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MSZL&M Property Damage Group Secures Two Dismissals for Roofing Subcontractor against General Contractor in Fire Loss

(December 6, 2018)  On July 22, 2011, during a complete renovation of the Tioga Marine Terminal II Warehouse in Philadelphia, a fire originated on the roof 10 hours after our client, the roofing contractor, left the jobsite.  Two years later, the Commonwealth filed suit against the General Contractor, who quickly joined our client.  Fortunately for us, the suit was filed in the statutorily constructed Board of Claims, a Court designed to only hear contract claims that involve the Commonwealth of Pennsylvania. 

Early in the case, upon the filing of a motion for summary judgment for spoliation of evidence (the G.C. discarded all documents in the job trailer at the conclusion of the job, even after being placed on notice of the claim), our client was voluntarily dismissed without prejudice by the G.C. so they did not have to respond to the pending motion.  This became the quintessential moment in the case.

Fast forward two years, and more than four years after the date of loss, when the G.C. decided to bring our client back into the case based upon dicta in a Court opinion.  Filing claims for breach of contract, negligence, and contractual indemnity, the Court granted our client’s Motion to Dismiss negligence for jurisdictional grounds and breach of contract for being outside the statute of limitations.   At the Pre Trial Conference, after 4 years of discovery, countless discovery motions, and numerous depositions, the Court granted our client’s Motion for Summary Judgment on the remaining count of contractual indemnity.

The cause of the fire had been ruled “undetermined” by the Philadelphia Fire Marshal, ATF, and all private origin and cause investigators.  There was no evidence of the subcontractor’s involvement in the cause of the fire and there was no evidence of an act or omission by the subcontractor as required by the subcontract.  Most importantly, there was not one single allegation by the Commonwealth that our client had any involvement in the fire.  The Court, without oral argument opined that since the breach of contract claim was dismissed, no claim could be made for any breach outside of contractual indemnity and since all parties stipulated to an undetermined cause of the fire, the claim was fatal. 

The G.C. has been adamant that the contract with the Commonwealth, which requires that any damage to the Work, pre acceptance by owner, be repaired at the expense of the GC, could be passed through to our client.  Mixing a breach of contract claim with a contractual indemnity claim, the G.C. failed to appreciate the nuance of contract law and the limitations of its position.   After taking an appeal, the G.C. and its insurance carrier lost its claim in a related matter for a declaratory judgment and rather than risk sanctions for continuing the litigation, the case was dismissed with prejudice. 

The drama and confusion created by the actions of the G.C. could have been forestalled had the G.C. worked with the subcontractor and not attempted to bully a settlement.  Rather than seeking the cooperation of the subcontractor, the G.C. decided that an assault on the most knowledgeable party, without any evidence of wrongdoing, was the proper course of action. 

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