El Dorado Chemical Company v. L & L Industrial Services, Inc. et al

Filing 50

ORDER granting 7 Motion to Dismiss; granting 10 Motion to Dismiss; case dismissed with prejudice. Signed by Honorable Susan O. Hickey on February 25, 2016. (cnn)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
EL DORADO DIVISION

EL DORADO CHEMICAL COMPANY

VS.

PLAINTIFF

CASE NO. 15-CV-1034

L&L INDUSTRIAL SERVICES, INC. and
JOHN INGRAM INCORPORATED

DEFENDANTS

ORDER
Before the Court are Motions to Dismiss filed on behalf of Defendants John Ingram
Incorporated (ECF No. 7) and L&L Industrial Services, Inc. (ECF No. 10). Plaintiff El Dorado
Chemical Company (“EDCC”) has responded to the motions (ECF No. 23), and Defendants have
each filed a reply. (ECF Nos. 27 & 31). The Court finds this matter ripe for consideration.
BACKGROUND
This suit arises from a May 15, 2012 explosion at EDCC’s DSN Nitric Acid Plant.
EDCC alleges that the explosion occurred due to contamination of oxygen gas supplied by Air
Liquide Industrial U.S. LP (“Air Liquide”). According to EDCC, Defendants L&L Industrial
Services Inc. (“L&L”) and John Ingram Inc. (“Ingram”) served as sub-contractors to Air Liquide
in the work that allegedly caused the contamination and explosion. On May 13, 2015, EDCC
filed suit against L&L and Ingram. 1 (ECF No. 1). EDCC’s Complaint includes a claim of
negligence against both L&L and Ingram and alleges that they each “owed [EDCC] the duty to

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EDCC filed a separate lawsuit against Air Liquide on May 13, 2014 in the Western District of
Oklahoma. On October 19, 2015, the Air Liquide case was transferred to this Court, per Judge Stephen P.
Friot’s October 19, 2015 Order. (El Dorado Chemical Company v. Air Liquide Industrial U.S. LP, Case
No. 1:15-CV-1063, ECF Nos. 66 and 67). The Air Liquide suit arises from the same May 15, 2012
explosion and includes claims of negligence and strict liability against Air Liquide.

exercise reasonable care and caution in carrying out its work at Air Liquide’s on-site oxygen
plant during the maintenance turn-around in the fall of 2011.” EDCC alleges L&L and Ingram
breached this duty of care when they (1) failed to properly and thoroughly clean the interior of
replacement oxygen piping segments installed in 2011 at Air Liquide’s on-site oxygen plant; (2)
failed to properly inspect the interior of these piping segments before placing them in service; (3)
failed to exercise due care and caution in the installation of the replacement oxygen piping
segments; and (4) failed to ensure that the relevant oxygen piping was clean and free of any
foreign contaminants.
In the present Motions to Dismiss, L&L and Ingram argue that EDCC’s Complaint was
filed outside of the three-year statute of limitations for claims of negligence. See Ark. Code
Ann. § 16-56-105. L&L and Ingram maintain that the statute begins to run when an alleged act
of negligence occurs. In this case, EDCC specifically alleges that L&L and Ingram’s acts of
negligence occurred in 2011. It is undisputed that EDCC’s May 13, 2015 Complaint was filed
more than three years after these alleged actions. It is EDCC’s position, however, that the statute
of limitations did not begin to run until May 15, 2012—the date of the explosion. If EDCC’s
position is correct, the Complaint was filed two days before the expiration of the three-year
statute of limitations. Accordingly, the question before the Court is whether the relevant date for
limitations purposes is the date of the alleged acts of negligence or the date of the explosion.
DISCUSSION
“[W]hen it appears from the face of the complaint itself that the limitations period has
run, a limitations defense may properly be asserted through a 12(b)(6) motion to dismiss.”
Wycoff v. Menke, 773 F.2d 983, 984-85 (8th Cir. 1985) (quotation omitted). In this case, the
relevant facts regarding the statute of limitations period—the date of the alleged negligence and

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the date of the explosion—are clear from the face of the Complaint. Accordingly, this issue is
properly before the Court on Defendants’ Motions to Dismiss pursuant to Fed. R. Civ. P.
12(b)(6).
Arkansas law requires that a cause of action for negligence be commenced within three
years after the cause of action accrues. Ark. Code Ann. § 16-56-105; Tate v. Lab. Corp. of Am.
Holdings, 285 S.W.3d 261, 262 (Ark. Ct. App. 2008). Arkansas courts have long adhered to the
“occurrence rule” in determining when a cause of action for negligence accrues. See Howard W.
Brill, Arkansas Law of Damages, § 13:4 (6th ed. 2014). This rule provides that “the statute [of
limitations] in negligence cases begins to run from the date the negligent act is committed.”
Martin v. Arthur, 3 S.W.3d 684, 688 (Ark. 1999).

Stated another way, “the three-year-

limitations period begins to run, absent concealment of the wrong, on the date that the negligent
act was committed, rather than the date that it was discovered.” Calcagno v. Shelter Mut. Ins.
Co., 957 S.W.2d 700, 701 (Ark. 1997). 2 See also Grand Valley Ridge, LLC v. Metro. Nat. Bank,
388 S.W.3d 24, 35 (Ark. 2012) (“The statute begins to run when the negligent act occurred.”);
Shepherd v. Baptist Health, 916 F. Supp. 2d 891, 899 (E.D. Ark. 2012) (“[E]ven if [the
defendant’s] alleged wrongdoing did qualify as ordinary negligence, [the plaintiff] provides no
authority for her contention that the discovery rule would therefore apply. In Martin, the
Arkansas Supreme Court stated that it is well settled that the statute of limitations in negligence
cases begins to run from the date the negligent act is committed.”) (internal quotations omitted).
The occurrence rule applies regardless of when the full extent of a plaintiff’s injuries are
revealed and regardless of whether there is an interval between the allegedly tortious act and the
damage suffered by the plaintiff. Field v. Gazette Pub. Co., 59 S.W.2d 19, 20 (Ark. 1933);
2

The Court notes that EDCC makes no allegation in its Complaint or response to the Motions to Dismiss
that there was fraudulent concealment of the alleged negligent actions in this case.

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Coghlan v. Smedley Enterprises, Inc., No. CA07-1349, 2008 WL 2268349, at *1 (Ark. Ct. App.
June 4, 2008).
In spite of these clear statements of law from Arkansas courts spanning many decades,
EDCC maintains that alleged negligent acts that occurred in 2011 should not trigger the statute
of limitations in this case because EDCC did not sustain injury until the explosion on May 15,
2012. EDCC argues that, without injury and damages, their cause of action against Ingram and
L&L could not have accrued until the explosion occurred. The Court finds EDCC’s argument
unavailing for two reasons.
First, EDCC is incorrect in concluding that it did not sustain an injury until the May 2012
explosion. EDCC’s Complaint alleges that L&L and Ingram had a duty to exercise reasonable
care and caution in carrying out its work at Air Liquide’s on-site oxygen plant and that this duty
was breached in 2011 when L&L and Ingram failed to properly clean, inspect, and install certain
piping and components. While EDCC’s damages stemming from the breach might have been
negligible before the explosion, EDCC would have had legal recourse to remedy the breach had
it been discovered. At a minimum, EDCC could have demanded the costs for cleaning or reinstalling the piping segments.
Second, even assuming that an injury was not sustained until the explosion in 2012,
EDCC’s argument fails to acknowledge Arkansas’s strict adherence to the occurrence rule.
Arkansas courts have consistently held that, in cases where an injury or damages do not arise
until long after the negligent act, the date of the negligent act remains the triggering date for the
statute of limitations. See, e.g., Moix-McNutt v. Brown, 74 S.W.3d 612, 614 (Ark. 2002); Ford's
Inc. v. Russell Brown & Co., 773 S.W.2d 90, 92-93 (Ark. 1989); Coghlan, 2008 WL 2268349, at
*1. Arkansas courts have also recognized that the application of the occurrence rule in these

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instances can result in unfairness to a plaintiff who may not have sustained damages until after
the statutory period has expired. Flemens v. Harris, 323 Ark. 421, 427, 915 S.W.2d 685, 689
(Ark. 1996) (recognizing the “dire consequences” of the occurrence rule in a case where
“damages did not result until after the statute of limitations had run”). However, Arkansas
courts have continued to apply the occurrence rule in spite of these fairness concerns and have
noted that “any change to [the] long standing rule should come from the General Assembly.” Id.
See also Brill, supra, § 13:4 (“The courts have stated that any deviation from the ‘occurrence
rule’ should be made by the legislature, whose century-long silence suggests approval of the
rule.”).
In essence, EDCC has asked this Court to apply a “date of the injury” rule or “date of
discovery” rule to this case rather than the long-standing occurrence rule. EDCC has not pointed
to any court in Arkansas that has deviated from the occurrence rule in a pure negligence case,
and the Court finds no reason to deviate from the rule here. It is undisputed that any alleged
negligent acts by L&L and Ingram occurred in 2011. EDCC’s Complaint was filed in 2015—far
more than three years after the negligent act occurred. Accordingly, EDCC’s claims against
L&L and Ingram are time-barred.
For the reasons stated above, the Court finds that the Motions to Dismiss filed on behalf
of Defendants John Ingram Incorporated (ECF No. 7) and L&L Industrial Services, Inc. (ECF
No. 10) should be and hereby are GRANTED. Accordingly, EDCC’s Complaint (ECF No. 1) is
hereby DISMISSED WITH PREJUDICE.
IT IS SO ORDERED, this 25th day of February, 2016.
/s/ Susan O. Hickey
Susan O. Hickey
United States District Judge

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