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Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032
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IN THE COMMON PLEAS COURT OF FRANKLIN COUNTY, OHIO
CIVIL DIVISION
STEED HAMMOND PAUL, INC., CASE NO. 17-CV-001032
Plaintiff, : JUDGE JEFFREY M. BROWN
v.
BERARDI PARTNERS, INC., : PLAINTIFF’S MOTION FOR PARTIAL
: SUMMARY JUDGMENT
Defendant.
Plaintiff Steed Hammond Paul, Inc. (“SHP”), by counsel and pursuant to Rule 56(A),
Ohio Rules of Civil Procedure, hereby moves this Court for a Partial Summary Judgment in its
favor on Defendant’s Third Affirmative Defense, on the ground that there is no genuine issue of
material fact pertaining to such defense and, as pointed out in the Memorandum below, Plaintiff
is entitled to judgment in its favor on such defense as a matter of law.
Specifically, as set forth below, given the record in the TransAmerica Building Co., Inc.
v. Ohio School Facilities Commission case, Ohio Court of Claims Case No. 2013-00349, the
settlement which forms the basis for Plaintiff's contribution/indemnity claim in this action was
entered into to avoid a greater liability to the Ohio School Facilities Commission and therefore
was not volunteered by SHP. The facts on which this Motion and Memorandum are based are
set forth in the testimony taken into evidence at the trial before the Ohio Court of Claims in the
case captioned Jutte Electric, Ltd. v. Ohio Facilities Construction Commission Ohio Court of
Claims Case No. 2014-00318, in which both SHP and Defendant Berardi Partners, Inc.
(“Berardi”) were parties with full opportunity to cross examine such witnesses, making suchFranklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032
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testimony admissible under Evidence Rule 804(B)(1), plus the attached Affidavit of Joshua
Predovich and additional documents cited in the Memorandum.
Respectfully submitted,
/s/David M. Rickert
David M. Rickert (0010483)
Attorney for Plaintiff
AUMAN, MAHAN & FURRY
110 North Main Street, Suite 1000
Dayton, Ohio 45402
(937) 223-6003, (937) 223-8550 Fax
dmr@amfdayion.com
Attorney for Plaintiff
MEMORANDUM
On January 30, 2008, Plaintiff Steed Hammond Paul, Inc. (“SHP”) contracted with the
Ohio School Facilities Commission (“OSFC”) to act as architect for the construction of academic
and dormitory buildings on the campuses of the Ohio School for the Deaf and the Ohio State
School for the Blind (Affidavit of Joshua Predovich, attach [hereinafter “Predovich Aff.”] par
4). In the course of preparing the statement of qualifications to compete for that project, SHP
engaged Defendant Berardi Partners, Inc. (“Berardi”) to design the dormitory portion of the
project, given Berardi’s expertise in design of multiple unit residential buildings (Predovich Aff.,
par. 3). After SHP was awarded the contract, Berardi took responsibility for the dormitory
building design and dormitory-related construction administration activities as subconsultants of
SHP. Berardi sealed all of the dormitory related drawings and responsible for responding to all
dormitory-related RFIs during the course of construction (/d.). For its part, the OSFC hired Lend
Lease as construction manager and contracted with TransAmerica Building Co., Inc. as a general
trades contractor and Jutte Electric, Ltd. as electrical contractor (Predovich Aff., par. 5).Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032
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Construction of the project was problematic. Ultimately, these problems resulted in the
filing of two lawsuits in the Ohio Court of Claims, TransAmerica Building Co., Inc. v. Ohio
School Facilities Commission and Jutte Electric, Ltd. v. Ohio Facilities Construction
Commission, referenced above. In each of these cases, the contractor sued the OSFC which in
turn filed third-party complaints against Lend Lease and SHP, and SHP in turn filed a fourth-
party claim against Berardi (Predovich Aff., par. 6 and Exhibit B attached thereto).
In both cases, SHP alleged that:
Any liability proven by the Third Party Plaintiff against SHP (which SHP denies)
would be directly and proximately caused by breaches of Berardi of its contract
and/or other duties owed to SHP regarding the subcontracted work, entitling SHP
to contribution or indemnity against Berardi in the amount of such liability.
(TransAmerica Building Co. Inc. v. Ohio School Facilities Commission, Fourth-
Party Complaint, par. 5; Predovich Aff. par. 6 and Exhibit B).
Any liability proven by the Third Party Plaintiff against SHP (which SHP denies)
would be directly and proximately caused by breaches of Berardi of its contract
and/or other duties owed to SHP regarding the subcontracted work, entitling SHP
to contribution or indemnity against Berardi in the amount of such liability. (Jutte
Electric Ltd. v. Ohio Facilities Construction Commission, Fourth-Party
Complaint, par. 5; Predovich Aff. par. 6 and Exhibit B).
The allegations are supported by the evidence:
In the Jutte v. Ohio School Facility Commission case, Josh Predovich, the Project
Manager for SHP, testified that Berardi was responsible for the design of the dormitories and
SHP was in turn responsible for Berardi’s work, being SHP’s subconsultant (Predovich Trial
Transcript excerpt previously filed with this Court, Vol. I, pp. 14-15). Berardi sealed the
architectural drawings for the dormitories (Vol. I, p. 129). Predovich testified that despite the
fact that the goal was to “prepare documents which will accurately and precisely convey the
design to the prime contractors” (Vol. I, p. 13) Berardi failed to do so. Predovich described his
interaction with Berardi as follows: “I was doing everything I could as the Project Manager forFranklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032
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the job to try to motivate my consultant.” (Vol. I, p. 43). When he would confront Berardi to get
drawings issued or corrected, Berardi would respond that they were too busy (Vol. II, pp. 7-8).
This lack of motivation may be explained by the fact that Berardi submitted inflated pay
applications so that it received 100 percent of its fee with six to eight months left on the project
(Vol. II, p. 25). As a result, conformed drawings incorporating the many changes in Berardi’s
initial design documents were, for example, promised in December 2010 and were still not
issued by May 2011 (Vol. II, p. 11).
Based on this and other testimony, even SHP’s own independent expert, Rick
Koehler (who was defending SHP’s position in the Jutte action), was forced to
conclude that Berardi’s drawings were not accurate (Excerpt of Koehler’s
testimony in the Jufte litigation previously filed with this Court, p. 12) and were
not timely, taking, for example, two years to produce some of the drawings (pp.
12-13). Berardi was repeatedly late in responding to requests for information
concerning its design documents (pp. 12-13) and the lack of completeness led to
delays on the job (pp. 14-15). In these ways, Koehler testified that Berardi’s work
fell below the required standard of care (p. 12) making SHP vicariously liable for
these failings (pp. 17, 19).
Koehler’s testimony about SHP’s liability for Berardi’s failings is borne out by
the SHP/OSFC contract which provides:
1.1.7 Consultants The Architect may provide services through one or more
consultants employed by the Architect (the “Consultants”); provided the Architect
shall remain responsible to the Commission for all duties and obligations of the
Architect under this Agreement... (Predovich Aff., par. 4 and Exhibit A attached
thereto).
In the TransAmerica litigation, the Ohio Court of Claims bifurcated the third and fourth
party claims in that case and such matter proceeded to trial as between TransAmerica and the
OSFC. The Referee in that case submitted his decision, a copy of which is attached to the
Predovich Affidavit as Exhibit C. In TransAmerica, the Referee found that TransAmerica was
entitled to damages from the primary defendant, OSFC in the sum of $1,837,404.35.Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032
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Both before and after the TransAmerica trial, mediation and settlement discussions were
held to resolve the TransAmerica claim. As part of that process, Berardi was asked to, and did,
participate in these settlement efforts (Predovich Aff., par. 8). Berardi did not offer sufficient
funds to effect a settlement with TransAmerica (Id.). Accordingly, on July 28, 2016, before the
third and fourth party claims in Transamerica were tried at a bifurcated trial, SHP agreed to
settle the third-party claim with the OSFC with the payment of $971,700 (Predovich Aff, par. 9).
The settlement resulted in the dismissal of the OSFC’s third-party claim with prejudice with the
OSFC and in turn the dismissal without prejudice of the fourth-party claim (Settlement
Agreement, attached to Predovich Affidavit, par. 9 and Exhibit D thereto). This action was then
filed to obtain indemnity for the amounts paid to TransAmerica by SHP on Berardi’s behalf.
In the course of mediating the instant lawsuit, questions arose concerning the legal
viability of Berardi’s third affirmative defense which reads:
Plaintiff's indemnification claim is barred by its voluntary settlement with
TransAmerica and/or OSFC (Answer, Third Affirmative Defense)
The central question posed in this Motion for Partial Summary Judgment is whether a
settlement payment made prior to a court decision finding liability against the putative
indemnitee is one made voluntarily so as to defeat a claim of indemnity or contribution.
This question is one proper for resolution under Rule 56(A), Ohio Rules of Civil
Procedure, which mechanism is available to test the viability of an affirmative defense (see
Greenwood Rehabilitation Inc. v. Boxell (Lucas Cty., 2005) 2005-Ohio-2492; Beine v. Apria
Healthcare (Franklin Cty. CP, 2010) 2010-Ohio Misc. LEXIS 5240; Nationwide Ins. Co. v.
Marsh (Cuyahoga Cty., 1983) 1983 Ohio App. LEXIS 12951).
Claims for indemnification or contribution are legally similar and are described as
follows:Eranklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032
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Contribution, when it exists, is the right of a person who has been compelled to
pay what another should have paid in part to require partial (usually
proportionate) reimbursement and arises from principles of equity and natural
justice. Indemnity, on the other hand, arises from contract, express or implied,
and is the right of a person who has been compelled to pay what another should
have paid to require complete reimbursement. (Harned v. Cregar (Trumbull Cty.,
1999) 1999 Ohio App LEXIS 1229 at *8, citing Traveler’s Indemnity Co. v.
Trowbridge (1975) 41 Ohio St. 2d 11; see also Smith v. Withrow (Butler Cty.,
1991) 1991, Ohio App LEXIS 6308).
As noted above, indemnity may be based on an implied contract:
A right to indemnity arises from contract, either express or implied, and is the
right of a person who has been compelled to pay what another should have paid to
require complete reimbursement. It is undisputed that there is no express contract
between National on the one hand and OSFC, Waverly, or AJS on the other.
Therefore, the dispositive question under National’s third assignment of error is
whether National has a potential claim based on an implied contract of
indemnity...
An implied contract of indemnity should be recognized in situations involving
related tortfeasores, where the one committing the wrong is so related to a
secondary party as to make the secondary party liable for the wrongs committed
solely by the other. Relationships which have been found to meet this standard
are the wholesaler/retailer, abutting property owner/municipality, independent
contractor/employer, and master/servant. (Waverly City School District Board of
Education v. Triad Architects, Inc. (Franklin Cty., 2008) 2008-Ohio-6917 at
*P33, 35).
Under the law of indemnity and contribution, one is not entitled to reimbursement if the
putative indemnitee/contributee voluntarily made the payment on behalf of the
indemnitor/contributor. (Farm Bureau Mutual Auto Ins. Co. v. Buckeye Union Casualty Co.
(1946) 147 Ohio St. 79; Aetna Casualty & Surety Co. v. Buckeye Union Casualty Co. (1952) 157
Ohio St. 385; Landmark Ins. Co. v. Cincinnati Ins. Co. (Portage Cty., 2001) 2001-Ohio-4311).
Courts both in Ohio and elsewhere have defined who is a “volunteer” for a contribution
or indemnity purposes as follows:
Generally speaking, the party making payment is a volunteer if, in so doing, he
has no right or interest of his own to protect, and acts without obligation, moral or
legal, and without being requested by anyone liable on the obligation. (AetnaFranklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032
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Casualty and Surety Co. v. Buckeye Union Casualty Co. (1952) 157 Ohio St. 385
at 392-393)
A volunteer settlor has been defined as a mere stranger or intermeddler who has
no interest to protect and no moral or legal obligation to pay. (Mullin Lumber Co.
v. Chandler Cal. App., 1986) 1986 Cal. App. LEXIS 2066.
Similarly, the court in Judge v. Allentown and Sacred Heart Hospital Center (Pa.
Commw. 1985) 496 A.2d 92 defined a volunteer as “one who, having no interest to protect and
without a moral or legal obligation to pay, discharges the debt of another.” (496 A.2d at 96);
Accord: Landmark Insurance Co. v. Cincinnati Insurance Co., supra; Grinnell Mutual
Reinsurance Co. v. Center Mutual Insurance Co. (N.D. 2003) 2003 N. D. LEXIS 47; St. Paul
Fire and Marine Insurance Co. v. Michelin (Il. App. 1973) 298 N.E. 2d 289; Nogacz v. Procter
Gamble Manufacturing Co. (Ill. App. 1975) 1975 Ill App. LEXIS 3507; Coco v. Jaskunas (NH
Super 2008) 2008 N.H. Super LEXIS 5.
For example, in the Ohio case of Landmark Insurance Co. v. Cincinnati Insurance Co.,
supra, multiple insurance companies were obligated to pay portions of the potential liability in
that case. When a single insurance company paid the entire amount of the settlement, which it
under no circumstances could be forced to pay in full, it was deemed to be a volunteer and not
entitled to indemnity or contribution. In the instant case, given Berardi’s position as a
subcontractor of SHP and the above-quoted contract provisions of the OSFC/SHP contract, SHP
was at all times obligated in the first instance to pay the full amount of any liability created by
Berardi.
A settling party is entitled to contribution or indemnity without the need to litigate the
subject claims to conclusion. Rowley Plastering Co. v. Marvin Gardens Development Corp.
(Arizona App., 1985) 883 P.2d 449; N.E. Finch Co. v. R.C. Mahon Co. (Ill. App., 1977) 370Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032
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N.E. 2d 160; Samuelson v. Chicago, Rock Island and Pacific Railroad Co. (Minn, 1970) 178
N.W. 2d 620. As the court stated in N.E. Finch, supra:
Without question, the law favors amicable settlement between litigants. In
furtherance of this policy, rules should not be encouraged which allow the
defendant no alternative but to litigate the question of his liability to a plaintiff in
order to preserve his cause of action over against a prospective indemnitor. It is
therefore unnecessary for a party seeking indemnity to obtain a judicial
determination that it is liable to an injured party . . . so long that in settling the
principal action the prospective indemnitee is responding to a reasonable
anticipation of personal liability. (370 N.E. 2d at 162-163).
Accord: Grinnell Mutual Reinsurance Co. v. Center Mutual Insurance Co., supra;
Lemmer v. IDS Properties, Inc. (Minn, 1980) 304 N.W. 2d 864; St. Paul Fire and Marine
Insurance Co. v. Michelin, supra. The Court in St. Paul noted:
Whether the legal principal upon which the third party complaint is based is
contribution or indemnity, in either case the fact that a party against whom a legal
liability is asserted made a fair settlement in good faith without any judgment
having been entered against him does not prevent him from seeking to enforce a
claim for reimbursement against another person primarily responsible for the
injuries suffered by the plaintiff. (298 N.E. 2d at 292).
Issues of the reasonableness of the amount of settlement only affect the amount
recoverable under a contribution or indemnity claim, and not the right of recovery itself. Nogacz
v. Procter Gamble Manufacturing Co., supra; St. Paul Fire and Marine Insurance Co. v.
Michelin, supra. Interestingly, the right of indemnification or contribution exists even if the
settled claim is later held to be invalid. Grinnell Mutual Reinsurance Co. v. Center Mutual
Insurance Co., supra; Lemmer v. IDS Properties, Inc., supra; Coco v. Jaskunas, supra.
In this case, as pointed out above, it was virtually undisputed that at all times Berardi
acted as a subcontractor/subconsultant for SHP, and that Berardi fell below its required standard
of care. Although the above-cited testimony was present in the Jutte litigation, based on similar
testimony presented at the TransAmerica trial in the first half of that case’s bifurcated trial,Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032
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between TransAmerica and Ohio School of Facilities Commission, the Referee decided as
follows, inter alia:
It is hard to appreciate just how confusing the plans were, but a good example is
revealed in an email from LL/Keith to SHP/Predovich on July 27, 2011, over
three months after TA had mobilized to the job site (TA-0410), referring to a
recent inspection, ‘[H]e is not going to sign off or approve any further inspection
requests until revised/updated/stamped drawings are available for review.’ This
was in reference to the DIC inspector’s confusion over the drawings. (Referee’s
Decision, p. 13).
Weeks before TA signed the Contract it requested revised and complete drawings
and SHP/Berardi promised to issue such drawings, including all changes to date
(TA-0164). These changes were extensive and consisted of well over 100
specific changes to the drawings, substantial changes to the technical
specifications and over 150 pre-bid RFIs, many of which affected the drawings.
While the bid set of plans may have been sufficient upon which to submit a bid,
they were not full and accurate nor were the details easily understood so as to be
sufficient for construction. To the contrary, the drawings were described by
various witnesses, including representatives of OSFC, SHP and LL, as flawed,
useless, worthless, trash, confusing and any number of other adjectives, none of
which are synonymous with unambiguous, full, accurate, or easily understood.
(Decision, p. 14).
The Referee acknowledges that construction drawings and specifications are
never perfect and the RFI process is one of several processes designed specifically
in recognition of this inevitable imperfection. However, the state of the bid
drawings was, by accounts of all of the witnesses who testified credibly,
unacceptable, incomplete, and not ideal. (Decision, p. 14).
Each time SHP issued revised construction drawings to LL, which it supposedly
captured the hundreds of changes and RFIs, they were reviewed by LL only to
discover that they were not correct and were confusing. This happened at least
four times over the course of six months, starting in December 2010. In other
words, SHP and its consultants, who developed the plans and specifications, and
whose design generated the hundreds of changes over the previous year, were
unable to consolidate these hundreds of changes and clarifications into a set of
drawings that was complete and accurate enough for LL to issue to the
contractors, including the TA. (Decision, pp. 16-17).
The impact of a lack of full and complete drawings of TA’s work was pervasive
and continuous throughout construction causing substantial inefficiencies and
disruptions to TA’s work. (Decision, p. 18).Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032
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The reports (TA-1200 and TA-1201) and testimony of McCarthy were persuasive
in addressing the impacts experienced by TA during construction and in showing
how OSFC, through its agents SHP and to a lesser extent LL, delayed TA’s work.
(Decision, p. 25).
Looking at these binders, it is hard to imagine how TA managed to complete its
tasks. TA’s work was impacted throughout construction not only because of the
confusing drawings, but also because of the lack of timely answers to questions
about the drawings and the specifications. (Decision, p. 36).
These drawings were never approved by DIC and these are the drawings that LL
insisted that TA use to construct the dorms. As it turns out, apart from not being
reviewed and approved by DIC, they were incomplete, not coordinated, full of
mistakes or omissions and did not incorporate hundreds of previous RFIs and
other addenda items generated during bid number one. (Decision, p. 50).
SHP had ongoing problems with Berardi trying to respond to the project’s needs.
For example, SHP/Predovich and Berardi/Matias exchanged a series of emails
starting on December 6, 2010 (TA-0176/1-3) where Matias from Berardi
promised to have the OCT 2010 BID SET updated by mid-December. Berardi
attempted to produce an updated set of drawings in mid-December, but they were
not acceptable to LL. LL’s then superintendent, Joe Rice, described them as
useless drawings, garbage and useless trash. (TA-0194) (p. 51).
Berardi fell below the standard of care for architects in terms of timeliness and
completing construction drawings, obtaining a permit, and the quality of the
documents. When asked to apportion the responsibility for the design problems
as between SHP and Berardi, Koehler testified that in his opinion if Berardi ‘had
not been involved in this project, none of us would be sitting in this room.’
Koehler was also critical of the timeliness of Berardi’s performance as it related
to responding to DIC’s comments, producing updated construction drawings and
the inaccuracies in the details of the construction drawings produced by Berardi.
(Decision, p. 52).
The design was in such a state of confusion and disarray that the architect itself
was never able to issue a comprehensible set of construction drawings to LL’s
satisfaction so that they could be issued to the contractors. (Decision, p. 54).
The sequence of work in the schedule changed constantly and was driven more by
design problems than contractor problems. (Decision, p. 55).
SHP’s consultant, Berardi, was routinely dilatory in delivering a buildable design
and in fact, never delivered one in acceptable form for issuance to TA by LL.
(Decision, p. 138).
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As a result of the foregoing factual findings, the Magistrate concluded:
While OSFC bears the primary legal responsibility for TA’s damages as the
owner of the Dorm Project, from the evidence as submitted at this trial, TA’s
losses were, for the most part, caused by the conduct of its authorized agents, LL
and SHP, and by SHP’s consultant, Berardi. (Decision, p. 138).
Based on the foregoing, the Referee awarded damages to TA in the sum of $1,837,404.35
plus pre-judgment interest (Decision, p. 124).
The Referee’s decision pertaining to Berardi’s misconduct (and therefore, the vicarious
liability of SHP for such conduct) is set forth more fully in the Referee’s decision, a copy of
which is attached to the Predovich Affidavit as Exhibit C.
Had SHP not settled the third party claim, it would have been required to attempt to
defend against OSFC’s third party claim before a Magistrate who had already opined that
Berardi’s failings were a cause of TransAmerica’s 1.8 million dollar loss in the first phase of that
trial. Settling that claim for $975,000 was, in the words of the Court in N.E. Finch Co. v. R.C.
Mahon Co., supra, a response to “a reasonable anticipation of personal liability.”
Under the above-cited authority, SHP did not need to litigate its claim against Berardi in
the TransAmerica action to settle the claim and seek indemnity or contribution from Berardi.
Berardi’s third affirmative defense, which purports to require completed litigation on which to
11Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032
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base a contribution or indemnity claim is without legal basis, and SHP is entitled to judgment to
that effect as a matter of law.
Respectfully submitted,
/s/David M. Rickert
David M. Rickert (0010483)
Attorney for Plaintiff
AUMAN, MAHAN & FURRY
110 North Main Street, Suite 1000
Dayton, Ohio 45402
(937) 223-6003
(937) 223-8550 Fax
dmr@amfdayton.com
Attorney for Plaintiff
CERTIFICATE OF SERVICE
Thereby certify that on July 13, 2018, I electronically filed the foregoing with the Clerk
of the Court by using the ECF system which will send a notice of electronic filing to the
following:
Bradley J. Barmen (0076515)
Theresa A. Sherman (0090971)
Lewis Brisbois Bisgaard and Smith, LLP
1375 E. 9th Street, Suite 2250
Cleveland, OH 44114
T: 216-344-9422 F: 216-344-9421
Brod. Barmen@lewisbrisbois
Tera Sherman @ lew isbrisbois
Counsel for Defendant Berardi Partners, Inc.
/s/David M. Rickert
David M. Rickert (0010483)
12
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Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - Q28 IN THE COMMON PLEAS COURT OF FRANKLIN COUNTY, OHIO CIVIL DIVISION STEED HAMMOND PAUL, INC., CASE NO. 17-CV-001032 Plaintiff, : JUDGE JEFFREY M. BROWN v. BERARDI PARTNERS, INC., : PLAINTIFF’S MOTION FOR PARTIAL : SUMMARY JUDGMENT Defendant. Plaintiff Steed Hammond Paul, Inc. (“SHP”), by counsel and pursuant to Rule 56(A), Ohio Rules of Civil Procedure, hereby moves this Court for a Partial Summary Judgment in its favor on Defendant’s Third Affirmative Defense, on the ground that there is no genuine issue of material fact pertaining to such defense and, as pointed out in the Memorandum below, Plaintiff is entitled to judgment in its favor on such defense as a matter of law. Specifically, as set forth below, given the record in the TransAmerica Building Co., Inc. v. Ohio School Facilities Commission case, Ohio Court of Claims Case No. 2013-00349, the settlement which forms the basis for Plaintiff's contribution/indemnity claim in this action was entered into to avoid a greater liability to the Ohio School Facilities Commission and therefore was not volunteered by SHP. The facts on which this Motion and Memorandum are based are set forth in the testimony taken into evidence at the trial before the Ohio Court of Claims in the case captioned Jutte Electric, Ltd. v. Ohio Facilities Construction Commission Ohio Court of Claims Case No. 2014-00318, in which both SHP and Defendant Berardi Partners, Inc. (“Berardi”) were parties with full opportunity to cross examine such witnesses, making suchFranklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - Q29 testimony admissible under Evidence Rule 804(B)(1), plus the attached Affidavit of Joshua Predovich and additional documents cited in the Memorandum. Respectfully submitted, /s/David M. Rickert David M. Rickert (0010483) Attorney for Plaintiff AUMAN, MAHAN & FURRY 110 North Main Street, Suite 1000 Dayton, Ohio 45402 (937) 223-6003, (937) 223-8550 Fax dmr@amfdayion.com Attorney for Plaintiff MEMORANDUM On January 30, 2008, Plaintiff Steed Hammond Paul, Inc. (“SHP”) contracted with the Ohio School Facilities Commission (“OSFC”) to act as architect for the construction of academic and dormitory buildings on the campuses of the Ohio School for the Deaf and the Ohio State School for the Blind (Affidavit of Joshua Predovich, attach [hereinafter “Predovich Aff.”] par 4). In the course of preparing the statement of qualifications to compete for that project, SHP engaged Defendant Berardi Partners, Inc. (“Berardi”) to design the dormitory portion of the project, given Berardi’s expertise in design of multiple unit residential buildings (Predovich Aff., par. 3). After SHP was awarded the contract, Berardi took responsibility for the dormitory building design and dormitory-related construction administration activities as subconsultants of SHP. Berardi sealed all of the dormitory related drawings and responsible for responding to all dormitory-related RFIs during the course of construction (/d.). For its part, the OSFC hired Lend Lease as construction manager and contracted with TransAmerica Building Co., Inc. as a general trades contractor and Jutte Electric, Ltd. as electrical contractor (Predovich Aff., par. 5).Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - Q30 Construction of the project was problematic. Ultimately, these problems resulted in the filing of two lawsuits in the Ohio Court of Claims, TransAmerica Building Co., Inc. v. Ohio School Facilities Commission and Jutte Electric, Ltd. v. Ohio Facilities Construction Commission, referenced above. In each of these cases, the contractor sued the OSFC which in turn filed third-party complaints against Lend Lease and SHP, and SHP in turn filed a fourth- party claim against Berardi (Predovich Aff., par. 6 and Exhibit B attached thereto). In both cases, SHP alleged that: Any liability proven by the Third Party Plaintiff against SHP (which SHP denies) would be directly and proximately caused by breaches of Berardi of its contract and/or other duties owed to SHP regarding the subcontracted work, entitling SHP to contribution or indemnity against Berardi in the amount of such liability. (TransAmerica Building Co. Inc. v. Ohio School Facilities Commission, Fourth- Party Complaint, par. 5; Predovich Aff. par. 6 and Exhibit B). Any liability proven by the Third Party Plaintiff against SHP (which SHP denies) would be directly and proximately caused by breaches of Berardi of its contract and/or other duties owed to SHP regarding the subcontracted work, entitling SHP to contribution or indemnity against Berardi in the amount of such liability. (Jutte Electric Ltd. v. Ohio Facilities Construction Commission, Fourth-Party Complaint, par. 5; Predovich Aff. par. 6 and Exhibit B). The allegations are supported by the evidence: In the Jutte v. Ohio School Facility Commission case, Josh Predovich, the Project Manager for SHP, testified that Berardi was responsible for the design of the dormitories and SHP was in turn responsible for Berardi’s work, being SHP’s subconsultant (Predovich Trial Transcript excerpt previously filed with this Court, Vol. I, pp. 14-15). Berardi sealed the architectural drawings for the dormitories (Vol. I, p. 129). Predovich testified that despite the fact that the goal was to “prepare documents which will accurately and precisely convey the design to the prime contractors” (Vol. I, p. 13) Berardi failed to do so. Predovich described his interaction with Berardi as follows: “I was doing everything I could as the Project Manager forFranklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - Q31 the job to try to motivate my consultant.” (Vol. I, p. 43). When he would confront Berardi to get drawings issued or corrected, Berardi would respond that they were too busy (Vol. II, pp. 7-8). This lack of motivation may be explained by the fact that Berardi submitted inflated pay applications so that it received 100 percent of its fee with six to eight months left on the project (Vol. II, p. 25). As a result, conformed drawings incorporating the many changes in Berardi’s initial design documents were, for example, promised in December 2010 and were still not issued by May 2011 (Vol. II, p. 11). Based on this and other testimony, even SHP’s own independent expert, Rick Koehler (who was defending SHP’s position in the Jutte action), was forced to conclude that Berardi’s drawings were not accurate (Excerpt of Koehler’s testimony in the Jufte litigation previously filed with this Court, p. 12) and were not timely, taking, for example, two years to produce some of the drawings (pp. 12-13). Berardi was repeatedly late in responding to requests for information concerning its design documents (pp. 12-13) and the lack of completeness led to delays on the job (pp. 14-15). In these ways, Koehler testified that Berardi’s work fell below the required standard of care (p. 12) making SHP vicariously liable for these failings (pp. 17, 19). Koehler’s testimony about SHP’s liability for Berardi’s failings is borne out by the SHP/OSFC contract which provides: 1.1.7 Consultants The Architect may provide services through one or more consultants employed by the Architect (the “Consultants”); provided the Architect shall remain responsible to the Commission for all duties and obligations of the Architect under this Agreement... (Predovich Aff., par. 4 and Exhibit A attached thereto). In the TransAmerica litigation, the Ohio Court of Claims bifurcated the third and fourth party claims in that case and such matter proceeded to trial as between TransAmerica and the OSFC. The Referee in that case submitted his decision, a copy of which is attached to the Predovich Affidavit as Exhibit C. In TransAmerica, the Referee found that TransAmerica was entitled to damages from the primary defendant, OSFC in the sum of $1,837,404.35.Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - Q32 Both before and after the TransAmerica trial, mediation and settlement discussions were held to resolve the TransAmerica claim. As part of that process, Berardi was asked to, and did, participate in these settlement efforts (Predovich Aff., par. 8). Berardi did not offer sufficient funds to effect a settlement with TransAmerica (Id.). Accordingly, on July 28, 2016, before the third and fourth party claims in Transamerica were tried at a bifurcated trial, SHP agreed to settle the third-party claim with the OSFC with the payment of $971,700 (Predovich Aff, par. 9). The settlement resulted in the dismissal of the OSFC’s third-party claim with prejudice with the OSFC and in turn the dismissal without prejudice of the fourth-party claim (Settlement Agreement, attached to Predovich Affidavit, par. 9 and Exhibit D thereto). This action was then filed to obtain indemnity for the amounts paid to TransAmerica by SHP on Berardi’s behalf. In the course of mediating the instant lawsuit, questions arose concerning the legal viability of Berardi’s third affirmative defense which reads: Plaintiff's indemnification claim is barred by its voluntary settlement with TransAmerica and/or OSFC (Answer, Third Affirmative Defense) The central question posed in this Motion for Partial Summary Judgment is whether a settlement payment made prior to a court decision finding liability against the putative indemnitee is one made voluntarily so as to defeat a claim of indemnity or contribution. This question is one proper for resolution under Rule 56(A), Ohio Rules of Civil Procedure, which mechanism is available to test the viability of an affirmative defense (see Greenwood Rehabilitation Inc. v. Boxell (Lucas Cty., 2005) 2005-Ohio-2492; Beine v. Apria Healthcare (Franklin Cty. CP, 2010) 2010-Ohio Misc. LEXIS 5240; Nationwide Ins. Co. v. Marsh (Cuyahoga Cty., 1983) 1983 Ohio App. LEXIS 12951). Claims for indemnification or contribution are legally similar and are described as follows:Eranklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - Q33 Contribution, when it exists, is the right of a person who has been compelled to pay what another should have paid in part to require partial (usually proportionate) reimbursement and arises from principles of equity and natural justice. Indemnity, on the other hand, arises from contract, express or implied, and is the right of a person who has been compelled to pay what another should have paid to require complete reimbursement. (Harned v. Cregar (Trumbull Cty., 1999) 1999 Ohio App LEXIS 1229 at *8, citing Traveler’s Indemnity Co. v. Trowbridge (1975) 41 Ohio St. 2d 11; see also Smith v. Withrow (Butler Cty., 1991) 1991, Ohio App LEXIS 6308). As noted above, indemnity may be based on an implied contract: A right to indemnity arises from contract, either express or implied, and is the right of a person who has been compelled to pay what another should have paid to require complete reimbursement. It is undisputed that there is no express contract between National on the one hand and OSFC, Waverly, or AJS on the other. Therefore, the dispositive question under National’s third assignment of error is whether National has a potential claim based on an implied contract of indemnity... An implied contract of indemnity should be recognized in situations involving related tortfeasores, where the one committing the wrong is so related to a secondary party as to make the secondary party liable for the wrongs committed solely by the other. Relationships which have been found to meet this standard are the wholesaler/retailer, abutting property owner/municipality, independent contractor/employer, and master/servant. (Waverly City School District Board of Education v. Triad Architects, Inc. (Franklin Cty., 2008) 2008-Ohio-6917 at *P33, 35). Under the law of indemnity and contribution, one is not entitled to reimbursement if the putative indemnitee/contributee voluntarily made the payment on behalf of the indemnitor/contributor. (Farm Bureau Mutual Auto Ins. Co. v. Buckeye Union Casualty Co. (1946) 147 Ohio St. 79; Aetna Casualty & Surety Co. v. Buckeye Union Casualty Co. (1952) 157 Ohio St. 385; Landmark Ins. Co. v. Cincinnati Ins. Co. (Portage Cty., 2001) 2001-Ohio-4311). Courts both in Ohio and elsewhere have defined who is a “volunteer” for a contribution or indemnity purposes as follows: Generally speaking, the party making payment is a volunteer if, in so doing, he has no right or interest of his own to protect, and acts without obligation, moral or legal, and without being requested by anyone liable on the obligation. (AetnaFranklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - Q34 Casualty and Surety Co. v. Buckeye Union Casualty Co. (1952) 157 Ohio St. 385 at 392-393) A volunteer settlor has been defined as a mere stranger or intermeddler who has no interest to protect and no moral or legal obligation to pay. (Mullin Lumber Co. v. Chandler Cal. App., 1986) 1986 Cal. App. LEXIS 2066. Similarly, the court in Judge v. Allentown and Sacred Heart Hospital Center (Pa. Commw. 1985) 496 A.2d 92 defined a volunteer as “one who, having no interest to protect and without a moral or legal obligation to pay, discharges the debt of another.” (496 A.2d at 96); Accord: Landmark Insurance Co. v. Cincinnati Insurance Co., supra; Grinnell Mutual Reinsurance Co. v. Center Mutual Insurance Co. (N.D. 2003) 2003 N. D. LEXIS 47; St. Paul Fire and Marine Insurance Co. v. Michelin (Il. App. 1973) 298 N.E. 2d 289; Nogacz v. Procter Gamble Manufacturing Co. (Ill. App. 1975) 1975 Ill App. LEXIS 3507; Coco v. Jaskunas (NH Super 2008) 2008 N.H. Super LEXIS 5. For example, in the Ohio case of Landmark Insurance Co. v. Cincinnati Insurance Co., supra, multiple insurance companies were obligated to pay portions of the potential liability in that case. When a single insurance company paid the entire amount of the settlement, which it under no circumstances could be forced to pay in full, it was deemed to be a volunteer and not entitled to indemnity or contribution. In the instant case, given Berardi’s position as a subcontractor of SHP and the above-quoted contract provisions of the OSFC/SHP contract, SHP was at all times obligated in the first instance to pay the full amount of any liability created by Berardi. A settling party is entitled to contribution or indemnity without the need to litigate the subject claims to conclusion. Rowley Plastering Co. v. Marvin Gardens Development Corp. (Arizona App., 1985) 883 P.2d 449; N.E. Finch Co. v. R.C. Mahon Co. (Ill. App., 1977) 370Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - Q35 N.E. 2d 160; Samuelson v. Chicago, Rock Island and Pacific Railroad Co. (Minn, 1970) 178 N.W. 2d 620. As the court stated in N.E. Finch, supra: Without question, the law favors amicable settlement between litigants. In furtherance of this policy, rules should not be encouraged which allow the defendant no alternative but to litigate the question of his liability to a plaintiff in order to preserve his cause of action over against a prospective indemnitor. It is therefore unnecessary for a party seeking indemnity to obtain a judicial determination that it is liable to an injured party . . . so long that in settling the principal action the prospective indemnitee is responding to a reasonable anticipation of personal liability. (370 N.E. 2d at 162-163). Accord: Grinnell Mutual Reinsurance Co. v. Center Mutual Insurance Co., supra; Lemmer v. IDS Properties, Inc. (Minn, 1980) 304 N.W. 2d 864; St. Paul Fire and Marine Insurance Co. v. Michelin, supra. The Court in St. Paul noted: Whether the legal principal upon which the third party complaint is based is contribution or indemnity, in either case the fact that a party against whom a legal liability is asserted made a fair settlement in good faith without any judgment having been entered against him does not prevent him from seeking to enforce a claim for reimbursement against another person primarily responsible for the injuries suffered by the plaintiff. (298 N.E. 2d at 292). Issues of the reasonableness of the amount of settlement only affect the amount recoverable under a contribution or indemnity claim, and not the right of recovery itself. Nogacz v. Procter Gamble Manufacturing Co., supra; St. Paul Fire and Marine Insurance Co. v. Michelin, supra. Interestingly, the right of indemnification or contribution exists even if the settled claim is later held to be invalid. Grinnell Mutual Reinsurance Co. v. Center Mutual Insurance Co., supra; Lemmer v. IDS Properties, Inc., supra; Coco v. Jaskunas, supra. In this case, as pointed out above, it was virtually undisputed that at all times Berardi acted as a subcontractor/subconsultant for SHP, and that Berardi fell below its required standard of care. Although the above-cited testimony was present in the Jutte litigation, based on similar testimony presented at the TransAmerica trial in the first half of that case’s bifurcated trial,Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - Q36 between TransAmerica and Ohio School of Facilities Commission, the Referee decided as follows, inter alia: It is hard to appreciate just how confusing the plans were, but a good example is revealed in an email from LL/Keith to SHP/Predovich on July 27, 2011, over three months after TA had mobilized to the job site (TA-0410), referring to a recent inspection, ‘[H]e is not going to sign off or approve any further inspection requests until revised/updated/stamped drawings are available for review.’ This was in reference to the DIC inspector’s confusion over the drawings. (Referee’s Decision, p. 13). Weeks before TA signed the Contract it requested revised and complete drawings and SHP/Berardi promised to issue such drawings, including all changes to date (TA-0164). These changes were extensive and consisted of well over 100 specific changes to the drawings, substantial changes to the technical specifications and over 150 pre-bid RFIs, many of which affected the drawings. While the bid set of plans may have been sufficient upon which to submit a bid, they were not full and accurate nor were the details easily understood so as to be sufficient for construction. To the contrary, the drawings were described by various witnesses, including representatives of OSFC, SHP and LL, as flawed, useless, worthless, trash, confusing and any number of other adjectives, none of which are synonymous with unambiguous, full, accurate, or easily understood. (Decision, p. 14). The Referee acknowledges that construction drawings and specifications are never perfect and the RFI process is one of several processes designed specifically in recognition of this inevitable imperfection. However, the state of the bid drawings was, by accounts of all of the witnesses who testified credibly, unacceptable, incomplete, and not ideal. (Decision, p. 14). Each time SHP issued revised construction drawings to LL, which it supposedly captured the hundreds of changes and RFIs, they were reviewed by LL only to discover that they were not correct and were confusing. This happened at least four times over the course of six months, starting in December 2010. In other words, SHP and its consultants, who developed the plans and specifications, and whose design generated the hundreds of changes over the previous year, were unable to consolidate these hundreds of changes and clarifications into a set of drawings that was complete and accurate enough for LL to issue to the contractors, including the TA. (Decision, pp. 16-17). The impact of a lack of full and complete drawings of TA’s work was pervasive and continuous throughout construction causing substantial inefficiencies and disruptions to TA’s work. (Decision, p. 18).Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - Q37 The reports (TA-1200 and TA-1201) and testimony of McCarthy were persuasive in addressing the impacts experienced by TA during construction and in showing how OSFC, through its agents SHP and to a lesser extent LL, delayed TA’s work. (Decision, p. 25). Looking at these binders, it is hard to imagine how TA managed to complete its tasks. TA’s work was impacted throughout construction not only because of the confusing drawings, but also because of the lack of timely answers to questions about the drawings and the specifications. (Decision, p. 36). These drawings were never approved by DIC and these are the drawings that LL insisted that TA use to construct the dorms. As it turns out, apart from not being reviewed and approved by DIC, they were incomplete, not coordinated, full of mistakes or omissions and did not incorporate hundreds of previous RFIs and other addenda items generated during bid number one. (Decision, p. 50). SHP had ongoing problems with Berardi trying to respond to the project’s needs. For example, SHP/Predovich and Berardi/Matias exchanged a series of emails starting on December 6, 2010 (TA-0176/1-3) where Matias from Berardi promised to have the OCT 2010 BID SET updated by mid-December. Berardi attempted to produce an updated set of drawings in mid-December, but they were not acceptable to LL. LL’s then superintendent, Joe Rice, described them as useless drawings, garbage and useless trash. (TA-0194) (p. 51). Berardi fell below the standard of care for architects in terms of timeliness and completing construction drawings, obtaining a permit, and the quality of the documents. When asked to apportion the responsibility for the design problems as between SHP and Berardi, Koehler testified that in his opinion if Berardi ‘had not been involved in this project, none of us would be sitting in this room.’ Koehler was also critical of the timeliness of Berardi’s performance as it related to responding to DIC’s comments, producing updated construction drawings and the inaccuracies in the details of the construction drawings produced by Berardi. (Decision, p. 52). The design was in such a state of confusion and disarray that the architect itself was never able to issue a comprehensible set of construction drawings to LL’s satisfaction so that they could be issued to the contractors. (Decision, p. 54). The sequence of work in the schedule changed constantly and was driven more by design problems than contractor problems. (Decision, p. 55). SHP’s consultant, Berardi, was routinely dilatory in delivering a buildable design and in fact, never delivered one in acceptable form for issuance to TA by LL. (Decision, p. 138). 10Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - Q38 As a result of the foregoing factual findings, the Magistrate concluded: While OSFC bears the primary legal responsibility for TA’s damages as the owner of the Dorm Project, from the evidence as submitted at this trial, TA’s losses were, for the most part, caused by the conduct of its authorized agents, LL and SHP, and by SHP’s consultant, Berardi. (Decision, p. 138). Based on the foregoing, the Referee awarded damages to TA in the sum of $1,837,404.35 plus pre-judgment interest (Decision, p. 124). The Referee’s decision pertaining to Berardi’s misconduct (and therefore, the vicarious liability of SHP for such conduct) is set forth more fully in the Referee’s decision, a copy of which is attached to the Predovich Affidavit as Exhibit C. Had SHP not settled the third party claim, it would have been required to attempt to defend against OSFC’s third party claim before a Magistrate who had already opined that Berardi’s failings were a cause of TransAmerica’s 1.8 million dollar loss in the first phase of that trial. Settling that claim for $975,000 was, in the words of the Court in N.E. Finch Co. v. R.C. Mahon Co., supra, a response to “a reasonable anticipation of personal liability.” Under the above-cited authority, SHP did not need to litigate its claim against Berardi in the TransAmerica action to settle the claim and seek indemnity or contribution from Berardi. Berardi’s third affirmative defense, which purports to require completed litigation on which to 11Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - Q39 base a contribution or indemnity claim is without legal basis, and SHP is entitled to judgment to that effect as a matter of law. Respectfully submitted, /s/David M. Rickert David M. Rickert (0010483) Attorney for Plaintiff AUMAN, MAHAN & FURRY 110 North Main Street, Suite 1000 Dayton, Ohio 45402 (937) 223-6003 (937) 223-8550 Fax dmr@amfdayton.com Attorney for Plaintiff CERTIFICATE OF SERVICE Thereby certify that on July 13, 2018, I electronically filed the foregoing with the Clerk of the Court by using the ECF system which will send a notice of electronic filing to the following: Bradley J. Barmen (0076515) Theresa A. Sherman (0090971) Lewis Brisbois Bisgaard and Smith, LLP 1375 E. 9th Street, Suite 2250 Cleveland, OH 44114 T: 216-344-9422 F: 216-344-9421 Brod. Barmen@lewisbrisbois Tera Sherman @ lew isbrisbois Counsel for Defendant Berardi Partners, Inc. /s/David M. Rickert David M. Rickert (0010483) 12