Sauer Incorporated v. McLendon Enterprises, Inc., No. 4:2020cv00157 - Document 34 (S.D. Ga. 2021)
Court Description: ORDER granting Defendant's 20 Motion for Summary Judgment. Signed by Judge William T. Moore, Jr on 8/31/2021. (ca)
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Sauer Incorporated v. McLendon Enterprises, Inc. Doc. 34 Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 1 of 26 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF GEORGIA SAVANNAH DIVISION SAUER INCORPORATED, A Pennsylvania Corporation, Plaintiff CASE NO. CV420-157 V. MCLENDON ENTERPRISES, INC., A Georgia Corporation, Defendant. ORDER Before Inc.'s, the Motion Court for is Defendant Summary Judgment. McLendon (Doc. Enterprises, 20.) For the following reasons. Defendant's motion (Doc. 20) is GRANTED.^ BACKGROUND^ ^ The case caption incorrectly lists Magruder Construction Company as a defendant in this case. Defendant McLendon filed a third-party complaint against Magruder, which it later dismissed. primary (Docs. defendant 8, in 14.) this However, case. Magruder Accordingly, was the never Clerk a of Court is DIRECTED to amend the caption to remove Magruder as a defendant in this case. 2 The relevant facts are taken principally from the Defendant's Statement of Material Facts (Doc. 22) and Plaintiff's response thereto (Doc. 27). Pursuant to Federal Rule of Civil Procedure 56(e) and Southern District of Georgia Local Rule 56.1, all material facts not controverted by specific citation to the record are deemed admitted, unless otherwise inappropriate. Where the parties offer conflicting accounts of the events in question, this Court draws all inferences and presents all evidence in the light most favorable to Plaintiff. See Hamilton v. Southland Christian Sch., Inc., 680 F.3d 1316, 1318 (11th Cir. 2012) (citing Moton v. Cowart, 631 F.3d 1337, 1341 (11th Cir. 2011)). Dockets.Justia.com Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 2 of 26 Plaintiff Sauer Incorporated brings this claim for breach of contract related to Defendant's construction work at the Fort Stewart Elementary School in Fort Stewart, Georgia. (Doc. 1 at SI 1.) contract (^^USACE") On or about with the to perform June United 3, 2011, States Army construction work Plaintiff Corps at entered of the a Engineers Fort Stewart Elementary School (the '"Project"). (Doc. 22 at SI 1; Doc. 27 at SI 1.) On November 12, 2012, Plaintiff entered a subcontract with Defendant, in which Defendant agreed to undertake certain civil sitework for the Project (the "Subcontract"). (Doc. 22 at SI 2; Doc. 27 at SI 2.) Under the Subcontract, Defendant's scope of work included erosion control, site clearing, site demolition, earthwork, grading, utilities, roadways and parking lots. (Doc. 22 at SI 2; Doc. 27 at SI 2.) Defendant's earthwork and grading scope of work included sub-grade preparation for pervious concrete sidewalks. (Doc. 1, Attach. 1 at 17.) Relevant to this case. Defendant agreed to provide compacted sub-grade and base course preparation for all areas to receive concrete and twenty-four inches of "sandy structural fill" for all areas to receive sidewalks. (Id. at 18.) Originally, pervious concrete Defendant did not agree under the Subcontract to install the actual sidewalks. (Id. at 23-24; Doc. 26 at SI 9; Doc. 27 at SI 3.) On July 22, 2013, Plaintiff and Defendant executed a change order which modified Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 3 of 26 Defendant's scope of work to include placement of the pervious concrete sidewalks, #57 stone base and geotextile fabric beneath the sidewalks. (Doc. 26 at 1 14.) The date on which Defendant installed the sidewalks is unclear, but Plaintiff began to receive complaints from the USAGE regarding the sidewalks in 2016.^ On January 5, 2016, Susan Smith, USAGE project engineer, advised Plaintiff via email that problems had developed with the sidewalks at the Project. (Doc. 22 at SI 5; Doc. 27 at SI 5; Doc. 21, Attach. 1 at 2.) Ms. Smith informed Plaintiff that the sidewalks had ^^heaved at the expansion joints in several places" and other expansion joints the joint material ha[d] been squeezed out . . . ." (Doc. 21, Attach. 1 at 2.) Ms. Smith also stated that the problems with the sidewalks were ^Mefinitely a site wide issue January and 13, not 2016, just David Plaintiff an email sidewalks and inquiring an isolated Warren, describing about occurrence." (Id.) USAGE area similar the engineer, problems ""status of On sent with the [Plaintiff's] fix." (Doc. 21, Attach. 2 at 2.) 2 Defendant contends that the sidewalks were installed in 2014, but Plaintiff denies this contention and objects under Federal Rule of Givil Procedure 56(c)(1)(A) because Defendant failed to cite to ""particular parts of materials on the record" to support its assertion. (Doc 22. at Because the exact date the SI 4; sidewalks were Doc. 27 at installed SI 4.) is not relevant to this case, the Gourt will assume they were installed sometime before 2016, when Plaintiff began to receive complaints about the sidewalks. Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 4 of 26 Plaintiff forwarded both emails to Defendant and requested that Defendant provide ^'immediate on-site review and response regarding this matter." (Doc. 21, Attach. 1 at 2; Doc. 21, informed Attach. 3 Defendant sidewalks and Defendant's at that that the On January Plaintiff Plaintiff surety ^^considering 2.) of would intended the possibility 20, issue 2016, be to inspecting provide with that Plaintiff notice the [Defendant] the to sidewalks may share responsibility in the matter." (Doc. 21, Attach. 3 at 2.) On April 22, performed sidewalks' 2016, Plaintiff temporary ^'heaving" advised remedial and to Defendant measures remove to the that it had alleviate ^'ramps" the in the sidewalks that the USAGE had deemed unsafe. (Doc. 21, Attach. 4 at 2.) Plaintiff further advised Defendant that two testing firms would be conducting tests and analysis on the sidewalks. (Id.) On April 26, 2016, Whitaker Laboratory, Inc., a testing firm retained by Plaintiff, issued a report titled ^'Subgrade Evaluation" soils which beneath the detailed its inspection pervious concrete of ^'near sidewalk" and surface opined on the soils' compliance with the provisions of the Subcontract. (Doc. 21, Attach. 5 at 2.) As part of the inspection, Whitaker Laboratory obtained soil samples up to a depth of twenty-four inches below the bottom of the pervious concrete and then Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 5 of 26 ^^visually classified" the samples. (Id.) Based on the results of its test, Whitaker Laboratory concluded that two of the three soil samples did not meet the requirements of ^'sandy select material" per the conditions of the Subcontract. (Id.) Whitaker Laboratory also stated fabric beneath the gravel" appeared fabric which ^^may not allow that to the consist a fast enough ''geotextile of a woven permeability rate into the underlying soils." (Id. at 2-3.) On June testing firm, 17, 2016, issued TEC its Services, report Plaintiff's regarding the second pervious concrete sidewalks at the Project site. (Doc. 21, Attach. 6 at 2; Doc. 22 at SI 13; Doc. 27 at SI 13.) TEC Services tested three core samples of the concrete from separate sections of the sidewalk, including a section that was exhibiting heaving, and evaluated the samples through ^'concrete petrography." (Doc. 21, Attach. 6 at 2; Doc. 22 at SI 14; Doc. 27 at SI 14.) The focus of TEC Services's evaluation was to determine if the expansion of the concrete was a result of an alkali-silica reaction (ASR) and if the curling was a result of insufficient curing. (Doc. 21, Attach. 6 at 2.) Based on its findings, TEC reported that the measured thickness of the concrete in all three samples was less than the four inches required in the project specifications. (Doc. 22 at SI 15; Doc. 27 at SI 15.) TEC concluded that 'Mt]he significantly heaved concrete Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 6 of 26 sidewalk at the joints and expansion which displaced the curbs is not a result of curling or an expansive subgrade" and that "ASR did not cause the expansion." (Doc. 21, Attach. 6 at 4.) TEC Services also found that the curling in the concrete may have been exacerbated by the thickness of the concrete being less than called for by the design specifications. (Id.) On July 12, 2016, Whitaker Laboratory conducted further testing at the Project site, this time taking six core samples from various sections of the pervious concrete sidewalk. (Doc. 21, Attach. 8 at 2; Doc. 22 at SI 20; Doc. 27 at SI 20.) For all six samples, Whitaker Laboratory measured the thickness of the concrete and the thickness concrete sidewalks. (Doc. of the 21, stone Attach. directly 8 at below 2.) the Whitaker Laboratory's findings revealed that two of the samples had a concrete thickness of less than the four inches required by the Subcontract. (Id.; Doc. 22 at SI 21; Doc. 27 at SI 21.) On July 1, 2016, Plaintiff sent Defendant and Hartford Fire Insurance Company, Defendant's surety, a notice of default. (Doc. 21, Attach. 7 at 2.) In the notice. Plaintiff states that, based on TEC Services's report. Defendant did not install the concrete sidewalks with the necessary thickness as required by the Subcontract. (Id. at 2-3.) Plaintiff also noted that TEC Services's report suggested that there may have been deficiencies in the curing process. (Id. at 3.) Plaintiff Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 7 of 26 further informed Defendant that its failure to timely commence repairs on contractual advised the sidewalks obligations. Defendant response to beginning its and (Id.) On Hartford notice remediation placed of on it in July that, 15, due default. the default 2016, to at its Plaintiff the Plaintiff sidewalk, of lack of would be Defendant and Hartford's cost, on July 18, 2016. (Doc. 26, Attach. 5 at 23.) On letter the September reiterating its Subcontract. stated 15, 2016, that sufficient (Doc. position 26, Defendant's thickness Plaintiff sent Hartford another that Attach. failure ^^alone Defendant had 8 at to was 2, 5-6.) install sufficient breached Plaintiff concrete to of trigger [Defendant's] contractual obligation to remove and replace the concrete." (Id. at 6.) Plaintiff also detailed the costs it had incurred repairing the defective concrete sidewalks and made a claim for $66,439.01. (Id. at 8.) On February 3, 2017, Plaintiff stating sent that Defendant and ^'[Plaintiff] Hartford a intend[ed] final to demand letter initiate legal proceedings against both parties to recover the $66,439.01 in damages caused plus interest, attorneys' fees and costs." (Doc. 26, Attach. 10 at 2.) On March 6, 2017, Plaintiff filed suit against Defendant and Hartford in the State Court of Toombs County (the "State Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 8 of 26 Suit") (Doc. 21, Attach. 9; Doc. 22 at 1 22; SI 22.) In its complaint. Plaintiff alleged that Doc. 27 at [Deferidant] breached the terms of its Subcontract by failing to properly perform its scope of work at the Project, causing defects such as curling, expansion and heaving of the sidewalks in certain areas." (Doc. 21, Attach. 9 at SI 11; Doc. 22 at SI 23; Doc. 27 at SI 23.) Plaintiff further alleged that "[i]n addition, [Defendant] breached the terms of the Subcontract by failing to follow the Project design as to the required slab thickness for the SI 12; sidewalks Doc. 22 alleged that at at the SI '24; project." (Doc. Doc. 27 at SI 21, Attach. 24.) 9 at Plaintiff also [Defendant] has materially breached the terms of the Subcontract by failing and refusing to properly perform its work at the Project, causing damages (Doc. 21, Attach. 9 at SI 14.) Based on Plaintiff sought an award of to [Plaintiff]." Defendant's breach. damages, costs and attorneys' fees. (Id. at SI 15.) In August 2017, the Plaintiff, Defendant and Hartford finalized a settlement agreement (the ""Settlement Agreement") by which Plaintiff agreed to release its claims against Defendant and Hartford in exchange for Defendant's payment of $46,500. (Doc. 22 at SI 28; Doc. 27 at SI 28; Doc. 21, Attach. 4 Sauer Inc. v. McLendon Enters., 17SV00015 (Ga. St. Ct. Mar. 6, 2017). Inc., et. al.. Case No Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 9 of 26 10 at 2-3.) The Settlement Agreement's release provision stated: In exchange for the Parties' performance under this Settlement Agreement, and other good and valuable consideration, the members, owners, Parties for themselves, their predecessors, successors and assigns hereby irrevocably, fully and forever releases the other Parties, their officers, directors, principals, employees, agents, representatives, attorneys-in-fact, attorneys-atlaw, insurers, successors, and assigns from any and all claims, actions, causes of action, suits, losses, demands, sums of money, and expenses from any claims raised or that could have been raised in the Litigation. (Doc. 21, Attach. 10 at filed of Voluntary its Notice 3.) On October 18, Dismissal 2017, Plaintiff with Prejudice in state court, dismissing the State Suit against Defendant and Hartford. (Doc. 21, Attach. 11 at 2.) On July 26, 2019, USAGE notified Plaintiff of a warranty claim based on problems sidewalks (the Plaintiff contends involved in ^'2019 the with new sidewalk that 2019 it sections claim") considered sidewalk claim of (Doc. the to the 26 at sidewalk be concrete 5 30.) sections "non-defective, acceptable, and not requiring repair" in 2016 and 2017. (Id. at ^31.) After receiving the 2019 sidewalk claim. Plaintiff contends that it investigated the defective sidewalk sections and 5 determined For reasons provided the that not Court the "buckling clear to with any the and Court, shifting of the Plaintiff has not communication regarding the 2019 sidewalk defects. from the USCAE Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 10 of 26 sidewalks at these new locations were caused by [Defendant's] Earthwork and Grading scope of work, the geotextile fabric, and installation defects." (Id. at SI 34.) Plaintiff notified Defendant of the 2019 sidewalk claim, and Defendant refused to repair the defective sections. (Id. at SISI 35-36.) As a result. Plaintiff was forced to make the necessary repairs to the 2019 sidewalk sections. (Id.) On July 16, 2020, Plaintiff instituted the current action against Defendant. (Doc. 1.) In its complaint. Plaintiff alleges that Defendant ^'breached the terms of the Subcontract by failing to properly perform its scope of work at the Project, causing defects in the sidewalks in certain areas of the Project." against (Id. Defendant Defendant's at for breach, SI 15.) Plaintiff damages incurred together with seeks as a interest, a judgment result costs, of and attorneys' fees. (Id. at SI 18.) Now, Defendant has moved for summary judgment on Plaintiff's claim. (Doc. 20.) For the following reasons, the Court finds Defendant's motion is due to be granted. STANDARD OF REVIEW According to Fed. R. Civ. P. 56(a), party may move for summary judgment, identifying each claim or defense—or the part of each claim or defense—on which summary judgment is sought." Such a motion must be granted ^^if the movant shows 10 Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 11 of 26 that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Id. The ^'purpose of summary judgment is to ^pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.' " Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1986) (quoting Fed. R. Civ. P. 56(e) advisory committee's note to 1963 amendment). Summary judgment is appropriate when the nonmoving party ^'fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. V. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2552, 91 L. Ed. 2d 265 (1986). The substantive law governing the action determines whether an element is essential. DeLong Equip. Co. V. Wash. Mills Abrasive Co., 887 F.2d 1499, 1505 (11th Cir. 1989). As the Supreme Court explained: [A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact. 11 Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 12 of 26 Celotex, 477 U.S. at 323, omitted). The burden then establish, going beyond by 106 8. Ct. shifts to the at the 2553 (quotation nonmoving pleadings, party that there to is a genuine issue concerning facts material to its case. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The Court must review the evidence and all reasonable factual inferences arising from it in the light most favorable to the nonmoving party. Matsushita, 475 U.S. at 587-88, 106 S. Ct. at 1356. However, the nonmoving party ^^must do more than simply show that there is some metaphysical doubt as to the material facts." Id., 475 U.S. at 586, 106 S. Ct. at 1356. A mere ^'scintilla" allegations, Prods., where a 135 will F.3d of evidence, not suffice. 1422, reasonable 1425 fact or simply See, e.g., (11th finder Cir. may conclusory Tidwell 1998). ^'draw v. Carter Nevertheless, more than one inference from the facts, and that inference creates a genuine issue of material fact, then the court should refuse to grant summary judgment." Barfield v. Brierton, 883 F.2d 923, 933-34 (11th Cir. 1989) (citing Samples v. City of Atlanta, 846 F.2d 1328, 1330 (11th Cir. 1988)). ANALYSIS Defendant argues that it is entitled to summary judgment on Plaintiff's breach of contract claim for two reasons. First, Defendant argues that Plaintiff's claim is precluded by 12 Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 13 of 26 principles of res judicata. (Doc. 21 at 10.) Second, Defendant argues that Plaintiff's claim is barred as a matter of law by the Settlement Agreement. (Id. at 7.) In response. Plaintiff contends that res judicata does not apply because its claim in the current lawsuit and its claim in the State Suit are distinct causes of action dependent upon different operative facts. (Doc. 25 at 15.) Additionally, Plaintiff contends that it was State either impossible Suit, and to raise the 2019 sidewalk claim in therefore, the claim be res judicata or contractual cannot release. (Id. barred the by at 20-22.) Lastly, Plaintiff contends that the parties did not intend the Settlement Agreement to cover unknown claims such as the 2019 sidewalk claim. (Id. at 22-24.) For the following reasons, the Court finds Plaintiff's current claim for breach of contract is barred by res judicata and Defendant's motion for summary judgment is due to be granted. I. RES JUDICATA ''The doctrine of res judicata promotes finality of judgments and prevents the re-litigation of claims." Gunby v. Simon, 277 Ga. 698, 699, 594 S.E.2d 342, 343 (2004). Res judicata bars claims that were previously litigated as well as "claims that could have been litigated in an earlier suit." Shurick v. Boeing Co., 623 F.3d 1114, 1116 (11th Cir. 2010). When a court is "asked to give res judicata effect to a state 13 Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 14 of 26 court judgment, [the court] must apply the res judicata principles of the law of the state whose decision is set up as a bar to further litigation." Kizzire v. Baptist Health Sys., Inc., 441 F.3d emphasis judgment 1306, omitted). bars this 1308 (11th Because Cir. Defendant action, the res 2006) (quotation contends judicata a and Georgia principles of Georgia apply. Id. Georgia has codified the principle of res judicata, providing that: A judgment of a court of competent jurisdiction shall be conclusive between the same parties and their privies as to all matters put in issue or which under the rules of law might have been put in issue in the cause wherein the judgment was rendered until the judgment is reversed or set aside. O.C.G.A. § 9-12-40. The Georgia Supreme Court has held that res judicata will bar an action if three requirements are met - """(l) identity of the cause of action, (2) identity of the parties or their privies, and (3) previous adjudication on the merits by a court of competent jurisdiction." Coen v. CDC Software Corp., 304 Ga. 105, 105, 816 S.E.2d 670, 671 (2018) (citations omitted). In this case, the parties only dispute whether the first requirement for res judicata is met—whether 14 Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 15 of 26 the State Suit and the present lawsuit embody identical causes of action.® A ^'cause of action" is defined as being ^'the entire set of facts which give rise to an enforceable claim." Coen, 304 Ga. at 112, 816 S.E.2d at 675 (citing Morrison v. Morrison, 284 Ga. 112, 116, 663 S.E.2d 714, 719 (2008) (disapproved of on other grounds)). The essential question in determining the identity of a cause of action ^^is whether both claims arose from the same set of facts." Sweet City Landfill, LLC v. Lyon, 352 Ga. App. 824, subsequent cause 836, 835 of action S.E.2d may arise 764, 776 from the (2019). same A set of facts ^^even if some new factual allegations have been made or some new relief has been requested." Harrel v. Bank of Am., N. Am., 813 quotation F. App'x marks 397, omitted) 401 (11th (quoting Cir. Dalton 2020) Paving (internal & Constr., Inc. V. S. Green Constr. of Ga., Inc., 284 Ga. App. 506, 508, 643 S.E.2d 754, 756 (2007)). ''In considering the 'entire set of facts,' we focus on the 'wrong' that is asserted." Coen, ® It is undisputed that Plaintiff and Defendant were both parties to the State Suit. Likewise, Plaintiff has not disputed Defendant's contention that the voluntary dismissal of the State Suit operated as a previous adjudication on the merits by a court of competent jurisdiction. (Doc. 21 at 11 (citing Fowler v. Vineyard, 261 Ga. 454, 456, 405 S.E.2d 678, 680 (1991) (concluding that a "voluntary dismissal with prejudice but without order of court should act as res judicata")).) Accordingly, the Court finds the first two requirements for res judicata are met. 15 Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 16 of 26 304 Ga. at 105, 816 S.E.2d at 671 (citing City of Columbus v. Anqlin, 120 Ga. 785, 791, 48 S.E. 318, 320-21 (1904)). To distinguish factual distinctions its claims. between Plaintiff the State attempts Suit and to the make present action. Plaintiff presents the affidavit of its Vice President of Operations who testified that there was no overlap between the sections of sidewalk Plaintiff replaced in 2016 and the sections Plaintiff replaced in 2019. (Doc. 26 at 20, 36, 38; Doc. 26, Attach. 3 at 2-6; Doc. 26, Attach. 11 at 2.) Plaintiff's vice considered the president sections sidewalk claim to Agreement was be of also testified sidewalk non-defective executed. (Doc. 26 that involved in at the time the at 5 31.) Plaintiff the 2019 Settlement Additionally, Plaintiff asserts that the State Suit breach of contract claim arose from requirement Defendant's for the failure concrete to meet sidewalks the whereas thickness the current lawsuit stems from defects in the sandy select material, the geotextile fabric, and other installation flaws. (Doc. 25 at 19.) Because sections and its new current claim underlying involves defects. different Plaintiff sidewalk argues its cause of action in this lawsuit is not identical to the cause of action in the State Suit. (Id. at 20.) Even assuming Plaintiff s current lawsuit presents novel factual allegations. Plaintiff is alleging the same wrong as 16 Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 17 of 26 in the State Suit. See Anglin, 120 Ga. at 791, 48 S.E. at 320- 21. ("Different cumulatively, facts to show may the be same alleged, wrong; and separately the or number and variety of the facts alleged will not make more than one cause of action, so long as but one wrong is shown."). In both cases Plaintiff is alleging that Defendant failed to properly perform its obligations under the Subcontract with respect to the Project. Notably, both Plaintiff's current complaint and complaint in the State Suit contain the identical allegation that "[Defendant] breached the terms of the Subcontract by failing to properly perform its scope of work at the Project . . . ." (Doc. 1 at SI 15; Doc. 21, Attach. 9 at SI 12.) Additionally, notice of the conclusion of the newly the record raised State is clear sidewalk Suit. that defects The testing Plaintiff had prior the to performed by Whitaker Laboratory, Inc. revealed potential defects in both the sandy select material and the sidewalks. (Doc. 21, the Attach. geotextile fabric beneath 5 at 2-3.) Plaintiff also noted potential problems with the installation method used for the sidewalks in their July 2016 letter to Defendant's surety. (Doc. 21, Attach. 7 at 2.) These defects, therefore, are part of the entire set of facts giving rise to Plaintiff's breach of contract claim in finds the causes of the action State in Suit. the 17 Accordingly, the State Suit and the Court current Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 18 of 26 suit are identical because they arise from the same set of operative facts, even if Plaintiff did not allege all the facts in the State Suit. See Dashtpeyma v. Walker, 859 S.E.2d 799, 803 (Ga. Ct. App. 2021) (citation omitted) (^'It is the entire set of facts themselves, once they occur, however, that give rise to the cause of action, regardless of whether the party fails to include certain facts in the first action."). Furthermore, ^Mr]es judicata acts as a procedural bar to claims that were raised or could have been raised in a prior action." Bryan Cnty. v. Yates Paving 361, 363, 638 S.E.2d 302, 304 & Grading Co., 281 Ga. (2006) (citations omitted) (emphasis added). "[I]t is only where the merits were not and could not have been determined under a proper presentation and management of the case that res judicata is not a viable defense." Piedmont Cotton Mills v. Woelper, 269 Ga. 109, 110, 498 S.E.2d 255, 256 (1998) (emphasis in original). Under the terms of the Subcontract, Defendant breached the agreement by failing ^^in any respect to perform and prosecute the Work properly and with promptness and diligence." (Doc. 26, Attach. 1 at 11.) Assuming that Plaintiff's allegations are true and that Defendant performed substandard work with respect to the defective Subcontract sidewalk when the sections. sidewalk Defendant sections were breached the installed. See Owen V. Mobley Constr. Co., 171 Ga. App. 462, 462, 320 S.E.2d 18 Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 19 of 26 255, 256 (1984) (citing Space Leasing Assocs. v. Atlantic Bldg. Sys., Inc., 144 Ga. App. 320, 324, 241 S.E.2d 438, 441 (1997)) (''[A]ny breach of contract based upon installation defects accrued when the building was substantially completed and the contract became due and payable."); see also Smith v. KLS Constr. Co., 247 Ga. App. 493, 493, 544 S.E.2d 197, 198 (2001) (holding that breach of a construction contract occurs on the true date even the if work was Plaintiff substantially completed). This is had not yet suffered ascertainable damages from the breach. Space Leasing, 144 Ga. App. at 324, 241 S.E.2d at 441 (quotations and citations omitted) (^^Under Georgia law, the statute of limitations runs from the time the contract is broken and not at the time the actual damages results or is ascertained."). The record is installed the before Court contract finds based on clear that the Plaintiff filed Plaintiff's the 2019 2019 sidewalk sections the current sidewalk State Suit. claim for sections had were Therefore, breach of accrued and could have been brought in the State Suit. Gamble v. Lovett Sch., 180 Ga. App. 708, 709, 350 S.E.2d 311, 312 (1986) (^^In contract actions the time of the breach controls, not the time the actual damages result or are ascertained."). Perhaps accrued prior recognizing to the that its Settlement 19 claim Agreement, is barred Plaintiff if it argues Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 20 of 26 that its claim the based viable at time First, Plaintiff on of the the appears 2019 State to sidewalk Suit. argue that sections {Doc. its 25 at claim was not 20-22.) did not accrue until it was forced to repair the sidewalks in 2019, and Plaintiff suffered an ascertainable injury, because the construction defect was in property owned by the USAGE. (Id. at 20-21.) In making this argument. Plaintiff cites to Georgia Court of Appeal's claim for decisions negligent design holding and that a construction property owner's accrues at the time of injury, rather than substantial completion, when the claim is based on a construction defect in property owned by a third party. (Id. at 20 (citing Atlanta Gas Light Co. v. City of Atlanta, 160 Ga. App. 396, 398, 287 S.E.2d 229, 232 (1981); Travis Pruitt & Assocs., P.C. v. Bowling, 238 Ga. App. 225, 226, 518 S.E.2d 453, 454 (1999); Sewell Sales & Serv., Inc. v. Travelers Indem. of Am., 255 Ga. App. 531, 533, 566 S.E.2d 346, 349 (2002).) The cases cited by Plaintiff all involve property owners bringing tort claims based on property damage suffered as a result of a construction defect present in property owned by a third party. See Atlanta Gas Light Co., 160 Ga. App. at 39697, 286 S.E.2d at 231 (City of Atlanta's property was damaged when pumping Travis station Pruitt, 238 owned Ga. by App. 20 at utility 225, company 518 exploded); S.E.2d at 452 Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 21 of 26 (flooding to neighboring property caused subdivision's by negligent drainage system); design Sewell, in 255 a Ga. App. at 533, 566 S.E.2d at 349 (finding insurance companies' negligent construction claims accrued at time of injury if their subrogees did not own the wiring that caused fire damage to the property). In these circumstances, courts find that the property owner's negligent construction claim does not accrue under O.C.G.A. § 9-3-30 until the negligent design of the neighboring property causes damage to the property owner. See Travis Pruitt, 238 Ga. App. at 226, 518 S.E.2d at 454. None of these cases, however, discuss the timing of accrual for a breach of contract claim. As stated previously, Georgia law is clear that a construction contract is breached at the time the construction is substantially completed. See Space Leasing, 14 4 Ga. App. at 324, 241 S.E.2d at 441; see also Costrini v. Hansen Architects, P.C., 247 Ga. App. 136, 137, 543 S.E.2d 760, 762 (2000) (^'The period of limitation on a construction contract commences on the date the work was substantially complete."). As a result, unlike in the case of a property owner who has no relationship to a negligent designer of neighboring property. Plaintiff had the ability to sue Defendant for breach of the Subcontract from the moment of breach, despite the property being owned by the USAGE. Accordingly, the Court rejects Plaintiff's argument that its 21 Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 22 of 26 current breach of contract claim was not viable because the sidewalk sections were owned by a third party.'' Next, Plaintiff appears to argue that Defendant did not breach its express warranty under the subcontract until it refused to repair the 2019 sidewalk sections. (Doc. 25 at 21.) Plaintiff is correct that an ^^express warranty to repair is not breached until the warrantor refuses to repair or inadequately repairs the defect[.]" Feinour v. Ricker Co., 255 Ga. App. 651, 655, 566 S.E.2d 396, 398-99 (2002). Plaintiff, however, did complaint. courts As ^'treat not raise noted the in a breach of Plaintiff's start date for warranty cited the claim authority, breach of in its Georgia express warranty claim differently" than a normal breach of contract claim. Feinour, 255 Ga. App. at 653, 566 S.E.2d at 398 (2002); see also Space Leasing, 144 Ga. App. at 324-25, 241 S.E.2d at 441 (finding breach of contract claim accrued at the time of substantial completion while breach of express warranty claim may not have accrued until the defendant failed to make repairs). Notably, the cases Plaintiff cites only concern the application of O.C.G.A. § 9-3-30. See Travis Pruitt, 238 Ga. App. at 226, 518 S.E.2d at 454. Georgia courts have ruled that ''the four-year statute of limitation in O.C.G.A. § 9-3-30 applies only to tort actions for damage to property. Actions arising out of contract do not fall within O.C.G.A. § 9-3-30's purview." Costrini, 247 Ga. App. at 137, 543 S.E.2d at 761-62 (quotation omitted). 22 Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 23 of 26 In this case. Plaintiff only raised a breach of contract claim based on Defendant's failure to perform its scope of work under the Subcontract. As previously stated, this claim had accrued prior the resolution of the State Suit and, therefore, could have been litigated therein. Accordingly, the Court finds judicata. Plaintiff's As a result. current claim Defendant's is motion barred (Doc. by 20) res is GRANTED. II. THE SETTLEMENT AGREEMENT Alternatively, Agreement bars the Court Plaintiff's finds current that claims. the Settlement The Settlement Agreement is governed by Georgia law. (Doc. 21, Attach. 10 at 3 (^MT]his Settlement Agreement shall be governed by the Laws of the State of Georgia.").) Under Georgia law, release or settlement agreement is a contract subject to construction by the court." Darby v. Mathis, 212 Ga. App. 444, 444, 441 S.E.2d 905, 906 (1994) (quoting Hopkins v. Hopkins, 186 Ga. App. 530, 531, 367 S.E.2d 825, 826 (1988)). ''The cardinal rule of construction is to determine the intention of the parties[.] But no construction is required or even permissible when the language employed by the parties in the contract is plain, unambiguous, and capable of only one reasonable interpretation." Hopkins, 186 Ga. App. at 531, 367 S.E.2d at 826 (citations and quotations 23 omitted). However, when the Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 24 of 26 terms of a settlement agreement are ambiguous regarding the parties' intent to bar future actions and cannot be adequately determined by the Court, the question of intent becomes a jury issue. See Tench v. Galaxy Appliance & Furniture Sales, Inc., 255 Ga. App. 829, 834, 567 S.E.2d 53, 59 (2002) (citing Vasche V. John Wieland Homes, Inc., 243 Ga. App. 178, 179-180, 530 S.E.2d 276, 278 (2000)). Defendant Agreement 21 at that unambiguously 7.) complaint raised argues in bars Specifically, is based the on State the language the Settlement Plaintiff's current suit. Defendant claims Suit of and argues that were that the that or (Doc. Plaintiff's could have Settlement been Agreement explicitly covered such claims. (Id.) In response. Plaintiff contends that its breach of contract claim in the State Suit was based only upon the deficient concrete thickness, whereas its current breach of contract claim is based upon defects in the sandy select material, the geotextile fabric, and the installation process. (Doc. 25 at 14, 19, 24.) Plaintiff also contends that sections of its the current sidewalk claim than involves the State entirely Suit. different (Id. at 19.) Lastly, Plaintiff contends that it could not have raised its current the claim additional in the State sidewalk Suit sections because were it was defective unaware until that after the parties executed the Settlement Agreement. (Id. at 21-22.) 24 Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 25 of 26 Looking to the language of the agreement, the Court finds that the Settlement Agreement unambiguously releases the parties ''from any claims raised or that could have been raised in the Litigation." (Doc. 21, Attach. 10 at 3 (emphasis added).) The Settlement Agreement defines "the Litigation" as the State Suit. (Id. at 2.) Accordingly, the relevant question is whether was Plaintiff's raised Because current State or the claim Suit, could Court had current have has claim been already accrued Plaintiff's and raised breach in determined could claim for is have barred the of State that been by contract Suit. Plaintiff's raised the in the Settlement Agreement. Plaintiff argues that the Settlement Agreement cannot bar its claim claim was executed. based on unknown (Doc. 25 the at 2019 the at sidewalk time 22-23). the Even sections because the Settlement Agreement was assuming Plaintiff was unaware of the defects giving rise to the 2019 sidewalk claim, Georgia law allows parties to discharge liability for unknown claims as long the release clearly expresses that intent. See U.S. Anchor Mfq. v. Rule Indus., 264 Ga. 295, 298, 443 S.E.2d 833, 835 (1994). The release in the Settlement Agreement applies to "any and all claims" "raised or that could have been raised in the Litigation." (Doc. 21, Attach. 10 at 3.) "Georgia courts have interpreted 25 'all claims' language to Case 4:20-cv-00157-WTM-CLR Document 34 Filed 08/31/21 Page 26 of 26 include unknown conduct." Watson v. Union Camp. Corp., 861 F. Supp. 1086, 1090 {S.D. Ga. 1994) (citing cases). Accordingly, the Court Defendant's finds the liability release for any unambiguously claim that discharged could have been raised in the State Suit, known or unknown. To hold otherwise would ^'impose upon unambiguous language a different meaning to comport with the drafter's claimed intent." Id. at 1089. Because Plaintiff s breach of contract claim is barred by the unambiguous terms of the Settlement Agreement, Defendant's motion (Doc. 20) is GRANTED. CONCLUSION For the foregoing reasons. Defendant's Motion for Summary Judgment (Doc. 20) is GRANTED. sr so ORDERED this 3/'~ day of August 2021. WILLIAM T. MOORE,*-JR. UNITED STATES DISTRICT COURT SOUTHERN 26 DISTRICT OF GEORGIA
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