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J. D’Amico, Inc. v. Massachusetts Water Resources Authority

Superior Court of Massachusetts, Suffolk

August 27, 2018

J. D’AMICO, INC.
v.
MASSACHUSETTS WATER RESOURCES AUTHORITY et al.

          File Date: August 28, 2018

          MEMORANDUM OF DECISION AND ORDER ON MASSACHUSETTS WATER RESOURCES AUTHORITY’S SPECIAL MOTION TO DISMISS

          Janet L. Sanders, Justice of the Superior Court

          This action arises out of the construction of a replacement water main owned by the Massachusetts Water Resources Authority (MWRA). Suit was originally brought by the general contractor on the project, plaintiff D’Amico, Inc. I (D’Amico) seeking declaratory relief with regard to its obligations on the project. The MWRA asserted a counterclaim against D’Amico and a third-party claim against Green International Affiliates, Inc. (Green), the design engineer on the project. Greene responded with its own claim for breach of contract, contending (in essence) that the MWRA had sued it in breach of a covenant not to sue. Now before the Court is the MWRA’s Special Motion to Dismiss pursuant to G.L.C. 231, § 59H, the so-called anti-SLAPP statute. This Court concludes that Green’s claim against the MWRA should indeed be dismissed, but not because it is a SLAPP suit within the meaning of G.L.c. 231, § 59H. Rather, this Court concludes that Green simply fails to state a claim upon which relief may be granted pursuant to Rule 12(b)(6), Mass.R.Civ.P. The motion is therefore ALLOWED on that basis.

         BACKGROUND

         The following is taken from the MWRA’s Third-Party Complaint and from Green’s Answer, in which Green asserts a Counterclaim against the MWRA. For purposes of a 12(b)(6) motion, this Court assumes the factual allegations in the Counterclaim to be true. It relies on the Third-Party Complaint to the extent that Green in its Answer admits to certain of its paragraphs. The Court also relies on the underlying contractual documents for the project, which are referenced in all the pleadings. To the extent that relevant provisions are unambiguous, their interpretation is for the Court to decide and therefore can be construed in the context of a motion to dismiss.

         The project at issue concerns the rehabilitation of an existing water main located in Waltham and Watertown (the Project). The Project included "slip-lining" 5, 400 feet of a High Density Polyethylene (HDPE) pipe into the existing water main and replacement of another three hundred feet of HDPE pipe between the slip-lined sections. In January 2011, the MWRA awarded a contract to Green to provide professional design and engineering services (the Design Contract). See Exhibit A to the Affidavit of Ko Ishikura, P.E. On May 3, 2013, the MWRA awarded the Construction Contract to D’Amico, who was responsible for performing all construction activities for the Project. Work on the Project began shortly thereafter.

         During the Project’s initial stages, D’Amico was required to submit shop drawings to the MWRA and Green pursuant Section 1.120 of the Construction Contract’s General Conditions. Green reviewed these shop drawings and requested additional information and calculations from D’Amico; the work proceeded without D’Amico providing this additional technical data. After the Project was complete, a series of leaks occurred in the pipe. After an investigation as to the cause, the MWRA notified D’Amico that it considered these leaks to be a systemic problem and made a formal demand on D’Amico and its surety (third-party defendant Travelers Casualty and Surety Company) to undertake repairs or bear the cost of corrective action. It made a similar demand on Green. See Exhibit 3 to Affidavit of Meghan McNamara. In a preemptive strike, D’Amico instituted this lawsuit. In its Third-Party Complaint against Green, the MWRA alleges that under Section 4 of the Design Contract, Green was required to monitor the progress and quality of the work and in particular verify that all construction and materials were in accordance with the contract documents. It alleges that Green failed to fulfill these obligations-allegations which Green denies.

          In its Answer to the Third-Party Complaint, Green asserts several affirmative defenses, including the defense that the damages for which the MWRA seeks are the responsibility of D’Amico, not Green. It goes on to set forth various terms of the Construction Contract between the MWRA and D’Amico regarding D’Amico’s contractual responsibilities. As to its Counterclaim, Green alleges that the MWRA has breached the Design Contract "by naming Green in the third-party complaint, asserting Green is responsible for D’Amico’s deficient work, and taking an adversary position against Green instead of cooperating with Green in the defense of the meritless claim brought by D’Amico." See ¶ 8 of Counterclaim. It seeks damages for losses sustained by this breach-presumably its attorneys fees and costs that it will incur from being named a third-party defendant.[1]

         DISCUSSION

         The anti-SLAPP statute provides a procedural remedy for early dismissal of lawsuits "brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances." 477 Harrison Ave., LLC v. Jace Boston, LLC, 477 Mass. 162, 167 (2017), quoting Duracraft v. Holmes Prods. Corp., 427 Mass. 156, 161 (1998). This procedural remedy is a special motion to dismiss, which allows a special movant to seek dismissal of "civil claims, counterclaims, or cross claims" based solely on its exercise of the right of petition. See G.L.c. 231, § 59H. To prevail on this motion, the special movant (here the MWRA) bears the initial burden of showing, through pleadings and affidavits, that the claims against it "are ‘based on’ the petitioning activities alone and have no substantial basis other than or in addition to the petitioning activities." Duracraft, 427 Mass. at 167-68. If the movant is able to sustain that threshold burden, the motion may still be defeated if the claim that is the target of the special motion (here Green’s Counterclaim) was not brought primarily to chill the special movant’s legitimate exercise of its right to petition. Blanchard v. Steward Carney Hospital, 477 Mass. 141, 159-61 (2017). With these legal principles in mind, this Court concludes that Green’s Counterclaim against the MWRA is not a SLAPP suit under the statute. Rather, it appears to be based on a fundamental misreading of the Design Contract.

         The Counterclaim purports to rely on certain provisions of the Design Contract. That agreement includes an attachment setting forth the Scope of Services that Green was to provide. Paragraph 6 of the Counterclaim quotes from Section 3 of that attachment, pursuant to which Green disclaimed any responsibility for certain acts and omissions of D’Amico. Section 4 of that same attachment, however, outlines Green’s responsibilities, which include precisely the obligations that the MWRA claims that Green breached. The Counterclaim also quotes a portion of Section 7.1 of the Design Contract, apparently interpreting certain language in that section to constitute a covenant not to sue. It quite clearly is no such thing. Rather, section 7.1 states:

The Consultant [Green] at its expense and with counsel acceptable to the Authority [the MWRA] shall defend and shall indemnify and hold harmless the Authority ... from and against all claims, causes of action, suits, losses, damages and expenses, including attorneys fees, arising out of or resulting from negligent acts, errors or omissions or breach of contractual duties to the Authority by the Consultant and anyone employed by it (including subconsultants and their employees) in performance of this Agreement.

         The language on which Green relies follows this but is only selectively quoted in the Counterclaim. It states that:

The Authority [the MWRA] shall give the Consultant [Green] prompt and timely notice of any claims threatened or made, or suit instituted against it which could result in a claim for indemnification hereunder, provided, however, that lack of such notice shall not be a waiver of the Consultant’s indemnification of the ...

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