v. Abercrombie & Fitch Stores, Inc.
Filing
267
MEMORANDUM Opinion and Order Signed by the Honorable Sharon Johnson Coleman on 10/5/2011:Mailed notice(keg, )
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
IN RETAIL FUND ALGONQUIN COMMONS, )
L.L.C., by its Manager, INLAND REAL ESTATE )
CORPORATION,
)
)
Plaintiff,
)
)
v.
)
)
ABERCROMBIE & FITCH STORES, INC., and )
JEFFREY R. ANDERSON REAL ESTATE, INC., )
)
Defendants.
)
__________________________________________)
ABERCROMBIE & FITCH STORES, INC., an
)
Ohio Corporation,
)
)
Counter-Plaintiff,
)
)
v.
)
)
IN RETAIL FUND ALGONQUIN COMMONS, )
L.L.C., by its Manager, INLAND REAL ESTATE )
ORPORATION,
)
)
Counter-Defendants.
)
__________________________________________)
ABERCROMBIE & FITCH STORES, INC.,
)
)
Third-Party Plaintiff,
)
)
v.
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ALGONQUIN COMMONS, LLC,
)
)
Third-Party Defendants.
)
__________________________________________)
ALGONQUIN COMMONS, LLC,
)
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Third-Party Plaintiff,
)
)
v.
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DUKE CONSTRUCTION LIMITED
)
No. 09-cv-5824
Judge Sharon Johnson Coleman
PARTNERSHIP,
)
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Third-Party Defendant.
)
__________________________________________ )
DUKE CONSTRUCTION LIMITED
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PARTNERSHIP,
)
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Third-Party Plaintiff,
)
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v.
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LEGAT ARCHITECTS, INC., JACOB & HEFNER )
ASSOCIATES, INC., STRUCTURES
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UNLIMITED,P.C., SHREMSHOCK
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ARCHITECTS, INC., PAUL J. FORD &
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COMPANY, INC., OLIVEWOOD
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CONSTRUCTION, INC. and MVP PLUMBING, )
INC.,
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)
Third-Party Defendants.
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__________________________________________ )
LEGAT ARCHITECTS, INC.,
)
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Third-Party Plaintiff,
)
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v.
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SHREMSHOCK ARCHITECTS, INC., PAUL J. )
FORD & COMPANY, INC., and OLIVEWOOD )
CONSTRUCTION, INC.,
)
)
Third-Party Defendants.
)
Memorandum Opinion and Order
Coming before the Court are six Motions to Dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6) for failure to state a claim. Paul J. Ford & Company moves to dismiss Count
X of Duke Construction LP’s Amended Third-Party Complaint [179] and Count II of Legat
Architects, Inc.’s Third-Party Complaint [181]. Shremshock Architects, Inc. moves to dismiss
Count IX of Duke Construction’s Amended Third-Party Complaint [198] and Count I of Legat
Architects, Inc.’s Third-Party Complaint [198]. Olivewood Construction Inc. moves to dismiss
Count XI of Duke Construction’s Amended Third-Party Complaint [201] and Count III of Legat
Architects, Inc.’s Third-Party Complaint [204]. Since all six motions pertain to two third-party
complaints and assert the same grounds for dismissal, this Court will address all five in a single
order. For the reasons stated below the motions are denied.
Background
In 2003, Abercrombie & Fitch Stores, Inc. (“Abercrombie”) undertook the design and
construction of a “bump-out” window display at its retail store at Algonquin Commons Shopping
Center in Algonquin, Illinois. Inland Real Estate Corporation purchased Algonquin Commons
Shopping Center from Algonquin Commons LLC in 2006. In March 2008, Abercrombie notified
Inland of water intrusion at their store. In September 2008, Abercrombie allegedly engaged in
self-help by gutting and abandoning the premises and stopped paying rent to Inland.
On April 7, 2011, Inland Real Estate Corporation, In Retail Fund Algonquin Commons
LLC, and In Retail Fund LLC, In Retail Manager LLC (collectively “Inland”), filed a Second
Amended Complaint against Abercrombie for negligent hiring and supervision, breach of contract
for failure to pay rent and indemnify, and breach of contract for failure to procure insurance. (Dkt.
142.)
Abercrombie filed a counterclaim against Inland claiming breach of the lease agreement
and constructive eviction, seeking reimbursement of the unamoritized portion of its investment in
the leasehold improvements ($311,682.39), remediation and demolition costs it incurred
($284,666), and lost profits. At the same time, Abercrombie filed a third-party complaint against
Algonquin Commons LLC (Inland’s predecessor in interest on the lease agreement) alleging the
same claims against Algonquin Commons, i.e., breach of the lease and constructive eviction.
(Dkt. 27.)
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Thereafter, Algonquin Commons filed two third-party complaints: one, against Duke
Construction LP and the Greeby Companies, and a second, against only the Greeby Companies
(Dkt. 59). Algonquin Commons voluntarily dismissed its second third-party complaint against
the Greeby Companies. Three more third-party complaints followed. Two are at issue here: (1)
Duke Construction’s third-party complaint against Shremshock Architects, Inc., Paul J. Ford &
Company, Olivewood Construction Inc. and MVP Plumbing Corporation for contribution due to
their defective design and construction of the “bump out”; and (2) Legat Architects, Inc.’s
(“Legat”) third-party complaint for contribution against Shremshock Architects, Paul J. Ford &
Company, and Olivewood Construction, Inc.
Legal Standard
A motion to dismiss pursuant to Rule 12(b)(6) challenges the sufficiency of the complaint.
When evaluating the sufficiency of a complaint, the court construes the complaint in the light
most favorable to the plaintiff, accepts all well-pleaded facts as true, and draws all inferences in
favor of the plaintiff. Reynolds v. CB Sports Bar, Inc., 623 F.3d 1143, 1146 (7th Cir. 2010)(citing
Reger Dev. LLC v. Nat’l City Bank, 592 F.3d 759, 763 (7th Cir. 2010). “To survive a motion to
dismiss, the plaintiff must do more than simply recite elements of a claim; the ‘complaint must
contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its
face.”’” Reynolds, 623 F.3d at 1146 (quoting Ashcroft v. Iqbal, 129 S. Ct. 1937,1949, 173 L. Ed.
2d 868 (2009)).
Discussion
The third-party defendant movants, Paul J. Ford & Company, Shremshock Architects, and
Olivewood Construction, argue in their respective motions that the allegations brought against
them by Duke Construction and Legat Architects for contribution should be dismissed for three
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reasons. First, the complaints must fail because the “original” third-party complaint (Abercrombie
v. Algonquin Commons), upon which these follow, is improper impleader under Rule 14(a)
because Abercrombie’s claim against Algonquin Commons is not derivative of Inland’s suit
against Abercrombie. Second, the movants argue that the contribution sought in the third-party
complaints is improper invocation of the Illinois Contribution Act because the Abercrombie v.
Algonquin Commons suit does not “sound in tort” and thus the movants are not joint tortfeasors.
Lastly, the movants assert that the Moorman Economic Loss Doctrine prohibits suits sounding in
tort for purely economic damages.
Rule 14(a) states that, “[a] defending party may, as third-party plaintiff, serve a summons
and complaint on a nonparty who is or may be liable to it for all or part of the claim against it.”
Fed. R. Civ. P. 14(a)(1). Therefore, the plain language of Rule 14(a) distinguishes a third-party
complaint as one where the defendant is attempting to transfer to the third-party defendant the
liability alleged against the defendant by the original plaintiff. Forum Ins. Co. v. Ranger Ins. Co.,
711 F.Supp. 909, 915 (N.D. Ill. 1989) (citing e.g., U.S. General Inc. v. Joliet, 598 F.2d 1050,
1053 (7th Cir. 1979); Parr v. Great Lakes Express Co., 484 F.2d 767, 769 (7th Cir. 1973);
Leaseway Warehouses, Inc. v. Carlton, 568 F.Supp. 1041, 1043 (N.D. Ill. 1983)). “The fact that
the third-party claim arose out of the same transaction or set of facts is irrelevant since impleader
cannot be used as a way of combining all controversies having a common relationship.” Wright &
A. Miller, Federal Practice and Procedure §1442, at 208 (1971).
Here, Abercrombie’s third-party complaint against Algonquin Commons is technically
improper impleader under Rule 14. From the face of the third-party complaint, Abercrombie is
not seeking to transfer its liability to Algonquin Commons. In fact, Abercrombie’s complaint
against Algonquin Commons is identical to its counterclaims against Inland. It seems that
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Abercrombie is attempting to use a third-party complaint to effectively bring Algonquin
Commons in to the instant case as a co-defendant on Abercrombie’s counterclaim against Inland.
Nevertheless, since Rule 15(a) encourages granting leave to amend, even though technically
improperly pleaded, this Court would allow Abercrombie to amend its third-party complaint.
Accordingly, this Court declines to dismiss the Duke and Legat’s third-party complaints on the
basis that the initial third-party complaint is technically faulty as currently pleaded.
Next, the movants argue that the contribution claims asserted against them by Duke and
Legat are not viable under the Illinois Contribution Act, 740 ILCS 100/2, because they are not
joint tortfeasors and the original complaint against Algonquin Commons from which the
contribution claims stem does not subject Algonquin to liability in tort.
Under Illinois Law, tortfeasors have a right of contribution “where 2 or more persons are
subject to liability in tort arising out of the same injury to person or property, or the same
wrongful death, *** even though judgment has not been entered against any or all of them.” 740
ILCS 100/2. “The injury is that which is incurred by the plaintiff, as opposed to any injury
suffered by the parties seeking contribution.” Illinois v. Brockman, 143 Ill.2d 351, 371 (1991).
The basis for contribution need not mirror the theory of recovery asserted in the original
complaint. Id. (citing J.I. Case Co. v. McCartin-McAuliffe Plumbing & Heating, Inc., 118 Ill.2d
447, 462 (1987)).
In this case, the plaintiff, Inland, claims injury from negligent hiring and supervision of
contractors and subcontractors by Abercrombie to design and build the bump-out that resulted in
water damage to the property and the contribution claims are for any potential liability for
negligence stemming from the design and construction of the same bump-out. See Legat
Architects’ Third-party Compl. Dkt. 135, ¶¶ 17 of each Count; Duke Construction’s Third-Party
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Compl. Dkt. 143, ¶¶ 27, 29. Although the contribution claims frame the injury as that of the
third-party plaintiff seeking contribution, the nature of third-party practice is that liability is
passed down the line of successive parties. Moreover, here Legat and Duke are seeking
contribution for their potential liability for the allegedly defective design and construction of the
bump-out which Inland claims caused it injury. The fact that Duke and Legat articulate their
claims in terms of their own injury it is clear that Duke and Legat’s injury would be that they
were found liable for the defective design and construction of the bump-out. This Court finds that
it is the same injury as the plaintiff, Inland.
Next, this Court must address whether the defendants are “subject to liability in tort” as
that phrase is used in the Contribution Act. “If the underlying claim does not create liability in
tort, a third-party plaintiff may not recover on a contribution claim.” Brockman, 143 Ill.2d at 372
(citing Hopkins v. Powers, 113 Ill.2d 206 (1986)). The Contribution Act focuses on the
culpability of the parties instead of the legal means by which the plaintiff is ultimately
compensated. Doyle v. Rhodes, 101 Ill.2d 1, 14 (1984). Here, the underlying claim is a negligence
claim, Count I of the Second Amended Complaint, asserts negligent hiring and supervision by
Abercrombie of the design and construction of the bump-out. SAC, Dkt. 142, ¶¶ 58-64. Not only
does the underlying claim create tort liability, but it specifically contemplates liability in tort by
third parties for negligent design and construction of the bump-out. All of the third parties in this
case, except Algonquin Commons, were involved in the design and construction of the bump-out.
Contribution is allowed for concurrent or successive tortfeasors as long as the same injury is
involved. Roberts v. Heilgeist, 124 Ill. App. 3d 1082, 1087 (2d Dist. 1984). Accordingly, this
Court finds that the alleged negligence creates the potential for liability in tort and that it may be a
proper predicate for a contribution claim.
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Lastly, the movants assert that the Moorman Economic Loss Doctrine precludes the
contribution claims because purely economic loss is not recoverable in tort. The movants argue
that there is no recovery under a tort or negligence theory for economic losses resulting from
defective construction. See Foxcroft Townhome Owners Ass’n v. Hoffman Rosner Corp., 96 Ill.2d
150, 155-57 (1983). However, this Court in prior ruling found that the negligence claims alleged
by Inland against Abercrombie were not barred by the Moorman Doctrine at least at the pleading
stage of the litigation. Judge Aspen previously considered the application of the Moorman
Doctrine to the alleged negligence at issue in this case, albeit as to Abercrombie, stating that “at
this stage we must reasonably infer in Plaintiff’s favor that the water intrusion problem was a
sudden and dangerous occurrence, similar to the thunderstorm in Mars[v. Heritage Builders of
Effingham, 327 Ill. App. 3d 346, 357-58 (4th Dist. 2002)].” Pursuant to the law-of-the-case
doctrine, a district court may only revisit a prior ruling in the same litigation if there is a
compelling reason, such as a change in the law or manifest error. Minch v. City of Chicago, 486
F.3d 294, 301 (7th Cir. 2007). Even though Judge Aspen’s ruling was solely as to Inland’s
complaint against Abercrombie, since we have already concluded that the alleged injury is the
same and the water intrusion is the same, this Court declines to revisit that ruling to apply the
Moorman Doctrine to bar the claims at this stage of the litigation.
Conclusion
For the reasons stated herein, the third-party defendants’ motions to dismiss are denied.
IT IS SO ORDERED.
Date: 10/5/2011
Entered:___________________________________
Sharon Johnson Coleman
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