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Turner Construction Co. v. MJ Flaherty Co.

Superior Court of Massachusetts, Suffolk

March 7, 2017

Turner Construction Company
v.
MJ Flaherty Company No. 136681

          Filed March 8, 2017

          MEMORANDUM OF DECISION AND ORDER ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND PLAINTIFF'S MOTION TO STRIKE THE EXPERT REPORT OF JACK GRANT

          Mitchell H. Kaplan, Justice of the Superior Court.

         INTRODUCTION

         This case arises out of a subcontract between the plaintiff, Turner Construction Company (Turner), and the defendant M.J. Flaherty Company (Flaherty). Turner was the general contractor on the construction of a 23-story commercial building at 157 Berkeley Street and certain related remodeling of an adjacent building for Liberty Mutual Insurance Company (the Project). Flaherty entered into a subcontract with Turner to perform the HVAC work on the Project (the Subcontract). The initial value of the Subcontract was $12, 462, 252. Turner brought this action against Flaherty to recover damages that it alleges that it suffered when Flaherty failed to complete its work on the Project and Turner had to hire another subcontractor to complete the HVAC work.[1]

         Flaherty has asserted counterclaims against Turner. Some of these claims are based on Turner's failure to pay Flaherty for all of the work that it performed. Here, the amount in dispute is complicated by the fact that in early 2013 several sub-subcontractors and material suppliers to Flaherty were not being paid and began to file notices of contract in anticipation of asserting mechanics' liens on the Project. In response, Turner entered into a series of agreements with Flaherty pursuant to which it issued checks to Flaherty for subcontracted work that were made jointly payable to Flaherty and the vendors to insure that they were being paid out of the sums Turner was disbursing to Flaherty.

         Flaherty, however, also has alleged that as a result of the manner in which Turner ran the Project, Flaherty was so adversely affected that the value of Flaherty as a going concern was adversely impacted and this resulted in a $6.4 million reduction in Flaherty's " new worth." This is, of course, a paradigm claim for consequential damages. This claim is the subject of the motion now before the court.

         It would be an extraordinary understatement to say that this case has a tortured procedural history. Turner has filed two previous motions for summary judgment that the court was unable to decide on their merits because they were premature or otherwise not properly before the court. It is treating this motion as a motion for partial summary judgment seeking dismissal of so much of the counterclaims as assert claims for consequential damages, and, to that extent, Turner's motion for summary judgment is ALLOWED.

         ADDITIONAL FACTS

         There are only a few additional facts that need be recited in connection with Flaherty's claim for consequential damages.

         As is typical of subcontracts for large, commercial building projects, the Subcontract contained a clause eliminating Flaherty's right to recover consequential damages.

Notwithstanding any term or provision herein to the contrary, Subcontractor expressly waives and releases all claims or rights to recover lost profit (except for profit on work actually performed), recovery of overhead (including home office overhead), and any other indirect damages, costs or expenses in any way arising out of or related to the Agreement, including the breach thereof by Contractor, delays, charges, acceleration, loss of efficiency or productivity disruptions and interference with the performance of the work.

         A number of change orders were issued for the HVAC work which increased the project price by something in excess of 20%. Flaherty asserts, and for purposes of this motion it is accepted as true, that Turner's project schedule was very aggressive. Additionally, changes to the schedule and project sequencing " negatively impacted . . . Flaherty's manner and method of performance and this increased Flaherty's costs" and made the project much more difficult for Flaherty to perform.

         DISCUSSION

         Summary ...


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