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ABC Soils Inc. v. DRS Power Technology, Inc.

United States District Court, D. Massachusetts

July 11, 2019

ABC SOILS, INC. and MARCIA BERGER, Plaintiffs,
v.
DRS POWER TECHNOLOGY, INC. Defendant.

          MEMORANDUM OF DECISION AND ORDER ON DEFENDANT'S MOTION TO DISMISS

          JUDITH GAIL DEIN, UNITED STATES MAGISTRATE JUDGE

         I. INTRODUCTION

         Plaintiffs ABC Soils, Inc. (“ABC”) and Marcia Berger brought this action against DRS Power Technology, Inc. (“DRS”), asserting claims relating to a contract for the excavation and environmental evaluation of a project site. DRS, a defense contractor for the United States Navy, hired ABC as a subcontractor to excavate the site in preparation for the installation of a tank for the Navy. ABC allegedly ran into unforeseen difficulties during the excavation that dramatically increased project costs, but was assured by DRS that ABC would be paid for the additional expense. At the conclusion of the project, the parties were unable to reach an agreement as to the proper amount owed. ABC filed suit on August 4, 2018, asserting a claim under Mass. Gen. Laws ch. 93A (“ch. 93A”) (Count I), a claim for breach of contract (Count II), and a claim for negligent infliction of emotional distress (“NIED”) (Count III).

         This matter is presently before the court on the “Defendant's Motion to Dismiss” (Docket No. 6), wherein the defendant asserts that that the plaintiffs' ch. 93A claim and NIED claim must be dismissed.[1] For the reasons detailed herein, this court concludes that ABC has failed to make out a claim under Mass. Gen. Laws. ch. 93A or a claim for negligent infliction of emotional distress. Therefore, DRS's Motion to Dismiss is ALLOWED as to Counts I and III of the plaintiffs' Complaint.

         II. STATEMENT OF FACTS

         This court summarizes the facts as alleged in the plaintiffs' Complaint, with additional uncontested facts where noted. Marcia Berger is the president of ABC, an environmental and excavation company headquartered in Massachusetts. (Docket No. 1 (“Complaint”) at 1). DRS is a major defense contractor that works extensively with the United States Navy. (Id.).

         In 2014, DRS entered into a contract with ABC for ABC to install a sub-floor tank pit at a DRS facility in Massachusetts and to perform associated environmental clean-up. (Id. ¶¶ 5, 7). The purchase order for the transaction specified that the upper budget for the project was $235, 000 and that the cost of all work performed within the scope of the project was not to exceed $335, 000 without the approval of DRS. (Id. ¶ 13, Ex. A). The purchase order incorporated the terms of a task order that ABC had submitted to DRS. (Id. ¶11). The task order indicated that “Should the work extend beyond the scope of work outlined herein, The Client [DRS] agrees to pay for all additional expenses incurred by ABC Soils.” (Id. ¶ 12).

         During the excavation, ABC discovered unanticipated environmental contamination and subsurface debris. (Id. ¶ 16). Specifically, the site was found to contain industrial debris, such as oven parts and railroad tracks, as well as concrete and other debris contaminated with polychlorinated biphenyls (PCBs). (Id. ¶¶ 17, 19). As a result, ABC was forced to engage in significant environmental remediation and removal on the project site. (Id. ¶ 18). To properly treat the contaminated debris and concrete, ABC had to power wash the debris before removing it for off-site disposal. (Id. ¶ 20). Additionally, ABC discovered that a concrete floor on site was five feet thick and reinforced with rebar and steel mesh, necessitating significant expense to remove it. (Id. ¶¶ 22, 23).

         Following the excavation, DRS requested that the pit be made deeper and larger, resulting in a 10.2% increase in volume from what had originally been agreed upon. (Id. ¶ 33). At the same time, DRS instructed ABC not to excavate to groundwater level, which forced ABC to undertake additional procedures to comply with the request. (Id. ¶ 34). ABC was required to install special, custom-built concrete forms into the pit due to the jagged and uneven nature of the excavation. (Id. ¶ 36). ABC had to remove heavy timbers from the excavation site as the concrete forms were installed, which cost additional time and effort. (Id. ¶ 37).

         ABC notified DRS of the cost increases associated with the PCB contamination and extensive debris. (Id. ¶ 26). DRS employees were also on site daily to witness the progress of the excavation. (Id. ¶ 27). A project manager for DRS assured ABC that ABC would be compensated for the additional work. (Id. ¶ 28). Officers for the United States Navy also surveyed the project site and pressured ABC to finish the project. (Id. ¶ 29).

         As a result of the unexpected subsurface conditions, ABC incurred expenses well in excess of original cost estimates for the project. (See id. ¶¶ 38-39). DRS has allegedly refused to fully compensate ABC for these additional costs, despite its earlier promise. (See id. ¶ 44). At one point, negotiations as to the amount due to ABC were ongoing, but stalled after a large staff reorganization at DRS. (Id. ¶ 43). To date, DRS has paid ABC $175, 000. (Id. ¶ 42). The plaintiffs allege that DRS owes ABC an additional $275, 941.97 plus interest. (Id. ¶ 45). DRS offered to settle the parties' payment dispute for $121, 520, but ABC rejected the offer as insufficient and significantly less than what was contractually owed. (Id. ¶ 46).

         As a result of DRS's unwillingness to pay what ABC believes it is owed, ABC was forced to cut back on expenses and reduce its staff. (Id. ¶ 47). ABC lost a key employee who took approximately $500, 000 in business with him when he left. (Id. ¶ 50). ABC was also forced to borrow money to make up for the loss in revenue. (Id. ¶ 49). Plaintiff Berger began working longer hours to cover company overhead. (Id. ¶ 48). As a result, Ms. Berger lost sleep, experienced anxiety and headaches, and missed out on time with her family. (Id. ¶ 51). Ms. Berger's son experienced difficulties in school, further exacerbating her emotional distress. (Id. ¶ 52). As a result of the financial hardship on Ms. Berger, tensions arose in her marriage and her spouse ultimately filed for divorce. (Id. ¶ 53).

         Additional facts will be provided below where appropriate.

         III. ...


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