The opinion
STATE OF MAINE BUSINESS AND CONSUMER COURT
Cumberland, ss Location: Portland
Docket No.: BCD-CV-11-03
)
415 CONGRESS STREET )
PROPERTIES, LP, and )
HARPERS DEVELOPMENT, LLC, )
)
Plaintiffs, )
)
V. )
)
URS GROUP, INC., URS )
CORPORATION, and T.F. )
PROPERTIES, INC., )
)
Defendants )
)
ORDER ON DEFENDANTS URS GROUP INC. AND URS CORPORATION'S
MOTION FOR SUMMARY JUDGMENT
Defendants URS Group, Inc. (URS Group) and URS Corporation (URS Corp.)
(collectively, the "URS Defendants") have moved for summary judgment on Counts I, II, and
III of Plaintiffs Harpers Development, LLC (Harpers) and 415 Congress Street Properties, LP's
(415 Congress) complaint. For the reasons stated within, the court grants the motion in part
and denies the motion in part.
BACKGROUND
The following facts are undisputed, except where noted. This case arises out of a
Property Condition Assessment ("PCA") performed by URS Corp. for Harpers on a building
located at 415 Congress Street in Portland, Maine ("the building"). (Defs.' Supp. S.M.F. ~ I;
Pl.'s Opp. S.M.F. ~ 1.) URS Corp. provides, among other things, professional architecture and
engineering services to its clients. (Defs.' Supp. S.M.F. ~ 7; Pl.'s Opp. S.M.F. ~ 7.) Harpers is
)
a leading, experienced real estate developer in the State of Maine. (Defs.' Supp. S.M.F. ,r 2;
Pl.'s Opp. S.M .F. ,r 2.) 415 Congress is a Maine limited partnership formed on September 21,
2004. (S.M.F. ,r S.) Harpers has no ownership interest in 415 Congress; they are entirely
separate entities. (Defs.' Supp. S.M.F. ,r 6; Pl.'s Opp. S.M.F. ,r 6.) Defendant T.F. Properties,
Inc. (T.F. Properties) sold the building to 415 Congress. (Defs.' Supp. S.M.F. ,r 9; Pl.'s Opp.
S.M.F. ,I 9.)
On March 5, 2004, Harpers contracted with Defendant T.F. Properties, Inc. (T.F.
Properties) to purchase the building, and later they entered into a Reinstatement of a First
Amendment to the Purchase and Sale Agreement. (Defs.' Supp. S.M.F. ,r ,r 20, 25; Pl.'s Opp.
S.M.F. ,r ,r 20, 25.) In November 2004, Harpers assigned all of its "right, title and interest in
and to any and all architectural plans, engineering work, [and] inspection reports" acquired by
Harpers "in connection with the acquisition or development of' the building to 415 Congress,
"together with any and all rights and claims relating thereto.'' (PL's A.S.M.F. ,r 12.) 1 Defs.'
Supp. S.M.F. ,r 20; Pl.'s Opp. S.M.F. ,r 20.) T.F. Properties then sold the building to 415
Congress on November 22, 2004. (Defs.' Supp. S.M.F. ,r 9; Pl.'s Opp. S.M.F. ,r 9.)
URS Corp. and Harpers entered into an "Agreement for Professional Services" (the
"Agreement") on February 5, 2004. (Defs.' Supp. S.M.F. ,r 15; Pl.'s Opp. S.M.F. ,r 15.) The
Agreement contains provisions entitled "Risk Allocation," "No Consequential Damages," "No
Third Party Rights," and "No Assignment," and the parties do not dispute the content of these
provisions. (Defs.' Supp. S.M .F. ,r,r 16-19; Pl.'s Opp. S.M.F. ,r,r 16-19.) The Agreement
contemplates that the scope of services it covers will be set forth in separate written work
orders. (Defs.' Ex. 4, Art. I.) The parties dispute whether Harpers hired URS Corp. to perform
1 The URS Defendants both deny and object to this statement of material fact. The URS Defendants' denial is
really however, more in the nature of a qualification than an outrigh~ denial. The URS Defendants point out that
the Agreement for Professional Serviced executed between Harpers and URS Corp. prohibits any party from
relying on the PCA unless URS gives its consent, but does not challenge the purported assignment. (Defs.' Reply
a "professional" PCA, but do not dispute that at least one of the URS Defendants did in fact
conduct the PCA. 2 (Defs.' Supp. S.M.F. ~ 8; Pl.'s Opp. S.M.F. ~ 8.) The work order to
perform the PCA on the building was executed on October 4, 2004, between Harpers and URS
Corp. (Defs.' Supp. S.M.F. ~ 34; Pl.'s Opp. S.M.F. ~ 34.)
URS Corp. performed a site visit of the building on October IS, 2004. (Defs.' Supp.
S.M .F. ~ 36; Pl.'s Opp. S.M.F . ~ 36.)3 Tony DiNicola, an architect, performed the PCA.
(Defs.' Supp. S.M.F. ~ 37; Pl.'s Opp. S.M.F. ~ 37.) DiNicola has never been licensed to practice
architecture in Maine. (Pls.' A.S.M.F. ~ 5; Defs.' Reply S.M.F. ~ 5 .) URS Corp. completed a
draft PCA on October 19, 2004. (Defs.' Supp. S.M.F. ~ 45; Pl.'s Opp. S.M.F. ~ 45.) URS Corp.
delivered the draft PCA via e-mail to Harpers on October 20, 2004. (Defs.' Supp. S.M.F. ~ 46;
Pl.'s Opp. S.M.F. ~ 46.) Harpers reviewed the report and informed URS Corp.: "This looks
very good! It is ready to print." (Defs.' Supp. S.M.F. ~ 47; Pl.'s Opp. S.M.F. ~ 47 .) URS Corp.
corrected several typos in the report and sent a clean, final copy to Harpers on October 28,
2004. (Defs.' Supp. S.M.F. ~ 50; Pl.'s Opp. S.M.F. ~ 50.)
The PCA's statement of the condition of the fac;:ade of the building forms the basis of
Plaintiffs' claims against the URS Defendants. (See Compl. ~ 24; Defs.' Supp. S.M.F. ~ 70; Pl.'s
Opp. S.M.F. ~ 70.) In their statements of material facts, Plaintiffs and URS Defendants cite to
different exhibits for the language of the report regarding the fac;:ade. The URS Defendants
cite to the draft, dated October 19, 2004, and sent to the Plaintiffs on October 20, 2004;
2 There is some dispute as to what party was in fact hired. (See Defs.' Supp. S.M.F. ,r ,r 8, 10-12; Pis.' Opp. S.M.F .
,r,r 8, 10-12.) The URS Defendants asserts that URS Group and URS Corp. are separate and distinct entities.
(Defs.' Supp. S.M.F. ,r 10.) The URS Defendants also claim that URS Group had no involvement in any
transaction or occurrence that is the subject of the plaintiffs' complaint. (Defs.' Supp. S.M.F . ,r 11.) Accordingly,
the URS Defendants contend that there is no contract between either plaintiff and URS Group. (Defs.' Supp.
S.M.F. ,r 12.) Plaintiffs aver that there is no record evidence to support separate corporate entities, and the record
evidence suggests Plaintiffs were doing business with URS Group. (Pis.' Opp. S.M.F.,r,r 10-12 .)
3 The URS Defendants state that they "performed the PCA on October IS, 2004," but Plaintiffs properly deny the
statement and point out that the record citations only support that the site visit or inspection occurred that day.
) (Defs.' Supp. S.M.F . ,r S6; Pis.' Opp. S.M.F. ,r S6 .)
s
Plaintiffs cite to the final report, dated and sent on October 28 2004. (See Defs.' Supp. S.M.F.
~ ~ 53-55; Pl.'s Opp. S.M.F. ~ 53-55.) The parties do not dispute, however, the content of the
PCA regarding the far;ade, which is identical in both versions:
• "There are several places in the masonry fa9ade where repainting of mortar
joints or minor repairs need to be made, including a vertical crack in the
pilaster at the northeast corner of the building. This repair work needs to be
carried out in the short term, to prevent additional water intrusion and
freeze/thaw action." (Defs.' Exh. 14 at 1-4; Defs.' Exh. 15 at 1-4.)
• "The copper flashing at the top side of the major ledge/cornice is in poor
condition. This has already been replaced at the northeast corner of the
building, along with repainting of mortar joints and replacement of sealant
joints, motivated by water intrusion at the fifth floor level wetting and
damaging the plaster interior finish. Also, some of the limestone detailing on
the underside of this ledge/cornice has deteriorated due to freeze/ thaw
action. While restoration of the deteriorated limestone is a cosmetic issue,
the work started on the northeast corner needs to continue, to include
replacement of the copper flashing and repainting/replacement of
deteriorated mortar and sealant joints at all the rest of this maJor
ledge/cornice, in order to arrest further limestone deterioration." (Defs.'
Exh. 14 at 1-4; Defs.' Exh. 15 at 1-4.)
• "There is some deterioration of the top of the stone medallion at the center of
the Congress Street fa9ade. This needs to be repaired." (Defs.' Exh. 14 at
1-5; Defs.' Exh. 15 at 1-5.)
(See Defs.' Supp. S.M.F. ~~ 53-55; Pl.'s Opp. S.M.F. ~ 53-55.) The fa9ade defects claimed by
Plaintiffs in this action relate to the terra cotta exterior of the building, which includes the
areas around the windows and at the building's cornices and ledges. (Defs.' Supp. S.M.F. ~ 70;
Pl.'s Opp. S.M.F. ~ 70.) 415 Congress continued to experience water infiltration problems
related to the fa9ade after it acquired the building and throughout 2005. (Defs.' Supp. S.M.F. ~
72; Pl.' s Opp. S.M.F. ~ 72.) In March 2006, a piece of the terra cotta ledge/cornice area fell to
the street below as a result of water penetration into the terra cotta that experienced
freeze/thaw cycles. (Defs.' Supp. S.M.F. ~~ 73, 77; Pl.'s Opp. S.M.F. ~~ 73, 77.)
Harpers and 415 Congress initiated this litigation by filing a seven-count complaint in
Cumberland County Superior Court on October 21, 2010. Three counts were brought against
4
URS Group: 1) breach of contract (Count I), 2) negligence (Count II), and S) unjust enrichment
(Count III). The case was transferred to the Business and Consumer Court on January 26,
2011. Plaintiffs filed an amended complaint adding URS Corp. as a defendant on April IS,
2011, as to Counts I, II, and III. The court held oral argument on Defendants' motion on
November 1, 2011.
ANALYSIS
Summary judgment is proper where there exist no genuine issues of material fact such
that the moving party is entitled to judgment as a matter of law. M.R. Civ. P. 56(c); see also
Levine v. R.B.K. Caly Corp., 2001 ME 77, , 4, 770 A.2d 653, 655. A genuine issue is raised
"when sufficient evidence requires a fact-finder to choose between competing versions of the
truth at trial." Parrish v. Wright, 2003 ME 90, , 8, 828 A.2d 778, 781 (quotations omitted). A
material fact is a fact that has "the potential to affect the outcome of the suit." Burdzel v. Sobus,
2000 ME 84, , 6, 750 A.2d 573, 575. "If material facts are disputed, the dispute must be
resolved through fact-finding." Curtis v. Porter, 2001 ME 158, , 7, 784 A.2d 18, 22. A party
wishing to avoid summary judgment must present a prima facie case for the claim or defense
that is asserted. Reliance Nat'l Indem. v. Knowles Indus. Svcs., 2005 ME 29, , 9, 868 A.2d 220,
224-25. At this stage, the facts are reviewed "in the light most favorable to the nonmoving
party." Lighifoot v. Sch. Admin. Dist. No. 35, 2003 ME 24, ~ 6, 816 A.2d 63, 65.
I. Statute of Limitations
The URS Defendants contend that the claims against them are time barred by both the
general and the design professional statute of limitations. Plaintiffs counter that the shorter
four-year statute oflimitations for design professionals does not apply because neither URS nor
DiNicola is a registered architect in Maine. Plaintiffs also contend that they have met the six
year general statute of limitations and their action is not time-barred.
)
5
A. Design Professional Statute of Limitations
The statute of limitations for design professionals states that "[a]ll civil actions for
malpractice or professional negligence against architects or engineers duly licensed or
registered under Title S2 shall be commenced within 4 years after such malpractice or
negligence is discovered ...." 14 M.R.S. § 752-A (2010). Title 32 M.R.S. § 220(1) (2010)
prohibits architects from practicing within the state "unless the person is duly licensed by the
board." The practice of architecture is defined as :
rendering or offering to render service to clients by consultations,
investigations, technical submissions and a coordination of structural factors
concerning the aesthetic or structural design and administration of construction
contracts or any other service in connection with the designing or
administration of construction contracts for buildings located inside the State
that have as their principal purpose human occupancy or habitation.
Id. The four-year statute of limitations with section 7 52-A only applies to professional
negligence claims against architects registered within the state. Because Mr. DiNicola
admittedly has never been a licensed architect in Maine (Defs.' Reply S.M.F. ~ 5), the statute of
limitations for design professionals does not apply.
B. General Statute of Limitations
According to the general statute of limitations, "[a]ll civil actions shall be commenced
within 6 years after the cause of action accrues and not afterwards, ... except as otherwise
specially provided." 14 M.R.S. § 752. A "year" means a calendar year. Tesseo v. Brown, 1998
ME 155, ~ 6, 712 A.2d 1059, 1060. "The general test for determining when a cause of action
accrues is when a plaintiff 'received a judicially recognizable injury."' Johnston v. Dow &
Coulombe, 686 A.2d 1064, 1065-66 (Me. 1996) (quoting Bozzuto v. Ouellette, 408 A.2d 697, 699
(Me. 1979) (citation omitted)). In a breach.of contract action, the cause of action accrues at the
date of the breach. Gile v. Albert, 2008 ME 58, ~ 8, 94.S A.2d 599, 601. '"[A] cause of action
)
6
sounding in tort accrues when the plaintiff sustains harm to a protected interest."' Johnston,
686 A.2d at 1066 (quoting Chiapetta v. Clark Assocs., 521 A.2d 697, 699 (Me. 1987)).
The URS Defendants argue that the test for accrual of Plaintiffs' cause of action should
be when the property assessment was performed, i.e. on October 1S, 2004, relying on Johnston
v. Dow & Coulombe, 686 A.2d 1064 (Me. 1996). In Johnston, the plaintiffs alleged that a
surveying firm negligently prepared a surveying plan. Id. at 1065. The plaintiffs claimed that
their cause of action did not accrue until abutting landowners succeeded in a quiet title action
against them. Id. at 1065. The Law Court disagreed and held that the plaintiffs "suffered an
injury at the time of the performance of the survey, and the statute of limitations began to run
at that time." 4 Id. at 1066. What Johnston indicates for this case is simply that the statute of
limitations began running, not when either or both Plaintiffs discovered the asserted
deficiencies in the PCA, but when the PCA was rendered.
In this case, the URS Defendants performed the site visit for the PCA on October 1S,
2004, outside the six-year period, but did not finalize and render the resulting report until
October 28, 2004, within the six-year limitations period. Because a cause of action accrues in
contract on the date of the breach, it is clear that the breach, if any, would have occurred when
the URS Defendants submitted the finalized report. Likewise, the breach of duty of care
alleged in the Plaintiffs' negligence claim cannot have occurred before the date on which the
finalized PCA report was presented to Harpers-how the assessment was conducted on
October 1S obviously influenced the content of the final PCA report, but the asserted
negligence consists of the alleged deficiencies in the final report.
-1The Law Court also addressed the statute of limitation for land surveyors and stated that: "We have never held
that the date of discovery triggered the running of the statute of limitations in an action for the alleged negligence
of surveyors and decline to do so in this case." Johnston v. Dow & Coulombe, 686 A.2d 1064, 1067 (Me. 1996). The
) Court refused to expand the discovery rule in the case of land surveyors. Id. at 1066.
7
Accrual of all three claims, on October 28, 2004, falls within the general statute of
limitations and thus is not time barred.
II. Claims Against URS Group
The URS Defendants assert that URS Group is a stranger to these transactions and
summary judgment should be granted in URS Group's favor. Plaintiffs assert that there is an
issue of material fact as to whether URS Group was involved in these transactions and claim
they need time for more discovery to uncover URS Group's relationship to URS Corp. and to
what extent URS Group was involved in the transaction at issue.
Plaintiffs are suing the URS Defendants for an allegedly inaccurate and incomplete
PCA. 5 (Amend. Compl. ~~ 20, 24.) Thus, the contract at issue is the contract for the PCA,
which was executed between Harpers and URS Corp. Plaintiffs admit that there was no
written agreement between Harpers and URS Group, but deny that there was no agreement
between the two, seemingly implying that there is an oral agreement between Harpers and
URS Group. (Pl.'s Opp. S.M.F. ~ 12.) In support, Plaintiffs cite to two documents in the
record: the cover letter to the final draft of the PCA, and the invoice for the PCA sent to
Harpers. (Defs.' Exh. 15 at 2; Defs.' Exh. 22 at 9.) The cover letter, signed by DiNicola, was
attached to the final draft of the PCA that URS sent to Harpers. The cover letter is signed by
URS Corporation and DiNicola, but the cover letter is on the letterhead of URS Group. (Defs.'
Exh. 15 at 2.) The invoice for the PCA does not identify whether the invoice is from URS
Corp. or URS Group; it just has "URS" in the upper corner of the page. (Defs.' Exh. 22 at 9.)
At the bottom of the invoice, however, is contact information for "Harley A. Morgan at 207
879-7686 or via email at Harley_Morgan@urscorp.com" for any questions regarding the bill."
s Plaintiffs suggest that the work order/contract for the PCA is not governed by the Agreement between Harper
and URS Corp. (Pls.' Opp'n MSJ 9), but that suggestion is unavailing. The work order for the PCA plainly states
that it is "[i]n accordance with the Agreement for Professional Services between [Harpers] and [URS Corp.] .. .
dated February 5, 2004." (Defs.' Exh. 9 at 1.)
8
(Defs.' Exh. 22 at 9.) Plaintiffs' statements of material facts do not address an oral contract
between URS Group and Harpers or between URS Group and 415 Congress, and Plaintiffs
admit that URS Group received no payment from Harpers or 415 Congress in connection with
these transactions. (Defs.' Supp. S.M.F. ~ 14; Pls.' Opp. S.M.F. ~ 14.)
Based on the record evidence cited by Plaintiffs, even when viewed in the light most
favorable to them, Plaintiffs have not generated an issue of material fact as to whom Plaintiffs
contracted with for the PCA. The written agreements for the professional services and the
work order are between Harpers and URS Corp.; URS Group received no payment for the
PCA; and other than the unsupported suggestion of an oral agreement between URS Group
and Harpers, Plaintiffs' statements of material facts do not address or support any such
agreement and summary judgment on Count I in favor of URS Group is warranted. Further,
because the negligence asserted is the negligence in the performance of the PCA, summary
judgment in favor of URS Group on Count II also is appropriate.
Finally, in Count III, Plaintiffs allege that they 1) conferred a benefit upon the URS
Defendants in the form of payment of money 2) with the URS Defendants' knowledge, S) the
URS Defendants accepted and retained the benefit received form Plaintiffs under such
circumstances as to make it inequitable for URS to retain it without having given consideration
of equal value in exchange, and 4) as a result, the Plaintiffs have suffered pecuniary harm.
(Amend. Compl. ~~ SS-36.)
On this count, summary judgment 1s appropriate in favor of URS Group because
Plaintiffs admit that URS Group received no payment from either 415 Congress or Harpers in
connection with the building. (Defs.' Supp. S.M.F. ~ 14; Pl's Opp. S.M.F. ~ 14.) Because the
only benefit that Plaintiffs claim they conferred on the Defendants is payment of money, the
)
9
admission of no payment to URS Group is fatal to their unjust enrichment claim and summary
judgment in URS Group's favor is appropriate.
As discussed at oral argument on this motion, the court will grant summary judgment
in favor of URS Group because Plaintiffs have not generated an issue of material fact as to their
involvement. URS Group's dismissal from the suit is without prejudice, and Plaintiffs are free
to inquire during discovery as to the direct involvement of URS Group in the PCA. If
Plaintiffs develop a basis-equating to a prima facie case against URS Group, see Reliance Na'l
Indem. v. Knowles Indus. Svcs., supra, 2005 ME 29 at,I 9, 868 A.2d at 224-25 -they may move
for an order revising this Order and reinstating the claims against URS Group. See M.R. Civ.
P. 54(b)( 1) (non-final order adjudicating claims is subject to revision at any time before entry of
final judgment).
III. Claims Agains t URS Corp.
A. Counts I and II - Breach ofContra ~t and Negligence
As noted, Plaintiffs are suing the URS Defendants for an allegedly inaccurate and
incomplete PCA. (Amend. Compl. ,r,r 20, 24.) 415 Congress is not a named party to the PCA,
but Harpers transferred to 415 Congress all of its "right, title and interest in an to any and all
architectural plans, engineering work, inspection reports" acquired by Harpers in connection
with the acquisition or development of' the building "together with any and all rights and
claims relating thereto" in November 2004. (Pls.' A.S.M.F. ,r 12; Defs.' Reply S.M.F. ,I 12.)
Defendants contend that the assignment of rights from Harpers to 415 Congress was
ineffective because the Agreement between URS Corp. and Harpers prohibits assignment and
third-party beneficiaries. (Defs.' MSJ 10-11.) Plaintiffs counter that these provisions only
prevent the assignment of duties or obligations, not the assignment'of rights. (Pls.' Opp'n MSJ
10-1.3; Pls.' A.S.M.F. ,I 12.)
10
"An assignment of a right is a manifestation of the assignor's intention to transfer it by
virtue of which the assignor's right to performan_ce by the obligor is extinguished in whole or
in part and the assignee acquires a right to such performance." Restatement (Second) of
Contracts § S 17( 1) ( 1981 ). Maine law recognizes the assignment of contractual rights as
permissible, "unless the substitution of a right of the assignee for the right of the assignor
would materially change the duty of the obligor, or materially increase the burden or risk
imposed on him by his contract." Chadwick-BaRoss, Inc. v. Martin Marietta Corp., 483 A.2d 711,
715 (Me. 1984) (quoting Restatement (Second) of Contracts§ 3 l 7(2)(a)).
The provisions of the Agreement upon which Defendants rely to challenge the
assignment ofrights are as follows :
ARTICLE XIII - No Third PartyR:ig!ru_. This Agreement shall not create
any rights or benefits to parties other than Client and URS. No third party shall
have the right to rely on URS opinions rendered in connection with the Services
without the written consent of URS and the third party's agreement to be bound
to the same conditions and limitations as Client.
ARTICLE XIV -Assignments. Neither party to this Agreement shall assign
its duties and obligations hereunder without the prior written consent of the
other party.
(Defs.' Supp. S.M.F. ,r,r 18-19; Pls.' Opp. S.M.F. ,r,r 18-19.) Based on these two provisions,
Defendants argue the intention of the parties was to prevent any other party from relying on
the PCA or gaining any rights in the contract. Plaintiffs counter that the assignment of rights
and claims allowed 415 Congress to step into the shoes of Harpers, and that 415 Congress is
now the party to the contract.
On its face, the assignment provision at Article XIV applies only to assignments of
duties and obligations, and does not prohibit an assignment of rights. Similarly, on its face,
Article XIII says that the Agreement, presumably in and of itself standing alone, does not
create any rights in third parties-it therefore is silent on the effect of an assignment of rights.
11
The court views both provisions as ambiguous at least and also is cognizant of Plaintiffs'
argument that both provisions should be construed against URS Corp. as the drafter. Thus,
the court declines to grant summary judgment to URS Corp based on the two provisions.
As to the merits of the breach of contract claims and the negligence claims as asserted
by 415 Congress and Harpers against URS Corp, issues of fact preclude awarding summary
judgment.
B. Count III - Unjus t Enrichment
In their Amended Complaint, Plaintiffs allege that they 1) conferred a benefit upon the
URS Defendants in the amount of the fee paid to URS Corp. for the PCA 2) with the URS
Defendants' knowledge, 3) the URS Defendants accepted and retained the benefit received form
Plaintiffs under such circumstances as to make it inequitable for URS to retain it without
having given consideration of equal value in exchange, and 4) as a result, the Plaintiffs have
suffered pecuniary harm. (Amend. Compl. ~ ~ 33-36.) With regards to the unjust enrichment
claim brought by Plaintiffs against URS Corp., the Law Court has said:
The remedy of "unjust enrichment describes recovery for the value of the benefit
retained when there is no contractual relationship, but when, on the grounds of
fairness and justice, the law compels performance of a legal and moral duty to
pay." Pajfhausen v. Balano, 1998 ME 47, ~ 6, 708 A.2d 269, 271. The existence
of a contractual relationship, "precludes recovery on a theory of unjust
enrichment." June Roberts Agency, Inc. v. Venture Properties, Inc., 676 A.2d 46, 49
n. l (Me. 1996).
Nadeau v. Pitman, 1999 ME 104, ~ 14, 731 A.2d 863, 866-67. Thus, the contract between
Harpers and URS Corp. precludes Harpers from recovering on an unjust enrichment theory,
and summary judgment in their favor is appropriate. See id. Further, because 415 Congress's
breach of contract claim is in essence Harpers' breach of contract claim, 415 Congress also is
precluded from proceeding on an unjust enrichment theory.
12
IV. Damages
Lastly, Defendants argue that should any count of Plaintiffs' complaint survive the
motion for summary judgment, any recovery should be limited to those laid out in the
Agreement. (Defs.' MSJ 17-19.) The Agreement contains the following risk allocation and
consequential damages clauses:
ARTICLE V -Risk Allocation. The liability of URS, its employees, agents
and subcontractors (referred collectively in this Article as "URS"), for Client's
claims ofloss, injury, death, damage, or expense, including, without limitation,
Client's claims of contribution and indemnification, express or implied, with
respect to third party claims relating to services rendered or obligations imposed
under this Agreement, including all Work Orders, shall not exceed in the
aggregate:
(1) The total sum of $250,000 for claims arising out of professional
negligence, including errors, omissions, or other professional acts, and including
unintentional breach of contract ...
(2) The total sum of $1,000,000 for claims arising out of negligence,
breach of contract, or other causes for which URS has any legal liability, other
than as limited by ( 1) above).
ARTICLE VII - Consequential Damages. Neither Party shall be liable to the
other for consequential damages, including, without limitation, loss of use or loss
of profits, incurred by one another or their subsidiaries or successors, regardless
of whether such damages are caused by breach ofcontract, willful misconduct,
negligent act or omission, or other wrongful act of either of them.
(Defs.' Supp. S.M.F. ~ ~ 16-17; Pls.' Opp. S.M.F. ~ ~ 16-17.)
It seems likely that the $250,000 cap applies, but because there are issues as to whether
URS Corp. rendered "professional services" or committed an "unintentional breach of contract,"
summary judgment on the effect of the dollar caps is premature.
Likewise, the provision precluding consequential damages is enforceable, but because
the Plaintiffs' claimed losses may include the value of physical deterioration or damage, which
13
likely would be deemed direct damages in the context of this case, Defendant URS Corp. has
not shown it is entitled to summary judgment on damages against Plaintiff 415 at least.
Further, Defendants have argued that the economic loss doctrine bars Plaintiffs from
recovering in tort for purely economic losses. The economic loss doctrine is customarily
applied in the products liability context, but even assuming it applies here, the facts do not
necessarily support it. Physical damage or loss usually renders the economic loss doctrine
inapplicable even where it would otherwise apply. 415 Congress claims losses from the further
physical damage or deterioration that it says would not have occurred but for URS Corp.'s
negligence, and Defendant URS Corp. has not shown it is entitled to summary judgment on
that ground.
However, Harpers has quite clearly not suffered any loss-at least not yet-as a result of
anything URS Corp. did or did not do in connection with the PCA. At oral argument,
Harpers' counsel explained that Harpers has joined as a co-plaintiff with 415 Congress because
Harpers may be liable to 415 Congress if Harpers' assignment of its rights under the PCA to
415 Congress does not stand up. This does not equate to any existing affirmative claim by
Harpers-the only cognizable claim Harpers would have, even if it is found liable to 415
Congress for making an invalid assignment, might be a contribution/indemnification claim
against URS Corp. Thus, Defendant URS Corp. will be granted summary judgment on
Harpers' damages claims against it based on the absence of any damage or loss to Harper as a
result of the PCA.
CONCLUSION
Based on the foregoing, it is hereby ordered as follows:
1. Defendant URS Group's Motion for Summary Judgment 1s GRANTED against both
Plaintiffs on Counts I, II, and III, subject to possible reinstatement as indicated above.
14
2. Defendant URS Corp.'s Motion for Summary judgment is GRANTED as to all claims by
Plaintiff Harpers Development and is also granted as to Plaintiff 415 Congress Street with
respect to Count III.
Pursuant to M.R. Civ. P. 79, the clerk is hereby directed to incorporate this Order and
Judgment by incorporation in the docket. ~
Dated November 10, 2011
A. M. Horton
Justice, Business and Consumer Court
Entered on the Oocl<et: \ \ • 1I./ •
11
~
Copies sent via Mail _ 8ectronfcally
15
STATE OF MAINE BUSINESS AND CONSUMER COURT
CUMBERLAND, ss. Location: Portland
Docket No.: BCD-CV-11-os
)
415 CONGRESS STREET )
PROPERTIES, LP, and )
HARPERS DEVELOPMENT, LLC, )
)
Plain tiffs, )
)
V. )
)
URS CORPORATION and T.F. )
PROPERTIES, INC., )
)
Defendants )
)
ORDER ON DEFENDANT URS CORPORATION'S
MOTION FOR PARTIAL SUMMARY JUDGMENT
Defendant URS Corporation (URS Corp.) has filed a Motion for Summary Judgment,
or, in the Alternative, Motion in Limine for an Order Enforcing the $250,000 Contractual
Damages Cap. Plaintiffs oppose the motion. The court elects to decide the motion without oral
argument, see M.R. Civ. P. 7(b )(7); Case Management Conference Scheduling Order No. 1 ~ 10.
For the reasons stated within, the court grants the motion for summary judgment.
BACKGROUND
The following facts are undisputed, except where noted.
This case arises from a Property Condition Assessment (PCA) performed by URS Corp.
for Plaintiff Harpers Development, LLC (Harpers) on a multi-story office building located at
415 Congress Street in Portland, Maine (the "Building"). (Supp. S.M.F. ~ 1; Opp. S.M.F. ~ 1.)
Harpers is an experienced real estate developer in Maine, engaging in sophisticated
development deals throughout the state, and in the past has purchased buildings of the same
age as the Building. (Supp. S.M.F. ~2; Opp. S.M.F. ~2.)
URS Corp. and Harpers entered into an agreement effective February 5, 2004, entitled
"Agreement for Professional Services," (the "Agreement") which referenced one or more "Work
Orders" to which the Agreement's terms and conditions would apply. (Supp. S.M.F. ~~6, 8;
Opp. S.M.F. ~ ~ 6, 8; see A.S.M.F. ~ 8.) The Agreement contains a "Risk Allocation" provision:
ARTICLE V - Risk Allocation. The liability of URS, its employees, agents
and subcontractors (referred to collectively in this Article as "URS"), for Client's
claims of loss, injury, death, damage, or expense, including, without limitation,
Client's claims of contribution and indemnification, express or implied, with
respect to third party claims relating to services rendered or obligations imposed
under this Agreement, including all Work Orders, shall not exceed in the
aggregate:
(1) The total sum of $250,000 for claims arising out of professional
negligence, including errors, omissions, or other professional acts, and including
unintentional breach of contract ...
(2) The total sum of $1,000,000 for claims arising out of negligence,
breach of contract, or other causes for which URS has any legal liability, other
than as limited by (1) above.
(Supp. S.M.F. ~7; Opp. S.M.F. ~7.)
On October 4, 2004, Harpers and URS Corp. executed a work order for the PCA on the
Building, which stated that "[t]he terms and conditions of the [Agreement] shall apply to this
Work Order, except as expressly modified herein." (Supp. S.M.F. ~ ~9-11; Opp. S.M.F.
~ ~ 9-11; Mattson Depo. Exh. 9.) URS Corp. assigned its employee, Tony DiNicola, to perform
the PCA. Mr. DiNicola is a registered architect, but he was not practicing architecture in
connection with the PCA. (Supp. S.M.F. ~ 12; Opp. S.M.F. ~ 12; A.S.M.F. ~ 11; Reply S.M.F.
~ 11.) The parties disagree about whether URS Corp. was directed to conduct the PCA
pursuant to ASTM standards1, and what entity may have directed URS Corp. to do so, but
there is no dispute that Mr. DiNicola utilized ASTM standards in conducting the PCA. (Supp.
S.M.F. ,r 15; Opp. S.M.F. ,rs; Mattson Depo. Exh. 15 at 2-2.) The results of the PCA were
presented to Harpers in October 2004 in a 73-page PCA report (the "Report"). (Supp. S.M.F.
~ 13; Opp. S.M.F. ,r 13.) URS Corp. billed Harpers a total of $2,086.44 for the PCA and Report.
(Supp. S.M.F. ,r 14.)2
In November 2004, Harpers assigned all of its "right, title and interest in and to any and
all architectural plans, engineering work, [and] inspection reports" acquired by Harpers "in
connection with the acquisition or development of' the building to Plaintiff 415 Congress
Street Properties, L.P., a Maine limited partnership formed on September 21, 2004 for the
purpose of owning and operating the Building, "together with any and all rights and claims
relating thereto." (Supp. S.M.F. ,rs, 4; Opp. S.M.F. ~ s, 4.) 3
The PCA's assessment of the condition of the fa9ade of the Building and URS Corp.'s
alleged omissions regarding the condition of the Building form the basis of 415 Congress's
claims against URS Corp. (Supp. S.M.F. ,r 19; Opp. S.M.F. ~ 19.) 415 Congress alleges that
URS Corp. owed it "a duty to perform [the PCAJ with the degree of skill, care, and diligence
ordinarily exercises by a building inspector" and that URS Corp. "breached its duty to perform
its services with the degree of skill, care, and diligence ordinarily exercised by a building
inspector." (Supp. S.M.F. ,r20; Opp. S.M.F. ~20.) 415 Congress has retained an expert witness
to testify on the standard of care. (Supp. S.M.F. ~21; Opp. S.M.F. ~21.)
ASTM standards are developed by ASTM International (formerly the American Society for Testing and
Materials) for use in a variety of technical and engineering applications. ·
2 Contrary to 415 Congress's denial of the statement of material fact (Opp. S.M.F. ~14), the cited exhibit supports
the statement that Harpers was the entity billed for the PCA. (See Mattson Depa. Exh. 22.)
.~ Although this supporting statement of material fact is not supported by a record citation, the fact of the
assignment was before the court in URS Corp. and URS Group, Inc.'s previous motion for summary judgment,
supported by a copy of the assignment in the court's record. The court includes it because it is not disputed by 415
J Congress, who only qualifies the statement to note that "[t]he document speaks for itself"
s
DISCUSSION
I. Standard of Review
Pursuant to M.R. Civ. P. 56(c), a moving party is entitled to summary judgment "if 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 set forth in those
statements and that [the] party is entitled to a judgment as a matter of law." See also Beal v.
Allstate Ins. Co., 2010 ME 20, ~ 11, 989 A.2d 733. A party wishing to avoid summary judgment
must present a prima facie case for each element of the claim or defense that is asserted against
it. See Reliance Nat'l Indem. v. Knowles Indus. Svcs., 2005 ME 29, ~9, 868 A.2d 220. "If material
facts are disputed, the dispute must be resolved through fact-finding." Arrow Fastener Co. v.
Wrabacon, Inc., 2007 ME .34, ~ 18, 917 A.2d 123 (quotation marks omitted). A factual issue is
genuine when there is sufficient supporting evidence for the claimed fact that would require a
fact-finder to choose between competing versions of the facts at trial. See Inkel v. Livingston,
2005 ME 42, 14, 869 A.2d 745.
II. Analysis
A. Ripeness
As a threshold matter, 415 Congress argues that the court should not address the
damage cap issue at this juncture in the case. First, 415 Congress argues that a limitation on
damages should only be addressed after liability has been established, thus challenging the
ripeness of URS Corp.'s motion. "Ripeness concerns the fitness of the issue for judicial decision
and the hardship to the parties of withholding court consideration." Wagner v. Sec'y of State,
66.3 A.2d 564, 567 (Me. 1995). The doctrine "[p]revent[s] judicial entanglement in abstract
disputes" and "avoid[s] premature adjudication." Johnson v. City of Augusta, 2006 ME 92, ~7,
902 A.2d 855.
4
415 Congress misconstrues the doctrine of ripeness to apply to individual claims in a
complaint, broken down by elements of the cause of action. A case is ripe or not upon the filing
of a complaint or other petition for judicial review based on whether "there exists a genuine
controversy between the parties that presents a concrete, certain, and immediate legal
problem." Id.; accord Marquis v. Town of Kennebunk, 2011 ME 128, ~ 18, 36 A.sd 861. Whether
the contractual damage cap applies is squarely before the court, representing a "genuine
controversy and a concrete, certain, and immediate legal problem" between the parties. The
doctrine of ripeness does not apply to prevent the Court's consideration of the motion.
415 Congress also argues that an "interlocutory ruling as to the scope of [its] damages"
1s unavailable by summary judgment. The court disagrees. M .R. Civ. P. 56(b) allows a
defending party, such as URS Corp., to move for "summary judgment in the party's favor as to
all or any part" of the claims against it. Damages or harm is an essential element for any
negligence action, see Davis v. RC & Sons Paving, Inc., 2011 ME 88, ~ 10, 26 A.sd 787, and URS
Corp. may move for partial summary judgment as to part of that claim.
B. Contractual Interpretation
Because the damages cap on its face applies to claims for "unintentional breach of
contract," and because there is no allegation of an intentional breach of contract on the part of
URS Corp, (Supp. S.M .F . ~2S; Opp. S.M .F . ~23), the cap plainly applies to Count I of the
complaint. The primary dispute between the parties is as to Count II, and specifically it focuses
on whether the claim in Count II is for "professional negligence" within the meaning of the
damages cap provision. 4
•f Befo re 4 15 Co ng r ess's opposi ng tate ment was due, URS Co rp. fil ed a su ppl emental s uppo11:ing s tate men t of
mater ia l facts tha t added 7 fa cts fo r th e court's consideration. 4• 15 Cong ress generally obj ects to the s up plemen tal
statem en t as un ti mely, Beca use th e cour t does no t find the s uppleme ntal sta te ments to be co ntro llin g to the
outcome of the motion, the court does not address them or rely upon them.
5
URS Corp. asserts that the Agreement unambiguously limits its liability for claims
arising out of the PCA because the PCA was a professional service and the contract limits
"claims arising out of professional negligence, including errors, omissions, or other professional
acts" to $250,000. (Supp. S.M.F. ~7; Opp. S.M.F. ~7.)
URS Corp. argues that professional services should be defined broadly, "so as to
embrace all activities for which the specialized training of the particular profession is required."
Centennial Ins. Co. v. Patterson, 564 F.sd 46, 5S (1st Cir. 2009). 415 Congress, on the other hand,
argues that the meaning of "professional negligence" in the Agreement is ambiguous because it
is not defined within the agreement and the term generally refers to negligence of doctors,
lawyers, and other licensed professionals. 415 Congress asserts that inspecting buildings, while
requiring a degree of experience, is not professional work in the same way that a doctor's or
lawyer's practice is "professional," and thus negligent conduct of a building inspection is not
professional negligence.
Interpretation of a contract and whether a contract term is ambiguous are both
questions of law. See Villas by the Sea Owners Ass'n v. Garrit:y, 2000 ME 48, ~9, 748 A.2d 457.
"A contract should be construed viewing it as a whole. An interpretation that would render
any particular provision in the contract meaningless should be avoided." McCarthy v. U.S.!.
Corp., 678 A.2d 48, 52 (Me. 1996). Likewise, any alleged ambiguity must be viewed in the
context of the entire contract to determine if another provision resolves the ambiguity. See id.
Further, "[i]t is a well established principle that a contract is to be interpreted to give effect to
the intention of the parties as reflected in the written instrument, construed in respect to the
subject matter, motive and purpose of making the agreement, and the object to be
accomplished." Estate ofBarrows, 2006 ME 143, ~ IS, 913 A.2d 608 (quotation marks omitted).
6
"If a contractual prov1s10n is unambiguous, it will be given its plain, ordinary, and
generally accepted meaning." Villas by the Sea Owners Ass'n, 2000 ME 48, ~9, 748 A.2d 457. A
contractual provision "is ambiguous if it is reasonably susceptible to more than one
interpretation." Madore v. Kennebec Heights Country Club, 2007 ME 92, ~7, 926 A.2d 1180;
accord Coastal Ventures v. Alsham Plaza, LLC, 2010 ME 63, ~ ~26-27, I A.sd 416.
The language in question is as follows:
ARTICLE V - Risk Allocation. The liability of URS, its employees, agents
and subcontractors (referred to collectively in this Article as "URS"), for Client's
claims of loss, injury, death, damage, or expense, including, without limitation,
Client's claims of contribution and indemnification, express or implied, with
respect to third party claims relating to services rendered or obligations imposed
under this Agreement, including all Work Orders, shall not exceed in the
aggregate:
(1) The total sum of $250,000 far claims arising out of profe~sional
negligence, including errors, omissions, or other professional acts, and including
unintentional breach of contract ...
(2) The total sum of $1,000,000 for claims arising out of negligence,
breach of contract, or other causes for which URS has any legal liability, other
than as limited by (I) above.
(Supp. S.M.F. ~7; Opp. S.M.F. ~7 (emphasis added).)
At the outset, it should be noted that the parties in this case used the same word in
characterizing their contract as an "Agreement for Professional Services" (emphasis added) and
in capping damages for "professional negligence" (emphasis added). There is absolutely no
indication that the parties intended the word "professional" to mean one thing in the first
context and something else in the other. Therefore, whatever the word "professional" might
mean in other situations, the parties here agreed that it applied to any services rendered under
the Agreement, as the PCA admittedly was. That undisputed fact alone arguably makes it
unnecessary to parse the meaning of "professional," and compels the conclusion that any claim
)
7
relating to the services performed under the Agreement for Professional Services is subject to
the "professional negligence" cap.
However. even if the focus instead is on whether "professional negligence" is an
ambiguous term, the court concludes it is not ambiguous. The term "professional negligence"
has a particular meaning under Maine law. See Madore, 2007 ME 92, ~7, 926 A.2d 1180.
"Professional negligence" is simply a variation of negligence, differing only by the standard of
care, or duty owed by the defendant to the plaintiff. The standard of care in a typical
negligence case is what an ordinary careful person would do or not do in the same situation,
considering all the facts of the case. See Fitts v. Central Me. Power Co., 562 A.2d 690, 69S n.2
(Me. 1989). The standard of care in a professional negligence case is the "failure to use such
skill, judgment, prudence, and preparation as is reasonable for an ordinarily competent
[prefessional) performing similar services under like conditions." Alexander, Maine Jury
Instruction Manual§ 7-78 at 7-82.1 (4th ed. 2011) (emphasis added).
Although 415 Congress cites to a number of decisions indicating that professional
negligence is only applicable to doctors, lawyers, accountants, and other highly trained,
licensed professionals, those cases are extra-territorial. The Law Court has clearly stated that
"the standards for demonstrating the elements of professional negligence do not differ from
profession to profession. The plaintiff in a professional negligence action must establish the
appropriate standard of care, demonstrate that the defendant deviated from that standard, and
prove that the deviation caused the plaintiff's damages." Graves v. S.E. Downey Land Surveryor,
P.A., 2005 ME 116, ~ 10, 885 A.2d 779 (quotation marks and citation omitted). The cases cited
by 415 Congress reflect a much narrower view of professional negligence than is applicable in
Maine, and the Court does not find them persuasive.
8
Because "professional negligence" is not ambiguous, it should be given its "plain,
ordinary, and generally accepted meaning." Villas by the Sea Owners Ass'n, 2000 ME 48, ~ 9, 748
A.2d 457. Consistent with the Law Court's precedent, "professional negligence" is the failure to
use such skill, judgment, prudence, and preparation in the course of rendering a service
requiring skill, training and judgment as is reasonable for an ordinarily competent professional
performing similar services under like conditions that results in injury or other loss to the
plaintiff.
In addition, the Agreement itself distinguishes between "professional negligence" and
"negligence," thus indicating that the parties understood and considered there to be two types
of negligent conduct under the contract whose risk they were allocating and set the damage cap
limits accordingly. 5 The pleadings themselves show that 415 Congress is not alleging that
URS Corp. breached the standard of care of what an ordinary careful person would have done
under the circumstances; 415 Congress alleges that URS Corp. owed it "a duty to perform [the
PCAJ with the degree of skill, care, and diligence ordinarily exercised by a building inspector."
(Supp. S.M.F. ~20; Opp. S.M.F. ~20 (emphasis added).) The fact that 415 Congress has hired
an expert to elucidate the standard of care only reinforces this point. (Supp. S.M.F. ~ 21; Opp.
S.M.F. ~21.)
A final and equally persuasive point is that, as noted at the outset, even if the term
"professional" were ambiguous in some contexts, the fact that the parties labeled their contract
"415 Congress suggests that under URS Corp.'s interpretation of the contract, all services performed would be
professional services, essentially wr it ing the ordinary negligence cap ou t of the co n tract. T he co ur t disagrees with
this characterization. Had Mr. DiN icola driven his ca r into th e buil ding upo n a rri va l, or left a ladder in a
precarious position that caused someone injury, or loose ned a pi ece or the fai;ad e tb at la ter fell an d injllred a
passer-by-all those examples would fall under the ordinary negligence damages cap.
In fact, 4 I 5 Congress's position that none of URS Corp.'s work constituted "professional services" would truly do
the opposite-write the professional negligence cap out of the contract.
9
as an "Agreement for Professional Services" virtually compels the inference that the cap on
damages for "professional negligence" applies to claims arising out of such services.
CONCLUSION
The $250,000 damages cap applies to "claims ansmg out of professional
negligence, including errors, om1ss10ns, or other professional acts, and including
unintentional breach of contract ... " Because Count I is a claim for breach of contract
in which there is no allegation that the breach was intentional, and because Count II is a
professional negligence claim arising out of services that the parties themselves labeled
as "professional services," the cap applies to both counts.
Defendant URS Corp.'s Motion for Summary Judgment, or, in the Alternative, Motion
in Limine far an Order Enforcing the $250,000 Contractual Damages Cap is GRANTED. The
Plaintiff 415 Congress's recovery against URS Corp. under Counts I and II of the complaint
shall be and is limited to $250,000 in damages, exclusive of interest and costs.
Pursuant to M.R. Civ. P. 79, the clerk is hereby directe
incorporation in the docket.
Dated July SO, 2012
Justice, Business and Consumer Court
J
10