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Hillside FXF, LLC v. Premier Design Build Group, LLC

Superior Court of Massachusetts, Suffolk, Business Litigation Session

November 30, 2016

Hillside FXF, LLC et al.
Premier Design Build Group, LLC et al No. 135614

         Filed December 1, 2016


          Janet L. Sanders, Justice

         This case arises out of the construction of a FedEx facility in Northborough, Massachusetts. Plaintiffs Hillside PXF, LLC (Hillside) and Jones Development Company, LLC (Jones) filed this action against defendants G. Lopes Construction, Inc. (Lopes), Premier Design Build Group, LLC (Premier), and Haley & Aldrich, Inc. (Haley) seeking to recover damages relating to remedial work performed after the construction. This Court has already denied motions for summary judgment made by Haley and by Premier as to plaintiffs' claims asserted against them. Now before this Court is Premier's Motion for Summary Judgment as to Count VII of its Cross Claim against defendant Lopes. Premier seeks a declaration from this Court that its subcontract with Lopes contains a valid and enforceable duty to indemnify and that Lopes is obligated to indemnify, defend, and hold Premier harmless from any errors or deficiencies related to the construction project. After careful review of the parties' submissions, this Court concludes that Premier's motion must be DENIED as to Lopes' duty to indemnify but ALLOWED as to its duty to defend.


         The relevant facts in the summary judgment record, viewed in the light most favorable to the plaintiffs, are as follows. Hillside and Jones engage in commercial development and construction projects. On August 23, 2011, Hillside as the owner/developer and Premier as the general contractor entered into an agreement to construct a FedEx freight facility at 300 Bartlett Street, Northborough, Massachusetts (the Project). Because the site was on a relatively steep slope, a significant amount of cut and fill and excavation work was required to prepare it for construction. The plaintiffs retained Premier to perform this work. Premier in turn retained Lopes as a subcontractor to perform demolition, grading, and excavation for the Project. The defendant Haley was retained by Premier to provide on-site monitoring of the earthwork.

         On September 21, 2011, Lopes began removing trees at the Project site, and excavation at the site continued through the fall. Hillside authorized Premier to proceed with the foundation installation in late December 2011, and footings and foundations for the Project were installed shortly thereafter. In February 2012, it was noticed that the walls appeared to have shifted laterally. Ultimately, it was determined that the foundations had settled and that this was caused by improper fill work. There are disputes of fact as to which entity--Premier, Lopes, or Haley--either alone or in combination with each other, was responsible for the foundation's failure. By the time the building was stabilized and the site repaired, Hillside had spent more than $3 million in remedial work.

         Premier's motion relies on certain provisions in two separate subcontracts it had with Lopes, one dated August 24, 2011 and the other dated March 1, 2012 (the Subcontracts). The Subcontracts have two clauses in each of them which can be fairly characterized as indemnification provisions. The first (Indemnification Provision #1) is as follows:

The Subcontractor [Lopes] shall indemnify and save harmless the Owner [Hillside] and the Contractor [Premier] and their officers, agents, servants and employees, from and against any and all claims, demands, suits, proceedings, liabilities, judgments, awards, losses, damages, costs and expenses, including attorneys fees, on account of . . . damage to or destruction of any property, directly or indirectly arising out of, relating to or in connection with the Work, whether or not due or claimed to be due in whole or in part to the active, passive or concurrent negligence or fault of the Subcontractor . . . and whether or not such claims, demands, suits or proceedings are just, unjust, groundless, false or fraudulent; and the Subcontractor shall and does hereby assume and agrees to pay for the defense of all such claims, demands, suits and proceedings . . . the Subcontractor shall not be required to indemnify the Contractor, his officers, agents, servants or employees against any such damages occasioned solely by acts or omissions of the contractor other than supervisory acts or omissions of the Contractor in the work .

(Emphasis added.) The second (Indemnification Provision #2) is part of the General Conditions of the Subcontracts and provides in relevant part that:

Subcontractor shall indemnify and hold harmless PDBG . . . Owner . . . and agents and employees of any of them (. . . " Indemnified Parties") from and against claims, damages, losses and expenses, including, but not limited to, attorneys fees arising out of or resulting from (i) performance or non-performance of the Work, (ii) breach of obligations of Subcontractor under the Contract Documents including, without limitation, defective Work . . . or (v) any other act or omission with respect to the Work by Subcontractor . . . resulting in . . . injury to or destruction of property, or loss thereof.

(Emphasis added.) This same provision goes on to more specifically describe the duty to defend:

Subcontractor hereby acknowledges and agrees that if any one or more claims or actions are asserted against PDBG Parties giving rise to a duty . . . [to] defend on the part of Subcontractor pursuant to this Section, PDBG Parties shall have the right to elect, in PDBG Parties' sole and absolute discretion, whether to contest any one or more of such claims or actions and Subcontractor shall be required to perform the obligations of Subcontractor set forth above regardless of whether PDBG Parties elect to contest such claim(s). If PDBG Parties elect to contest any such claim(s), PDBG Parties shall have the right to select PDBG Parties' own counsel and control their defense and Subcontractor shall bear the cost of employing such counsel . . .

         Both of Indemnification Provision #1 and Indemnification Provision #2 refer to " Work." The General Conditions define " Work to include " all design, labor, materials, skill, equipment, taxes, services, delivery charges, supervision, administration, facilities, and field measurement necessary to produce the construction required by the Subcontract Agreement and other Contract Documents." The term " Contract Documents" is also defined by the Subcontracts and includes the Construction Agreement between plaintiffs and Premier. Finally, the Subcontracts state that they shall be construed in accordance with Massachusetts law and their provisions shall be interpreted where possible in a manner to sustain their legality and enforceability."

         Hillside and Jones filed this action October 28, 2013. By letter dated December 27, 2013, Premier tendered its defense and indemnification of this matter to Lopes. Counsel for Lopes requested additional information, and on February 4, 2014, Premier issued a more detailed amended tender of defense and indemnity to Lopes. Thereafter, Lopes declined to defend and ...

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