Manker, Jr. et al v. The Zurich Services Corporation
Filing
106
ORDER dismissing 62 Motion in Limine; dismissing 63 Motion in Limine; dismissing 64 Motion in Limine; granting 65 Motion for Summary Judgment; dismissing 66 Motion in Limine; dismissing 67 Motion in Limine; dismissing 68 Motion in Limine; dismissing 69 Motion in Limine. Signed by Judge B. Avant Edenfield on 8/1/13. (bcw)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION
LAWRENCE MANKER, JR. and
STEPHANIE HUNT, as Administrator of
the Estate of Malcolm Canton Frazier,
deceased and KENDRA FRAZIER, as
child of Malcolm Carlton Frazier,
deceased,
Plaintiffs,
4:12-cv-89
V.
THE
ZURICH
CORPORATION,
SERVICES
Defendant.
ORDER
Before the Court is Defendant The
Zurich Services Corporation's ("Zurich")
Motion for Summary Judgment against
Plaintiffs Lawrence Manker, Jr., Stephanie
Hunt, as Administrator of the Estate of
Malcolm Canton Frazier, and Kendra
Frazier, as child of Malcolm Canton Frazier,
and several motions in limine. ECF Nos.
62-69. For the reasons stated herein,
Zurich's Motion for Summary Judgment,
ECF No. 65, is GRANTED, and the motions
in limine, ECF Nos. 62-64; 66-69, are
DISMISSED as MOOT.'
I. BACKGROUND
This case concerns the tragic events of
February 7, 2008, when a large explosion
Plaintiffs voluntarily withdrew the designation of
several individuals as expert witnesses, thus
rendering ECF Nos. 63, 64, 66, and 67 moot. This
Order granting Zurich's motion for summary
judgment renders ECF Nos. 62, 68, and 69 moot.
occurred at Imperial Sugar Company's
("Imperial") Port Wentworth, Georgia sugar
refinery plant. ECF No. 77 at 5. The
explosion destroyed the plant's production
capability, caused more than $250,000.00 in
physical damage, and killed fourteen people.
Id. It injured Manker and killed Malcolm
Carlton Frazier. Id
Zurich American Insurance Company
("ZAIC"), a Zurich affiliate, was the
"insurer underwriter" for Imperial's property
insurance policy for its Port Wentworth
plant. ECF No. 84 at 2. ZAIC retained
Zurich to conduct inspections of the plant.
Id. Zurich inspected the plant in 2004,
2005, 2006, and 2007 through its employee
John Nowiak. Id.
The 2008 explosion was caused by
stainless steel covers that were placed over a
tunnel conveyor belt beneath Silos 1 and 2
in the months before Zurich's last inspection
of the plant in April 2007. Id. at 3-4.
Plaintiffs contend that Zurich's negligence
in failing to identify the catastrophic threat
of explosion at Imperial's plant caused the
injuries to Manker and Malcolm Canton
Frazier. See ECF No. 77.
On December 15, 2008, Plaintiffs sued
Imperial Sugar Company, Savannah Foods
& Industries, Inc., Savannah Molasses &
Specialties Company, Imperial-Savannah
LP, Imperial Distributing, Inc., Stokes
Contracting, Inc., Kerby Enterprises, Inc.,
the American Institute of Baking, Inc., AIB
International, Inc., Savannah Foods
Industrial Inc., Savannah Bridge Co., Inc.,
and Zurich in the State Court of Chatham
County, Georgia. Id. at 2. On November
16, 2011, Zurich was dismissed without
prejudice from that action. Id. Plaintiffs
then filed this case on March 30, 2012. ECF
No. 1. Zurich moved for summary
judgment on all claims against it. ECF No.
65.
II. STANDARD OF REVIEW
"Summary judgment is appropriate when
the record evidence, including depositions,
sworn declarations, and other materials,
shows 'that there is no genuine dispute as to
any material fact and the movant is entitled
to judgment as a matter of law." Feliciano
v. City of Miami Beach, 707 F.3d 1244,
1247 (11th Cir. 2013) (quoting Fed. R. Civ.
All evidence and factual
P. 56(a)).
inferences, however, must be viewed "in the
light most favorable to the non-moving
party," and "all reasonable doubts" resolved
in his favor. Id Nevertheless, should the
moving party meet its initial burden to point
out the absence of evidence supporting an
essential element on which the non-moving
party bears the burden of proof, the nonmoving party "must do more than simply
show that there is some metaphysical doubt
as to the material facts." Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 586 (1986); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986).
III. ANALYSIS
In Huggins v. Aetna Cas. & Sur. Co.,
245 Ga. 248 (1980)2, the Supreme Court of
Georgia adopted § 324A of the Restatement
of Torts (Second) Liability To Third Person
2
"As a federal court sitting in diversity jurisdiction,
we apply the substantive law of the forum state, in
this case, [Georgia], alongside federal procedural
law." Horowitch v. Diamond Aircraft Indus., Inc.,
645 F.3d 1254, 1257 (11th Cir. 2011) (citing Erie
R.R. Co. v. Tompkins, 304 U.S. 64(1983).
For Negligent Performance Of Undertaking,
which provides:
One who undertakes, gratuitously or
for consideration, to render services
to another which he should recognize
as necessary for the protection of a
third person or his things, is subject
to liability to the third person for
physical harm resulting from his
failure to exercise reasonable care to
protect his undertaking, if
(a) his failure to exercise
reasonable care increases the risk
of such harm, or
(b) he has undertaken to perform
a duty owed by the other to the
third person, or
(c) the harm is suffered because
of reliance of the other or the
third
person
upon
the
undertaking.
The property insurance policy issued to
Imperial states "[w]e have the right but not
the obligation to. . . [m]ake inspections and
surveys at any time; . . . [g]ive you reports
on the conditions we find; and
[r]ecommend changes." ECF No. 65-2 at
172. The policy further states:
Any inspections, surveys, reports or
recommendations relate only to
insurability and the premiums to be
charged. We do not make safety
inspections. We do not undertake to
perform the duty of any person or
organization to provide for the health
and safety of workers of the public.
We do not warrant that conditions..
[a]re safe or healthful; or .
[c]omply with laws, regulations,
codes or standards.
compel a denial of Defendant's motion for
summary judgment in this case.
Id.
At issue in Cleveland was the inspection
of one boiler, not an entire refinery. After
each inspection, that insurer issued a
certificate of inspection that was to be
placed "in a conspicuous place under glass
in the room containing the boiler." Id. at
749 (emphasis added). That a certificate of
inspection so prominently placed inside the
boiler room created a genuine dispute as to
whether employees relied on those
inspections for safety purposes seems
obvious.
a Property
issued
Zurich
also
Policyholder Risk Improvement Report after
its inspections bearing the following notice:
Only you can make your workplace
safe. Those duties are not delegated
and Zurich Services Corporation
accepts no delegation of those duties.
Zurich Services Corporation will
assist you by providing the specific
services for which you have
contracted. However, it makes no
warranties in conjunctions with those
services, and it undertakes no
obligation other than set out in the
contract.
By contrast, no similar evidence exists
here of any such certificate displayed
anywhere at Imperial's plant. Moreover,
although there was some evidence that the
employer in Cleveland conducted its own
safety program, there was no evidence that
before the boiler exploded, it was ever aware
of any unsafe conditions or impending
calamity. The record evidence here shows
that Imperial was very aware of the
condition that caused the explosion
(stainless covers over conveyor belts), and
that those covers were a serious explosion
hazard (Imperial's actual knowledge of the
danger is discussed more infra).
Id. at 236.
Although true that in Cleveland v. Am.
Motorists h75., the court held that a similar
policy provision—as well as the fact that the
policy covered only property damage—did
not alone compel summary judgment in
favor of the insurer, that court also cautioned
that "[t]his is not to imply that an insurer
may never undertake inspections solely for
its own benefit and not for the benefit of the
employer, employee, or others . . . and,
therefore, no reliance was warranted." 163
Ga. App. 748, 751 (1982). The Cleveland
court held that an insurer covering property
loss to a steam generating boiler that
exploded, killing the plaintiff's husband,
was not entitled to summary judgment on
the plaintiff's negligent inspection claim.
Id. at 752. The facts and circumstances of
that case differ substantially from the instant
case, however, and Cleveland does not
That an entity conducting an inspection
may do so for reasons other than the
physical well-being of others—and that such
a finding may be appropriately made as a
matter of law—is demonstrated by
Davenport v. Cummins Ala., Inc., 284 Ga.
App. 666 (2007), where a wood chipper
engine exploded and severely injured the
worker operating it. The Davenport court
affirmed a grant of summary judgment in
ci
U
a duty on [the insurer] and there is no
evidence that [the insured] informed
[the insurer or its inspector] of his
expectation in that regard. Nor did
[the insurer] undertake such a duty..
Nor is there any evidence that
[the inspector], through any action
on his part, assumed such a duty or
undertook to render that service.
favor of the company that conducted a
performance inspection of the engine and
included in its review document a similar
disclaimer to the one included by Zurich
stating that the review was not a safety
inspection. Id. at 669, 673. The Davenport
court held that such evidence showed that
the inspection involved engine performance
only, and that the inspecting company
undertook no duty to perform a safety
inspection.
Id at 673 (stressing that
"Section 324A of the Restatement will not
support a cause of action based on the theory
that a party who did not undertake to render
services should have done so").
Id at 855.
Here, like in Davenport and GuideOne,
the evidence viewed in the light most
favorable to Plaintiffs simply does not show
that their injuries were caused by reliance on
any duty of Zurich to conduct safety
inspections. Zurich and its affiliates
explicitly informed Imperial that Zurich's
inspections were for underwriting purposes
only and that Zurich did not and would not
conduct safety inspections. See ECF No.
65-2 at 172, 236. Here, as in GuideOne,
although a manager testified that he relied
on Zurich's inspections for safety purposes,
the insurance policy imposed no such
duty—in fact, it explicitly disclaimed any
such duty—and there is no evidence in the
record that Imperial informed Zurich of such
expectations. Because Zurich did not
undertake to render safety inspections,
Plaintiffs' negligent inspection claim cannot
be based on the theory that Zurich should
have conducted safety inspections.
See
Davenport, 284 Ga. App. at 673.
Similarly, in GuideOne Mut. Ins. Co. v,
Hunter, 286 Ga. App. 852 (2007), the court
held that summary judgment in favor of the
insurer was proper on a negligent inspection
claim. In GuideOne, the claims adjuster for
the homeowner's insurer inspected roof and
water damage to the home to determine
damages and cost of repairs. Id at 852-54.
The plaintiffs later sued the insurer for
personal injuries caused by mold, arguing
that the insurer was negligent in failing to
inspect for mold, warn of mold dangers, and
recommend appropriate remediation. Id.
The GuideOne court reversed the trial
court's denial of the insurer's motion for
summary judgment because the insurer's
inspections were for the limited purpose of
determining damages and cost of repairs,
and
It also bears noting that each and every
Georgia case that the Court has located
imposing liability for negligent inspection in
the insurance context involved a defendant
that was the insurance company that issued
the policy, but that is not the case here.
[a]lthough [the insured] testified that
he was relying on [the insurer and its
inspector] to advise him on the
necessary extent of repairs, the
insurance policy did not impose such
4
Zurich is a separate entity that performed
inspections for the insurer's underwriter, not
Imperial, for underwriting purposes. This is
not a case where the defendant is the
insurance company that contracted with the
employer, and, in the process, conducted
inspections that may or may not have been
for the benefit of the employer as well as the
insurer.
Perhaps most detrimental to Plaintiffs'
claims against Zurich, however, is the record
evidence showing that Imperial had actual
knowledge of the condition that caused the
explosion (stainless covers over conveyor
belts), and that those covers were a serious
explosion hazard, after the alleged negligent
2007 inspection of Zurich, but before the
2008 explosion occurred. On January 20,
2008, Darren Pevey, the plant safety
manager, emailed the plant manager and
safety director, warning:
We have serious dust, explosion
hazards on the 9th floor silo. In
some places sugar is piled up under
the steel belt with nowhere to go
because of the stainless covers over
the belt. . . . I know the stainless
covers are a quality thing but they
are also allowing sugar to get from
underneath the belt and piling up
into bearings and other metal
components.
We have a serious issue here we
need to address.
ECF No. 65-2 at 470 (emphasis added).
Graham Graham, Imperial's Vice
President of Operations also inspected the
plant on several occasions in late 2007 and
early 2008, prompting him to warn
Imperial's CEO that the plant's safety
deficiencies were alarming. Id. 410-12,
468-69. Graham also recalled the CEO
saying, "I am surprised we haven't killed
anyone at this facility. It's -- in my opinion,
it's so dangerous." Id. at 412.
Plaintiffs cannot argue that although
Imperial had actual knowledge of the
imminent danger caused to human life by
the steel covers in one silo, it was not also
aware of the same threat caused by the same
covers it had installed in another silo. To so
hold would be an unreasonable inference,
not a reasonable one. See Blackston v.
Shook and Fletcher Insulation Co., 764 F.2d
1480, 1482 (11th Cir. 1985) (stressing that
at summary judgment stage, "[a]ll
reasonable inferences" should be made in
favor of the nonmovant, not unreasonable
inferences).
The record evidence shows that Imperial
did not simply rely on Defendant's
inspections and remain in the dark as to the
serious explosive hazard created by the
stainless covers over the belts; rather,
Imperial conducted its own safety
inspections and assessments, identified the
unsafe condition that caused the explosion,
and attempted—unsuccessfully—to address
the danger. In light of Imperial's actual
knowledge of the imminent danger to life
caused by the stainless covers over the belts,
Defendant cannot be liable for Plaintiffs'
injuries. Compare Argonaut Ins. Co. v.
Clark, 154 Ga. App. 183, 187 (1980) (noting
that when an employer has its own safety
program, "an insurer does not owe an
employee a legal duty to warn him or his
employer of conditions which he and his
employer had a greater opportunity to
discover"), with Universal Underwriters v.
Smith, 253 Ga. 588 (1984) (noting that
liability based on negligent safety
inspections typically rests on a "continuation
of business as usual in the belief that any
necessary precautions would be taken or
called to the user's attention"). Any
argument that had Imperial learned of the
danger of the covers sooner from Defendant,
it would have removed them before the
explosion occurred is no more than bald
speculation that cannot help Plaintiffs to
survive summary judgment.
HI. CONCLUSION
The record evidence shows that Zurich's
inspections were limited to underwriting
purposes for the property insurance policy.
Plaintiffs cannot show that their injuries
were caused by reliance on any duty of
Zurich to perform safety inspections.
Accordingly, Zurich's Motion for Summary
Judgment, ECF No. 65, is GRANTED. The
motions in limine, ECF Nos. 62-64; 66-69,
are DISMISSED as MOOT.
This
of August 2013.
'f//J'/
B. AVANT EDENFIELD, JUDG
UNITED STATES DISTRICT ç) URT
SOUTHERN DISTRICT OF OE( RGIA
ro
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