ASP Denver, LLC v. Lend Lease (US) Construction Inc. et al
Filing
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ORDER Granting Plaintiff's 82 Motion for Partial Summary Judgment. By Judge Christine M. Arguello on 05/03/2018. (athom, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 16-cv-03140-CMA-MEH
ASP DENVER, LLC,
ASP,
v.
LEND LEASE (US) CONSTRUCTION INC., f/k/a Bovis Lend Lease, Inc.,
APOGEE WAUSAU GROUP, INC., d/b/a Wausau Window and Wall Systems, and
VIRACON, INC.,
Defendants,
LEND LEASE (US) CONSTRUCTION INC., f/k/a Bovis Lend Lease, Inc.,
Third-Party Plaintiff,
v.
METROPOLITAN GLASS, INC.,
Third-Party Defendant.
ORDER GRANTING PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT
This matter is before the Court on Plaintiff ASP Denver, LLC’s, (“ASP”) Motion for
Partial Summary Judgment (Doc. # 82), wherein ASP moves for summary judgment on
its breach of contract claim against Defendant Lendlease, (US) Construction Inc.
(“Lendlease”). For the following reasons, the Court grants ASP’s motion.
I.
BACKGROUND
A. THE PROJECT
ASP is the owner and lessor of a building located at 8000 East 36th Avenue in
Denver. (Doc. # 82 at 2.) This lawsuit stems from the construction of a Window System
comprised of certain windows and curtain walls encasing that building (“the Project”).
(Id.) Lendlease served as ASP’s general contractor for construction of the Project
pursuant to a contract that the parties executed in August 2008. The executed contract
consists, in relevant part, of the Modified AIA Document A111 — 1997, Standard Form
of Agreement Between Owner and Contractor (the “Agreement”); the Modified AIA
Document A201 — 1997, General Conditions of the Contract for Construction, (the
“General Conditions”); the Drawings; and the Specifications. (Doc. # 82-1 at 2, Article 1)
(Collectively, the “Contract Documents”). 1
Under the terms of the Contract Documents, Lendlease has the ability to engage
subcontractors for the completion of the work. (Doc. # 82-2, at § 3.3.1) (“Nothing herein
is intended to preclude the Contractor from delegating control over construction means,
methods, techniques, sequences and procedures to Subcontractors . . . ; provided
however, that Contractor shall remain solely responsible to Owner with respect thereto
notwithstanding any such delegation.”). Lendlease therefore engaged a subcontractor,
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Lendlease concedes that it executed the Agreement but denies that it executed the General
Conditions and disagrees that it can be bound be the provisions contained therein. Lendlease,
however, provides no support for that denial and the Court rejects it. Indeed, the executed
Agreement contains a provision expressly incorporating the General Conditions. It states “the
Contract Documents consist of this Agreement, the General Conditions of the Contract for
Construction, Drawings, Specifications, . . . these form the Contract, and are as fully part of the
Contract as if attached to this Agreement or repeated herein.” (Doc. # 82-1 at 2, Article 1).
Plainly read, this provision binds Lendlease to all the listed documents.
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Defendant Metropolitan Glass, Inc. (“Metropolitan Glass”), to perform the work relating
to the Window System. (Id. at 3.) Metropolitan Glass in turn contracted material
suppliers, Defendants Viracon, Inc. (“Viracon”) and Apogee Wausau Group, Inc.
(“Wausau”). 2 (Id.)
B. BREACH OF CONTRACT CLAIM
ASP’s breach of contract claim arises from alleged defects and deficiencies in
the manufacture and/or installation of the Window System in the Project. (Doc. # 82 at
2.) There are 1,943 insulated glass units (“IGUs”) in the Window System. (Doc. # 88 at
12.) Over time, numerous IGUs have displayed evidence of “spotting and fogging.”
(Doc. ## 82-3 at 23–24, 92-1 at 47.) ASP alleges that this “spotting and fogging” on the
IGUs renders the Window System non-conforming to contractual requirements. (Doc. #
82 at 13.) ASP also claims that, based on a plain reading of the Contract Documents,
Lendlease is solely responsible for the defects in the IGUs, even if the defects are
attributable to work completed by the Subcontractors. (Doc. # 82 at 3.) (emphasis
added.) Therefore, ASP is seeking partial summary judgment as to Lendlease’s liability
for breach of contract. (Id.) ASP is also seeking to recover damages arising out of or
relating to the repair and replacement of the Window System but concedes that
damages are better suited for resolution at trial. 3 (Id.)
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The Court refers to Metropolitan Glass, Viracon, and Wausau as “Subcontractors” collectively.
Lendlease contends that the issue of liability and damages are inextricably intertwined because
ASP would need to identify on a window-by-window basis the units that do not conform to the
Contract Documents. (Doc. # 88 at 13.) That dispute is irrelevant for purposes of this motion.
Indeed, as stated herein, it is undisputed that at least some IGU’s are non-conforming and ASP
concedes that resolution of the number of defective IGUs is better-suited for the jury at trial.
(Doc # 82 at 3.)
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Lendlease contends that summary judgment is not warranted on this claim
because (1) there exist ambiguities in the Contract Documents regarding Lendlease’s
performance and liability, and (2) there are genuine disputes governing the cause of the
“spotting and fogging.” (Doc. # 88 at 10.) The Court disagrees.
II.
LEGAL PRINCIPLES
A. SUMMARY JUDGMENT STANDARD
Summary judgment is warranted when the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law. Turnkey Sols. Corp. v. Hewlett Packard Enter. Co., No. 15-cv-01541CMA-CBS, 2017 WL 3425140, at *2 (D. Colo. Aug. 9, 2017). A fact is “material” if it is
essential to the proper disposition of the claim under the relevant substantive law. Id. A
dispute is “genuine” if the evidence is such that it might lead a reasonable jury to return
a verdict for the nonmoving party. Id. In reviewing motions for summary judgment, a
court must view the evidence in the light most favorable to the non-moving party. Id. To
grant summary judgment, the evidence presented must be so powerful that no
reasonable jury would find otherwise. Andersen v. Lindebaum, 160 P.3d 237, 239–40
(Colo. 2007).
B. CONTRACT LAW
Well-established principles of contract law guide this Court’s review. “When the
written contract is complete and free from ambiguity, [the court] will find it to express the
intentions of the parties and enforce it according to its plain language.” Gagne v. Gagne,
338 P.3d 1152, 1163 (Colo. App. 2014). In addition, courts must interpret and enforce
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contracts as written and cannot rewrite or restructure them. Janicek v. Obsideo, LLC,
271 P.3d 1133, 1138 (Colo. App. 2011). A court must also interpret a contract “in its
entirety with the end in view of seeking to harmonize and to give effect to all provisions
so that none will be rendered meaningless.” Pepcol Mfg. Co. v. Denver Union Corp.,
687 P.2d 1310, 1313 (Colo.1984).
C. ELEMENTS OF BREACH OF CONTRACT CLAIM
To prevail on a breach of contract claim, ASP must demonstrate by a
preponderance of the evidence:
(1) The existence of a contract;
(2) performance by the ASP or some justification for nonperformance;
(3) failure to perform the contract by the Lendlease; and
(4) resultant damages to the ASP.
See W. Distrib. Co. v. Diodosio, 841 P.2d 1053, 1058 (Colo. 1992).
III.
ANALYSIS
It is undisputed that ASP has demonstrated the first two elements of a breach of
contract claim. Indeed, Lendlease concedes that a contract existed between ASP and
Lendlease, and Lendlease does not dispute ASP’s performance under that contract.
(Doc. # 88 at 2.)
However, Lendlease alleges that genuinely disputed material facts remain in
regard to the third and fourth elements. (Id.) Lendlease argues that judgment as a
matter of law with respect to its performance under the contract and resultant damages
is precluded by (1) disputed issues of contract interpretation, including the definition of
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“defective” and the number of IGUs that fall within that definition; and (2) disputed facts
concerning the cause of the alleged defects. The Court rejects Lendlease’s arguments
and grants summary judgment on Lendlease’s liability for breach of contract for the
following reasons.
First, the Court finds as a matter of law that Lendlease is liable for the acts and
omissions of the Subcontractors pursuant to the plain language of the Contract
Documents. As pertinent here, the Contract Documents provide that Lendlease “shall
fully execute the Work described in the Contract Documents, except to the extent
specifically indicated in the Contract Documents to be the responsibility of others.” (Doc.
# 82-1 at 2, Article 2.) It adds that Lendlease “shall perform the Work in accordance to
the Contract Documents” and “shall be responsible for inspection of portions of Work
already performed to determine that such portions are in proper condition to receive
subsequent Work.” (Doc. # 82-2 at 13 §3.1.2, 14 §3.3.3.) The Contract Documents
similarly bind the Subcontractors to the Contract Documents; they state that Lendlease
“shall require each Subcontractor . . . to be bound to the Contractor by terms of the
Contract Documents, and to assume . . . all the obligations and responsibilities . . . that
the Contractor, by these Contract Documents, assumes toward the Owner.” (Doc. # 822 at 23 §5.3.1.) Moreover, the Contract Documents expressly provide that Lendlease is
“solely responsible for quality control of the Work” on the Project, including “inspection”
and “examin[ation of] the Work as necessary to ensure” compliance with the Contract
Documents. (Doc. ## 82-3 at 1, 2 (general); 11 (exterior wall), 20 (curtain wall and
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glazed assembly); 27 (glazing)). Most importantly, the Contract Documents plainly
impute all liability for the Subcontractors’ work to Lendlease:
§ 3.3.1 …Nothing herein is intended to preclude the Contractor from
delegating control over construction
means, methods, techniques,
sequences and procedures to Subcontractors performing portions of the
Work; provided however, that Contractor shall remain solely responsible to
Owner . . . notwithstanding any such delegation.
§ 3.3.2 The Contractor shall be responsible to the Owner for acts and
omissions of the Contractor's employees, Subcontractors . . . performing
portions of the Work for or on behalf of the Contractor or any of its
Subcontractors.
(Doc. # 82-2 at 14.)
The Court finds that based on the plain language of these provisions, Lendlease
is responsible to ASP (1) for ensuring that all work conforms to the requirements of the
Contract Documents, and (2) for the “acts and omissions” of the Subcontractors,
including Defendants Metropolitan Glass, Viracon, and Wausau. Lendlease’s arguments
to the contrary are unconvincing.
Second, the Court also finds that the “spotting and fogging” on the IGUs clearly
do not conform to the Contract Documents. The Court is not persuaded otherwise by
Lendlease’s suggestion that “spotting and fogging” may not fall under the definition of
“defective” because that definition is ambiguous in the Contract Documents. To the
contrary, the plain language of the Contract Documents provides numerous provisions
unambiguously defining the term “defective.” And those provisions broadly incorporate
any and all non-conforming defects. For example, the Documents provide:
“. . . the Work will be free from defects not inherent in the quality required
or permitted, and that the Work will conform to the requirements of the
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Contract Documents. Work not conforming to these requirements . . .
shall be considered defective.”
(Doc. # 82-2 at 15, §3.5.1).
“. . . Defective materials and workmanship is hereby defined to include
water penetration or air infiltration, glass breakage, deterioration of
finishes, failure of operating parts to function properly, and other
evidence of deterioration or failure of the Work to comply with
performance or other requirements
(Doc. # 82-3 at 13, §1.9(A)) (Exterior Wall Warranty).
“. . . Such defects are hereby defined to include any evidence of early
deterioration, weathering or aging, uncontrolled water penetration or
air infiltration, glass breakage, deterioration of finishes, failure of
operating parts to function properly, and any other evidence of
deterioration or failure to comply with requirements of the Contract
Documents . . .,
(Doc. # 82-3 at 20, §1.7(A)) (Curtain Wall and Glazed Assembly).
In other words, the Contract Documents provide a broad and unambiguous
definition for what is considered defective and Lendlease’s contrary arguments are
unavailing. Although Lendlease argues that the “spotting and fogging” on the IGUs does
not fall under the definition of “defective,” Lendlease has presented no evidence to
support that assertion, nor do any of the experts so find. (Doc ## 82-3 at 67, 92-1 at 66.)
Third, and finally, the Court rejects Lendlease’s argument that disputed facts
underlying the alleged cause of the “spotting and fogging” preclude summary judgment.
Lendlease attempts to avoid entry of summary judgment by asserting that an unknown
third party or “factor wholly unrelated to Lendlease, Metropolitan Glass, Wausau, or
Viracon” could have caused the alleged defects. This argument is unpersuasive
because Lendlease has provided no factual evidence to support this conclusory
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assertion. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (the party opposing
summary judgment must present “specific facts” showing that a genuine issue for trial
remains); Fed R. Civ. P. 56(c)(1)(A)(“[A] party asserting that a fact . . . is genuinely
disputed must support the assertion by . . . citing to particular parts of materials in the
record . . . or showing that the materials cited do not establish the absence or presence
of a genuine dispute, or that an adverse party cannot produce admissible evidence to
support the fact.”).
Indeed, Lendlease’s own expert contradicts this assertion. Lendlease’s expert
specifically opines that the defects in the Window System were caused by the parties
who “were contracted to complete work that [Lendlease] could not self-perform” and that
they “should be responsible for any alleged defects.” (Doc. # 82-3 at 68.) ASP’s expert
report likewise attributes the cause to Lendlease’s Subcontractors, allocating fault for
the defects as follows:
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(Doc. # 92-1 at 64.) Nothing in either expert report suggests that an unknown factor may
have caused the “fogging and spotting,” or that anyone outside of the named
Defendants could have been responsible.
Accordingly, based on the foregoing analysis, the Court finds that there are no
disputed issues of material fact as to whether (1) the “spotting and fogging” on the IGUs
is considered a defect under the Contract Documents; (2) Lendlease, one of its
Subcontractors, or a combination thereof caused the “spotting and fogging”; and (3)
Lendlease is solely responsible for the defects in the IGUs, even if the defects are
attributable to work completed by the Subcontractors, and thus, is contractually liable to
ASP for those defects. Summary judgment on ASP’s breach of contract claim is,
therefore, warranted.
IV. CONCLUSION
For the foregoing reasons, the Court GRANTS Plaintiff ASP Denver, LLC’s
Motion for Partial Summary Judgment as to Lendlease’s liability for breach of contract.
The quantity of damages owed will be left for determination at trial. (Doc. # 82.)
DATED: May 3, 2018
BY THE COURT:
_______________________________
CHRISTINE M. ARGUELLO
United States District Judge
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