Cottman Ave. PRP Grp. v. Amec Foster Wheeler Envtl. Infrastructure Inc.

Full title: COTTMAN AVENUE PRP GROUP, et al., Plaintiffs, v. AMEC FOSTER WHEELER…

Court: UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

Date published: Feb 13, 2020

439 F. Supp. 3d 407 (E.D. Pa. 2020)

Opinion

CIVIL ACTION No. 16-6613

02-13-2020

COTTMAN AVENUE PRP GROUP, et al., Plaintiffs, v. AMEC FOSTER WHEELER ENVIRONMENTAL INFRASTRUCTURE INC., Defendant.

Daniel Hentschel, Hunton Andrews Kurth LLP, Miami, FL, Dawn Getty Sutphin, Prospect Park, PA, Jeffrey Noble Martin, Michael S. Levine, Hunton Andrews Kurth LLP, Washington, DC, Dan J. Jordanger, Hunton & Williams, Richmond, VA, for Plaintiff. Cory P. Taylor, Richard J. Davies, Milber Makris Plousadis & Seiden, LLP, Berwyn, PA, for Defendant.

Goldberg, District Judge

Daniel Hentschel, Hunton Andrews Kurth LLP, Miami, FL, Dawn Getty Sutphin, Prospect Park, PA, Jeffrey Noble Martin, Michael S. Levine, Hunton Andrews Kurth LLP, Washington, DC, Dan J. Jordanger, Hunton & Williams, Richmond, VA, for Plaintiff.

Cory P. Taylor, Richard J. Davies, Milber Makris Plousadis & Seiden, LLP, Berwyn, PA, for Defendant.

MEMORANDUM OPINION

Goldberg, District Judge

Plaintiffs, a group of utility companies,¹ have sued Defendant AMEC Foster Wheeler Environmental Inc. ("AMEC"), under Section 113 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. 9613 ("CERCLA") and for Pennsylvania common law breach of contract and breach of warranty. Plaintiffs allege that AMEC improperly designed a sheet pile wall needed to prevent PCB-contaminated soils from entering the Delaware River. AMEC seeks summary judgment as to all claims brought by Plaintiffs and, in turn, Plaintiffs seek summary judgment on their breach of contract claims and their entitlement to litigation costs and fees. For the following reasons, both Motions for Summary Judgment will be granted in part and denied in part.

1 Plaintiffs include Cottman Avenue PRP Group, Baltimore Gas & Electric Company, Consolidated Edison Company of New York, Inc., Jersey Central Power & Light Company, Long Island Lighting Company d/b/a/ LIPA, Metropolitan Edison Company, Orange and Rockland Utilities, Inc., PECO Energy Company, Potomac Electric Power Company, PPL Electric Utilities Corporation, Public Service Electric and Gas Company, and Virginia Electric and Power Company.

I. STATEMENT OF FACTS

A. General Background

From approximately 1968 until 1973, the Metal Bank of America, Inc. ("Metal Bank"), conducted transformer salvage operations at the Metal Bank Cottman Avenue National Priorities List Site (the "Site"), at 730 Milner Street in Philadelphia, Pennsylvania. (DSUF ¶ 1.)² Various utility companies, including Plaintiffs, sold their used and discarded transformers and capacitors to Metal Bank, and oil containing PCBs and other contaminants were released into the environment during the salvage process. (DSUF ¶ 2.)

2 References to the parties' pleadings will be made as follows: Plaintiffs' Statement of Undisputed Facts ("PSUF"); Defendant's Counterstatement ("DC"); Defendant's Statement of Undisputed Facts ("DSUF"); and Plaintiffs' Counterstatement ("PC"). To the extent a statement is undisputed by the parties, I will cite only to the parties' statements of undisputed fact. If a statement is disputed and can be resolved by reference to the exhibits, I will cite the supporting exhibit or exhibits. I will also cite to the supporting exhibits in the event further clarification of a fact is required.

Between 1980 and 2006, the United States pursued judicial remedies against the owners and operators of the Site for (a) reimbursement of cleanup costs and (b) injunctive relief for further remedial work. (PSUF ¶ 4; DC ¶ 4.) In September 1983, the U.S. Environmental Protection Agency ("EPA") placed the Site on the Superfund National Priorities List. (PSUF ¶ 5; DC ¶ 5.) In 1997, the EPA issued a Record of Decision ("ROD") that set forth the EPA's preferred remedy for the contamination at the Site. (PSUF ¶ 7; DC ¶ 7.) The ROD called for, in part:

Installation of an oil collection system consisting of a sheet pile wall around the southern and western perimeter of the property; interceptor trenches with oil-water separators and sump pumps, or similar collection devices, inside the wall to prevent oil from migrating to the Delaware River; discharge of collected groundwater to the Delaware River in accordance with the National Pollution Discharge Elimination System requirements; and off-site disposal of collected oil in accordance with the [Resource Conservation and Recovery Act] and [Toxic Substances Control Act].

(Compl., Ex. 1, at 1–2.) The ROD went on to specify that prior to excavation of soil from the southern portion of the property, "a sheet pile wall shall be installed around the southern and western perimeter of the property adjacent to the Delaware River to prevent erosion of fill materials into the river and facilitate installation of the oil collection system." (Id. at 54.) Any collected oil was to be disposed of off-site in accordance with Pennsylvania Residual Waste Management regulations. (Id. )

In 1998, the EPA issued an administrative order ("Administrative Order" or "AO") requiring Plaintiffs, consisting of eight members of the "potentially responsible persons" group ("Plaintiffs" or "PRP Group"), to prepare a design for the remedial action in accordance with the ROD. (PSUF ¶ 12; DSUF ¶ 4.) The PRP Group issued a request for proposal ("RFP") to consulting firms for performance of the remedial design under the AO. The RFP contained the Technical Scope of Work Requirements for the Site, including "[p]lacement of a sheet pile wall with oil/water separators to prevent any remaining PCBs from migrating to the Delaware River through either surface erosion or groundwater." (Compl., Ex. 2 ¶ 2.1.) Those requirements also provided that the oil collection system, consisting in part of the sheet pile wall, was to be "installed at the Site in accordance with the ROD." (Id. ¶ 2.3.)

B. The 1998 Contract

In July 1998, Ogden Energy and Environmental Services ("Ogden")—the predecessor-in-interest to Defendant AMEC—along with its "team partner" Hart Crowser, Inc., submitted a proposal to the PRP Group. (PSUF ¶ 15; DC ¶ 15.) Ogden represented that it had "an intimate knowledge of the requirements of implementing this design project," based on its "review of the ROD, Administrative Order and the Scope of Work." (PSUF ¶ 16; DC ¶ 16.) Ogden's proposal further stated that it understood the design project to require "[p]lacement of a sheet pile wall with oil/water separators to prevent any remaining PCBs from migrating to the Delaware River through either surface erosion or groundwater." (PSUF ¶ 17; DC ¶ 17.) The design work for the "Interceptor Trench" was to "include [a] sheet pile cutoff wall, or if determined to be practical and feasible, an HDPE [high-density polyethylene] curtain, interceptor trench or horizontal well system, sumps, pumps, controls, LNAPL [light non-aqueous phase liquid] collection tank and building." (PSUF ¶ 18; DC ¶ 18.)

In 1998, Ogden entered into a contract with the PRP Group to serve as the environmental engineering firm that would prepare the remedial design under the EPA order (the "1998 Contract"). (PSUF ¶ 19; DC ¶ 19.) The contract required Ogden to "perform the Scope of Services ... as set forth in Attachment C to the RFP and the Design Contractor's proposal, as amended." (PSUF ¶ 20; DC ¶ 20.) Ogden warranted that it was "experienced, properly qualified, registered, equipped, organized and financed to perform Services under this Agreement, is engaged in the business of hazardous substance investigation and cleanup, and has developed the requisite experience for investigation and cleanup of such substances." (PSUF ¶ 22; DC ¶ 22.) Ogden further stated that it would "conduct its activities in a safe and professional manner and in compliance with EPA's Administrative Order and all applicable statutes, ordinances, orders, rules and regulations of the federal, state and local governments in whose jurisdiction such activities are performed." (PSUF ¶ 24; DC ¶ 24.) Ogden warranted its services to be "free from defects due to materials, workmanship and/or design" and agreed that if any of its services failed to conform to the professional responsibility standard, it would, "at its expense, perform corrective Services of the type originally performed as may be required to correct any such defective services of which" it was notified in writing by the PRP Group. (PSUF ¶¶ 26–27; DC ¶¶ 26–27.) In addition, it agreed to "defend, indemnify and hold harmless PRP Group from and against any and all claims, losses, damages, liability, costs or actions, including, without limitation, reasonable attorney fees and other costs and expenses ... arising out of, resulting from or in connection with any unlawful, negligent or willful misconduct or omission" by Ogden or its employees or subcontractors. (PSUF ¶ 28; DC ¶ 28.) To guarantee its obligations, Ogden agreed to secure and maintain insurance policies to cover its work. (PSUF ¶¶ 29–30; DC ¶¶ 29–30.) The 1998 Contract provided the following with respect to the disposal of waste materials:

Unless otherwise specified, [Ogden] will act as the PRP's agent in overseeing the proper handling, initial storage at the site, sampling, and final disposal of waste materials such as drill cuttings, soil and water samples, and well development and pumping test water that may be generated during the performance of the Services. PRP Group shall hold Design Contractor harmless from and against any allegation that Design Contractor is the owner or operator of the site, or owned, possessed or arranged for the transportation, treatment or disposal of any material with respect to which services are provided hereunder, so long as Design Contractor obtains PRP Group's prior consent with respect to the arrangements for transportation, treatment or disposal of the material at issue.

(PSUF, Ex. 3, ¶ 18.)

Ogden's team partner, Hart Crowser, worked on the design of the sheet pile wall from the beginning of the project under the AO in 1998 until early 2002. (PC, Ex. 39.) In February 2002, Hart Crowser retained Ocean & Coastal Consultants to complete the design of the wall. (Id. )

The actual construction work on the sheet pile wall was subcontracted by Hart Crowser to AMEC Earth and Environmental, Inc. ("AMEC EE"). (DSUF ¶ 6.) Ogden and AMEC EE performed the remedial design work set forth in the 1998 Contract during the time period between 1998 and 2002. (PSUF ¶ 35; DC ¶ 35.) In the interim, in 2000, AMEC EE purchased the assets and assumed certain liabilities of Ogden Energy and Environmental Services ("Ogden"). (PSUF ¶ 2; DC ¶ 2.) Defendant AMEC Foster Wheeler Environmental & Infrastructure, Inc. ("AMEC") is the surviving division of AMEC Earth and Environmental, Inc. ("AMEC EE") following a 2013 merger. (PSUF ¶ 1; DC ¶ 1.)

The remedial design work by Ogden included the collection of data and engineering analyses addressing the various elements of the ROD remedy, including the sheet pile wall. (PSUF ¶ 37; DC ¶ 37.) One of Ogden's deliverables under the AO and the 1998 Contract was a Pre-Design Investigation ("PDI") Report that documented certain conditions at the Site, including the presence of hazardous substances at the Site and geotechnical data relevant to the Interceptor Trench remedial design component. (PSUF ¶ 38; DC ¶ 38.) In September 2002, AMEC, having assumed Ogden's responsibilities and liabilities, submitted to the EPA a final remedial design report under the AO. (PSUF ¶ 39; DC ¶ 39.) The EPA approved the remedial design report under the AO in January 2003. (PSUF ¶ 40; DC ¶ 40.)

The parties agree that AMEC performed all services due under the 1998 Contract no later than April 2003. (DSUF ¶ 7.)

C. The 2003 Contract With AMEC

As noted above, between 1980 and 2006, the United States pursued judicial remedies against the owners and operators of the Site in the United States District Court for the Eastern District of Pennsylvania, under the caption United States of America v. Union Corporation, et al., Civil Action No. 80-1589 (the "Union Corporation litigation"). The members of the PRP Group were named as third-party defendants in the litigation. (Compl., Ex. 7.) This case, which occurred in parallel with the EPA's administrative action, proceeded to a trial on liability in 2002 before the Honorable James T. Giles. (PSUF ¶ 43; DC ¶ 43.) Following the trial, Judge Giles issued an opinion finding the former owners and operators of the Site liable for contamination at the Site under CERCLA and the Resource Conservation and Recovery Act ("RCRA"). (PSUF ¶ 44; DC ¶ 44.) Judge Giles retained jurisdiction over phases two and three of the trial, which included a determination of whether the Government's response costs were reasonable and recoverable, as well as the scope of any further remedial action (phase two), and a determination of the liability of the third-party defendants (phase three). U.S. v. Union Corp., 259 F. Supp. 2d 356, 364 (E.D. Pa. 2003).

In April 2003, AMEC and the PRP Group entered into a new professional services agreement, in which AMEC agreed to provide "[a]ssistance to the PRP Group and its legal counsel, as they may request such assistance from the Consultant, with respect to the Union Corporation litigation" (the "2003 Contract"). (DSUF, Ex. E, ¶ 1.) AMEC's obligations, warranties, and promises under the 2003 Contract included many of the same provisions as in the 1998 Contract. (PSUF ¶ 50; DC ¶ 50.)

In June 2004, the United States and the PRP Group negotiated a Revised Remedial Plan that called for certain changes to the ROD remedy for the Site. (PSUF ¶ 51; DC ¶ 51.) In particular, the Revised Remedial Plan called for "[i]nstallation of a sheet pile wall at the southwestern corner of the Site." (PSUF ¶¶ 52–53; DC ¶¶ 52–53.) "Once in place, the sheet pile wall would contain any PCB contamination that exist[ed] on the surface of the oversize material and prevent migration of PCBs to the Delaware River." (PSUF ¶ 54; DC ¶ 54.)

In mid to late 2005, as part of a global settlement of the Union Corp. litigation, the members of the PRP Group entered into a "Utility Group Consent Decree" ("Utility CD") with the United States. (Compl., Ex. 7.) The Utility CD called for a revised final design to be submitted to the EPA for approval, after which the PRP Group would give the EPA a work plan for the performance of the remedial action at the site that was consistent with the revised final design. (Id. ¶ 11.) The CD provided that "[i]n the event of any action or occurrence during the performance of the Work which causes or threatens a release of Waste Material from the Site that constitutes an emergency situation or may present an immediate threat to public health or welfare or the environment, Settling Third-Party Defendants shall ... immediately take all appropriate action to prevent, abate, or minimize such release or threat of release." (Id. ¶ 52.) The court approved the Utility CD on March 7, 2006, but retained jurisdiction over the CD for the duration of its performance. (Id. at p. 53 and ¶ 106.)

The PRP Group proposed, with the EPA's approval, that AMEC serve as the PRP Group's remedial design consultant to prepare a revised final remedial design under the Utility CD. (PSUF ¶ 63; DC ¶ 63.) Prior to the Consent Decree, AMEC and the PRP Group had entered into a Change Order, dated September 10, 2004, wherein AMEC would provide design services to the PRP Group. (PSUF, Ex. 7.) Pursuant to that Change Order, AMEC performed work on the revised final remedial design report, required under the Utility CD, during the years 2006–2008. (PSUF ¶ 65; DC ¶ 65.) By letter dated February 28, 2008, the EPA approved the revised final remedial design and the remedial action work plan. (PSUF ¶¶ 66–67; DC ¶¶ 66–67; DSUF ¶ 11.)

The PRP Group proposed, and the EPA approved, Malcolm Pirnie, Inc. ("MPI") as the Supervising Contractor and Resident Engineer for the remedial action. (PSUF, Ex. 6, at UTIL_000184061.) In addition, the PRP Group proposed, and the EPA approved, Tetra Tech EC ("TTEC") as the remedial contractor for the remedial action at the Site. (Id.; PSUF ¶ 69; DC ¶ 69.) TTEC prepared the initial Remedial Action Work Plan, which set forth the means and methods for construction of the approved remedial design, including a construction quality control plan and methodology for decontamination of equipment and disposal of contaminated material. (DSUF ¶ 18.)

D. Construction on the Project

TTEC began the remedy construction at the Site in July 2008. (PSUF ¶ 70; DC ¶ 70.) During construction, MPI served as Supervising Contract and Resident Engineer of the Project, providing oversight "to assure compliance with the regulatory agreements, designs, plans, and specifications." (DSUF ¶ 13 & Ex. H at AR200081.) Under the Consent Decree, "[a]ll aspects of the Work to be performed by [the PRP Group] pursuant to Sections VI (Performance of the Work by [the PRP Group] ), VII (Remedy Review), VIII (Quality Assurance, Sampling, and Data Analysis), and XV (Emergency Response) of th[e] Consent Decree [were] under the direction and supervision of the Supervising Contractor." (DSUF, Ex. F, ¶ 10(a).)

During this time, AMEC provided engineering support services. (DSUF ¶ 13; PSUF ¶ 71; DC ¶ 71.) AMEC's services included on-site inspections of the work performed by TTEC and its contractors when requested by MPI. (PSUF, Ex. 10, at 66:1–67:20, 234:12–19.) AMEC personnel also interacted on-site with personnel from the Army Corps, the EPA, and the Pennsylvania Department of Environmental Protection. (PSUF ¶ 74; DC ¶ 74.)

In 2009, the PRP Group terminated TTEC's contract and replaced it with Sevenson, Inc. ("Sevenson"), to complete construction of the remedy. (DSUF ¶ 19; PSUF ¶ 76; DC ¶ 76.) Pursuant to the Contract Change Order, AMEC continued to provide design services. (PSUF, Ex. 12.) AMEC's services also included on-site inspections—at the request of MPI—of the work performed by Sevenson and its subcontractors to determine if it was in accordance with AMEC's design. (PSUF ¶ 79 & Ex. 14; DC ¶ 79.) AMEC participated in site visits to look at aspects of the construction, offer its opinion about an aspect of the construction, or approve certain design issues. (PSUF, Ex. 10, at 91:1–9; PSUF, Ex. 15, at 282:21–284:15.)

In early August 2009, Sevenson continued installation of the sheet pile wall that TTEC had started and, in doing so, installed tie-rods supporting the sheet pile wall in a manner that deviated from the approved design. Specifically, the tie-rods at the 45-degree corner of the wall were spaced further apart than called for by the design drawings. (DSUF, Ex. O, Daily Report 8/5/09.) MPI requested that AMEC analyze this issue, and, on August 28, 2009, AMEC provided to MPI a draft analysis of the effect of the non-conforming tie-rod spacing on global stability of the wall. (DSUF ¶ 22 & Ex. P.) MPI approved the draft with minor changes. (Id. ) On September 8, 2009, AMEC provided its final analysis of the tie-rod issue to MPI, concluding that "it would be acceptable to proceed with the construction of the wall as constructed" without any repairs "to adjust the irregular spacing of the tierod installation." (DSUF ¶ 23 & Ex. Q.)

MPI forwarded that analysis to the EPA, which requested that it be supplemented, in part, to "perform calculations to determine the new load magnitudes caused by the increased tieback spacings and to analyze the tiebacks, waler and deadman to determine if these structural elements can support the new increased loads." (DSUF, Ex. R.) MPI requested that AMEC prepare a response to the EPA. (Id. )

On September 17, 2009, AMEC's geotechnical engineer, Don Dotson, prepared a response on behalf of AMEC, noting that neither the tiebacks, the walers, nor the deadmen would be overstressed beyond the intended load. (PSUF, Ex. 40; see also PSUF, Ex. 41, at 132:9–134:23.) The response indicated that AMEC was "available to conduct any additional analyses that the regulators require." (PSUF, Ex. 40.) Although AMEC allegedly prepared additional analyses of the wall, any such analyses were not sent to MPI or the PRP Group. (PSUF, Ex. 41 at 80:23–92:8.) According to the Complaint, the PRP Group and its members relied on AMEC's review and approval of the construction of the sheet pile wall to fulfill their obligations under the Utility CD. (Compl. ¶¶ 89, 92.)

Construction of the remediation was completed in 2010. (DSUF ¶ 27 & Ex. X.) The Final Inspection for the construction occurred on April 29, 2010. (DSUF ¶ 29.) In 2011, AMEC provided one additional task for the PRP Group, when counsel for the PRP Group authorized AMEC to provide certain documents that had been requested by Trustees for the Metal Bank Site. (DSUF ¶ 27.) After early 2012, however, AMEC did not perform any additional services related to the Site for which AMEC sought or received payment under any agreement with the PRP Group. (DSUF, Ex. Y, at Response to Request No. 4.)

E. The Operation and Maintenance of the Site

The Utility CD required that, following construction of the remedial action at the Site, the PRP Group had to prepare and implement an operations and maintenance plan to monitor the remedy. (PSUF ¶ 81; DC ¶ 81.) In July 2009, Acadis US, Inc. ("Acadis") acquired MPI and became the PRP Group's supervising contractor. Acadis, acting on behalf of the PRP Group, prepared and submitted to the EPA an Operations and Maintenance ("O&M") plan as required by the Utility CD. (PSUF ¶ 82; DC ¶ 82.) The EPA approved the original O&M plan, which has been periodically updated over time. (PSUF, Exs. 16 & 17; DSUF, Ex. Z.)

The O&M plan required periodic inspection of the sheet pile wall. (PSUF ¶ 84; DC ¶ 84.) From August 2010 through December 2015, representatives of the PRP Group performed various inspections of the sheet pile wall, although it is unclear exactly how many inspections were performed or what precisely was done during these inspections. (PSUF, Ex. 2.)

F. Problems with the Sheet Pile Wall

In October 2012, after a representative of the Army Corp. of Engineers identified potential signs of movement of the wall, the PRP Group's supervising contractor hired RA Consultants ("RAC"), a geotechnical engineering firm with expertise in sheet pile walls and other retaining structures, to perform a visual inspection of the wall. (DSUF ¶ 40; PC ¶ 40 & Ex. 42.) On November 12, 2012, Walter Papp, a senior partner at RAC, performed his first inspection of the wall. (PSUF ¶ 87; DC ¶ 87.) In the course of that inspection, he discovered cracks in the waler located at the 45-degree corner of the wall (in Zone 2, the area of the non-conforming tie-rod spacing), as well as additional signs of movement in Zones 1 and 3 and areas of corrosion on the wall. (DSUF, Ex. AA.) In March 2013, the PRP Group submitted a revised Metal Bank NPL Site Remedial Action Report/Engineer's Report to the EPA, which concluded that, although the sheet pile wall showed signs of movement, it "appears to be performing in accordance with its design intent." (Id. ) On September 20, 2013, the EPA approved the Report and "consider[ed] the construction phase of the remedial action concluded in accordance with the approved remedial design." (DSUF, Ex. CCC.)

In April 2014, RAC performed another inspection of the wall. (PSUF, Ex. 43 at 120:22–121:21.) That inspection noted additional movement of the tieback plates relative to the waler in Zone 2, and found that the waler failed at this location as a result. (DSUF, Ex. DD.) In addition, there was movement of the wall in Zones 1 and 3. (Id. ) The inspection report recommended more extensive monitoring and potential design of a permanent repair. (Id. )

On May 29, 2014, counsel for the PRP Group wrote to inform AMEC of the movement of the wall and the damaged walers. (PSUF, Ex. 20.) The letter requested AMEC's input on "possible approach(es) to ensure the continued usefulness of the wall." (Id. ) According to that letter, the PRP Group was "attempting to determine the causes for the inadequate performance and potential failure of the wall, and [was] putting AMEC on notice of that concern as well, so AMEC [could] review its contractual and insurance obligations." (Id. ) AMEC provided no written response to that letter. (PSUF ¶ 91 & Ex. 15, at 352:10–15; DC ¶ 91.)³

3 The PRP Group's counsel issued similar letters to the PRP Group's former supervising contractor, Arcadis (formerly MPI), and former remedial contractor, Sevenson. (PSUF ¶ 92; DC ¶ 92.) Both Arcadis and Sevenson responded to the letters. (PSUF, Exs. 23 & 24 at 64:13–68:3.)

During the summer of 2014, RAC performed a geotechnical analysis of the "as built construction of the sheet pile wall to determine the wall and tie rod loading and potential failure mode." (Compl., Ex. 13.) RAC also reviewed design and construction documents dating at or before the time of construction, particularly the design analysis provided by AMEC, which accounted for the installed sheet-pile embedment depths that were shorter than required on the design drawings. (Id. ) RAC concluded that AMEC's analysis was in error, noting that:

While the AMEC analysis found the sheet pile wall to be sufficient for as-built conditions, we noted that AMEC only checked the design at mean high water conditions both in front and behind the wall. We performed an analysis of the sheet pile wall for mean low water conditions and found several modes of failure for the sheet-pile wall including, overstressed tie-backs, overstressed sheet piles, and global stability failure including the dead-man tie rod anchoring system.

(Id. ) Ultimately, RAC recommended that multiple repairs to the sheet pile wall be undertaken. (Id. )

In October 2014, DEEP Excavation, LLC ("DEEP") reviewed RAC's August 2014 report and confirmed that "the cracking of the waler was caused by a combination of poor layout of the deadman wall, and a marginally stable wall under extreme tide conditions." (PSUF, Ex. 25.) It agreed with RAC's repair recommendations and added several additional recommendations. (Id. )

G. The Repair Work Begins

In October 2014, the PRP Group submitted to the EPA a sheet pile wall repair work plan. (PSUF ¶ 116; DC ¶ 116.) The plans were subject to comment by several governmental agencies, after which the PRP Group submitted an amended repair plan. (PSUF ¶¶ 117–18; DC ¶¶ 117–18.) Upon the EPA's approval of the plan, the PRP Group and its consultants prepared detailed technical specifications and drawings. (PSUF ¶¶ 119; DC ¶ 119.)

On December 12, 2014, the PRP Group, acting through counsel, sent a second letter to AMEC indicating that both RAC and DEEP concluded that the sheet pile wall was not properly designed for "low flow conditions in the Delaware River" and that because of this defective design, "the wall is damaged and is at risk of failure." (PSUF, Ex. 26.) The letter went on to state that "[b]ased on the available information, in particular the enclosed reports of RA Consultants and DEEP Excavation, AMEC is responsible for the damage to the sheet pile wall through the defective design of the wall for low flow conditions." (Id. ) It concluded that "[u]nder AMEC's contracts with the PRP Group, AMEC is liable for the costs required to remedy the under-design of the wall" and demanded that AMEC "acknowledge its responsibility and agree to indemnify the Group (i) by reimbursing the Group for costs incurred and (ii) either performing or paying for repair of the wall." (Id. )

Having received no response, counsel for the PRP Group again contacted AMEC by letter dated June 2, 2015. (PSUF, Ex. 27.) The letter advised that, before the end of June, the PRP Group was going to issue a request for proposal to perform the wall repair and that, by the end of August, it would select a contractor for the repair work. (Id. ) It concluded that, "if AMEC wishes to limit its exposure by performing the repair work itself, AMEC must notify the Group during June of its interest in doing so. In any event, we wish to make clear that the PRP Group will hold AMEC responsible for all costs that have been and will be incurred to assess the damage and repair the wall." (Id. ) AMEC did not accept the PRP Group's demand to perform or pay for the wall repair work. (PSUF ¶ 110; DC ¶ 110.)

In July 2015, representatives of AMEC and Hart Crowser visited the Site to perform an inspection of the sheet pile wall. (PSUF ¶ 111; DC ¶ 111.) The following April, a representative of AMEC requested information about the sheet pile wall from Ramboll Environ ("Ramboll"), the PRP Group's supervising engineer. (PSUF ¶ 112; DC ¶ 112.) The Ramboll representative informed AMEC that the EPA had already approved the PRP Group's contractor and the contractor's plan for repair of the wall, and that the repair work was set to begin. (PSUF ¶ 113; DC ¶ 113.)

By email of April 26, 2016, AMEC informed the PRP Group that its expert had made observations of the wall, obtained project information, and completed his assessment of the condition of the wall with the proposed repairs. (Def.'s Opp'n Summ. J., Ex. 1.) AMEC requested to speak with the PRP Group regarding those repairs. (Id. ) In response, the PRP Group indicated that, absent any commitment from AMEC to perform or pay for wall repair, it was "moving forward with repair of the wall as required by EPA Region 3 and the consent decree that obligates the Group to perform operation, maintenance and monitoring of the Site remedy." (Id. ) AMEC then suggested that the proposed repairs be postponed as it believed the wall was not at risk for failure and that the scope of the repairs were not necessary. (Id. ) The PRP Group declined to delay the repairs, noting that "that ship has sailed." (Id. )

The PRP Group retained Creamer Environmental, Inc. ("Creamer") to construct the repairs to the sheet pile wall. (PSUF ¶ 124; DC ¶ 124.) In May 2016, Creamer International, Inc. performed the repair work by placing 5,509.6 tons of R6 stone on the river side of the wall in front of Zones 1, 2, and 3. (DSUF ¶ 55; PSUF ¶ 126; DC ¶ 126.)

On December 7, 2016, the EPA issued a letter to Ramboll formally approving "the work recently completed to repair defects to the sheet-pile wall designed and installed as part of a Court-ordered remedial action at the Metal Bank (Cottman Avenue) Superfund Site in Philadelphia, Pennsylvania." (DSUF, Ex. LL.) The letter noted that "[p]ost-construction inspections by EPA in 2012 revealed structural defects of the sheet-pile wall, including, among other things, damage to components of the wall that were most likely caused by movement of the wall toward the adjacent Delaware River." (Id. ) The EPA concluded by commenting that:

In 2016, EPA approved the final design submitted by the Utility Group to repair the sheet-pile wall by placing a rip-rap berm on the river side of the wall and by welding additional structural steel components to the failed waler in order to reinforce the wall. In addition, existing tie-rods and "dead men" were tested to assess their capacities. The Repair Plan, as well as any other approved plans submitted in accordance with the 2006 Consent Decree, are enforceable under the Consent Decree. The Utility Group successfully completed implementation of the Repair Plan in July 2016.

(Id. )

The EPA's Second Five-Year Review Report stated that evaluations of the Site in and after 2012 "determined that one of the wall's walers (a type of structural beam) had failed and warranted repair." (PSUF, Ex. 17 at 12.) The Report noted that "this repair occurred between May and July 2016. No significant outward movement of the wall has been noted since the repair." (Id. at 12.) It concluded that "[t]he sheet pile wall is in good condition following a 2016 repair and effectively prevents erosion of fill materials into the river." (Id. at 17.)

H. The PRP Group's Lawsuit Against AMEC

On December 23, 2016, the PRP brought this lawsuit against AMEC, setting forth four causes of action: breach of warranty, breach of contract, a claim for contribution under CERCLA § 113(f)(3)(B), and a claim for declaratory judgment under CERCLA § 113(g)(2). Following discovery and extensive mediation discussions, the parties filed cross-motions for summary judgment.

II. STANDARD OF REVIEW

Federal Rule of Civil Procedure 56 states, in pertinent part:

A party may move for summary judgment, identifying each claim or defense—or the part of each claim or defense—on which summary judgment is sought. 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. The court should state on the record the reasons for granting or denying the motion.

Fed. R. Civ. P. 56(a). "Through summary adjudication, the court may dispose of those claims that do not present a ‘genuine dispute as to any material fact’ and for which a jury trial would be an empty and unnecessary formality." Capitol Presort Servs., LLC v. XL Health Corp., 175 F. Supp. 3d 430, 433 (M.D. Pa. 2016).

A factual dispute is "material" if it might affect the outcome of the suit under the applicable law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). An issue is "genuine" only if there is a sufficient evidentiary basis that would allow a reasonable fact-finder to return a verdict for the non-moving party. Id. The court must resolve all doubts as to the existence of a genuine issue of material fact in favor of the non-moving party. Saldana v. Kmart Corp, 260 F.3d 228, 232 (3d Cir. 2001). Unsubstantiated arguments made in briefs are not considered evidence of asserted facts. Versarge v. Twp. of Clinton, 984 F.2d 1359, 1370 (3d Cir. 1993).

These summary judgment rules do not apply any differently where there are cross-motions pending. Lawrence v. City of Phila., 527 F.3d 299, 310 (3d Cir. 2008). Rather, " ‘[c]ross-motions are no more than a claim by each side that it alone is entitled to summary judgment, and the making of such inherently contradictory claims does not constitute an agreement that if one is rejected the other is necessarily justified or that the losing party waives judicial consideration and determination whether genuine issues of material fact exist.’ " Id. (quoting Rains v. Cascade Indus., Inc., 402 F.2d 241, 245 (3d Cir. 1968) ).

III. DEFENDANT AMEC'S MOTION FOR SUMMARY JUDGMENT

Defendant AMEC seeks summary judgment on the entirety of the Complaint brought by Plaintiffs, the PRP Group. First, Defendant contends that it cannot legally be liable on the CERCLA claims in Counts III and IV of the Complaint. Second, Defendant posits that all of Plaintiffs' claims, except the claim for indemnification, are barred by the statute of limitations. Finally, Defendant asserts that Plaintiffs' claim for defense and indemnification in Count II is not viable.

A. CERCLA Claims (Counts III and IV)

In 1980, Congress enacted the Comprehensive Environmental Response, Compensation, and Liability Act, 94 Stat. 2767, as amended, 42 U.S.C. §§ 9601 – 9675, in response to the serious environmental and health risks posed by industrial pollution. Burlington N. & Santa Fe Ry. Co. v. U.S., 556 U.S. 599, 602, 129 S.Ct. 1870, 173 L.Ed.2d 812 (2009). "The Act was designed to promote the timely cleanup of hazardous waste sites and to ensure that the costs of such cleanup efforts were borne by those responsible for the contamination." Id. (internal quotation marks omitted).

Section 9607(a) imposes strict liability for environmental contamination upon four broad classes of potentially-responsible persons ("PRPs"): the current owner or operator of a facility; any person who owned or operated the facility at the time of disposal of a hazardous substance; any person who arranged for disposal, treatment, or transport of a hazardous substance; and any person who accepted a hazardous substance for transport to sites selected by such person. U.S. v. CDMG Realty Co., 96 F.3d 706, 712 (3d Cir. 1996) (citing 42 U.S.C. § 9607(a) ). "Once an entity is identified as a PRP, it may be compelled to clean up a contaminated area or reimburse the Government for its past and future response costs." Burlington N., 556 U.S. at 609, 129 S.Ct. 1870. Because the Act imposes strict liability, causation need not be proven. In re Bell. Petrol. Servs., Inc., 3 F.3d 889, 897 (5th Cir. 1993). Under 42 U.S.C. § 9613 of that Act, however, a PRP "may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title" in order to allocate response costs. 42 U.S.C. § 9613(f)(1). Alternatively, under certain limited circumstances, a PRP may bring a contribution claim against a person who is a "response action contractor." 42 U.S.C. § 9619(a).

Plaintiffs seek contribution under CERLA from Defendant both as an "arranger," under § 9607(a)(3), and a "response action contractor," under § 9619(a). Defendant moves for summary judgment, asserting that, as a matter of law, it cannot be classified as an "arranger" or held liable as a "response action contractor." I address each argument individually.

1. "Arranger" Liability

To determine whether a defendant may be held liable as an "arranger," it is crucial to start with the language of the statute, which provides that CERCLA liability attaches to an entity that "arrange[s] ... for disposal or treatment ... of hazardous substances owned or possessed by such person." 42 U.S.C. § 9607(a)(3). In Morton Int'l v. A.E. Staley Co., Inc., 343 F.3d 669 (3d Cir. 2003), the United States Court of Appeals for the Third Circuit established a two-part test to determine arranger liability. First, the plaintiff must prove that the defendant owned or possessed the waste. Id. at 678. Second, the plaintiff must show "the defendant's actual or presumed knowledge that the processing of that material can or will result in the release of hazardous waste; or the defendant's control over the production process." Id.

Subsequently, in Burlington Northern and Santa Fe Ry. Co. v. U.S., 556 U.S. 599, 129 S.Ct. 1870, 173 L.Ed.2d 812 (2009), the United States Supreme Court delineated the bounds of "arranger liability." The Court recognized that "the determination whether an entity is an arranger requires a fact-intensive inquiry that looks beyond the parties' characterization of the transaction as a ‘disposal’ or a ‘sale’ and seeks to discern whether the arrangement was one Congress intended to fall within the scope of CERCLA's strict-liability provisions." Id. at 610, 129 S.Ct. 1870. The Court recognized that, under the plain language of the statute, an entity may only qualify as an arranger under § 9607(a)(3) "when it takes intentional steps to dispose of a hazardous substance." Id. at 611, 129 S.Ct. 1870 (emphasis added); see also Virginia Street Fidelco, LLC v. Orbis Prods. Corp., No. 11-2057, 2016 WL 4150747, at *4 (D.N.J. Aug. 3, 2016). "[K]nowledge alone is insufficient to prove that an entity ‘planned for’ the disposal...." Burlington N., 556 U.S. at 612, 129 S.Ct. 1870 ; see also United States v. Gen. Elec. Co., 670 F.3d 377, 383, 390 (1st Cir. 2012) (finding, under Burlington, "that mere knowledge of future disposal will not trigger arranger liability," but that a "well-documented history of purposeful inaction" demonstrated sufficient intent to render defendant liable for arranging for the disposal of a hazardous substance); Celanese Corp. v. Martin K. Eby Constr. Co., 620 F.3d 529, 533 (5th Cir. 2010) ("[T]he entity must ‘take [ ] intentional steps’ or ‘plan[ ] for’ the disposal of the hazardous substance." (citing Burlington, 556 U.S. at 612, 129 S.Ct. 1870 )).

Here, Plaintiffs contend that Defendant qualifies as an "arranger" under CERCLA because of its role as a design engineer with authority to manage hazardous substances and existing on-site contamination through its design of the sheet pile wall. They go on to reason that "that sort of control is sufficient to impose strict liability on AMEC for releases of hazardous substances regardless of whether there is proof of negligence." (Pls.' Opp'n Summ. J. 6.) Plaintiffs conclude that Defendant's design of the sheet pile wall allowed contaminants to escape through seams in the wall and, "[t]hus [Defendant] intended that there always would be ‘actual’ releases from the Site." (Id. ) As such, they argue that I should deny Defendant's Motion for Summary Judgment because there is a genuine issue of material fact regarding whether Defendant's activities—designing a defective sheet pile wall and approving design changes proposed in the field—give rise to "arranger" liability.

Plaintiffs' argument reflects a misunderstanding of "arranger" liability under both the statute and controlling case law. According to the undisputed facts, Defendant did not dispose of any hazardous substances at the Site. (DSUF ¶ 35.) Moreover, nothing in the record suggests that Defendant ever owned or possessed any hazardous substances.⁴ Rather, according to all of the evidence, Defendant was responsible for designing and constructing the sheet pile wall in order to contain the release of any hazardous substances already deposited at the Site. (DSUF, Ex. Y, Response to Request Nos. 8 & 9.)

4 Plaintiffs urge that "[d]uring the pre-design investigation, [Defendant] performed for the Group under the 1998 AO with the EPA, [Defendant] possessed hazardous substances in samples that it obtained for laboratory analysis, packaged for off-site shipment, and arranged for transportation to third-party disposal sites." (PC ¶ 36.) This allegation is insufficient to make Defendant an "arranger" because it does not involve affirmative steps to introduce hazardous materials at the Site.

Plaintiffs are unable to point to any evidence that Defendant took intentional steps regarding the disposal of a hazardous substance. The mere effort to remediate and manage hazardous substances that may have leaked into the environment does not, as a matter of law, rise to the level of taking intentional steps to dispose of a hazardous substance. See U.S. v. CDMG Realty Co., 96 F.3d 706, 711 (3d Cir. 1996) ("[T]he passive migration of contamination dumped in the land prior to Dowel's ownership does not constitute disposal."); see also Blasland, Bouck & Lee, Inc. v. City of North Miami, 96 F. Supp. 2d 1375, at 1379 (S.D. Fl. 2000) ("To be liable as an arranger, a party must take an affirmative step to introduce hazardous substances to an area—mere inaction or inept action which fails to remedy but does not worsen existing contamination is not sufficient.").

As there are no material facts reflecting that Defendant took intentional steps to dispose of a hazardous substance on the Site, I will grant Defendant's Motion and find that, as a matter of law, Defendant was not an "arranger" under CERCLA.

2. "Response Action Contractor" Liability

Alternatively, Plaintiffs contend that Defendant is liable as a "response action contactor" under § 9619(a) of CERCLA. This section provides:

(1) Response action contractors: A person who is a response action contractor with respect to any release or threatened release of a hazardous substance ... shall not be liable under this subchapter or under any other Federal law to any person for injuries, costs, damages, expenses, or other liability (including but not limited to claims for indemnification ...) which results from such release or threatened release.

(2) Negligence, etc.: Paragraph (1) shall not apply in the case of a release that is caused by conduct of the response action contractor which is negligent, grossly negligent, or which constitutes intentional misconduct.

42 U.S.C. § 9619(a).

"Prior to the enactment of section 9619, ‘response action contractors, despite the exercise of due care and satisfactory performance of contract specifications, could, by virtue of their involvement with hazardous waste sites, be included in the definitions of owner, generator, or transporter and therefore could be subject to [strict] liability.’ " New Castle Cnty. v. Halliburton NUS Corp., 903 F. Supp. 771, 775 (D. Del. 1995) (quoting H.R. Rep. No. 99-253(I), 99^th Cong., 2^nd Sess., 92 reprinted in 1986 U.S.C.C.A.N. 2835, 2874), aff'd, 111 F.3d 1116 (3d Cir. 1997). Section 9619(a) was enacted to "clarif[y] and differentiat[e] the liability of response action contractors ... from the liability of responsible parties." Id. at 775 (quoting H.R. Rep. No. 99-253(I) ). Congress chose to provide additional protection in the form of a negligence threshold. Id.

Plaintiffs insist that facts of record establish that Defendant's negligence resulted in a "threatened" release of hazardous substances and that threatened releases, as well as actual releases, can subject negligent contractors to CERCLA liability. Plaintiffs, however, misread the statute. By its plain terms, the statute does not impose liability on response action contractors except where the contractor's negligence or intentional conduct results in the actual release of hazardous substances. See Blasland, Bouck & Lee, Inc. v. City of N. Miami, 96 F. Supp. 2d 1375, 1380 (S.D. Fla. 2000) ("[A] response action contractor cannot be liable for response costs unless it is negligent and such negligence causes the release of a hazardous substance."); 1 Caroline Broun and James O'Reilley, RCRA and Superfund: A Practice Guide, 3d § 10:33 (2019) ("[A] ‘response action contractor cannot be liable for response costs unless it is negligent and such negligence causes the release of a hazardous substance.’ ") (quotations omitted). Had Congress intended to include "threatened" releases in the negligence exception, it would have done so. Thus, to the extent Plaintiffs claim only that there was a threatened release of hazardous substances at the Site, Defendant cannot be held liable under CERCLA.⁵

5 Case law interpreting this provision is sparse. Nonetheless, none of the cases cited by Plaintiffs support the proposition that a response action contractor can be liable for negligence only if it results in a threatened release. In fact, Plaintiffs miscite or misquote several cases. See Amtreco, Inc. v. O.H. Mats., Inc., 802 F. Supp. 443, 446 (M.D. Ga. 1992) (finding that a response action contractor was not immune from liability for state and common law torts; not commenting on CERCLA liability); New Castle Cnty v. Halliburton NUS Corp., 903 F. Supp. 771, 775 (D. Del. 1995) (explicitly recognizing that although a response action contractor is liable to "any other person" who is harmed by the response action contractor's negligence, the response action contractor "is not liable under CERCLA or any other federal law to any person absent a finding that the response action contractor was negligent, grossly negligent, or engaged in intentional misconduct."), aff'd in part 111 F.3d 1116 (3d Cir. 1997) ; New Mexico v. EPA, 310 F. Supp. 3d 1230, 1261 n.19 (D.N.M. 2018) (recognizing that the U.S. may indemnify a response action contractor against any liability for negligence arising out of the performance of the cleanup contract, but not addressing CERCLA liability).

Alternatively, Plaintiffs argue that even if 42 U.S.C. § 9619(a) of CERCLA applies to only actual, but not threatened, releases of hazardous substances, there are facts to establish that a release of hazardous substances occurred through the sheet pile wall. In support, Plaintiffs cite to a singular piece of evidence—the deposition of the PRP Group's Rule 30(b)(6) designee, Joseph Vitale—who testified as follows:

Q. Do you believe that soil has migrated through the wall?

A. In substantial amounts, no. There's always some just because there's water that passes through the lines as designated and there is some colloidal particles, but not of substance.

Q. Would that include the soil with PCBs attached to it?

A. Yes, because PCBs tend to attach to solid material rather than water. It's not

very soluble in water, but again, you know, the whole reason for the repair was for the threat of releases as opposed to having a release.

(Def.'s Mot. Summ. J., Ex. BB, at 132:11–12.) Based on that testimony, Plaintiffs contend that Defendant is liable, as a response action contractor, for negligently allowing the actual release of hazardous substances.

Such speculative testimony, however, does not create a genuine issue of material fact as to whether Defendant was responsible for a "release." The term "release" is defined, in part, as "any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment (including the abandonment or discarding of barrels, containers, and other closed receptacles containing any hazardous substance or pollutant or contaminant) ..." 42 U.S.C. § 9601(22). According to § 9619(a), the "release" has to occur as a result of Defendant's negligent conduct. Mr. Vitale's testimony, however, simply suggests that minimal amounts of soil, with PCBs attached to it, may have migrated—as would "always" happen by nature of the situation—through the sheet pile wall. Such evidence does not "exceed the ‘mere scintilla’ standard" required to raise an issue of fact as to whether Defendant's conduct negligently resulted in an actual "release" as defined above. Petruzzi's IGA Supermkts., Inc. v. Darling-Del. Co., Inc., 998 F.2d 1224, 1230 (3d Cir. 1993).

Indeed, the undisputed evidence of record reflects that Plaintiffs continually represented—both to governmental agencies and in connection with this litigation—that the alleged defects in the sheet pile wall caused no actual releases, but simply posed a threat of release. In Plaintiffs' February 14, 2013 letter to counsel for the National Oceanic and Atmospheric Administration ("NOAA"), Plaintiffs' counsel affirmatively stated that "[c]ontaminant levels found post-construction are similar to, if not lower than, background levels found throughout the Delaware River. There is also no evidence that data collected during the post-construction monitoring phase of the remedy show any continuing release of contaminants from the Site to natural and aquatic resources." (DSUF, Ex. MM.)

Moreover, Mr. Vitale testified on behalf of Plaintiffs that, "as far as a material breach of concern, we're not aware that the—you know, it breached at that time. But we were concerned that it could breach in the future and that's why we did what we did." (DSUF, Ex. EE, 153:5–21; see also 155:11–21.) According to Mr. Vitale, in the 2016 Long-Term Monitoring Annual Report, Plaintiffs expressly stated that "[t]he sheet pile wall continues to meet its design objective of preventing off-site migration of contaminated soil particles into the aquatic environment." (DSUF, Ex. EE, 243:21–244:10.) Mr. Vitale represented that this statement was accurate and that the concern about the sheet pile wall was not that it "release[d] or unzip[ped] to release sediment or soils into the aquatic environment," but rather that there was the "threat" of release only. (DSUF, Ex. EE, 245:2–11.) He further remarked that if there had been a sign of actual release, it would have had to be reported to the EPA. (DSUF, Ex. EE, 162:6–21.) Mr. Vitale concluded that hazardous contaminants "didn't release in the past or the present at the time this [the Long-Term Monitoring Annual Report] was written, and we repaired it so it wouldn't happen in the future." (DSUF, Ex. EE, 243:20–246:8.) Mr. Vitale affirmatively stated that "the whole reason for the repair was for the threat of release as opposed to having a release." (DSUF, Ex. BB, 133:21–23.)

In short, there are insufficient facts to establish that Defendant's negligence in construction of the sheet pile wall, as designed and approved, resulted in any actual release of hazardous chemicals. Accordingly, I find that Defendant cannot be held liable under CERCLA as a response action contractor. As Plaintiffs have not articulated any cognizable basis for Defendant's potential liability, I must grant judgment in favor of Defendant on Plaintiffs' claim for contribution under CERCLA.

B. Statute of Limitations

Defendant next posits that two of Plaintiffs' claims face a statute of limitations bar: (1) the breach of warranty claim for failure to engineer and design the sheet pile wall pursuant to the contract, and (2) the breach of contract claim for failure to secure and maintain insurance policies.⁶ Defendant contends that neither of these claims was filed within the applicable four-year statute of limitations. Plaintiffs respond that, under the discovery rule, they have timely asserted their claims both for breach of warranty and for breach of contract.⁷

6 Defendant also alleges that the CERCLA claims are time barred. As I will dismiss these claims on grounds set forth above, I need not address the alleged statute of limitations issues.

7 Via footnote, Plaintiffs argue that, under the doctrine of promissory estoppel, Defendant should be barred from propounding a statute of limitations defense because Defendant promised to perform work at the Site competently, the Group relied on that promise to its detriment, and Defendant failed to respond to the EPA's demands to repair the wall.
Aside from the fact that Plaintiffs provide almost no legal analysis for this argument, I find that it has no merit. The doctrine of promissory estoppel is employed to enforce a promise where there has been no consideration, i.e. , no binding contract. Jodek Charitable Trust, R.A. v. Vertical Net Inc., 412 F. Supp. 2d 469, 478 (E.D.Pa. 2006). It is not used to bar a statute of limitations defense.

1. Breach of Warranty

Plaintiffs' breach of warranty claim alleges that the 1998 and 2003 Contracts with Defendant contained express warranties regarding Defendant's work on the sheet pile wall. (Compl. ¶ 131.) Specifically, the 2003 Contract⁸ stated:

8 To the extent the 1998 and 2003 Contracts are identical or virtually identical, I cite solely to the 2003 Contract.

Consultant shall conduct its activities in a safe and professional manner in compliance with all applicable statutes, ordinances, orders, rules and regulations of the federal, state and local governments in whose jurisdiction such activities are performed. Consultant shall conduct its activities in accordance with accepted professional standards for engineering and scientific practices adopted by environmental firms performing services of a similar nature in effect at the time Services are rendered. Consultant warrants said Services to be accurate and free from defects due to materials, workmanship and/or design in accordance with such professional standards.

(DSUF, Ex. E.)

Plaintiffs contend that Defendant breached each of these express warranties by: (a) failing to engineer and design the sheet pile wall as warranted; (b) failing to conduct its activities in a safe and professional manner in compliance with the EPA's Administrative Order and all applicable statutes, ordinances, orders, rules, and regulations; (c) failing to conduct its activities in accordance with accepted professional standards for engineering and scientific practices; and (d) failing to provide services that were accurate and free from defects due to materials, workmanship, and/or design. (Compl. ¶¶ 132–135.) In addition, Plaintiffs assert that Defendant breached an "implied warranty that Defendant's designs and specifications would give the sheet pile wall a reasonable fitness for its intended purpose." (Id. ¶¶ 136–37.)

Defendant urges that Plaintiffs do not identify any breaches of warranty that occurred after Defendant performed its last services in 2011. As this case was not commenced until December 2016, Defendant asserts that this claim was filed past the expiration of Pennsylvania's four-year statute of limitations.

It is well-established that federal courts apply state law to determine when an action accrues for the purposes of the statute of limitations in matters arising under state law. Ragan v. Merchants Transfer & Warehouse Co., 337 U.S. 530, 533, 69 S.Ct. 1233, 93 L.Ed. 1520 (1949) ; Creghan v. Procura Mgmt., Inc., 91 F. Supp. 3d 631, 648 (E.D. Pa. 2015). Under Pennsylvania law, the statute of limitations for breach of an express warranty claim is four years. 13 Pa. Cons. Stat. § 2725(a) ; Zaleski v. Melt Rest., No. 15-2552, 2016 WL 3087392, at *3 (E.D. Pa. June 1, 2016). A cause of action for breach of warranty accrues when "tender of delivery is made," irrespective of the "aggrieved party's lack of knowledge of the breach." Floyd v. Brown & Williamson Tobacco Corp., 159 F. Supp. 2d 823, 831 (E.D. Pa. 2001) (quoting 13 Pa. Cons. Stat. § 2725(a)–(b) ). In other words, the statute of limitations will begin to run "when the seller makes tender of delivery; however, if the warranty ‘explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance,’ the cause of action accrues when the breach is or should have been discovered." Soutner v. Covidien, No. 17-2178, 2019 WL 3801438, at *8 (M.D. Pa. Aug. 13, 2019) (citing 13 Pa. Cons. Stat. § 2725(b) ).⁹

9 Implied warranties of merchantability and fitness for a particular purpose do not explicitly extend to future performance, however, and thus the exception found at § 2725(b) does not apply. See Nationwide Ins. Co. v. Gen. Motors Corp., 533 Pa. 423, 625 A.2d 1172, 1178 (1993) (finding implied warranty claims barred by the statute of limitations). "Therefore, a cause of action for breach of implied warranty accrues upon tender of delivery." Soutner, 2019 WL 3801438, at *8.

Here, the 1998 and 2003 Contracts do not explicitly extend the express warranty to future performance and, thus, a four-year statute of limitations controls. The parties agree that Defendant performed its last services for Plaintiffs under the Contracts in 2011. Accordingly, "tender of delivery" occurred at that time. Yet, Plaintiffs did not commence this litigation until December 23, 2016, well past the four-year statute of limitations for breach of warranty claims.

Plaintiffs urge that, without authorization, they could not have possibly brought the breach of warranty claims earlier because the Site is subject to CERCLA, which gives the EPA absolute authority to control Site work. Specifically, 42 U.S.C. § 9622(e)(6) provides that:

When either the President, or a potentially responsible party pursuant to an administrative order or consent decree under this chapter, has initiated a remedial investigation and feasibility study for a particular facility under this chapter, no potentially responsible party may undertake any remedial action at the facility unless such remedial action has been authorized by the President.

42 U.S.C. § 9622(e)(6). According to Plaintiffs, the EPA can rely upon information generated by Plaintiffs' ongoing Operations and Maintenance ("O&M") obligations to trigger further response actions required by the Consent Decree when problems are identified.

In this case, from 2009–2013, the EPA did not require Plaintiffs to do anything about the wall, other than standard Operations and Maintenance. Plaintiffs state that neither they nor the EPA had notice of defects with the wall that required further response actions until at least April 2014. According to Plaintiffs, it was not until mid-2014—after they inspected the steel pile wall and found movement—that the EPA directed them to identify the reasons for failure of the wall and to prepare a plan for repairs. In August 2014, RAC, on behalf of Plaintiffs, determined that Defendant's defective design was the cause of the problem. Only then did the EPA give its approval for remediation and repair work. As such, Plaintiffs claim that they could not have brought a breach of warranty claim prior to that time.

Plaintiffs' argument mistakenly relies on the discovery rule. "The discovery rule is a judicially created exception to the general rule that a cause of action accrues when the wrongful conduct is committed. It tolls the running of the statute of limitations until the party asserting the claim either knows or reasonably should know: 1) that he or she has suffered an injury; and 2) that the injury sustained was caused by the conduct of another party." Andritz Sprout-Bauer, Inc. v. Beazer East, Inc., 12 F. Supp. 2d 391, 414–15 (M.D. Pa. 1998). It is well settled, however, that the discovery rule does not apply to breach of warranty claims.¹⁰ Soutner, 2019 WL 3801438, at *8 (citing cases); see also City of Philadelphia v. Lead Indus. Assoc., 994 F.2d 112, 121 n.7 (3d Cir. 1993) (finding the discovery rule did not apply to breach of warranty claims by City against manufacturers of lead-based paint; claim accrued when paint was delivered, not when city reasonably should have known that it was injured by use of such paint in buildings); Northampton Cty. Area Cmty. College v. Dow Chem., U.S.A., 389 Pa.Super. 11, 566 A.2d 591 (1989) ("[T]he tort discovery rule does not apply to breach of warranty actions"; "[a]n exception addressing the situation in which the warranty extends to future performance does not apply in this case because there was no express warranty extending to future performance."), aff'd, 528 Pa. 502, 598 A.2d 1288 (1991).

10 Plaintiffs mischaracterize the applicable case law. They cite New Castle County v. Halliburton NUS Corp., 111 F.3d 1116, 1125 (3d Cir. 1997) for the proposition that the discovery rule has been applied in CERCLA actions. (Pls.' Opp'n Summ. J. 21, n.41.) That case, however, applied the discovery rule to a CERCLA claim, not to a state breach of warranty claim.
Plaintiffs also argue that the discovery rule has been applied in breach of contract actions involving latent defects in construction, and then infer that the discovery rule must likewise be applicable in breach of warranty cases. This argument ignores the distinction between breach of warranty and breach of contract and disregards the wealth of case law explicitly recognizing that the discovery rule does not apply to breach of warranty actions even if the alleged breach is not apparent until after tender of delivery. See McLaughlin v. Bayer Essure, No. 14-7314, 2019 WL 1382710, at *7 (E.D. Pa. Mar. 27, 2019) (citing cases).

Moreover, even assuming arguendo that the discovery rule applied to breach of warranty claims, Plaintiffs' cause of action would still be untimely. Under the discovery rule, the running of the statute of limitations on a cause of action in tort may be delayed until such time as the cause of action could or should have been discovered through the exercise of due diligence. Bickell v. Stein, 291 Pa.Super. 145, 435 A.2d 610, 612 (1981). "If ... the plaintiff alleges the existence of a latent defect in construction, the cause of action does not accrue until the plaintiff became aware or, through exercise of reasonable diligence, should have become aware of the defect." Northampton Cty., 566 A.2d at 598.

Here, Plaintiffs admit that a principal of RAC, working on behalf of the PRP Group, performed his first inspections of the wall in November 2012. (PSUF ¶ 87.) Those inspections identified "unexpected movement of the wall and stresses on the features of the wall." (PSUF ¶ 88.) It was that discovery that ultimately led to Plaintiffs' investigation and preparation of plans for repairs to the wall, which were ultimately submitted to the EPA. (PSUF ¶¶ 95–101.) Thus, at minimum, Plaintiffs' cause of action accrued in late November 2012, when it actually became aware of the defect in the sheet pile wall.

Plaintiffs' argument that they were limited by the EPA's failure to require any new work on the sheet pile wall has been rejected by the United States Court of Appeals for the Third Circuit. In City of Philadelphia v. Lead Industries Association, Inc., 994 F.2d 112 (3d Cir. 1993), the plaintiff sued manufacturers of lead-based paint and their trade association to recover costs of abating the hazardous paint. Id. at 115–16. The plaintiff argued that its tort claims accrued when federal regulations were enacted which required the City to remove lead-based paint from federally-funded housing. Id. at 121. The Third Circuit disagreed and found that the tort claims accrued when plaintiff reasonably should have known that the use of lead-based paint in its buildings was hazardous, remarking that "[t]hough the cost of removing the lead possibly could be the measure of damages, it is not the injury." Id. (citations omitted). The Third Circuit reasoned that state tort claims did "not depend on any provision of federal law for their success." Id.

Similarly here, Plaintiffs' breach of warranty claim is a state law claim that does not depend on any provision of federal law or action by the EPA for its success. Although the EPA did not require Plaintiffs to engage in response actions until mid-2014, it is undisputed that Plaintiffs were aware of potential defects in the wall in 2012. While the costs of the remedial work required by the EPA could be the measure of damages, that is not the injury. Accordingly, even if the discovery rule applied, I find that Plaintiffs' breach of warranty cause of action accrued no later than November 2012, making their Complaint—filed in December 2016—untimely.

For all of the reasons set forth above, I will grant summary judgment in Defendant's favor on Plaintiff's breach of warranty claim

2. Breach of Contract for Failure to Procure and Maintain Insurance Policies

Defendant next posits that Plaintiffs' breach of contract claim for failure to procure and maintain insurance is also barred by the statute of limitations. On this issue, I find that a genuine issue of material fact remains.

Both the 1998 and the 2003 Contracts required Defendant to obtain and maintain, "throughout the time during which it provide[d] services on behalf of the PRP Group," three types of insurance: Professional Errors & Omissions ("E&O") insurance, with limits of at least $1 million per claim; Comprehensive General Liability ("CGL") insurance, with limits of at least $2.5 million; and Excess Liability insurance, with limits of at least $2.5 million. (PSUF ¶¶ 29–32 & Exs. 3, 5.) Plaintiffs contend that Defendant's failure to procure and maintain the insurance required to protect the parties under the Contracts is threefold: (1) Defendant failed to obtain E&O insurance for eight of the required years, and the E&O insurance actually purchased was not the required amount; (2) Defendant failed to obtain CGL insurance for the period from 1998 to 2003, and purchased insufficient CGL insurance for the period of 2004 to 2011; and (3) Defendant never procured excess liability insurance. According to Plaintiffs, such failures constitute an unequivocal breach of contract.

Defendant asserts that the breach of contract claim is time barred by Pennsylvania's four-year statute of limitations set forth in 42 Pa. Cons. Stat. § 5525. "In a contract case, the cause of action accrues when there is an existing right to sue based on the breach of contract." Cooper v. Sirota, 37 F. App'x 46, 48 (3d Cir. 2002). "Generally, an action founded on a contract accrues when the contract is breached." Sadtler v. Jackson–Cross Co., 402 Pa.Super. 492, 587 A.2d 727, 731 (1991).

It is undisputed that the 1998 and 2003 Contracts required Defendant to secure and maintain multiple insurance policies, naming Plaintiffs as additional insureds. (PSUF ¶¶ 29, 50; DC ¶¶ 29, 50.) In connection with that obligation, the Contracts also stated that Defendant was required to provide Plaintiffs with certificates of insurance evidencing procurement of such insurance. (PSUF, Ex. 3, ¶ 20; PSUF Ex. 5, ¶ 20.) Plaintiffs allege that although they intermittently received certificates of insurance during the 1998–2009 time period, they stopped receiving any certificates of insurance after 2009, despite the fact that the obligations of the 2003 Contract continued into 2011. (PSUF, Ex. 36.) Defendant thus argues that Plaintiffs were on notice of a potential breach as of 2010, but did not commence this lawsuit until December 2016, more than six years after receipt of the last certificate of insurance.

Unlike with the breach of warranty claim, however, Pennsylvania recognizes a discovery rule in breach of contract cases. "[T]he discovery rule focuses not on the plaintiff's actual knowledge, but rather on whether the knowledge was known, or through the exercise of diligence, knowable to the plaintiff." Mest v. Cabot Corp., 449 F.3d 502, 511 (3d Cir. 2006) (internal quotation marks omitted). The party attempting to apply the discovery rule "bears the burden of demonstrating that he exercised reasonable diligence in determining the existence and cause of his injury." Id. "To demonstrate reasonable diligence, a plaintiff must establish[ ] that he pursued the cause of his injury with those qualities of attention, knowledge, intelligence and judgment which society requires of its members for the protection of their own interests and the interests of others." Id. (quotations omitted). Lack of knowledge, a mistake, or a misunderstanding will not toll the statute. See Pocono Int'l Raceway, Inc. v. Pocono Produce, Inc., 503 Pa. 80, 468 A.2d 468, 471 (1983). "Though the reasonable diligence test accounts for the different capacities of different plaintiffs, the test is nonetheless an objective one." Perelman v. Perelman, 545 F. App'x 142, 149 (3d Cir. 2013).

Where "reasonable minds would not differ in finding that a party knew or should have known on the exercise of reasonable diligence of his injury and its cause, the court determines that the discovery rule does not apply as a matter of law." Brawner v. Educ. Mgmt. Corp., 513 F. App'x 148, 150 (3d Cir. 2013) (quoting Fine v. Checcio, 582 Pa. 253, 870 A.2d 850, 858–59 (2005) ). As a general rule, however, "the point at which the complaining party should reasonably be aware that he has suffered an injury is a factual issue best determined by the collective judgment, wisdom and experience of jurors." Crouse v. Cyclops Indus., 560 Pa. 394, 745 A.2d 606, 611 (2000) (internal quotations and citations omitted); see also Adams v. Zimmer US, Inc., 943 F.3d 159, 164 (3d Cir. 2019) (holding that factual issues pertaining to a plaintiff's notice and diligence are for a jury to decide).

Here, given the progression of events leading to this lawsuit, I find that reasonable minds could differ as to when Plaintiffs' duty of diligence to investigate Defendant's non-compliance with the insurance obligation arose. During the period that insurance coverage was required, Defendant produced certificates of insurance for seven of those years: 1998–1999, 1999–2000, 2001–2002, 2003–2004, 2004–2005, 2006–2007, and 2008–2009. But Defendant failed to produce certificates for the intervening years or any time after 2009. The failure to produce certificates of insurance constituted a technical breach of an explicit contractual obligation. Plaintiffs chose, however, to accept the seven existing certificates of insurance as evidence that Defendant continued to procure the required insurance during the entire time period. Such intermittent production of certificates of insurance could have reasonably misled Plaintiffs into believing that Defendant remained in compliance with its contractual duty to procure insurance.

Thereafter, in November 2012, Plaintiffs were first put on notice of a structural defect in the wall. After the EPA approved Plaintiffs' plan for remediation, Plaintiffs wrote to Defendant regarding the wall defects "so [Defendant could] review its contractual and insurance obligations." (PSUF, Ex. 20.) Defendant provided no written response to that letter either to confirm or deny that such insurance existed. Subsequently, in December 2014 and again in June 2015, Plaintiffs provided Defendant with definitive notice that Plaintiffs believed Defendant's design of the sheet pile wall was responsible for the wall's damage and that Defendant was liable for the remedial costs. (PSUF, Exs. 26 & 27.) Neither Defendant nor any of its insurance carriers notified Plaintiffs of an intent to indemnify Plaintiffs for their losses and damages.

Following completion of the remedial work by an alternate contractor, Plaintiffs filed this lawsuit alleging, among other things, that, "[t]o the extent that [Defendant] failed to secure and maintain the required insurance coverage or failed to put its insurance carriers on notice or otherwise failed to invoke properly the terms of the insurance coverage," Defendant breached its contractual obligation. (Compl. ¶ 150.) However, it was not until Defendant's April 13, 2017 service of its initial discovery disclosures—which included no actual insurance policies—that Plaintiffs obtained specific information about Defendant's alleged breach. (PSUF, Ex. 29, at 7.) Plaintiffs then served their First Set of Requests for Production on Defendant seeking, "all insurance policies that you obtained for your work related to the Site," "all documents and communications since May 29, 2014, between you and any insurer or an employee, consultant, contractor or agent of an insurer related to your work at the Site," and "all documents and communications since May 29, 2014, between you and any insurer or an employee, consultant, contractor or agent of an insurer related to demands by the Group, including but not limited to the Complaint." (PSUF, Ex. 30, Request Nos. 1–3.) Defendant again produced no insurance policies or correspondence. (PSUF ¶ 134, DC ¶ 134.) Indeed, no actual policies were produced until after the close of discovery and, even then, the policies produced reflected only eight years of E&O coverage, seven years of CGL coverage, and no Excess Liability Insurance. As such, Plaintiffs contend that their notice of the breach could not have occurred any earlier than Defendant's response to the initial disclosures in April 2017.

In light of the foregoing, a genuine issue of material fact remains as to when Plaintiffs knew or should have known about Defendant's failure to procure the requisite insurance in compliance with its contractual obligations. While Defendant lays blame on Plaintiffs for pursuing a breach of contract action without any prior investigation of Defendant's breach, Plaintiffs appear to have repeatedly attempted to obtain insurance coverage information from Defendant prior to that time, to no avail. Moreover, I find that reasonable minds could differ as to when the fact of the breach was known or reasonably knowable to Plaintiffs through the exercise of diligence. Given that "the point at which the complaining party should reasonably be aware that he has suffered an injury is a factual issue best determined by the collective judgment, wisdom and experience of jurors," Crouse, 745 A.2d at 611, I decline to dismiss this claim as time barred.

C. Breach of Duty of Indemnification

Finally, Defendant raises three separate arguments in support of its Motion for Summary Judgment on Plaintiffs' indemnification claim. First, it asserts that the indemnification provision did not survive termination of the 2003 Contract in 2011. Second, Defendant contends that the indemnification provision does not apply here because Plaintiffs do not seek defense and indemnification of "third-party" claims. Finally, Defendant argues that any duty to defend was not triggered because Plaintiffs never explicitly demanded a legal defense. I address each argument individually.

1. Whether the Duty of Indemnification Survived Termination of the Contract

Defendant's primary challenge to the breach of indemnification claim alleges that the indemnification provision of the 1998 and 2003 Contracts did not survive termination of the agreement. Specifically, paragraph 15.1 of the 1998 and 2003 Contracts provides that:

Consultant [Defendant] shall defend, indemnify and hold harmless PRP Group [Plaintiffs] from and against any and all claims, losses, damages, liability, costs or actions, including, without limitation, reasonable attorney fees and other costs and expenses ("damages") to the extent arising out of, resulting from or in connection with any unlawful, negligent or willful misconduct or omission by the Consultant, its agents, employees or subcontractors, in the performance of this Agreement, or resulting from or in connection with any direct or indirect exposure of an agent, employee or subcontractor of consultant to toxic or otherwise hazardous substances or conditions while performing Services pursuant to this Agreement so long as such exposure or conditions are not caused by the unlawful conduct, the gross negligence or the willful misconduct or omission on the part of the PRP Group. PRP Group shall defend, indemnify and hold harmless Consultant from and against any and all damages to the extent solely arising out of, resulting from or in connection with any unlawful, grossly negligent or willful misconduct or omission by the PRP Group under this Agreement.

(PSUF, Ex 3, ¶ 15.1; Ex. 5, ¶ 15.1.)

Defendant reasons that the absence of any language that this provision "survives" termination of the agreement—considered in conjunction with the inclusion of such survival language in two other provisions of the 1998 and 2003 Contracts—suggests that the indemnification provision did not, in fact, survive the Contract's expiration. Because the 2003 Contract stated that "[t]his Agreement shall terminate at such time as the Services are completed," (id. ¶ 7), and because Defendant completed the services due under both the 1998 and 2003 Contracts no later than 2011, Defendant asserts that its obligations under the indemnification provision—including any obligation to defend, indemnify, and hold harmless Plaintiffs—were extinguished in 2011.¹¹

11 Both the 1998 and the 2003 Contracts contain the same indemnification provision. Defendant argues that only the 2003 Contract is operative here because, pursuant to its express terms, the 2003 contract "supersede[d] all prior negotiations, representation or agreements, either written or oral." (PSUF Ex. 5, ¶ 2.) Plaintiffs reject this argument, positing that the Contracts cover different subject matters and, as such, the 2003 Contract does not supersede the 1998 Contract.
As resolution of this issue has no bearing on the issues before me, I decline to resolve it.

Given the linguistic ambiguity in the provision at issue, I turn to ordinary principles of contract interpretation. As a general rule, "courts should not construe ambiguous writings to create lifetime promises." M&G Polymers USA, LLC. v. Tackett, 574 U.S. 427, 135 S.Ct. 926, 190 L.Ed.2d 809 (2015). In Litton Financial Printing Division v. National Labor Relations Board, 501 U.S. 190, 111 S.Ct. 2215, 115 L.Ed.2d 177 (1991), the United States Supreme Court held that "contractual obligations will cease, in the ordinary course, upon termination of the [contract]." Id. at 207, 111 S.Ct. 2215. The Court, however, recognized that there are exceptions to this rule, which "are determined by contract interpretation." Id. Specifically, the Court remarked that rights "which accrued or vested under the agreement will, as a general rule, survive termination of the agreement. And of course, if a[n] ... agreement provides in explicit terms that certain benefits continue after the agreement's expiration, disputes as to such continuing benefits may be found to arise under the agreement, and so become subject to the contract's arbitration provisions." Id. at 207–08, 111 S.Ct. 2215. Finally, the Court noted that "structural provisions relating to remedies and dispute resolution ... may in some cases survive in order to enforce duties arising under the contract." Id. at 208, 111 S.Ct. 2215.

Although precedent addressing the survival of indemnification clauses is sparse, cases addressing the survival of arbitration and forum selection clauses provide some guidance. Courts have repeatedly held that such clauses can survive termination of the agreement where they are broadly written to apply to "any legal dispute" and the dispute involves facts and occurrences that arose before expiration of the contract. TriState HVAC Equip., LLC v. Big Belly Solar, Inc., 752 F. Supp. 2d 517, 535 (E.D. Pa. 2010) ; see also 13 Corbin on Contracts § 67.2, at 12 (rev. ed. 2003) ("Although termination and cancellation of an agreement extinguish future obligations of both parties to the agreement, neither termination nor cancellation affect those terms that relate to the settlement of disputes or choice of law or forum selection clauses."). This remains true despite the absence of language expressly providing for the survival of these provisions. See TriState HVAC, 752 F. Supp. 2d at 535 ("The exclusion of the forum-selection clause from the ‘survival’ clause ... does not evidence a clear intent that, upon termination of the agreement, the forum-selection clause would cease to apply to claims arising under the agreement."); AAMCO Transmissions, Inc. v. Romano, 42 F. Supp. 3d 700, 707 (E.D. Pa. 2014) ("Courts have upheld the applicability of forum selection clauses even where the termination provision of the contract expressly provides for the survival of certain enumerated provisions but not the forum selection clause.").

Defendant contends that an indemnification clause is not akin to these types of structural provisions. In support, it cites to the recent, non-precedential opinion from the Third Circuit in Nitterhouse Concrete Prods., Inc. v. Glass, Molders, Pottery, Plastics & Allied Workers Int'l Union, 763 F. App'x 164 (3d Cir. 2019). In that matter, the plaintiff company and defendant union had, over the course of many years, entered into multiple collective bargaining agreements ("CBA"s), which contained provisions requiring the union to indemnify the company from any claim or liability which "may arise by reason of the existence of [the company's pension plan]." Id. at 165. The union decided to not renew the collective bargaining agreement and, as a result, the company withdrew from the pension plan. Id. Pursuant to the Employee Retirement Income Security Act ("ERISA"), the pension plan assessed withdrawal liability against the company. Id. The company then invoked the indemnification clause in the CBA and demanded relief from the union for the assessed withdrawal liability. Id. at 165–66. The district court found that the indemnity provision did not extend to withdrawal liability incurred after expiration of the CBA.

On appeal, the Third Circuit affirmed. It remarked that the union's contractual indemnity obligation expired at the time the collective bargaining expired unless "(A) the liability accrued during the contract period; (B) the parties intended the indemnification agreement to extend past the CBA's termination; or (C) a contractual exception exists." Id. at 166. Under the first exception, the Court noted that the indemnification provision at issue provided for the union to indemnify the company from "any claim or liability which may arise by reason of the existence of the Plan. " Id. (emphasis added). By its very nature, withdrawal liability only arose after plan membership ended. Id. at 166–67. In other words, because the accrual of withdrawal liability could only follow the contract's expiration and the company's subsequent withdrawal from the plan, the liability did not accrue during the contract period. Id. The Court also reviewed the contracting history and noted that the parties had expressly agreed that the indemnification would not be enforceable after termination of the contract. Id. at 167–68. Finally, the Court found that "the indemnification agreement here [was] not of the nature of provisions that de facto survive arbitration." Id. at 168.

The contractual language in the indemnification provision at issue here, however, is distinguishable from the one in Nitterhouse and more akin to a forum selection clause or other structural provision relating to remedies and dispute resolution. Unlike the provision in Nitterhouse, which was limited to "any claim or liability which may arise by reason of the existence of the Plan," the provision here does not limit the indemnification to losses, damages, or liability arising only during the course of the Contracts. Rather, it extends to "any and all" claims, losses, damages, liability, costs or actions arising out of "or resulting from " Defendant's negligence "in the performance " of the work under the Contracts. Such language unambiguously indicates that the provision was intended to be remedial in nature and survive contractual expiration so long as—similar to a forum selection clause—the underlying negligence giving rise to the claim, loss, damage, liability, cost, or action had its source in the work completed under the Contracts and during the contractual period.¹²

12 Defendant argues that the "confidentiality" and "audit provisions" in sections eight and eleven of the contracts contain specific survival language stating that those provisions "shall survive termination of the Agreement." It contends that that survival language would be superfluous if all of the other contractual provisions survived in the absence of such language.
I find no merit to this argument. As noted in TriState HVAC, "[t]he exclusion of the forum-selection clause from the ‘survival’ clause—which, as a general matter, is intended to ensure the survival of certain contractual provisions that might otherwise be extinguished upon termination of the agreement—simply does not evidence a clear intent that, upon termination of the agreement, the forum-selection clause would cease to apply to claims arising under the agreement." 752 F. Supp. 2d at 535–36. That same reasoning holds true here. The confidentiality and audit provisions in the 1998 and 2003 Contracts would not clearly survive termination or expiration of these Contracts and, thus, the survival language was necessary. The indemnification language, however, was written to encompass "any and all" claims, losses, etc. resulting from Defendant's negligence in performance of the Contracts.

To adopt Defendant's contrary interpretation—that the indemnification provision did not survive expiration of the contract—would effectively render the provision a nullity. Under Defendant's theory, the indemnification provision would provide no remedy if Defendant provided negligent work on the last day of the contract. This is especially true in this particular context wherein the EPA had to approve any remedial work done under the Consent Order. It would be illogical to limit the indemnification language to claims brought solely during the time period during which Defendant was actually doing the work, regardless of whether either Plaintiffs or the EPA could possibly know about defects in the work. The indemnification provision, like a "structural provision relating to remedies and dispute resolution," must "survive in order to enforce duties arising under the contract." Litton Fin. Printing, 501 U.S. at 208, 111 S.Ct. 2215. Thus, I presume "as a matter of contract interpretation that the parties did not intend [this] pivotal dispute resolution provision to terminate for all purposes upon the expiration of the agreement." Id.

Finally, I find no merit to Defendant's argument that this interpretation would, in essence, mean that Defendant's contractual obligations last forever. As noted above, the defense and indemnification obligation exists only to the extent there are "claims, losses, damages, liability, costs or actions" that are causally connected to Defendant's negligence or willful misconduct. To the extent that future problems with the sheet pile wall cannot be so connected, Defendant retains no defense or indemnification obligation.¹³

13 In one sentence of its opposition brief, Defendant argues that Plaintiffs have not established such negligence or misconduct. (Def.'s Mem. Supp. Summ. J. 11.) That question, however, is best reserved for a fact-finder.

2. Whether the Defense and Indemnification Obligations Apply to the Claims Here

Defendant next argues that, even if the defense and indemnification obligations survived, they are not triggered under the facts of this case. Rather, according to Defendant, those obligations are triggered only by claims of third-parties against Plaintiffs. Defendant posits that the claim at issue here is a first-party claim for reimbursement of the Plaintiffs' asserted costs associated with repairs to the wall.

Plaintiffs respond that (1) under Pennsylvania law, indemnity can, in fact, apply to first-party claims, and (2) in any event, Plaintiffs faced third-party claims by the EPA for repairs to the sheet pile wall pursuant to the Utility Consent Decree.

Plaintiffs' first argument is unsupported by the relevant jurisprudence. It is well settled, under Pennsylvania law that "[i]ndemnity agreements are to be narrowly interpreted in light of the parties' intentions as evidenced by the entire contract." Consol. Rail Corp. v. Del. River Port. Auth., 880 A.2d 628, 632 (Pa. Super. Ct. 2005), appeal denied, 898 A.2d 1071 (Pa. 2006). "Courts in this circuit have recognized that the terms ‘defend, indemnify, and hold harmless’ signal an intent to restrict the indemnification obligations to third-party claims." Horsehead Corp. v. Topcor Augusta, LLC, No. 15-198, 2018 WL 5634330, at *27 (W.D. Pa. Aug. 29, 2018). Most notably, in Travelers Indem. Co. v. Dammann & Co., 594 F.3d 238 (3d Cir. 2010), the Third Circuit interpreted identical language to the indemnification provision here and held that "indemnify" must be interpreted in relation to the accompanying words "defend" and "hold harmless." Id. at 255. It found that "the only sensible reading of [the] clause evidences a requirement that third-party liability exist for the clause to be triggered." Id. ¹⁴ Multiple district courts have taken the same approach. See also Exelon Generation Co., LLC v. Tugboat DORIS HAMLIN, No. 06-0244, 2008 WL 2188333, at *2 (E.D. Pa. May 27, 2008) (finding that "a common sense reading" of an indemnification provision requiring defendant to "indemnify, hold harmless and defend" the plaintiff "suggest[ed] that it refers only to third-party claims"); Equitrans Servs., LLC v. Precision Pipeline, LLC, 154 F. Supp. 3d 189, 203 (W.D. Pa. 2015) (holding that language required party to "defend, indemnify, and hold harmless" another party from and against "any claims, demands, causes of action, damages, liabilities, judgments, losses, fines, awards, penalties, costs and expenses," indicate an intent to restrict indemnification obligations to third party claims); ARFA Enters., Inc. v. Fioravanti, No. 12-3293, 2014 WL 12599822, at *13–14 (E.D. Pa. Feb. 24, 2014) (use of the words "indemnify" in relation to "defend" and "hold harmless" "evidences a requirement that third-party liability exist for the clause to be triggered."); Kellers Sys., Inc. v. Transport Int'l Pool, Inc., 172 F. Supp. 2d 992, 998–99 (N.D. Ill. 2001) (concluding that, under Pennsylvania law, an indemnification provision requiring a party to "defend" and "hold harmless" was limited to third-party claims); but see Waynesborough Country Club of Chester Cty. v. Diedrich Niles Bolton Architects, Inc., No. 07-155, 2008 WL 4916029 (E.D. Pa. Nov. 12, 2008) (declining to find that contract indemnity provision was limited to third-party claims).

14 The Third Circuit in Travelers applied New Jersey law, but "its analysis is instructive ... because the relevant principles of contract construction that were applied in Travelers mirror the principles of contract construction that apply ... under Pennsylvania law." Equitrans Servs., LLC v. Precision Pipeline, LLC, 154 F. Supp. 3d 189, 203 n.8 (W.D. Pa. 2015). Indeed, the Pennsylvania Superior Court has recognized that "under the law of both [Pennsylvania and New Jersey], an asserted indemnification contract will be carefully scrutinized, and is subject to strict construction." Gerard v. Penn Valley Constructors, Inc., 343 Pa.Super. 425, 495 A.2d 210, 212 (1985).

Plaintiffs concede that the Pennsylvania Supreme Court has not yet spoken on this issue, but contend that these cases stand in conflict with the most recent pronouncement from the Pennsylvania Superior Court in Keystone Care Administrative Services, Inc. v. Bruce Grossinger, D.O., No. 1051-EDA-2015, 2016 WL 6875923 (Pa. Super. Ct. Nov. 21, 2016). In that matter, the court allowed one party to a contract to recover legal fees incurred in litigating a breach of contract claim against the other party to the contract, effectively extending the indemnification provision to first-party claims.

Keystone, however, is not dispositive for two reasons. First and foremost, the language of the provision in Keystone is distinguishable. The indemnity provision in that case stated that:

Each party agrees to fully, completely and unconditionally indemnify, defend, and hold the other party harmless from and against any and all claims, actions, liabilities, losses, costs and expenses (including, without limitation, costs of judgments, settlements, court costs and attorney's fees) arising out of or relating to, or alleged to arise out of or relate to, negligent or intentional acts or omissions of the indemnifying party or any breach by the indemnifying party of any representation, warranty, obligation or covenant under this Agreement.

Id. at *9 (emphasis added). The court found that "[b]y its terms, the provision is not expressly limited to third party claims," but that it expressly covered both first-party and third-party claims. Id. at *10. In so holding the court focused on the uniqueness of the indemnity language which included an agreement by both parties to indemnify the other party for "any breach by the indemnifying party of any" obligation under the contract. Id. Such language does not exist in the indemnification provision before me.¹⁵ See Horsehead Corp., 2018 WL 5634330, at *27 (noting that Keystone did not really involve an indemnification clause in the traditional sense).

15 In a vigorous dissent, Judge Strassberger disagreed with the majority's interpretation of the indemnification provision and found that it improperly converted a fairly straightforward third-party indemnification provision into a fee-shifting provision. He concluded that, "[i]n this action involving sophisticated parties who surely knew how to draft a fee-shifting provision, I would hold that the trial court erred in concluding that there was a clear agreement of the parties that one of them could recover attorney's fees from the other for litigation stemming from breach of the contract." Id. at *12.

Moreover, Keystone is an isolated decision from the Pennsylvania Superior Court—not the Pennsylvania Supreme Court—and is both unpublished and "non-precedential." Under Pennsylvania law, "[a]n unpublished memorandum shall not be relied upon or cited by a Court or party in any other action or proceeding," except for very limited circumstances not applicable here. U.S. v. Saunders, 29 F. App'x 78, 80 (3d Cir. 2002) ; see also In re Keyes, 83 A.3d 1016, 1024, n.3 (Pa. Super. Ct. 2013) ("Under the Internal Operating Procedures of this court, an unpublished memorandum decision may be relied upon or cited only under extremely limited circumstances.") (citing Internal Operating Procedures of the Superior Court of Pennsylvania, § 65.37). As such, even if Keystone were analogous to this matter, it is not controlling authority.

Nonetheless, even interpreting the indemnification provision here to apply to only third-party claims, I find that Plaintiffs' indemnity claim survives because there is a genuine issue of material fact as to whether Plaintiffs' request for defense and indemnification arises out of the Utility Consent Decree by the EPA against Plaintiffs, i.e. out of a third-party claim. Plaintiffs' Complaint specifically alleges that Defendant breached the contract by:

[F]ailing to defend, indemnify and hold [Plaintiffs] harmless against (i) claims

by EPA that repair of the sheet pile wall was required to stop releases of hazardous substances from the Site to the environment and to prevent releases that were threatened due to a complete failure of the wall attributable to [Defendant's] defective design, (ii) losses, damages and costs associated with the investigation, planning and repair of the wall required to remedy [Defendant's] defective design, and (iii) liability under CERCLA and the Utility CD for releases and threatened releases of hazardous substances attributable to [Defendant's] defective design.

(Compl. ¶ 145.)

The evidence substantiates Plaintiffs' theory that their defense and indemnification claims stem from their efforts to comply with and avoid liability to the EPA. It is undisputed that, in mid to late 2005, a Utility Group Consent Decree was executed that required Plaintiffs, in part, to respond to actual or threatened release of waste material at the Site and that, if Plaintiffs failed to take appropriate response action, Plaintiffs were liable to reimburse the EPA all costs of the response action. (Compl., Ex. 7 ¶ 52.) Moreover, as Plaintiffs note, under the Consent Decree, the EPA had continuing rights to require modifications of the remedial work performed at the Site, require Plaintiffs to engage in additional studies or investigations of the remedial work, require further response actions at the Site, and require Plaintiffs to perform such further response actions. (Id. ¶¶ 14, 17, 18, 20.) When Plaintiffs first discovered the alleged defects in the wall, they sent multiple letters to Defendant, which indicated that their efforts to repair the wall came as part of the maintenance and monitoring obligations to the EPA and that the EPA had to approve the design of the repair efforts. (PSUF, Exs. 20, 26, 27.) Indeed, in their June 2, 2015 letter, Plaintiffs explicitly notified Defendant that "U.S. EPA Region 3 is requiring as part of the response activities at the Site that the wall be repaired to prevent its failure." (PSUF, Ex. 27.)

Such evidence is sufficient to create a genuine issue of material fact regarding whether Plaintiffs' request for defense and indemnity is based on Plaintiffs' third-party liability to the EPA, as opposed to a claim for first party liability. See Equitrans, 154 F. Supp. 3d at 204–05 (declining to grant summary judgment where it was unclear whether certain third-party claims pursuant to road bonds that pre-dated the construction contract at issue fell within indemnification provision). Given this factual dispute, I will deny Defendant's Motion on this ground.

3. Whether the Duty to Defend Was Triggered

Defendant's final argument in support of its Motion for Summary Judgment asserts that the duty to defend was never triggered because Plaintiffs never demanded a defense. Defendant contends that Plaintiffs only demanded that Defendant "acknowledge its responsibility for the failing sheet pile wall and agree to indemnify [Plaintiffs]: (i) by reimbursing the Group for costs incurred and (ii) either performing or paying or repair of the wall." (PSUF, Ex. 26.) Because none of the three letters from Plaintiffs ever made a specific "demand for a legal defense (or even use[d] any variant of the word ‘defense’)," Defendant urges that summary judgment should be granted as to Plaintiffs' claim for defense.

"[A] contractual provision in the non-insurance context that includes an indemnification provision that contains a duty to defend is to be interpreted by general contract principles (including those relevant to indemnification claims)." Air Prods. & Chems., Inc. v. Procter & Gamble Mfg. Co., No. 18-4878, 2019 WL 4751885, at *17 (E.D. Pa. Sept. 30, 2019). "Generally, the duty to defend is triggered if the underlying complaint avers facts that would support indemnification under the agreement, and the indemnitor must defend until such time as the claim is confined to recovery that the contract does not cover." Mace v. Atl. Refining Mkting. Corp., 567 Pa. 71, 785 A.2d 491, 500 (2001).

Against this legal backdrop, Defendant's argument that Plaintiffs had to expressly demand a legal defense is meritless. Nothing in the 1998 or 2003 Contracts required that Plaintiffs make an express demand in order to trigger the duty to defend. Rather, the Contracts simply provided that Defendant was required to defend Plaintiffs "from and against any and all claims, losses, damages, liability, costs or actions, including, without limitation, reasonable attorney fees and other costs and expenses ("damages") to the extent arising out of, resulting from or in connection with any unlawful, negligent or willful misconduct or omission by the Consultant, its agents, employees or subcontractors, in the performance of this Agreement." (PSUF, Ex. 3 ¶ 15.1; Ex. 5 ¶ 15.1.) Accordingly, I decline to find that Plaintiffs' absence of an express demand is per se fatal to their breach of the defense/indemnification provision claim.

Nevertheless, it is also not clear from the evidence before me when—or even if—any duty to defend was ever triggered under the facts of this case. I discuss this issue in more detail below with respect to Plaintiffs' Motion for Summary Judgment.

D. Conclusion as to Defendant's Motion for Summary Judgment

In light of the foregoing, I will grant in part and deny in part Defendant's Motion for Summary Judgment. Defendant is entitled to summary judgment on Plaintiffs' claims under CERCLA (Counts III and IV of the Complaint) as Plaintiffs have presented no genuine issue of material fact regarding Defendant's liability as either an "arranger" or a "response action contractor." Defendant is also entitled to summary judgment on Plaintiffs' breach of warranty claim in Count I of the Complaint, as that claim is barred by the statute of limitations. As to Plaintiff's breach of contract claims in Count II, however, I will deny Defendant's Motion for the reasons set forth in detail above.

IV. PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT

Plaintiffs' Cross-Motion for Partial Summary Judgment seeks judgment in their favor on three issues: (1) the breach of contract claim for defense and indemnification; (2) the breach of Defendant's contractual obligation to procure and maintain insurance; and (3) Plaintiffs' entitlement to the recovery of reasonable litigation costs and fees in connection with this case.¹⁶

16 I note that Plaintiffs sought, and I granted leave to file a reply brief of "up to 15 pages" in support of their Motion for Summary Judgment. My Policies and Procedures permit, with leave of Court, reply briefs of no more than ten pages. Plaintiffs' ensuing reply brief, however, was fifteen pages filled with twenty-seven single-spaced footnotes containing extensive substantive arguments. Particularly egregious is footnote twenty, which consists of two full paragraphs, and three bullet-pointed subparagraphs. While I have reviewed these footnotes, I will not specifically address all of the cases and exhibits raised solely within.

A. Breach of Contractual Duties of Defense and Indemnification

Plaintiffs first allege that Defendant breached its duty to defend by failing to respond to Plaintiffs' written notifications regarding the failure of the sheet pile wall. They posit that "Amec's decision to sit idly by and allow the Group to incur costs to investigate and repair the wall, when Amec was on notice of the Group's and EPA's concerns, was an unrefuted breach of Amec's contractual duty to defend." (Pls.' Mem. Supp. Summ. J. 10.) Plaintiffs go on to assert that "[t]he Group did not need to offer to pay anything to Amec to trigger that duty. It only needed to offer some proof, as it did, that Amec was a cause of the wall's failure." (Id. ) As undisputed facts of record establish that Defendant ignored Plaintiffs' demand letters, Plaintiffs contend that the breach occurred at that time.

In support of their argument, Plaintiffs rely on two Pennsylvania cases. In ThyssenKrupp Elevator Corp. v. Humford Equities, 15 Pa. D. & C. 5th 422 (2010), the defendant contracted with the plaintiff for the maintenance of three elevators in a building. Id. at 423. While the agreement was in effect, two separate personal injury actions were filed by different individuals against both plaintiff and defendant, alleging that the plaintiff failed to properly maintain one of the elevators, which resulted in personal injury. Id. The plaintiff filed suit alleging breach of contract against the defendant for failure to provide defense and indemnity in the personal injury actions under the following contractual provision:

[Defendant] agree[s] to indemnify, defend, save harmless, discharge, release and forever acquit [plaintiff] ... from any and all claims, demands, suits, and proceedings ... of any nature whatsoever, including but not limited to loss, damage, injury or death that are alleged to have arisen from or alleged to be in connection with the presence, use, misuse, maintenance, installation, removal, manufacture, design, operation or condition of the equipment covered by this agreement ... specifically including claims or losses alleged to have arisen from the joint or sole negligence of [plaintiff].

Id. at 424. The Court of Common Pleas found that under the clear and unambiguous language of the contract—which triggered the duty to defend whenever a claim, demand, suit, and/or proceeding brought claims alleging that the plaintiff's negligence was the cause—the duty to defend arose when the two underlying personal injury claims were filed. Id. at 429. The court determined that any other interpretation would be "at odds with the clearly expressed and apparent intent of the parties as well as the manifest purpose of a duty to defend clause." Id.

Similarly, in County of Delaware v. J.P. Mascaro & Sons, Inc., 830 A.2d 587 (Pa. Super. Ct. 2003), aff'd, 582 Pa. 590, 873 A.2d 1285 (2005), the plaintiff, Delaware County, owned and operated two incinerators that disposed of solid waste, and it contracted with the defendant to remove and dispose of residue produced by the incinerators. Id. at 589. Delaware County was sued by the New Jersey Department of Environmental Protection and by homeowners, alleging improper dumping at a New Jersey landfill. Id. Delaware County demanded defense and indemnification under the contract, which provided that the defendant "defend, indemnify and save harmless [Delaware County] from and against all suits for claims that may be based on any alleged injury ... to any person or property that may be alleged to have occurred in the course of the performance of this Contract...." Id. at 591 (emphasis added). The defendant refused and Delaware County sued. Id. at 589–90. Following a trial verdict in favor of Delaware County, the Pennsylvania Superior Court found that because the defendant was responsible for transporting and disposing of the waste at issue, and in light of the "broad language contained in the indemnity clause," the defendant owed a duty to defend and indemnify Delaware County against the illegal dumping actions. Id. at 592.

The key distinction between those cases and the one before me, however, lies in the plain language of the defense and indemnification provisions at issue. In both ThyssenKrupp and County of Delaware, the duty to defend was triggered by mere allegations that the claim, loss, injury, etc. was the result of actions by the indemnitor. By contrast, the contract provision here requires that Defendant defend, indemnify, and hold harmless Plaintiffs from claims, losses, damages, etc. only "to the extent arising out of, resulting from or in connection with any unlawful, negligent or willful misconduct or omission" by Defendant.¹⁷

17 Plaintiffs cite a series of cases for the proposition that a duty to defend arises when an indemnitor receives notice of a claim that potentially falls within the scope of an indemnity provision. All of these cases, however, are in the insurance context, which clearly recognizes that a defense obligation in an insurance contract "arises whenever the complaint filed by the injured party may potentially come within the coverage of the policy." Gedeon v. State Farm Mut. Auto. Ins. Co., 410 Pa. 55, 188 A.2d 320, 321–22 (1963).
This case does not involve an insurance provision. "[U]nder Pennsylvania law ... a contractual provision in the non-insurance context that includes an indemnification provision that contains a duty to defend is to be interpreted by general contact principles (including those relevant to indemnification claims)." Air Prods. & Chems., 2019 WL 4751885, at *17.

The Pennsylvania Commonwealth Court case of Carson/DePaul/Ramos v. Driscoll/Hunt, 2004 No. 02166, 2006 WL 2009047 (Pa. Comm. Pl. June 29, 2006) offers guidance under more closely analogous circumstances. In that matter, defendant Driscoll/Hunt was hired as construction manager on the construction of Citizens Bank Park. Id. at *1. Driscoll/Hunt then contracted with numerous subcontractors on the project. Id. As a result of multiple problems, several of the subcontractors sued Driscoll/Hunt to recover damages due to Driscoll/Hunt's alleged mismanagement of the project. Id. Driscoll/Hunt then sued the sheet pile contractor, Goettle, claiming that Goettle caused or contributed to the damages, and that Goettle had to defend and indemnify Driscoll/Hunt with respect to the suits against Driscoll/Hunt by the other subcontractors. Id. In a summary judgment motion, Driscoll/Hunt alleged that it had proven Goettle's breach of the duty to defend because Goettle never undertook any defense of Driscoll/Hunt. Id. Specifically, the defense provision at issue stated:

[Goettle's] obligation to indemnify and hold [Driscoll/Hunt] harmless is in addition to [Goettle's] obligation to defend [Driscoll/Hunt]. With respect to any obligation of [Goettle] to indemnify and hold [Driscoll/Hunt] harmless, [Driscoll/Hunt], at its sole option, also may tender its defense to [Goettle]. If [Driscoll/Hunt] tenders its defense to [Goettle], then [Goettle] shall defend [Driscoll/Hunt] at [Goettle]'s expense.... If [Driscoll/Hunt] chooses to defend itself, then [Goettle] shall pay [Driscoll/Hunt]'s costs of defense.

Id. at *2. Driscoll/Hunt argued that, under this provision, Goettle had an immediate duty to defend Driscoll/Hunt in that action. Id. at *6.

The court denied Driscoll/Hunt's motion for summary judgment. It found that the language of the contract before it was not as broad as that employed in insurance contracts," noting that Goettle "did not expressly agree to defend [Driscoll/Hunt] in any suit in which Goettle's possible fault is raised by [Driscoll/Hunt] or another party." Id. at *6. Instead, Goettle "agreed to defend [Driscoll/Hunt] only where its duty to indemnify is clear ... [i]n other words, Goettle's duty to defend [Driscoll/Hunt] is contingent upon its first having a duty to indemnify [Driscoll/Hunt]." Id. Because Goettle's duty to indemnify was disputed and contingent upon which party was found at fault, the court determined that the duty to defend was also contingent upon who was found to be responsible for the claimed losses. Id. at *7. Although the court remarked that this interpretation made the duty to defend worthless, because there would no longer be a need for defense once liability was established, the court recognized that if Goettle was found to be at fault, it would have to reimburse Driscoll/Hunt's reasonable defense costs. Id.; see also ThyssenKrupp, 15 Pa. D. & C. 5th at 428 (finding that the duty to defend language in Carson/DePaul/Ramos was distinguishable because, in Carson, the indemnitor only contracted to defend the indemnitee where the duty to indemnify was clear, not when the underlying claims were filed).

That same rationale applies to the contractual language before me. Like in Carson/DePaul/Ramos, the contractual provision at issue only triggers the duty to defend where the "claims, losses, damages, liability, costs or actions, including, without limitation, reasonable attorneys fees and other costs and expenses" unequivocally "aris[e] out of, result[ ] from or in connection with any unlawful, negligent or willful misconduct or omission" by Defendant. Thus, absent a clear determination that Defendant's negligent or willful misconduct caused the wall defect, no duty to defend arose. Stated differently, although the duty to defend and duty to indemnify are separate and independent duties, both had to be triggered by the material fact of unlawful, negligent, or willful misconduct or omission by Defendant. While that interpretation renders the defense obligation "worthless," the defense and indemnification provision allows Plaintiffs to recover reasonable defense costs in the event a legal determination is made that Defendants were indeed negligent or engaged in willful misconduct in the performance of their contractual duties.

In their Motion for Partial Summary Judgment, Plaintiffs concede that—at this juncture of the litigation—they cannot affirmatively establish the causal connection between Defendant's actions/omissions and the failure of the sheet wall. Rather, they claim that, for purposes of the duty to defend, it was sufficient that they offered some proof—as they did through the three letters to Defendant—that Defendant's actions or omissions were a cause of the wall's failure.

Under the most logical interpretation of the Contracts, however, Defendant's defense obligation cannot be deemed to have arisen at the time of the three letters from Plaintiffs to Defendant. The first letter, dated May 29, 2014, simply put Defendant on notice of the movement in the sheet pile wall, indicated that the PRP Group was investigating potential fixes, and stated that [t]he Group is attempting to determine the causes for the inadequate performance and potential failure of the wall, and is putting AMEC on notice of that concern as well." (PSUF, Ex. 20.) The subsequent letter of December 12, 2014, notified Defendant that experts have determined that the sheet pile wall was improperly designed and "demand[ed] that AMEC acknowledge its responsibility and agree to indemnify the Group (i) by reimbursing the Group for all costs to assess the problems with the wall and to plan for its repair and (ii) by either undertaking the repair or reimbursing the Group for all costs of repair." (PSUF, Ex. 26.) The third letter of June 2, 2015 indicated that "U.S. EPA Region 3 is requiring as part of the response activities at the Site that the wall be repaired to prevent its failure. Through the end of April 2015, the [PRP Group] had incurred almost $170,000 in response costs to address the defective design and damage to the wall." (PSUF, Ex. 27.) It further stated that the PRP Group intended to select a contractor for the repair work at the end of August and "if AMEC wishes to limit its exposure by performing the repair work itself, AMEC must notify the Group during June of its interest in doing so. In any event ... the PRP Group will hold AMEC responsible for all costs that have been and will be incurred to assess the damage and repair the wall." (Id. ) It is undisputed that Defendant never accepted liability or even responded to any of the letters until May 2016, when it requested an "opportunity to be heard" by Plaintiffs and the EPA about its assessment of the wall's condition and the appropriate repairs. (Def.'s Opp'n Summ. J., Ex. 1.)

While these letters clearly reflect some sort of demand for action by Defendant in response to a legal claim by the EPA, they do not trigger the defense obligation under the contract. Rather, in order for the defense obligation to be implicated—and, in turn, for Plaintiffs to recoup reasonable attorneys' fees and costs related to their response to the EPA's demands—Plaintiffs have to effectively prove entitlement to indemnity. Given Plaintiffs' concession that the issue of responsibility for the wall's failure must be determined by a jury, I cannot, at this juncture grant summary judgment on Plaintiff's breach of the duty to defend claim.

B. Breach of the Duty to Indemnify

Plaintiffs also seek summary judgment on a portion of their breach of the duty to indemnify claim. Plaintiffs concede that they do "not seek a partial summary judgment on the ‘negligence’ ground for indemnity," i.e. , that Defendant's negligence caused the failure of the sheet pile wall. (Pls.' Mem. Supp. Summ. J. 12.) Rather, they seek summary judgment "on the alternative grounds that Defendant engaged in ‘willful misconduct’ and committed actionable ‘omissions’ " by ignoring Plaintiffs' demand letters, visiting the Site but not sharing information about its observations with Plaintiffs, requesting that Plaintiffs delay wall repairs on the eve of the start date for repairs to begin, and not putting insurance carriers on notice of Plaintiffs' claims. (Id. at 12–13 & n.10.) In other words, Plaintiffs contend that Defendant's intentional decision to not respond to Plaintiffs' demand for wall repairs by the EPA constitutes "willful misconduct" that renders it liable under the indemnification provision.

Plaintiffs' argument is circuitous. In order to find merit to Plaintiffs' position that these acts constituted willful misconduct/omissions under the contract, I would need to find that Defendant had an affirmative obligation to respond to Plaintiffs' demand letters, put insurance carriers on notice of Plaintiffs' claims, and take responsibility for the sheet pile wall repairs. As set forth in detail above, absent undisputed evidence that the defects in the sheet pile wall arose out of or related to negligent or intentional acts or omissions by Defendant, Defendant cannot be deemed to have any further obligation under the Contracts to respond to Plaintiffs' letters. Accordingly, I will deny Plaintiffs' Motion for Summary Judgment on this claim. C. Breach of the Duty to Procure and Maintain Insurance

Plaintiffs' third proffered argument seeks summary judgment on Defendant's alleged breach of its contractual obligation to procure and maintain insurance. Specifically, as noted above, the 1998 and 2003 Contracts required that Defendant obtain and maintain, throughout the period it provided services for Plaintiffs, three types and specific amounts of insurance: (1) Professional Errors & Omissions ("E&O") insurance, with limits of at least $1 million per claim; (2) Comprehensive General Liability ("CGL") insurance, with limits of at least $2.5 million; and (3) Excess Liability insurance, with limits of at least $2.5 million. Plaintiffs maintain that following an extensive period of discovery, the undisputed record reveals that Defendant failed to procure and maintain that insurance.¹⁸

18 Plaintiffs note that, according to the evidence, Defendant's breach is three-fold. First, Defendant only obtained E&O insurance for eight years. Of those eight years, the insurance that it purchased applied only where the loss at issue was greater than $5 million to $7.5 million—the amount of the self-retention in each of the policies procured—thereby failing to satisfy the amount requirements.
Second, documents produced by Defendant fail to show any CGL insurance procured for the period 1998 to 2004, the period when Defendant and Hart Crowser prepared the original remedial design. The only information available as to the existence of these insurance policies is copies of certificates of insurance that Plaintiffs, not Defendant, produced in discovery. For the period 2004 to 2011, for which Defendant actually did procure CGL insurance, none of those policies are endorsed to cover "liability assumed under this Agreement."
Finally, Defendant has failed to produce any Excess Liability insurance policies, instead relying only on certificates of insurance that Plaintiffs produced for the period of 1998 to 2010.

Defendant responds that Plaintiffs cannot prove any of the three elements of a breach of contract claim: breach, causation, or damages. See MDB v. Punxsutawney Christian Sch., 386 F. Supp. 3d 565, 590 (W.D. Pa. 2019) (noting that, in Pennsylvania, to recover for a breach of contract, a plaintiff must show "(1) the existence of a contract, including its essential terms; (2) a breach of duty imposed by the contract; and (3) resultant damages.") (quoting Corestates Bank v. Cutillo, 723 A.2d 1053, 1058 (Pa. Super. Ct. 1999)). Specifically, Defendant contends that a genuine issue of material fact exists as to whether a breach occurred. Second, Defendant posits that Plaintiffs cannot prove that any failure to procure insurance caused Plaintiffs' costs and damages to be unreimbursed. Finally, Defendant asserts that even if a breach occurred, Plaintiffs have failed to prove the essential element of damages.

1. Whether an Issue of Fact as to Breach Exists

Defendant first contends that although it can produce evidence for only some of the fifteen years of required insurance,¹⁹ that fact does not entitle Plaintiffs to summary judgment. Defendant asserts that "the failure of the ability, in discovery, to prove the existence of one thing is not proof of its non-existence," reasoning that:

19 Specifically, as to the E&O insurance, Defendant notes that there are certificates of insurance for eight years, but it has no evidence that it secured the other seven years. As to the CGL insurance, Defendant asserts that there are certificates of insurance for seven years, but concedes that it has not been able to adduce evidence establishing that it purchased the other eight years of CGL insurance required by the contracts.

The jury will hear testimony and see documentation of the fact that Amec did secure at least seven of the 15 years of the required policies, and it will be also [sic] hear testimony that it cannot find the policies or certificates evidencing the

fact that it secured the required policies for the other seven to eight years. It will remain for the jury to determine, as a matter of fact, if: (1) Amec cannot prove it secured those policies because it secured them but cannot locate the documentation of that fact; or (2) Amec cannot prove it secured those policies because it did not purchase those policies in the first instance. That is a question of fact that remains for the jury to decide. That reality alone is enough to require that Plaintiffs' motion seeking judgment under Section 20 be denied.

(Def.'s Opp'n Summ. J. 16.)

Such an argument does not suffice at this stage of the litigation. It is well established that to defeat a motion for summary judgment, the nonmoving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ; see also Podobnik v. U.S. Postal Serv., 409 F.3d 584, 594 (3d Cir. 2005) (holding that party opposing summary judgment "must present more than just bare assertions, conclusory allegations or suspicions to show the existence of a genuine issue") (internal quotation marks omitted). The "mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment;" a factual dispute is genuine only where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (emphasis in original). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. at 249–50, 106 S.Ct. 2505. Thus, the "mere existence of a scintilla of evidence" in support of the nonmoving party's position is insufficient to defeat a motion for summary judgment." Anderson, 477 U.S. at 252, 106 S.Ct. 2505.

In light of these standards, Defendant has failed to create a genuine issue of material fact to defeat summary judgment. While the certificates of insurance evidence compliance for some of the years covered by the contracts, Defendant has produced no evidence that it procured insurance during the years for which no certificates of insurance exist. At minimum, in the absence of either the certificates of insurance or the actual insurance policies, Defendant could have contacted and/or deposed representatives of the insurance companies that provided the insurance; produced copies of cancelled checks or bank records evidencing payment for the insurance policies; or provided affidavits from its employees that were involved with procuring the insurance. Defendant's unsubstantiated promise that it will produce evidence at trial in the form of "testimony" that it cannot find the policies or certificates for the remaining seven to eight years rises to nothing more than the bare assertions, conclusory allegations, or suspicions deemed insufficient to defeat a motion for summary judgment. Given Defendant's admission that it has no evidence that it procured insurance as required by the Contracts, I find, as a matter of law, that Plaintiffs have proven their entitlement to summary judgment on the element of breach.

2. Whether Plaintiffs Can Prove Causation

Defendant next contends there are no facts to clearly establish that the E&O, CGL, and Excess Liability policies that were to have been secured under the Contracts would have covered the costs and damages Plaintiffs now seek. Defendant engages in a lengthy discussion about what types of losses E&O, CGL, and Excess Liability policies cover and reason that any policies that Defendant would have purchased under the Contracts would not have covered the losses at issue here.

Defendant's speculation about insurance it was supposed to have purchased—but did not purchase—cannot defeat summary judgment. Under the Contracts, Defendant was required to purchase and maintain CGL Insurance "to cover liability assumed under this Agreement," E&O insurance "covering Engineering Design," and Excess Liability insurance, all of which was to name Plaintiffs and the EPA as additional insureds and to insure against "liability from damages to property, resulting from [Defendant]'s performances of Services under this Agreement." (PSUF Exs. 3 and 5, ¶ 20.) To the extent Defendant failed to obtain this insurance and Plaintiffs sustained losses that come within the required insurance, Defendant is liable for Plaintiffs' losses.²⁰

20 Defendant goes on to contend that Plaintiffs must produce expert testimony that the CGL policies required under the Contracts would have covered the types of costs and damages that Plaintiffs allege here. The two cases cited by Defendant in support, however, are completely irrelevant as they involve a breach of the professional duty by an insurance broker to procure insurance. The courts noted that expert testimony was required to establish the degree of skill required of an insurance broker, a question not at issue here. See Atain Ins. Co. v. Jonco Trading, Inc., No. 12-673, 2013 WL 11090742, at *21 (W.D. Pa. Dec. 17, 2013) (discussing need for expert testimony to establish degree of skill required of insurance broker); Randazzo v. Nat'l Penn. Ins. Co., No. 03243, 2011 WL 7110210 (Pa. Compl. Pl. Dec. 15, 2011) (noting that the testimony of an expert was essential to aid the jury in understanding the complexities of the insurance practice and policies and, in turn, the duty owned by the broker to the plaintiffs).
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3. Whether Plaintiffs Can Prove Damages

Finally, Defendant contends that Plaintiffs have not established the required element of damages as a result of the failure to procure insurance. I find no merit to this contention.

Insurance "policies are commonly issued to contractors insuring them against liability for damages or injuries occurring in connection with the performance of their contracts." DiPietro v. City of Phila., 344 Pa.Super. 191, 496 A.2d 407, 409 (1985). It is well established under Pennsylvania law that "one who enters into an agreement to obtain insurance and neglects to fulfill his obligation becomes himself insurer and liable as such." Zortman v. Volk, 97 Pa. Super. 137, 140 (1929) ; see also Borough of Wilkinsburg v. Trumbull-Denton Joint Venture, 390 Pa.Super. 580, 568 A.2d 1325, 1326 (1990) ("Where a party breaches an agreement to obtain insurance, the breaching party is liable for the full amount of the damages sustained."). The Pennsylvania Supreme Court has explained:

Plaintiff's damage is not to be measured by the premium it would have had to pay, had it taken out insurance to protect it against such a loss. This would be the measure had defendant notified plaintiff the insurance would not be or could not be obtained ... for in that event plaintiff would be required to minimize the possible loss, if it elected to continue performance of the contract notwithstanding. No such notice appears to have been given, however, and, in the absence thereof, plaintiff was entitled to assume defendant would comply with its contract, and may recover the damages actually sustained because of its failure to do so.

Hagan Lumber Co. v. Duryea Sch. Dist., 277 Pa. 345, 121 A. 107, 108–09 (1923).

Defendant contends that Plaintiffs have no proof that they would suffer damages as a result of the missing insurance. Defendant argues that "what would happen is that [Defendant] would be placed in the role of the missing insurance carrier ... [and] serv[e] as its own ‘insurer.’ " (Def.'s Resp. Oppp'n Summ. J. 21). It goes on to reason that because its assets are "in the billions of dollars," it has the ability to cover Plaintiffs' cost of remediation in the event Defendant is found liable. (Id. at 21–22.) Thus, Defendant concludes that Plaintiffs cannot establish the existence of recoverable damages.

Defendant's speculative argument is misplaced. The requirement that a contractor obtain insurance is a "material term in a construction contract" and a "failure to obtain such insurance constitutes a material breach of contract." Raddison Design Mgmt., Inc. v. Cummins, No. 07-92, 2011 WL 818668, at *5 (W.D. Pa. Mar. 2, 2011) (quotations omitted). The damage results from the absence of that insurance coverage, thereby requiring Defendant to act as its own insurer to the extent Plaintiffs have suffered a loss that would be covered under those policies. The mere fact that Defendant may have the ability to satisfy those damages does not detract from the fact that damages have been sustained.

Of course, to determine the precise amount of damages at issue, Plaintiffs must first prove their entitlement to indemnity under the indemnification clause of the contracts—a fact which Plaintiffs concede requires a determination by a fact-finder. To the extent, however, that Plaintiffs can prove an entitlement to indemnification that should have been covered by the required insurance, Defendant will be required to act as its own insurer and pay all of the proven losses.

D. Application of Indemnity Provision to First-Party Litigation Costs and Fees

Plaintiffs' final summary judgment claim seeks a declaration that they will later be entitled to recover its reasonable attorneys' fees if Defendant is adjudged liable for breaching its contracts. Specifically, Plaintiffs assert that, under the terms of the indemnity provision, they are entitled to any attorneys' fees and costs incurred in connection with this litigation to enforce the contract.

Pennsylvania applies the "American Rule" with respect to attorneys' fees, which requires that each litigant pays its own fees, win or lose, unless a statute or contract requires otherwise in specific and explicit terms. Herd Chiropractic Clinic, P.C. v. State Farm Mut. Auto. Ins. Co., 619 Pa. 438, 64 A.3d 1058, 1066 (2013). Most jurisdictions that apply the American Rule "presume that fees incurred in defending an indemnified claim are shifted to the indemnitor while fees incurred in ascertaining the existence of a duty to indemnify are not." Warren Drilling Co., Inc. v. Equitable Production co., 621 F. App'x 800, 806 (6th Cir. 2015) (interpreting Pennsylvania law). In other words, "absent a clear statement to the contrary, the indemnified party may not recover attorney's fees incurred in the course of determining the meaning or scope of an indemnity clause." Id.

Plaintiffs contend that the indemnification provision here gives rise to a "clear statement" of intent to shift attorneys' fees. Relying on both Keystone Care, 2016 WL 6875923 (Pa. Super. Ct. Nov. 21, 2016), addressed in detail above, and Maule v. Philadelphia Media Holdings, LLC, No. 08-3357, 2010 WL 3859613 (E.D. Pa. Oct. 1, 2010), they posit that an indemnification provision in a private contract allows for the shifting of fees in an action to enforce that contract.

In both of these cases, however, the indemnification provision clearly signaled that attorneys' fees for first-party litigation were indemnifiable. For example, in Keystone Care, the indemnification provision specifically provided that each party agreed to indemnify, defend and hold harmless the other party against any losses or costs, including attorneys' fees, from "any breach by the indemnifying party of any representation, warranty, obligation or covenant under this Agreement." 2016 WL 6875923, at *9. Likewise, in Maule, the indemnification provision allowed recovery of attorneys fees "relating to ... any breach of this Agreement by Contractor." 2010 WL 3859613, at *5. Thus, the provisions in both cases were not limited to third-party claims, but rather expressly allowed recovery for attorneys' fees resulting from breaches of the contract.

By contrast here, the indemnification language provides that Defendant "shall defend, indemnify and hold harmless" Plaintiffs from claims, losses, damages, etc., including attorneys' fees and costs "to the extent arising out of, resulting from or in connection with any unlawful, negligent or willful misconduct or omission by the Consultant, its agents, employees or subcontractors, in the performance of this Agreement." (PSUF, Exs. 3 &5, ¶ 15.01.) Unlike Keystone Care and Maule, the provision at issue here says nothing about recovery of attorneys' fees in the event of a breach of contract.

Notwithstanding these observations, this argument is premature at this stage of the case. Plaintiffs ask that I decide whether they would be entitled to attorneys' fees and costs in this litigation if they prevail on their indemnification claim at trial. Rather than making a decision based on speculative events, I will allow Plaintiffs to re-raise this issue if they prevail at trial. At that time, I will resolve the matter based on the facts established on the record.

V. CONCLUSION

In light of the foregoing, I will grant both Motions for Summary Judgment in part and deny them in part as set forth in detail above. An appropriate Order follows.