Notre Dame v. Morabito, 327

Decision Date09 March 2000
Docket NumberNo. 327,327
Citation752 A.2d 265,132 Md. App. 158
PartiesCOLLEGE OF NOTRE DAME OF MARYLAND, INC. v. MORABITO CONSULTANTS, INC., et al.
CourtCourt of Special Appeals of Maryland

James D. Skeen (James W. Constable and Wright, Constable & Skeen, LLP, on the brief), Baltimore, for appellant.

John A. King (Kenneth D. Smith and King & Attridge, on the brief), Rockville, for appellees.

Argued before EYLER, SONNER and ROBERT L. KARWACKI (Ret., specially assigned), JJ. EYLER, Judge.

The issue in this case, one of first impression, is whether a provision in a contract is valid that purports to state when a cause of action accrues for breach, and if so, whether it can be used as a defense by a party to the contract in a suit by a nonparty to that contract. More specifically, the owner of a building contracted with an architect to perform design services and the architect contracted with a structural engineer to perform the structural engineering portion of the design services. Both contracts contained the accrual provision. The owner sued the structural engineer.

Factual Background

The College of Notre Dame of Maryland, Inc., appellant, owns and operates a college located at 4701 North Charles Street in Baltimore City. The main administration building on campus is Gibbons Hall. Appellant decided to renovate Gibbons Hall, which included the conversion of space on the fifth floor from residential use to office and classroom use.

Appellant retained the architectural firm of Brown, Worrall & Johnson, Inc., to provide architectural services. The contract entered into between appellant and the architect was a standard American Institute of Architects (AIA) document, designated B141 (1987 ed.). The contract was dated December 12, 1989, and was signed on January 25, 1990. The contract included "normal structural, mechanical, and electrical engineering services."

On September 22, 1989, Morabito Consultants, Inc., a structural engineering firm and an appellee herein, submitted a proposal to the architect for "professional consulting structural engineering services for the structural review of Gibbons Hall." The proposal was based on an hourly fee with the total not to exceed $2,000. The proposal indicated that, following a review of the building, appellee would submit a structural analysis, which would outline any necessary repairs for the building to safely support "all superimposed live and dead loads as required by the BOCA 1987 building code." The proposal was not signed by the architect.

Morabito Consultants, Inc. proceeded with its review, however, and submitted a report dated October 26, 1989, in which it stated that the building was structurally sound. In pertinent part, in a section labeled "Fifth Floor & Attic Framing," Morabito Consultants, Inc. stated that the trusses did not need structural repair but recommended that, during the renovation of the building, it review the condition of the bottom cord of the trusses. In its report, Morabito Consultants, Inc. concluded that the building was structurally sound and capable of supporting all superimposed live and dead loads as required by the applicable building code.

At the architect's request, Morabito Consultants, Inc. visited the project on May 24, 1990, "in order to review the existing structure to assess what effect the proposed alterations have on this facility...." In the report dated May 25, 1990, relating to that visit, there was no mention of the trusses.

On September 18, 1990, the architect and Morabito Consultants, Inc. executed an agreement dated September 10 for consulting structural engineering services for the proposed renovations at Gibbons Hall. The agreement provided for a lump sum fee of $2,000 and any additional services to be provided at an hourly rate. It provided that the engineering services would meet the design requirements contained in the contract between appellant and the architect. It also specified that certain articles contained in AIA document C141, architect-consultant agreement, sixth edition, 1987, were incorporated into the contract between the architect and Morabito Consultants, Inc., including article 9.3.

Article 9.3 in the contract between appellant and the architect (Form B141) and in the contract between the architect and Morabito Consultants, Inc. are identical. Article 9.3 provides:

Causes of action between the parties to this Agreement pertaining to acts or failures to act shall be deemed to have accrued and the applicable statutes of limitations shall commence to run not later than either the date of Substantial Completion for acts or failures to act occurring prior to Substantial Completion, or the date of issuance of the final Certificate for Payment for acts or failures to act occurring after Substantial Completion.

On March 26, 1991, Morabito Consultants, Inc. inspected the building and, in a letter dated April 3, 1991 directed to appellant, stated that the building was structurally sound. At that time, some of the walls and ceilings had been removed. The report stated that "a visual review" was performed but that "the majority of the building structure is still covered by ceilings and walls." In pertinent part, the report indicated that no structural modifications needed to be made to the trusses. It also recommended that a representative of appellant climb into the truss space and visually inspect all of the trusses for pipe penetrations through the individual truss members and to notify appellee if any such conditions were found.

In 1997, on a routine inspection of the building, appellant found significant movement "internal to the building" on the fifth floor. It retained Whitney, Bailey, Cox & Magnani, consulting engineers, to inspect the building. That firm did so and concluded that the design team for the renovation, which included Morabito Consultants, Inc., had failed to calculate properly the increase in live loads associated with the change in occupancy of the building. As a result of the increase in loads, the truss system was overstressed.

On December 9, 1998, appellant filed a complaint in the Circuit Court for Baltimore City against Morabito Consultants, Inc. and Frank T. Morabito, a professional engineer associated with the firm, appellees. Appellant sued in negligence and breach of contract and alleged that appellees were hired to perform a structural analysis but failed to advise of problems, specifically, problems with the trusses. Appellants sought damages for the cost of repairs to the extent that they exceeded the amount that would have been expended had the problem been disclosed by appellees in April 1991. Appellees filed a motion to dismiss the complaint on the ground that article 9.3 in the January 25, 1990 contract between appellant and the architect, incorporated in the contract between the architect and Morabito Consultants, Inc., was applicable and required the action to be filed within three years after substantial completion of construction. Consequently, according to appellees, the action was time-barred. Appellant opposed the motion and filed affidavits in support of its opposition. As a result, the circuit court treated the motion as a motion for summary judgment and, on March 3, 1999, granted it. Appellant filed a motion for reconsideration, which was denied, and then noted an appeal to this Court. The question before us is whether the circuit court erred in granting summary judgment in favor of appellees.

Appellant makes two arguments. First, appellant contends that a genuine issue of material fact exists as to whether the services rendered on March 26, 1991, as distinguished from the services rendered prior to that time, were in fulfillment of the obligations contained in the contract between appellant and the architect. Appellant's position is that it contracted directly with appellees for the March 26, 1991 services, and the standard form of agreement between appellant and the architect had no application to those services. Additionally, with respect to Mr. Morabito individually, appellant argues that he was sued for services personally rendered by him, and he was not a party to the contract between the architect and Morabito Consultants, Inc. Thus, according to appellant, the contract could not apply to services rendered by him.

Second, appellant asserts that if the services were rendered in fulfillment of the contractual obligations of the architect to appellant, article 9.3 should not be enforced because it is ambiguous or not sufficiently clear and definite to warrant taking away a fundamental right of appellant. Appellant acknowledges that the project was substantially completed by the end of 1991 and that this action was filed too late and is barred unless the discovery rule applies. Because article 9.3 effectively eviscerates the discovery rule, according to appellant, a clear statement of intention is required. Appellant points to the language in (1) article 9.3 that refers to "causes of action between the parties to this agreement" and does not expressly refer to consultants; (2) article 9.5 that prohibits assignment of the agreement without the written consent of the other party; and (3) article 9.7 that states the agreement represents the entire and integrated agreement between the parties.

Standard of Review

Maryland Rule 2-501(a) provides that "[a]ny party may file at any time a motion for summary judgment on all or part of an action on the ground that there is no genuine dispute as to any material fact and that the party is entitled to judgment as a matter of law." Thus, "[i]n order to grant summary judgment, the trial court must determine that no genuine dispute exists as to any material fact, and that one party is entitled to judgment as a matter of law." Crews v. Hollenbach, 126 Md.App. 609, 624, 730 A.2d 742, cert. granted, 356 Md. 16, 736 A.2d 1064 (1999); Green v. Brooks, 125 Md.App. 349, 365, 725 A.2d 596 (1999); Chicago...

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