MEMORANDUM AND ORDER
Mallinckrodt LLC (Mallinckrodt) hired AECOM Technical Services, Inc. (AE-COM) to excavate and provide decontamination services at the site of a former columbium-tantalum (C-T) plant licensed by the Nuclear Regulatory Commission. The parties agreed that the “Target Price” for the project was $3.7 million. But after
I. STATEMENT OF UNDISPUTED FACTS
A. AECOM’s Bid Proposal
Mallinckrodt formerly operated a plant in St. Louis, Missouri that extracted co-lumbium and tantalum compounds from ores. In 2009, Mallinckrodt sought a contractor to decommission the facility. Phase, I of the plan-demolishing the plant-was complete. Now Mallinckrodt was seeking a contractor to execute Phase II, which involved decommissioning the facility’s floor slabs, foundations, sewers, pavement,. sediment basins, and land. Mal-linckrodt included a copy of the Phase II plan in its Request for Proposal, which described Mallinckrodt’s efforts to measure the level of radioactivity at the site. Based on these efforts, -the Phase II plan estimated that , there was potentially 129,-000 cubic feet of subsurface radioactive waste to be decontaminated or removed. (Docket Nos. 88-7:25, 88-12:28).
AECOM emerged as a candidate for the project and entered into negotiations with Mallinckrodt. On one occasion, AECOM asked: - •
You previously indicated that the volume and footprint of the contamination is considerably larger that [sic] outlined in the decommissioning plan. Should [AE-COM] address the additional cost and schedule impacts to project logistics, schedule and price?
(Docket No. 94-5:3). Mallinckrodt responded:
As with any remediation job, you can do . all the pre-characterization you want but will never exactly know how big the éxcavation will be until you put a shovel in the ground. The scope of the work 4s to excavate until cleanup criteria is met. The area identified in the Phase II plan was estimated based on the pre-charac-terization data and should not be considered the limits of excavation - or scope. For the-.purpose of preparing the.Final Status Survey as required by- the [Nuclear Regulatory Commission] the entire area of the CT processing buildings will need to be addressed in some matter whether it be removing concrete pads and foundations or excavating contaminated soils.
(Docket No. 94-5:3).
After a competitive bidding process, Mallinckrodt selected AECOM’s bid proposal. AECOM stated that it would employ the “most cost-effective methods” to complete the project. For example, AE-COM proposed to use “real-time instrumentation” such as GPS-correlated gamma survey equipment, and high resolution gamma spectrometers to detect the relative levels of radiation coming from different parts of the site. Using this data, AECOM stated that, it would be able to calculate and compare the cost of decontamination versus bulk disposal for any given aréa. AECOM referred to this approach as a “surgical” technique to decrease the volume of material that would
With respect to pricing, AECOM’s bid proposal stated that the project involved several logistical and operational challenges including: (1) unknown quantities of materials, radioactivity levels of materials, and the cost-benefit of segregation and decontamination; and (2) unknown subsurface conditions that may impact excavation techniques and excavation production. Given these unique variables, AECOM explained that the project was not conducive to a Lump Sum or Unit Rate pricing structure because of how “site unknowns” might potentially affect the project. Instead, AECOM proposed' a “Partnered Payment Structure” that included a Target Cost of $2.7 million and a fee based on the difference between actual costs and the Target Cost. According to AECOM, the Target Cost was based, on the estimates in Mallinckrodt’s Phase II plan.
The parties entered into two contract documents, a Master Environmental Services Agreement and a First Amendment. In relevant part, the Master Environmental Services Agreement stated in a section titled “BILLING AND PAYMENT/MECHANIC’S LIENS”:
[Mallinckrodt] shall not be obligated to pay to [AECOM] any amount in excess of the Contract Price for a project. However, if requested by [AECOM], [Mallinckrodt] may approve by way of a written Change Directive an increase to the Contract Price or Budget from time to time and in [Mallinckrodt’s] sole discretion.
(Docket No. 88 — 18:5). The First Amendment further stated in a section titled “Compensation”:
AECOM shall be reimbursed for actual costs incurred with incentives ... The contract shall be based .on the Target Price described in Section 5.2 of this Amendment. This Target Price shall be based on AECOM’s Costs plus the incentive fees described in Section 5.5 and 5.6
Target Price: The Target Price for this Project is $3,700,000. This price includes. all Costs associated with conducting all activities described in the Contract Documents
Adjustments to the.Target Price: The Target Price will only be adjusted if there is a significant unforeseen event, material, or site condition which is outside of the scope of the work described in any and/or all Contract Documents. Any such Adjustment must be agreed to in writing by both parties
Target Volume: The parties recognize that efficient soil management and environmental practices will minimize the volume of soil that must be disposed of off-site. Based on pre-excavation characterization and volumetric estimates by [Mallinckrodt], a Target Volume of 3,419 tons of regulated soils from Plant 5 for removal has been established.
Incentive Project Fee: The Incentive Project Fee will be based on the difference between the Target Price and the total project. Costs. Should the total Cost of the Project be less than the Target Price ... [Mallinckrodt] and AE-COM will share’ equally the savings ... Should the total costs of the Project exceed 94% of the Target Price, AE-COM will be reimbursed a minimum of Cost plus three percent (3%) or the Incentive Project Fee described in this section, whichever is the greater amount;
(Docket No. 88-22:7-8).
B. Delays and AECOM’s Requests for Additional Funding
AECOM began working, at the site towards the end , of 2010, but issues regard
Three months after submitting the change request, AECOM submitted a second one in September 2011, seeking to spend an additional $5.66 million and bringing the proposed total budget to $13.36 million. (Docket Nos. 94-111, 94-112). AECOM also further pushed back its estimated date of completion to March 2012. These new estimates, AECOM stated, were based on a “more detailed analysis” of the amount of excavation that remained. AECOM also described the new estimate as “conservative” and reassured Mallinckrodt that the company was seeking efficiencies wherever possible and intended to complete the project under the total amount requested and within the timeframe outlined in the new proposed schedule. Mallinckrodt again refused to adjust the' Target Price but authorized AECOM to spend up to an additional $4 million, bringing the total budget to $11.7 million.
AECOM submitted a third request for additional funds in February 2012. The company now requested authorization to spend an additional $3.57 million and to increase the budget to $15.3 million. (Docket No. 94r-129). AECOM stated that its request was based on the “factors cited in the previous request.” Additionally, AECOM stated that water management costs had increased to avoid delays in excavation. Beyond that, AECOM delayed its estimated date of completion yet again to May 15, 2012. Mallinckrodt refused to adjust the Target Price but authorized AECOM to spend an additional $2 million, bringing the total budget to $13.7 million.
By April 2012, AECOM had already exceeded the new budget, with total spending at $14.36 million. As a result, AECOM again requested additional funding, estimating that raising the budget to $15.3 million would allow for two to three more weeks of work. Several days later, AECOM also told Mallinckrodt that it now estimated that completion of the project would require a total budget of $17.9 million, which would include a 3% fee to AECOM of over $520,000. AE-COM explained that excavation in other areas of the plant had taken much longer than expected because: (1) delays from initial efforts to minimize waste; and (2) the significantly greater amount of material requiring removal.
This fourth plea for more money triggered a meltdown. Mallinckrodt rejected the request for additional funds. The
Over the next month, Mallinckrodt approached AECOM about amending the contract to include a lump sum not to exceed amount. AECOM reported that it had spent $15.4 million to date and would require an additional $3.48 million to complete the project. After adding AECOM’s three percent fee of approximately $567,000, AECOM’s estimated total cost of the project was $19.46 million. Mallinck-rodt also approached Energy Solutions, Inc. about taking over the project on a lump sum basis. On May 23, 2012, Mal-linckrodt terminated AECOM and hired Energy Solutions to complete the project for approximately $5.4 million. (Docket Nos. 94-151:2-3, 94-155:2).
C. Violation of a St, Louis Water Permit
In addition to the delays and cost overruns, Mallinckrodt alleges that AECOM violated a sewer permit issued by the City of St. Louis. In November 2011, AECOM discontinued all wastewater discharges after discovering that some of the discharges may have exceeded the radioactivity limits set by Mallinckrodt’s permit with the St. Louis Sewer District. (Docket No. 94-118). AECOM stated that the root cause of the discharges appeared to be a failure to monitor the water treatment system and a delay in reviewing laboratory analytical results. One month later, the Metropolitan St. Louis Sewer District issued a Notice of Violations to Mallinckrodt, alleging that the project’s water discharges contained ■ elevated levels of radiation. (Docket No. 99). In response, AECOM conducted an ■ investigation into the incident, designed and installed a new water treatment system, and adjusted its standard operating procedures for water treatment and discharges. Despite this issue, Mallinckrodt approved AECOM’s third change request for additional funds in March 2012. .
D. Procedural Background
Soon after AECOM’s termination, the battle between AECOM and Mallinckrodt began. Both companies take aim at each other with a proliferation of claims. AE-COM alleges breach of contract (Count 1); quantum meruit/unjust enrichment (Counts 2-3); breach'of the covenant of good faith- and fair dealing (Count 4); unfair and deceptive business practices in violation of Mass. Gen. Laws ch. 93A (Count 5); misrepresentation (Count 6); and declaratory judgment (Count' 7). Meanwhile, Mallinckrodt alleges claims for breach • of contract (Counts 1-4); negligence (Count 6); unfair and deceptive business practices in violation of • Mass. Gen. Laws ch. 93A (Count 7); and breach of the covenant of good faith and fair dealing (Count 8). Both parties now move for summary judgment.
II. LEGAL STANDARDS
Summary judgment is appropriate when there is “no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.Civ.P. 56(a). To succeed on a motion for summary judgment, the moving party must demonstrate that there is an “absence of evidence supporting the non-moving party’s case.” Sands v. Ridefilm Corp.,
In its review of the evidence, the Court must examine the facts in the light most favorable to the non-moving party and draw all reasonable inferences in their favor. Sands,
III. DISCUSSION ,
This case is full of material fact disputes that will have to be resolved by a jury. As a result, the Court finds that summary judgment is only appropriate for (1) Mal-linckrodt and AECOM’s Chapter 93A claims; (2) AECOM’s negligent misrepresentation claim; and (3) AECOM’s request for a declaration that the contract between the parties is void. In all other respects, AECOM and Mallinckrodt’s motions for summary judgment are denied.
A. Chapter 93A Claims — Whether the Acts or Practices Occurred Primarily and Substantially within Massachusetts
Malliñckrodt and AECOM’s Chapter 93A claims (Malliñckrodt Count 7 and AE-COM Count 5) fail as a matter of law because the actions and transactions. underlying the claims did not occur “primarily and substantially” within Massachusetts. See Mass. Gen. Laws ch. 93A, § 11.
Before reaching the merits of a Chapter 93A claim, the Court-must “determine whether the center of gravity of the circumstances that give rise to the [§ 11] claim is primarily and substantially within the Commonwealth.” Kuwaiti Danish Comput. Co. v. Dig. Equip. Corp.,
Mallinckrodt’s Chapter 93A claim essentially alleges that AECOM’s bid proposal and requests for additional funds were unfair and deceptive. But for the “low-ball” bid and estimates, Mallinckrodt claims that it would not have selected AE-COM for the project or approved of AE-COM’s repeated requests for additional funding. The following pivotal events and circumstances underlying this claim, however, wene outside Massachusetts: (1) the nucleus of Mallinckrodt’s relationship with AECOM was an excavation and decontamination project at a facility in St. Louis, Missouri; (2) requests for additional funding (including AECOM’s allegedly false and fraudulent estimates) were typically submitted by an AECOM project manager based in Texas and approved by Mallinck-rodt’s Director of Environmental Remediation in Missouri; and (3) AECOM’s bid proposal was submitted by its Texas office to Mallinckrodt employees in Missouri.
On-the other side of the ledger, at .least two AECOM employees in Massachusetts communicated with Mallinckrodt, especially during the bidding process and prior to termination. This included (1) AECOM Vice President Montgomery Lovejoy, who served as Mallinckrodt’s initial point-of-contact during the bidding process and signed the First Amendment to the Master Environmental Services Agreement; and (2) AECOM Vice President & Chief Counsel Jon Mahoney, who received Mallinck-rodt’s official termination of AECOM, Aso, invoices were typically sent from AE-COM’s office in Massachusetts to Mal-linckrodt’s project manager in Missouri.
But these minor connections to Massachusetts do not change the center of gravity for Mallinckrodt’s Chapter 93A claims. The Court recognizes that Lovejoy described himself as the “overall sort of conscience of AECOM” during the bidding stage. But of the three AECOM representatives who signed the bid proposal, only Lovejoy was located in Massachusetts. Aso, internal AECOM discussions about pricing included many more employees from outside of Massachusetts than within. And, as mentioned above, once the project began, AECOM’s ^Project Manan-ger in Texas submitted four requests for additional funding to Mallinckrodt’s Director for Environmental Remediation in Missouri. In short, Lovejoy and Maho-ney’s roles from. Massachusetts were relatively minor compared with the more influential roles played by others in Texas and Missouri. Ater weighing these factors, the Court agrees that Mallinckrodt’s Chapter 93A claim did not “primarily and substantially” occur in Massachusetts. Rather, the “center of gravity” for the unfair and deceptive acts was primarily in Missouri (the site of the project and Mal-linckrodt’s U.S. headquarters) and Texas (the location of AECOM’s project manager). For these reasons, the Court allows AECOM’s motion for summary judgment on Mallinckrodt’s Chapter 93A claim. (Count 7).
Similarly, the Court will dismiss AE-COM’s Chapter 93A claim (Count'5); which is based on Mallinckrodt’s alleged (1) failure to provide accurate information regarding the volume of contaminated material; (2) refusal to adjust the Target Price; and (3) termination of AECOM and refusal to pay. Like Mallinckrodt’s Chapter 93A claim, the “center of gravity” for all of this conduct is not “primarily and substantially” in Massachusetts. Rather, the vast majority of these interactions took place between Mallinckrodt employees, in Missouri and AECOM employees in Texas. Aso, these communications all concerned
B. Negligent Misrepresentation
The Court will also allow Mallinckrodt’s motion for summary judgment on AE-COM’s negligent misrepresentation claim (AECOM Count 6).
Under Massachusetts law, a defendant is liable for negligent misrepresentation when (1) in the course of his business, (2) he supplies false information for the guidance of others (3) in their business transactions (4) causing and resulting in pecuniary loss to others (5) by their justifiable reliance on the information, and that he (6) failed to exercise reasonable care or competence in obtaining or communicating the information. DeWolfe v. Hingham Centre, Ltd.,
1. Estimation of the Amount of Contaminated Material
To begin with, there is no evidence that Mallinckrodt failed to exercise reasonable care or competence in obtaining or communicating information about the amount of contaminated material at the site. AECOM argues that Mallinckrodt negligently described its estimates as “well-characterized” and “accurate” during pre-bid negotiations. In support of this point, AECOM relies on deposition testimony from Mallinckrodt employee Karen Burke, AECOM employee Ed Palser, and expert Daniel Caputo. (Docket Nos. 87 ¶ 20, 110 ¶ 33). But none of these people pointed to specific Mallinckrodt statements pledging to the accuracy of the estimates. Burke admitted that Mallinckrodt provided characterization data to AECOM for bidding purposes. But she also told AE-COM that “you never really understand the volume of material. You can characterize a site, you know, 10,000 percent, and you never really know until you start excavating.” (Docket No. 88-3:19). Similarly, Palser testified that Mallinckrodt directed AECOM to bid in accordance with the decommissioning plan. (Docket No. 88-23:9). But he did not say anything about whether Mallinckrodt provided any express or implied warranty about the accuracy of estimates in the decommissioning plan. AECOM’s best evidence comes from
Meanwhile, the record contains numerous examples where Mallinckrodt disclaimed any warranty about the accuracy of its estimates. Before AECOM submitted its bid proposal, it sent an e-mail to Mallinckrodt stating that “you previously indicated that the volume and footprint of the contamination is considerably larger [than] outlined in the decommissioning plan.” (emphasis added). Mallinckrodt responded:
As with any remediation job, you can do all the pre-characterization you want but you will never exactly know how big the excavation will be until you put a shovel in the ground. The scope of the work is to excavate until the cleanup criteria is met. The area identified in the Phase II plan was estimated based on the pre-characterization data and should not be considered the limits of excavation or scope.
(Docket No. 94-5:3). This e-mail exchange occurred in October 2008, a year before AECOM submitted its bid proposal in October 2009. Beyond that, the decommissioning plan also consistently referred to the potential volumes of contaminated materials as estimates. See Docket No. 88-7:25 (referring to the “estimated” volume of contaminated subsurface soil, unreacted C-T ore, and total volume of potentially contaminated solid waste).
Similarly, the record also shows that AECOM was fully aware of the unknown amount of excavation that the project would entail, and they accounted for this x-factor accordingly. AECOM’s bid proposal lists some of the logistical and operational challenges for the project as: (1) “Unknown quantities of materials, radioactivity levels of materials ... and the cost-benefit of segregation and decontamination”; and (2) “Unknown subsurface conditions that may impact excavation techniques and excavation production.” AECOM’s bid proposal also stated that the project was not conducive to a lump sum amount because of the “potential impacts of site unknowns.” (Docket No. 88-20:38). Even viewing the facts in the light most favorable to AECOM, the Court concludes there is no evidence about how Mallinckrodt should have derived its estimates or transmitted its uncertainty about its estimates to AECOM in a more reasonable or competent way. See Skowronski v. Sachs,
AECOM responds that its position is supported by Craig v. Everett M. Brooks Co.,
Nota actually further confirms that there is no negligent misrepresentation claim here. In Nota, an architectural firm told contractors that they should anticipate about 12,000 cubic yards of excavation in order to build a new school.
2. Adjustments to the Target Price '
AECOM also argues that Mallinck-rodt negligently'misrepresented that the Target Price would be adjusted if the site conditions were materially different than expected. But AECOM’s only evidence of such a promise comes from the contract, which states:
Adjustments to the Target Price: The Target' Price will only be adjusted if there is a significant unforeseen event, material, or site condition which is outside the scope of the work described in any and/or all Contract Documents. Any such
Adjustment must be agreed to in writing by both parties. (Docket Nos. 87 ¶24; 88-22:7). Because AECOM’s negligent misrepresentation claim , is essentially based on Mallinckrodt’s failure to adjust the Target Price as promised in the contract, AECOM’s relief lies in contract, not in tort. See Cumis Ins. Soc’y, Inc. v. BJ’s Wholesale Club, Inc.,
C. Declaration that the Contract is Void — Mutual Mistake
AECOM’s plea for a declaration that the contract'is void (AECOM Count 7) also
Under the doctrine of mutual mistake, “[w]here there has been a mistake between the parties as to the subject matter of a contract, there has been no ‘meeting of the minds,’ and the contract is. voidable at the election of the party adversely affected.” LaFleur v. C.C. Pierce Co.,
Applying this legal framework, mutual mistake is inapplicable here because AECOM was fully aware of the unknown quantity of contamination at the Mallinckrodt site when it entered into the contract. As mentioned above, Mallinck-rodt informed AECOM before they submitted their bid that the amount of contamination estimated in the Request for Proposal could be inaccurate. More to the point, AECOM also acknowledged this in their bid proposal, highlighting on multiple occasions that the unknown quantity of contamination was one of the logistical challenges for the project. Because of the unknown quantity of contamination, AE-COM and Mallinckrodt agreed to a special pricing structure where the parties would share the risk. If' the costs ended up coming below the Target Price, both parties would share the benefits. But if the costs ended up exceeding the Target Price, AECOM explained that “a portion of AE COM’s profit is at risk if we are not successful implementing the project to the target cost.” (Docket No. 88-20:38). Based on this record, a reasonable jury could not find that the parties entered into the contract with mistaken assumptions about the quantity of contamination. See Covich,
AECOM responds that Mallinckrodt instructed them to solely bid on the amount of material estimated in the Phase II Decommissioning Plan. Based on these instructions, AECOM argues that Mallinckrodt solely assumed the risk of any unforeseen radioactive material that needed to be removed. But the record is devoid of any such assumption of risk. Mallinckrodt’s Request for Proposal contained no indication that there was any cap or maximum on the amount of material that would need to be removed. AECOM’s bid proposal also contemplated that the amount of material to be removed was an unknown, which is why a lump sum pricing structure would be infeasible. Mallinckrodt also told AECOM that the estimates in the Phase II Plan should not be considered the limits of excavation or scope of work. Both companies therefore understood that the amount of material to be removed was unknown. A reasonable jury would have to conclude that this was a case of mutual risk-taking, not mutual mistake.
D. Remainder of AECOM and Mal-linckrodt’s Motions for Summary Judgment
For .the following reasons, the Court summarily denies the remainder of AE-COM and Mallinckrodt’s motions for summary judgment:
First, Mallinckrodt seeks summary judgment for its own and AECOM’s claims for breach of contract and breach of the implied covenant of good faith and fair dealing. But a reasonable jury could rule either way on the merits of these claims.
Mallinckrodt argues in Counts 1-2 that AECOM breached its promise to provide reliable information when it submitted inaccurate reports and estimates of the costs required to complete the project. Count 8 of Mallinckrodt’s complaint similarly argues that these unreliable estimates breached the covenant of good faith and fair dealing. A jury might agree with Mallinckrodt. But a reasonable jury could also reject these claims. Viewing the facts in AECOM’s favor, AECOM submitted its bid proposal assuming that Mallinckrodt’s estimates in the Phase II Decommissioning Plan were at least in the ballpark of the amount of material that would need to be removed. Once AECOM began working at the site, however, it soon became clear that Mallinckrodt’s estimates were grossly incorrect. As a result, AECOM attempted to provide the best estimates possible for how much completing the project would cost and how long it would take based on the information that was available. A reasonable jury could certainly reject the claim that AECOM’s estimates and delays were mere attempts to endlessly string along Mallinckrodt while the price of the project steadily grew.
By the same token, a reasonable jury could also find that Mallinckrodt breached the covenant of good faith and fair dealing. Mallinckrodt estimated in its Phase II plan that the “total volume of potentially contaminated solid waste in CT Phase II is estimated to be 129000 [cubic feet].” (Docket No. 887:25) (emphasis added). Based on this estimate of “potential” contamination, the parties agreed to a
Mallinckrodt also argues that it is entitled to summary judgment for Count 4 because AECOM breached the contract when it failed to manage waste water discharges, causing a violation of a sewer permit issued by the City of St. Louis. But the record for this claim also contains significant disputes of fact. To begin with, AECOM argues that it cured any potential breach by investigating the water discharge and revising its procedures. There is also a dispute of fact regarding whether Mallinckrodt suffered any damages from the breach. The parties dispute whether the violation caused any delays or costs for the project in the short term or harm to Mallinckrodt’s record and reputation in the long term. As a result, Count 4 of Mal-linckrodt’s complaint must also proceed to trial.
Second, AECOM argues that several of Mallinckrodt’s claims are duplicative. Specifically, AECOM argues that the warranty and negligence claims are duplicative (Mallinckrodt Counts 2, 3, and -6); and (2) the claims for breach of the covenant of good faith and fair dealing and breach of contract are duplicative (Mallinckrodt Counts 1 and 8). Belatedly, Mallinckrodt argues that AECOM’s claims for breach of contract and quantum meruit/unjust enrichment are mutually exclusive theories of recovery (AECOM Counts 1-3). The Court agrees that many of these claims are based on the same-or mutually exclusive-underlying facts and theories of recovery. Nevertheless, the Court will encourage the parties to prove these claims at trial, and will ensure that no duplicative or mutually exclusive damages are awarded. See Szalla v. Locke,
Third, AECOM argues that Mallinck-rodt’s express warranty claim (Mallinck-rodt Count 2) cannot be based on any promises made in AECOM’s bid proposal because (1) the bid proposal was never incorporated into the contract; and (2) any such promises constitute mere puffery. Both of these arguments miss the mark.
To begin with, the Court rejects the argument that AECOM’s bid proposal was not incorporated into the contract between AECOM and Mallinckrodt, at least with respect to AECOM’s description of the scope of services it would provide. To incorporate extrinsic material, the language of the contract “must clearly communicate that the purpose of the reference is to incorporate the referenced material into the contract.” NSTAR Elec. Co.
AECOM’s bid proposal was also not mere puffery as a matter of law. Massachusetts courts have recognized that “loosely optimistic statements that are so vague, so lacking in specificity, or so clearly constituting the opinions of the speaker” may constitute mere “puffing” or “sales talk” upon which no reasonable person could rely. Shaw v. Dig. Equip. Corp.,
■ Finally, AECOM seeks a declaration that Mallinekrodt owes any outstanding costs plus a three percent incentive fee under the" contract. In relevant part, the contract states:
Incentive Project Fee: The Incentive Project Fee will be based on the' difference between the Target Price and the total project Costs. Should the total Cost of the Project be less than the Target Price ... [Mállinckrodt] and AE-COM will share equally the savings ... Should the ‘ total costs of the Project exceed" 94% of the Target Price, AE-COM will be reimbursed a minimum of Cost plus three percent (3%) or the Incentive Project Fee described in this section, whichever is the greater amount.
(Docket No. 88-22:8). The Court interprets the plain language to mean that, at a minimum, AECOM should be reimbursed for its costs plus three percent under the contract. Mallinekrodt responds that this section was never meant to apply if the total costs of the project exceeded the target price. If it were. otherwise, Mal-linckrodt argues that AECOM would have no incentive to control the costs once the Target Price was exceeded. But this argument finds no support in the text of the contract. The contract .unambiguously states- that if the total costs of the project exceeded 94% of the Target Price,. AE-COM would be reimbursed a minimum of cost plus three percent. This reading -of the contract is perfectly consistent .with logic - and reason. Under this pricing structure,-AECOM had an incentive to keep costs low because the parties would share equally ..in the savings if the total costs of the project came in below the target price. Granted, AECOM knew that it was guaranteed a fee of three percent of
But this is not the end of the story. As described above, Mallinckrodt has presented evidence' of AECOM’s own material breaches of the contract, including a failure to provide accurate estimates and dates of completion. These breaches arguably justify and excuse Mallinckrodt’s failure to pay. See Prozinski v. Ne. Real Estate Servs., LLC,
ORDER
The Court ALLOWS IN PART AND DENIES IN PART AECOM’s motion for summary judgment (Docket No. 85), and ALLOWS IN PART AND DENIES IN PART Mallinckrodt’s motion for summary judgment (Docket No. 89). The ’ Court ALLOWS Mallinckrodt’s motion for summary judgment on Counts 5-7 of AE-COM’s amended complaint. The Court ALLOWS AECOM’s motion for summary judgment on Count 7 of Mallinckrodt’s second amended complaint. .,
Notes
. Mallinckrodt's motion also refers to an intentional misrepresentation claim, but AE-COM’s opposition only addresses negligent misrepresentation. To the extent that AE-COM’s complaint alleges a claim for intentional misrepresentation, Mallinckrodt’s motion for summary judgment is allowed without opposition.
. Because the Court will allow Mallinckrodt's motion for summary judgment on this claim, the Court need not address Mallinckrodt’s alternative argument that the AECOM’s request for a declaratory judgment is invalid because it will not terminate the controversy.
. The Court does not need to address AE-COM’s argument that Mallinckrodt’s breach of contract claim (Count 1) fails to the extent it generally accuses AECOM of exceeding the $3.7 million Target Price. Mallinckrodt no longer argues that AECOM breached the contract when its expenditures eclipsed the Target Price. Instead, Count 1 is based on AE-COM’s alleged: (1) failure to provide accurate cost estimates and reports; (2) false representations regarding its ability to complete the project at certain costs; and (3) failure to complete .the project within the deadlines and estimates it provided.