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Novum Structures, LLC v. Larson Engineering, Inc.

United States District Court, E.D. Wisconsin

April 30, 2019

NOVUM STRUCTURES, LLC, Plaintiff,
v.
LARSON ENGINEERING, INC. and IRONSHORE SPECIALTY INSURANCE CO., Defendants.

          REPORT AND RECOMMENDATION THAT THE PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT BE DENIED

          WILLIAM E. DUFFIN, U.S. Magistrate Judge.

         1. Background and Facts

         With its granite exterior and five-story Corinthian columns, Northwestern Mutual's neoclassical headquarters has been an imposing Milwaukee landmark since 1914. Over the subsequent century the company expanded its footprint with the construction of additions and adjacent buildings. In 2014 Northwestern Mutual undertook a project to significantly alter its Milwaukee campus. The project included the demolition of a 16-story building and the construction of a 32-story tower in its place. The project also included enclosing the courtyard of the original headquarters building with a glass covered atrium supported by a steel structure.

         Novum Structures, LLC was hired to build the glass enclosed atrium. (ECF No. 32, ¶ 8.) As it had done many times since at least 1999, Novum called on Larson Engineering, Inc. to assist in the project. (ECF No. 32, ¶ 10.) The two companies had no written contract (ECF Nos. 32, ¶ 13; 35-1, ¶ 12), and they now dispute the nature of Larson's engagement. Novum contends Larson was the “engineer of record” on the atrium project. (ECF No. 32, ¶ 12.) Larson asserts that it was hired merely to conduct a peer review of Novum's design drawings to ensure they conformed to the local building code. (ECF Nos. 32, ¶ 12; 35-1, ¶ 21.)

         In December 2014 Novum prepared a set of design drawings and supporting calculations for the atrium's steel structure. (ECF No. 32, ¶ 15.) Novum sent the documents to Larson engineer Kevin Schultz, who reviewed them and responded with comments and questions. (ECF No. 32, ¶¶ 16-17.) After his comments and questions were resolved by Novum, Schultz arranged to have his colleague, Kesh Ramdular, stamp (sometimes called seal) the drawings and calculations. (ECF No. 32, ¶ 18.) According to Novum, stamping is the process by which the engineer of record, after reviewing the structural design documents, affirms that the design of the structure is adequate and safe. (ECF No. 32, ¶ 23.) Larson disputes that it was the engineer of record; it says that the stamp merely reflected Ramdular's conclusion that the drawings met the local building code. (ECF No. 31 at 2.) Ramdular stamped the drawings because, unlike Schultz, he was licensed in Wisconsin as a professional engineer. (ECF No. 32, ¶ 19.)

         The drawings that Larson reviewed did not specify the sort of weld that would be used with respect to the roof trusses where they connected to the edge beam. (ECF No. 32, ¶ 34.) Novum designed those welds itself and had another company fabricate the trusses and beams in accordance with drawings that Novum did not provide to Larson for its review. (ECF No. 35-1, ¶¶ 9-10, 39.)

         In January 2016, during construction, ice built up in the connection boxes, “which are locations where certain trusses connect to the edge beams.” (ECF No. 35-1, ¶ 9.) The ice build-up led to cracks in the welds. (ECF No. 35-1, ¶ 27.) Novum does not claim that Larson was negligent for failing to include a weld design that would have sustained the ice pressures (ECF No. 35 at 2, 10); it appears undisputed that any weld design would have cracked given the ice infiltration (ECF No. 31 at 8-9, 17-19). The ice build-up was merely fortuitous in that it spurred an investigation which revealed that the design included welds that were insufficient for the loads. (ECF Nos. 32, ¶ 39; 35 at 2, 10-11.)

         Novum filed this action alleging Larson was negligent and breached its contract with Novum when it stamped “plans that called for truss welds that were insufficient to meet the structural demands of the building to be constructed.” (ECF No. 1, ¶¶ 19, 24.)

         2. Summary Judgment Standard

         “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A fact is “material” only if it “might affect the outcome of the suit” and a dispute is “genuine” only if a reasonable factfinder could return a verdict for the non-movant. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248 (1986). In resolving a motion for summary judgment, the court is to “construe all evidence and draw all reasonable inferences from the evidence in” favor of the non-movant. E.Y. v. United States, 758 F.3d 861, 863 (7th Cir. 2014) (citing Gil v. Reed, 535 F.3d 551, 556 (7th Cir. 2008); Del Raso v. United States, 244 F.3d 567, 570 (7th Cir. 2001)). “The controlling question is whether a reasonable trier of fact could find in favor of the non-moving party on the evidence submitted in support of and [in] opposition to the motion for summary judgment.” White v. City of Chi., 829 F.3d 837, 841 (7th Cir. 2016).

         3. Analysis

         3.1. Negligence

         Under Wisconsin common law, a professional such as an engineer has a duty to exercise “the standard of care ordinarily exercised by the members of that profession.” Milwaukee Partners v. Collins Eng'rs, Inc., 169 Wis.2d 355, 362, 485 N.W.2d 274, 277 (Ct. App. 1992) (quoting A.E. Inv. Corp. v. Link Builders, Inc., 62 Wis.2d 479, 489, 214 N.W.2d 764, 769 (1974); Helmbrecht v. St. Paul Ins. Co., 122 Wis.2d 94, 111-12, 362 N.W.2d 118, 128 (1985)); see also Shipman v. State, 43 Wis. 381, 390 (1877); Restat 2d of Torts, § 299A (1979). But that does not mean that an engineer's drawings must be perfect and free from mistakes or defects. Shipman, 43 Wis. at 390-91; see also Smith v. Walsh Constr. Co. II, LLC, 95 N.E.3d 78, 90 (Ind.Ct.App. 2018) (quoting Mayberry Cafe, Inc. v. Glenmark Constr. Co., 879 N.E.2d 1162, 1173 (Ind.Ct.App. 2008));

         According to Novum, by stamping the drawings Novum provided to it, Larson acknowledged that it was the engineer of record. As a result, it bore overall responsibility for the design of the atrium. (ECF No. 26 at 12 (all citations reflect the ECF pagination).) “A n engineer of record like Larson must review and approve the shop and erection drawings for a steel structure, including any weld connections and their effects on the structural system at issue, as the engineer of record has responsibility for the adequacy and safety of the entire structure, no matter who designed the components and connections of the structure…. Passively reviewing only the drawings Novum submitted did not suffice.” (ECF No. 35-1, ¶ 10.) This ...


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