Coakley Landfill Group v. IT Corp. CV-98-167-JM 02/18/00 P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
The Coakley Landfill Group
v. Civil No. 98-167-JM Opinion No. 2000 DNH 045 IT Corporation
_________________________________ O R D E R
In the above-captioned diversity action, the Coakley
Landfill Group alleges that defendant IT Corporation breached its
contract to provide environmental remediation of the Coakley
Landfill and violated New Hampshire Revised Statutes Annotated
(RSA) 358-A. IT subsequently filed a third-party complaint
against members of the Coakley Group alleging breach of contract,
wrongful termination, and violation of RSA 358-A. Currently
before the court is IT's Motion for Partial Summary Judgment to
which the Coakley Group objects. For the reasons that follow,
the court grants IT's motion.
Background
In 1992, the United States and the State of New Hampshire
filed an action under §§ 106 and 107 of the Comprehensive Environmental Response Compensation and Liability Act (CERCLA)
against several municipalities and businesses allegedly
responsible for contamination of the Coakley Landfill. The group
of potentially responsible parties, who became known as the
Coakley Landfill Group, entered a consent decree, which required
them to implement the clean up of the site. The Group selected
IT as the remedial contractor to perform the work required by the
consent decree.
On July 26, 1996 the Group and IT entered into an agreement
describing the terms and conditions of the project. According to
this agreement, the Group would pay IT $4,808,766.40 to complete
the project.1 According to plaintiff, IT initially agreed to
have the landfill project completed by October 7, 1997. At IT's
request, this deadline was extended to October 31, 1997. As of
that date, IT had not completed construction of the project.
According to the agreement, the Group could terminate IT's
services if it was dissatisfied with the work performed by IT.
1The Group admits that this was the original contract price for the project but alleges that this price was subsequently adjusted to $4,625,196.40.
2 See Environmental Remediation Contractor Agreement, Article 19.2.
If the Group terminated the contract, the agreement provided
that:
the Contractor shall not be entitled to receive any further payment until the Work is finished. If, upon completion of the Work, the unpaid balance of the Contract Price exceeds all claims, costs, losses and damages sustained by the Group arising out of or resulting from completing the Work such excess will be paid to the Contractor.
Because of IT's alleged contract breaches, the Group
terminated the agreement in March of 1998 and filed a complaint
in state court, which was subsequently removed to this court.
Specifically, the Group alleges that IT repeatedly made
misrepresentations to the Group regarding IT's performance of
contractual obligations, failed to procure needed material for
the site, failed to employ competent personnel, and failed to
provide adequate oversight of the survey layout. According to
the Group, all of these alleged breaches resulted in IT's failure
to meet contractual deadlines. Up until the time that the Group
terminated IT, the Group had paid IT $1,130,544.07. In response
3 to the Group's suit, IT filed a third-party complaint2 against
individual members of the Coakley Group.
To complete the project, the Group hired another contractor,
H.E. Sargent, Inc. Sargent completed the project in August of
1998. Based on the Group's response to interrogatories over a
year ago, the cost to complete the project was $2,006,350.76.
See IT's Motion for Partial Summary Judgment, Exhibit C, Response
to Interrogatory No. 15.
Discussion
I. Standard of Review
The court may only grant a motion for summary judgment where
the "pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show
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."
2In its amended complaint IT joined Colder, the project engineer selected by the Group to prepare the remedial design work plan and oversee remediation activities and SeaHill Construction, the principal supplier of sands and soils for the project as third party defendants.
4 Fed. R. Civ. P. 56(c). Accordingly, at this stage of the
proceeding, the court does not weigh the evidence and determine
the truth of the matter but instead determines whether there is a
genuine issue of fact for trial. See Stone & Michaud Ins. Bank
Five for Savings, 785 F. Supp. 1065, 1068 (D.N.H. 1992) (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). The
substantive law identifies which facts are material so that "only
disputes over facts that might affect the outcome of the suit
under the governing law will properly preclude the entry of
summary judgment. Factual disputes that are irrelevant or
unnecessary will not be counted." Caputo v. Boston Edison Co.,
924 F.2d 11, 12-13 (1st Cir. 1991) (quoting Anderson, 477 U.S. at
248) .
The party seeking summary judgment bears the initial burden
of establishing the lack of genuine issues of material fact. See
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Quintero de
Quintero v. Aponte-Rogue, 974 F.2d 226, 227-28 (1st Cir. 1992) .
As a result, the court must view the entire record in the light
most favorable to the non-moving party, "''indulging all
5 reasonable inferences in that party's favor.'" Mesnick v.
General Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991) (quoting
Griqqs-Rvan v. Smith, 904 F.2d 112, 115 (1st Cir. 1990)).
However, once a defendant has submitted a properly supported
motion for summary judgment, the plaintiff "may not rest upon
mere allegation or denials of his pleading, but must set forth
specific facts showing that there is a genuine issue for trial."
Anderson, 477 U.S. at 256.
2. Article 19.2 of the Agreement
In its motion, IT contends that the Group breached Article
19.2 of the agreement between IT and the Group. In support of
this claim IT alleges that (1) the adjusted contract price was
$4,808,7 66.40, (2) IT has only been paid $1,130,549.07, (3) the
project has been completed, and (4) the Group's cost to complete
the project was $2,006,350.76. Thus, IT alleges that the Group
is bound, according to Article 19.2 of the agreement, to pay IT
$1,671,871.41--the difference between the contract price, the
payment IT has already received, and the Group's cost to complete
the project.
6 a. Claimed Attorneys' Fees.
The Group contends that summary judgment is not appropriate
at this time because of attorneys' fees which it seeks to
recover.
The New Hampshire Supreme Court has consistently stated that
"the general rule in this State is that each party to a lawsuit
is responsible for payment of his or her own lawyer's bill."
Adams v. Bradshaw, 135 N.H. 1 , 16 (1991) (citation omitted). "An
award of attorney's fees is the exception rather than the rule
and requires 'statutory authorization, an agreement between the
parties, or an established exception.'" Flanagan v. Prudhomme,
138 N.H. 561, 576 (1994) (citation omitted). The Group relies on
both the agreement and statutory exceptions.
(i) Agreement for Attorneys' Fees
First, the Group argues that Article 19.2 should be
interpreted broadly to include attorneys' fees within the Group's
costs for completing the project. Because the Group's attorneys'
fees are still accruing with this action, the Group asserts that
its costs for completing the project cannot be determined. Thus,
7 the Group contends that there is a genuine issue of fact as to
how much, if any, money IT is entitled to under Article 19.2.
The meaning of language in an agreement is a question of law
for the court to determine. See Miller v. Miller, 133 N.H. 587,
590, 578 A.2d 872, 873 (1990) (citations omitted). In
interpreting a contract the court is to consider the written
agreement, all its provisions, its subject matter, the situation
of the parties at the time it was entered into and the object
intended. See Commercial Union Assurance Co. v. Brown Co., 120
N.H. 620, 623, 419 A.2d 1111, 1113 (1980) (citation omitted) . The
starting point, therefore, is the contract language itself. See
Parkhurst v. Gibson, 133 N.H. 57, 62 (1990)(absent fraud, duress,
mutual mistake or ambiguity, parties' intent gleaned from words
in contract). The language used is to be given its reasonable
meaning and is to be construed in the context of the agreement as
a whole. See Keshishian v. CMC Radiologists, 142 N.H. 168, 177,
698 A.2d 1228, 1234 (1997); Logic Assocs., Inc. v. Time Share
Corp., 124 N.H. 565, 572, 474 A . 2d 1006, 1010 (1984).
The court begins its analysis by considering whether a reasonable interpretation of Article 19.2 includes attorneys'
fees as part of the costs associated with completing the landfill
project. According to Article 19.2, if the project is completed
and "the unpaid balance of the Contract Price exceeds all claims,
costs, losses and damages sustained by the Group arising out of
or resulting from completing the Work such excess will be paid to
the Contractor." Environmental Remediation Contractor Agreement,
Article 19.2. It is evident that Article 19.2 does not expressly
provide for attorneys' fees. In fact. Article 19.2 does not
reference or mention legal action by either party against each
other. Instead, it is clear that Article 19.2 is concerned with
aspects of completing the work in a termination situation--(1) by
clarifying under what circumstances the Group may terminate the
contract, (2) by clarifying how the project would be handled by
the Group upon termination, and (3) by clarifying when and how
much (if at all) the contractor would be paid upon termination.
See id.
In sharp contrast to the language of Article 19.2 the
contract contains another clause, which explicitly permits the
9 Group to recover attorneys' fees from the contractor for certain
acts. See Environmental Remediation Contractor Agreement,
Article 7.16. The language in this clause provides that IT will
indemnify and defend the Group "from and against any and all
losses, damages, fines, forfeitures, costs, penalties (including
but not limited to Stipulated Penalties), liabilities and
expenses (including but not limited to legal fees and reasonable
costs of investigation), judgments, liens, causes of action,
suits, claims or demands ... " Environmental Remediation
Contractor Agreement, Article 7.16. In this clause it was
clearly the parties' intent to include attorneys' fees as part of
the expenses to be paid by IT.
Unlike the indemnity provision for attorneys' fees, the only
costs specifically referred to in Article 19.2 are those costs
that relate to the completion of the landfill project. Given the
subject matter covered by Article 19.2 in the contract, the fact
that it does not specifically refer to attorneys' fees in
contrast to Article 7.16, and the sophistication of the parties
to this contract, I conclude that where the parties intended to
10 include attorneys' fees within the Group's costs they did so
expressly.
______ I find that the language of Article 19.2 is clear and
unambiguous. Thus, the court finds that Article 19.2 cannot be
construed to include attorneys' fees within the costs to complete
the landfill project. This interpretation "gives meaning and
effect to all the language in that clause and appears to best
reflect the intention of the parties when viewed in the context
of the entire contract, the situation of the parties at the time,
and the object intended." Commercial Union Assurance Co., 120
N.H. at 623 (citation omitted).
(ii)__________________ Claim for Attorneys' Fees Under _____________________ N.H. RSA 35 8-A
Not only does the Group assert the right to hold back any
fees and damages it may recover under N.H. RSA 358-A from
payments it owes under Article 19.2, it asserts that the 358-A
claim precludes the entry of partial summary judgment. IT
suggests that the Group's assertions are a smoke screen. If the
Group is ultimately entitled to fees and damages under 358-A, it
has nothing to do with Article 19.2.
11 The fact that the Group has claims which equal or exceed the
IT claim under Article 19.2 does not mean that partial judgment
is precluded. See Chemetron Corporation v. Cervantes, 92 F.R.D.
26, 30 (D.P.R. 1981). In the context of the IT claim under
Article 19.2 the Group's claim is in the nature of a recoupment.
It is not necessary to fully adjudicate the Group's claims.
Furthermore, IT's "Reply" makes clear that it seeks nothing more
than a partial summary judgment on "the narrow issue of the
operation of Article 19.2 of the Contract."
The existence of the Group's RSA 358-A claim (and its other
claims) is significant to a decision under Fed. R. Civ. P. 54(b)
as to entry of final judgment, not to a decision as to summary
judgment under Fed. R. Civ. P. 56. This is further supported by
Rule 56(d) which clearly recognizes that partial summary judgment
"is merely a pretrial adjudication that certain issues shall be
deemed established for the trial of the case." Fed. R. Civ. P.
56(d) advisory committee' note.
(b) Sum Due Under Article 19.2
Having determined that attorneys1 fees are not included
12 within the Group's costs to complete the project and do not
preclude partial summary judgment, the court now must determine
whether any other issues of fact preclude IT's motion. As
indicated in the Group's responses to interrogatories in December
of 1998, IT offers the Groups' December 1998 answers to
interrogatories to prove that the adjusted contract price was
$4,808,7 66.40 and that the cost to complete the project was
$2,006,350.76. The Group disputes its own answers to
interrogatories through the affidavit of Daniel C. MacRitchie.
According to this affidavit the adjusted contract price was
$4,625,196.40, not $4,808,766.40 as set forth in the Group's
interrogatory answer. In addition, the costs to complete the
project and litigation fees have not been finalized. The Group
asserts that although its costs to complete were $2,006,350.76
when it responded to interrogatories in December 1998, by
February 1999 these costs had increased to $2,413,130.99. As of
July 1999, MacRitchie avers that additional costs continue to
13 increase as additional invoices were still being received.3
Thus, the Group argues, with these amounts in dispute, summary
judgment is not appropriate.
Adequate disclosure during discovery is "consonant with the
federal courts' desire to 'make a trial less a game of blindman's
bluff and more a fair contest with the basic issues and facts
disclosed to the fullest practical extent.'" Thibeault v. Square
D C o ., 960 F.2d 239, 244 (1st Cir. 1992) (quoting United States
v. Procter & Gamble Co., 356 U.S. 677, 682 (1958)) (emphasis
added). Thus, pursuant to Rule 26(e) (2),
[a] party is under a duty to seasonably amend a prior response to an interrogatory . . . if the party learns that the response is in some material respect incomplete or incorrect and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing.
(Emphasis added.)
The Group has failed to offer any explanation for its
3 How invoices could continue to be received eleven months after completion of the work is not explained, assuming there could be a credible explanation.
14 failure to amend its interrogatory answers seasonably. If one
accepts the MacRitchie affidavit as true the Group knew by
February 1999 that its interrogatory answer was wrong as to the
cost to complete. MacRitchie baldly avers that two change orders
reduced the contract price from the $4,808,766.40 amount asserted
in the interrogatory. The Group provided no evidence of these
change orders other than MacRitchie's bald assertion, no
explanation for them, no explanation of when they occurred or why
they were not revealed in the interrogatory and no amended answer
to interrogatories. Since the work was completed by August 1998,
it is certainly not clear why these alleged change orders were
not known by the December 1998 interrogatory answers. The Group
has not advised the court that its cost to complete answer has
been amended to this date. At the very least "seasonably" as
used in Rule 26(e) (2) must mean within three or four months of
discovery. It cannot mean a year. The Group's failure to update
is unexplained and unexcused.
The failure to supplement the interrogatory leaves a
contradiction between the Group's answer to interrogatories and
15 its proffered affidavit. Ordinarily the court does not, and
should not, make credibility assessments in deciding summary
judgment motions. Anderson, 477 U.S. 255. However, it has long
been recognized that under certain circumstances an affidavit
filed in opposition to a motion for summary judgment may be
disregarded if it contradicts that party's prior testimony or
admission. See Perma Research & Dev. Co. v. Singer Co., 410 F.2d
572, 578 (2d Cir. 1969) (party's deposition testimony
contradicted by party's affidavit); Jack v. Trans World Airlines,
Inc., 854 F. Supp. 654, 659-660 (D.N.D. C a l . 1994) (party's
interrogatories contradicted by own summary judgment affidavit);
Stefanik v. Friendly Ice Cream Corporation, 183 F.R.D. 52, 53-54
(D. Mass. 1998) (party's pleading averments contradicted by
affidavit).
"When an interested witness has given clear answers to unambiguous questions, he cannot create a conflict and resist summary judgment with an affidavit that is clearly contradictory, but does not offer a satisfactory explanation of why the testimony is changed." Colantuoni v. Alfred Calcagni & Sons, Inc., 44 F.3d 1, 4-5 (1st cir. 1994)(citations omitted).
In other words, a party "is not permitted to kick over the chess
16 board in the face of a checkmate." Stefanik, 183 F.R.D. at 54.
A satisfactory explanation for the change is necessary. Id.
Here, interrogatory answer no. 15 of December 1998
specifically stated that the "costs continue to increase, and are
not the final damages amounts." The affidavit indicates that
additional invoices were received as of February 1999 to bring
the total costs to $2,413,130.99. The affidavit provides a
sufficient explanation for the contradiction in costs of the
project between the interrogatory answer of $2,006,350.76 and the
affidavit statement of $2,413,130.99. The affidavit statement
that as of July 1999 costs continued to accrue on this project
completed a year before and where no such costs were shown to
have been incurred from February 1999 through July 1999, provides
no explanation, let alone a sufficient explanation, to find
continuing costs. I find that there is no genuine issue of
material fact that the costs to complete under Article 29.2 do
not exceed $2,413,130.99.
Interrogatory answer no. 24 states that the current Contract
Price is $4,808,766.40. By the date of that answer the project
17 had been completed for four months. Article 11 permits deletions
from the work but requires the Group to issue Change Orders or
Work Change Directives for any such deletions so that the
Contractor can promptly proceed. The work ended in August 1998.
The affidavit provides absolutely no explanation to show a
discrepancy or mistake in the answer to interrogatory. It does
not explain when the change orders occurred, what they
particularly involved or how they could occur months after
completion of the work. In fact, the affiant provides no
explanation of the contradiction between the interrogatory and
the affidavit. To the contrary, MacRitchie attacks IT's affiant
for his statement of contract price, apparently blissfully
ignorant of the fact that he was in reality seeking to contradict
the Group's interrogatory answer. The affiant's function was to
receive invoices and process them. 5 3, affid., document 33.
There is no foundation for his assertion of the contract price
evidenced in his affidavit, as opposed to the interrogatory
answer of the Group, the party which certainly knew the contract
price. The Group submitted as part of a motion to compel a
18 letter of its attorney to IT's attorney concerning the revised
contract of value of $4,625,196.40. Document no. 54, Exhibit A.
That letter makes it clear that the MacRitchie affidavit
correctly states the Group's asserted contract value. It also
makes it clear that, contrary to the MacRitchie affidavit, the
revised number is not the result of two change orders but rather
is the result of (1) the net of seven change orders, (2) the net
of six work directives, (3) ten unit cost adjustments and (4) the
deletion of paving. The lack of care given to accuracy in the
affidavit or in assuring that the court is not mislead is
obvious. It does not enhance a party's credibility to see a
detailed letter of the party's attorneys sent twenty-three days
after an affidavit which partially contradicts the affidavit
filed with the court which partially contradicts the unamended
interrogatories.
The explanation of the interrogatory/affidavit contradiction
is barely sufficient, but recognizing the importance of avoiding
credibility determinations in summary judgment determinations, I
find that there is no genuine issue of fact that the contract
19 price is not less than $4,625,196.40.
If IT believes that it incurred attorneys' fees and costs
due to the Group's failure to seasonably amend its interrogatory
answers, IT should file a motion for sanctions and I will issue a
show cause order.
Conclusion
For the foregoing reasons, IT's motion for partial summary
judgment (document no. 22) is granted in part. Under Article
29.2 the contract price is not less than $4,625,196.40 and the
costs to complete to be deducted from that sum is no greater than
$2,413,130.99. The sums paid to IT before termination totaled
$1,130,544.07. Pursuant to the provisions of Article 29.2 IT has
a contractual right to be paid $1,081,521.34.
SO ORDERED.
James R. Muirhead United States Magistrate Judge
Date: February 18, 2000
cc: George R. Moore, Esq. Jeremy Ritzenberg, Esq. James C. Wheat, Esq. Patrick A. Thompson, Esq.
20 C. Kevin Leonard, Esq. Paul M. Monzione, Esq.