Connecticut Cases June 14, 2019: Centerplan Construction Company, LLC v. City of Hartford

Case Description

UNPUBLISHED OPINION

OPINION

Moukawsher, J.

Who had the right under the contracts to control the project architect: Hartford or its stadium development team?

The only way to know is to read all of the parties’ contracts and make sense of them as a whole- the way a reasonable person would. This yields an answer.

The contracts gave Hartford the right to approve the architectural plans and changes to them. The contracts gave the development team- Centerplan and DoNo- the right to control how the plans were carried out, including control over the architect.

The parties’ authority is set out in several sections of the Development Services’ Agreement (developer DoNo’s contract) along with sections of the Design Build Contract (builder Centerplan’s contract), and the Architect’s contract Hartford assigned to Centerplan.

The most important agreement is between DoNo and Hartford. It’s the February 4, 2015 Development Services Agreement (DoNo, the Developer’s Agreement).

From the outset the developer’s contract promises DoNo operational control, including over architectural issues. Paragraph 1 promises: DoNo "shall have control of ... management of all third-party vendors ... including without limitation, architects ..."

Paragraph 3(a) of the contract says those architects will be Pendulum Studio II, LLC, a company the developer can remove with city consent- consent that can’t be "unreasonably withheld, conditioned, or delayed." This subparagraph then reiterates that the developer will "oversee all professional consultants."

Paragraph 3(c) assigns to DoNo the job of the "completion of the In Progress Project Plans" which are attached to the contract as Exhibit I. It promises that DoNo will "assume City’s rights and obligations under the Professional Services Contract by and between City and Project Architect ..." In subpart (v) of this subparagraph DoNo "agrees that the scope of design and development specifications for construction set forth in the Project Plans, and the construction of the Project Facilities will adhere to the In Progress Project Plans, including, without limitation, the Minimum Requirements and the quality standards set forth in the In Progress Plans, and the final Project Plans."

So the In Progress Project Plans existed on the date the contract was signed and DoNo promised to follow them. Still, in subsection 3(g) the contract, it re-emphasizes that how to carry them out is DoNo and Centerplan’s job:

DoNo and Centerplan "shall be solely responsible for and have full control over design, construction, construction means, methods, techniques, sequences, or procedures, and for safety precautions and programs in connection with the construction of the Project Facilities. Neither the City nor the City’s Representative has any right or obligation under this Agreement or the Design Build Contract to direct the Developer or the Design Builder to perform any work or otherwise interfere with performance of the Developer or Design Builder’s work ... [unless the] work does not conform to the requirement of the Project plans.

The same paragraph tells the ball club that would ultimately use the stadium to stay out of the way too- inviting it to visit and giving it the right to request certain things but only so long as they don’t "hinder or interfere with the construction of the Project Facilities or the activities of Developer’s contractors ..."

Paragraph 4 of the Developer’s Agreement goes on to give Hartford "commercially reasonable approval" over the "In Progress Project Plans"- plans paragraph 6 also calls "the current ‘in progress’ design plans.’ Otherwise this paragraph says: "It is the intention of the parties for Developer to "have complete control over the design and construction means and methods to be performed at the project facilities ..." The paragraph ends by making DoNo "responsible for all acts and omissions of ... Project Architect ..."

Paragraph 6(c) of the Developer’s contract continues a steady drum beat: "[DoNo] shall have sole control over the design of the Project Plans ... the expenditure of the Budget and the GMP, value engineering decisions, all aspects of management and administration of the design and construction of the Project Facilities, and the expenditure of the contingency (which shall be part of the GMP)."

"Finalization of the In Progress Project Plans, which shall ultimately become the Project Plans, shall be undertaken at the direction of [DoNo and Centerplan]." Paragraph 6 requires DoNo and Centerplan "to promptly complete the Project Plans in accordance with the In Progress Project Plans or reasonably inferred from the In Progress Project Plans to arrive at and achieve the final Project Plans." In other words, the plans that are in progress need fleshing out, and it is DoNo and Centerplan’s job to do it with the City interfering only if the in-progress bones are being changed.

This paragraph continues to make any such changes to the in-progress bones subject to Hartford’s approval: "Developer shall obtain the prior approval of City for any Material Change to the In Progress Project Plans or any Material Change between the In Progress Project Plans and the final Project Plans, which approval may be granted or denied in the City’s sole discretion." "Material Change" is defined in the Developer’s Contract Exhibit C as "any modification to the In Progress Project Plans." This paragraph also gives the city right to make undefined "Allowance Elections" and the team the right to "designate" its furniture, fixtures, and equipment needs. But beyond that it states again that "it is imperative that [DoNo and Centerplan] control the design phase and any further changes to the In Progress Project Plans that are not Material Changes."

Once the Project Plans are done, changes to them also require Hartford’s consent. Article 1 of Centerplan’s builder’s contract says that the builder’s job is to "execute the Work described in the Design-Build Documents." It further says the Design-Build Documents are "this agreement ... and its attached Exhibits"- exhibits that include the completed project plans. Under Article A.7 of the builder’s contract, any changes to this "Work" requires either consent in the form of a change order or a contract change directive.

While Centerplan’s builder’s contract requires Hartford’s consent for changes, the builder’s contract- incorporated into the developer’s contract by reference- is labeled the " Design Build Contract." It has the same emphasis on Centerplan and DoNo’s overarching responsibility for architectural design issues incident to carrying out the plans. In paragraph 7.7 with emphasis added it says:

Subject to the City of Hartford’s rights with respect to direction of approvals of design , change orders, budget and schedule set forth in, and subject to the limitations in the Development Services Agreement, Design-Builder shall have sole control and discretion over the design of the Project ... all aspects of management and administration of the design and construction of the Project ...

On August 29, 2015, to carry out its earlier promise to let DoNo assume Hartford’s rights over the architect, Hartford signed a document assigning its right under the architect’s contract with the city. Under paragraph 7 of the assignment, this left Centerplan the holder of Hartford’s powers and obligations regarding the architect- with the limited exception highlighted here:

[Centerplan], by its acceptance of this Assignment, hereby assumes and agrees to be bound by the applicable representations, obligations , terms, and conditions of the Agreement, subject only to paragraph 5 above, from and after the date hereof, and [Hartford] shall be relieved of further obligation pursuant to the same should such obligation arise on or after executions of this Assignment and pertain to any matter that does not derive from Part A or Part B of Exhibit B of the Agreement.

Section 5 is the next phase of the architect’s work- overseeing work carrying out its drawings. This work is said to be "under the purview and direction of Centerplan. And, as the assignment says and the parties agree, Exhibit B to the assignment contains a Part A- the In Progress Plans (preliminary drawings)- and a Part B- the Project Plans (March 23, 2015 drawings). As expressed above, Hartford’s "obligations" are those that "derive" from these two parts of Exhibit B. Reading parts A and B, the only Hartford "obligation" under them is the obligation to pay the architect. Therefore, this language means that Hartford keeps the obligation to pay the architect under Part A and B and Centerplan picks up everything else the assignment refers to: the part C work and "the applicable representations ... terms, and conditions" of Part A, Part B and every other contractual matter related to the architect.

In case the developer’s contract wasn’t clear enough about who is responsible for any misdeeds by the architect, the builder’s contract reiterates it. Article A.3.2.3 of the builder’s contract- part of an attachment to the attachment- again makes Centerplan’s responsibility clear: "[Centerplan] shall be responsible to the Owner for acts and omissions of the ... Architect ..."

Taken as a whole the agreements plainly assign to Centerplan and DoNo the dominant power over design issues that arise while carrying out the plans. This power includes the right to direct architect activities during the design and construction process and explicit responsibility for the Architects’ acts and omissions. Hartford must agree to the plans and changes to them. DoNo and Centerplan are in charge of carrying them out.

Therefore, if the stadium construction was slowed by design flaws or other architectural wrongs, the contracts make Centerplan and DoNo responsible. If a design flaw requires a plan change, Centerplan and DoNo need Hartford’s approval to carry it out. If a problem with the architect does not require a plan change, the contracts give Centerplan and DoNo the right to direct the architect to remedy it. And if DoNo is dissatisfied with the architect it can ask Hartford to approve firing the architect and, if it is the reasonable thing to do, Hartford must promptly consent.

Of course, none of these conclusions about what the contracts provide, suggest the contract’s words are oblivious to the parties’ behavior. The contracts gave Centerplan and DoNo rights. If Hartford violated them by frustrating the development team’s work causing them to miss the deadline, then it would be fair for the jury find for Centerplan and DoNo. But if Hartford stayed within its bounds and the delays were caused by Centerplan, DoNo or any of the subcontractors- including the architects- then as between Centerplan and DoNo on the one side and the City on the other the fault lies with Centerplan and DoNo.