Jacobsen Construction Company, Inc. v. FS Jackson Hole Development Company, LLC (LASC Case #BC312011)

Jacobsen Construction Company, Inc. v. FS Jackson Hole Development Company, LLC. (LASC Case #BC312011).  Matter proceeds to judicial reference before retired Judge Olson. Jacobsen Construction Company, Inc. (“Jacobsen”) files suit against FS Jackson Hole Development Company, LLC (“FSJH”) for non-payment relating to the Four Seasons resort in Jackson Hole Wyoming.  FSJH cross-complains for construction and design deficiencies.  Jacobsen subsequently cross-complains against numerous subcontractor parties, including our client, Bartile Roofs, Inc. (“Bartile”).  Bartile installed the roof at the hotel which has approximately 150,000 square feet of roof surface and almost a mile (5,200 lineal feet) of roof edge.FSJH produces a cost of repair which includes approximately $6 million for an entire re-roof.  After about four years in litigation, FSJH settles the construction defect claims for $3,070,000 and the design deficiency claims for $1,900,000.  Of this amount, Jacobsen paid $1,265,000 to settle the roofing construction defect claims.  The only parties remaining are Jacobsen and Bartile.  Jacobsen’s pre-trial demand to Bartile is $2 million (consisting of the $1.265 million it paid to settle the roofing construction claims and approximately $700K in attorneys’ fees allocated to Bartile).  We proceed to trial before retired Judge Olson.A key issue in the case is which contract(s) are applicable.  The Master Subcontract Agreement (“MSA”) between Jacobsen and Bartile contains a Type I indemnification provision.  (Quite frankly, it is the strongest indemnification provision that I have ever seen).  Judge Olson ultimately found that the MSA was not executed by either party.  However, the Subcontract Work Order (SWO) incorporates by reference the MSA.  There are two different SWOs, and the difference is huge.  The SWO that Jacobsen argues is the applicable agreement is signed and dated by both parties on 11/1/02 and specifically incorporates by reference the MSA by date and MSA number.  The SWO which we contend is the correct one, does not reference any MSA by specific date, but does identify a MSA number in a small box on the first page of the document.  Additionally, it should be pointed out that we are missing the last two pages (including the signature page) to our SWO.  In the end, Judge Olson found that our SWO was the applicable SWO and that the incorporation by reference language was not specific enough to incorporate the MSA.  (Note:  Judge Olson found that Jacobsen must have forged their version of the SWO).  As such, Judge Olson found that there was no express indemnity provision in existence between Jacobsen and Bartile.

That left only equitable indemnity and Judge Olson did determine that Jacobsen is entitled to equitable indemnity from Bartile based on comparative fault.  There were a total of 22 roofing defect allegations asserted in the underlying action.  One of the primary allegations was that the roof edge was improperly constructed which required a complete roof edge repair (which repairs were actually performed).  Judge Olson found for Bartile on each and every issue.  In summary, Judge Olson found that Bartile was not negligent in the performance of its contract, and therefore, Bartile has no liability to Jacobsen on their claim for indemnity.