Facts

Plaintiff Jacobsen Construction Company Inc. filed suit against defendant FS Jackson Hole Development Company LLC (FSJH) for non-payment relating to the Four Seasons resort in Jackson Hole, Wyoming.

FSJH cross-complained for construction and design deficiencies, alleging a total of 22 roofing defect. 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).

Jacobsen subsequently cross-complained against numerous subcontractor parties, including 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 linear feet) of roof edge. FSJH produced a cost of repair, which included approximately $6 million for an entire re-roof.

After about four years in litigation, FSJH settled the construction defect claims for $3.07 million and the design deficiency claims for $1.9 million. Of this amount, Jacobsen paid $1,265,000 to settle the roofing construction defect claims. The only parties remaining were Jacobsen and Bartile.

The key issue in the case was which contracts were applicable. The Master Subcontract Agreement (MSA), between Jacobsen and Bartile, contained a Type I indemnification provision. The court ultimately found that the MSA was not executed by either party. There were also two Subcontract Work Orders (SWO-A and SWO-B).

SWO-A, which Jacobsen argued was the applicable agreement, was signed and dated by both parties on Nov. 1, 2002 and specifically incorporated by reference the MSA by specific date, but did not identify an MSA number in a small box on the first page of the document.

SWO-B, which Bartile contended was the applicable SWO, was missing the last two pages (including the signature page).

The court found that SWO-B was the governing SWO and that the incorporation by reference language was not specific enough to incorporate the MSA. Accordingly, the court found that there was no express indemnity provision in existence between Jacobsen and Bartile, leaving only the question of equitable indemnity.

PLAINTIFF'S CONTENTIONS:
Jacobsen contended that Bertile was negligent in the performance of its contract and therefore liable for equitable indemnity.

DEFENDANT'S CONTENTIONS:
Bertile contended that it was not negligent.

Settlement Discussions

Jacobsen's pre-trial demand to Bartile is $2 million (consisting of the $1,265,000 it paid to settle the roofing construction claims and approximately $700,000 in attorney fees allocated to Bartile.

Result

The court found that Bartile was not negligent in the performance of its contract, and therefore, Bartile had no liability to Jacobsen on their claim for equitable indemnity. The court concluded that "Bartile is entitled to a judgment to the effect that Jacobsen take nothing from Bartile and should be awarded its costs of suit."