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Atlantic City Associates LLC v. Carter & Burgess Consultants

November 13, 2008

ATLANTIC CITY ASSOCIATES LLC, ET AL., PLAINTIFFS,
v.
CARTER & BURGESS CONSULTANTS, INC., ET AL., DEFENDANTS.
PALMIERI/PETROCELLI JOINT VENTURE, PLAINTIFF,
v.
ATLANTIC CITY ASSOCIATES LLC, ET AL., DEFENDANTS.
THOMAS COMPANY, INC., PLAINTIFF,
v.
KEATING BUILDING CORP.,ET AL., DEFENDANTS.



The opinion of the court was delivered by: Noel L. Hillman, U.S.D.J.

OPINION

HILLMAN, District Judge

Before the Court are Carter & Burgess Consultants, Inc.'s ("C&B" or "Architect") motion for partial summary judgment and Atlantic City Associates LLC's ("ACA" or "Owner") cross motion for partial summary judgment. C&B seeks dismissal of ACA's claims for consequential damages and seeks a limitation on the amount of damages that ACA can potentially recover against C&B in accordance with the contract entered into between C&B and ACA. ACA argues that the modified language of the contract indemnifying ACA holds C&B responsible for the full amount of damages allegedly due to C&B's negligence, errors and omissions.

On October 23, 2008, a hearing was held and counsel for ACA and C&B presented argument in support of their respective motions. For the reasons expressed below, C&B's motion is granted in part and denied in part, and ACA's motion is granted in part and denied in part.

I. JURISDICTION

In each of the consolidated cases, there is complete diversity between the plaintiff and defendant, and the parties have plead an amount in controversy in excess of $75,000.00. Therefore, this Court exercises subject matter jurisdiction over these consolidated cases pursuant to 28 U.S.C. § 1332 (diversity of citizenship).

II. BACKGROUND

These consolidated cases involve a construction project for mixed retail and commercial use property located in Atlantic City, New Jersey referred to as "The Walk" (the "Walk Project"). ACA is the owner/lessee of the property. C&B provided the architectural, engineering and other design services.

On or about November 15, 2000, C&B submitted a proposal ("Proposal") to ACA to provide architectural services for the Walk Project. Section F of the Proposal capped damages recoverable from C&B and states in pertinent part:

To the fullest extent permitted by law, the total liability, in the aggregate, of Architect/Engineer and Architect/Engineer's officers, directors, employees, agents ... to [ACA] ... for any and all injuries, claims, losses, expenses or damages whatsoever arising out of or in any way related to Architect/Engineer's services ... from any cause or causes whatsoever, including but not limited to, the negligence, errors, omissions, strict liability, breach of contract, misrepresentation or breach of warranty of Architect/Engineer ... shall not exceed the total compensation received by Architect/Engineer under this Agreement.

On June 18, 2001, the parties entered into a signed contract ("Contract" or "Agreement"). Paragraph 1.4.1.3. of the Contract provided that the Proposal was incorporated into the Contract "except where it might result in a conflict with this Agreement, and if such conflict exists, this Agreement shall prevail." The Contract contained a waiver of consequential damages provision, in paragraph 1.3.6. which stated,

The Architect and the Owner waive consequential damages for claims, disputes or other matters in question arising out of or relating to this Agreement. This mutual waiver is applicable, without limitation, to all consequential damages due to either party's termination in accordance with Paragraph 1.3.8.

The Contract also contained an indemnity provision, in paragraph 2.9.2.2, which stated,

The Architect agrees to indemnify, hold harmless, protect the Owner and the Owner's agents, representatives, the Construction Manager, and any affiliated or related entities of the Owner against any and all claims, loss liability, damage, costs and expenses, including reasonable attorney's fees, to the extent caused by the negligent acts, ...


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