Lake Superior v. Hammel, No. A05-800.

• Decision Date: 06 June 2006
• Docket Number: No. A05-800.,No. A05-1533.
• Citation: 715 N.W.2d 458
• Parties: LAKE SUPERIOR CENTER AUTHORITY, et al., Appellants, v. HAMMEL, GREEN & ABRAHAMSON, INC., defendant and third party plaintiff, Respondent, Rutherford & Chekene, a California corporation, defendant and third party plaintiff, Respondent, v. Melander, Melander & Schilling, Inc., et al., Third Party Defendants, and Rutherford & Chekene, a California corporation, Defendant and Fourth Party Plaintiff, v. Concrete Restorers, Inc., Fourth Party Defendant.
• Court: Minnesota Court of Appeals

Page 458

715 N.W.2d 458

LAKE SUPERIOR CENTER AUTHORITY, et al., Appellants, v. HAMMEL, GREEN & ABRAHAMSON, INC., defendant and third party plaintiff, Respondent, Rutherford & Chekene, a California corporation, defendant and third party plaintiff, Respondent, v. Melander, Melander & Schilling, Inc., et al., Third Party Defendants, and Rutherford & Chekene, a California corporation, Defendant and Fourth Party Plaintiff, v. Concrete Restorers, Inc., Fourth Party Defendant.

No. A05-800.

No. A05-1533.

Court of Appeals of Minnesota.

June 6, 2006.

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Stephanie A. Ball, Fryberger, Buchanan, Smith & Frederick, P.A., Duluth, MN, for appellants.

Donald G. Clapp, Clapp & Erickson, St. Paul, MN, for respondent Hammel, Green & Abrahamson.

Jeffrey W. Coleman, John A. Markert, Stephen F. Buterin, Coleman, Hull & Van Vliet, PLLP, Minneapolis, MN, for respondent Rutherford & Chekene.

William M. Hart, Michael D. Hutchens, Erica Gutmann Strohl, Meagher & Geer, P.L.L.P., Minneapolis, MN, for respondent Marcy Construction Company.

Considered and decided by KALITOWSKI, Presiding Judge; SHUMAKER, Judge; and MINGE, Judge.

OPINION

KALITOWSKI, Judge.

In this appeal following a trial regarding alleged defects in the design of a large exhibit tank in an aquarium, appellants contend that the district court erred by (1) denying their motion for new trial; (2) denying their motion for judgment notwithstanding the verdict; (3) denying their motion to amend the pleadings; and (4) awarding respondents excessive expert-witness fees. By notice of review, respondent architect argues that the district court erred by (1) failing to dismiss appellants' complaint for failure to timely serve an expert-review affidavit; (2) denying motions for summary judgment and directed verdict; (3) granting a partial stay of enforcement of the judgment of costs and disbursements; and (4) denying its request for daily transcript fees. Respondent tank designer also argues that the district court erred by denying the motion for summary judgment. We affirm the district court in all respects.

FACTS

Appellant Lake Superior Center Authority (Authority) is a public corporation formed by an act of the legislature in 1990. Appellant Lake Superior Center (Center) is a nonprofit corporation formed to develop and obtain funding for the Great Lakes Aquarium in Duluth, Minnesota. In June 1997, Authority and respondent Hammel, Green and Abrahamson, Inc. (HGA) entered into an architectural contract in which HGA agreed to provide lead architectural, design, and engineering services relating to the construction of the aquarium. HGA contracted with respondent Rutherford and Chekene, Inc. (R & C), a California design firm, to consult on the project and provide design services for the project's exhibit tanks.

Authority also contracted with the following parties: (1) Koosman Project Management Services (Koosman) to serve as the owner's agent; (2) Adolfson & Peterson, Inc./Johnson-Wilson Construction Management, Inc. (A & P/JW) to serve as construction manager on the project; (3) Marcy Construction Company (Marcy) to serve as the project's concrete contractor; and (4) Krech/Ojard and Associates, P.A. (K/O) to provide architectural and engineering inspection services on the project. Marcy contracted with Duluth Ready Mix (DRM) and Concrete Restorers (CR) to provide labor and materials. Center retained American Engineering and Testing, Inc. (AET) to provide two different services on the project, engineering inspection and concrete mix design. And HGA contracted with Melander, Melander and Schilling (MMS) to provide consulting services.

Construction began on the project in December 1998. In October 1999, the project encountered substantial problems with the concrete poured for the walls of the Isle Royal Tank, the largest exhibit tank in the aquarium. Repair of the defective walls required significant additional labor and expenditures, but the aquarium eventually opened on July 29, 2000.

In March 2001, Marcy brought an arbitration claim against Authority to recover expenses it incurred as a result of repair work on the Isle Royal Tank. Authority counterclaimed, alleging that Marcy owed it damages for inadequate and defective work. In January 2002, Marcy and Authority settled their claim by entering into a Pierringer agreement. Under the agreement, Authority tendered payment to Marcy and agreed to settle, release, and discharge its claims against Marcy. Authority also agreed to indemnify and hold Marcy harmless for any claims for contribution or indemnity made by others jointly liable with Marcy for damages.

On May 3, 2002, appellants filed a complaint against HGA asserting, among other things, claims of negligence, vicarious liability, and contribution and indemnity. Appellants argued that HGA was negligent in providing project design and specifications that led to defects in the Isle Royal Tank and was vicariously liable for the actions of its subconsultants. HGA also filed a third-party complaint against other parties involved in construction of the tank, including R & C, MMS, A & P/JW, Koosman, AET, and K/O.

On August 6, 2002, appellants served their affidavit certifying expert review. On August 9, 2002, appellants filed an application to waive and/or extend the time limits for certification of expert review under Minn.Stat. § 544.42. The district court held that the affidavit served on August 6 was timely. HGA moved to dismiss appellants' complaint for failure to abide by the time limits for certification of expert review, but the district court denied the motion. Both this court and the Minnesota Supreme Court denied HGA's subsequent petitions for review of the district court's denial of the motion to dismiss.

In spring of 2003, R & C and HGA moved for summary judgment, asserting that the statute of limitations set out in Minn.Stat. § 541.051 barred appellants' claims. The district court denied the motion for summary judgment.

In October 2003, appellants amended their complaint to add R & C as a defendant, arguing that R & C was also liable due to its inadequate and defective project specifications. R & C denied the claims and brought counterclaims, cross-claims against HGA, and third-party claims against Marcy, DRM, K/O, AET, A & P/JW, and CR.

In April 2004, HGA and R & C entered into a settlement, defense, and indemnity agreement. Under the settlement, HGA agreed to release its claims against R & C and to hold R & C harmless to the extent of HGA's insurance policy. The agreement stated that it was a Pierringer release as approved and interpreted by Pierringer v. Hoger, 21 Wis.2d 182, 124 N.W.2d 106 (1963), and Frey v. Snelgrove, 269 N.W.2d 918 (Minn.1978).

By May 2004, HGA and R & C had both asserted claims against Marcy. Marcy moved for summary judgment based on its settlement with Authority. The district court granted Marcy's motion, dismissing HGA's and R & C's claims against Marcy because appellants had an obligation to indemnify Marcy under their settlement. On May 13, 2004, HGA and R & C jointly made a rule 68 offer of settlement to appellants for $1,000,000, which was rejected by appellants.

During July and August of 2004, HGA entered into settlement agreements with K/O, AET, and A & P/JW and moved to dismiss its claims against the settling parties. The district court dismissed the settling parties with prejudice, stating that the dismissal did not preclude appellants from asserting any claims against the dismissed parties, subject to applicable rules of law and procedure.

The trial began with voir dire on August 31, 2004, and lasted almost two months. At the close of appellants' case, the remaining defendants, HGA, R & C, and third-party defendant MMS, moved for directed verdict. The court granted the motion regarding MMS and denied it regarding HGA and R & C.

The jury returned its special verdict on October 23, 2004. The jury found that (1) respondents HGA and R & C were not negligent; (2) K/O, A & P/JW, AET as concrete-mix designer, and CR were not negligent; (3) Marcy and AET, as special inspector, were negligent, and fault was apportioned 75% and 25%, respectively; (4) appellants and Koosman were negligent but their negligence was not a direct cause of the tank defects; and (5) $270,000 could reasonably repair the defects on the tank. The jury also found that appellants discovered or should have reasonably discovered their injury due to the defective and unsafe condition of the tank on or before May 1, 2000. The district court dismissed HGA and R & C based on the jury's special verdict and found both of them entitled to costs and disbursements. The court also dismissed DRM and CR.

The next day, appellants moved to amend the pleadings in accordance with Minn. R. Civ. P. 14.01, 15.02. The motion sought to add various third-party defendants as direct defendants. Additionally, appellants asked the court to determine that certain parties were liable in indemnity. In December 2004, appellants moved for judgment notwithstanding the verdict (JNOV) or, in the alternative, a new trial. On February 22, 2005, the district court issued orders denying appellants' motions for amendment and indemnity, JNOV, and a new trial.

In March 2005, HGA and R & C submitted to the court their applications for costs and disbursements. Appellants objected to taxation of costs and disbursements against them generally and raised specific objections to many of respondents' itemized costs. In April 2005, appellants also moved to stay enforcement or execution of any monetary judgment in favor of HGA and R & C during appellate proceedings.

After a hearing, the court issued its order as to costs and disbursements and appellants' motion for a stay on June 7, 2005. The district court reduced or denied parts of HGA's and R &...