DeAngelis Diamond Construction, LLC v. Rogers Manufacturing Corp.

CourtDistrict Court, M.D. Tennessee
DecidedDecember 14, 2023
Docket3:21-cv-00822
StatusUnknown

This text of DeAngelis Diamond Construction, LLC v. Rogers Manufacturing Corp. (DeAngelis Diamond Construction, LLC v. Rogers Manufacturing Corp.) is published on Counsel Stack Legal Research, covering District Court, M.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DeAngelis Diamond Construction, LLC v. Rogers Manufacturing Corp., (M.D. Tenn. 2023).

Opinion

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION

DEANGELIS DIAMOND ) CONSTRUCTION, LLC, ) ) Plaintiff/Counter Defendant, ) ) v. ) Case No. 3:21-cv-00822 ) Judge Aleta A. Trauger ) ROGERS MANUFACTURING CORP., ) ) Defendant/Counter Plaintiff. )

MEMORANDUM Rogers Manufacturing Corp. (“RMC”) has filed a Motion for Summary Judgment (Doc. No. 46), to which DeAngelis Diamond Construction, LLC (“DDC”) has filed a Response (Doc. No. 48), and RMC has filed a Reply (Doc. No. 50). RMC’s Reply purports to include a Motion to Strike (Doc. No. 50 at 1–4), to which DDC has filed a Response (Doc. No. 53). For the reasons set out herein, both motions will be denied. I. BACKGROUND1 A. The Parties’ Contract DDC is a construction company, and RMC is a supplier of construction materials. On October 12, 2020, they entered into a Supplier Agreement for a project identified as the “Berry Farms Town Center [Apartments].” (Doc. No. 46-1 at 1.) The parties agree that the Supplier

1 Unless otherwise indicated, the facts set forth herein are from RMC’s Statement of Undisputed Material Facts (Doc. No. 49), DDC’s Response to RMC’s Statement of Undisputed Material Facts (Doc. No. 52), DDC’s Statement of Additional Material Facts (Doc. No. 48-3), RMC’s Response to DDC’s Statement of Additional Material Facts (Doc. No. 51), and the evidentiary materials cited and relied upon by the parties. Agreement was a “valid contract” and was “the only contract governing [RMC’s] performance on” the Berry Farms project. (Doc. No. 51 ¶ 6; Doc. No. 52 ¶ 1.) The Supplier Agreement requires DDC to pay RMC $3,743,935.00, subject to amendment, in exchange for the purchased materials and RMC’s performance of certain tasks

associated with providing those materials. (Doc. No. 52 ¶ 2.) The body of the Agreement, however, does not list the specific materials being purchased. (Id. ¶ 6.) Rather, it requires RMC to provide “all . . . material, accessories, equipment, hoisting, unloading, and permits necessary for a complete rough carpentry supply package in accordance with the Contract Documents.” (Doc. No. 46-1 at 11.) Those “Contract Documents” are expressly identified and consist chiefly of plans for the buildings themselves. (Id. at 6.) The Agreement describes the agreed-upon price as a “negotiated lump sum subcontract amount based on the Contract Documents and this [RMC’s] understanding of what is necessary to provide a complete project [S]cope of Work.” (Doc. No. 46-1 at 7.) The Agreement, however, also sets forth procedures for changes to the Scope of Work—

necessitating changes in the total price—through a “change order” system. Such change orders permitted DDC to request additional “[w]ork on a time and material basis.” (Id. at 10.) The parties agree that, prior to the conflict giving rise to this case, valid, DDC-approved change orders resulted in a revised contract price of $3,876,907.43. (Doc. No. 52 ¶¶ 2, 14.) According to DDC, the change orders and increased costs were the result of “design changes which necessitated delivery of additional materials.” (Id. ¶ 14.) The Supplier Agreement includes two integration clauses. The first clause appears in the contract’s initial Terms & Conditions and provides that “[t]he Supplier Agreement contains the entire Agreement between the parties relating to [RMC’s] performance at the Project and supersedes all previous agreements between the parties whether written or oral with respect to the subject matter.” (Id. at 4.) The second integration clause appears in the Scope of Work itself and states: This Subcontract and associated Scope of Work voids and supersedes all other previous agreements and proposals by the Subcontractor. All proposals and communications in association with this Scope of Work, which conflict with the description of the Work herein, are specifically rejected or withdrawn.

(Id. at 7.) The Supplier Agreement states that “any controversy or claim arising out of or relating to this Supplier Agreement, or the breach thereof, shall be settled under the laws of the State of Tennessee.” (Doc. No. 46-1 at 4.) It includes the following indemnity provision: INDEMNITY/DUTY TO DEFEND/HOLD HARMLESS: The work performed by [RMC] shall be at the risk of [RMC] exclusively. To the fullest extent permitted by law, [RMC] shall defend, indemnify and hold harmless [DDC], the owner of the Project and all other parties that [DDC] is required to defend, indemnify or hold harmless (collectively, the “Indemnitees”) from all loss, damage and expense sustained by [DDC] and from all claims, liability and expense suffered by it by reason of any property damage (including patent and trademark rights), personal injury (including death) or other claim or action brought by any other person, firm or corporation, arising out of or in consequence of the purchase, sale or use of any of the goods, products or services referred to in this order, provided that Supplier shall have no such responsibility with respect to liability resulting solely from [DDC’s] gross negligence or intentional misconduct.

(Id. at 3–4.) B. The Parties’ Falling Out The Berry Farms project progressed, and RMC did provide DDC with a substantial quantity of materials, for which DDC, in return, paid most of the contract’s balance— $3,713,737.44. (Doc. No. 52 ¶ 3.) The parties disagree, however, regarding the remainder, if any, owed. DDC argues that it has validly withheld the remainder of the revised price, because RMC “breached the Supplier Agreement by failing to provide materials necessary for the project.” (Id. ¶ 4.) DDC asserts that the lowered price reflects an “additional deductive change order to RMC,” based on RMC’s failure to provide the materials necessary to complete the project in its entirety. (Id. ¶ 2.) RMC, however, says that it has provided everything that it agreed to provide. Prior to the

start of work on the project, RMC produced a detailed Master Materials List that, RMC says, it understood to describe the “loose lumber . . . necessary to complete its scope of work.” (Id. ¶ 7.) The Master Materials List is not designated as among the formal Contract Documents. RMC, however, says that it understood the List to represent what was being purchased and that it supplied those materials accordingly—in addition to other materials covered by the valid change orders—fulfilling the entirety of its obligations under the contract. (Id. ¶ 13.) In support of this assertion, RMC cites testimony from its Rule 30(b)(6) witness, who stated that “we shipped everything on our original list . . . everything on our original breakdown and about 13 percent more.” (Doc. No. 46-3 at 58.) DDC responds that the contract was not for RMC to provide the specific materials on a

pre-project list or “breakdown,” but to supply the materials necessary to complete the project as depicted in the actual, enumerated Contract Documents. DDC has filed an Affidavit of its Project Manager for the Berry Farms project, Kelly Pope, in which Pope explains that, “[b]ecause DDC is neither a structural engineer, nor a framer, nor a lumber supplier, it relied upon the expertise of the proposing companies to accurately estimate the amount and price of lumber and associated materials that would be needed to construct the Project.” (Doc. No. 48-1 ¶ 6.) By paying a lump sum for whatever materials would ultimately be necessary, DDC made it so that the costs of any underestimation of the materials needed would fall on RMC, as the supplier and the party responsible for that estimate in the first place. See Retail Builders, Inc. v. Latham, No. M2004- 00771-COA-R3-CV, 2005 WL 3508013, at *10 (Tenn. Ct. App. Dec. 22, 2005) (discussing the nature of fixed-price construction contracts). DDC points out that, in addition to the Master Materials List not being a Contract Document and therefore not being a formal part of the Scope of Work, the List also wholly

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DeAngelis Diamond Construction, LLC v. Rogers Manufacturing Corp., Counsel Stack Legal Research, https://law.counselstack.com/opinion/deangelis-diamond-construction-llc-v-rogers-manufacturing-corp-tnmd-2023.