Sears, Roebuck and Co. v. Hardin Construction Group, Inc. et al

Filing 64

ORDER granting 38 Defendants' Motion to Dismiss; granting 10 Defendants' Motion to Dismiss as set out. Signed by Judge Kristi K. DuBose on 10/26/2016. (cmj)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
SEARS AND ROEBUCK AND CO.,
Plaintiff,
v.
HARDIN CONSTRUCTION
GROUP, INC., et al.,
Defendants.

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CIVIL ACTION NO. 16-00272-KD-B

ORDER
This matter is before the Court on Defendants’ Motions to Dismiss (Docs. 10, 38)
Plaintiff’s Responses in Opposition (Docs. 18, 47), and Defendants’ Replies (Doc. 24). Upon
consideration, and for the reasons discussed herein, the motions to dismiss are GRANTED.
I.

Background
On June 9, 2016, Plaintiff Sears and Robuck (“Sears”) filed this action against five

defendants: 1) Hardin Construction Group, Inc. (“Hardin Inc.”); 2) Carl M. Hair, Jr. (“Hair”)1; 3)
Hardin Construction Company, LLC (“Hardin LLC”); 4) DPR Construction, GP (“DPR GP”);
and 5) DPR Construction, Inc. (“DPR Inc.”).2 The Court’s jurisdiction is founded on diversity
pursuant to 28 U.S.C. § 1332.
In 1996, Sears and Hardin Inc. contracted for Hardin Inc. to make renovations to Sears’
Bel Air Mall retail store location in Mobile, Alabama. The construction contract called for
Hardin Inc. to “install the elevators and escalators” in the store. (Doc. 1 at 3). On June 14, 2014,

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Hair was dismissed from this action on October 3, 2016. (Docs. 51, 62). Accordingly, Hair’s motion to dismiss
(Doc. 39) is MOOT.
2
On October 4, 2016 the Court held a hearing on this matter. The Court instructed the Defendants to supplement
their filings with additional information regarding the proper parties in this matter. On October 18, 2016, Defendants
Hardin LLC, DPR GP, and DPR Inc. submitted supplemental briefing indicating that either Hardin LLC or Hardin
Inc. were proper defendants. (Doc. 64). Both parties are named in this suit. The sole member of Hardin LLC is DPR
GP and DPR Inc. is one of three members of DPR GP. (Id.). Hardin Inc. is a dissolved entity but it appears Hardin
LLC is one of its successors. (Id.).

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there was a fatal accident involving an escalator at the Mobile Sears location. Sears has been
sued for wrongful death in a separate action. 3
The instant Complaint alleges that, pursuant to the terms of their construction contract
Hardin Inc. is required to defend and indemnify Sears against an underlying claim alleging
defects related to an escalator that Hardin Inc. constructed in 1997. (Docs. 1 and 1-1). Hardin
Inc. has refused to indemnify Sears, arguing that it is no longer obligated to do so. As a result,
Sears claims Hardin Inc. has breached the indemnity provision of the parties’ contract. The
Complaint alleged that the four additional defendants were successors in interest to Hardin Inc.
On July 6, 2016, Defendants Hardin LLC, DPR Inc., and DPR GP filed a motion to
dismiss all claims, arguing that the applicable Alabama statute of repose barred the claim. (Doc.
10). On November 6, 2016, Defendant Hardin Inc. filed a motion to dismiss, adopting the
arguments contained in the July 6, 2016 motion to dismiss. (Doc. 38).
II.

Discussion
a.

Standard of Review

In deciding a motion to dismiss under Rule 12(b)(6) for “failure to state a claim upon
which relief can be granted,” the Court must construe the complaint in the light most favorable to
the Plaintiffs, “accepting all well-pleaded facts that are alleged therein to be true.” E.g., Miyahira
v. Vitacost.com, Inc., 715 F.3d 1257, 1265 (11th Cir. 2013). “Under Rule 10(c) Federal Rules of
Civil Procedure, [copies of written instruments that are exhibits to a pleading] are considered
part of the pleadings for all purposes, including a Rule 12(b)(6) motion.” Solis-Ramirez v. U.S.
Dep't of Justice, 758 F.2d 1426, 1430 (11th Cir. 1985) (per curiam). “Fed. R. Civ. P. 8(a)(2)
requires that a pleading contain ‘a short and plain statement of the claim showing that the pleader
is entitled to relief’ in order to give the defendant fair notice of what the claim is and the grounds
3

Kirksey v. Schindler Elevator Corporation et al., 15-CV-00115-WS-N (S.D. Ala.).

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upon which it rests.” Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1288 (11th Cir. 2010)
(quotation omitted). “‘While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not
need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement
to relief requires more than labels and conclusions, and a formulaic recitation of the elements of
a cause of action will not do.’ ” Id. at 1289 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555, 127 S. Ct. 1955, 1964-65, 167 L. Ed. 2d 929 (2007)). A complaint's “ ‘[f]actual allegations
must be enough to raise a right to relief above the speculative level ... on the assumption that all
the allegations in the complaint are true (even if doubtful in fact).’ ” Id. (quoting Twombly, 550
U.S. at 555). “[T]o survive a motion to dismiss, a complaint must now contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Id. (quoting
Twombly, 550 U.S. at 570). While this “plausibility standard is not akin to a ‘probability
requirement’ at the pleading stage, ... the standard ‘calls for enough fact to raise a reasonable
expectation that discovery will reveal evidence’ of the claim.” Id. (quoting Twombly, 550 U.S. at
556).
Moreover, “‘the tenet that a court must accept as true all of the allegations contained in a
complaint is inapplicable to legal conclusions.’” Id. at 1290 (quoting Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009)). Under the plausibility standard, “‘where the well-pleaded facts do not permit
the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it
has not “show [n]”—“that the pleader is entitled to relief.”’” Id. (quoting Iqbal, 556 U.S. at 679
(quoting Fed. R. Civ. P. 8(a)(2))). Iqbal “suggested that courts considering motions to dismiss
adopt a ‘two-pronged approach’ in applying these principles: 1) eliminate any allegations in the
complaint that are merely legal conclusions; and 2) where there are well-pleaded factual
allegations, ‘assume their veracity and then determine whether they plausibly give rise to an

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entitlement to relief.’ ” Id. (quoting Iqbal, 556 U.S. at 679). “Importantly, ... courts may infer
from the factual allegations in the complaint ‘obvious alternative explanation [s],’ which suggest
lawful conduct rather than the unlawful conduct the plaintiff would ask the court to infer.” Id.
(quoting Iqbal, 556 U.S. at 679 (quoting Twombly, 550 U.S. at 567)).
“[G]enerally, the existence of an affirmative defense will not support a rule 12(b)(6)
motion to dismiss for failure to state a claim. A district court, however, may dismiss a complaint
on a rule 12(b)(6) motion when its own allegations indicate the existence of an affirmative
defense, so long as the defense clearly appears on the face of the complaint.” Fortner v. Thomas,
983 F.2d 1024, 1028 (11th Cir. 1993) (quotation omitted)).
b.

Analysis4

Defendants’ motions to dismiss are based on their position that Ala. Code § 6-5-221,
which is Alabama’s construction statute of repose, bars Sears’ claims. The parties do not dispute
that the building was substantially completed on June 30, 1997. (Doc. 10-1 at 4). The allegations
giving rise to the underlying action for which Plaintiff seeks indemnification occurred on or
about June 14, 2014. (Doc. 1 at 5). The underlying action was filed in December 2014, and Sears
sought indemnification on March 16, 2016. (Id. at 5-6). Thus, the demand for indemnification
occurred nearly nineteen years after construction was substantially completed.
Pursuant to Ala. Code § 6-5-221:
(a) All civil actions in tort, contract, or otherwise against any architect or engineer
performing or furnishing the design, planning, specifications, testing, supervision,
administration, or observation of any construction of any improvement on or to
real property, or against builders who constructed, or performed or managed the
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The construction contract (Doc. 1-1) does not contain a choice of law provision and the parties do not dispute that
Alabama law controls. Under Alabama law, in the absence of such a provision, the law of the state where the
contract is to be performed applies. “In fact, the long standing rule in Alabama is that ‘the nature, obligation, validity
and interpretation of a contract are according to the laws of the state where made, or where performance begins, ...
unless it is to be performed in some other place, in which case the law of the other place and of performance will
govern.’” Owens v. Superfos A/S, 170 F. Supp. 2d 1188, 1194–95 (M.D. Ala. 2001)(quoting J.R. Watkins v. Hill,
108 So. 244, 245 (1926). Accordingly, the Court will apply Alabama law.

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construction of, an improvement on or to real property designed by and
constructed under the supervision, administration, or observation of an architect
or engineer, or designed by and constructed in accordance with the plans and
specifications prepared by an architect or engineer, for the recovery of damages
for:
(i) Any defect or deficiency in the design, planning, specifications, testing,
supervision, administration, or observation of the construction of any
such improvement, or any defect or deficiency in the construction of
any such improvement; or
(ii) Damage to real or personal property caused by any such defect or
deficiency; or
(iii) Injury to or wrongful death of a person caused by any such defect or
deficiency;
shall be commenced within two years next after a cause of action accrues or
arises, and not thereafter. Notwithstanding the foregoing, no relief can be
granted on any cause of action which accrues or would have accrued more
than seven years after the substantial completion of construction of the
improvement on or to the real property, and any right of action which
accrues or would have accrued more than seven years thereafter is barred,
except where prior to the expiration of such seven-year period, the architect,
engineer, or builder had actual knowledge that such defect or deficiency exists
and failed to disclose such defect or deficiency to the person with whom the
architect, engineer, or builder contracted to perform such service.
(c) This section shall apply and extend to every action or demand, whether
commenced by direct action, action for contribution or indemnity, or by
counterclaim, cross-claim, or third party practice and whether commenced by an
owner of the improvement or any other person…
Ala. Code § 6-5-221(emphasis added).
Thus, under Alabama law, in order for Sears’ to have a timely indemnity claim, Sears’
claim must have accrued on or before June 30, 2004, which is seven years after construction was
substantially completed. Sears’ claims did not arise until June 14, 2014. Thus, pursuant to Ala.
Code § 6-5-221, the action is time barred. 5

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When the construction contract was executed, the statute of repose was 13 years. In 2011, this statute was amended
to shorten the period of repose from 13 to 7 years. Whether 13 or 7 years, Sears’s claim still falls outside of this time
period. The thirteen year period would have expired June 30, 2010.

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However, an exception to Ala. Code § 6-5-221, found in Ala. Code § 6-5-227 exists. As
outlined below, the parties may agree to extend the period of repose when certain requirements
are met:
Nothing contained in this article shall be construed to bar, prior to the expiration
of a written express warranty, contract, or indemnity, causes of action or rights of
action in contract against architects, engineers, and builders as defined in this
article arising out of breach of contract for written express warranties, contracts,
or indemnities which by the written terms thereof shall extend beyond the
period of seven years after the substantial completion of construction of an
improvement on or to the real property. Any written express warranty, contract, or
indemnity for the purposes of an action in contract based upon the written express
warranty, contract, or indemnity shall be enforceable for the period of time
specified in writing, and all civil actions in contract arising out of the written
express warranty, contract, or indemnity against any architect, engineer, or builder
who gave the written express warranty, contract, or indemnity must be
commenced within two years next after the cause of action accrues or arises, and
not thereafter; and no relief can be granted and shall be barred on any cause
of action which accrues after the expiration of the term or period of said
written express warranty, contract, or indemnity.
Ala. Code § 6-5-227 (emphasis added).
While parties may execute written indemnity agreements that continue beyond seven
years after construction is substantially completed, in order to do so, the “period of time” must be
“specified in writing.” Ala. Code § 6-5-227. Sears argues that this is exactly what the parties
have done, that the contents of the construction contract’s indemnity paragraph comport with
Ala. Code § 6-5-227, and the parties intended for Defendants’ indemnity obligations to endure
indefinitely. As grounds, Sears points to the following language from the construction contract:
The indemnification obligations hereunder shall not be limited by any limitation
on the amount, type of damages, compensation or benefits payable by or for the
Contractor or any subcontractor under workers’ compensation acts, disability
benefit acts, other employee benefit acts or any statutory bar.
(Doc. 1-1 at 1, ¶5) (emphasis added).

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Sears argues that the inclusion of the phrase “any statutory bar” evidences the parties’
intent for the indemnity obligations to continue indefinitely. In support, Sears cites two cases in
support of their position that the indemnity obligations are ongoing. These cases are Black
Diamond Coal Mining Co. v. USX Corp., 581 So.2d 839 (Ala.1991) and Lloyd Noland Found.,
Inc. v. Tenet Healthcare Corp., 277 F. App’x 923 (11th Cir. 2008). However, these cases are
distinguishable, as neither involved a statute of repose or a construction contract. Further, the
exception codified by Ala. Code § 6-5-227 was first enacted in 1994, which was after Black
Diamond was decided in 1991.
Additionally, this Court is not called upon to determine whether an indemnity provision
with an indefinite duration is permissible Alabama law. Rather, the Court must determine
whether the indemnity provision of this construction contract between the parties satisfies the
requirements of Ala. Code §6-5-227, which permits contracting parties to extend the period of
repose when it is specified in writing.
The Court begins by examining the statute itself. Courts have long recognized that their
“authority to interpret statutory language is constrained by the plain meaning of the statutory
language in the context of the entire statute, as assisted by the canons of statutory construction.”
Collins v. Experian Information Solutions, Inc., 775 F.3d 1330, 1334 (11th Cir. 2015) (citation
omitted). Federal courts presume that the legislature “said what it meant and meant what it said.”
CBS Inc. v. PrimeTime 24 Joint Venture, 245 F.3d 1217, 1222 (11th Cir.2001) (citations
omitted). To discern a statute's plain meaning, “[i]n the absence of a statutory definition of a
term, we look to the common usage of words for their meaning.” Id. (citations omitted). Courts
“must interpret a statute in a manner consistent with the plain language of the statute unless
doing so would lead to an absurd result.” United States v. Wilson, 788 F.3d 1298, 1310 (11th

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Cir.2015) (citation and internal quotation marks omitted). As Defendants point out, the Alabama
legislature codified its intent in adopting Ala. Code § 6-5-221’s statute of repose:
(e) The legislative objective of abolishing potential liabilities of architects and
engineers and builders after the passage of a sufficient period of time from the
completion of their work is rationally and reasonably related to the permissible
state objective of removing responsibility from, and preventing suit against these
regulated professions and builders which are least likely to be responsible or at
fault for defects and deficiencies which cause injury long after their services or
work is completed. The Legislature has deemed that, after a lapse of time of more
than seven years without incident, the burden on the courts to adjudicate, the
complexities of proof with the obstacle of faded memories, unavailable witnesses
and lost evidence, and even where evidence is available, the opportunity for
intervening factors such as acts or omissions of others in inadequate maintenance,
improper use, intervening alterations, improvements and services, and other
negligence, and such as changes in standards for design and construction and
changes in building codes, and the burden on architects and engineers and
builders, who have no control over the improvements after their services are
completed, to disprove responsibility after acceptance and years of possession by
other parties, all weigh more heavily in favor of repose or the abolishing of rights
of action against architects and engineers and builders than allowing adjudication
of the few, if any, meritorious claims which might have accrued thereafter. The
Legislature finds that the burden of tenuous claims upon both the courts and
architects and engineers and builders sufficiently vindicates the denial of a right
of action after the passage of a period of seven years from the substantial
completion of the construction of the improvement.
Ala. Code § 6-5-225(e). Additionally, the Alabama Supreme Court has stated:
Buildings are unique in that typically they are intended to endure indefinitely if
not permanently. Without [the construction statute of repose], architects, builders,
and engineers would remain subject to liability until they die or, indeed, for some
months after they have died. See 43–2–350(b), Ala.Code 1975. The construction
statute of repose bears a substantial relationship to the eradication or amelioration
of this potentially perpetual liability as well as the evils specifically found by the
Legislature.
Baugher v. Beaver Constr. Co., 791 So. 2d 932, 937 (Ala. 2000). The Court has been unable to
find any case law specifically addressing Ala. Code § 6-5-227. However, its language plainly
requires that parties wishing to extend the period of repose beyond seven years after the
substantial completion of construction must specify the period of time in writing.

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Relevant tenets of contract interpretation under Alabama law include the following: “The
question whether a contractual term is ambiguous or unambiguous is a question of law for the
court to decide.” Hamilton v. Employees' Retirement System of Alabama, 14So.3d 839, ––––,
2009 WL 129981, *3 (Ala. Jan. 16, 2009); see also Mega Life and Health Ins. Co. v. Pieniozek,
516 F.3d 985, 991 (11th Cir.2008) (under Alabama law, whether contract is ambiguous is a
question of law for the court). Moreover, “[i]n determining whether the language of a contract is
ambiguous, courts construe the words according to the interpretation ordinary men would place
on the language used therein.... The words are given the meaning that persons with a usual and
ordinary understanding would place on the words.” Progressive Specialty Ins. Co. v. Naramore,
950 So.2d 1138, 1141 (Ala.2006) (citations and internal quotations omitted). “If the terms within
a contract are plain and unambiguous, the construction of the contract and its legal effect become
questions of law for the court.” Nationwide Ins. Co. v. Rhodes, 870 So.2d 695, 696–97
(Ala.2003) (citation omitted). “General contract law requires a court to enforce, as it is written,
an unambiguous and lawful contract.” Drummond Co. v. Walter Industries, Inc., 962 So.2d 753,
780 (Ala.2006). By contrast, “[i]f the trial court finds the contract to be ambiguous, it must
employ established rules of contract construction to resolve the ambiguity,” and may only submit
the ambiguity to the finder of fact if application of those canons of construction proves
insufficient to resolve it. Pieniozek, 516 F.3d at 992 (internal quotations and citations omitted);
see also New Gourmet Concepts, Inc. v. Siedo Investments Co., 988 So.2d 961, 967 (Ala.2007)
(“When we find an agreement to be ambiguous, we must employ established rules of contract
construction to resolve the ambiguity found in the inartfully drafted document.”) (citation
omitted).

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While the sentence in question in the contract could have been better drafted, the Court is
able to dissect it. The sentence broken down and enumerated according to punctuation states as
follows:
The indemnification obligations hereunder shall not be limited by any limitation
on
1)
2)
3)
4)

the amount,
type of damages,
compensation or
benefits

payable by or for the Contractor or any subcontractor under
1)
2)
3)
4)

workers’ compensation acts,
disability benefit acts,
other employee benefit acts or
any statutory bar.

(Doc. 1-1 at 1, ¶5) (emphasis added).
Thus, the amount of indemnification, payable by the Contractor, is not limited by a
statutory bar. However, this provision cannot reasonably be interpreted to be a written extension
of the statute of repose as required by Ala. Code § 6-5-227. Rather it appears that its purpose
was to remove any limitations on the amount of recovery. Even accepting Sears’ argument that
the parties intended duration of the construction contract’s indemnity obligations not be limited
by “any statutory bar,” including the statute of repose, the contract language still does not satisfy
the requirements of §6-5-227 because the intended “period of time” is not “stated in writing.”
Accordingly, as the language used in the contract does not extend the applicable period of
repose, Sears’ claims are time barred pursuant to Ala. Code §220 et seq.

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III.

Conclusion
Upon consideration of the foregoing, the Defendants’ motions to dismiss filed pursuant to

Fed. R. Civ. P. 12(b)(6) are GRANTED, as Sears’ claims are time barred. (Docs. 10 and 38).
Pursuant to Fed. R. Civ. P. 58, judgment will issue by separate document.
DONE and ORDERED this 26th day of October 2016.
/s/ Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE

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