Phenix-Georgetown v. Chas. H. Tompkins Co.

• Decision Date: 15 May 1984
• Docket Number: No. 83-599.,83-599.
• Citation: 477 A.2d 215
• Parties: PHENIX-GEORGETOWN, INC., Appellant, v. CHAS. H. TOMPKINS CO., Appellee.
• Court: D.C. Court of Appeals

477 A.2d 215

PHENIX-GEORGETOWN, INC., Appellant, v. CHAS. H. TOMPKINS CO., Appellee.

No. 83-599.

District of Columbia Court of Appeals.

Argued January 31, 1984.

Decided May 15, 1984.

COPYRIGHT MATERIAL OMITTED

Ronald G. Precup, Washington, D.C., with whom Lucien Hilmer, Washington, D.C., was on the brief for appellant.

Jack Rephan, Washington, D.C., with whom Joanne Dekker, Washington, D.C., was on the brief for appellee.

Before FERREN, TERRY and ROGERS, Associate Judges.

ROGERS, Associate Judge:

Phenix-Georgetown, Inc. (Phenix) appeals the granting of summary judgment in favor of Chas. H. Tompkins, Inc. (Tompkins) on Phenix's third-party complaint against Tompkins seeking breach of contract damages for losses suffered by Phenix, as lessor, when it was sued by its tenant, Weissbard & Fields, P.C. (Weissbard). Weissbard sued Phenix to recover damages for breach of lease conditions, particularly Phenix's failure to provide adequate air conditioning, and constructive eviction. Phenix asserts on appeal that there are genuine issues of material fact outstanding between itself and Tompkins which render summary judgment inappropriate. Tompkins replies that there are no such issues and that as a matter of law Phenix is not entitled to any such damages. After review of the record, we reverse and remand.

I.

The record indicates Phenix entered into a contract with Tompkins in 1977 for its services as construction manager to oversee the construction of a mixed-use real estate complex called Prospect Place on property owned by Phenix in the District of Columbia. The contract¹ required Tompkins to "supervise and direct the work using his best skill and attention", to be "solely responsible for all construction means, methods, techniques, sequences and procedures and for coordinating all portions of the work under the contract", and to warrant that "all work will be of good quality, free from faults and defects and in conformance with the contract documents" (General Conditions 4.3.1 and 4.5.1). Tompkins hired R.E. Anderson Co. (Anderson) to install the air conditioning system. Under the contract, Tompkins was responsible to the owner (Phenix) for acts and omissions of all persons performing under the contract and for inspecting all of Anderson's work to guard the owner against defects (General Condition 4.10 and AGC Article 2.1.13).

Weissbard, a law firm, rented office space on the third floor at Prospect Place for a five-year term, and took possession after issuance of a certificate of occupancy on October 12, 1979. On the same date Phenix conditionally accepted the mechanical equipment, including the air conditioning system, installed by Anderson. In a letter to Tompkins, Phenix acknowledged its responsibility from that date on for servicing the equipment, but noted that its acceptance was subject to completion of the contract, final inspection,² start-up³ and submission of a "punchlist."⁴ On January 25, 1980, Tompkins and the owner's architect, Metcalf Associates (Metcalf), certified the Prospect Place project as being substantially complete in accordance with the contract;⁵ the certificate provided that an attached list of incomplete or unsatisfactory items did not alter Tompkins' responsibility to complete all work in accordance with the contract.

During the first summer of its tenancy, Weissbard complained to Phenix about inadequate air conditioning.⁶ The Prospect Place property manager, Begg, Inc. (Begg), also advised Phenix, by letter of August 13, 1980, about an air conditioning problem in an office and on the third floor of the office building and asked what course of action Phenix wished to pursue.⁷ Phenix forwarded Begg's letter to the architect, Metcalf, with a cover letter, dated August 19, 1980, asking whether the air conditioning problem should be corrected by Tompkins, Anderson, or Williard, Inc., the maintenance contractor. Phenix's letter stated the problems arose from either improper equipment installation or malfunction, and copies (enclosing Begg's August 13 letter) were sent to Tompkins and Anderson.⁸ On August 29, 1980, Tompkins received a letter from Anderson acknowledging receipt of Begg's August 13 letter and informing Tompkins that Anderson would check the air conditioning complaint.⁹

At approximately the same time, the architect's mechanical engineer indicated that corrections were required in the balancing of the system. Metcalf's mechanical engineer, Glassman-LeReche (Glassman), had designed the system and Anderson's subcontractor, Comfort Control, Inc., had balanced it and submitted a report to Glassman for approval in May 1980. On August 28, 1980, Metcalf notified Tompkins that Glassman had disapproved Comfort Control's balance report, and Tompkins instructed Anderson, on September 3, 1980, to review the report and take "immediate appropriate corrective action."¹⁰ Accordingly, Anderson notified Comfort Control, which thereafter made several adjustments to the air conditioning system.¹¹ Tompkins asserts it heard nothing further about the air conditioning system until it was served with Phenix's third party complaint on September 3, 1982.¹²

Tompkins received final payment of the contract price from Phenix on October 23, 1980.¹³ On November 25, Tompkins received from the architect, Metcalf, a "punchlist" of corrections to be made under the equipment warranty; corrections were noted above the heating and air cut-off systems, but none related to air conditioning problems in the office complex.

Shortly after Weissbard sued Phenix for breach of lease conditions and constructive eviction,¹⁴ Phenix retained an engineering firm to investigate Weissbard's complaint. On July 26, 1982, Philip Derrig, director of engineering at W.R. Wehrs & Associates, Inc., inspected the mechanical system design and installation at Prospect Place and found that the air ducts had been improperly installed. He concluded that "improper installation of those ducts was one of the main causes of the inadequate air conditioning." (Affidavit of Philip Derrig). Phenix claimed this was its first notice, except for "punch-list" items, that the mechanical system had been improperly installed. (Affidavit of Charles Greenwald, President of Phenix). Derrig's subsequent inspection revealed similar problems with the air ducts throughout the third floor of the office building. He concluded that repair would require breaking through the ceiling and, after reviewing Comfort Control's balance report (which had been disapproved by Glassman), that the readings in the report could not have been actual readings due to the improper installation. Phenix thereafter sued Tompkins to recover any damages it might have to pay to Weissbard on the grounds that Tompkins had breached its contract with Phenix, resulting in faulty workmanship on the project.

In response to Phenix's third party complaint, Tompkins filed a motion to dismiss or alternatively for summary judgment.¹⁵ The motion to dismiss for failure to state a claim upon which relief could be granted, Super.Ct.Civ.R. 12(b)(6), asserted that (1) Phenix's third party complaint was fatally defective under Super.Ct.Civ.R. 14 because it did not allege a direct line of liability between Phenix and Tompkins which was independent of that between Phenix and Weissbard;¹⁶ (2) Phenix's alleged damages were consequential damages not foreseeable by Tompkins and thus not recoverable by Phenix; and (3) Phenix did not have a cause of action for indemnity under the terms of the contract. Tompkins' motion for summary judgment, Super.Ct.Civ.R. 56; asserted that there was no genuine issue of material fact and that Tompkins was therefore entitled to judgment because (1) Phenix, by accepting the work and making final payment, waived any defects in construction; and (2) Tompkins never received timely written notice of faulty or defective work as required by the contract.¹⁷ Phenix opposed the motion, alleging that among the genuine issues were: (1) whether the defect in the air conditioning was latent, and thus not waived by final payment to Tompkins for the project; and (2) whether Phenix knew or should have known of the defect when its mechanical design engineer (Glassman) rejected the balance report and subsequent corrective work was performed by Tompkins' sub-subcontractor (Comfort Control).¹⁸ The motions judge requested, on January 31, 1983, supplemental memoranda on the issue of Phenix's right to indemnity, and on May 2, 1983, Tompkins' motion for summary judgment was granted; the court did not specify the grounds for granting the motion for summary judgment and did not rule on the Rule 12(b)(6) motion. It is from this order that Phenix appeals.

II.

Summary judgment is properly granted only when the pleadings and other materials on file demonstrate that no genuine issue of material fact remains for trial, and that the movant is entitled to judgment as a matter of law. McCoy v. Quadrangle Development Corp., 470 A.2d 1256 (D.C. 1983); Burch v. Amsterdam Corp., 366 A.2d 1079, 1083-84 (D.C.1976).¹⁹ To be successful, the moving party has the burden of demonstrating the absence of any material factual issue. Nader v. de Toledano, 408 A.2d 31, 42 (D.C.1979) ("If evidence would permit the factfinder to hold for the non-moving party under the appropriate burden of proof [which varies with the nature of the civil action being litigated], the motion for summary judgment should be denied."). The party opposing the motion need only show that there is sufficient evidence supporting the claimed factual issue to require a jury to resolve the parties' differing versions of the truth. Franklin Investment Co., Inc. v. Huffman, 393 A.2d 119, 122 (D.C.1978). On review of summary judgment the appellate court makes an independent review of the record, and its standard of review is the same as that of the trial court in initially considering the motion. Holland v. Hannan, 456 A.2d 807, 814-15 (D.C.1983).²⁰ Further, ...