Heritage Harbour, L.L.C. v. John J. Reynolds, Inc.

DAVIS, Judge. This is an appeal from the grant of the motion to dismiss of appellees John J. Reynolds, Inc., et al., by the Circuit Court for Anne Arundel County (Robert H. Heller, J.). Appellants Heritage Harbour, L.L.C., et al., present one question for our review, which we rephrase for clarity as follows: Did the trial court err in dismissing appellants’ complaint for failure to state a claim upon which relief may be granted? We answer the question presented in the negative and affirm the judgment of the trial court.

We hold that the trial court properly dismissed appellants’ complaint for failure to state a claim upon which relief may be granted and that, in any event, appellants would not have survived the motion to dismiss because of the Economic Loss Doctrine and appellants’ failure to file the required certificate of a qualified expert. PROCEDURAL AND FACTUAL BACKGROUND On December 16, 1998, the Council of Unit Owners of South River Condominium (the Council) filed an eleven-count complaint (the Underlying Suit) against appellants Heritage Har-bour, L.L.C., Daniel Aguilar, Jo Ann Aguilar, Columbia Pacific Management, Inc., Securitization Pool, L.P., Richard K. Sont-gerath, Daniel R. Baty, and Stanley L. Baty, developers of the South River Condominium Project (the Project). The suit, filed in the Circuit Court for Anne Arundel County, alleged the existence of numerous structural and non-structural defects in the buildings located at the South River Condominiums. Appellants then filed a Petition to Compel Arbitration. 1 ⁷⁰³ On July 25, 2000, appellants filed a complaint against John J. Reynolds, Inc., Tiber Construction, Belfast Valley Contractors, Inc., South River Joint Venture, Atlas Air Conditioning, Cochran Plumbing, M & W Caulking Applicators, Buchanan Iron Works, Sun Precast, Building Analytics, Coastal Construction & Restoration, Inc., Criterium Hare Engineers (currently trading as Adelberg Hare & Associates, Inc.), RAL Designs, Reifman & Blum Associates, Dolco Aluminum, MLM Concrete, Plus One Masonry, Vaneo Enterprises, Inc., Cochran Mechanical, Inc., and Mike Jordan Construction, the Project’s original developers, designers, and contractors. 2 The complaint sought contribution and contractual indemnification “[i]n the event that [appellants], individually or jointly, are held or found to be liable to any party to the Underlying Litigation.” Appellees 3 Adelburg, Hare & Associates, Atlas Air Conditioning Co., Belfast Valley Contractors, Inc., Building Analyt-ics, Cochran Plumbing, Inc., Dolco Aluminum, Inc., Plus One Masonry, Inc., RAL Designs, Inc., Reifman & Blum Associates, Inc., South River Joint Venture, Inc., Sun Precast Co., Inc., and Vaneo Enterprises, Inc., filed motions to dismiss.

Atlas Air Conditioning Co., Belfast Valley Contractors, Inc., Cochran Plumbing & Heating, Inc., Plus One Masonry, RAL Designs, Reifman & Blum Associates, South River Joint Venture, and Vaneo Enterprises, Inc., moved to dismiss for failure to state a claim pursuant to Md. Rule 2-322(b)(2). Adelberg, Hare & Associates, Inc., Building Analytics, South River Joint Venture, RAL Designs, and Reifman & Blum Associates moved to dismiss for failure to file the required certificate of a qualified expert pursuant to Md.Code (1998 Repl.Vol.), Cts. & Jud. Proc. (C.J.) § 3-2C-02.

Hearings were held on December 6 and 20, 2000. The trial judge issued multiple orders dated December 26, 2000, February 7 and February 23, 2001, ⁷⁰⁴ granting appellees’ motions to dismiss without prejudice. These orders dismissed appellants’ complaint [f]or the reasons stated in court on December 6 and December 20, 2000, at the hearings on the various Motions to Dismiss and for the reasons enumerated in the various Memoranda filed on behalf of the various [appellees] in their respective Motions to Dismiss, and for the further reason that [appellants] did not state a claim upon which relief may be granted.... Appellants filed a Motion to Alter and Amend the Court’s Order with a Motion for Consolidation and Stay on January 8, 2001, seeking clarification of the trial court’s order to more clearly define their issues on appeal.

Because the Statute of Repose could expire on appellants’ claims, denying them any right of recovery against appellees, appellants additionally asked the trial court to preserve the indemnity and contribution causes of action pending decision on the Petition to Arbitrate in the Underlying Suit. The trial court denied the motion without a hearing. Because some defendants in the case sub judice never responded to appellants’ complaint nor filed motions to dismiss, the court’s order did not constitute a final judgment as to all claims. As a result, appellants were unable to appeal.

Upon appellants’ motion for final judgment, the circuit court entered a June 12, 2001 order, granting final judgment. STANDARD OF REVIEW We said in Lubore v. RPM Associates, Inc., 109 Md.App. 312, 322-23 , 674 A.2d 547 (1996): Under Maryland Rule 2-322(b)(2) (1996), a defendant may seek a dismissal on the ground that the complaint fails “to state a claim upon which relief can be granted.” When moving to dismiss, a defendant is asserting that, even if the allegations of the complaint are true, the plaintiff is not entitled to relief as a matter of law. Hrehorovich v. Harbor Hosp. Ctr., 93 Md.App. 772, 784 , 614 A.2d 1021 (1992).

Thus, in considering a motion to dismiss for failure to state a claim, the circuit court examines only the sufficiency of the ⁷⁰⁵ pleading. Id. “The grant of a motion to dismiss is proper if the complaint does not disclose, on its face, a legally sufficient cause of action.” Id. at 785 , 614 A.2d 1021 . This Court, therefore, shall assume the truth of all well-pleaded relevant facts as alleged in appellant’s complaint and all reasonable inferences drawn therefrom. Morris v. Osmose Wood Preserving, 340 Md. 519, 531 , 667 A.2d 624 (1995).

Accordingly, because they were directly taken from appellant’s complaint, we shall assume the truth of the facts set forth above. When, as here, the trial court does not state its reasons for granting a motion to dismiss, an appellate court will affirm the judgment if the record discloses that the trial court was legally correct. Briscoe v. City of Baltimore, 100 Md.App. 124, 128 , 640 A.2d 226 (1994). “[A]ny ambiguity or uncertainty in the allegations bearing on whether the complaint states a cause of action must be construed against the pleader.” Faya v. Almaraz, 329 Md. 435, 444 , 620 A.2d 327 (1993). LEGAL ANALYSIS Economic Loss Doctrine Appellees contended at oral argument before this Court that the interplay between the pleadings requirements set forth in Scott v. Jenkins, 345 Md. 21 , 690 A.2d 1000 (1997), and the Economic Loss Doctrine, set forth in Council of Co-Owners of Atlantis Condominium,, Inc. v. Whiting-Turner Contracting Co., 308 Md. 18 , 517 A.2d 336 (1986), and Morris v. Osmose Wood Preserving, 340 Md. 519 , 667 A.2d 624 (1995), provides a step-by-step process by which we should conduct our review.

That process was reiterated by Chief Judge Robert C. Murphy writing for the Court of Appeals: Based on Whiting-Turner, the plaintiffs argue that we should permit their tort claims to proceed because the roofs present a risk of personal injury. The roofs, plaintiffs argue, cannot support weight and therefore create a risk of physical injury to anyone who goes on them (homeowners, repairmen, or firefighters) and to anyone who may be under them if they collapse under the weight of a heavy snowfall or a strong wind gust. Defendants argue that the risk is ⁷⁰⁶ not clear enough to bring the claim within the Whiting-Turner exception. Alternatively, they argue that we should abandon the exception or limit its application to cases involving claims against builders or architects.

Whiting-Turner and U.S. Gypsum [v. Baltimore, 336 Md. 145 , 647 A.2d 405 (1994) ], considered together, reveal a two-part approach to determine the degree of risk required to circumvent the economic loss rule. We examine both the nature of the damage threatened and the probability of damage occurring to determine whether the two, viewed together, exhibit a clear, serious, and unreasonable risk of death or personal injury. Thus, if the possible injury is extraordinarily severe, i.e., multiple deaths, we do not require the probability of the injury occurring to be as high as we would require if the injury threatened were less severe, i.e., a broken leg or damage to property. Likewise, if the probability of the injury occurring is extraordinarily high, we do not require the injury to be as severe as we would if the probability of injury were lower.

Morris, 340 Md. at 533 , 667 A.2d 624 . In order to successfully claim that appellees are liable to them for contribution and/or indemnity, appellants must have alleged that appellees have original tort liability to plaintiffs in the Underlying Suit. See Parler & Wobber v. Miles & Stockbridge, P.C., 359 Md. 671 , 756 A.2d 526 (2000). If unable to establish original tort liability, appellants cannot receive contribution or indemnity.

Appellees assert that appellants are unable to overcome the initial obstacle because of the Economic Loss Doctrine. In order to circumvent the Economic Loss Doctrine, appellants must allege the existence of a serious risk of injury to persons or property. Appellants have not asserted such liability, appellees maintain; their complaint failed to state a claim and should be barred by the Economic Loss Doctrine. In delineating the Economic Loss Doctrine, the Court of Appeals explained: ⁷⁰⁷ It is generally said that a contractor’s liability for economic loss is fixed by the terms of his [or her] contract.

Tort liability is in general limited to situations where the conduct of the builder causes an accident out of which physical harm occurs to some person or tangible thing other than the building itself that is under construction. Whiting-Turner, 308 Md. at 23 , 517 A.2d 336 . An exception to the above rule was established, however: [T]he determination of whether a duty will be imposed in this type of case should depend upon the risk generated by the negligent conduct, rather than upon the fortuitous circumstance of the nature of the resultant damage. Where the risk is of death or personal injury the action will lie for recovery of the reasonable cost of correcting the dangerous condition.

Id. at 27 , 517 A.2d 336 . Appellants posit that the Economic Loss Doctrine does not apply because their claims are not based in tort; rather, their claims are for contribution and indemnity. As we shall explain, infra, appellants’ claims for contribution and indemnity are not ripe. In support of their reliance on the exception, appellants remind us that their cause of action is statutory, arising by operation of the Uniform Contribution Among Tort Feasors Act, Md. Ann.Code (1957), art. 50, § 17(a).

Their argument is without merit, however, as the plaintiffs in the Underlying Suit allege various torts, including negligence, intentional misrepresentation, negligent misrepresentation, fraudulent concealment, civil conspiracy, and breach of fiduciary duty. Because appellants contend that they are entitled to reimbursement from appellees, they must necessarily contend that appellees committed such torts; therefore, appellants’ initial response fails. Alternatively, appellants contend that the plaintiffs in the Underlying Suit do, indeed, allege construction defects that give rise to a substantial risk of serious personal injury. In support of their position, appellants cite paragraph 31(f) of the complaint, which alleges structural concerns regarding balcony slabs, paragraph 31(i), which alleges inadequate railing supports, paragraph 81(t), which alleges compromised fire rated walls and slabs, and paragraph 31(w), which alleges ⁷⁰⁸ improper installation and operation of a building fire protection system.

The allegations contained in the complaint filed in the Underlying Suit, according to appellants’ theory of the case, can serve as the basis for their allegations against appellees, as this is an action for contribution and indemnity. Countering that these claims constitute mere possibilities or invitations to speculate, appellees posit that the allegations are insufficient. ’See, e.g., Morris, 340 Md. at 536 , 667 A.2d 624 . In order to bypass the Economic Loss Doctrine, appellants must plead clear facts that would support a finding of extreme danger and an imminent risk of severe personal injury. Id.

No allegations of imminent risk of personal injury or death can be associated with the alleged defects claimed by the plaintiffs in the Underlying Suit, as “[cjonditions that present a risk to general health, welfare, or comfort but fall short of presenting a clear danger of death or personal injury do not suffice.” Id. at 532-33 , 667 A.2d 624 . Appellants have failed to allege the existence of any substantial risk to persons or property; therefore, their claims are precluded by the Economic Loss Doctrine. Certificate of an Expert Pursuant to C.J. § 3 — 2C—02(a)(1), “a claim shall be dismissed, without prejudice, if the claimant fails to file a certificate of qualified expert with the court.” According to subsection (a)(2) of the section, this statement “shall contain a statement from a qualified expert attesting that the licensed professional against whom the claim is filed failed to meet an applicable standard of professional care,” and “be filed within [ninety] days after the claim is filed.” It is undisputed that appellants failed to file the required certificate within the prescribed ninety days; the effect of this failure, however, remains disputed by the parties. Appellants insist that the requirement does not apply to them — or at the very least should be waived 4 — as their cause ⁷⁰⁹ of action against appellees is not based in professional negligence; rather, they maintain that their suit sounds in contribution and indemnity.

As more specifically discussed, infra, we are faced with the ripeness issue. Appellees counter that appellants’ request for such remedies must be based on an alleged negligent act or omission. Because appellants do not allege any contractual duties owed to them by appellees, their claims are necessarily based on the allegations of negligence contained in the complaint. Appellants’ initial response, therefore, fails.

Appellants argue in the alternative that the requirement was satisfied by the filing of a certificate prepared for the case at bar by Robert W. Davidson, AIA, plaintiffs’ expert in the Underlying Suit, and a certificate drafted by their own expert, Kenneth J. O’Connell, Ph.D., P.E. Not surprisingly, appellees counter that the affidavits filed were insufficient — they failed to allege any specific deficiencies in the performance of appel-lees’ duties — and untimely — they were not filed until December 15, 2000. Noting that appellants were required to file the certificates no later than October 25, 2000, or ninety