United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 21, 2017 Decided June 30, 2017

No. 16-7128

HENSEL PHELPS CONSTRUCTION CO.,

APPELLANT

v.

COOPER CARRY INC.,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 1:15-cv-01961)

Catherine E. Stetson argued the cause for appellant. 

With her on the briefs was Eugene A. Sokoloff.

Paul J. Kiernan and Stephen B. Shapiro were on the brief 

for amicus curiae The Associated General Contractors of 

America and Associated General Contractors of Metropolitan 

Washington D.C. in support of appellant.

Jonathan C. Shoemaker argued the cause for appellee. 

With him on the brief was James F. Lee Jr. 

Before: BROWN and PILLARD, Circuit Judges, and 

SILBERMAN, Senior Circuit Judge.
2

Opinion for the Court filed by Circuit Judge BROWN.

BROWN, Circuit Judge: This controversy concerns 

breach-of-contract and indemnification claims arising out of 

alleged defects in the design of the Marriott Marquis Hotel 

adjacent to the Walter E. Washington Convention Center 

(“the Project”). Hensel Phelps Construction Company 

(“Hensel Phelps”) claims Cooper Carry “materially breached” 

its contractual obligations in eighteen respects, including by 

failing to meet the applicable standard of care and by failing 

to design the Project in accordance with applicable fire codes. 

Compl. ¶ 24, J.A. 10–11. Additionally, Hensel Phelps argues 

Cooper Cary is contractually obligated to indemnify Hensel 

Phelps for the losses associated with rectifying the alleged 

design errors. The district court granted summary judgment 

to Cooper Carry on both counts. We hold that the statute of 

limitations has run on Hensel Phelps’s breach-of-contract 

claim, and the terms of the indemnification clause do not 

cover first-party claims. We accordingly affirm.

I.

A.

Marriott International entered into an initial Agreement 

with Cooper Carry on March 5, 2008, under which Cooper 

Carry agreed to design and monitor the construction of the 

Project for a lump sum of $14,335,602. The Agreement 

divided Project completion into five phases: conceptual 

design, schematic design, design development, construction 

document, and construction contract administration. As the 

Project progressed, Cooper Carry would bill Marriott on a 

monthly basis, and final payment was due to Cooper Carry 

upon, among other things, “the full completion of the services 

hereunder.” Agreement Art. 4.05.6, J.A. 25. The 
3

construction contract administration phase obligated Cooper 

Carry to perform tasks such as “shop drawing and 

construction materials sample review and approval, answering 

requests for information from contractor(s), preparing 

construction contract change order and field orders, 

confirming the contractors’ percentage of completion of work 

to substantiate payment requests, reviewing and approving 

construction mock-ups, and conducting site observations and 

preparing reports.” J.A. 39. It also required Cooper Carry to 

provide construction administration services as set forth in the 

as-of-yet-unwritten construction contract for the Project. 

Once the construction contract between Marriott and the 

construction entity was finalized, it would be sent to Cooper 

Carry for approval and incorporated by reference into the 

initial Agreement.

Cooper Carry made numerous promises in the initial 

Agreement, two of which are particularly relevant to this 

litigation. First, Cooper Carry agreed to act in accordance 

with “the professional standards of skill, care and diligence 

ordinarily expected of leading, internationally recognized 

architectural firms on projects of comparable scope and 

complexity.” Agreement Art. 2.01, J.A. 17. Second, Cooper 

Carry represented it was knowledgeable of all applicable 

laws, “codes, ordinances, rules, regulations and other 

requirements imposed by [relevant] governmental 

authorities,” “all . . . governmental approval requirements,” 

and “National Fire Protection Association (‘NFPA’) 

standards.” Agreement Art. 2.05.1, J.A. 19–20. With respect 

to fire safety specifically, Cooper Carry agreed to design the 

Project in conformity with “the BOCA National Building 

Codes, the NFPA National Fire Codes (especially NFPA 101, 

Life Safety Code) and the Marriott Fire Protection/Life Safety 

design.” J.A. 49. In addition to its service-related obligations 

and representations, Cooper Carry acknowledged “Marriott 
4

may sustain financial loss for which [Cooper Carry] may be 

liable if the Project or any part thereof is delayed because 

[Cooper Carry] negligently fails to perform the Services in 

accordance with this Agreement, including, but not limited to, 

the Schedule.” Agreement Art. 3.01, J.A. 22. Cooper Carry

also agreed to indemnify Marriott “[t]o the fullest extent 

permitted by law, . . . from and against any claim, judgment, 

lawsuit, damage, liability, and costs and expenses, including 

reasonable attorneys’ fees, as a result of, in connection with, 

or as a consequence of [Cooper Carry’s] performance of the 

Services under this Agreement . . . .” Agreement Art. 6.01, 

J.A. 27.

The initial Agreement contained a dispute-resolution 

provision, which allowed “[a]ny party . . . from time to time” 

to “call a special meeting for the resolution of disputes that 

would have a material impact on the cost or progress of the 

Project.” Agreement Art. 7.09.1, J.A. 31 (emphasis added). 

If an informal dispute-resolution process failed, the parties 

agreed to attempt mediation, which would last no more than 

twenty working days unless the parties agreed otherwise. “If 

[a] dispute [was] settled through the mediation process, the 

decision [would] be implemented by written agreement 

signed by all the parties involved.” Agreement Art. 7.09.2, 

J.A. 31. The Agreement provided that “[a]ll claims and 

disputes not settled by mediation shall be resolved through 

litigation in [the] court having jurisdiction over same.” 

Agreement Art. 7.09.3, J.A. 32. Additionally, the Agreement 

provided that “[t]he presence of any claim or dispute, or legal 

proceeding arising hereunder shall not relieve [Cooper Carry] 

from its obligation to properly perform its Services as set 

forth herein, nor shall it relieve Marriott from making 

payments with respect to undisputed Services in accordance 

with the terms of this Agreement.” Agreement Art. 7.09.5, 

J.A. 32 (emphasis added).
5

B.

As stated above, the initial Agreement, signed in 2008,

contemplated that Marriott would enter into a second contract 

governing the Project’s construction. Approximately twoand-a-half years later, however, the Project was converted to 

the design-build model of delivery. Under this approach, the 

owner contracts with only one party—the design-builder—to 

both design and construct a project. 1 PHILIP L. BRUNER &

PATRICK J. O’CONNOR, JR., ON CONSTRUCTION LAW § 2:17 

(Dec. 2016) [hereinafter BRUNER & O’CONNOR]. To 

accomplish this conversion, HQ Hotels—which had 

previously acquired development rights for the Project from 

Marriott—entered into a Design/Build Agreement with 

Hensel Phelps on October 26, 2010, under which Hensel 

Phelps agreed to complete the Project’s construction “no later 

than April 1, 2014” for a guaranteed maximum price of 

$354,517,391. Claim Narrative at 2, J.A. 230. Also on 

October 26, 2010, Marriott assigned its rights and obligations 

under the initial Agreement to Hensel Phelps, without making

any changes to that document. Accordingly, “any and all 

duties, obligations, and standards of care that Cooper Carry 

owed to Marriott under the [initial Agreement] were assigned 

and transferred to Hensel Phelps.” Compl. ¶ 10, J.A. 7. 

Thereafter, the Project “progressed effectively on a designbuild basis[,] with Cooper Carry having complete design 

coordination.” Claim Narrative at 2, J.A. 230. As of October 

26, Cooper Carry had completed the first three phases of the

Project and was in the midst of completing the fourth. The 

Design/Build Agreement also included a list of alreadycompleted design documents provided by Cooper Carry.

Unfortunately, the new arrangement went sour rather 

quickly. On March 8, 2011, Cooper Carry met with the 

District of Columbia Department of Consumer and 
6

Regulatory Affairs and was promptly informed that its 

designs did not comply with applicable fire codes. Hensel 

Phelps claims that remedying these errors cost it $4,402,380 

and required “significant” design alterations, “[s]ignificant 

changes in mechanical and electrical scopes,” and a ten-anda-half-month delay in the Issued for Construction design 

issuance. See Claim Narrative at 11–14, J.A. 239–42. Over 

the next three years, Hensel Phelps contends it discovered 

approximately seventeen additional defects in Cooper Carry’s 

designs that, when combined with the fire safety issues, 

allegedly cost $8,493,556 to remediate.

Hensel Phelps initiated dispute-resolution proceedings in 

January 2015, raising, inter alia, breach-of-contract, 

indemnification, and negligent misrepresentation claims. 

Regarding breach of contract, it asserted Cooper Cary “failed 

to meet the high standard stated in the [initial Agreement] 

and/or breached Cooper Carry’s obligations therein,” Claim 

Narrative at 2, J.A. 230 (emphasis added), including its 

“obligations,” “warranties,” and “representations” pertaining 

to “fire and life safety design,” id. at 8–9, 11, J.A. 236–37, 

239. See also Claim Narrative at 12, J.A. 240 (“This failure 

to address fire and life safety is an express breach of the fire 

and life safety obligations contained in the [initial Agreement] 

Scope of Work.”). In support of its allegations, Hensel Phelps 

submitted a detailed Claim Narrative describing the eighteen 

alleged breaches and their respective costs.

Mediation failed in October 2015. Hensel Phelps filed a 

complaint in district court the following month, alleging 

breach-of-contract and indemnification claims. Cooper Carry 

moved to dismiss or, alternatively, for summary judgment, 

arguing the District of Columbia (“D.C.”) three-year statute of 

limitations for contract claims had already run. Additionally, 

it asserted the plain text of the initial Agreement’s 
7

indemnification clause did not cover first-party claims. 

Cooper Carry attached Hensel Phelps’s Claim Narrative to its 

motion, and Hensel Phelps did not object.

The district court granted summary judgment for Cooper 

Carry. Hensel Phelps Constr. Co. v. Cooper Carry, Inc., 210 

F. Supp. 3d 192, 195 (D.D.C. 2016). It found the contract 

was first breached—and the statute of limitations therefore 

began to run—on October 26, 2010, when Hensel Phelps 

assumed Marriott’s rights under the initial Agreement and 

Cooper Carry delivered the defective design documents. Id.

at 197 (“Once the time for compliant performance had passed 

and Hensel Phelps had accepted the initial design documents 

on which its claim for damages is based, the clock began to 

run against Hensel Phelps.”); see also id. at 198. The court 

also found the text of the initial Agreement’s indemnification 

clause did not cover first-party claims, noting that, in 

accordance with the traditional purpose of such clauses, it 

“clearly anticipate[d] the problem of third-party litigation.” 

Id. at 199.

Hensel Phelps now appeals, arguing—as it did below—

that the contract was not breached until April 1, 2014, when 

the Project was substantially complete. It asks this Court 

either to reverse the district court’s judgment or to remand for 

further proceedings to interpret the allegedly ambiguous 

provisions of the initial Agreement.

Hensel Phelps is organized under the laws of Delaware 

with its principal place of business in Colorado; Cooper Carry 

is a Georgia-based corporation with its principal place of 

business in Georgia. The district court had diversity 

jurisdiction under 28 U.S.C. § 1332, and we have jurisdiction 

under 28 U.S.C. § 1291.
8

II.

A.

This Court reviews the district court’s grant of summary 

judgment de novo, “examin[ing] the record to determine 

whether any genuine issue of material fact pertinent to the 

ruling remains, and if not, whether the substantive law was 

correctly applied.” Caiola v. Carroll, 851 F.2d 395, 398 

(D.C. Cir. 1988). All inferences are drawn in the 

nonmovant’s favor. Walker v. Johnson, 798 F.3d 1085, 1091 

(D.C. Cir. 2015). “[A]mbiguity in a contract raises a genuine 

issue of material fact, which is for the factfinder to resolve.” 

Debnam v. Crane Co., 976 A.2d 193, 198 (D.C. 2009)

(quoting Rastall v. CSX Transp., Inc., 697 A.2d 46, 51 (D.C. 

1997)).

B.

All parties agree D.C. law governs this case. See also

Agreement Art. 7.10, J.A. 32. D.C. Code § 45-401(a) directs 

courts to look to the common law where statutes are silent. 

D.C. imported the common law of Maryland as of 1801, and 

so D.C. courts have “customarily[] looked to post-1801 

decisions of the Court of Appeals of Maryland for assistance 

in interpreting the law.” Heard v. United States, 686 A.2d 

1026, 1029 (D.C. 1996); see also Little v. United States, 709 

A.2d 708, 711 (D.C. 1998).

D.C. courts “adhere[] to an objective law of contracts.”

Carlyle Inv. Mgmt. L.L.C. v. Ace Am. Ins. Co., 131 A.3d 886, 

894–95 (D.C. 2016). This means “the written language 

embodying the terms of an agreement will govern the rights 

and liabilities of the parties regardless of the intent of the 

parties at the time they entered the contract, unless the written 

language is not susceptible of a clear and definite meaning.” 
9

Id. “The writing must be interpreted as a whole, giving a 

reasonable, lawful, and effective meaning to all its terms, and 

ascertaining the meaning in light of all the circumstances 

surrounding the parties at the time the contract was made.” 

Id. at 895. “In determining whether a contract is ambiguous, 

[courts] examine the document on its face, giving the 

language used its plain meaning,” Debnam, 976 A.2d at 197, 

“unless, in context, it is evident that the terms used have a 

technical or specialized meaning,” Carlyle, 131 A.3d at 895. 

In essence, courts “determine what a reasonable person in the 

position of the parties would have thought the disputed 

language meant.” Id. at 895. Furthermore, “a contract is not 

ambiguous merely because the parties do not agree over its 

meaning, and courts are enjoined not to create ambiguity 

where none exists.” Id.

Under D.C. law, parties have three years “from the time 

the right to maintain the action accrues” to file a breach-ofcontract claim. D.C. CODE § 12-301(7). “Accrue” is not 

defined, but “[a]ctions usually accrue when they come into 

existence.” Felter v. Kempthorne, 473 F.3d 1255, 1259 (D.C. 

Cir. 2007). “An action for breach of contract generally 

accrues at the time of the breach.” Wright v. Howard Univ., 

60 A.3d 749, 751 (D.C. 2013); Murray v. Wells Fargo Home 

Mortg., 953 A.2d 308, 319–20 (D.C. 2008).

III.

A.

Hensel Phelps and Cooper Carry disagree about what 

“first breach” rule this Court should apply to their contract. 

Hensel Phelps argues the Project is governed by a unitary 

construction contract, under which courts typically interpret 

first breach as occurring upon “substantial completion” of the 

Project. See 3 BRUNER & O’CONNOR § 8:23 (defining 
10

“substantial completion” as “that point in the construction 

where the work is sufficiently complete that the owner may 

occupy or utilize the work for the use for which it was 

intended”). Because substantial completion did not occur 

until April 2014, Hensel Phelps argues its claim is not timebarred. By contrast, relying primarily on Comptroller of 

Virginia ex rel. Virginia Military Institute v. King, 232 S.E.2d 

895, 900 (Va. 1977), and Hilliard & Bartko Joint Venture v. 

Fedco Systems, Inc., 522 A.2d 961, 967 (Md. 1987), Cooper 

Carry asserts we should view the initial Agreement as a 

design agreement, and the contract was thus first breached 

when Hensel Phelps accepted Cooper Carry’s defective 

designs.

We find it unnecessary to wade into this debate, however. 

For, like most other rules of contract, legal rules that specify 

first breach are default ones, and parties are free to depart 

from them as they wish. Looking to the initial Agreement’s 

terms suffices to demonstrate that Hensel Phelps’s cause of 

action accrued prior to substantial completion.

As a preliminary matter, we note the parties consented to 

have the initial Agreement interpreted according to its “plain 

meaning.” Agreement Art. 7.20, J.A. 35. We think the plain 

terms of the initial Agreement, read in context, make it clear 

that Hensel Phelps could have initiated dispute-resolution 

procedures for breach of contract in March 2011, after 

discovery of Cooper Carry’s failure to design the Project in 

accordance with applicable fire safety codes. The initial 

Agreement specified that “[a]ny party may from time to time 

call a special meeting for the resolution of disputes that would 

have a material impact on the cost or progress of the Project.” 

Agreement Art. 7.09.1, J.A. 31. No temporal conditions 

precedent needed to be satisfied before parties could

commence dispute resolution; all that was required was a 
11

material effect on either the Project’s cost or its progress. 

According to Hensel Phelps, remedying the fire safety errors 

cost almost four-and-a-half million dollars, required 

significant structural and design alterations, and resulted in a 

ten-and-a-half-month delay in the issuance of a necessary 

document. The cost and effects on the schedule suggest the 

fire safety issues met the criteria laid out in Article 7.09.1.

We also read the initial Agreement to require parties to 

proceed to court if dispute resolution failed. Read in full, 

Article 7 of the initial Agreement set out a series of iterative, 

sequential steps a party needed to walk through in order to 

resolve a dispute, beginning with informal proceedings and 

culminating with a lawsuit filed in court. Removing the 

description of what procedures were to be used within each 

step of the process, the section provided as follows:

Any party may from time to time call a special 

meeting for the resolution of disputes that would 

have a material impact on the cost or progress of the 

Project. . . . If the dispute has not been resolved

within five (5) working days . . . , a mediator, 

mutually acceptable to the parties and experienced in 

design and construction matters shall be retained by 

the parties. . . . If the dispute is settled through the 

mediation process, the decision will be implemented 

by written agreement signed by all the parties 

involved. . . . All claims and disputes not settled by 

mediation shall be resolved through litigation in 

court having jurisdiction over same.

Agreement Arts. 7.09.1–7.09.3, J.A. 31–32 (emphases added). 

The parties added no proviso to the “shall be resolved” 

language indicating such lawsuits could not commence until 

after substantial completion of the Project. Nor did they do so 
12

in the section entitled “Causes of Action,” which merely 

stated that “[c]auses of action between the parties to this 

Agreement . . . shall be deemed to have accrued and the 

applicable statutes of limitations shall commence to run in 

accordance with the law applicable to this Agreement.” 

Agreement Art. 7.15, J.A. 34. And, in fact, the initial 

Agreement expressly contemplated the possibility of litigation 

before its completion. Article 7.09.5—contained within the 

same section as the dispute-resolution procedures—stated that 

“[t]he presence of any . . . legal proceeding arising hereunder

shall not relieve [Cooper Carry] from its obligation to 

properly perform its Services as set forth herein, nor shall it 

relieve Marriott from making payments with respect to 

undisputed Services in accordance with the terms of this 

Agreement.” J.A. 32; see also Agreement Art. 5.03, J.A. 26 

(permitting Marriott to terminate Cooper Carry for cause 

“should [Cooper Carry] fail substantially to perform in 

accordance with the terms of this Agreement”). This 

provision contained no language cabining its application only 

to litigation between a party to the initial Agreement and 

subcontractors, as Hensel Phelps argued at oral argument. 

See Oral Arg. Rec. 14:10–14:59. By its plain terms, and 

contextualized within Article 7 as a whole, it applied equally 

to legal disputes between Hensel Phelps and Cooper Carry

that had not been “resolved” via the dispute-resolution

procedures.

Perhaps Hensel Phelps believed a different first breach 

rule would apply once the Design/Build Agreement was 

signed and introduced the concept of substantial completion, a 

concept absent from the initial Agreement. See Design/Build 

Agreement Art. 6.15, J.A. 120. But this belief was never 

enshrined objectively in the text of either the assignment 

agreement or alterations to the initial Agreement’s text, and it 

is objective language, not subjective intent, that guides our 
13

analysis. Carlyle, 131 A.3d at 894. Here, the terms are clear 

and unambiguous: Hensel Phelps had the right to begin 

dispute-resolution procedures in March of 2011 and to bring a 

lawsuit in court if and when those proceedings failed. We 

must hold Hensel Phelps to its bargain. Because it filed its 

complaint more than three years after the action accrued, its 

breach-of-contract claim is time-barred.1

B.

We similarly find Hensel Phelps’s indemnification 

argument unavailing.

Hensel Phelps contends the initial Agreement’s 

indemnification clause used broad and expansive language

and contained no limitation confining its scope only to thirdparty claims. Like any other contractual provision, 

indemnification clauses must be interpreted by looking to the 

 1 We also find it noteworthy that Hensel Phelps’s characterization

of events corresponds with our interpretation. Though Hensel 

Phelps argued to this Court that first breach could not have 

occurred until after substantial completion, it repeatedly described 

Cooper Carry’s actions as “breaches” in its Claim Narrative. We 

recognize the initial Agreement provided that “no reference to . . . 

any admissions against interest made in the course [of mediation] 

may be made or offered as evidence in any subsequent litigation.” 

Agreement Art. 7.09.2, J.A. 31. However, Cooper Carry drew 

attention to Hensel Phelps’s characterizations in its response brief.

Appellee Br. 11–12. Hensel Phelps failed to object in its reply brief

and expressly disclaimed the Narrative as a statement against 

interest at oral argument. See Oral Arg. Rec. 15:45–17:00. Thus, 

whatever protection the Agreement provided against reliance on 

admissions in the course of mediation is arguably forfeited. We 

need not resolve this forfeiture issue, however; even leaving aside 

Hensel Phelps’s descriptions, Cooper Carry is entitled to summary 

judgment.
14

objective language as the expression of the parties’ intent. 

However, this objective analysis also considers the context in 

which words are used. Holland v. Hannan, 456 A.2d 807, 

816–17 (D.C. 1983); see also RESTATEMENT (SECOND) OF 

CONTRACTS § 202 (1981) (“[t]he meaning of words . . . 

commonly depends on their context.”). Contextual analysis

allows courts to “determine what a reasonable person in the 

position of the parties would have thought the disputed 

language meant,” as well as to determine if, “in context, it is 

evident that the terms used have a technical or specialized 

meaning.” Carlyle, 131 A.3d at 895.

Unquestionably, indemnification clauses have 

traditionally been used and interpreted as extending only to 

third-party claims. 3 BRUNER & O’CONNOR § 10:39; 42 

C.J.S. Indemnity § 1 (June 2017). In the initial Agreement, 

the terms “claim, judgment, lawsuit, damage, liability, and 

costs and expenses,” Art. 6.01, J.A. 27, must be interpreted in 

light of this traditional function. Furthermore, the D.C. Court 

of Appeals has advocated for strict construction of 

indemnification clauses to avoid covering “any obligations 

which the parties never intended to assume.” Am. Bldg. 

Maint. Co. v. L’Enfant Plaza Props., 655 A.2d 858, 861 (D.C. 

1995); see also id. (noting “[t]here is no liability to indemnify 

unless it is plainly spelled out in the contract”); James G. 

Davis Constr. Corp. v. HRGM Corp., 147 A.3d 332, 340–41 

(D.C. 2016) (reading an indemnification clause covering “any 

and all costs and expenses” to reach first-party claims by 

looking to a second indemnification clause protecting only 

against “loss or losses directly connected with the 

performance of the Construction Contract” and reasoning the 

parties purposely chose a broader formulation for the clause at 

issue). Here, no clear and unequivocal intent to include firstparty claims appears on the face of the instrument and, 
15

construing the clause strictly, we decline to expand the scope 

of its reach.

2

IV.

For the foregoing reasons, the judgment of the district 

court is

Affirmed.

 2 Hensel Phelps argued, both below and to this Court, that the bulk 

of its indemnification claims—approximately 7.2 million dollars’ 

worth—do constitute third-party claims. It defined third-party 

claims as those charged to Hensel Phelps by subcontractors,

whereas first-party claims are those incurred directly by Hensel 

Phelps, such as additional overhead and administration costs. See

Oral Arg. Rec. 24:43–27:34. But all first-party claims involve 

some payout to a third party. For instance, in Hensel Phelps’s 

example of additional administrative costs, Hensel Phelps must pay 

out to a third party—its employee—to provide that administration

service. Reading the clause according to Hensel Phelps’s 

interpretation would render it no different than a standard breachof-contract claim, and we decline to do so here.