-468Z
CourtU.S. District Court — Western District of Washington
PartiesAT&T MOBILITY LLC, a Delaware limited liability corporation, Plaintiff, v. HOLADAY-PARKS-FABRICATORS, INC., a Washington corporation, Defendant. v. EVERGREEN POWER SYSTEMS, INC., a Washington corporation, et al., Third-Party Defendants.



This matter comes before the Court on Plaintiff AT&T's Motion for Partial Summary Judgment against Holaday-Parks, docket no. 88, and Holaday-Parks' Motion for Summary Judgment against AT&T, docket no. 90. For the reasons discussed below,the Court hereby GRANTS in PART and DENIES in PART AT&T's Motion and DENIES Holaday-Parks' Motion.

I. Background

On March 8, 2011, Holaday-Parks, Inc. ("Holaday-Parks") entered into a contract ("Construction Agreement") with AT&T Mobility, LLC ("AT&T") to serve as the general contractor to provide a back-up power system for AT&T's Bothell Data Center. Compl. ¶ 4 (docket no. 1). This work included the procurement and installation of a fuel system to provide diesel fuel to generators, which included installation of three above-ground fuel tanks.

The construction of the fuel system was complete, or nearly complete, when on July 21, 2008, Steve Latimer, an employee of Holaday-Parks' subcontractor Source North America ("Ace Tank"), was at the facility with Holaday-Parks project coordinator Alicia Martinez, and noticed a malfunction in the Day Tank 3 fuel system. The fuel tank was showing only 71% full on the control panel, but was in fact full. Identifying the malfunction as a faulty sensor, Latimer disabled the sensor by disconnecting a wire, and took the tank off line. Exs. E & F to Decl. of Jeffrey D. Laveson in Supp. of Holaday Parks' Mot. for Summ. J. ("Laveson Decl.") (docket no. 91). That same afternoon, Martinez met with AT&T employee Mike Richey to inform him of the problem. She did not notify AT&T in writing. Ex. F to Laveson Decl.

Ritchey asked AT&T employee Carleton Kirkus to troubleshoot the system the following week. On July 29, 2008, Kirkus and Holaday-Parks' electrical subcontractorEvergreen Power System's ("Evergreen") employee Steve Stathum inspected the tank. Upon noticing the disconnected wire, Stathum reconnected the wire and turned the tank back on. Ex. O to Laveson Decl.

On August 1, 2008, 16,000 gallons of diesel fuel overflowed from Day Tank 3. Compl. ¶¶ 4, 12. On March 19, 2010, AT&T filed suit against Holaday-Parks. On April 12, 2010, Holaday-Parks filed a third-party complaint against Evergreen, Ace Tank, which supplied the fuel control system, and Phillips Pump, LLC, which manufactured the fuel control system. Def. Answer and Third Party Compl. (docket no. 7).

AT&T now moves for partial summary judgment against Holaday-Parks, arguing that Holaday-Parks breached the Construction Agreement in three respects and that Holaday-Parks' fault-based affirmative defenses should be dismissed. Holaday-Parks moves for summary judgment, seeking to dismiss all of AT&T's claims.


I. Standard of Review

The Court shall grant summary judgment if no genuine dispute of material fact exists and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A fact is material if it might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In support of its motion forsummary judgment, the moving party need not negate the opponent's claim, Celotex, 477 U.S. at 323; rather, the moving party will be entitled to judgment if the evidence is not sufficient for a jury to return a verdict in favor of the opponent, Anderson, 477 U.S. at 249. To survive a motion for summary judgment, the adverse party must present affirmative evidence, which "is to be believed" and from which all "justifiable inferences" are to be favorably drawn. Id. at 255, 257. When the record taken as a whole, could not lead a rational trier of fact to find for the non-moving party, summary judgment is warranted. See, e.g., Beard v. Banks, 548 U.S. 521, 529 (2006).

A. AT&T's Motion for Partial Summary Judgment (Docket no. 88)

AT&T moves for partial summary judgment on its claims for Breach of Contract for performance of defective work, failure to supervise, and failure to provide written notice of defects in Holaday-Parks' work. AT&T also moves to dismiss several of Holaday-Parks' affirmative defenses.

1. AT&T's Breach of Contract Claims

As an initial matter, the parties do not dispute that the Construction Agreement between Holaday-Parks and AT&T was still in effect at the time of the fuel spill.1 Nor do the parties dispute that Georgia law should apply to AT&T's Breach of Contract claims, acknowledging the choice of law provision in the Construction Agreement.

a) Performance of Defective Work

AT&T argues that by producing defective work, Holaday-Parks breached Article 1 of the Construction Agreement, which provides that "[Holaday-Parks] agrees to furnish all supervision, tools, equipment, labor and materials necessary to complete fully, in a workman like manner in accordance with the Contract Documents . . . and within the times specified in the Project Schedule . . . for each Project." Construction Agreement Article 1 (docket no. 1-2) (emphasis added). Under Georgia law, a breach of the contract duty of "workmanlike manner" occurs "when the builder fails to exercise a reasonable degree of care, skill, and ability under similar conditions and like surrounding circumstances as is ordinarily employed by others in the same profession." Nulite Indus. Co., LLC v. Horne, 252 Ga. App. 378, 379 (2001) (quoting Hall v. Harris, 239 Ga. App. 812, 817 (1999)).

AT&T also relies upon the warranty provision of the Construction Agreement as evidence of what the parties intended performance of the work on the project would entail. Specifically, the warranty provision provides that:

[Holaday-Parks] warrants to the Company that all materials and equipment furnished under this Contract will be new unless otherwise specified, and that all Work will be of good quality, free from faults and defects and in conformity with best trade practices and the Contract Documents.

Construction Agreement Article 4, subsection D(1).

AT&T argues that Holaday-Parks admits that Holaday-Parks' subcontractor's use of unshielded wire was a breach of the duty to perform work in a workmanlike fashion and free from defects, relying on Holaday-Parks' expert's report stating that shielded wire should have been used because the unshielded wire that was used "provided no electrical shield from outside EMI generated by higher voltages, rotating machines, lighting ballast, and other sources of electromagnetic noise." Supplemental Expert Report of Jon Mathison (docket no. 74-1). AT&T also points to Holaday-Parks' assertion in its briefing in response to Evergreen's motion for summary judgment that "[incontroverted evidence further supports AT&T's contention that the unshielded wire specified and installed by Evergreen caused the fuel control system malfunction." Holaday-Parks' Response to Evergreen's Motion for Summary Judgment at 10 (docket no. 76).

Holaday-Parks meekly responds that, although it agrees that the "destructive influence of electromagnetic noise on the analog module explains why the system broke," this explanation "falls far short of the conclusion made by AT&T that 'defective work was performed.'" Holaday-Park's Response at 10 (docket no. 101). Holaday-Parks also contends this is not an "admission that defective work caused the fuel spill." However, Holaday-Parks fails to elaborate a theory for why the use of unshielded wire was not "defective work" in its Response. Moreover, Holaday-Parks elaborates at length as to why the use of unshielded wire was defective work in its Response to Evergreen's motion for summary judgment. See, e.g., Holaday-ParksResponse to Evergreen's Motion for Summary Judgment at 7 (citing deposition testimony of Evergreen's subcontractor Gary Gerber, and elaborating that "Mr. Gerber admits he included the low-voltage fuel control system wiring on his stamped drawing, without a disclaimer, even though he and his firm did not feel themselves qualified to design low voltage systems. This admission, standing alone, is sufficient evidence of Gerber's breach of duty as a professional engineer and his breach of the subcontract under which he stamped the low voltage control wiring diagrams for Evergreen."). As no issue of material fact exists as to whether the installation of unshielded wire was defective, the Court grants summary judgment in favor of AT&T on this issue.2 The issue of whether the defect was the proximate cause of the spill is left for trial.

b) Failure to Supervise

AT&T argues that Holaday-Parks breached Article 4, subsection B of the Construction Agreement by failing to supervise the work of Holaday-Parks' subcontractors. Article 4, subsection B provides in relevant part that:

[Holaday-Parks] shall supervise and direct the Work, using his best skill and attention. He shall be solely responsible for all construction means, methods, techniques, sequences and procedures and for coordinating all portions of the Work under the Contract.

AT&T points to deposition testimony of Holaday-Parks' account executive, Bijit Giri, to attempt to show that Holaday-Parks did not supervise the work of its subcontractors:

Q: Did you understand that Holaday-Parks had an obligation under Exhibit No. 218 [the Construction Agreement] to coordinate and supervise all of the work on the fuel system?
A: I understand that we had a responsibility to coordinate all of the work.
Q: Did you think you had responsibility for supervising all of the work on the fuel system?
A: No, I don't - each discipline does their part of the

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