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Washington Tennis & Education Foundation, Inc. v. Clark Nexsen, Inc.

United States District Court, District of Columbia

August 20, 2018

WASHINGTON TENNIS & EDUCATION FOUNDATION, INC., Plaintiff,
v.
CLARK NEXSEN, INC., et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          AMIT P. MEHTA UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         Dissatisfied with Defendant Clark Nexsen, Inc.'s (“Clark Nexsen” or “Defendant”) services related to the construction of a $10 million tennis and education facility in Southeast Washington, D.C., Plaintiff Washington Tennis & Education Foundation, Inc. (“WTEF” or “Plaintiff”) brought this lawsuit against Clark Nexsen, asserting two claims: (1) breach of the parties' contract, known as the “Architect Agreement, ” and (2) breach of Clark Nexsen's common law duty of professional care. WTEF also sought to add as co-plaintiff Washington Tennis & Education Foundation East, Inc. (“WTEF East”), a related but separate entity to whom Plaintiff assigned “all of [its] right, title and interest” in the Architect Agreement in order to obtain certain federal tax credits. In response to Plaintiff's two-count Complaint, Defendant counterclaimed for breach of contract.

         This court initially granted Clark Nexsen's Motion for Summary Judgment and denied WTEF's Motion to Add WTEF East as a co-plaintiff. The court concluded that, by virtue of WTEF's assignment of “all of [its] right, title, and interest” in the Architect Agreement to WTEF East, WTEF lacked standing to sue Defendant for claims arising from the Agreement. The court therefore dismissed Plaintiff's claims against Defendant and rejected WTEF's bid to add WTEF East to the suit to cure the standing defect of its original claims. The matter proceeded solely on Defendant's counterclaim for breach of contract.

         Plaintiff now moves for reconsideration of the dismissal of its claims or, in the alternative, for certification of an interlocutory appeal. WTEF asserts that the court incorrectly concluded that it assigned its breach of contract and professional negligence claims to WTEF East and further erred by prohibiting WTEF East from joining the suit. Upon reconsideration, the court finds no error in its conclusion that WTEF lacks standing to bring a breach of contract claim against Defendant by virtue of assigning its rights and interests in the Architect Agreement to WTEF East. The court likewise upholds its ruling dismissing Plaintiff's tort claim, but does so on a different ground: the professional malpractice claim, whether advanced by WTEF or WTEF East, is barred by the statute of limitations. In view of that ruling, the court affirms its decision to disallow WTEF East from joining this action because adding WTEF East would be futile. The court also rejects WTEF's request to certify this matter for interlocutory review.

         Accordingly, the court denies Plaintiff's Motion for Reconsideration, or in the Alternative, for Certification of an Interlocutory Appeal.

         II. BACKGROUND

         The court incorporates the relevant facts laid out in its Memorandum Opinion and Order, dated September 13, 2017, and recites here only the information necessary to resolve the Motion for Reconsideration. See generally Mem. Op. & Order, ECF No. 58 [hereinafter Sept. 13 Order].

         A. Factual Background

         In brief, Plaintiff WTEF, a nonprofit organization, and Defendant Clark Nexsen, an architecture and engineering firm, [1] entered into what the parties refer to as the “Architect Agreement” on October 6, 2010. Pursuant to that contract, Clark Nexsen agreed to provide architectural design and construction oversight services for Plaintiff's new indoor tennis facility, known as the East Capitol Campus. See Def.'s Mot. for Summ. J., ECF No. 46 [hereinafter Def.'s Summ. J. Mot.], Ex. N, ECF No. 47 [hereinafter Architect Agreement]. The Architect Agreement outlined the scope of Clark Nexsen's design responsibilities, setting out the following sequential phases of design: the Schematic Design Phase, the Design Development Phase, and the Construction Document Phase. See Architect Agreement, Art. 3, §§ 3.2-3.4. According to the Agreement, each new phase of design began “based on Owner's [i.e., WTEF's] approval” of the prior phase of design. Id. §§ 3.2.5, 3.3.1, 3.4.1. The Agreement further set forth the scope of Clark Nexsen's bidding phase and construction phase responsibilities. Id. §§ 3.5-3.6.

         In December 2011, Plaintiff formed a new nonprofit entity, WTEF East, as a wholly-controlled subsidiary of WTEF. Sept. 13 Order at 3. The express purpose of WTEF East's formation was to take advantage of certain tax credits to finance the East Capitol Campus project. Id. WTEF transferred all property rights in the East Capitol Campus to WTEF East to secure the tax benefits. Id. at 3-4. This restructuring also caused WTEF, with the consent of Clark Nexsen, to assign “all of [its] right, title, and interest” in the Architect Agreement to WTEF East. See Def.'s Summ. J. Mot., Ex. O, ECF No. 46-18 [hereinafter Assignment Agreement]. The assignment became effective on December 30, 2011, see id., as did the Sublease Agreement by which WTEF East subleased the East Capitol Campus facility to WTEF, see Def.'s Reply in Supp. of Def.'s Mot. for Summ. J., ECF No. 52 [hereinafter Def.'s Summ. J. Reply], Ex. AG, ECF No. 52-2, at 18 (Sublease Agreement).

         On March 1, 2012, the D.C. Department of Consumer and Regulatory Affairs (“DCRA”) issued a building permit to WTEF East, and construction of the East Capitol Campus began shortly thereafter. See Def.'s Summ. J. Mot. at 34; id., Ex. Z, ECF No. 46-29. Clark Nexsen then issued a Certificate of Substantial Completion on November 13, 2012, certifying that the work performed under the Architect Agreement was sufficiently complete so as to allow occupancy or use of the facility. See Def.'s Summ. J. Mot., Ex. AA, ECF No. 46-30. WTEF began conducting its programming in the East Capitol Campus facility in January 2013.

         Dealings between the parties went awry not long after, caused by a host of perceived design and construction defects. By letter dated July 14, 2014, Richard L. Aguglia, President of WTEF East, submitted a request for mediation to Clark Nexsen pursuant to section 8.2 of the Architect Agreement. See Def.'s Summ. J. Mot., Ex. V, ECF No. 46-25 [hereinafter Mediation Demand]. When mediation proved unsuccessful, WTEF, and WTEF alone, filed this action on November 10, 2015. See Notice of Removal, ECF No. 1, Compl., ECF No. 1-3, ¶ 9.

         B. Procedural History

         Plaintiff advances two theories of liability in its Complaint. In Count I, WTEF alleges that Defendant breached the Architect Agreement through errors and defects in its design of the East Capitol Campus and its oversight of the construction process. Id. ¶¶ 11-13. In Count II, WTEF alleges that Defendant committed professional malpractice by failing to perform its work with the skill and care ordinarily provided by architects in this locality and by violating industry standards. Id. ¶¶ 14-17. In its Complaint, WTEF identifies eleven “problems” with the East Capitol Campus facility “for which Clark Nexsen bears sole responsibility, or shares responsibility with [the general contractor, HITT], ” id. ¶ 9, and for which “WTEF calculates the cost of remediating” to be in excess of $750, 000, id. ¶ 10.

         In summary, as alleged by Plaintiff, the defects are as follows:

(a) Gutters and Downspouts: The roof drainage on the East Capitol Campus is inadequate due to Clark Nexsen's design errors. The gutters regularly overflow when it rains, causing water to flood into the facility, and one of the downspouts is not tied into the underground storm drainage system. The gutters and downspouts show extraordinarily rapid deterioration.
(b) HVAC System: Clark Nexsen's subcontractor designed the HVAC system for the East Capitol Campus and predicted the monthly utility bills WTEF would incur. Neither the subcontractor nor Clark Nexsen, however, advised WTEF that the predicted utility costs could be achieved only with a mechanical building management system. WTEF has incurred utility bills that exceed those predicted as a result. Major components of the HVAC system are failing and show extraordinarily rapid deterioration.
(c) Improper Storefront Location: The “storefront wall” near the front end of the facility was not built according to the Clark Nexsen-issued design documents, and does not align with the exterior wall of the facility. Adrian Lazaro, a Clark Nexsen architect, learned of the improper location of the storefront wall and yet issued a Certificate of Substantial Completion without giving notice to WTEF.
(d) Condensate Line: The condensate line exiting from the facility's mechanical room drains onto an exterior sidewalk, creating a slip-and-fall hazard.
(e) Exterior Wall Detail: The Clark Nexsen-issued design documents erroneously specified the type of block to be used in the exterior walls of the facility, necessitating the issuance of a change order.
(f) Exterior Columns: Despite repeated painting, WTEF has experienced recurring improper venting and peeling paint at the base of the exterior columns at the front of the facility, indicating a design error by Clark Nexsen.
(g) Buckling Interior Floors: The vinyl tile flooring buckles in a straight line across the hallway near Room 128 due to Clark Nexsen's failure to specify expansion joints in the floor to match expansion joints in the underlying slab.
(h) Indoor Tennis Court Light Fixture Guards: Clark Nexsen's original design for indoor tennis court light fixtures called for exposed light bulbs. Plaintiff incurred $8, 000 in costs to install guards to ensure the safety of players below.
(i) Pilaster Adjustments: Clark Nexsen's original design for the pilaster had incorrect dimensions, requiring additional steel reinforcement at a cost of $2, 295.
(j) Added Column Footing: Clark Nexsen's original design for the support columns was deficient, leading to a cost of $1, 400 for additional structural support.
(k) Storm Pipe from Tennis Court Drains: Clark Nexsen's original design erroneously called for the tennis court drains to be piped into the front bioretention drain. The drains instead should have been connected to the sewer. The cost of ...

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