In the Matter of Tutor Perini Corporation

Filing 88

MEMORANDUM OPINION AND ORDER. The Court has considered all of the arguments raised by the parties. To the extent not specifically addressed, they are either moot or without merit. Tutor Perini should provide Bridge and the Court with a detailed expla nation for the apportionment of its attorneys' fees and costs devoted to the defense of Hughes by September 15, 2016. The Court will hold an evidentiary hearing on September 22, 2016 at 3:00 P.M. SO ORDERED. (Evidentiary Hearing set for 9/22/2016 at 03:00 PM before Judge John G. Koeltl.) (Signed by Judge John G. Koeltl on 9/5/2016) (rjm)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
────────────────────────────────────
In re
Bridge Construction Services of
Florida, Inc., Hughes Bros., Inc.,
and Tutor Perini Corp.,

12 Civ. 3536 (JGK)
12 Civ. 6285 (JGK)
13 Civ. 3123 (JGK)

Petitioners.

MEMORANDUM OPINION AND
ORDER

────────────────────────────────────
JOHN G. KOELTL, District Judge:

Before the Court is the application of Tutor Perini Corp.
(“Tutor Perini”) and Hughes Bros., Inc. (“Hughes”) for
attorneys’ fees following the Court’s decision on the merits.
See In re Bridge Constr. Servs. of Florida, Inc., No. 12-CV-3536
(JGK), 2016 WL 2755877 (S.D.N.Y. May 12, 2016) (“Bridge III”).
Bridge Construction Services of Florida, Inc. (“Bridge”) objects
to the provision of any attorneys’ fees or costs.
Familiarity with the procedural history and facts of this
case is assumed. See id. at *1-9; see also In re Bridge Const.
Servs. of Florida, Inc., 39 F. Supp. 3d 373, 378–80 (S.D.N.Y.
2014) (“Bridge I”).
In short, the Subcontract Agreement between Tutor Perini
and Bridge, which is governed by New York law, establishes the
liabilities of the parties for indemnification and defense.
Section 11.1 of the Subcontract Agreement establishes what
claims, damages, and expenses are recoverable. It states:

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11.1
To
the
fullest
extent
permitted
by
law,
Subcontractor [Bridge] shall indemnify, defend, and
hold harmless Contractor [Tutor Perini], Owner, and
their officers, employees, consultants and agents from
and against all liability, claims, damages, losses,
costs, fines and expenses, (including attorney’s fees
and disbursements) caused by, arising out of or
resulting from the performance of the Work or the acts
or
omissions
of
the
Subcontractor,
its
subsubcontractors
or
anyone
directly
or
indirectly
employed by the Subcontractor or any of its subsubcontractors or for whose acts the Subcontractor or
any of its sub-subcontractors may be liable; provided
that any such liability, claim, damage, loss, cost, or
expense is caused, in whole or in part, by the
negligent act or omission of the Subcontractor, its
sub-subcontractors or anyone directly or indirectly
employed by any of them or for whose acts any of them
may be liable when the loss, injury or damages arises
out of, relates to, is connected to, or results from
the Subcontractor's work. This required Subcontractor
indemnity
specifically
does
not
include
indemnification for the Contractor’s own negligence,
except to the extent permitted by law. Such obligation
shall not be construed to negate or otherwise reduce
any other right or obligation or indemnity, which
would otherwise exist.
Subcontract Agreement at 20, ECF Dkt. No. 261-2; see also
In re Bridge Const. Servs. of Florida, Inc., 140 F. Supp.
3d 324, 331 (S.D.N.Y. 2015) (“Bridge II”).
Section 11.3 of the Subcontract Agreement is the provision
that triggers when a duty to defend commences:
11.3 The Subcontractor [Bridge] agrees that its
obligation to defend, indemnify and hold harmless
Contractor [Tutor Perini] and other indemnitee(s)
pursuant to the provisions of this Subcontract
commences
when
a
claim
is
made
even
if
the
Subcontractor disputes its obligation to defend,
indemnify and hold harmless. Should the Subcontractor
fail to promptly assume its duty to defend such a
claim, the Contractor or the indemnitee(s), at its

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sole option, may provide for that defense through
counsel of its own choosing, at Subcontractor’s sole
expense. Subcontractor agrees to pay all defense costs
so incurred by the Contractor or other indemnitee(s)
upon demand.
Subcontract Agreement at 20, ECF Dkt. No. 261-2.
The Court has already found that Bridge has the obligation
to reimburse Tutor Perini for the costs that it incurred after
Bridge declined to assume the defense of Tutor Perini in the
underlying action. See Bridge II, 140 F. Supp. 3d at 335.
Bridge has raised objections to various aspects of the
claims for attorneys’ fees.
First, Bridge argues that it should not be required to pay
the $59,792.69 that Tutor Perini allegedly incurred before Jose
Ayala, who was injured during the incident at issue, sued Tutor
Perini. Section 11.3 of the Subcontract Agreement governs
Bridge’s duty to defend and specifies when it begins. As the
Court held previously: “A fair reading of Section 11.3 makes it
plain that Bridge’s duty to defend commences when a claim is
made against Tutor Perini arising out of the acts or omissions
of Bridge, ‘even if [Bridge] disputes its obligation to defend,
indemnify and hold harmless.’” Id. at 335 (quoting the
Subcontract Agreement at 20). Bridge II also addresses what the
Subcontract Agreement means by “claim”: “The term ‘claim’ is not
defined in this context in the Subcontract Agreement, but it is
generally understood as ‘[a] demand for money, property, or a

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legal remedy to which one asserts a right’ or ‘[a]n interest or
remedy recognized at law,’ similar to a cause of action.” Id. at
334 n.6 (quoting “claim,” Black’s Law Dictionary (10th ed.
2014)). Until Ayala made a demand for money, property, or a
legal remedy, there was no event that required Bridge to
indemnify Tutor Perini. Accordingly, Bridge is not required to
pay the $59,792.69 that Tutor Perini allegedly incurred before
Ayala sued Tutor Perini.
Second, Bridge argues that it should not be required to pay
for any attorneys’ fees incurred after Ayala settled with Tutor
Perini. After that time, the only issue for Tutor Perini was the
contractual dispute with Bridge over how much each party should
pay for the costs of the settlements with Ayala. The Court
resolved the question of apportionment after the non-jury trial.
See Bridge III, 2016 WL 2755877, at *13-14 (holding that
Bridge’s negligence caused 40% of Ayala’s damages while Tutor
Perini’s negligence caused 60%).
Bridge argues that pursuant to the interpretation of New
York law by the New York Court of Appeals in Hooper Associates,
Ltd. v. AGS Computers, Inc., 548 N.E.2d 903 (N.Y. 1989), an
indemnification agreement presumptively covers only the costs of
defending against the claims of a third party and that the legal
fees and disbursements incurred in an intra-party litigation are
not recoverable under an indemnity agreement unless it is

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“unmistakably” clear from the language of the contract that such
defense costs are covered. Id. at 905.
However, Hooper differs in several important respects from
this case. As an initial matter, Hooper did not involve any
claim by a third party. Instead, the plaintiff in Hooper
successfully sued the defendant, who had been hired to build the
plaintiff a computer, for breach of contract. Id. at 903-04. The
contract contained an indemnification clause whereby the
defendant agreed to “indemnify and hold harmless” the plaintiff
“from any and all claims, damages, liabilities, costs and
expenses, including reasonable counsel fees arising out of” (i)
any breach by the defendant of any express or implied warranty
or any express representation, (ii) the performance of any
service, (iii) the infringement on any patent, copyright, or
trademark rights of any person or corporation as a result of any
use by the plaintiff, (iv) the installation, operation, and
maintenance of the system, or (v) any mechanic’s liens. Id. at
903 n.1.
In Hooper, the New York Court of Appeals concluded that the
indemnification clause at issue “[did] not contain language
clearly permitting plaintiff to recover from defendant the
attorney’s fees incurred in a suit against defendant. On the
contrary, [the indemnification clause was] typical of those
which contemplate reimbursement when the indemnitee is required

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to pay damages on a third-party claim.” Id. at 905. The court
reviewed the areas covered by the clause and concluded: “All
these subjects are susceptible to third-party claims for
failures in the installation or operation of the system. None
are exclusively or unequivocally referable to claims between the
parties themselves or support an inference that defendant
promised to indemnify plaintiff for counsel fees in an action on
the contract.” Id.
Unlike Hooper, the issue in this case is not the attorneys’
fees incurred in a suit for a breach of contract between the
parties to the indemnification agreement where there has been no
third party claim. The dispute involves underlying claims by a
third party, Ayala, against Bridge, Tutor Perini, and Hughes.
After Tutor Perini settled its claims against Ayala, Bridge
maintained its claim for total indemnification against Tutor
Perini, arguing that Tutor Perini and Hughes were solely at
fault for the underlying incident. The Court adjudicated
Bridge’s claim in the non-jury trial, where the Court found both
Bridge and Tutor Perini (but not Hughes) at fault for Ayala’s
injuries. This case was not, as in Hooper, a simple breach of
contract action between the two parties to a contract that
contained an indemnification agreement that was reasonably
construed only to apply to attorneys’ fees in the event of a
third party claim. This case involved a third party claim.

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The language in the indemnification clause in this case is
also markedly broader than the language in the indemnification
clause in Hooper. Here, Bridge agreed to “indemnify, defend, and
hold harmless Contractor [Tutor Perini] . . . from and against
all liability, claims, damages, losses, costs, fines and
expenses, (including attorney’s fees and disbursements) caused
by, arising out of or resulting from the performance of the Work
or the acts or omissions of the Subcontractor [Bridge].”
Subcontract Agreement at 20, ECF Dkt. No. 261-2 (emphasis
added). Plainly, Bridge agreed to hold Tutor Perini harmless
from the attorneys’ fees Tutor Perini incurred “caused by,
arising out of or resulting from” the work performed by Bridge,
or Bridge’s negligence. Indemnification is not limited to a
specific list of items, as in Hooper, and cannot be read to be
limited solely to the suit by the third party when the
apportionment of fault from that third party claim remained to
be determined. While the indemnification clause in Hooper was
narrow and specific, the indemnification clause here is broad
and general.
Other courts have recognized the limited nature of Hooper’s
holding. For example, in Crossroads ABL LLC v. Canaras Capital
Mgmt., LLC, 963 N.Y.S.2d 645 (App. Div. 2013), the court
distinguished Hooper, holding that the indemnification clause in
Crossroads did not preclude intra-party claims. The

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indemnification provision at issue in Crossroads was similar to
the clause at issue here. It applied “to ‘any and all claims,
demands, actions, suits or proceedings,’ provided that
Crossroads’ involvement therein is by reason of its service,
etc. to [a defendant].” Id. at 646. The court called this
language “extremely broad,” noting that the “parties chose to
use highly inclusive language in their indemnification
provision, which they chose not to limit by listing the types of
proceedings for which indemnification would be required.” Id.
“Therefore, while the rule set forth in Hooper . . . applies in
those cases where the parties’ intent is not evident from the
plain language of the agreement, that is not the case here.” Id.
Likewise, in this case, the parties’ intent is clear---Bridge
was required to indemnify Tutor Perini for costs caused by,
arising out of or resulting from the acts or omissions of
Bridge. This provision covers the attorneys’ fees incurred in
the apportionment of liability between the parties. See MidHudson Catskill Rural Migrant Ministry, Inc. v. Fine Host Corp.,
418 F.3d 168, 177-78 (2d Cir. 2005) (Sotomayor, J.)
(distinguishing Hooper and affirming the award of attorneys’
fees where the indemnity clause “swe[pt] broadly, providing for
reimbursement of attorney’s fees regardless of the nature of the
underlying action,” including actions between the parties).

8

Accordingly, Bridge is also required to pay for any attorneys’
fees incurred after Ayala settled with Tutor Perini.
Third, Bridge argues that it is not liable for the
attorneys’ fees incurred by Tutor Perini in accepting the
defense of Hughes. Bridge’s argument on this issue is
persuasive.
Bridge did not agree to indemnify Tutor Perini for the work
or the omissions of Hughes. Tutor Perini’s liability for the
defense of Hughes arises from the indemnification obligation
Tutor Perini undertook in a Bareboat Charter Agreement with
Hughes. Tutor Perini argues, incorrectly, that its Subcontract
Agreement with Bridge included an indemnification of Hughes.
Tutor Perini contends that Section 11.3 requires Bridge to
defend and indemnify Tutor Perini “and other indemnitee(s)
pursuant to the provisions of the Subcontract when a claim is
made . . . .” Subcontract Agreement at 20, ECF Dkt. No. 261-2.
But the “indemnitees” referred to in that clause are plainly the
indemnitees referred to in Section 11.1. They are Tutor Perini,
and the “Owner, and their officers, employees, consultants and
agents.” Id. The Subcontract Agreements creates no obligation by
Bridge to indemnify Hughes, and Tutor Perini cannot bootstrap
Bridge’s obligation to indemnify Tutor Perini and the
“indemnitee(s)” in the Subcontract Agreement into an obligation
to indemnify Hughes.

9

Nevertheless, there are not many expenses that could
reasonably have been incurred solely for Hughes. Tutor Perini
was liable for the upkeep of the barge after it had chartered
it. Hughes could only have been liable for the condition of the
barge at the time it was chartered. See Hughes-Tutor Perini
Bareboat Charter Party Agreement at 17, ECF Dkt. No. 261-4
(“Charterer [Tutor Perini] hereby agrees to indemnify, hold
harmless and defend Vessel, Owner [Hughes] and Owner’s Agent
against any claim, demand or damage of whatsoever nature arising
out of Charterer's use, operation and/or maintenance of the
Vessel and against any claim or demand of any third party . . .
.”). The lack of reasonable attorneys’ fees expended in
defending Hughes is reflected by the fact that Hughes was found
to have no liability at all at trial. See Bridge III, 2016 WL
2755877, at *12 (“While there is no credible evidence of
negligence on the part of Hughes, there is ample evidence of
negligence on the part of Tutor Perini.”).
But some means must be found to apportion fairly the
attorneys’ fees expended in the defense of Hughes. Tutor Perini
submitted a hearsay affidavit from its lawyer recounting the
work of a paralegal that attempted to calculate the amount of
the attorneys’ fees devoted to Hughes. But Bridge correctly
points out that this affidavit was submitted after trial and
without the benefit of cross-examination.

10

It is common for courts to segregate attorneys’ fees spent
on claims or expenses that are not compensable. See, e.g.,
Yurman Design, Inc. v. PAJ, Inc., 29 F. App’x 46, 48-49 (2d Cir.
2002) (summary order); VIDIVIXI, LLC v. Grattan, No. 15-cv-7364
(JGK), 2016 WL 4367972, at *5 (S.D.N.Y. Aug. 13, 2016); Beastie
Boys v. Monster Energy Co., 112 F. Supp. 3d 31, 58 (S.D.N.Y.
2015). Likewise, the Court of Appeals has allowed gross
approximations. See, e.g., Kirsch v. Fleet Street, Ltd., 148
F.3d 149, 172–73 (2d Cir. 1998); De La Paz v. Rubin & Rothman,
LLC, No. 11-cv-9625 (ER), 2013 WL 6184425, at *4 (S.D.N.Y. Nov.
25, 2013) (citing McDonald ex rel. Prendergast v. Pension Plan
of the NYSA—ILA Pension Trust Fund, 450 F.3d 91, 96 (2d Cir.
2006)).
In this case, Bridge argues that it has not had the
opportunity for cross-examination of the relevant billing
information. Accordingly, the Court will hold another hearing at
which Tutor Perini can present evidence related to an
approximation of the attorneys’ fees devoted to the defense of
Hughes that should be deducted from its request for attorneys’
fees. Tutor Perini should provide the exhibits in advance to
Bridge.
Fourth, Bridge argues that the fees should be reduced by
60% because otherwise it would have to pay for Tutor Perini’s
negligence. This argument is without merit. Tutor Perini was

11

sued and Bridge had the obligation to defend Tutor Perini
irrespective of Tutor Perini’s fault. See Bridge II, 140 F.
Supp. 3d at 335 (“The obligation [of Bridge] to pay the defense
costs does not depend on an ultimate finding of fault by Bridge,
and the decision whether to provide a defense is necessarily
made before any finding of fault has been made.”). If Bridge had
defended Tutor Perini, Bridge would have paid the whole cost of
the defense. Bridge should not now be in a better position
because it required Tutor Perini to defend itself. Indeed, the
Subcontract was clear. If Bridge did not defend Tutor Perini and
Tutor Perini hired its own counsel, those costs were to be at
Bridge’s “sole expense” and Bridge agreed “to pay all defense
costs so incurred” by Tutor Perini. Subcontract Agreement at 20,
ECF Dkt. No. 261-2.
Fifth, and finally, is the issue of interest. Interest
should accrue at the rate of 9% under New York law and, pursuant
to the New York Civil Practice Law and Rules, it should be
calculated from the midpoint of the expenses. See C.P.L.R.
§ 5001(b); see also Order, May 31, 2016, ECF Dkt. No. 256.
CONCLUSION
The Court has considered all of the arguments raised by the
parties. To the extent not specifically addressed, they are
either moot or without merit.

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Tutor Perini should provide Bridge and the Court with a
detailed explanation for the apportionment of its attorneys’
fees and costs devoted to the defense of Hughes by September 15,
2016. The Court will hold an evidentiary hearing on September
22, 2016 at 3:00 P.M.

SO ORDERED.
Dated:

New York, New York
September 5, 2016

______________/s/______________
John G. Koeltl
United States District Judge

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