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Board of Trustees of Residences v. VL Realty, LLC

Superior Court of Massachusetts, Suffolk, Business Litigation Session

November 30, 2016

Board of Trustees of the Residences at Atlantis Marina Condominium Trust
v.
VL Realty, LLC et al. Nauset Construction Corporation (Def./Third-Party Pl.)
v.
Madaio Glass, Inc. et al. (Third-Party Def.); Madaio Glass, Inc. (Fourth-Party Pl.)
v.
St. Cloud Window, Inc. (Fourth-Party Def.) No. 135571

         MEMORANDUM OF DECISION AND ORDER ON: 1. THIRD-PARTY DEFENDANT MADAIO GLASS, INC.'S (MADAIO) MOTION FOR PARTIAL SUMMARY JUDGMENT; 2. THIRD-PARTY DEFENDANT GLEESON POWERS, INC.'S (GLEESON) MOTION FOR SUMMARY JUDGMENT; THIRD-PARTY DEFENDANT JAMES HARDIE BUILDING PRODUCTS, INC.'S (HARDIE) MOTION FOR SUMMARY JUDGMENT; 4. THIRD/FOURTH-PARTY DEFENDANT ST. CLOUD WINDOW, INC.'S (ST. CLOUD) MOTION FOR SUMMARY JUDGMENT

         

          Mitchell H. Kaplan, Justice

         This case is before the court, once again, on the motions for summary judgment or partial summary judgment identified above. The background facts of this case have been recited in previous decisions of the court, and the grounds for the court's rulings have been explained in greater detail, on the record, at the hearing on these motions convened on November 16, 2016. The purpose of this memorandum of decision and order is only to summarize the court's conclusions and make clear the claims that have been dismissed and those that remain for trial, scheduled to begin on March 28, 2017. This memorandum will employ terms and names defined in prior opinions.

         Madaio

         The claims against Madaio arise out of the subcontract that it entered into with Nauset for the installation of exterior windows and doors. Madaio contends that it is entitled to summary judgment because " Nauset has testified that Madaio installed windows in the manner as agreed to by Nauset and the Owner, despite any language in the subcontract calling for pan flashing." Nauset's testimony is hardly surprising as it would be liable to owner for any faulty work on the part of its subcontractor. There is, however, no writing confirming an agreed change to the subcontract, which expressly calls for Madaio to install pan flashings. Questions of fact and law exist concerning whether the subcontract was modified to eliminate this requirement. Additionally, the plaintiff's and the architect's experts have offered opinions that there were other deficiencies in Madaio's work that caused doors and windows not to be water tight and this has damaged common areas of the Atlantis condominiums. In consequence, questions of fact exist with respect to this issue as well. Accordingly, Madaio's motion is denied with respect to all third-party claims for contractual and common-law indemnity and contribution.

         Nauset has also brought a claim against Madaio for breach of its subcontract based on an alleged failure to provide Nauset with liability insurance, insuring it against any loss arising as a result of Madaio's work on the project. However, Madaio named Nauset as an additional insured under the insurance policy that it purchased covering its work on the project. Nauset predicates this claim against Madaio on the liability insurer's decision to participate in Nauset's defense, but subject to a reservation of rights. Summary judgment will enter dismissing this claim because it is premature: there is no case or controversy presently ripe for adjudication by the court. The insurer's decision to defend pursuant to a reservation of rights is not evidence that the policy Madaio obtained, and to which Nauset was added as a named insured, did not meet Madaio's obligations under its subcontract. Only if Nauset is found liable in this action, in whole or in part, because Madaio's work is found to have been negligently performed or in breach of its obligations under the subcontract, and the liability insurer nonetheless refuses to indemnify Nauset, could there possibly be a dispute as to whether the policy purchased by Madaio failed to meet its obligations under the subcontract to provide insurance for Nauset, and even then such a declination of coverage by the insurer might have been erroneous. There is presently no basis for adjudicating Madaio's alleged breach.

         Gleeson

         Gleeson entered into a subcontract with Nauset to provide waterproofing on the project, in particular in the garage. It is undisputed that soon after installation of this waterproofing, leaks began to appear in the underground garage. It appears that the contract specifications called for a so-called bath-tub design for the underground waterproofing while the relevant drawings did not. It is undisputed that a membrane design was employed. Questions of fact exist concerning whether Gleeson fulfilled its contractual obligations to bring this discrepancy between the specifications and the drawings to the attention of the owner and general contractor, in the manner required by the subcontract. Even if it did not, questions of fact exist concerning whether such a breach, if it happened, could have caused damage: here the question is whether all parties knew of the discrepancy and agreed to adopt the less expensive alternative. A breach occasioned by a failure to provide written notice of the discrepancy could only have caused damage if the owner and general contractor were unaware of the discrepancy and did not participate in the decision not to use the bathtub design.

         Additionally, questions of fact exist concerning whether Gleeson properly installed sealant according to the drawings and properly applied sealant between balcony and wall and underneath balcony doors.

         Gleeson also asserts that Nauset released any claims that it might have against it based on inadequate waterproofing because of language contained in a (i) change order: " The rework expires 1 year after the agreed upon acceptance by Nauset and/or the Owner"; and (ii) a subsequent note: " By signing this, the Owner and Nauset accept the condition of the basement and put into effect the terms of the final waterproofing settlement." The meaning of these writings, which do not contain the common language used in releases, is ambiguous. Whether the parties intended that they constitute a release of all claims against Gleeson for alleged breach of its subcontract involves a disputed question of fact.

         Nauset also asserts a claim for breach of the provision in the subcontract requiring Gleeson to obtain insurance covering Nauset for claims arising out of Gleeson's work on the project. That claim is dismissed for the same reasons that Nauset's analogous claim asserted against Madaio is dismissed. Gleeson included Nauset as a named insured on its liabilility policy, and the insurer is defending Nauset under a reservation of rights. There is, presently, no means to adjudicate whether the policy on which Gleeson added Nauset as a named insured failed to provide the coverage that Gleeson contracted to provide to Nauset.

         Hardie

         Hardie was a material supplier to the project. It supplied three types of products used in the construction of the project: clapboard siding, trim board, and panel siding. Nauset asserted third-party claims against Hardie alleging defects in the materials supplied. These materials were installed in 2006 and the problems in the project were identified no later than 2007. The plaintiff filed its complaint against Nauset and others on July 8, 2011. Nauset did not file its third-party complaint against Hardie until July 31, 2014, some eight years after Nauset supplied the materials in question.

         Nauset asserts claims against Hardie for breach of warranty and contribution. The Uniform Commercial Code (G.L.c. 106, § 2-318) provides the period of limitations for breach of warranty claims arising out of the sale of goods such as the construction materials supplied by Hardie. It is three years from the date the injury and damage occurs. Here that would ...


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