Frerichs Construction Co. v. Minnesota Counties Insurance Trust

666 N.W.2d 398, 2003 Minn. App. LEXIS 897, 2003 WL 21743751
CourtCourt of Appeals of Minnesota
DecidedJuly 29, 2003
DocketC9-03-307
StatusPublished
Cited by2 cases

This text of 666 N.W.2d 398 (Frerichs Construction Co. v. Minnesota Counties Insurance Trust) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frerichs Construction Co. v. Minnesota Counties Insurance Trust, 666 N.W.2d 398, 2003 Minn. App. LEXIS 897, 2003 WL 21743751 (Mich. Ct. App. 2003).

Opinion

OPINION

RANDALL, Judge.

Respondent construction company, which had contracted with appellant to construct a building, sued appellant for damages resulting from a breach of contract. Appellant counterclaimed,' alleging that respondent had breached the contract by failing: (1) to report the presence of asbestos and (2) to promptly cease operations upon discovery of the asbestos, contending that it incurred expenses in abating the asbestos from the site and from a pit where respondent had placed it. The district court granted summary judgment to respondent on the counterclaim. Appellant argues that there was a'jury question as to whether respondent “reasonably believed” that asbestos was present, which would have required it to stop excavation. We affirm.

FACTS

The facts of this case concern a site known as the Empire Builder Industrial Park. This site has had various uses over the years, including uses as an asphalt plant, a foundry, and an auto-salvage yard. In 1985, the St. Paul Port Authority (SPPA) purchased the site along with adjoining land to re-develop it into the Empire Builder Industrial Park. Over the course of the project, various buildings *400 were demolished. Part of this process involved the removal of asbestos insulation.

In 1993, the SPPA hired American Engineering and Testing (AET) to conduct environmental assessments of the site, including soil borings and soil testing. Upon performing a Phase I evaluation, AET did not find any contamination of the soil. Although subsequent tests revealed that the site’s soil was contaminated with diesel-range organics and volatile organic compounds, no asbestos was detected. On April 14, 1999, based on AET’s numerous environmental assessments, the Minnesota Pollution Control Agency (MPCA) issued a “No Further Action” letter to the SPPA, stating SPPA need not take any further action to remediate groundwater and soil contamination for the site. This letter cleared the way for construction to begin on the site. Appellant Minnesota Counties Insurance Trust (MCIT) purchased the site shortly thereafter.

In November 1999, AET completed an excavation contingency plan that was part of a conditional purchase agreement between appellants and the SPPA to offset the cost of geotechnical soil-correction work in the area where the building was to be constructed. The contingency plan identified steps the general contractor should take to detect contamination during the course of excavation. But, the contingency plan only addressed detecting oily or stained soil, and not asbestos.

On May 12, 2000, appellant entered into a contract with respondent, Frerichs Construction Company, Inc., to be the general contractor for a project to construct a new office building. The pertinent part of the contract states in Article .10.1.2 that:

In the event the Contractor encounters on the site material reasonably believed to be asbestos or polychlorinated biphe-nyl (PCB) which has not been rendered harmless, the Contractor shall immediately stop Work in the area affected and report the condition to the Owner and Architect in writing.

The contract further provides in Article 10.1.4 that:

To the fullest extent permitted by law, the Owner shall indemnify and hold harmless the Contractor, Architect, Architect’s consultants and agents and employees of any of them from and against claims, damages, losses and expenses, including but not limited to attorney’s fees, arising out of or resulting from the performance of the Work in the affected area if in fact the material is asbestos or polychlorinated biphenyl (PCB) and has not been rendered harmless, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the Work itself) including loss of use resulting therefrom, but only to the extent caused in whole or in part by negligent acts or omissions of the Owner, anyone directly or indirectly employed by the Owner or anyone for whose acts the Owner may be liable, regardless of whether or not such claim, damage, loss or expense is .paused in part by a party indemnified hereunder. Such obligation shall not be construed to negate, abridge, or reduce other rights or obligations of indemnity which would otherwise exist as to a party or person described in this Subparagraph 10.1.4.

Despite the existence of -the contingency plan, respondent was not made aware of the plan until July 24, 2000.

Respondent began construction of the building on June 12, 2000, and on June 19, 2000, respondent’s excavation subcontractor, third-party defendant Julian M. Johnson Construction Corporation (Johnson), began the project’s excavation work. While excavating the site, Johnson encoun *401 tered buried concrete and other construction debris, but nothing it recognized to be asbestos. Johnson transported some of the excavated materials to the Hammes Sand and Gravel Company in Lake Elmo, Minnesota, while the rest of the material was stockpiled on the site.

During the excavation process, a representative of Stork Twin City Testing (TCT) was retained by appellant to perform independent testing. The representative examined the excavation and construction debris and did not detect the presence of asbestos. Further, project architect Randy Engel visited the site on July 7, 2000, to observe and report on the progress of the construction. Engel did not detect the presence of asbestos. A few days later, the MPCA visited the site and inspected the stockpiled soil. The MPCA, once again, did not detect the presence of asbestos.

On July 18, 2000, MPCA returned to the site to re-inspect the soil. While inspecting the site, a MPCA worker discovered what appeared to be asbestos. MPCA immediately notified appellant, who in turn, notified respondent. Respondent correctly stopped work on the excavation and piling as soon at it learned of the possible presence of asbestos. Subsequent tests were conducted to determine whether the soil contained asbestos.

During the course of the testing, a meeting was held on July 19, 2000, where it was determined that respondent would suspend all excavation until the parties were notified of the test results. Braun Intertec collected various soil samples that confirmed MPCA’s suspicion of the presence of asbestos. Shortly thereafter, Braun completed a contingency plan addendum that described the procedures that should be used to investigate, manage, and dispose of contaminated soil and construction debris encountered during the project construction. Even with the existence of the addendum, all grading and site .work remained on hold until additional testing was completed. Over the next several months, additional evidence of the presence of asbestos was discovered, furthering delay of the project. This delay caused the completion date of the project to be postponed.

On December 5, 2001, respondent filed a complaint alleging breach of contract and breach of warranty by appellant. Appellant counterclaimed against respondent and Johnson. Count I of the counterclaim alleged breach of contractual obligation to notify the owner of alleged differing site conditions and the presence of asbestos. Count II alleged breach of contractual obligation'to seasonably complete the project.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
666 N.W.2d 398, 2003 Minn. App. LEXIS 897, 2003 WL 21743751, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frerichs-construction-co-v-minnesota-counties-insurance-trust-minnctapp-2003.