48 Mass. App. Ct. 1 | Mass. App. Ct. | 1999
This litigation arises from construction-related disputes between an architect and a general contractor, both of whom had been retained by a municipal owner in connection with a library renovation project. After securing an award in arbitration from the owner for claims based primarily on the architect’s actions, the general contractor sued the architect directly for various torts including negligent misrepresentation, interference with contractual relations, and defamation, as well as for unfair and deceptive practices pursuant to G. L. c. 93A. The general contractor’s claims arise from the architect’s conduct before and during construction, and from a postconstruction evaluation of the general contractor made by the architect to the State certifying authority. The trial court judge granted the architect’s motion for summary judgment on all claims; those arising out of the postconstruction evaluation were dismissed because the general contractor had insufficient proof of an essential element of its claims, viz., damages, and the remaining claims were dismissed on the basis of res judicata.
On appeal, the general contractor contends (a) that the general contractor’s prior arbitration proceeding against the project owner does not operate as a claim or issue preclusion bar to its direct tort claims against the architect arising from the architect’s project performance; (b) that the trial judge erred in granting summary judgment on the evaluation-based claims because there is a genuine issue of material fact whether the general contractor suffered damages; and (c) that it was error to grant summary judgment on the general contractor’s claims for G. L. c. 93A violations because res judicata is inapplicable and there are genuine issues of material fact whether the general contractor suffered damages.
We affirm in part and reverse in part.
Pursuant to the construction contract, the contractor brought an arbitration proceeding against the owner (prior arbitration) in which it sought to recover damages for extra costs incurred on the project. Among other things, the contractor sought damages for additional building materials and labor necessitated by discrepancies in and modifications to the architectural plans (building-related claims), and for employing a superintendent for longer than anticipated (delay claims). Although the architect testified and submitted documents at the arbitration hearing, it was not, and contractually could not have been, joined as a named party in the prior arbitration. Because the construction contract included a “no damages for delay” clause as required by G. L. c. 30, § 39O, the arbitrator determined that the contractor was not entitled to delay damages, and, after hearing the evidence, allowed the owner’s motion to strike the contractor’s delay claims. The arbitrator essentially found the contractor and the owner each fifty percent responsible for building-related damages, and awarded the contractor half of the costs incurred.
Following completion of project construction, the architect evaluated the contractor’s performance on the project and submitted a project evaluation form to the Massachusetts Division of Capital Planning and Operations (DCPO) pursuant to the public bidding statute, G. L. c. 149, § 44D.
In its subsequent Superior Court action brought directly against the architect, the contractor seeks to recover damages for negligent misrepresentation, interference with contractual relations with the owner, interference with advantageous business relations with DCPO, violation of G. L. c. 93A, and various torts including intentional and negligent misrepresentations, fraud, deceit, and defamation. For ease of discussion, we break these somewhat amorphously pleaded claims into several broad categories: (1) the contractor’s tort claims arising out of the architect’s performance on the project, including both building-related claims and delay claims (performance-based claims); (2) the contractor’s tort claims arising out of the architect’s evaluation of the contractor’s project performance; and (3) the contractor’s claims under G. L. c. 93A arising out of the architect’s project performance and evaluation of the contractor.
Discussion. 1. The contractor’s tort claims arising out of the architect’s project performance. The architect asserted its entitlement to summary judgment on these claims based upon the defense of res judicata. It argued, and the judge agreed, that the prior arbitration between the contractor and the owner precluded the contractor’s building-related and delay claims brought directly against the architect in the current action.
“The term ‘res judicata’ includes both claim preclusion and issue preclusion.” Sarvis v. Boston Safe Deposit & Trust Co., 47 Mass. App. Ct. 86, 98 (1999). “The doctrine of claim preclusion makes a valid, final judgment conclusive on the parties and their privies, and bars further litigation of all matters that were or should have been adjudicated in the action.” Heacock v. Heacock, 402 Mass. 21, 23 (1988). For claim preclusion to bar the contractor’s building-related and delay claims against the architect, “three elements are required: (1) the identity or privity of the parties to the present and prior actions; (2) identity of the cause of action; and (3) prior final judgment on the merits.” Gloucester Marine Rys. Corp. v. Charles Parisi, Inc., 36 Mass. App. Ct. 386, 390 (1994).
“The doctrine of issue preclusion ‘prevents relitigation of an
a. Identity or privity of the parties. Claim preclusion has as a prerequisite that there be an identity or privity of the parties to the present and prior actions, while issue preclusion requires that the party against whom issue preclusion is asserted in the present action was a party or in privity with a party to the prior adjudication. The architect and the owner are not identical, but the architect claims privity with the owner pursuant to the architect contract between the owner and the architect as well as the construction contract between the contractor and the owner. On this basis, the architect contends that it can use the prior arbitration award to preclude the contractor’s building-related and delay claims in the current action.
“[O]ne not a party to the first action may use a judgment in that action defensively against a party who was a plaintiff in the first action on the issues which the judgment decided.” Home Owners Fed. Sav. & Loan Assn. v. Northwestern Fire & Marine Ins. Co., 354 Mass. 448, 455 (1968). Bailey v. Metropolitan Property & Liab. Ins. Co., 24 Mass. App. Ct. 34, 36 (1989). “A nonparty to a prior adjudication can be bound by it ‘only where [the nonparty’s] interest was represented by a party to the prior litigation.’ ” Massachusetts Property Ins. Underwriting Assn. v.
Both the construction contract and the architect contract designate the architect as the owner’s representative with authority to act on behalf of the owner during the construction of the project. The architect contract also contains a clause limiting the architect’s liability to the owner. Indeed, the contractor’s performance-based claims in the prior arbitration and in the present action rest upon the architect’s alleged faulty performance under the architect contract. Associated Constr. Co. v. Camp, Dresser & McKee, Inc., 646 F. Supp. 1574, 1578 (D. Conn. 1986).
The contractor, however, argues that the construction contract’s “no joinder” clause, which prevented the contractor from forcing the architect into that arbitration, prevents the arbitrator’s decision from having any preclusive effect on the architect. We conclude the contrary: the “no joinder” clause underscores the privity between the architect and the owner in the prior arbitration. As the trial judge pointed out in his well-reasoned memorandum of decision, “there was no reason for [the architect] to be included in the arbitration because the [owner] was liable for [the architect’s] actions.” The first prerequisite for claim preclusion was accordingly established by the moving party.
b. Identity of causes of action. Claim preclusion requires that
In the prior arbitration against the owner, the contractor claimed that the architect’s acts and omissions caused the contractor to incur additional costs for materials and labor. The arbitrator took into account the problems with the floor height, the structural steel, the duct work, and the punchlist, and ordered the owner to pay the contractor damages for additional material and nondelay-based labor costs. In its direct action against the architect, the contractor bases its building-related tort claims (labeled variously, but not entirely plainly, in the complaint as negligent misrepresentation, interference with contractual relations, and tort) upon acts and omissions relating to floor height, structural steel, duct work, plaster, and punchlist problems.
Similarly, as to the architect’s acts and omissions causing delays in the project and consequent additional costs to the contractor, the contractor asserted in the prior arbitration that various incidents involving the architect delayed the project, causing damage to the contractor. The delay claims in the current action are based on essentially the same facts that the contractor relied upon in the prior arbitration, including tardy review of submittals and structural steel drawings, failure to grant time extensions, and issuance of an overinflated punchlist which required substantial administrative time to resolve. The arbitrator heard evidence concerning, and assessed responsibility for, certain delays as between the architect and the contractor in connection with floor elevation plan discrepancies and review of structural steel drawings. Such matters were deemed arbitrable and were in fact arbitrated. While awarding damages for additional material and labor costs arising from the architect’s faulty performance, however, the arbitrator determined that he had no authority to compensate the contractor for damages specifically due to the architect’s delays. He accord
The contractor’s tort claims against the architect in this action arising out of the architect’s performance on the project, including both huilding-related and delay claims, are based on the same set of operative facts and seek redress for the same wrongs as in the prior arbitration. Notwithstanding the contractor’s cause of action nomenclature for its tort claims in this litigation and its contract claims in the prior arbitration, the causes of action in both are essentially the same. “A claim is the same for [claim preclusion] purposes if it is derived from the same transaction or series of connected transactions.” Saint Louis v. Baystate Med. Center, Inc., 30 Mass. App. Ct. 393, 399 (1991), citing Boyd v. Jamaica Plain Co-op. Bank, 7 Mass. App. Ct. 153, 163-164 (1979). “The statement of a different form of liability is not a different cause of action, provided it grows out of the same transaction, act, agreement, and seeks redress for the same wrong.” Mackintosh v. Chambers, 285 Mass. 594, 596 (1934). See Tuite & Sons, Inc. v. Shawmut Bank, N.A., 43 Mass. App. Ct. 751, 753 (1997). Indeed, in the arbitration, the contractor contested the very factual issues concerning responsibility, as between itself and the architect, for actions resulting in additional project costs which it seeks to re-litigate in this proceeding. Those factual issues were determined by the arbitrator and were essential to the arbitration award. See Bailey v. Metropolitan Property & Liab. Ins. Co., 24 Mass. App. Ct. at 37. The same facts are vital to establishing certain of the elements of the performance-based tort claims that the contractor now asserts in this action against the architect.
There can be no serious question on this point as to the building-related claims. The arbitrator addressed the merits of the contractor’s claims for additional material and labor costs and set forth his reasons for awarding or not awarding the contractor money for specific claimed additional costs. The contractor’s effort to distinguish the delay-based claims by suggesting that the arbitrator did not really adjudicate them on the merits is equally unavailing.
After the contractor concluded its proofs in the arbitration hearing, the owner asked the arbitrator to dismiss or strike all delay claims on the ground that they were barred by the construction contract and G. L. c. 30, § 39O. In response, the arbitrator issued a detailed interim decision in which he (a)
The striking or dismissal of the claims seeking damages for delay is the equivalent of a dismissal pursuant to Mass.R. Civ.R 12(b)(6), 365 Mass. 755 (1974), and constitutes an adjudication on the merits for claim preclusion purposes. Mestek, Inc. v. United Pac. Ins. Co., 40 Mass. App. Ct. 729, 731 (1996). Mass.R.Civ.P. 41(b)(2), 365 Mass. 804 (1974). The arbitrator acted within his authority in determining whether the contractor was entitled to delay damages under the contract, and accepted evidence and argument on the issue. This is unlike a dismissal for lack of jurisdiction, for improper venue, or for failure to join a party. Mass.R.Civ.P. 41(b)(3), 365 Mass. 805 (1974).
The architect, as the moving party, accordingly demonstrated satisfactorily the prerequisites necessary for the application of res judicata and the trial judge correctly determined that the contractor’s tort claims arising out of the architect’s project performance were barred.
2. Evaluation-based tort claims. The contractor alleges that the evaluation that the architect submitted to DCPO upon completion of the project pursuant to G. L. c. 149, § 44D, contained intentional and willful falsehoods, misrepresentations, and defamatory statements about the contractor. The contractor asserts that these statements constitute intentional and negligent misrepresentations, fraud, deceit, and defamation. The architect sought summary judgment as to these claims because it asserted that proof of actual damages, a necessary element of these
In his affidavit, the architect’s attorney recites that he was informed by the contractor’s attorney that a person or persons unnamed at DCPO decided to disregard the architect’s evaluation of the contractor and accordingly that the evaluation would not affect the contractor’s “DCPO rating.” He also recited that “[ajlthough opposing counsel has recently informed my office that [the contractor’s] DCPO rating was adversely affected for a year and a half period, no explanation has been given regarding how [the contractor’s] rating was directly affected by the conduct of [the architect], or how actual damages in dollar terms were incurred.” The contractor’s motion to strike this affidavit as being in noncompliance with Mass.R.Civ.P. 56(e), 365 Mass. 825 (1974), was denied in a footnote to the trial judge’s memorandum of decision. The judge made clear that, in his view, “it demonstrates the lack of evidence to support [the contractor’s] claim for damages as resulting from [the architect’s] submission of the feelingmark [evaluation] to DCPO.” This was error.
Affidavits in support of motions for summary judgment, among other things, “shall be made on personal knowledge [and] shall set forth such facts as would be admissible in evidence.” Mass.R.Civ.P. 56(e). “All affidavits or portions thereof made on information and belief, as opposed to personal knowledge, are to be disregarded in considering a motion for summary judgment.” Shapiro Equip. Corp. v. Morris & Son Constr. Corp., 369 Mass. 968, 968 (1976), citing Automatic Radio Mfg. Co. v. Hazeltine Research, Inc., 339 U.S. 827, 831 (1950). The affidavit of the architect’s attorney was not based
In addition to the defective affidavit, the architect supported its motion for summary judgment by reference to the contractor’s answer to interrogatory number twenty. In this interrogatory, the architect asked the contractor for the basis upon which the contractor asserted that the architect had intentionally interfered with the contractor’s relationship with DCPO. Notably, the interrogatory asked the contractor only about its intentional interference claim, not its other claims arising from the evaluation. The contractor answered that the impact of the architect’s evaluation “on TLT’s future bidding capacity is significant and ongoing.” While the moving party’s supporting material need not disprove the existence of the nonmoving party’s damages, it must “demonstrate that proof of [damages] at trial is unlikely to be forthcoming.” Kourouvacilis v. General Motors Corp., 410 Mass. 706, 714 (1991). This burden was not met by the architect’s reference to a statement by the contractor that the complained of evaluation has a significant and ongoing impact on its future bidding capacity.
Because the architect did not meet its initial burden of affirmatively demonstrating that proof of an essential element of the evaluation-based claims, damages, was unlikely to be forthcoming, summary judgment for the architect on such claims should not have entered. See Smith v. Massimiano, 414 Mass. 81, 86-87 (1993).
3. G.L. c. 93A claims. The contractor claims that the architect engaged in unfair and deceptive trade practices in violation of G. L. c. 93A. It bases these allegations on conduct giving rise to its other claims, namely the architect’s project performance and its submission of the evaluation to DCPO. The trial judge granted the architect’s motion for summary judgment on all claims without specific explanation of his treatment of the G. L.
The architect contends that actual damages is a necessary element of a G. L. c. 93A, § 11, claim and, since the contractor would be unable to prove damages for the evaluation-based torts, it would also be unable to prove damages for its evaluation-based G. L. c. 93A claim. For the reasons just discussed, summary judgment on the contractor’s evaluation-based claims because of lack of proof of damages was improvidently granted. Hence, the contractor’s G. L. c. 93A claims based on the evaluation also survive. See Dulgarian v. Stone, 420 Mass. 843, 853 (1995). (“Defamatory statements are actionable under G. L. c. 93A[, § 11]. . . . However, where allegedly defamatory statements do not support a cause of action for defamation, they also do not support a cause of action under G. L. c. 93A[, § 11]”).
Turning now to the performance-based G. L. c. 93A claims, we must determine whether they, like the performance-based tort claims, are barred by res judicata. There is nothing in the record before us to suggest that the parties intended to litigate the c. 93A claims in the arbitration proceedings, or that the arbitrator was asked to consider or decide such claims.
Conclusion. We affirm the portion of the judgment dismissing the contractor’s tort claims based on the architect’s performance during the project, reverse the portion of the judgment dismissing the contractor’s tort claims based on the evaluation, reverse the portion of the judgment dismissing the contractor’s G. L.
So ordered.
General contractors wishing to bid on contracts subject to the public bidding statute, G. L. c. 149, §§ 44A-44H, must meet eligibility requirements as
“If a party clearly intended to arbitrate the transaction at issue, then that party should not later be permitted to circumvent the prior arbitration award by suing a person who was functionally central to the transaction but who was technically not a party to the arbitration.” Shell, Res Judicata and Collateral Estoppel Effects of Commercial Arbitration, 35 UCLA L. Rev. 623, 665 (1988).
For example, in the current action, the contractor claims that the architect negligently misrepresented the elevations of certain floor heights which resulted in a discrepancy causing substantial damages to the contractor. The arbitrator, however, already awarded the contractor $9,467.00 for the “discrepancy in the plans prepared by the Architect.”
By way of example, the contractor alleges that the architect made negligent misrepresentations in its plans regarding floor elevations. The contractor presented evidence on the discrepancy in plans concerning floor alignments at the arbitration and the arbitrator found the architect fifty percent responsible for the resulting discrepancy in floor alignment.
The contractor did not appeal the prior arbitration pursuant to G. L. c. 251, §§ 12 and 13.
The contractor does not dispute that the prior arbitration would have a preclusive effect on any subsequent suit between itself and the owner, but contends that it should not have such effect as to the architect, a nonparty to the arbitration, a point we previously resolved against the contractor.
Somewhat similarly, dismissal of an action on the basis of Statute of Frauds, statute of limitations, or the defendant’s lack of capacity have been considered sufficiently on the merits to bar a subsequent suit under the doctrine of claim preclusion. Velasquez v. Franz, 123 N.J. 498, 505-513 (1991). Smith v. Russell Sage College, 54 N.Y.2d 185, 194 (1981). See Quigley, Dismissal of Action on Statute of Frauds and Statute of Limitations Grounds Is Sufficiently Close to Merits to Bar Subsequent Suit Under Doctrine of Res Judicata, 56 St. John’s L. Rev. 763 (1982); Salerno, Civil Procedure — Res Judicata, 22 Seton Hall L. Rev. 1035 (1992).
See Lakian v. Globe Newspaper Co., 399 Mass. 379, 383 (1987) (defamation); Poly v. Moylan, 423 Mass. 141, 149 (1996) (misrepresentation); Warner-Lambert Co. v. Execuquest Corp., 427 Mass. 46, 47-50 (1998) (deceit). We note that the architect did not assert the defense of qualified immunity and we accordingly do not opine as to it.
Massachusetts courts have not yet determined whether and when municipalities are amenable to suit under G. L. c. 93A, § 11, see U.S. Leasing Corp. v. City of Chicopee, 402 Mass. 228, 232 (1988); All Seasons Servs., Inc. v. Commissioner of Health & Hosps. of Boston, 416 Mass. 269, 271 (1993), and we do not decide this now.