Nat'l Labor Coll., Inc. v. Hillier Group Architecture N.J., Inc.

• Decision Date: 14 September 2010
• Docket Number: Civil Action No. DKC 09-1954
• Citation: 739 F.Supp.2d 821
• Parties: NATIONAL LABOR COLLEGE, INC. v. The HILLIER GROUP ARCHITECTURE NEW JERSEY, INC., et al.
• Court: U.S. District Court — District of Maryland

739 F.Supp.2d 821

NATIONAL LABOR COLLEGE, INC.

v.The HILLIER GROUP ARCHITECTURE NEW JERSEY, INC., et al.

Civil Action No. DKC 09-1954.

United States District Court, D. Maryland.

Sept. 14, 2010.

Herman Martin Braude, Scott C. Hofer, Braude and Margulies P.C., Washington, DC, for National Labor College, Inc.

Patrick James Attridge, King and Attridge, Rockville, MD, Joseph Mitchell Gesker, Jr., Lee & McShane, P.C., Washington, DC, for The Hillier Group Architecture New Jersey, Inc., et al.

MEMORANDUM OPINION

DEBORAH K. CHASANOW, District Judge.

Two motions to dismiss are pending and ready for resolution in this breach of contract case. The issues are fully briefed and the court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons that follow, Defendant Hillier's motion to dismiss will be granted in part and denied in part and Defendant Tolk's motion to dismiss will be granted.

I. Background

This case involves the planning and construction of a new building at the National Labor College in Silver Spring, Maryland. Plaintiff, the National Labor College, hired Defendant Hillier Group Architecture New Jersey, Inc. and RMJM, Inc. (collectively "Hillier") to create initial architectural and engineering designs and secure permits for a new building. Defendant TOLK, Inc. ("Tolk") served as a sub-consultant. Plaintiff alleges in its complaint that Defendants breached their contracts and didnot meet applicable professional standards. Defendants counter that they met all required standards and did not breach any contract. Both have now moved to dismiss. (Papers 13 and 14).

A. Factual Background

Plaintiff and Hillier entered into a written contract ("Agreement" at Paper 1, Attach. 1) on August 30, 2003. (Paper 1 ¶ 8). The Agreement concerned a new building to be known as the Lane Kirkland Center ("LKC"), which was to be a two-story multipurpose building. It would contain classroom facilities, kitchen and dining facilities, conference rooms, and retail areas for use by the faculty, students and public. ( Id. ¶ 6).

The Agreement is an American Institute of Architects Form B141 Standard Owner-Architect Agreement (1987 Edition) with several modifications, including a heightened standard of care. ( Id. ¶ 9). In addition to specifying the applicable standard of care, the Agreement required Hillier to assume a number of duties. Hillier and Plaintiff agreed that the budget for the completed building would be $13,000,000.00. ( Id. ¶ 10).

Also in 2003, Hillier contracted with Tolk for the mechanical, electrical, and plumbing ("MEP") design of the LKC. ( Id. ¶ 14). As Hillier's sub-consultant, Tolk was required to provide the MEP drawings and specifications that would be included in the architecture and engineering documents ("A/E Documents"). ( Id. ¶ 15).

In January 2004, Hillier delivered a "permit set" of documents to Montgomery County for permit approvals. (Paper 1 ¶ 17). A month later, Plaintiff submitted the plans for a "peer review" by other architectural firms in the D.C. area; the reviewers found a number of problems with the Hillier design and Tolk's MEP design. ( Id. ¶ 18). Comments by the reviewers were given to Hillier and Tolk, who made changes to the plans to address some of the concerns. ( Id. ¶ 19). In mid-April 2004, Hillier informed Plaintiff that it had adequately responded to the peer comments, that the A/E documents were ready for prospective contractors to scope and bid on, and that a four-week bidding period would be adequate. ( Id. ¶ 20). Hillier also told Plaintiff that bidding and award could be completed by the beginning of June, which would allow the LKC to be finished by Labor Day 2005 (15 months later). ( Id.). Relying on Defendant Hillier's assertions, Plaintiff submitted the A/E Documents for bidding by general contractors over the objections of the construction manager for the LKC project. ( Id. ¶ 21). Plaintiff received initial bids in late May 2004, but all bids significantly exceeded Plaintiff's target budget of $13 million. ( Id. ¶ 22).

Because the bids all exceeded the target budget, Plaintiff entered into negotiations during the summer with several contractors. ( Id. ¶ 23). Ultimately, Plaintiff awarded the contract to build the LKC to Grunley Walsh U.S., LLC ("Grunley Walsh") for a base contract price of $17.4 million. ( Id.). According to the terms of that contract, the LKC was to be substantially complete within 450 days of the Notice to Proceed with construction, which was issued on September 14, 2004. ( Id. ¶¶ 24-25). Thus, under the contract's schedule, Grunley Walsh should have completed the LKC no later than December 8, 2005. ( Id. ¶ 25).

Unfortunately, "numerous delays" and "inefficiencies" ensued after Plaintiff told Grunley Walsh to proceed. In the end, Grunley Walsh did not complete the project until October 2006, about ten months after the date by which it was supposed to be "substantially complete." ( Id. ¶¶ 26, 32).

Plaintiff catalogs a series of design defects and problems that occurred during construction. These problems included an incomplete set of A/E Documents, documents that were insufficiently detailed, and long response times from Hillier. ( Id. ¶¶ 29, 31, 37). The incomplete A/E Documents led to a number of Requests for Information ("RFIs") from the construction contractors during construction. ( Id. ¶ 29). For instance, the A/E Documents failed to "provide detail adequate for the timely and complete preparation of shop drawings by [Grunley Walsh] and its subcontractors" and in "numerous instances, the A/E Documents were in conflict with each other" or "contained incorrect specifications of equipment and/or materials to be used." ( Id. ¶ 31).

The A/E Documents also failed to comply with all government codes, delaying the issuance of necessary building permits. ( Id. ¶ 30-31). Local inspection authorities required substantial corrective work to the A/E Documents and additional work by contractors before they would issue permits to the LKC. ( Id. ¶ 35). Because of various deficiencies discovered during construction, Hillier's design team needed to issue over 300 additional sketches. ( Id. ¶ 45).

Plaintiff alleges that Hillier and Tolk made matters worse by their failure to address design issues as they arose in an adequate and timely fashion. According to Plaintiff, Hillier and Tolk were both "tardy in responding to RFIs submitted by the [Defendants] inadequately addressed issues that arose." ( Id. ¶ 37). Hillier also closed its D.C. office during the construction, and two of the "Project Architects" left the firm. ( Id. ¶¶ 39 & 40). The new Project Architect was based in New Jersey and was not a licensed architect in Maryland. ( Id. ¶ 41).

B. Procedural Background

Plaintiff filed its complaint on July 27, 2009. (Paper 1). It alleges five counts: (I) negligence against Hillier; (II) negligence against Tolk; (III) breach of contract against Hillier; (IV) breach of contract against Tolk (under a third party beneficiary theory); and (V) common law indemnification against Hillier. After the court granted them an extension of time, both Defendants submitted separate motions to dismiss on September 8, 2009. (Papers 13 & 14). The motions are now fully briefed.

II. Standard of Review

The purpose of a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) is to test the sufficiency of the plaintiff's complaint. See Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir.1999). Except in certain specified cases, a plaintiff's complaint need only satisfy the "simplified pleading standard" of Rule 8(a), Swierkiewicz v. Sorema N.A., 534 U.S. 506, 513, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Nevertheless, "Rule 8(a)(2) still requires a 'showing,' rather than a blanket assertion, of entitlement to relief." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 n. 3, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). That showing must consist of more than "a formulaic recitation of the elements of a cause of action" or "naked assertion [s] devoid of further factual enhancement." Ashcroft v. Iqbal, ---U.S. ----, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (internal citations omitted).

At this stage, the court must consider all well-pled allegations in a complaint as true, Albright v. Oliver, 510 U.S. 266, 268, 114 S.Ct. 807, 127 L.Ed.2d 114 (1994), and must construe all factual allegations in thelight most favorable to the plaintiff. See Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir.1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir.1993)). The court need not accept unsupported legal allegations, Revene v. Charles Cnty. Comm'rs, 882 F.2d 870, 873 (4th Cir.1989), legal conclusions couched as factual allegations, Iqbal, 129 S.Ct. at 1950, or conclusory factual allegations devoid of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir.1979); see also Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir.2009). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged, but it has not 'show[n] ... that the pleader is entitled to relief.' " Iqbal, 129 S.Ct. at 1950 (quoting Fed. R. Civ. P. 8(a)(2)). Thus, "[d]etermining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.

III. Hillier's Motion to Dismiss

Plaintiff has brought separate claims against Hillier for negligence and breach of contract, although the basis for each is substantially the same. As long ago as 1969, courts have recognized the significant overlap between the causes of action in professional malpractice cases:

It would appear that in recent years the trend has been for courts, in applying

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