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Prestress Services Industries of TN, LLC v. W. G. Yates & Sons Construction Co.

United States District Court, N.D. Mississippi, Oxford Division

November 16, 2017




         This court presently has before it three motions for partial summary judgment filed in the above-entitled action. Having considered the memoranda and submissions of the parties, it is now prepared to rule.

         This action arises out of the construction of the Parking Garage adjacent to the Pavilion on the Ole Miss Campus, a project which saw numerous delays and cost overruns which spawned the instant litigation. The factual and procedural history of this case is, unfortunately, quite complex, and this court will not attempt to recount in full the many failures, by many parties, which are alleged to have contributed to the project's delays. Indeed, many of these alleged failures are no longer directly relevant to this case, since several settlement agreements have been reached which significantly limit the scope of this action.

         Broadly, however, this court notes that in 2014, the Ole Miss Athletic Foundation (“the Foundation”) entered into agreements with Prestress Services Industries of TN, LLC (“PSI”) for the purchase of precast components for the Garage. PSI, in turn, contracted with Hoch Associates (“Hoch”) to design these components. Hoch, a Texas engineering firm, found it necessary to engage the services of Nangia Engineering of Texas, Ltd. (“Nangia”) since the latter firm had on staff the required engineer licensed to practice in Mississippi. In his deposition, however, Robert Nangia testified that he made no actual marks on Hoch's drawings sent to him to review, and he appeared to describe his role as simply rubber-stamping the work done by Hoch. The Foundation entered into a separate contract with W. G. Yates & Sons Construction Company to construct the Garage, and AECOM Design (“AECOM”) served as the architect of record on the project.

         PSI was the original plaintiff in this case, and, in its complaint, it assigned a considerable amount of blame to the architect AECOM, which has since settled the claims against it. Specifically, PSI maintained that AECOM's design for the garage made it exceedingly difficult to build it with the seven-foot clearance between floors which is required by applicable building standards. As discussed below, now that AECOM and PSI have each settled, Yates, as the assignee of PSI's claims, seeks to hold Hoch (and by extension Nangia) liable for their part in what the parties refer to as the “minimum clearance design bust.”[1] Consideration of the minimum clearance issue is complicated, however, by the fact that it was far from the only difficulty experienced by the project. To the contrary, there is quite substantial evidence that Yates and Hoch each contributed to the delays suffered by the project with their own errors, discussed below, which are unrelated to the minimum clearance issue.

         In light of the above facts, it is unsurprising that sorting out the relative fault and liability of the large number of contractors involved in the project has proven quite difficult. Nevertheless, several settlements and assignments have been entered into among the parties, and they have served to re-arrange the order of battle in this lawsuit to a very significant degree. For example, it appears that Yates, formerly a defendant, now essentially has the status of a plaintiff asserting claims against Hoch, which has itself asserted third party claims against Nangia. For the purposes of this order, however, Hoch and Nangia assert common defenses to the claims asserted by Yates, and they have joined each others' motions. Thus, for the sake of simplicity, this order will sometimes refer to Yates as “plaintiff” and Hoch and Nangia as “defendants, ” even though Nangia is, once again, more accurately regarded as a third party defendant.

         In light of the aforementioned settlements, the remaining claims asserted by Yates are twofold. The first of these claims is partly conceded, namely that Hoch failed to design certain precast concrete parts in accordance with relevant seismic standards. Contemporaneous emails from Hoch conceded that it made errors in this regard, and, as discussed below, it now appears to limit its defense on this issue to that of causation, rather than breach of duty. More specifically, Hoch (and Nangia) each contend that, whatever acts of negligence they may have committed in failing to account for seismic standards, these failures did not cause the delays suffered by the project. That is, defendants argue that the project would have been delayed an even greater period of time by Yates' own errors in building (and, at times, tearing down and re-building) certain portions of the garage, regardless of any seismic design errors. And, indeed, the record does contain findings from independent engineers hired by the Foundation suggesting that Yates may have made errors in this regard.

         Sorting out the “concurrent delay” causation issues arising from potential acts of professional negligence by both of the remaining sides to this litigation seems likely to be a tall order at trial. The consideration of these issues will likely be made even more complex by the existence of Yates' second claim, which involves the aforementioned minimum clearance design issue. While AECOM paid a rather large sum to settle the claims asserted against it on this issue, Yates maintains that Hoch (and by extension Nangia) must still account for their portion of the blame in this context. In asserting liability in this regard, the complaint clearly alleges that Hoch failed to warn of AECOM's design errors, and, as discussed below, Hoch presently seeks dismissal of that failure to warn claim. In its summary judgment briefing, however, Yates insists that the complaint asserts not only a failure to warn claim against Hoch, but also a design defect claim as well. Hoch disputes that the complaint asserts any such design defect claim and it argues that, even if it does, Yates failed to adequately support it with expert testimony.

         With the foregoing in mind, this court now turns to the three motions for partial summary judgment presently before it, two of which are mentioned above. This court first addresses Nangia's summary judgment motion (joined by Hoch) on the concurrent delay issue. As noted previously, Nangia and Hoch each contend that Yates committed its own errors in building and rebuilding the garage and that, in light of the serious delays caused by those errors, the overall project suffered no additional delays resulting from the corrections required to the seismic work performed by Hoch and Nangia.

Specifically, defendants argue that:
[I]n seeking delay damages from Nangia, Yates wholly disregards its own concurrent and unrelated delay which exceeded the completion date for the seismic issue by two months. Yates fails to mention in that delay claim that they had other remediation obligations to the Owner, Ole Miss Athletics Foundation (“Ole Miss”), in repairing the P4 level topping slab that took multiple pours and repairs to complete. Yates' P4 remediation was in fact not completed and accepted until June 10, 2015. In contrast, the seismic remediation was completed on March 26, 2015, and accepted by Hoch on April 9, 2015. The P4 topping slab remediation was required, under the contract documents, to be completed before substantial completion would be declared. As the facts will show, substantial completion was not declared until June 10, 2015 after Yates completed work on the P4 topping slab. Thus, as a matter of contract interpretation and Mississippi law, Yates cannot recover delay damages against Hoch, as its own P4 remediation caused a delay which exceeded the completion date for the seismic remediation by several months. Thus, the contracts preclude Yates' recovery against Hoch and/or Nangia for seismic remediation delay as a matter of law.

[Nangia and Hoch brief at 2]. This strikes this court as being a rather classic jury issue, and, in order to prevail on this issue as a matter of law, defendants would presumably be required to demonstrate that the “critical path” of the project was not delayed to even a small degree by their own errors on the seismic issue. This court finds that defendants' evidence falls well short of establishing this, and barring such, summary judgment is inappropriate.

         Having said that, this court does note that defendants appear to have evidence which might, at the very least, seriously limit their eventual liability in this context. For example, defendants point to a February 2015 change order entered into between the Foundation and Yates which re-defined the date of substantial completion to include a requirement that any “punchlist work” not exceed $50, 000 in estimated cost. Defendants further argue that “Yates, through Chet Nadolski, indicated that the P4 topping slab remediation exceeded $50, 000 in repair” and that, as such, “Yates could not possibly be at substantial completion, under the written language of these construction agreements, until June 10, 2015, when Yates was certified as having completed the P4 remediation.” [Brief at 11].

         In the court's view, defendants' arguments on this issue appear to be at least potentially strong ones, but, at the end of the day, they are arguments which are properly addressed to a jury. This court is certainly not prepared to state, based on the record and summary judgment evidence before it, that any errors made by defendants in complying with seismic standards had no effect whatsoever in producing the overall project delays. Indeed, this court notes that Yates' contention is that it was itself forced to perform a great deal of additional work on the precast concrete materials to make them compliant with seismic standards, and a jury might well conclude that the time it spent in doing so contributed to its failure to complete the remediation work earlier than it did.

         In so stating, this court notes that Yates counters with robust arguments of its own on the concurrent delay issue. For example, Yates characterizes the “enhancements” which it made in 2015 to its earlier repairs on the P4 slab as “extremely minor” ones. Yates also takes issue with defendants' timeline, arguing that:

Nangia asserts that “Yates' remedial construction on P4 topping slab continues past April 9, 2015, not concluding until June 10, 2015.” This implies that the P4 slab remediation was a continuous process. As stated there was no substantive work on the P4 slab between December 31, 2014 and June 1, 2015. The critical path shifted to the seismic code retrofit on January 21, 2015. There was no time that the seismic code retrofit and the P4 slab remediation were concurrent activities on the critical path.

[Brief at 5]. It is thus apparent that the parties disagree regarding fundamental factual issues relevant to the concurrent delay issue, and it seems clear that a jury will be required to resolve these issues. Indeed, this court regards the concurrent delay issue as not only involving triable jury issues, but some of the more complex jury issues which it can recall.[2] This court therefore has little difficulty in concluding that this issue is not a proper one for resolution on summary judgment, and defendants' motion will therefore be denied.

         This court now turns to Hoch's motion (joined by Nangia) for partial summary judgment on the minimum clearance design issue. As noted previously, Yates' claims in this context include both a failure to warn claim which Hoch concedes was properly assserted in the complaint and a design defect claim which, it insists, was not. In arguing that triable jury issues exist regarding its failure to warn claim against Hoch, Yates argues that:

In addition, Yates did also allege that Hoch failed to warn of its design error. In a construction context, a construction professional has a duty to perform in accordance with the project plans and specifications. However, under Mississippi law, if the plans and specifications create “a construction problem of which the builder/contractor, the man with expertise should be well aware, ” then the contractor has a duty to warn. George B. Gilmore Company v. Garrett, 582 So.2d 387, 396 (Miss. 1991). Thus, “[t]he jury was warranted in finding [the contractor] negligent in failing to warn the [owner] of a possible problem [with Yazoo Clay], and in undertaking to construct the house without making a soil test, and such failures alone or in combination proximately caused the damage to the house.” Id. at 393. While Garrett specifically dealt with the contractor's common law duty to warn of a possible problem, Yates believes that this reasoning as regards a duty to warn should be applied to Hoch with respect to its failure to produce a workable design both as an implied contractual obligation and as a duty under common law.

[Brief at 8].

         Thus, Yates relies upon the Mississippi Supreme Court's decision in Garrett in support of its argument that Hoch had a common law duty to warn of defects in the minimum clearance design, even if it did not commit those defects itself. Importantly, Hoch fails to even address the Garrett decision in its twenty page reply brief, which is almost entirely devoted to Hoch's design defect claim. In the court's view, Garrett does at least arguably appear to support Yates' argument in this context, since the contractor in that case was certainly not at fault for the presence of Yazoo Clay deposits below the house. Nevertheless, the ...

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