Skanska USA Bldg., Inc. v. J.D. Long Masonry, Inc.

• Decision Date: 24 July 2019
• Docket Number: Civil Case No. SAG-16-933
• Parties: SKANSKA USA BUILDING, INC., Plaintiff, v. J.D. LONG MASONRY, INC., Defendant.
• Court: U.S. District Court — District of Maryland

SKANSKA USA BUILDING, INC., Plaintiff, v. J.D. LONG MASONRY, INC., Defendant.

Civil Case No. SAG-16-933

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

July 24, 2019

MEMORANDUM OPINION

Plaintiff Skanska USA Building, Inc. ("Skanska") filed a one-count Complaint against Defendant J.D. Long Masonry, Inc. ("Long"), seeking money damages in connection with an alleged breach of a subcontract between the parties. ECF 1. The parties have filed competing Motions for Summary Judgment on the issue of liability. See ECF 71 (Skanska's Motion for Summary Judgment, with accompanying memorandum of law ("Skanska's Motion")); ECF 72 (Long's Renewed Motion for Summary Judgment, with accompanying memorandum of law (Long's Motion)); ECF 73 (Long's Opposition to Skanska's Motion); ECF 74 (Skanska's Opposition to Long's Motion); ECF 75 (Long's Reply); ECF 76 (Skanska's Reply). The issues have been fully briefed, and no hearing is necessary. See Local R. 105.6 (D. Md. 2018). For the reasons that follow, I will grant Skanska's Motion and deny Long's Motion.

I. FACTUAL BACKGROUND

The National Institutes of Health ("NIH") hired Skanska as the general contractor on a project to build a research facility in Baltimore, Maryland. ECF 26 ¶¶ 4-5. Skanska and Long entered into a subcontract in October, 2004 ("the Subcontract"). ECF 71-2. The Subcontract required Long to construct a masonry façade for the research facility, in exchange for monetary payment. Id. Long was the sole masonry contractor working on the research facility. ECF 71-4 at 6. Relevant to the instant dispute, the Subcontract contained the following provisions:

ARTICLE XXIII

INDEMNITY AND INSURANCE

23.1 To the fullest extent permitted by law, the Subcontractor hereby assumes entire responsibility and liability for any and all damage or injury of any kind or nature whatever (including death resulting therefrom) to all persons, whether employees of the Subcontractor or otherwise, and to all property, caused by, resulting from, arising out of or occurring in connection with the execution of the Work; and if any claims for such damage or injury (including death resulting therefrom) be made or asserted, . . . the Subcontractor agrees to indemnify, defend, and save harmless Skanska . . . from and against any and all such claims, and further from and against any and all loss, cost expense, liability, damage or injury, including legal fees and disbursements, that Skanska, the Architect or Owner, their officers, agents, servants or employees may directly or indirectly sustain, suffer or incur as a result thereof.

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ARTICLE XXX

INDEMNIFICATION

30.1 To the fullest extent permitted by law, the Subcontractor shall indemnify, defend and hold Skanska, the Owner, the Owner's subsidiaries and associates, the Architect/Engineer and their respective agents and employees (the "Indemnitees") harmless from all claims, loss, costs and expenses (including attorney's fees and disbursements) whether arising before or after completion of the Subcontractor's Work, caused by, arising out of, resulting from, or occurring in connection with, the performance of the Work by the Subcontractor, its sub-subcontractors, their agents and employees, their presence on the premises or the breach of this Agreement whether or not caused in part by the active or passive negligence or other fault of the Indemnitees excepting only such claims, costs, expenses or liabilities caused by the sole negligence of the Indemnitees.

ECF 71-2 at 21, 24. Skanska received a certificate of substantial completion of the research facility on October 4, 2007, and notified Long on October 12, 2007 that "service warranties/guarantees are to begin on this date." ECF 71-9.

Although it issued the certificate of completion, NIH had notified Skanska of some structural concerns with the research facility, including concerns relating to the masonry workLong had performed. ECF 26 ¶ 7. In 2009, NIH hired an engineering firm, Wiss, Janney, Elstner Associates, Inc. ("WJE"), to visually assess the masonry façade and prepare an investigative report. ECF 26 ¶ 8. WJE's resulting "Draft Report" ("the 2009 WJE Report") documented visible evidence of issues with the façade, including cracking, spalling of lipped brick, and improper installation of through-wall flashing. ECF 72-5. In 2010, NIH and the Office of General Counsel for Health and Human Services hired an engineering firm, Exponent, Inc., to conduct an assessment of the building structure. ECF 26 ¶ 11. In its report ("the 2010 Exponent Report"), Exponent opined that "[t]otal and differential settlement is ongoing and is expected to occur in the future . . . and may occur in areas that previously did not exhibit signs of distress."¹ ECF 21-6 at 32.

After receipt of the 2009 WJE Report and the 2010 Exponent Report, NIH and Skanska entered into a settlement agreement including a "warranty list" of items to be repaired by Skanska and its subcontractors, and Skanska provided the sections of the "warranty list" pertaining to masonry work to Long for repair. ECF 71-10; 72-3 at 43-44. Following those repairs, on August 3, 2011, Skanska and Long executed a "Settlement Agreement and Release" ("the Release") to resolve all existing issues between them. ECF 1-2. The Release specifically provides that it "shall not be construed to modify, amend, or otherwise alter the terms of the Subcontract . . ." and that"Long expressly agrees that it shall remain liable for . . . Long's continuing warranty or indemnity obligations, if any, as set forth in the Subcontract." Id. at § 6.2.

On April 9, 2013, "approximately twenty rows of brick facade spanning more than twenty feet fell from the eighth story" of the research facility ("the Incident"). ECF 71-4 ¶ 79. Ten days later, Skanska sent a letter notifying Long of the Incident and of Long's contractual obligation "to fully indemnify, defend, and hold Skanska harmless from and against any claim or damage that may arise out of or related to this matter." ECF 71-11. NIH again retained WJE as a consultant to investigate the Incident. Id.; ECF 71-13. By letter dated April 24, 2013, Skanska invited Long to participate in the WJE investigation. ECF 71-12. On July 31, 2013, WJE issued a report ("the 2013 WJE Report") alleging several deficiencies in Long's masonry work, including lack of horizontal soft joints, improper spacing, location, and depth-of-engagement of lateral veneer anchors, and inadequate bearing for the clay brick veneer on the shelf-angles. ECF 71-13. WJE recommended significant remediation and repair work, to include removal and reinstallation of the brick façade above and below each floor-line shelf-angle, and possible replacement of the brick veneer in its entirety. Id.

Skanska sent the 2013 WJE report to Long. ECF 71-14. In April, 2014, Skanska demanded that Long perform the repairs recommended by WJE, or provide Skanska with evidence suggesting that Long was not responsible for the Incident. Id. On May 2, 2014, Skanska declared Long in default under the Subcontract, as a result of Long's failure to take responsibility for the Incident and to perform repairs. ECF 1-7.

In April, 2015, Skanska again wrote to Long to advise of its intention to coordinate with NIH to perform the remediation work, and to invite Long to attend a meeting with NIH to discuss the remediation plan. ECF 1-8. On March 29, 2016, as the remediation work was ongoing,Skanska filed its Complaint in this case, asserting, among other breaches, that Long had breached the indemnification provisions of the Subcontract. ECF 1.

In this litigation, Skanska relies upon the expert opinion of Scott Silvester, a principal at the engineering firm of Simpson Gumpertz & Heger Inc.² In his sworn declaration, ECF 71-17, Silvester described his investigation of the cause of the Incident, and set forth conclusions, to a reasonable degree of engineering certainty, regarding the causes of the collapse. ECF 71-17 ¶¶ 4-7 (with attached report). In relevant part, Silvester concluded that Long's masonry work "did not comply with contract requirements and failed to meet applicable industry standards." Id. ¶ 7(v).

In its Rule 26(a)(2) disclosures, Long identified three persons as potential "Hybrid/Fact Experts": an employee of WJE, Daniel Lemieux, an employee of Exponent, Dr. David W. Sykora, and one of its own employees, Camillo DiCamillo. ECF 71-19. Long has submitted no declarations or sworn testimony from any of those witnesses, to be considered in connection with the pending dispositive motions.

II. LEGAL STANDARD

Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment is appropriate only "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party bears the burden of showing that there is no genuine dispute of material facts. See Casey v. Geek Squad, 823 F. Supp. 2d 334, 348 (D. Md. 2011) (citing Pulliam Inv. Co. v. Cameo Props., 810 F.2d 1282, 1286 (4th Cir. 1987)). If the moving party establishes that there is no evidence tosupport the non-moving party's case, the burden then shifts to the non-moving party to proffer specific facts to show a genuine issue exists for trial. Id. The non-moving party must provide enough admissible evidence to "carry the burden of proof in [its] claim at trial." Id. at 349 (quoting Mitchell v. Data Gen. Corp., 12 F.3d 1310, 1315-16 (4th Cir. 1993)). The mere existence of a scintilla of evidence in support of the non-moving party's position will be insufficient; there must be evidence on which the jury could reasonably find in its favor. Id. at 348 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986)). Moreover, a genuine issue of material fact cannot rest on "mere speculation, or building one inference upon another." Id. at 349 (quoting Miskin v. Baxter Healthcare Corp., 107 F. Supp. 2d...