Westfield Insurance Company v. Centra, Inc.

Filing 68

ORDER Granting Jacobs Engineering Group's #62 MOTION to Dismiss : Jacobs is dismissed from this civil action, by Judge Richard P. Matsch on 10/3/2014. (jsmit)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Senior Judge Richard P. Matsch
Civil Action No. 13-cv-02419-RPM
WESTFIELD INSURANCE COMPANY, an Ohio corporation,
Plaintiff,
v.
CENTRIA, INC., a Delaware corporation; and
JACOBS ENGINEERING GROUP, INC., a Delaware corporation,
Defendants.

ORDER GRANTING JACOBS ENGINEERING GROUP’S MOTION TO DISMISS

The Colorado Army National Guard (“the Guard”) built a hangar and related facilities at
the Eagle County Airport in Gypsum, Colorado known as the High Altitude Army Aviation
Training Site (“HATTS Project” or “the Project”).

The Guard contracted with Jacobs

Engineering Group, Inc. (“Jacobs”) to design the HATTS Project and provide construction
supervision. The Guard contracted with Hensel Phelps Construction Company (“Hensel
Phelps”) to serve as the general contractor on the Project.
Hensel Phelps entered into subcontracts with Noorda Sheet Metal to construct and install
a metal roofing system and with Noorda Materials to supply materials. Noorda Materials
contracted with Centria, Inc. for the supply of certain materials.
Westfield Insurance Company (“Westfield”) issued performance and payment bonds to
Hensel Phelps for Noorda Sheet Metal and a supply bond to Hensel Phelps for Noorda
Materials.

The roof system leaked during the winter of 2012-2013. Hensel Phelps terminated the
Noorda contracts and made the necessary repairs for a cost exceeding $1.5 million.
Westfield paid Hensel Phelps $1 million in settlement of Westfield’s surety bond
obligations. Hensel Phelps, in turn, assigned all claims it may have against others on the
Project to Westfield. In its Second Amended Complaint [Doc. 59 at 11-13], Westfield seeks
damages from Jacobs for professional negligence and breach of contract; Westfield also
seeks contribution from Jacobs. Jacobs moved for dismissal of these claims pursuant to Fed.
R. Civ. P. 12(b)(6).
Westfield’s professional negligence and breach of contract claims against Jacobs are
based on the theory that when Hensel Phelps incurred the $1.5 million cost of repairing the
Project roof, Hensel Phelps became equitably subrogated to the rights of the Colorado
National Guard; thus, when Hensel Phelps assigned all of its Project-related claims to
Westfield, Westfield stepped into Hensel Phelps’ shoes and became subrogated to the
Colorado National Guard’s Project-related rights against Jacobs. There is no precedent for
the claim that a general contractor is by law subrogated to any possible claims that a project
owner may have against a subcontractor when the general contractor voluntarily completes
the work of the subcontractor. Westfield has failed to state a viable tort or contract claim
against Jacobs based on this theory.
Westfield’s negligence claim is also barred by Colorado’s economic loss rule. Westfield
asserts that, in designing the HATTS Project, Jacobs breached a duty of care owed by design
professionals that arises from tort law.

Jacobs’ contract with the Guard sufficiently

memorialized Jacobs’ professional tort duty.

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Westfield’s claim against Jacobs for contribution, which must be based on a sustainable,
underlying tort claim, is accordingly barred.
Hensel Phelps could not have asserted the Guard’s rights against Jacobs, either in
contract or in tort. Jacobs did not owe the Guard a tort duty of care that was independent of
Jacobs’ contract with the Guard. It is therefore
ORDERED that Defendant Jacobs Engineering Company’ Motion to Dismiss [Doc. 62]
is granted. Jacobs is dismissed from this civil action.
Dated:

October 3, 2014
BY THE COURT:
s/Richard P. Matsch
_____________________
Richard P. Matsch
Senior Judge

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