Dominion Resources Services Inc. v. Alstom Power, Inc.

          RULING RE: CROSS-MOTIONS FOR SUMMARY JUDGMENT AND DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS (DOC. NOS. 129, 131, 132, 134)

          Janet C. Hall, United States District Judge

         Plaintiffs, Dominion Resources Services, Inc., Dominion Resources, Inc., Dominion Energy, Inc., Dominion Generation Corporation, and Dominion Technical Solutions, Inc. (collectively “Dominion” and “plaintiffs”), bring this action concerning alleged breach of a contract against defendant Alstom Power, Inc. (“Alstom”). See Amended Complaint (“Am. Compl.”) (Doc. No. 45) at 1.

         Before the court are the parties' Cross-Motions for Summary Judgment. See Motion for Summary Judgment on Phase I (“Pl.'s MSJ”) (Doc. No. 129); Motion for Summary Judgment Dismissing Plaintiffs Breach of Contract Claims (“Def.'s First MSJ”) (Doc. No. 131); Motion for Summary Judgment Dismissing Plaintiffs Claims as Barred by the Statute of Limitations (“Def.'s Second MSJ”) (Doc. No. 132); and Motion for Summary Judgment on the Pleadings and Alternative Motion for Summary Judgment (“Def.'s Third MSJ”) (Doc. No. 134).

         For the reasons stated below, the Motions for Summary Judgment are granted in part and denied in part, and the Motion for Judgment on the Pleadings is denied.

         I. STANDARD OF REVIEW

         A. Summary Judgment

         On a motion for summary judgment, the burden is on the moving party to establish that there are no genuine issues of material fact in dispute and that the party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); Wright v. N.Y. State Dep't of Corr., 831 F.3d 64, 71-72 (2d Cir. 2016). Once the moving party has met its burden, the nonmoving party “must set forth specific facts showing that there is a genuine issue for trial, ” Anderson, 477 U.S. at 256, and present “such proof as would allow a reasonable juror to return a verdict in [its] favor, ” Graham v. Long Island R.R., 230 F.3d 34, 38 (2d Cir. 2000). “An issue of fact is genuine and material if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Cross Commerce Media, Inc. v. Collective, Inc., 841 F.3d 155, 162 (2d Cir. 2016).

         In assessing the record to determine whether there are disputed issues of material fact, the trial court must “resolve all ambiguities and draw all inferences in favor of the party against whom summary judgment is sought.” LaFond v. Gen. Physics Servs. Corp., 50 F.3d 165, 175 (2d Cir. 1995). “Where it is clear that no rational finder of fact ‘could find in favor of the nonmoving party because the evidence to support its case is so slight,' summary judgment should be granted.” F.D.I.C. v. Great Am. Ins. Co., 607 F.3d 288, 292 (2d Cir. 2010) (quoting Gallo v. Prudential Residential Servs., Ltd. P'ship, 22 F.3d 1219, 1224 (2d Cir. 1994)). On the other hand, where “reasonable minds could differ as to the import of the evidence, ” the question must be left to the finder of fact. Cortes v. MTA N.Y. City Transit, 802 F.3d 226, 230 (2d Cir. 2015) (quoting R.B. Ventures, Ltd. v. Shane, 112 F.3d 54, 59 (2d Cir. 1997)).

         When, as here, both parties come before the court on cross-motions for summary judgment, the court is not required to grant judgment as a matter of law for either side. See Ricci v. DeStafano, 530 F.3d 88, 109-10 (2d Cir. 2008). “Rather the court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.” Id. at 110.

         B. Motion for Judgment on the Pleadings

         In deciding a Motion for Judgment on the Pleadings, pursuant to Federal Rule of Civil Procedure 12(c), courts “employ[ ] the same standard applicable to dismissals pursuant to Fed.R.Civ.P. 12(b)(6).” Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir. 2010) (alterations in original). Therefore, courts “accept all factual allegations in the complaint as true and draw all reasonable inferences in [plaintiffs'] favor.” Id. To survive a Motion for Judgment on the Pleadings, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Id.

         II. FACTS^[1]

         Dominion and Alstom executed a contract titled “Amended and Restated Alliance Agreement” (“Alliance Agreement”) on February 1, 2005. Plaintiffs' Local Rule 56(a)(2) Statement of Material Facts in Opposition to Motion for Summary Judgment (“Pl. SOF”) ¶ 1. The Alliance Agreement applied to certain services provided by Alstom related to the construction, operation, and maintenance of Dominion's power generation facilities. Id. ¶ 2. Dominion and Alstom agreed that the Alliance Agreement would be construed in accordance with Virginia law. Id. ¶ 3. The Alliance Agreement's General Terms and Conditions were Dominion's standard terms and were prepared by Dominion. Id. ¶ 4. Section 5 of the Alliance Agreement contained the parties' rights and obligations as to one another regarding indemnity and defense in the event of certain claims filed against either party. See id. ¶ 5; Pl. SOF, Ex. 1 (“Alliance Agreement”) (Doc. No. 133-1) at 39- 40. Section 7 of the Alliance Agreement required Alstom to obtain and maintain insurance policies, including “commercial general liability insurance.” Pl. SOF ¶ 6. The Alliance Agreement stated that Alstom and Dominion each would, “to the extent permitted by its insurers, require each of their respective insurers to waive all rights of recovery against each other, whether in contract, tort (including negligence and strict liability) or otherwise.” Id. ¶ 7.

         Prior to the execution of the Alliance Agreement, Dominion and Alstom did not discuss whether the Agreement required the parties to obtain “non-eroding” insurance policies. Id. ¶ 9. Alstom obtained a primary insurance coverage (“the Zurich Policy”) and an excess insurance policy (“the Allianz policy”) for the 2007-2008 period, both of which contained “eroding” limits of liability. Id. ¶ 13. Dominion was an additional insured party under both policies. Id. ¶ 26. The Alliance Agreement required Alstom to provide Dominion with Certificates of Insurance; Alstom submitted such a certificate in March 2007, confirming that Alstom had obtained the Zurich and Alliance Policies. Id. ¶ 28. The March 2007 Certificate of Insurance included the representation that Alstom had obtained “Commercial General Liability” coverage. Id.

         In April 2007, Alstom performed an inspection of a boiler at a Dominion-owned power generating station in Massachusetts. Id. ¶ 33. In November 2007, the boiler failed, resulting in injuries-including fatal injuries-to five workers at the Dominion facility. Id. ¶ 36. In May 2009, the workers and the estates of the workers injured and killed in the accident filed a lawsuit (the “Underlying Litigation”) in Massachusetts state court. Id. ¶ 37. The plaintiffs in the Underlying Litigation alleged that the boiler accident was caused by the fault of Dominion, Alstom, and other defendants. Id. ¶ 39.

         On July 24, 2009 and September 26, 2009, Alstom made written demands on Dominion that Dominion defend and indemnify Alstom for the claims in the Underlying Litigation. Id. ¶ 40. Dominion denied those demands in a letter dated September 29, 2009. Id. ¶ 41. In the same letter, Dominion noted its position that, “[i]n the event that Plaintiffs' claims against Dominion are determined to be ‘arising out of, resulting from, or caused by or to the extent in connection with any of the Materials or Equipment supplied or Services performed by Alstom'” and the Alliance Agreement's exception to the duty to indemnify, that Alstom would be “obliged to indemnify Dominion.” See Defendant's Local Rule 56(a)(1) Statement of Material Facts, Ex. F (“Notice of Claims Letter”) (Doc. No. 135-6) at 3-4. Dominion further noted that the letter was meant to fulfill the requirement of written notice in accordance with Section 5 of the Alliance Agreement. Id. at 4. Dominion did not expressly use the word “defend” in its Notice of Claims Letter. Pls.' SOF ¶ 42. The Notice of Claims Letter was the only written notice to Alstom, prior to the current action, concerning the claims in this action. Id. ¶ 43.

         On December 15, 2009, Dominion and Alstom entered into a tolling agreement (“the Tolling Agreement”), concerning the Underlying Litigation. Id. ¶ 45. The Tolling Agreement stated that Dominion would have "one year from the date of any settlement or final judgment to bring any action for, or related to, indemnification, contribution, or any other claim or cross claim that may be asserted against (Alstom) with respect to the claims asserted in the [Underlying] Litigation." Id. ¶ 46.

         On March 23, 2015, the Massachusetts court in the Underlying Litigation entered an “Order for Entry of Dismissal Nisi, ” providing that the action had been “REPORTED SETTLED to the Court by counsel.” Id. ¶ 57. The Order noted that a judgment of dismissal was to enter on June 22, 2015. Id. On April 7 and 9, a judge in the Underlying Litigation made notations on pleadings filed in the Massachusetts action, stating that the settlements were “fair and reasonable.” Id. ¶ 63.

         III. DISCUSSION

         A. Alstom's Motions

         Alstom has filed three Motions for Summary Judgment, and a Motion for Judgment on the Pleadings. See Doc. Nos. 131, 132, and 134. In its first Motion, Alstom argues that summary judgment in its favor is warranted because (1) no admissible evidence establishes that Alstom had an obligation under the Alliance Agreement to obtain a “non-eroding” insurance policy, see Def.'s First MSJ (Doc. No. 131) at 6; (2) Alstom complied with its contractual duties by procuring the insurance policies at issue in this case, id. at 18; (3) Dominion did not suffer any recoverable damages; and (4) Dominion's alleged damages were not caused by Alstom's breach, or were alternatively barred or limited by provisions of the Alliance Agreement, id. at 30.

         In its second Motion for Summary Judgment, Alstom argues that Dominion's breach of contract claims are barred by the applicable statute of limitations. See Def.'s Second MSJ (Doc. No. 132) at 2-4. Alstom first argues that Dominion's breach of contract claims accrued no later than 2007, as to Count II, and 2009, as to Count I. Id. at 5-9. Second, Alstom argues that, even if the court concludes that the parties' Tolling Agreement is applicable to Dominion's claims, the claims are still time-barred because the one-year tolling of the statute of limitations ran from the earlier of any settlement or final judgment as to an applicable claim, and the parties' Memorandum of Understanding (“MOU”) agreements constituted such a settlement. Id. at 10-17.

         In its Third Motion for Summary Judgment, Alstom argues that there is no genuine issue of material fact as to whether section 11-4.1 of the Virginia Code voids any portion of the Alliance Agreement that would impose a requirement on Alstom to pay Dominion for expenses incurred in its defense of the Underlying Litigation. See Def.'s Third MSJ (Doc. No. 134) at 4-6, 8-11. In its Motion for Judgment on the Pleadings Alstom argues that, taking Dominion's allegations as true, Dominion's relief is nonetheless barred by the same Virginia statute. See id. at 6-8.

         1. Statute of Limitations

         Alstom makes two arguments as to why Dominion's claims are barred by the applicable statute of limitations. First, Alstom argues that, because breach of contract claims are subject to Virginia's five-year statute of limitations, Dominion's claims accrued no later than 2007 and 2009, for Count II and Count I, respectively. See Def.'s Second MSJ (Doc. No. 132) at 5. Second, Alstom argues that, even if a Tolling Agreement between the parties tolled the statute of limitations, the tolling period expired before Dominion initiated the present action. See id. at 13.

         a. Applicability of the Tolling Agreement

         Dominion and Alstom entered into a Tolling Agreement on December 15, 2009. See Defendant's Local Rule 56(a)(1) statement, Ex. G (“Tolling Agreement”) (Doc. No. 135-7) at 2. The Tolling Agreement made clear that, “[p]rior to settlement or final judgment in the [Underlying] Litigation, the Parties shall not file or assert any claims or cross claims arising from the claims asserted in the Litigation against any of the other Parties to this Agreement, including claims for indemnification and contribution.” Id. at 2 ¶ 1. The Agreement further stated that all parties to the agreement would have “one year from the date of any settlement or final judgment” to bring any “claim or cross claim that may be asserted against any of the Parties to the [Underlying] Litigation with respect to the claims asserted in the litigation.” Id. at 3. The Parties also agreed that, “[i]n the event that any applicable statute of limitations is shorter, such limitations period shall be tolled until one year after the date of any settlement or final judgment in the [Underlying] Litigation.” Id.

         Alstom's first argument, that Dominion's claims are time-barred because the Tolling Agreement did not apply to toll the applicable statute of limitations, see Def.'s Second MSJ at 5, is without merit. The Tolling Agreement stated that the parties would have “one year from the date of any settlement or final judgment to bring any action for, or related to, indemnification, contribution, or any other claim or cross claim that may be asserted against any of the Parties to the Litigation with respect to the claims asserted in the Litigation.” Tolling Agreement at 3 ¶ 2. The broad language of the Tolling Agreement unambiguously tolled any applicable statute of limitations on claims between the parties. Alstom offers no argument to contest the applicability of the Tolling Agreement to Dominion's present claims. Because any statute of limitations was tolled until one year after any settlement or judgment in the underlying litigation, Alstom's Motion for Summary Judgment on the basis that the five-year statute of limitations barred Dominion's claims as of 2012 and 2014, respectively, is denied.

         b. Date of Tolling Period Commencement

         Alstom's second argument is that, even assuming that the Tolling Agreement applies to Dominion's claims, the claims are time-barred. Alstom raises two arguments in this regard. Alstom first argues that the one-year tolling of the statute of limitations began running in February 2015, when the parties in the Underlying Litigation entered into Memorandum of Understanding (“MOU”) agreements. See Def.'s Second MSJ at 11-12. Alstom argues that, by February 2015, “the plaintiffs in the underlying litigation action had agreed to accept specified amounts to settle their claims.” Id. at 11. Alstom further argues that MOUs between the defendants and the plaintiffs “(1) confirmed that the parties had ‘reached an agreement to settle any and all claims' asserted by the various plaintiffs in the underlying litigation action, (2) specified the total settlement amount agreed for each plaintiff, and (3) allocated payment of those amounts to Dominion, Alstom and other parties.” Id. at 11-12. Alstom points to the parties' actions following the MOUs as support for the existence of a settlement agreement: (1) the parties reported to the court in March 2015, that “the action was settled;” (2) the court entered a dismissal order in March 2015; (3) the defendants agreed to allow the plaintiffs to publish an article confirming settlement; and (4) the parties later executed additional settlement agreements consistent with the amounts agreed upon in February 2015. Id. at 12. Alstom's second argument is that, notwithstanding any involvement of the plaintiffs in the Underlying Litigation, MOU agreements between the defendants in the Underlying Litigation were sufficient to start the tolling period. See Defendant's Reply to Plaintiff's Opposition to Summary Judgment (“Def.'s Reply in Supp.”) (Doc. No. 145) at 9-10. Based on the foregoing, Alstom contends that the tolling period commenced in February 2015. Id.; Def.'s Second MSJ at 13.

         Dominion argues that the Massachusetts Workers' Compensation Act, section 15 of chapter 152 of the Massachusetts General Laws, required that any settlement required court approval, “after a hearing in which both the employee and the insurer have had an opportunity to be heard, ” in order to be enforceable. See Mass. Gen. Laws ch. 152 § 15;^[2] Pls.' Mem. in Opp. at 16. Therefore, “the only settlement date recognized under Massachusetts law is the date of the statutorily required court hearings and approvals-here, April 7 and April 9, 2015.” Pls.' Mem. in Opp. at 17. Because Dominion filed the current action on April 6, 2016, see Complaint (Doc. No. 1), it argues that its claims are timely.

         Alstom responds that (1) section 15 of chapter 152 of the Massachusetts General Laws does not apply to the MOUs signed by the defendants in the Underlying Litigation alone; (2) the unambiguous language of the Tolling Agreement makes clear that the running of the one-year limitations period did not require court approval of settlement agreements; and (3) construing the Tolling Agreement so as to apply only to approved settlement agreements would impermissibly render other parts of the Agreement meaningless. See Def.'s Second MSJ at 13-15; Def.'s Reply in Supp. at 9-10.

         i. Relevant Settlements for Purpose of Tolling Agreement

         As noted above, Alstom argues that, without regard to any settlements involving the plaintiffs in the Underlying Litigation, the MOUs between the defendants in the Underlying Litigation were sufficient to trigger the beginning of the one-year limitations period in the Tolling Agreement. Def.'s Reply in Supp. at 9-10. Alstom also argues that Massachusetts law did not require court approval of settlements between defendants in the Underlying Litigation. Id. The court rejects as objectively unreasonable Alstom's interpretation of the Tolling Agreement, such that agreements in principle to settle claims, made solely between the defendants in the Underlying Litigation, were sufficient to trigger the start of the one-year claims period.

         As the Virginia Supreme Court recently reiterated, “[i]n determining whether a term is ambiguous, a court cannot look at the term in isolation; it must look at the term in the context of the entire contract.” James River Ins. Co. v. Doswell Truck Stop, LLC, 827 S.E.2d 374, 376 (Va. 2019). In this case, viewing the Tolling Agreement as a whole, it is clear that the term “any settlement” is a reference to settlement in the Underlying Litigation between the opposing parties, as opposed to related agreements in principle to settle made between the defendants.

         First, the preamble to the Tolling Agreement indicates that the motivating factor in the pursuit of the Tolling Agreement was the fact that “Plaintiffs in the [Underlying] Litigation have asserted claims against the Parties to [the Tolling Agreement].” Tolling Agreement at 2. Second, paragraph one of the Tolling Agreement states that, “[p]rior to settlement or final judgment in the Litigation, the Parties shall not file or assert any claims or cross claims arising from the claims asserted in the Litigation.” Id. ¶ 1 (emphasis added). The first sentence of paragraph two of the Tolling Agreement states that the parties will have “one year from the date of any settlement or final judgment” to bring claims against one another related to the Underlying Litigation. Id. ¶ 2. While the reference to “any settlement” in the first sentence of paragraph two is not qualified by the words “in the Litigation, ” the following sentence states that any shorter limitations period “shall be tolled until one year after the date of any settlement . . . in the Litigation.” Id.

         Alstom provides no basis to read the second reference to “any settlement” as describing a different “settlement” than that referenced in the preceding paragraph and subsequent sentence. Reading the words of the Agreement consistently, the Tolling Agreement's references to “any settlement” means settlement in the Litigation. See Cone v. Cone, 64 Va. Cir. 311 (2004) (reading contract to “allow[ ] the same meanings and the same connotations to be used for wording throughout the entire contract”).

         While agreements between the defendants in the Underlying Litigation as to the manner or structure of potential settlement with the plaintiffs could be construed as related to the Litigation, they could not reasonably be understood as being “settlements . . . in the Litigation.” Moreover, as noted above, the preamble to the Tolling Agreement indicates that the agreement was precipitated by the fact that “the Plaintiffs in the [Underlying] Litigation . . . asserted claims against the Parties to [the Tolling] Agreement.” It would be unreasonable to read the Agreement in a manner that would render sufficient to trigger the one-year claim period agreements that (1) did not include the plaintiffs in the Underlying Litigation, and (2) would not resolve the plaintiffs' claims in the Litigation. The court therefore concludes that the one-year time period in the Tolling Agreement, which period was to be triggered by “any settlement or judgment, ” could only reasonably be construed as referencing settlements between the plaintiffs and defendants in the Underlying Litigation. The court denies Alstom's Motion for Summary Judgment on the basis that agreements in principle between the defendants in the Underlying Action were sufficient to start the clock on the claims period.

         ii. Agreements Between Plaintiffs and Defendants

         Alstom also argues that the conduct of the parties in the Underlying Litigation “after executing the February 2015 MOUs demonstrated that an enforceable settlement had been reached.” See id. at 12. In particular, Alstom argues that (1) two of the plaintiffs in the Underlying Litigation “signed and executed separate Settlement Agreements” with the defendants in the Underlying Litigation in February 2015; (2) the parties reported the action settled to the court; (3) the court entered an Order for Entry of Dismissal Nisi on March 23, 2015; (4) the defendants in the Underlying Litigation permitted the plaintiffs to publish an article confirming that a settlement had been reached as of March 2015; and (5) the parties later ...