Indianapolis-Marion Lib. v. Charlier Clark

• Decision Date: 06 February 2009
• Docket Number: No. 06A05-0804-CV-239.,06A05-0804-CV-239.
• Citation: 900 N.E.2d 801
• Parties: The INDIANAPOLIS-MARION COUNTY PUBLIC LIBRARY, Appellant-Plaintiff, v. CHARLIER CLARK & LINARD, P.C., and Thornton Tomasetti Engineers, Appellees-Defendants.
• Court: Indiana Appellate Court

900 N.E.2d 801

The INDIANAPOLIS-MARION COUNTY PUBLIC LIBRARY, Appellant-Plaintiff, v. CHARLIER CLARK & LINARD, P.C., and Thornton Tomasetti Engineers, Appellees-Defendants.

No. 06A05-0804-CV-239.

Court of Appeals of Indiana.

February 6, 2009.

Gregory F. Hahn, Robert S. Daniels, Charles R. Whybrew, Kevin M. Quinn, Tabbert Hahn Earnest & Weddle LLP, Indianapolis, IN, Attorneys for Appellant.

Gerard L. Gregerson, Karl L. Mulvaney, Brad A. Wilt, Bingham McHale LLP, Indianapolis, IN, Attorneys for Appellees Thornton Tomasetti Engineers and Joseph G. Burns.

Thomas D. Collignon, Patrick J. Dietrick, Collignon & Dietrick, PC, Indianapolis, IN, Attorneys for Appellee Charlier Clark & Linard, PC.

OPINION

BAKER, Chief Judge.

We once again turn the page and delve into another chapter of the saga surrounding the renovation and expansion of the Central Library Project in Indianapolis. Perhaps our discussion below may best be summarized as follows:

When only economic harm is involved, the question becomes "`whether the consuming public as a whole should bear the cost of economic losses sustained by those who failed to bargain for adequate contract remedies.'"[¹]

And, as New York Court of Appeals Chief Judge Benjamin Cardozo recognized:

If liability for negligence exists, a thoughtless slip or blunder . . . may expose [one] to a liability in an indeterminate amount for an indeterminate time to an indeterminate class.

. . .

[I]f there has been neither reckless misstatement nor insincere profession of an opinion, but only honest blunder, the ensuing liability for negligence is one that is bounded by the contract, and is to be enforced between the parties by whom the contract has been made.

Ultramares Corp. v. Touche, 255 N.Y. 170, 179-89, 174 N.E. 441, 444-48 (1931).

Appellant-plaintiff Indianapolis-Marion County Public Library (Library) appeals the trial court's entry of summary judgment in favor of appellees-defendants Charlier Clark & Linard, PC, (CCL), Thornton Tomasetti Engineers (TTE), and Joseph G. Burns (collectively, the appellees). Specifically, the Library argues that the judgment entered for the appellees on its negligence claims was erroneous because those claims were not barred under the economic loss doctrine as espoused by our Supreme Court in Gunkel v. Renovations, Inc., 822 N.E.2d 150 (Ind.2005). Concluding that the trial court properly granted summary judgment for the appellees because the economic loss doctrine precludes the Library from recovering under these circumstances, we affirm.

FACTS²

The Library is a municipal corporation located in Indianapolis. In the late 1990s, the Library approved a plan for the expansion and renovation of its main facility in Indianapolis. The project included (1) the renovation of a building commonly known as the Cret Building; (2) the demolition of a multi-story annex structure; (3) the construction of a six-story tower; (4) the construction of an underground parking garage, which also serves as the structural foundation for the tower; (5) the construction of a new 300-seat auditorium; and (6) the construction of an atrium, which connects the Cret Building and the tower.

In February 1998, the Library engaged Woolen Molzan and Partners, Inc. (WMP), to serve as architect of record for the project. Thereafter, WMP engaged the services of several consultants, including TTE, which is an international engineering company that is headquartered in New York.³ WMP ultimately hired TTE to provide structural engineering services for the project.

In July 1999, WMP and TTE entered into a standard architect/consultant agreement. TTE agreed to provide the original structural design for the new and renovated spaces within the project. Among other things, TTE was responsible for providing construction documents, bidding services, and construction phase services. The contract provided in part that

[TTE] shall not be responsible for the acts or omissions of the Architect, Architect's other consultants, contractor, subcontractors, their agents or employees, or other persons performing any of the Work.

. . .

The Architect and [TTE], respectively, bind themselves, their partners, successors, assigns and legal representatives to the other party to the Agreement and to the partners, successors, assigns and legal representatives of such other party with respect to all covenants of this Agreement. Neither Architect nor [TTE] shall assign this Agreement without the written consent of the other.

. . .

Nothing contained in this Agreement shall create a contractual relationship with or a cause of action in favor of a third party against either the Architect or [TTE].

Appellant's App. p. 230, 240. The Library never purchased any services for the project directly from TTE.

Based upon TTE's recommendation, WMP retained CCL, a small civil engineering firm in Indianapolis, to provide certain services relating to the construction of the parking garage. On May 9, 2002, WMP and CCL executed an agreement, pursuant to which CCL agreed to perform twelve site visits to determine whether the project was in general compliance with construction standards. CCL was to be paid $12,000 for its services.

On August 12, 2002, TTE issued final stamped structural design drawings for the project. Burns, who was a managing principal of TTE, affixed his engineer's seal to the designs. Thereafter, the Library and WMP amended the original architect agreement and executed a standard form of agreement. CCL representatives were not made aware of the amendment to the initial agreement. Moreover, although CCL was referenced in the agreement, it was not a signatory to the document. Following the execution of the amended agreement, the Library began awarding contracts to various construction firms.

The Library broke ground on the project on September 27, 2002. The Library subsequently awarded a bid package to Shook, LLC (Shook), for the garage's construction. After TTE provided the structural design of the garage, the Library and Shook contracted for the garage construction, and Shook commenced work on March 17, 2003. Just prior to that date, WMP had issued a proposal request that required substantial modifications to the original drawings that TTE had prepared. Thus, TTE was requested to issue a new set of structural drawings. Among other things, WMP suggested that the concrete strength be increased and that an additional wall be installed.

In response, Shook provided estimates associated with the proposal. Initially, Shook's estimates totaled over $820,000, which required the approval from the Library's Board of Trustees. TTE represented to the Library that the changes set forth in the proposal were necessary to coordinate other bid packages, but Library personnel believed that the proposal was likely an effort to correct deficiencies in the structural design of the garage. However, the Library subsequently approved the proposal on May 28, 2003, and thereafter, Shook reduced its estimate to $518,515.

During the construction process, Shook prepared its own shop drawings, which were based on those of TTE. After the shop drawings were completed, Shook delivered them to the construction manager for the project, Turner Trotter Shiel-Sexton (TTSS), which ultimately submitted them to WMP. WMP then submitted the shop drawings to TTE for review. Following TTE's approval, Shook and the subcontractors followed the drawings and added steel reinforcements to the structural members of the garage.

During construction, Shook and its subcontractors received numerous inquiries regarding placement of the steel reinforcement beams. Those inquiries were submitted to TTE and stemmed from the lack of detail and/or clarity in the drawings. As construction progressed, significant problems developed with the rebar and concrete in the garage. In fact, after the completion of each concrete pour, numerous defects were discovered, including exposed steel reinforcement and voids in the beams and columns.

When CCL first visited the site on August 14, 2003, its personnel had not reviewed all of the shop drawings. Thereafter, WMP representatives informed Randy Schmidt and Dennis Bird of CCL that they should perform spot checks on the conventional reinforcing steel placement and focus their attention "on observing post tension tendons." CCL's Br. p. 4. At no time did CCL and the Library directly contract with each other. And, pursuant to the express terms of the WMP-CCL contracts, it was WMP's sole responsibility to provide CCL with all pertinent documents concerning the work that CCL was to observe, including shop drawings, plans and specifications, requests for information, and change orders. Although CCL is an engineering firm, it did not design any engineering works on the project. CCL neither prepared nor issued any engineering drawings, and no one from CCL affixed an engineering stamp to any of the construction or design documents.

Following the initial visit, CCL issued a Construction Observation Report, which described various deficiencies that related to the placement of the steel reinforcements. However, not all of the discrepancies were apparent or visible from the inspections. On August 18, 2003, Bird inspected the steel placement using the shop drawings that TTE had approved three days earlier. Later that afternoon, Bird received a revised set of shop drawings and used those when conducting a subsequent site visit.

On August 22, 2003, WMP and CCL entered into a second agreement, which provided that CCL was responsible for administering various services, including visiting the construction site, reviewing applicable shop drawings, determining if the construction was in general compliance with the construction documents, and preparing construction observation reports within one week of each site visit. Again, at no time did CCL perform engineering work on the project, and CCL always visited the site when directed to do so by...