TLT Const. Corp. v. A. Anthony Tappe and Associates, Inc.

Decision Date30 September 1999
Docket NumberNo. 97-P-469,97-P-469
CourtAppeals Court of Massachusetts

Carol A. Frisoli, Brighton, for the plaintiff.

Warren D. Hutchison, Brookline, for the defendants.



This litigation arises from construction-related disputes between an architect and a general contractor, both of whom had been retained by a municipal owner in connection with a library renovation project. After securing an award in arbitration from the owner for claims based primarily on the architect's actions, the general contractor sued the architect directly for various torts including negligent misrepresentation, interference with contractual relations, and defamation, as well as for unfair and deceptive practices pursuant to G.L. c. 93A. The general contractor's claims arise from the architect's conduct before and during construction, and from a post-construction evaluation of the general contractor made by the architect to the State certifying authority. The trial court judge granted the architect's motion for summary judgment on all claims; those arising out of the postconstruction evaluation were dismissed because the general contractor had insufficient proof of an essential element of its claims, viz., damages, and the remaining claims were dismissed on the basis of res judicata.

On appeal, the general contractor contends (a) that the general contractor's prior arbitration proceeding against the project owner does not operate as a claim or issue preclusion bar to its direct tort claims against the architect arising from the architect's project performance; (b) that the trial judge erred in granting summary judgment on the evaluation-based claims because there is a genuine issue of material fact as to whether the general contractor suffered damages; and (c) that it was error to grant summary judgment on the general contractor's claims for G.L. c. 93A violations because res judicata is inapplicable and there are genuine issues of material fact as to whether the general contractor suffered damages.

We affirm in part and reverse in part.

Factual background. The materials before the judge, viewed in the light most favorable to the nonmoving party, disclose these facts. See, e.g., Yakubowicz v. Paramount Pictures Corp., 404 Mass. 624, 626, 536 N.E.2d 1067 (1989). In order to renovate and construct additions to the Beverly Public Library (project), the city of Beverly (owner) entered into a contract (architect contract) with the project architect, A. Anthony Tappe and Associates (architect), and a separate contract (construction contract) with the general contractor, TLT Construction Corporation (contractor). The project did not proceed smoothly. The architect's failure to make decisions and review submittals in a timely manner caused the construction schedule to suffer from various delays and disruptions. Discrepancies in, and subsequent modifications to, the architectural plans caused the contractor to use more building materials and to perform more repair work than anticipated.

Pursuant to the construction contract, the contractor brought an arbitration proceeding against the owner (prior arbitration) in which it sought to recover damages for extra costs incurred on the project. Among other things, the contractor sought damages for additional building materials and labor necessitated by discrepancies in and modifications to the architectural plans (building-related claims), and for employing a superintendent for longer than anticipated (delay claims). Although the architect testified and submitted documents at the arbitration hearing, it was not, and contractually could not have been, joined as a named party in the prior arbitration. Because the construction contract included a "no damages for delay" clause as required by G.L. c. 30, § 39O, the arbitrator determined that the contractor was not entitled to delay damages, and, after hearing the evidence, allowed the owner's motion to strike the contractor's delay claims. The arbitrator essentially found the contractor and the owner each fifty percent responsible for building-related damages, and awarded the contractor half of the costs incurred.

Following completion of project construction, the architect evaluated the contractor's performance on the project and submitted a project evaluation form to the Massachusetts Division of Capital Planning and Operations (DCPO) pursuant to the public bidding statute, G.L. c. 149, § 44D. 2 This evaluation, according to the contractor, contains false and defamatory statements and misrepresentations. It was not addressed in the prior arbitration.

In its subsequent Superior Court action brought directly against the architect, the contractor seeks to recover damages for negligent misrepresentation, interference with contractual relations with the owner, interference with advantageous business relations with DCPO, violation of G.L. c. 93A, and various torts including intentional and negligent misrepresentations, fraud, deceit, and defamation. For ease of discussion, we break these somewhat amorphously pleaded claims into several broad categories: (1) the contractor's tort claims arising out of the architect's performance on the project, including both building-related claims and delay claims (performance-based claims); (2) the contractor's tort claims arising out of the architect's evaluation of the contractor's project performance; and (3) the contractor's claims under G.L. c. 93A arising out of the architect's project performance and evaluation of the contractor.

Discussion. 1. The contractor's tort claims arising out of the architect's project performance. The architect asserted its entitlement to summary judgment on these claims based upon the defense of res judicata. It argued, and the judge agreed, that the prior arbitration between the contractor and the owner precludes the contractor's building-related and delay claims brought directly against the architect in the current action.

"The term 'res judicata' includes both claim preclusion and issue preclusion." Sarvis v. Boston Safe Deposit & Trust Co., 47 Mass.App.Ct. 86, 98, 711 N.E.2d 911 (1999). "The doctrine of claim preclusion makes a valid, final judgment conclusive on the parties and their privies, and bars further litigation of all matters that were or should have been adjudicated in the action." Heacock v. Heacock, 402 Mass. 21, 23, 520 N.E.2d 151 (1988). For claim preclusion to bar the contractor's building-related and delay claims against the architect, "three elements are required: (1) the identity or privity of the parties to the present and prior actions; (2) identity of the cause of action; and (3) prior final judgment on the merits." Gloucester Marine Rys. Corp. v. Charles Parisi, Inc., 36 Mass.App.Ct. 386, 390, 631 N.E.2d 1021 (1994).

"The doctrine of issue preclusion 'prevents relitigation of an issue determined in an earlier action where the same issue arises in a later action, based on a different claim, between the same parties or their privies.' [Heacock v. Heacock, 402 Mass. at 23 n. 2, 520 N.E.2d 151.] It requires proof that '(1) there was a final judgment on the merits in the prior adjudication; (2) the party against whom estoppel is asserted was a party (or in privity with a party) to the prior adjudication; and (3) the issue in the prior adjudication is identical to the issue in the current adjudication. Additionally, the issue decided in the prior adjudication must have been essential to the earlier judgment.' Commissioner of the Dept. of Employment & Training v. Dugan, 428 Mass. 138, 142, 697 N.E.2d 533 (1998) (citation omitted). Issue preclusion can be used only to prevent relitigation of issues actually litigated in the prior action. Fidelity Mgmt. & Research Co. v. Ostrander, 40 Mass.App.Ct. 195, 199, 662 N.E.2d 699 (1996), and thus we look to the record to see what was actually litigated. See Gleason v. Hardware Mut. Cas. Co., 324 Mass. 695, 699, 88 N.E.2d 632 (1949)." Sarvis, supra at 98-99, 711 N.E.2d 911. As the party moving for summary judgment on the basis of claim and issue preclusion, the architect bears the burden of establishing each of these factors. Sarvis, supra at 99, 711 N.E.2d 911. Pederson v. Time, Inc., 404 Mass. 14, 16-17, 532 N.E.2d 1211 (1989).

a. Identity or privity of the parties. Claim preclusion has as a prerequisite that there be an identity or privity of the parties to the present and prior actions, while issue preclusion requires that the party against whom issue preclusion is asserted in the present action was a party or in privity with a party to the prior adjudication. The architect and the owner are not identical, but the architect claims privity with the owner pursuant to the architect contract between the owner and the architect as well as the construction contract between the contractor and the owner. On this basis, the architect contends that it can use the prior arbitration award to preclude the contractor's building-related and delay claims in the current action.

"[O]ne not a party to the first action may use a judgment in that action defensively against a party who was a plaintiff in the first action on the issues which the judgment decided." Home Owners Fed. Sav. & Loan Assn. v. Northwestern Fire & Marine Ins. Co., 354 Mass. 448, 455, 238 N.E.2d 55 (1968). Bailey v. Metropolitan Property & Liab. Ins. Co., 24 Mass.App.Ct. 34, 36, 505 N.E.2d 908 (1987). "A nonparty to a prior adjudication can be bound by it 'only where [the nonparty's] interest was represented by a party to the prior litigation.' " Massachusetts Property Ins. Underwriting Assn. v. %65 sub6 Norrington, 395 Mass. 751, 754, 481 N.E.2d 1364 (1985), quoting from Mongeau v. Boutelle, 10 Mass.App.Ct. 246, 249-250, 407 N.E.2d 352 (1980). S...

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