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SJC-11778

COGHLIN ELECTRICAL CONTRACTORS, INC. vs. GILBANE BUILDING 

COMPANY & another;1 DIVISION OF CAPITAL ASSET MANAGEMENT AND

MAINTENANCE, third-party defendant.

Worcester. March 2, 2015. - September 2, 2015.

Present: Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, &

Hines, JJ.

Contract, Public works, Construction contract, Delivery, 

Warranty, Indemnity. Warranty. Indemnity. Public Works, 

Construction management at risk.

Civil action commenced in the Superior Court Department on 

July 17, 2013.

A motion to dismiss a third-party complaint was heard by 

Brian A. Davis, J.

The Supreme Judicial Court granted an application for 

direct appellate review.

John W. DiNicola, II (Michael Brangwynne with him) for 

Gilbane Building Company.

James A. Sweeney, Assistant Attorney General, for Division 

of Capital Asset Management and Maintenance.

The following submitted briefs for amici curiae:

 

1 Travelers Casualty & Surety Company of America.
2

David J. Hatem, Cheryl A. Waterhouse, & Amanda E. Mathieu

for American Council of Engineering Companies of Massachusetts & 

another.

Shannon A. Reilly for Construction Industries of 

Massachusetts.

Joel Lewin, Robert V. Lizza, Jonathan T. Elder, & Robert T. 

Ferguson, Jr., for Associated General Contractors of 

Massachusetts, Inc.

Hugh J. Gorman, III, & Jeffrey J. Pyle for Columbia 

Construction Company.

GANTS, C.J. This case requires us to resolve three issues 

regarding a public construction contract that implements the 

construction management at risk delivery method, pursuant to 

G. L. c. 149A: (1) Does the owner who furnishes the plans and 

specifications in a public construction management at risk 

project give an implied warranty of their sufficiency for the 

purpose intended, as the owner does under our common law in 

traditional design-bid-build construction projects? (2) If so, 

did the parties to the construction management at risk contract

in this case disclaim the implied warranty? (3) If they did 

not, did the indemnification provision in the contract prohibit 

the construction manager at risk (CMAR) from filing a thirdparty complaint against the owner in a case brought by a 

subcontractor seeking reimbursement of additional costs, thus 

requiring the CMAR to file a separate complaint against the 

owner to recover the additional costs caused by an insufficient 

or defective design under the implied warranty?
3

We conclude: (1) under our common law, a public owner of a 

construction management at risk project gives an implied 

warranty regarding the designer's plans and specifications, but 

the scope of liability arising from that implied warranty is 

more limited than in a design-bid-build project; (2) the 

construction management at risk contract in this case did not 

disclaim the implied warranty; and (3) the indemnification 

provision in the contract did not prohibit the CMAR from filing 

a third-party complaint against the owner that sought 

reimbursement under the implied warranty for damages claimed by 

the subcontractor arising from the insufficiency of or defects 

in the design.2

Background. The Division of Capital Asset Management and

Maintenance (DCAM) is the owner of a construction project to 

build a psychiatric facility at the site of the Worcester State 

Hospital (Project). DCAM entered into a contract with

Ellenzweig Associates (Designer) to prepare the Project's 

designs. See G. L. c. 7C, § 44 ("Designer" is individual or 

other entity "engaged in the practice of architecture, landscape 

architecture, or engineering" and registered in discipline 

 

2 We acknowledge the amicus briefs submitted by American 

Council of Engineering Companies of Massachusetts and 

Massachusetts Chapter of the American Institute of Architects; 

Associated General Contractors of Massachusetts, Inc.; 

Construction Industries of Massachusetts; and Columbia 

Construction Company.
4

required for project). When the designs were partially 

completed, DCAM entered into a contract with Gilbane Building 

Company (Gilbane) as the CMAR.

3 Gilbane entered into a 

subcontract with Coghlin Electrical Contractors, Inc. (Coghlin),

to perform electrical work. The subcontract incorporated by 

reference the terms of the contract between DCAM and Gilbane.

On July 19, 2012, approximately one month before it 

substantially completed its work, Coghlin submitted to Gilbane a 

request for equitable adjustment of the contract price. Nearly 

one year later, on July 17, 2013, Coghlin filed a complaint in 

the Superior Court against Gilbane, alleging, inter alia, that 

Gilbane committed a breach of its subcontract with Coghlin by 

causing Coghlin to incur additional costs resulting from various 

scheduling, coordination, management, and design errors.4

Gilbane then filed a third-party complaint against DCAM, 

asserting that, "in the event that Coghlin proves its claims 

against Gilbane," DCAM committed a breach of its contract with 

 

3 The contract between Gilbane Building Company (Gilbane) 

and the Division of Capital Asset Management and Maintenance 

(DCAM) states that Gilbane "is an independent contractor and is 

not an agent or employee of, or a joint venturer with, DCAM."

4 Coghlin Electrical Contractors, Inc. (Coghlin), also named 

Gilbane's surety under a payment bond, Travelers Casualty and 

Surety Company of America, as a defendant in its complaint. See 

G. L. c. 149, § 29.
5

Gilbane by refusing to pay Gilbane the amounts claimed by 

Coghlin.

Because DCAM's liability on the third-party complaint is 

contingent upon Coghlin prevailing on its complaint, we recite

the relevant factual allegations in both the complaint and the 

third-party complaint.

5 In October, 2009, Coghlin began 

performing electric work on the first of two sets of buildings 

and, for the first year, was generally able to perform on 

schedule. However, beginning around November, 2010, various 

errors, omissions, and changes severely affected Coghlin's 

performance, causing Coghlin to incur a forty-nine per cent 

increase in labor hours. Coghlin's increased costs resulted 

both from Gilbane's alleged mismanagement of the Project, such 

as its failure to issue monthly schedules and coordinate the 

 

5 The judge declined to convert the motion to dismiss into a 

motion for summary judgment, so we do not consider the affidavit 

and the attached correspondence submitted by Gilbane with its 

opposition to the motion to dismiss as part of the record on 

appeal, and rest solely on the allegations in the pleadings, as 

well as the contracts referenced in the pleadings. See Marram

v. Kobrick Offshore Fund, Ltd., 442 Mass. 43, 45 n.4 (2004) 

(where offering memorandum and subscription agreement were not 

attached to complaint but plaintiff had notice and "relied on 

them in framing the complaint," attachment of such documents to 

motion to dismiss did not convert motion to one for summary 

judgment). See also Sher v. Desmond, 70 Mass. App. Ct. 270, 281

n.14 (2007) (attached correspondence in support of motion to 

dismiss did not convert motion into summary judgment motion

where judge did not give notice to parties "that the judge 

intended to treat the motion to dismiss as one for summary 

judgment").
6

various subcontractors, and from design defects and changes. As 

to the design, Coghlin alleged that the ceilings in the project 

were designed to leave two feet of space between the ceilings 

and the bottom of the structural steel, but "[w]hen Project work 

began, it was revealed that the design required approximately 

five feet of mechanical and electrical work to be placed in the 

ceiling area." After six weeks of attempting to resolve the 

discrepancy, Coghlin was directed to place the electrical work 

as high as possible in the ceiling, and was told that the 

Designer and Gilbane would address the issue later. Coghlin 

also alleged that, "[w]hen wall framing began, based upon design 

changes and for other reasons not related to Coghlin's 

performance, it became evident that the floors would not be 

framed in a logical and sequential fashion." In addition, 

Coghlin alleged that the Designer specified that Coghlin use 

certain specific electrical fixtures on the Project, but the 

Designer rejected them when Coghlin filed the product 

submittals.

In its third-party complaint, Gilbane claims that it 

performed its work in accordance with the contract, and that 

DCAM has not paid Gilbane for the amounts sought by Coghlin.

DCAM filed a motion to dismiss the third-party complaint. After 

conducting a hearing, the judge allowed the motion and judgment 

was entered in favor of DCAM.
7

In his decision, the judge recognized that Gilbane's thirdparty complaint effectively alleged that DCAM should indemnify 

Gilbane for "damages caused by design changes and design 

errors," that were "unrelated to any wrongdoing on Gilbane's 

part," for which Gilbane may be liable to Coghlin. The judge, 

citing J. Lewin & C.E. Schaub, Jr., Construction Law § 7:3, at 

452 (2012) (Lewin & Schaub, Jr.), acknowledged that 

Massachusetts common law "traditionally has been protective of 

construction contractors in circumstances where the owner has 

supplied erroneous or, perhaps, ambiguous plans and 

specifications." See Lewin & Schaub, Jr., supra at § 7:3, at 

464 (2014-2015) ("where a party provides a contractor with a set 

of plans and specifications for construction to follow, there is 

an implied warranty that those plans and specifications are 

adequate and sufficient"). The judge concluded, however, that 

the implied warranty of the owner applies only where the 

construction project uses the traditional design-bid-build 

construction method, in which the owner retains a designer to 

design the project, construction bids are submitted based on 

that design, and the general contractor who wins the contract is 

expected to build the project in accordance with the plans and 

specifications of the design. The judge determined that this 

implied warranty does not apply where, as here, the construction 

project uses the construction management at risk method, given 
8

the "material changes in the roles and responsibilities 

voluntarily undertaken by the parties" to such contracts.

The judge also determined that the indemnification 

provision in the contract between DCAM and Gilbane, which 

requires Gilbane to indemnify, defend, and hold harmless DCAM 

from all claims, damages, losses, and expenses "arising out of 

or resulting from the performance of the Work," as defined in 

the contract, imposes liability on Gilbane for any damages it 

might win in its third-party claims against DCAM. The judge 

concluded that, because Gilbane effectively is suing itself in 

its third-party complaint, Gilbane's third-party claims create 

"an impermissible 'circuity of obligation'" (citation omitted). 

Gilbane appealed, and we allowed its motion for direct appellate 

review.

Discussion. "We review the allowance of a motion to 

dismiss de novo," accepting as true the facts alleged in the 

plaintiff's and the third-party plaintiff's complaints as well 

as any favorable inferences that reasonably can be drawn from 

them. Galiastro v. Mortgage Elec. Registration Sys., Inc., 467 

Mass. 160, 164 (2014). To survive a motion to dismiss, the 

facts alleged and the reasonable inferences drawn therefrom must 

"plausibly suggest . . . an entitlement to relief." Flagg v. 

Alimed, Inc., 466 Mass. 23, 26-27 (2013), quoting Iannacchino v. 

Ford Motor Co., 451 Mass. 623, 636 (2008).
9

1. Construction management at risk contracts under G. L. 

c. 149A. a. Construction project delivery methods. The 

construction management at risk contract at issue in this case 

differs from contracts made pursuant to the conventional designbid-build method. In a design-bid-build project, "the owner 

retains an engineer or an architect on a separate contract to 

complete the design of the public facility," and once the design 

is complete, the design is made available to potential bidders 

and the construction contract is advertised for bid. Associated 

Subcontractors of Mass., Inc. v. University of Mass. Bldg. 

Auth., 442 Mass. 159, 165 n.8 (2004), quoting D. Gransberg, The 

Cost of Inaction: Does Massachusetts Need Public Construction 

Reform? at 3 (1999). Contractors submit prices, and the project 

is awarded to the "lowest responsive and responsible bidder." 

Associated Subcontractors of Mass., Inc., supra, quoting

Gransberg, supra. The construction services contract between 

the owner and the contractor allocates to the contractor the 

responsibility of "selecting, coordinating, and administrating 

the work of all of the various subcontractors." Lewin & Schaub, 

Jr., supra at § 2:6, at 14. "[T]he risk of the design is 

allocated to the engineer or architect, while the risk of 

construction is allocated to the contractor." Id. at 14-15.

On January 1, 2005, § 27 of the "Act further regulating 

public construction in the Commonwealth" became effective, see 
10

St. 2004, c. 193, § 27, authorizing public agencies to use two 

additional delivery methods: design-build and construction 

management at risk. In a design-build project, the owner 

contracts with a single party that assumes both the design and 

the construction responsibilities. See G. L. c. 149A, § 15 

("Design build" defined as "construction delivery system that 

provides responsibility for the delivery of design services and 

construction services within a single contract"); Lewin & 

Schaub, Jr., supra at § 2:6, at 15. By replacing two entities 

with one, owners may reduce delays and focus responsibility on a 

single entity. See J. Sweet & M.M. Schneier, Legal Aspects of 

Architecture, Engineering and the Construction Process § 14.09E

(9th ed. 2013) (Sweet & Schneier) ("Owners are often frustrated 

when they look to the designer who claims that the contractor 

did not follow the design, with the latter claiming that the 

problem was poor design"). In Massachusetts, a public agency is 

only authorized to use the design-build method for certain 

public works projects, not public building projects. G. L. 

c. 149A, § 14.

The construction management at risk method is available to 

public agencies for the "construction, reconstruction, 

installation, demolition, maintenance or repair of any building 

estimated to cost not less than [$5 million]." Id. at § 1. 

Similar to the design-bid-build method, the owner enters into 
11

separate contracts, one with the designer and one with the CMAR. 

Id. at § 3 (public agency must procure services of designer, who 

is "independent of the owner's project manager and [CMAR]," 

before submitting application to use construction management at 

risk method). However, in the construction management at risk

method, the owner may contract with the CMAR before the design 

has been completed. Id. at § 7 (total dollar amount for CMAR 

services is based on design documents "which are no less 

developed than [sixty] per cent"). See Office of the Inspector 

General, Experience of Massachusetts Public Agencies with 

Construction Management at Risk Under M. G. L. c. 149A, at 9 

(Oct. 2009) (OIG Report) (CMAR "selected during the design stage 

of the project"). By contracting during the design phase, the 

owner may "involve the [CMAR] in project planning and . . . 

benefit from the [CMAR's] expertise." Lewin & Schaub, Jr., 

supra at § 17:42, at 1226. See P.L. Bruner & P.J. O'Connor,

Jr., On Construction Law, § 6:59 (2002) (Bruner & O'Connor, Jr.)

(CMAR "provides preconstruction services tailored to introduce 

construction expertise into the design phase"). The CMAR

provides its services in exchange for a guaranteed maximum price 

(GMP), representing the maximum amount that the owner will pay. 

See G. L. c. 149A, § 2; id. at § 7. Absent a change order, the 

CMAR is generally responsible for any costs that exceed the GMP. 

See Lewin & Schaub, Jr., supra at § 17:42, at 1227.
12

b. Implied warranty of the designer's plans and 

specifications. We now consider whether the owner in a 

construction management at risk contract made pursuant to G. L. 

c. 149A impliedly warrants the sufficiency of the designer's 

plans and specifications. In design-bid-build projects, "[i]t 

is well established that where one party furnishes plans and 

specifications for a contractor to follow in a construction job, 

and the contractor in good faith relies thereon, the party 

furnishing such plans impliedly warrants their sufficiency for 

the purpose intended." Alpert v. Commonwealth, 357 Mass. 306, 

320 (1970). See United States v. Spearin, 248 U.S. 132, 136 

(1918) ("if the contractor is bound to build according to plans 

and specifications prepared by the owner, the contractor will 

not be responsible for the consequences of defects in the plans 

and specifications"). See also Richardson Elec. Co. v. Peter 

Francese & Son, 21 Mass. App. Ct. 47, 50 (1985) ("There is 

implied in a set of construction plans and specifications a 

warranty that they are accurate as to descriptions of the kind 

and quantity of work required"). This implied warranty between 

the owner and the contractor "is a representation that the 

design is defect-free," and the contractor "need only show that 

the defect exists and that he suffered damages as a result 

thereof" in order to recover. Bruner & O'Connor, Jr., supra at 

§ 9:82, at 670, 671 n.5, quoting Harrington, Thum, & Clark, The 
13

Owner's Warranty of the Plans and Specifications for a 

Construction Project, 14 Pub. Con. L. J. 240, 259-260 (1984). 

In design-bid-build projects, the implied warranty of the owner 

"is not overcome by the usual clauses requiring builders to 

visit the site, to check the plans, and to inform themselves of 

the requirements of the work." Spearin, supra. However, the 

implied warranty does not absolve a contractor of all liability 

related to design; where the contractor does not rely in good 

faith on the designer's plans and specifications, the contractor 

is responsible for the increased costs arising from design 

defects. See Alpert, supra. Consequently, where a contractor 

encounters an "obvious omission, inconsistency, or discrepancy 

[in the design], he should take steps, by way of his own 

investigation, or by putting questions to the owner (or owner's 

representatives), to bridge gaps in the documents." Richardson 

Elec. Co., supra at 52. Compare John F. Miller Co. v. George 

Fichera Constr. Corp., 7 Mass. App. Ct. 494, 498 (1979) (if 

discrepancy is subtle, and if reasonable, conscientious 

contractor examining design "might miss a requirement which is 

out of sequence or ineptly expressed, the burden of the error 

falls on the issuer of the specifications").6

 

6 Because the issue is not raised, we do not address the 

distinction between "performance" specifications and "design" 

specifications. See J. Lewin & C.E. Schaub, Jr., Construction 

Law § 7:4, at 467 (2014-2015) (design specifications "describe 
14

Until today, we have not considered whether the owner's 

implied warranty of the designer's plans and specifications 

applies in public construction management at risk projects. See 

generally Bruner & O'Connor, Jr., supra at § 6:67, at 617

("Because construction management is a newer approach and has 

not been the subject of as many court decisions, there is less 

certainty as to interpretation of the contract documents, and 

less uniformity as to the extent and allocation of 

responsibilities, and it is more difficult to predict 

liabilities"). When we adopted the implied warranty as part of 

our common law, public agencies were generally limited to using 

the design-bid-build method, see Lewin & Schaub, Jr., supra at 

§ 17:41, at 1225; OIG Report, supra at 1, where the owner "is in 

control of the design development process" and the contractor 

"has no ability or opportunity to contemporaneously, 

meaningfully, or otherwise influence the process of design 

development and is required to construct in strict conformance 

with the furnished project design." Peterson, One Small Step in 

 

the materials to be used in the work and the manner in which the 

contractor's work is to be constructed in detail" while 

performance specifications "focus on the result to be achieved"

and give contractor discretion as to how to complete final 

product). We assume for the purposes of reviewing the allowance 

of the motion to dismiss that the designs at issue in this case 

contain design specifications. See id. at 468 (contractor 

"cannot rely on an implied warranty to shield itself from 

liability arising out of defective performance specifications").
15

Mindset, One Giant Leap for the Construction Law Industry: How 

the Judicial Stage Is Set for IPD and the Only Thing Missing Is 

Willing Participants, 39 N. Ky. L. Rev. 557, 561-562 (2012), 

quoting Hatem, Design Responsibility in Integrated Project 

Delivery: Looking Back and Moving Forward 14 (Jan. 2008) 

(unpublished manuscript).

The relationship between the owner and the CMAR is 

different from the traditional relationship between the owner

and the general contractor in a design-bid-build project. The 

act defines "construction management at risk" as

"a construction method wherein a construction management at 

risk firm provides a range of preconstruction services and 

construction management services which may include cost 

estimation and consultation regarding the design of the

building project, the preparation and coordination of bid 

packages, scheduling, cost control, and value engineering, 

acting as the general contractor during the construction, 

detailing the trade contractor scope of work, holding the 

trade contracts and other subcontracts, prequalifying and 

evaluating trade contractors and subcontractors, and 

providing management and construction services, all at a

[GMP], which shall represent the maximum amount to be paid 

by the public agency for the building project, including 

the cost of the work, the general conditions and the fee 

payable to the construction management at risk firm" 

(emphasis added).

G. L. c. 149A, § 2. Unlike design-bid-build projects where the 

designer designs and the contractor builds, the CMAR may provide 

consultation regarding the design of the project and therefore 

may influence the project's final plans and specifications. See 

OIG Report, supra at 9 ("final design may reflect or incorporate 
16

substantial input from the [CMAR]"). Additionally, the CMAR 

agrees to a GMP and has the opportunity when negotiating the 

contract to consider the risk of incurring additional costs. 

See id. at 32 (construction management at risk contracts contain 

"CM Contingency," which is monetary amount intended to cover 

risk of "project costs that are not associated with scope 

changes or latent conditions encountered during the construction 

phase"). See also Bruner & O'Connor, Jr., supra at § 9:84, at 

678 ("If . . . it can be clearly established that the contractor 

did or should have accounted for possible errors in the plans 

and specifications when pricing the work, then it appears 

inappropriate to hold the owner to this implied warranty 

standard").

As significant as these differences in relationship are, we 

are not persuaded that the relationships are so different that 

no implied warranty of the designer's plans and specifications

should apply in construction management at risk contracts made 

pursuant to G. L. c. 149A and that the CMAR should bear all the 

additional costs caused by design defects. See OIG Report, 

supra at 12-13, 58 ("Owner-generated design changes and 

incomplete or flawed plans and specifications may . . . warrant 

change orders that increase the contract price" and "owner is 

also responsible for the cost of change orders, which increase 

the original GMP"). See also Hackenbrach, An Overview of Major 
17

Project Delivery Methods and Their Design Risk Allocation, in 

Shared Design § 3.01[C], at 3-11 (2011) (CMAR generally bears 

risk that actual costs to complete project may exceed price it 

has agreed upon with owner, "unless it can show that the costs 

increased due to owner-directed changes, the owner's actions or 

omissions, or other circumstances which the contract treats as 

within the owner's responsibility"). The CMAR may consult 

regarding the design of the project, but the owner, through the 

designer, ultimately controls the design and is the final 

arbiter of it; unless the contract states otherwise, the owner 

is generally under no obligation to accept the CMAR's 

suggestions regarding the plans and specifications. The implied 

warranty derives in part from the basic principle that 

"responsibility for a defect rests on the party to the 

construction contract who essentially controls and represents 

that it possesses skill in that phase of the overall 

construction process that substantially caused the defect." 

Sweet & Schneier, supra at § 16.02A. Although the CMAR may be 

more likely to bear some responsibility for a design defect than 

a general contractor in a design-bid-build project, we adhere to 

this basic principle by applying the implied warranty to public 

construction management at risk contracts, where the owner

maintains control of the design by contracting a separate 

designer and may be able to transfer liability to the designer 
18

responsible for the defect. See Hackenbrach, supra at 3-12 ("In 

a 'textbook' [construction management at risk contract], the 

[CMAR] does not bear the risk of design deficiencies, as the 

owner retains a separate design professional and the [owner's 

implied warranty] applies . . .").

Nor are we persuaded that the Legislature, when it enabled 

the construction management at risk method in public building 

projects by enacting G. L. c. 149A, intended to abolish the 

owner's implied warranty and to require the CMAR to bear the 

entirety of the risk arising from design defects. The statute 

states that the CMAR "may" provide "consultation" regarding the 

design but is not required to do so. Ordinarily, to "consult" 

means to discuss, give advice, or confer. See Milton v.

Massachusetts Bay Transp. Auth., 356 Mass. 467, 474 n.8 (1969), 

quoting Webster's Third New International Dictionary 490 (1963) 

("consult" defined as "to deliberate on," "discuss," "to ask 

advice of," "to take counsel," and "confer"). The possibility 

that the CMAR may consult regarding the building design does not 

suggest that the CMAR should be the guarantor against all design 

defects, even those that a reasonable CMAR would not have been 

able to detect. Although the statute requires a GMP for the 

CMAR's services, the GMP may be established when only sixty per 

cent of the design documents have been developed. The 

Legislature could not reasonably have intended that the CMAR, by 
19

agreeing to a GMP, would bear all the risk arising from the 

design when the CMAR may not have seen as much as forty per cent 

of the design documents before agreeing upon a GMP. Even where 

a CMAR is given substantial consultative responsibilities 

regarding the design, the owner remains free to reject the 

CMAR's advice and suggestions. In addition, under G. L. c. 7C, 

§ 51 (e), "[a] public agency shall not enter into a contract for 

design services unless the public agency or the designer . . . 

has obtained professional liability insurance covering negligent 

errors, omissions and acts of the designer," and the total 

amount of insurance "shall at a minimum equal the lesser of [$1 

million] or [ten] per cent of the project's estimated cost of 

construction, or such larger amounts as the public agency may 

require." The statute does not permit a lesser amount of 

professional liability insurance in construction management at 

risk projects. Based on the language of G. L. cc. 149A and 7C, 

we understand that the legislative intent in providing the 

construction management at risk alternative was to permit the 

CMAR a greater consultative role regarding the project's design, 

not to eliminate the owner's responsibility for design defects.

Although the owner's implied warranty applies in a public 

construction management at risk contract, the differences 

between the responsibilities of a general contractor in a 

design-bid-build project and those of a CMAR affect the scope of 
20

the implied warranty. The general contractor in a design-bidbuild project may benefit from the implied warranty where it 

relied on the plans and specifications in good faith, but the 

CMAR may benefit from the implied warranty only where it has 

acted in good faith reliance on the design and acted reasonably 

in light of the CMAR's own design responsibilities. The CMAR's 

level of participation in the design phase of the project and 

the extent to which the contract delegates design responsibility 

to the CMAR may affect a fact finder's determination as to 

whether the CMAR's reliance was reasonable. The greater the 

CMAR's design responsibilities in the contract, the greater the 

CMAR's burden will be to show, when it seeks to establish the 

owner's liability under the implied warranty, that its reliance 

on the defective design was both reasonable and in good faith. 

See generally Sweet & Schneier, supra at § 14.04 ("all of the 

modern variations [on the design-bid-build method] have as a 

common denominator: a blurring of the lines of 

responsibility"). Therefore, the CMAR may recover damages 

caused by the breach of the implied warranty, but only if it 

satisfies its burden of proving that its reliance on the 

defective plans and specifications was reasonable and in good 

faith. The amount of recoverable damages may be limited to that 

which is caused by the CMAR's reasonable and good faith reliance 
21

on design defects that constitute a breach of the implied 

warranty.

2. Express disclaimer of implied warranty. Having found 

that there is an implied warranty of the designer's plans and 

specifications in construction management at risk contracts made 

pursuant to G. L. c. 149A, we now consider whether the contract 

between DCAM and Gilbane expressly disclaims the owner's implied 

warranty. See Daniel O'Connell's Sons v. Commonwealth, 349 

Mass. 642, 647-648 (1965) ("express disclaimer" of owner's 

responsibility for accuracy of geological data precluded 

liability based on contractor's reliance on such data); D. 

Federico Co. v. Commonwealth, 11 Mass. App. Ct. 248, 252 (1981) 

(implied warranty not recognized "where the contract terms 

specifically precluded warranty of, or reliance on" designer's 

quantity estimates). See also White v. Edsall Constr. Co., 296 

F.3d 1081, 1085 (Fed. Cir. 2002) ("Only express and specific 

disclaimers suffice to overcome the implied warranty that 

accompanies design specifications"); Lewin & Schaub, Jr., supra

at § 7:3, at 466 ("implied warranty [of design sufficiency]

. . . may be mitigated by an express disclaimer of liability").

We find no express disclaimer of the implied warranty of 

the designer's plans and specifications in the contract between 

DCAM and Gilbane. We note that DCAM, on appeal, concedes that 

"the Superior Court's dismissal in this case does not negate 
22

principle that the owner remains liable to the [CMAR] for design 

changes, errors and omissions which flow from the work of the 

designer" and that "[i]f Gilbane is found liable to Coghlin and 

the liability flows from design issues rather than other aspects 

of [Gilbane's] responsibilities, then there would have to be an 

allocation of that liability between Gilbane, [DCAM] and the 

[D]esigner." DCAM and Gilbane agree that the contract does not 

impose full responsibility for design defects on Gilbane, and 

the contract supports their interpretation.

As the judge recognized, the contract delegates extensive 

responsibilities to Gilbane to "carefully study" and "carefully 

compare" all design-related documents; "take field measurements 

and verify field conditions," compare them to the designs, and 

"report to the Designer any questions, errors, inconsistencies, 

or omissions." Gilbane must "review" the designs "on a 

continuous basis" with a group of architects or engineers in 

order to "discover inconsistencies, errors and omissions," and 

"review the design documents for clarity, consistency, 

constructability, maintainability/operability and coordination 

among the trades." Gilbane also must attend Project meetings 

with DCAM and the Designer and "consult with DCAM and the 

Designer concerning planning for construction of the Project."

Although Gilbane undertakes significant design-related 

obligations, there is no express abrogation of the implied 
23

warranty. See White, 296 F.3d at 1085, citing Spearin, 248 U.S. 

at 137 ("general disclaimers requiring the contractor to check 

plans and determine project requirements do not overcome the 

implied warranty, and thus do not shift the risk of design flaws 

to contractors who follow the specifications"). The contract 

instead states that the "recommendations and advice of [Gilbane] 

concerning design modifications and alternatives shall be 

subject to the review and approval of DCAM," and, the Designer 

"shall decide all questions which may arise as to the 

interpretation of the [designs] and as to the fulfillment of 

this Contract on the part of [Gilbane]." Such provisions show 

that the Designer and DCAM maintain authority and control over 

the Project's design. In comparison, when describing some of 

Gilbane's design-related responsibilities, the contract states:

"[Gilbane] shall consult with DCAM and the Designer 

regarding the selection of materials, building systems and 

equipment, and shall recommend alternative solutions 

whenever design details affect construction feasibility, 

schedules, cost or quality (without, however, assuming the 

Designer's responsibility for design) and shall provide 

other value engineering services to DCAM" (emphasis added).

In stating that Gilbane shall recommend alternative designrelated solutions, without assuming "the Designer's 

responsibility for design," the plain language of the contract 

supports, rather than disclaims, the implied warranty.7

 

7 The "No Personal Liability; Consequential Damages" 

provision of the "Miscellaneous Provisions" article, stating, 
24

Thus, in the absence of an express disclaimer, the owner's 

implied warranty of the designer's plans and specifications 

applies. Here, Gilbane has undertaken extensive design review 

and consultation obligations while the Designer remains 

responsible for producing the designs. If Gilbane is found 

liable for additional costs to Coghlin, Gilbane may be able to 

recover, but only to the extent that the additional costs were 

caused by Gilbane's reasonable and good faith reliance on the 

defective plans and specifications that resulted in a breach of

the owner's implied warranty, despite Gilbane's own contractual 

design responsibilities.

3. Indemnification provision. Section one of the 

indemnification provision of the contract provides in pertinent 

part:

"To the fullest extent permitted by law, [Gilbane] shall 

indemnify, defend . . . and hold harmless DCAM and their 

officers, agents, . . . employees, [and] representatives

. . . from and against all claims, damages, losses and 

expenses, including but not limited to court costs and 

attorneys' fees, arising out of or resulting from the 

performance of the Work, including but not limited to those 

arising or resulting from: labor performed or furnished 

and/or materials used or employed in the performance of the 

Work; violations by [Gilbane] . . . of any Laws; violations 

of any provision of this Contract by [Gilbane] . . . ; 

injuries to any persons or damage to any property in 

 

"In no event shall DCAM or [Ellenzweig Associates (Designer)] be 

liable to the [CMAR] except for obligations expressly assumed by 

DCAM or the Designer under the Contract Documents," does not 

constitute a specific or express disclaimer of the implied 

warranty of the designer's plans and specifications.
25

connection with the Work; or any act, omission, or neglect 

of [Gilbane's] Personnel.[8]

"[Gilbane] shall be obligated as provided above, regardless 

of whether or not such claims, damages, losses and/or 

expenses, are caused in whole or in part by the actions or 

inactions of a party indemnified hereunder. . . ."

Section two of the provision, titled "Designer's Actions," 

states:

"The obligations of [Gilbane] under Section [one] above 

shall not extend to the liability of the Designer, its 

agents or employees, arising out of (i) the preparation or 

approval of maps, Drawings, opinions, reports, surveys[,] 

Change Orders, designs or Specifications, or (ii) the 

giving of or the failure to give directions or instructions 

by the Designer, its agents or employees provided such 

giving or failure to give is the primary cause of the 

injury or damage."

The judge concluded that the indemnification provision 

required Gilbane to indemnify DCAM for "any liability" that 

might be imposed upon DCAM as a result of Gilbane's own third-

 

8 "Work" is a defined term in the contract:

"The Work consists of all the work identified in the 

Contract Documents. The Work comprises the completed 

construction required by the Contract Documents and 

includes all labor, tools, materials, supplies, equipment, 

permits, approvals, paperwork, calculations, submittals, 

and certificates necessary to develop, construct and 

complete the Work in accordance with all Laws, and all 

construction and other services required to be supervised, 

overseen, performed or furnished by [Gilbane] or that the 

Contract Documents require [Gilbane] to cause to be 

supervised, overseen, performed or furnished. [Gilbane] 

shall provide and perform for the Contract Price all of the 

duties and obligations set forth in the Contract 

Documents."
26

party claims. Thus, according to the judge, Gilbane's thirdparty complaint created an impermissible "circuity of 

obligation," because Gilbane may not seek damages from DCAM when

DCAM would have a right to be indemnified by Gilbane for those 

same damages. Furthermore, the judge rejected Gilbane's 

contention that section two excluded any obligation to 

indemnify, defend, and hold harmless DCAM for design defects, 

and found that section two only excused Gilbane from the 

obligation to indemnify, defend, and hold harmless the Designer, 

as one of DCAM's "agents [or] representatives."

The judge's reasoning was premised on his conclusion that 

Gilbane did not have the benefit of the implied warranty of the 

designer's plans and specifications. We instead interpret the 

indemnification provision in light of the implied warranty and 

conclude that, although broad in scope, the indemnification 

provision does not cover claims, damages, losses, and expenses

arising out of the Designer's work, as opposed to Gilbane's 

design-related duties. Here, the contract states that the 

indemnification provision is triggered by claims, damages, 

losses, and expenses "arising out of or resulting from the 

performance of the Work," which we interpret to mean Gilbane's 

performance. See Bruner & O'Connor, Jr., supra at § 10:58 

("Nearly every indemnity provision contains language limiting 

the indemnitor's obligation to loss occasioned in some way or 
27

another to the activities or work of the indemnitor").9 As part 

of its "Work" under the contract, Gilbane is responsible for 

"construction and other services required to be supervised [and] 

overseen," but Gilbane does not "supervise" or "oversee" the 

Designer's work. See Department of Community Affairs v. 

Massachusetts State College Bldg. Auth., 378 Mass. 418, 430 

(1979), quoting Fluet v. McCabe, 299 Mass. 173, 179 (1938) ("to 

supervise" means "to oversee, to have oversight of, to 

superintend the execution of or performance of [a thing], or the 

movements or work of [a person]; to inspect with authority; to 

inspect and direct the work of others"). Rather, the contract 

provides that Gilbane's recommendations are subject to the 

review and approval of DCAM and that the Designer has authority 

over the interpretation of the designs. Gilbane reviews and 

consults regarding the designs, but the contract expressly 

declares that Gilbane does not assume the "Designer's 

responsibility for design." In light of the implied warranty of 

the designer's plans and specifications, and the contractual 

definition of "Work," we conclude that claims, damages, losses, 

and expenses that arise out of the Designer's performance, as 

 

9 In its brief, DCAM states that the contract "requires 

Gilbane to defend DCAM from all claims "arising out of the 

performance of Gilbane's work." Moreover, DCAM describes the 

contractual definition of "Work" as defining "'Work' for which 

Gilbane is responsible."
28

opposed to Gilbane's design consultation and review performance,

do not trigger the indemnification provision.

10

Furthermore, we conclude that section two of the 

indemnification provision exempts Gilbane of its obligations to 

defend, indemnify, or hold harmless both the Designer and DCAM 

for additional costs caused by design defects. The judge 

interpreted this section as exempting only the Designer from

Gilbane's duties under section one of the indemnification

provision. But where the owner, through the implied warranty, 

is legally responsible for the designer's plans and 

specifications, and where the CMAR has a contractual 

relationship with the owner but not the designer, the apparent 

purpose of this provision can be wholly accomplished only by 

interpreting it to include both the designer and the owner who 

impliedly warrants the designer's plans and specifications. See 

Key Constr., Inc. v. State Auto Prop. & Cas. Ins. Co., 551 F. 

Supp. 2d 1266, 1268, 1270-1271 & n.2 (D. Kan. 2008) (applying 

Oklahoma law, subcontractor not required to indemnify contractor 

for losses or injuries caused by architect's plans and 

specifications, where indemnification provision stated that 

 

10 Because Gilbane has plausibly alleged that the claims of 

Coghlin, for which it seeks recovery from DCAM, arise out of 

design defects attributable to the Designer, and are therefore 

outside of the triggering language of the indemnification 

provision, we do not address DCAM's circuity of obligation 

argument.
29

subcontractor's obligations "shall not extend to the liability 

of the Architect"). If we were to interpret section two as the 

judge did, the Designer effectively would be indemnified by 

Gilbane for increased labor and material costs arising from 

defects in its design, even though the contract expressly 

declares that Gilbane has no duty to indemnify the Designer. 

The reason is that Gilbane can only sue DCAM, not the Designer, 

to recover these additional costs under its contract, and would 

be barred from doing so under the judge's interpretation, thus 

negating any possibility that the Designer would need to defend 

a third-party claim brought by DCAM to recover these damages. 

Therefore, we conclude that Gilbane is exempt from its 

obligations to indemnify, defend, and hold harmless DCAM for 

damages caused by defects in the Designer's plans and 

specifications that constitute a breach of the implied warranty, 

and that the indemnification provision does not bar Gilbane's 

third-party complaint.

4. Third-party complaint. DCAM contends that, even if it 

may be found liable to Gilbane for defects in the Designer's 

work, the third-party complaint was properly dismissed, because 

Gilbane may only bring a claim against DCAM after Coghlin wins a 

judgment against Gilbane based at least in part on a finding of 

"liability" attributable to the Designer's work. According to 

DCAM, Gilbane's filing of a third-party complaint against DCAM 
30

is inconsistent with its duty to defend DCAM under the 

indemnification provision. It contends that compliance with 

that provision requires Gilbane first to defend against 

Coghlin's claims to final resolution. Pursuant to this 

argument, only if Gilbane is found liable to Coghlin, and that 

liability is attributable to the Designer's work, may Gilbane 

pursue a claim against DCAM.

Rule 14 of the Massachusetts Rules of Civil Procedure, as 

amended, 385 Mass. 1216 (1982), seeks to avoid the duplicative 

efforts that DCAM's interpretation would dictate, by allowing a 

defendant to file a third-party complaint against a party "who 

is or may be liable" to the defendant "for all or part of the 

plaintiff's claim against him." "Because Rule 14 expressly 

allows what is in effect anticipatory litigation, a third-party 

defendant may not and should not object on the grounds that the 

defendant's liability has not yet been established." Reporters'

Notes to Rule 14, Mass. Ann. Laws Court Rules, Rules of Civil 

Procedure, at 335 (LexisNexis 2014-2015). Where the claims 

alleged do not trigger the indemnification provision, and a twostep procedure would run counter to the purposes of rule 14 and 

common practice in construction law, we shall not interpret the 

duty to defend or any other obligation in the indemnification 

provision to require Gilbane to forebear from filing suit 

against DCAM until a judgment has been obtained in the Coghlin 
31

suit, unless there is express language in the contract requiring 

these two steps. See Sweet & Schneier, supra at § 2.06 ("In 

construction disputes, it is common for the defendant to assert 

a counterclaim against the plaintiff or to make claims against 

third parties arising from the same transaction"). See, e.g., 

Campbell Hardware, Inc. v. R.W. Granger & Sons, 401 Mass. 278, 

279 (1987) (public construction dispute in which subcontractor 

sued general contractor for additional work performed and 

general contractor brought third-party action against public 

owner). There is no such express language in the contract

between DCAM and Gilbane. Therefore, we decline to prevent 

Gilbane from bringing its third-party complaint.

Conclusion. Because Gilbane's third-party complaint 

against DCAM plausibly states a claim for relief, we vacate the 

allowance of the motion to dismiss and the entry of judgment,

and we remand the case to the Superior Court for further 

proceedings consistent with this opinion.

11

So ordered.

 

11 We acknowledge that Gilbane has requested that we take 

judicial notice of the contract between DCAM and the Designer as 

a public record, even though it was neither referenced in nor 

appended to the pleadings. In light of our reversal of the 

dismissal in this case, we need not decide the issue.