Penta Corporation v. Town of Newport, 042318 NHSUP, 212-2015-CV-00011

Docket Nº:212-2015-CV-00011
Party Name:Penta Corporation v. Town of Newport v. AECOM Technical Services, Inc. Third Party Defendant v. WesTech Engineering, Inc. Third Party Defendant
Case Date:April 23, 2018
Court:Superior Court of New Hampshire

Penta Corporation


Town of Newport


AECOM Technical Services, Inc. Third Party Defendant


WesTech Engineering, Inc. Third Party Defendant

No. 212-2015-CV-00011

Superior Court of New Hampshire, Merrimack

April 23, 2018




This case arises out of upgrades to a wastewater treatment facility ("WWTF") in Newport, New Hampshire. The Town of Newport ("Town") found it necessary to upgrade its WWTF to comply with certain regulatory requirements. The Town engaged AECOM Technical Services, Inc. ("AECOM") to design an upgrade the WWTF. The Town hired the Plaintiff, Penta Corporation ("Penta"), to construct the system. Penta purchased equipment from WesTech Engineering ("WesTech"), a subcontractor which manufactured the disc filters that were required to treat the wastewater in the upgraded WWTF. The WWTF was never able to meet the Town's requirements and it was declared a total loss in 2015.

This litigation began when Penta filed a Complaint against the Town for breach of contract based upon the Town's refusal to pay Penta, the general contractor, for building the WWTF. The Town brought a Counterclaim against Penta and a Third-Party Complaint against AECOM, the engineer that designed the WWTF, alleging in substance that the filter system for the WWTF was improperly designed and built. In turn, AECOM brought a Third-Party Complaint against WesTech. Penta filed a Cross-claim against AECOM, and AECOM brought a Counterclaim against the Town and a Cross-claim against Penta.

The case has been vigorously litigated. Motions, sometimes based upon tort claims which do not exist, or strained readings of the straightforward contract documents, have fallen into the Court's file like autumn leaves. For the reasons stated in this Order, Penta's Motion for Summary Judgment as to Count II of the Town's Amended Counterclaim is GRANTED. Penta's Motion for Summary Judgment as to Count II of AECOM's Counterclaim is GRANTED. WesTech's Motion for Summary Judgment as to Cross-claims of the Town against WesTech is GRANTED. The Town's Motion for Summary Judgment on Counts I-IV of WesTech's Counterclaim is GRANTED. WesTech's Motion to Dismiss Third-Party Claims of AECOM against WesTech is GRANTED. WesTech's Motion for Summary Judgment as to Third-Party Claims of AECOM against WesTech is DENIED as moot.


Undisputed Facts

The parties have filed a number of summary judgment motions. To prevail on a Motion for Summary Judgment, the moving party must "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." RSA 491:8-a, III. In order to defeat summary judgment, the non-moving party "must put forth contradictory evidence under oath, 'sufficient . . . to indicate that a genuine issue of fact exists so that the party should have an opportunity to prove the fact at trial.'" Phillips v. Verax Corp., 138 N.H. 240, 243 (1994) (quotation omitted). A fact is material if it affects the outcome of the case under the applicable substantive law. Palmer v. Nan King Rest., Inc., 147 N.H. 681, 683 (2002). In considering a party's motion for summary judgment, the Court considers the evidence, and all inferences properly drawn from it, in the light most favorable to the nonmoving party. Sintros v. Hamon, 148 N.H. 478, 480 (2002).

The following facts do not appear to be in dispute.[1] In 2007, the United States Environmental Protection Agency ("EPA") issued National Pollutant Discharge Elimination Permits No. NH 0100200 ("NPDES Permit") to the Town. The NPDES Permit allowed the Town to discharge wastewater subject to certain effluent limitations, including limits on the discharge of phosphorus. In March 2009, the EPA issued an Administrative Order ("AO") which reflected the EPA's conclusion that the WWTF was discharging wastewater into the Sugar River in violation of the limits contained in the NPDES Permit on the discharge of phosphorous. (Decl. of Cori Palmer in Opp'n to Penta's Mot. Summ. J., Ex. 1.) The Town was ordered to submit a report identifying how it would upgrade and modify the WWTF to bring it into compliance with the effluent requirements of the NPDES Permit by December 31, 2009, and to bring the WWTF into compliance with the NPDES Permit by October 31, 2012. (Id.)

In order to comply with the EPA's AO, in August 2009, the Town entered into an Engineering Report Phase Contract with AECOM ("the Study Contract"). (Tab 3.) The purpose of the Study Contract was to provide "an evaluation of alternatives and a recommendation for the upgrade of the WWTF necessary for the purpose of complying with the phosphorous limits contained in the . . . NPDES Permit." (Id.) During 2009 and 2010, AECOM worked closely with two companies, I. Kruger, Inc. ("Kruger") and Inflicto Degremont DesnaDeg ("Inflicto") in order to develop and test two phosphorus-reducing treatment alternatives: (1) coagulation followed by direct filtration and (2) ballasted sedimentation process. (See Tab 6.) AECOM commissioned Kruger, a manufacturer of wastewater treatment equipment, to conduct a pilot test of the direct filtration treatment process, which took place in November 2009. (See Tab 4.)

In January 2010, Kruger produced a report for AECOM entitled "Hydrotech Discfilter Pilot Study Report ("Pilot Study"). (Id.) The Pilot Study included a disc filter process description, pilot unit specifications, coagulant and polymer chemical data and the pilot testing protocol. (Id. at 1-6.) Kruger concluded that "the Hydrotech Discfilter would be a viable fit for the Newport WWTF capable of removing total phosphorous down below 0.35 mg/L." (Id. at E-1.) Around this same time, Kruger also submitted a disc filter system proposal to provide all necessary equipment for the filtration system ("First Kruger Proposal"). (Tab 5.) After reviewing the Pilot Study and another report from Inflicto, AECOM submitted to the Town an "Evaluation of Phosphorous Removal Alternatives" ("Evaluation") in January 2010. (Tab 6.) AECOM concluded the disc filters and process proposed by Kruger was more cost effective than alternatives. (Id.)

AECOM and the Town continued to discuss the scope of services that AECOM would provide through the remainder of the design process into the construction phase of the Project. On January 14, 2011, Dennis Setzko of AECOM wrote to the Town and stated, in relevant part, "AECOM will provide the means and design a system that will provide for the Town and the contractor to allow continuous unaffected operation of the [WWTF] and to meet the requirements of permits issued, " and that AECOM will, during design, specify the equipment and identify the responsibilities of the contractor. (Id.)

In May 2011, the Town entered into a Preliminary Engineering Design Phase Contract for Professional Services for Treatment Works ("Preliminary Design Contract"), which called for AECOM to advance the design of phosphorous removal upgrades to the WWTF to comply with the AO issued by the EPA. (Tab 9.) Following execution of the Preliminary Design Contract, AECOM continued to solicit and rely on input from Kruger. On July 13, 2011, Kruger provided AECOM with a revised disc filter system proposal ("Second Kruger Proposal"). (Tab 10.) There were a number of differences between the First Kruger Proposal and the Second Kruger Proposal.

AECOM responded to the Second Kruger Proposal with a series of questions, posed by AECOM and answered by Kruger on July 20, 2013. (Tab 11.) An email exchange between Mark Stewart, a project manager for Kruger, and Timothy Wassell, a representative of AECOM, referenced the continued collaboration between Kruger and AECOM. (Tab 11.) The final project specifications mirrored the specifications contained in the Second Kruger Proposal in virtually all respects. (See Tab 10; Tab 24.) On August 3, 2011, Kruger submitted another revised proposal ("Third Kruger Proposal"), which was identical to the Second Kruger Proposal with the exception of the date and the price; the "proposed disc filter system" was identical. (Tab 11; Tab 12.)

On September 9, 2011, AECOM and the Town executed a Final Engineering Design Phase Contract for Professional Services for Treatment Works ("Final Design Contract"). (Tab 13.) The Final Design Contract calls for AECOM to: [P]roceed with all engineering, calculations, and other work as required and necessary to meet [the Town's] obligation under its NPDES Permit . . . and to develop and produce final plans, specifications, and associated contract documents involved in the construction of treatment works for [the Project].

(Id. at 2.) AECOM continued to communicate with Kruger about the Project through the fall of 2011. On October 8, 2011, AECOM informed Kruger it was moving into final...

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