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Frerichs Construction Company, Inc. v. Minnesota Counties Insurance Trust

July 29, 2003

FRERICHS CONSTRUCTION COMPANY, INC., RESPONDENT,
v.
MINNESOTA COUNTIES INSURANCE TRUST, APPELLANT,
v.
JULIAN M. JOHNSON CONSTRUCTION CORPORATION, ET. AL., THIRD-PARTY DEFENDANTS,
v.
BUETOW & ASSOCIATES, INC., THIRD-PARTY DEFENDANT AND THIRD-PARTY PLAINTIFF,
v.
FISCHER ENGINEERING, INC., ET AL., ADDITIONAL THIRD-PARTY DEFENDANTS,
v.
TWIN CITY GLASS CONTRACTORS, INC., INTERVENOR.



Ramsey County District Court File No. C4-01-11190

Considered and decided by Randall, Presiding Judge, Schumacher, Judge, and Willis, Judge.

SYLLABUS BY THE COURT

The district court properly granted summary judgment in favor of respondent where there was insufficient evidence available in the record to create a fact question whether respondent believed asbestos was present at the construction site, before the asbestos was pointed out to respondent.

The opinion of the court was delivered by: Randall, Judge

Affirmed

OPINION

Respondent construction company, which had contracted with appellant to construct a building, sued appellant for damages resulting from a breach of contract. Appellant counterclaimed, alleging that respondent had breached the contract by failing: (1) to report the presence of asbestos and (2) to promptly cease operations upon discovery of the asbestos, contending that it incurred expenses in abating the asbestos from the site and from a pit where respondent had placed it. The district court granted summary judgment to respondent on the counterclaim. Appellant argues that there was a jury question as to whether respondent "reasonably believed" that asbestos was present, which would have required it to stop excavation. We affirm.

FACTS

The facts of this case concern a site known as the Empire Builder Industrial Park. This site has had various uses over the years, including uses as an asphalt plant, a foundry, and an auto-salvage yard. In 1985, the St. Paul Port Authority (SPPA) purchased the site along with adjoining land to re-develop it into the Empire Builder Industrial Park. Over the course of the project, various buildings were demolished. Part of this process involved the removal of asbestos insulation.

In 1993, the SPPA hired American Engineering and Testing (AET) to conduct environmental assessments of the site, including soil borings and soil testing. Upon performing a Phase I evaluation, AET did not find any contamination of the soil. Although subsequent tests revealed that the site's soil was contaminated with diesel-range organics and volatile organic compounds, no asbestos was detected. On April 14, 1999, based on AET's numerous environmental assessments, the Minnesota Pollution Control Agency (MPCA) issued a "No Further Action" letter to the SPPA, stating SPPA need not take any further action to remediate groundwater and soil contamination for the site. This letter cleared the way for construction to begin on the site. Appellant Minnesota Counties Insurance Trust (MCIT) purchased the site shortly thereafter.

In November 1999, AET completed an excavation contingency plan that was part of a conditional purchase agreement between appellants and the SPPA to offset the cost of geotechnical soil-correction work in the area where the building was to be constructed. The contingency plan identified steps the general contractor should take to detect contamination during the course of excavation. But, the contingency plan only addressed detecting oily or stained soil, and not asbestos.

On May 12, 2000, appellant entered into a contract with respondent, Frerichs Construction Company, Inc., to be the general contractor for a project to construct a new office building. The pertinent part of the contract states in Article 10.1.2 that:

In the event the Contractor encounters on the site material reasonably believed to be asbestos or polychlorinated biphenyl (PCB) which has not been rendered harmless, the Contractor shall immediately stop Work in the area affected and ...


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