Opinion
16-P-728
08-08-2017
JORDAN'S FURNITURE, INC. v. CARTER & BURGESS, INC. & another.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
This case stems from the construction of a new shopping complex in the town of Reading, designed by Carter & Burgess, Inc. (Carter). Carter's design stacked two retail stores vertically in a single facility. Jordan's Furniture, Inc. (Jordan's), occupies three floors of the complex and uses a portion of the space as a warehouse. Jordan's brought this suit against Carter and Carter's successor, Jacobs Engineering Group, Inc. (Jacobs), alleging negligence, breach of contract, and breach of express warranty, after portions of the warehouse floor began to deteriorate and repairs performed by Suffolk Construction (Suffolk), the general contractor, did not abate the problems.
Following a jury-waived trial, the judge found for Jordan's on its negligence claim alone and awarded $1,744,793 in compensatory damages. Both sides have appealed.
With interest and costs added, the final judgment totaled $2,716,338.43.
Jordan's argues that Carter contractually agreed to hold itself to a higher standard of care than that imposed by the common law and promised a specific result such that Jordan's should have prevailed on its breach of contract and breach of express warranty claims. Jordan's also claims that it is contractually entitled to indemnification from Carter and Jacobs for its attorney's fees and expenses. Carter and Jacobs contest the judgment on procedural grounds, arguing that Jordan's suit is barred by the statute of repose and the statute of limitations. They also contest the award of prejudgment interest. We affirm in all respects the judgment.
Facts. The trial judge made lengthy and comprehensive findings of fact, supported by the record, which the parties do not challenge as being clearly erroneous. We summarize only what is necessary for resolution of this appeal.
1. Construction of the shopping complex. The owner of the complex and Carter, as project architect and engineer, executed an "Architectural/Engineering Services Agreement" (owner-architect agreement or agreement) for the design and construction of the complex in 2002. The agreement identified Jordan's as a "proposed tenant," and contained, inter alia, provisions outlining the agreed-to standard of care and circumstances necessitating indemnification.
Jordan's warehouse is located on the second floor of the complex. The floor is comprised of a suspended 135,000 square foot concrete slab, reinforced by girders and beams. In the warehouse space, Jordan's opted to use a "high rack" storage system, which allowed for storage of items from floor to ceiling. To retrieve heavy loads (up to 1,500 pounds) from the storage racks, Jordan's uses a "stockpicker" machine, which operates like a forklift and weighs approximately 9,300 pounds.
Giancarlo Botazzi, Carter's project engineer, testified that Carter took the weight of the storage system and the stockpicker into account when designing the second floor, and that the design required additional support beams in specific areas. As construction progressed, Carter requested that the town issue various temporary certificates of occupancy (TCOs). The first, issued on September 2, 2004, allowed Jordan's employees access to a portion of the second floor to begin installing merchandise displays.
Carter's design provided for a capacity of 400 pounds per square foot.
The second TCO, issued twelve days later on September 14, 2004, allowed employees access to a portion of the third floor. These TCOs allowed Jordan's to install furniture displays in approximately 96,000 square feet of retail space on the second floor and approximately 40,000 square feet of retail space on the third floor, or a combined whole of some fifty-four percent of the facility. Jordan's opened to the general public on October 29, 2004.
The judge found that Phillip Daly, the lead architect and a Carter employee, had requested that the town issue the first TCO, so as to permit Jordan's staff to begin installing merchandise displays. Daley informed the town that construction and merchandising continued apace, work that was then scheduled to be completed by the end of October of 2004. Daley likewise requested that the town issue the second TCO, acknowledging that considerable work had yet to be completed.
2. Deterioration of warehouse floor. In April, 2005, Jordan's employees, including its director of property development and facilities, John Hanley, observed that certain portions of the concrete floor in the warehouse area were crumbling. Hanley contacted Carter to notify it of the problem. Discussions were had between Jordan's representatives and Botazzi (and others). Botazzi recommended that someone from an outside firm serve as a consultant and assess the situation. The consultant issued a written report, dated July 11, 2005, opining that the problem involved areas of the floor that had frozen shortly after installation. This was confirmed by a second outside firm, which analyzed samples of the floor and noted damage caused by shrinkage. The consultant recommended removal and replacement of a sizeable portion of the warehouse slab. Suffolk, which had constructed the floor, assumed responsibility for the necessary repairs. Carter assisted in preparing drawings for the repairs, which substantially conformed to the original drawings, and added several additional reinforcing bars. Installation of the new floor began in February, 2006, and was completed in March. In October, 2006, however, Hanley noticed cracking in the newly-installed slab. Botazzi inspected the area in question and agreed to report back after further study. Nearly six months later, in April, 2007, Botazzi issued a written report in which he opined that some of the cracks were due to shrinkage (these are normal and do not compromise the floor's structural integrity), and others were due to Suffolk's failure to install "reinforcing materials" over the steel girders on which the slab rested. Suffolk challenged Botazzi's conclusions, confident that the reinforcing materials were installed per the drawings provided, and that it had always held the view that Carter's design was inadequate to support use of the stockpicker. Botazzi disagreed, maintaining that the floors as designed were adequate to support the weight; the two continued to blame each other for months, without reaching any conclusive answers.
In December, 2009, Jordan's engaged an outside firm specializing in forensic construction, Wiss, Janney, Elstner Associates, Inc. (WJE), to study the problem. WJE opined that the damage to the floor stemmed from faults in Carter's design. Essentially, it concluded that Carter had miscalculated and as a result, the floor was unable to support the concentrated loads applied by Jordan's stockpicker.
Relying on WJE's report and the testimony of WJE's structural engineer, the judge found that "the floor in the area of the loading dock and the area where the [warehouse] is presently located, were inadequate for their intended use, and negligently designed, with the concentrated demand of the stockpicker exceeding the capacity of the floor as designed." He ultimately concluded that Carter's failure to "adequately evaluate the [effects] of the use of the stockpicker on the floor for the [warehouse and loading areas] constituted a deviation from the exercise of reasonable care required of members of the engineering profession engaged in the design of commercial facilities," and that such deviation was a cause of the damage. The judge awarded compensatory damages to Jordan's based on the cost of the necessary repairs.
Standard of review. "On appeal, we are bound by the trial judge's findings of fact, including all reasonable inferences, that are supported by the evidence." Almeida v. Arruda, 89 Mass. App. Ct. 241, 244 (2016). We review his legal conclusions de novo. Ibid. We further note that the case before us is distinctively fact-intensive.
Discussion. 1. Jordan's contractual claims. The judge determined that Jordan's breach of contract and breach of express warranty claims were duplicative of Jordan's negligence claim, all three being based on the same core facts. Relying on various parts of the owner-architect agreement, which (in its view) establish a heightened duty of care and an express warranty, Jordan's argues that the judge erred. We agree with the judge that the alleged heightened standard of care contained in the relevant portions of the owner-architect agreement, pars. 9M and 9N, "essentially requires compliance with generally accepted standards of professional practice, and does not create any additional obligations beyond such standard." Moreover, in order for Jordan's to maintain an action for breach of an express warranty, Carter must have expressly promised a certain, specific result. See Klein v. Catalano, 386 Mass. 701, 720 (1982) ; Anthony's Pier Four, Inc. v. Crandall Dry Dock Engrs., Inc., 396 Mass. 818, 822 (1986). Our reading of the owner-architect agreement leads us to conclude that Carter made no such promise here, and nothing in the case law cited by Jordan's compels a different result. See Anthony's Pier Four, Inc., supra at 822-823; Coca-Cola Bottling Co. v. Weston & Sampson Engrs., Inc., 45 Mass. App. Ct. 120, 128-130 (1998). Per the terms of the agreement, Carter agreed that it would exercise the standard of care required of its profession, no more, no less. See Klein, supra. We agree with the judge that Jordan's negligence claim, breach of contract claim, and breach of warranty claim all turn on whether Carter breached the standard duty of care, and conclude that the judge did not err in dismissing the contract claims as duplicative.
Apart from its claim for indemnification for attorney's fees and expenses, Jordan's does not seek damages additional to those awarded by the judge. Rather, Jordan's contends that its contract and express warranty claims are critical in view of Carter's and Jacobs' argument that Jordan's negligence claim is barred by the statutes of limitations and repose. Where we determine, infra, that Jordan's negligence claim is not time-barred, Jordan's concern is not at issue.
We are not persuaded by Jordan's contention at oral argument that the brief reference to "retail and movie theatre space" in par. 9M of the agreement created an express warranty. Contrast Anthony's Pier Four, Inc. v. Crandall Dry Dock Engrs., Inc., 396 Mass. 818, 822-823 (1986).
We note that the judge's thorough findings were made with the benefit of a full bench trial, and that he reached the same conclusion. Compare Coca-Cola Bottling Co. v. Weston & Sampson Engrs., Inc., 45 Mass. App. Ct. 120, 128 (1998) (holding in context of breach of express warranty claim that "[w]hile the issue is close, we conclude that there was sufficient evidence to present the question to the jury").
Nor did the judge err in rejecting Jordan's suggestion that it was entitled, as a matter of contract, to be indemnified by Carter for fees and costs incurred in this case. The owner-architect agreement's indemnification provision is narrowly drawn and, even if generously construed under a third-party beneficiary theory, does not permit any reasonable inference that either signatory (Carter or the owner) had intended to provide Jordan's, a contemplated tenant, a right of indemnification.
2. Carter's and Jacobs' claims—statute of limitations and statute of repose. General Laws c. 260, § 2B, as amended by St. 1984, c. 484, § 53, provides for a statute of limitations and a statute of repose that, in their own distinct way, limit the duration of tort liability for architects like Carter, who provide " ‘individual expertise’ in the business of designing, planning, constructing, and administering improvements to real estate." Dighton v. Federal Pac. Elec. Co., 399 Mass. 687, 696 (1987). Section 2B's statute of limitations mandates that a negligence claim be commenced within three years "after the cause of action accrues," though the three-year period may be tolled by the discovery rule for an inherently unknown harm. See Anthony's Pier Four, Inc., 396 Mass. at 824-825.
By contrast, § 2B's statute of repose mandates that a negligence claim must be filed within six years; it is not subject to equitable tolling, and acts as an absolute bar to a party's action against a design professional. See Klein, supra at 702-703. The statute of repose advances the Legislature's "judgment" that a protected actor shall be free from liability after a "legislatively determined" time period. CTS Corp. v. Waldburger, 134 S. Ct. 2175, 2183 (2014). This policy is reflected in par. 1 of § 2B, which provides in pertinent part: a "tort" action for damages, "arising out of any deficiency or neglect in the design, planning, construction or general administration of an improvement to real property ... shall be commenced ... [no] more than six years after the earlier of the dates of: (1) the opening of the improvement to use; or (2) substantial completion of the improvement and the taking of possession for occupancy by the owner." With these principles in mind, we proceed to our analysis.
a. Statute of repose. Carter and Jacobs assert that the town's issuance of the TCOs in September, 2004, marked the opening of the improvement to use. We disagree. The judge expressly found that the TCOS issued in September, 2004, had a narrow, limited purpose: to allow Jordan's employees to install merchandising in advance of the store opening. Moreover, Jordan's was not permitted to use all, or even the greater part of its space, including the second floor's main entrance, the IMAX theater and vestibule, and other retail areas on the second and third floors, before a third TCO had issued in October, 2004. Further, the judge found that as of September 14, 2004, Jordan's front main entrance, exterior facade, warehouse, parking lot, and certain other site improvements were incomplete. Based on the foregoing, the judge found that the TCOs issued by the town in September, 2004, "were not intended" to permit Jordan's to use its premises to sell furniture to the public. He concluded, therefore, that the TCOs did not "open[ ] ... the improvement to use" for purposes of § 2B, and that Jordan's negligence claim was not barred by the statute of repose. We agree with the judge's thorough analysis.
The judge found that work as to these areas continued through October, 2004. He found that Carter's first punch list was dated October 20, 2004. Furthermore, along with its correspondence (dated October 26) to the town, Carter attached certain punch lists for architectural, structural, plumbing, and electrical work, among other items, as well as a punch list prepared by a third party for fire protection work.
Carter and Jacobs do not identify any published opinion of the Supreme Judicial Court or this court that has held that the issuance of a TCO is conclusive of the "opening of an improvement to use" under § 2B. We do not foreclose the possibility that the issuance of a TCO, in conjunction with other facts, may provide the basis for the conclusion that an improvement is open to use. Our decision here is limited to the specific circumstances of this case.
b. Statute of limitations. Carter and Jacobs also urge that § 2B's three-year statute of limitations bars Jordan's negligence claim because Jordan's either knew or should have known that the warehouse floor problems were a product of Carter's negligence well before September, 2007, making its claim filed in 2010 untimely. We disagree.
Jordan's must have had knowledge or sufficient notice that it was harmed and of what caused the harm before its cause of action could accrue for limitations purposes. In appraising when Jordan's was on legal notice of harm caused by Carter's conduct, the familiar standard is that of a reasonably prudent person situated in Jordan's position. See Bowen v. Eli Lilly & Co., 408 Mass. 204, 210 (1990). "Notice" does not refer to Jordan's "discovery of every fact necessary to prevail on the claim, but rather to discovery of [its] injury as causally connected to [Carter's alleged] negligence." International Mobiles Corp. v. Corroon & Black/Fairfield & Ellis, Inc., 29 Mass. App. Ct. 215, 218 (1990).
We conclude that ample evidence in the trial record supports the judge's ruling that Jordan's neither knew nor reasonably should have known, at any time prior to September 17, 2007 (three years prior to the filing of the action), that the harm to the floor was caused by Carter's faulty design. Indeed, Jordan's acted diligently in trying to determine the precise cause of its harm and Carter's repeated insistence that others, and not it, were responsible belies its argument. The judge did not err in concluding that the discovery rule tolled the running of the statute of limitations and that Jordan's negligence claim was timely.
c. Prejudgment interest. Carter and Jacobs also argue that the judge's award of prejudgment interest, see G. L. c. 231, § 6B, on the entire compensatory damages award was in error. We disagree. The judge properly recognized the mandatory language of the prejudgment interest statute, and followed precedent warranting this result. See Commonwealth v. Johnson Insulation, 425 Mass. 650, 665-666 (1997). See also Short v. Marinas USA Ltd. Partnership, 78 Mass. App. Ct. 848, 856 (2011) ("Under Massachusetts law, G. L. c. 231, § 6B, the judge is required to add prejudgment interest to the plaintiff's award of damages at the prescribed rate"). In the circumstances of this case, the judge neither abused his discretion nor erred in awarding statutory prejudgment interest.
General Laws c. 231, § 6B, as amended through St. 1982, c. 183, § 2, reads in relevant part: "In any action in which a verdict is rendered or a finding made or an order for judgment made ... for damage to property, there shall be added by the clerk of court to the amount of damages interest thereon."
The judge initially declined to award prejudgment interest. Jordan's filed a motion for reconsideration pursuant to Mass.R.Civ.P. 60, 365 Mass. 828 (1974), which the judge treated as having been filed under Mass.R.Civ.P. 60(b)(6). The judge did not abuse his discretion in this regard. See Honer v. Wisniewski, 48 Mass. App. Ct. 291, 294 (1999) (courts may determine whether and under what section relief under rule 60 might be granted). Further, the judge did not abuse his considerable discretion in allowing the motion for reconsideration; it is not in the interests of justice for a judgment that is in error to stand where a party has acted reasonably promptly to correct it. See Owens v. Mukendi, 448 Mass. 66, 71-72 (2006).
We affirm in all respects the judgment entered on the docket on July 1, 2015.
To the extent we do not discuss other arguments made by the parties, they have not been overlooked. "We find nothing in them that requires discussion." Commonwealth v. Domanski, 332 Mass. 66, 78 (1954). This is particularly so in view of the trial judge's extensive findings of fact and rulings of law.
So ordered.
Affirmed.