Conopco, Inc. v. Allen & Hoshall, Inc.

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 05a0137n.06
Filed: February 22, 2005
No. 03-6635
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
CONOPCO, INC., D/B/A SLIM-FAST FOODS CO., )
)
Plaintiff-Appellant, )
)
v. ) On Appeal from the United States
) District Court for the Western
ALLEN & HOSHALL, INC., ) District of Tennessee
)
Defendant-Appellee. )
Before: BOGGS, Chief Judge; MARTIN, Circuit Judge; and WEBER, District
Judge.*
PER CURIAM. Plaintiff-Appellant Conopco Incorporated (“Slim-Fast”) appeals the
district court order of summary judgment for the defendant, an architectural firm, on claims of
breach of contract and professional negligence. Slim-Fast argues that summary judgment is
inappropriate because the contract at issue is ambiguous and because a reasonable person could
conclude the defendant violated its professional duty. For the reasons stated below, we affirm.
I
This is a diversity case about the construction of a floor in Slim-Fast’s warehouse in
Covington, Tennessee. Slim-Fast hired Allen & Hoshall (“A&H”), an architectural firm, to design
*
The Honorable Herman J. Weber, United States District Judge for the Southern District
of Ohio, sitting by designation.
No. 03-6635
the warehouse, including the floor. Slim-Fast wanted a white concrete floor in the warehouse. A&H
submitted a design for the warehouse, including the floor, on December 12, 1997. Pursuant to
Tennessee law, Tenn. Code Ann. § 62-2-306, A&H submitted its design under the firm’s seal. That
design was used to solicit bids from contractors. Linkous Construction Company (“Linkous”) was
then selected to serve as the contractor.
Before construction began, Slim-Fast rejected A&H’s floor design. Not just any floor would
do; Slim-Fast wanted a white floor. Slim-Fast first asked A&H to develop a concrete mix that
would make the floor white, but A&H declined because of a lack of expertise with concrete mixes.
Then, in the summer of 1998, Slim-Fast retained William B. Allen of Allen & Associates (“Allen”)
to develop another design for the floor. On October 7, 1998, Slim-Fast directed Linkous to build
the floor in accordance with Allen’s design. On October 8, 1998, Allen formally submitted a floor
design with several modifications to the original A&H design. Specifically, Allen recommended
1) elimination of wire mesh reinforcement, 2) using dowels at all construction and control joints,
and 3) using Eucosil to cure the concrete. Before the floor was poured, A&H was asked by Slim-
Fast to approve the new floor design. Again, A&H declined because of a lack of expertise with
“slag” (the mixed concrete employed here to make the floor white).
Linkous poured the concrete for the floor on October 19-21, 1998. On November 10, 1998,
A&H submitted to Slim-Fast Amendment 1 (the “Amendment”). The Amendment was drafted by
Allen and incorporated all the changes Allen had recommended. It is not disputed that A&H had
no part in the design alterations in the Amendment. No seal was included in the Amendment, and
the documents indicate that the floor design was done by Allen.
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The floor proved defective. Slim-Fast claims that the design and construction of the floor
was improper, which led to the “curling” of the slabs in the warehouse floor. Slim-Fast’s experts
have identified four potential causes: 1) the use of Eucosil to cure the concrete, 2) the failure of
Linkous to install dowels in the control joints, 3) the use of a vapor barrier, and 4) the elimination
of the wire mesh reinforcement.
Slim-Fast sued A&H for breach of contract and professional negligence.1 On August 21,
2003, the district court resolved cross summary judgment motions by holding for the defendant on
all claims. Slim-Fast’s breach of contract claim had two components: first, liability for the defective
floor design; second, liability for the failure of the contractor to construct the floor in accordance
with the design. The district court concluded that A&H was not liable for the floor design in light
of Slim-Fast’s undisputed rejection of A&H’s design and solicitation of a replacement design from
Allen. The court further concluded that A&H was under no contractual obligation to inspect or
supervise the construction of the warehouse. Finally, the district court concluded that the
professional negligence claim simply duplicated the breach of contract claim for faulty design, and
that the defendant could not be liable for professional negligence for alleged omissions that were
not within A&H’s contractual duties.
II
We review a grant of summary judgment motion de novo, taking all facts in the light most
1
Both Linkous and Euclid Chemical Company (the maker of the Eucosil curing agent)
were originally named as co-defendants, but both settled before the summary judgment motion
was filed.
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favorable to the non-moving party. Shamaeizadeh v. Cunigan, 338 F.3d 535, 543-44 (6th Cir. 2003).
It is not disputed that Tennessee law governs. In diversity cases, we apply the choice of law
doctrine of the state in which the district court sits. Cole v. Mileti, 133 F.3d 433, 437 (6th Cir.
1998). The contract specifies that Tennessee law governs. Tennessee will honor such choice of law
provisions if it shows a reasonable relationship to the transaction, unless it violates the public policy
of the forum state. Tenn. Code Ann. § 47-1-105; Arcata Graphics Co. v. Heidelberg Harris, Inc.,
874 S.W.2d 15, 27 (Tenn. Ct. App. 1993). For tort claims, including the professional negligence
claim in this case, Tennessee applies a “most significant relationship” test. Hataway v. McKinley,
830 S.W.2d 53, 59 (Tenn. 1992). The events at issue – including the formation of the contract, the
floor designing, and the construction – all took place in Tennessee. This satisfies the “most
significant relationship” tort law test and “reasonably related to the transaction” contract law test.
A
“The cardinal rule for interpretation of contracts is to ascertain the intention of the parties
from the contract as a whole and to give effect to that intention consistent with legal principles.”
Sherman v. Am. Water Heater Co., Inc., 50 S.W.3d 455, 457-58 (Tenn. Ct. App. 2001). “[A]
contract’s provisions must be interpreted in the context of the entire contract, viewed from beginning
to end and all its terms must pass in review, for one clause may modify, limit or illustrate another.”
D & E Const. Co., Inc. v. Robert J. Denley Co., Inc., 38 S.W.3d 513, 519 (Tenn. 2001) (citations
omitted). Whether a contract is ambiguous is a question of law for the court. Bratton v. Bratton,
136 S.W.3d 595, 601 (Tenn. 2004).
A&H’s basic duties under the contract are set out in Article 2, under the title “Basic
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Services.” The principal duty is to provide “Construction Documents” that set out the requirements
for construction and are suitable for bidding. Slim-Fast no longer argues that A&H violated this
basic duty. Instead, it claims that an ambiguity in Article 3, titled “Additional Services,” permits
the construction that the contract required A&H to insure that Allen’s floor design was sound.
Slim-Fast argues that the “Contingent Additional Services” provisions in Paragraph 3.3 and
the notice requirement in Paragraph 3.1.1 could reasonably be construed to impose liability on A&H.
Paragraph 3.1.1 states: “If services described under Contingent Additional Services in Paragraph 3.3
are required due to circumstances beyond the Architect’s control, the Architect shall notify the
Owner prior to commencing such services.” Slim-Fast argues that these provisions, which appear
in Paragraph 3.3, required A&H to insure Allen’s floor design was sound:
3.3.1 Making revisions in the Drawings, Specifications, or other documents when such
revisions are:
1. inconsistent with approvals or instructions previously given by the Owner,
including revisions made necessary by adjustments in the Owner’s program or
Project budget.
....
3.3.2. Providing services required because of significant changes in the Project including,
but not limited to, size, quality, complexity, the Owner’s schedule, or the method of bidding
or negotiating an contracting for construction[.]
Slim-Fast argues that these provisions could reasonably have covered the floor redesign by Allen,
and hence obligated A&H to take responsibility for changes in the design, or at least provide written
notice to Slim-Fast that it was necessary to provide “Contingent Additional Services.”
On their face, these provisions did not require A&H to insure that Allen’s floor design was
sound. The Contingent Additional Services provisions clearly function to insure the architect is
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compensated if it performs additional duties, and that it first notify the Owner (Slim-Fast) before
performing such duties requiring compensation. The language that triggers the Contingent
Additional Services in paragraph 3.1.1 is: “[if these services] are required due to circumstances
beyond the Architect’s control.” (emphasis added). The sum of A&H’s duty was to provide an
appropriate set of designs for the warehouse. Slim-Fast’s decision to hire another architect for floor
design is not a circumstance that “required” additional services by A&H because nothing in the
contract obligates A&H to approve, supervise, or review third-party work. Therefore the Contingent
Additional Services provisions never came into play.
Equally problematic for Slim-Fast is that the contract does have a provision that specifically
identifies work with separate parties as “Optional Additional Services.” Optional Additional
Services are discretionary services that the Owner (Slim-Fast) may purchase separately by making
a written request. Among them is paragraph 3.4.9: “Providing services in connection with the work
of a construction manager or separate consultants retained by the Owner.” This provision only
makes senses if working with third parties, like Allen, is not among the duties A&H must perform
or might have performed under other sections of the contract. Because there is no contention the
Owner (Slim-Fast) requested, in writing under paragraph 3.4.9, that A&H perform additional
services with “separate consultants,” summary judgment is proper on the breach of contract claim.
B
Tennessee law requires architects to affix their seal to all plans prepared by them or under
their charge. Tenn. Code Ann. § 62-2-306. The statute also prohibits architects from putting their
seal on work they did not produce or oversee. The original plans issued on December 12, 1997,
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were issued under A&H’s seal. The Amendment – which incorporated Allen’s new floor design
– was issued by A&H on November 10, 1998, but the Amendment indicates that the new design was
done by Allen. The Amendment was not under A&H’s seal – the only sealed document ever issued
by A&H with respect to this project was the December 12, 1997, original plan. Slim-Fast argues
that the Amendment was somehow incorporated into the original document in such a fashion that
it was also under the seal that applied to the original plans. It claims that because the plans were
issued under seal, any defects in them are professional negligence even if A&H was not
contractually responsible.
Slim-Fast’s argument is without merit. This tort argument suffers from two fatal defects
even if we accept, arguendo, the dubious theory that the Appendix was somehow under seal because
the original plans were under seal.2 First, there is an obvious causation problem: the Appendix could
not have resulted in the defective floor because it was issued after the floor was built. The Appendix
was issued in November 1998, a month after the warehouse floor was poured in October 1998. It
is undisputed that the Appendix was to update the designs after construction, so Slim-Fast would
have a copy of “as built” specifications. On this ground alone, we need not consider this theory any
further.
Second there is no basis for the claim that issuing plans under seal creates liability for
professional negligence. Slim-Fast cites no authority for the proposition that tort liability can result
2
Slim-Fast cites no authority for the proposition that an Appendix or a revision to a plan
that is clearly not the work of the architect can be considered under seal merely because the
original plan is under seal. When the designs in the Appendix are clearly the work of another
architect, this is a counter-intuitive proposition, to say the least.
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from the misplacement of a seal (or any placement of a seal whatsoever). There is nothing in the
language of the statute or case law to support the idea that misapplication of a seal can create an
additional professional duty apart from contract. The plaintiff asserts that Tennessee law imposes
“certain duties on architects with respect to plans issued under their seal,” but has no citation for this
proposition, and has no clear legal argument to support it (other than a true, but irrelevant, argument
about how the statute is intended to safeguard health and promote the public welfare). The statute
requires architects to affix their seal to their plans, and prohibits them from affixing it to plans they
did not produce. The only cases citing the seal statute are suits between architects and the Tennessee
licensing board over the suspension or revocation of an architect’s license to practice. See, e.g.,
Wamp v. Tennessee State Bd. of Architectural and Engineering Examiners, 868 S.W.2d 273 (Tenn.
1993). The only remedy we have been able to find for misapplication of a seal is administrative,
through an action by the licensing board. See ibid. At bottom, Slim-Fast is asking us to create a
common law doctrine to buttress a public policy arguably expressed in the statute. For obvious
reasons, we decline.
III
For the reasons set forth above, we AFFIRM the district court’s grant of summary judgment
for the defendant.
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