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SBA Network Services, Inc. v. Telecom Procurement Services

July 20, 2006

SBA NETWORK SERVICES, INC., PLAINTIFF,
v.
TELECOM PROCUREMENT SERVICES, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Arthur J. Schwab United States District Judge

Electronically Filed

Memorandum Opinion

This is an action for breach of contract. Plaintiff, SBA Network Services, Inc. (SBA) alleges that defendant Telecom Procurement Services, Inc. (TPS), breached a subcontract agreement when it failed to provide indemnification for a fire to a cellular telecommunication allegedly caused by the negligence of sub-subcontractors TNT Communications (TNT), Gerald Kerschner (Kershner), and Rick Rollert (Rollert). Plaintiff seeks damages for replacement of the tower in the amount of $237,369.97, plus attorney's fees and costs. Pending before this Court are the parties cross-motions for summary judgment. After careful consideration, and for the reasons that follow, this Court will grant plaintiff's motion for summary judgment (doc. no. 13) against defendant TPS as to liability, will deny plaintiff's motion for summary judgment (doc. no. 13) as to damages at this time, and will deny defendant TPS's motion for summary judgment (doc. no. 15) as to the breach of contract claim, and will grant said motion as to the negligence claims.

I. Facts

The facts may be fairly summarized as follows: On October 9, 2003, a fire occurred at a cellular telecommunications tower which was owned by Sprint. Cingular Wireless (Cingular) contracted with Bechtel Corporation (Bechtel) to add Cingular's capacity at various cellular tower sites in New York state, including the Catskill, New York site, where the subject fire occurred. Bechtel then contracted with SBA as well as TPS for work at these sites. TPS had submitted a bid to Bechtel for work on the cellular tower at the Catskill site, but Bechtel awarded the sub-contract to SBA.

SBA is a Florida corporation, but it does business in New York state. TPS is a New York corporation with a principal of business in New York, and in addition TPS performs work in other states, including Pennsylvania. Defendant TNT is a sole proprietorship with its principal place of business in Iowa, and defendants Kershner and Rollert, are residents of Iowa and are the owners of TNT.

The Catskill work required the addition of one (1) entry port into the cellular tower near its base and three (3) exit ports near the top of the tower, which TPS proposed in its "Firm Fixed Quotation" to SBA on September 29, 2003 for the sum $2,300.00. As part of the "Firm Fixed Quotation" TPS also proposed work on another site (Saugerties, New York) for $2,000.00

On October 1, 2003, Jackie Donahue, in her capacity as a contract expeditor for SBA, sent a facsimile to TPS, entitled "Quotation Reference", which consisted of four (4) pages. The first page was a fax cover sheet indicating the total number of pages faxed as four, and stating "Here is the signed contract. Please accept this as your notice to proceed." The second page was a return copy of the first page of the "Pricing Proposal" ("Firm Fixed Quotation") which had been sent by TPS to SBA on September 29, 2003 ("[TPS] is pleased to provide the following formal price proposal valid for 30 days. . . ") The third page was the second page of the TPS Pricing Proposal, which was signed by Jackie Donahue. And, the fourth page was a return copy of the appendix page to the TPS pricing proposal which contained a brief statement of the work to be performed by TPS.

The next day, October 2, 2003, a "Purchase Order Subcontract Agreement," was signed and dated by SBA representative Victor Lizardo, and also signed and dated by an authorized representative of TPS, Patricia Nelson, which incorporated the "Firm Fixed" pricing of the October 1, 2003 document - $4,300.00. The "Purchase Order Subcontract Agreement," further stated: "The selected following attachments are incorporated into this Subcontractor Agreement." Exhibit A - "Subcontract Agreement," Exhibit B - "General Conditions for Construction Subcontracts," Exhibit C - "Minimum Safety Requirement For Contract Work Form 4002," and Exhibit D - "Supplement Equal Employment Opportunity Form 4079."

Notably, Section 29.0 of the "General Conditions for Construction Subcontracts" (Exhibit B), which was incorporated into the "Purchase Order Subcontract Agreement," states as follows: Subcontractor shall protect, hold free and harmless, defendant and indemnify Contractor and Owner (including its agents and employees) for all indemnity, penalties, costs, losses, damages, expenses, causes of action, claims or judgments (including attorneys' fees) resulting from injury or death sustained by any person (including Subcontractor's employees) or damage to property of any kind, which injury, death or damages arises out of or is in any way connected with the performance of work under this contract. Subcontractor's aforesaid indemnity and save harmless agreement shall apply to any acts or omissions, willful misconduct or negligent conduct, whether active or passive on the part of Contractor, Owner or Subcontractor or its agents, lower tier subcontractors or employees: except that said agreement shall not be applicable to injury, death or damage to property arising from the sole negligence or willful misconduct of Contractor, Owner, his agents, servants or independent contractors (other than Subcontractor) who are directly responsible to Contractor or Owner.

On October 4, 2003, subcontractor TPS contracted with sub-subcontractor TNT and entered into a Purchase Order Agreement in the amount of $3,500.00 for the work at the Catskill and Saugerties sites.

On the morning of October 9, 2003, Joseph Rains, an SBA superintendent arrived at the Catskill site and met with defendants, Kershner and Rollert, who were the employees/owners of TNT. Only Rains had access to the compound at the Catskill site and he unlocked the gate to the compound area and gave TNT access to it. The parties dispute whether Rains was the supervisor ("was in charge of") TNT employees Kershner and Rollert on the date of the fire. Doc. No. 22, at 12.

Nonetheless, at the time of the fire, the only persons who were present were TNT employees/owners Kershner and Rollert, and SBA superintendent Rains. Although section 19.0 of the "General Conditions for Construction Subcontracts" (incorporated into the "Purchase Order Subcontract Agreement") required TPS to have a supervisor on site, because Terry Pennell of TPS informed SBA that he would not be onsite, Rains decided to go to the site, and he listed himself as the supervisor of the site on the form he signed (which was required by Bechtel) on October 9, 2003. However, according to plaintiff, TPS's failure to have a supervisor on site as required by section 19.0 of the Purchase Order Subcontract Agreement between SBA and TPS required Rains to complete the paperwork required by Bechtel. Prior to the fire, Kershner and Rollert indicated to Rains that they would cut and install the entry (bottom) port on October 9, 2003, but they would finish the job by installing the three (3) exit (top) ports the next day.

At some point during Kershner's performance of work on the cellular tower, Rains left the site and took Rollert to the local hardware store to purchase grinding wheels. After escorting Kershner to the store, Rains then left the Catskill site, and when he returned later on that day, as he was driving into the area, Rains noticed smoke coming out of the tower. He tried to call Todd D'Angelo of SBA, Summer Pieczonka of Bechtel, along with 911, and he ultimately notified the state police of the fire. Although attempts were made by TNT employees to extinguish the fire before substantial structural damage occurred, the fire caused the tower to bend and look as it if was going to fall. Because TPS supervisors were not present, Rains completed a sixty-second and sixty-minute incident report, as was required by Bechtel. Ultimately, the tower was damaged beyond repair and plaintiff was required to pay for the costs of replacement of the tower after the fire and according to plaintiff, the costs for replacement was $237,369.97.

Plaintiff filed the instant action alleging that defendant TPS breached the "Subcontract Order Purchase Agreement" when it failed to provide indemnification for the fire caused by the alleged negligence of its agents/sub-subcontractors TNT, Kershner and Rollert (Count I). Plaintiff also brought a claim for negligence (Count II) against defendant TPS, as well ...


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