Foley Company v. Mixing & Mass Transfer Technologies, LLC

Filing 227

ORDER denying 133 Pedrotti's motion for summary judgment. Signed on 8/6/13 by Chief District Judge Fernando J. Gaitan, Jr. (Enss, Rhonda)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
FOLEY COMPANY,
Plaintiff,
v.
MIXING & MASS TRANSFER
TECHNOLOGIES, LLC
Defendant/Third-Party Plaintiff,
v.
HDR ENGINEERING, INC., and
R.E. PEDROTTI CO., INC.,
Third –Party Defendant
v.
HDR ENGINEERING, INC.,
Fourth-Party Plaintiff,
v.
DELICH, ROTH, & GOODWILLIE, P.A.,
Fourth-Party Defendant.

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

Case No. 4:11-CV-01080-FJG

ORDER
Currently pending before the Court is Third-Party Defendant R.E. Pedrotti
Company, Inc.’s (“Pedrotti”) Motion for Summary Judgment (Doc. No. 133).
I.

BACKGROUND
On January 24, 2006, Foley Company and Unified Government of Wyandotte

County, Kansas City, Kansas (“UG”) entered into a contract (“Contract”), pursuant to

which Foley was to serve as the general contractor for a project known as the Kaw
Point Wastewater Treatment Plant Improvements Project I.D. 6176 (“Project”). The
Contract required that Foley complete all work specified by the Contract documents
within three hundred sixty-five (365) calendar days after the date established in the
Notice to Proceed, unless the period for completion was extended. Pursuant to the
Contract, Foley was to pay liquidated damages of Two Thousand and 00/100 Dollars
($2,000.00) per day to UG for each calendar day thereafter. The Notice to Proceed was
issued by UG on February 13, 2006. As such, the date for completion of all work was
established as February 12, 2007. (Doc. No. 1).
Foley’s scope of work under its Contract included Section 13180, Retrofitted
Oxygenation System (“Oxygenation System”), of the Technical Specifications for the
Project. Foley entered into a subcontracting or purchase order agreement (“Purchase
Order”) with Mixing & Mass Transfer Technologies, LLC (“M2T2”) with respect to the
Oxygenation System on or about April 14, 2006. The Purchase Order provided that
M2T2 would pay liquidated damages to Foley if M2T2 did not meet agreed upon dates
in the delivery schedule attached to the Purchase Order and Foley had to pay liquidated
damages to UG. (Doc. No. 1).
Pedrotti operated under two contracts with respect to the Project: one contract
between Pedrotti and Foley to provide instrumentation and computer modifications to
the Plant (“Foley Contract”) and one between Pedrotti and M2T2 to provide computer
programming services with respect to the Project (“M2T2 Contract”). (Doc. No. 134,
145, & 178).

2 

M2T2 failed to meet the agreed upon dates and the Project was delayed. On
June 4, 2010, by letter, UG advised Foley that the Project was completed on February
1, 2010, which was the date on which the performance testing on the Oxygenation
System required by Section 13180 was approved. According to the June 4, 2010 letter,
there was a delay in completion of 1, 084 days, and at a daily liquidated damages rate
of $2,000.00 per day, the amount owed by Foley to UG on account of liquidated
damages was Two Million One Hundred Sixty Eight Thousand and 00/100 Dollars
($2,168,000.00). Foley negotiated a final settlement of liquidated damages owed by
Foley to UG on the Project in the amount of Five Hundred Sixty Six Thousand and
00/100 Dollars ($566,000.00). Foley and UG executed a Settlement Agreement on
June 30, 2011 which states in part that “the delay in completion of the Project was
caused by Foley’s Supplier M2T[2], with whom the Unified Government is not in privity
of contract.” (Doc. Nos. 1, 134, 145, & 178).
Subsequently, on October 21, 2011, Foley filed the present action claiming that
all conditions precedent to Foley’s right to recovery from M2T2 have been met to Foley,
or have been waived, released, or excused by M2T2. As such, Foley asserts two
breach of contract claims against M2T2 for recovery of the Settlement Agreement
amount. On April 25, 2012, M2T2 filed its Second Amended Answer, wherein it asserts
a Counterclaim against Foley for breach of contract for failure to pay the remaining
balance on the account. M2T2 also filed a Third-Party Complaint against Pedrotti for
equitable or non-contractual indemnity. Specifically, M2T2 asserts the following:
Pedrotti was retained by the [UG] as the sole source provider of certain
software and systems integration for work undertaken at the Plant. In this

3 

role, Pedrotti had the professional obligation and duty to evaluate the
necessary improvements needed to software and operations control
systems

for

the

Oxygenation

System,

prepare

any

necessary

modifications or updates to software, and prepare operations and
maintenance manuals, as well as training modules for the Project. Both
M2T[2] and Pedrotti had the obligation to supply the professional and
technical expertise in accordance with their respective contracts and
ensure that their respective obligations undertaken at the Plant were
performed in a timely manner. Pedrotti failed to fulfill its obligations in a
timely manner, which resulted in Project delay.

Foley now seeks

liquidated damages from M2T[2] resulting from Project delay caused, in
part, by Pedrotti.
(Doc. Nos. 1 & 51).
On May 16, 2013, Pedrotti filed the present Motion for Summary Judgment (Doc.
Nos. 133 & 134).
II.

STANDARD OF REVIEW
A moving party is entitled to summary judgment on a claim only if there is a

showing that “there is no genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). “[T]he substantive law
will identify which facts are material. Only disputes over facts that might affect the
outcome of the suit under the governing law will properly preclude the entry of summary
judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). If the moving
party meets this requirement, the burden shifts to the non-moving party to “set forth

4 

specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. 242,
248 (1986). In Matsushita Electric Industrial Co. Ltd. v. Zenith Radio Corp., 475 U.S.
574, 586 (1986), the Court emphasized that the party opposing summary judgment
“must do more than simply show that there is some metaphysical doubt as to the
material facts” in order to establish a genuine issue of fact sufficient to warrant trial. In
reviewing a motion for summary judgment, the court must view the evidence in the light
most favorable to the non-moving party, giving that party the benefit of all inferences
that may be reasonably drawn from the evidence. Matsushia, 475 U.S. 574, 588; Tyler
v. Harper, 744 F.2d 653, 655 (8th Cir. 1984), cert. denied, 470 U.S. 1057 (1985).
To establish a claim for non-contractual indemnity, which is also referred to as
common law indemnity or equitable indemnity, the Plaintiff must show:

(1) the

discharge of an obligation by the Plaintiff; (2) the obligation discharged by the Plaintiff is
identical and co-extensive to an obligation owed by the Defendant; and (3) the
discharge of the obligation by the Plaintiff is under such circumstances that the
obligation should have been discharged by the Defendant, and (4) Defendant will be
unjustly enriched if the Defendant does not reimburse the Plaintiff to the extent that the
Defendant’s liability has been discharged.

Beeler v. Martin, 306 S.W.3d 108, 111

(Mo.App. 2010); See State ex rel. Manchester Ins. and Indem. Co. v. Moss, 533 S.W.2d
772, 774-75 (Mo. 1975); See also State ex rel. Laclede Gas Co. v. Godfrey, 468 S.W.2d
693, 698 (Mo.App. 1971). A party asserting equitable indemnity is not asserting that a
contractual right to indemnity exists; rather such a party is asserting that, given the
special nature of the case’s circumstances, equity demands that one party indemnify
the other. Am. Nat’l Prop. and Cas. Co. v. Jester, 358 S.W.3d 75 (Mo.App. 2011).

5 

III.

DISCUSSION
Pedrotti states that summary judgment should be granted in its favor. First, no

genuine issue of material fact exists because M2T2 has not presented or elicited in
discovery, or otherwise, any facts to support its erroneous allegation that Pedrotti is
responsible, in part, for any delay on the Project.

The record before the Court

demonstrates the complete opposite. The record demonstrates the following: Pedrotti
fully performed all obligations under both the Foley Contract and the M2T2 Contract on
the Project; Pedrotti fulfilled all of its obligations under the Foley Contract and M2T2
Contract in a timely manner; Pedrotti was promptly and fully paid upon its completion of
all obligations under both the Foley Contract and M2T2 Contract; any delay on the
Project was caused by M2T2 and no other party; and all damages Foley is seeking in
this lawsuit were the result of M2T2’s delay and not caused by any other party.
Second, M2T2 has not satisfied – and cannot satisfy – the elements of an equitable
indemnity claim in that M2T2 is unable to demonstrate that Pedrotti will be unjustly
enriched in the event M2T2 is required to reimburse Foley for the liquidated damages
Foley paid to UG resulting from M2T2’s Project delays. The Settlement Agreement
specifically states that the delay was caused by M2T2.

Furthermore, in Foley’s

Responses to Third-Party Defendant HDR’s First Request for Admissions, Foley
acknowledged that all of the damages that Foley is claiming in its lawsuit against M2T2
were caused by M2T2 and no other party. Accordingly, Pedrotti states that summary
judgment should be granted in its favor. (Doc. Nos. 134 & 178).
M2T2 states that Pedrotti’s argument is misplaced. First, Pedrotti’s failure to
provide sufficient staff and untimely providing portions of operation and maintenance

6 

manuals for the Retrofitted Oxygenation System caused Project delay. Pursuant to the
terms of the technical specifications for the computer system integration, Pedrotti was to
provide two programmers on the Project.

Pedrotti, however, only provided one

programmer for the Project. Due to other work obligations, this programmer was, at
times, unavailable to meet or discuss integration of the Oxygenation System with
M2T2’s representative, although this coordination was critical for timely performance.
Further, Pedrotti was required to provide certain materials for completion of the
operation and maintenance manuals for the Oxygenation System.

Despite M2T2’s

request to provide these materials, Pedrotti delayed in ultimately providing them. This
was done even though Pedrotti was informed that the failure to provide this information
could result in Project delay. Second, Pedrotti would be unjustly enriched if M2T2 is
compelled to pay Foley. As shown by the foregoing, Pedrotti did engage in certain acts
or omissions which resulted in Project delay. Pedrotti’s reliance on Foley’s Admissions
is insufficient to overcome its burden of establishing that a genuine issue of material fact
exists here. Pedrotti’s reliance on Foley’s characterization of the culpability of those
with co-extensive duties to complete the Project within the contracted timeframe is
misplaced and attempts to remove that duty from the finder of fact and vest that
determination with a party to the litigation. This is clearly inappropriate. Accordingly,
M2T2 maintains that Pedrotti caused Project delay and that should M2T2 be required to
assume liquidated damages, Pedrotti will be unjustly enriched. As such, M2T2 states
Pedrotti should not be granted summary judgment. (Doc. No. 145).
Pedrotti responds that M2T2’s reliance on Section 16900 of the technical
specifications is misplaced. Section 16900 of the technical specifications sets forth the

7 

requirements which must be met by the System Integrator in order to be selected by the
Contractor as the System Integrator for the Project. It is devoid of any reference to a
particular number of programmers that must be available on the Project and thus,
Pedrotti was in full compliance. Further, the programmer’s unavailability was the result
of M2T2’s lack of organization on this Project and not the result of delay on the part of
Pedrotti.

Finally, Pedrotti timely prepared and provided to M2T2 all portions of

operation and maintenance manuals prior to training and in accordance with the Plans
and Specifications for the Project.

As such, Pedrotti states it should be granted

summary judgment. (Doc. No. 178).
The Court hereby DENIES Pedrotti’s Motion for Summary Judgment (Doc. No.
145). First, admissions can only be used against the party making the admission. See
Jones v. Nat’l Am. Univ., 608 F.3d 1039, 1045 (8th Cir. 2010); See also United States v.
Heppner, 519 F.3d 744, 750-51 (8th Cir. 2008). Therefore, Foley’s admissions that it
contemplated Pedrotti’s contribution to the delay or damages on the Project is irrelevant
and thus, a genuine issue of material fact still exists on this point. Second, a genuine
issue of material fact still exists as to whether Pedrotti’s staff was made sufficiently
available and whether operation and maintenance manuals were timely provided in
order to avoid Project delay.
IV.

CONCLUSION
For the aforementioned reasons, Pedrotti’s Motion for Summary Judgment (Doc.

No. 133) is DENIED.
Date: August 6, 2013
Kansas City, Missouri

S/ FERNANDO J. GAITAN, JR.
Fernando J. Gaitan, Jr.
Chief United States District Judge 

8