Yeadon Fabric Domes, LLC v. Roberts Environmental Control Corporation
Filing
68
MEMORANDUM Opinion and Order. Signed by the Honorable Manish S. Shah on 7/21/2016: Defendant Roberts's motion for judgment on the pleadings, 57 , is denied. The motion to dismiss, 45 , filed by third-party defendants Mestek, Inc. and Temprite, Inc., is also denied. [For further detail see attached order.] Status hearing is set for 10/27/16 at 9:30 a.m. Notices mailed by Judicial Staff. (psm, )
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
YEADON FABRIC DOMES, LLC,
Plaintiff,
v.
ROBERTS ENVIRONMENTAL CONTROL
CORPORATION,
Defendant.
and
No. 15 CV 6679
Judge Manish S. Shah
ROBERTS ENVIRONMENTAL CONTROL
CORPORATION,
Third-Party Plaintiff,
v.
MESTEK, INC. and TEMPRITE, INC.
Third-Party Defendants.
MEMORANDUM OPINION AND ORDER
Plaintiff Yeadon Fabric Domes, LLC contracted with the Hanover Park
District to replace the District’s tennis air dome. Yeadon subcontracted the
replacement of the HVAC system in the dome to defendant Roberts Environmental
Control Corporation. After installing one particular component of the dome’s
inflation mechanism, a Roberts technician returned to service the component. In
doing so, he detached a pressure sensor, which resulted in the dome overinflating
and tearing. Yeadon filed suit against Roberts for breach of contract and negligence,
seeking damages. Roberts in turn filed a third-party complaint against third-party
defendants Mestek, Inc. and Temprite, Inc., alleging that a technician from one of
those entities told Roberts’s technician to detach the sensor. Roberts seeks
contribution from Mestek and Temprite in the event that it is held liable for
negligence and ordered to pay more than its pro rata share.
Mestek and Temprite move to dismiss Roberts’s third-party complaint.
Roberts moves for partial judgment on the pleadings, seeking dismissal of Yeadon’s
negligence claim. For the following reasons, both motions are denied.
I.
Legal Standards
A complaint may be dismissed pursuant to Rule 12(b)(6) if it fails to state a
claim upon which relief may be granted. Fed. R. Civ. P. 12(b)(6); see Wigod v. Wells
Fargo Bank, N.A., 673 F.3d 547, 555 (7th Cir. 2012). Rule 12(c) permits a party to
move for judgment after the answer has been filed. Fed. R. Civ. P. 12(c). The same
standard applies to both motions to dismiss under Rule 12(b)(6) and motions for
judgment on the pleadings under Rule 12(c). Buchanan-Moore v. Cty. of Milwaukee,
570 F.3d 824, 827 (7th Cir. 2009).
A plaintiff’s “[f]actual allegations must be enough to raise a right to relief
above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555
(2007). In other words, a “complaint must contain sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). All reasonable inferences
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are drawn in favor of the non-movant. Lodholtz v. York Risk Servs. Group, Inc., 778
F.3d 635, 639 (7th Cir. 2015).
II.
Facts
On August 26, 2013, plaintiff Yeadon Fabric Domes, LLC entered into a
contract with the Hanover Park District to replace the District’s tennis air dome. [1]
¶ 5; [35] ¶ 8.1 Yeadon agreed to design, furnish, and replace the dome and related
components, including the HVAC, electrical, and alarm systems, and to perform
ancillary work for the dome. [1] ¶ 6; [35] ¶ 8. On October 10, 2013, Yeadon entered
into a subcontractor agreement with defendant Roberts Environmental Control
Corporation, under which Roberts agreed to perform the work related to the HVAC
system. [1] ¶ 7; [35] ¶ 9.
On April 4, 2014, Roberts replaced one particular unit required to operate the
dome, the Honeywell Flame Control module. [1] ¶ 8; [35] ¶ 10. Eleven days later,
the District told Yeadon that the exhaust from the unit was blackening the surface
of the dome. [1] ¶ 9; [35] ¶ 11. On April 18, 2014, Roberts tried to fix the flame
control module. [1] ¶ 10; [35] ¶ 11. In doing so, it disconnected the pressure sensing
tube, which resulted in over-inflating the dome. [1] ¶ 10; [35] ¶ 11. The dome
ruptured, its fabric tearing in several locations, and began to deflate. [1] ¶¶ 11–12;
[35] ¶ 12. Yeadon asked Roberts to fix it but got no response. [1] ¶ 12. To mitigate
the damage and prevent further damage, Yeadon made temporary repairs to the
fabric and structural components of the dome. [1] ¶ 13; [35] ¶ 13. In the following
1
Bracketed numbers refer to entries on the district court docket.
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weeks, Yeadon visited the dome several times to make repairs and re-inflate it. [1]
¶ 14; [35] ¶ 13.
In its third-party complaint against third-party defendants Mestek, Inc. and
Temprite, Inc., Roberts alleges that on April 18, while servicing the flame control
module, its technician spoke to Yeadon’s technical support representative, who
instructed the Roberts technician to detach a wire sensor in order to run a
diagnostic test on the module. [35] ¶ 16. Roberts identifies that technical support
representative as a Temprite employee, and further alleges that Yeadon had
retained Mestek and Temprite for technical support services prior to the incident.
[35] ¶¶ 17–18, 37, 61.
III.
Analysis
Mestek’s motion to dismiss and Roberts’s motion for partial judgment on the
pleadings incorporate a near-identical set of facts, and both rely heavily on the
Illinois Supreme Court’s holding in Moorman Manufacturing Co. v. National Tank
Co., 91 Ill.2d 69, 91 (1982).
A.
The Moorman Doctrine
In Moorman, the Illinois Supreme Court held that a plaintiff cannot recover
for solely economic losses in a tort action. 91 Ill.2d at 91. The court reasoned that
contract law is best suited to provide a remedy for loss related to defeated
expectations in a commercial bargain, while tort theory is more appropriate when a
plaintiff is exposed to an unreasonable risk of injury. Id. at 81. This holding applies
to cases involving negligently-performed services. See Anderson Elec., Inc. v.
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Ledbetter Erection Corp., 115 Ill.2d 146, 153 (1986). But three exceptions may
apply: 1) where the plaintiff sustained personal injury or property damage resulting
from a sudden or dangerous occurrence; 2) where the plaintiff’s damages are
proximately caused by a defendant’s intentional, false representation; and 3) where
the plaintiff’s damages are proximately caused by a negligent misrepresentation by
a defendant in the business of supplying information for the guidance of others in
their business transactions. In re Chicago Flood Litig., 176 Ill.2d 179, 199 (1997)
(citations omitted).
Mestek argues that the Moorman doctrine precludes liability for Yeadon’s
negligence claim against Roberts, because Yeadon alleges only economic losses.
Mestek believes that, as a result, Roberts’s contribution claim against it fails.
Roberts does not respond to Mestek’s motion to dismiss, but instead incorporates
Mestek’s argument into its own motion against Yeadon. Yeadon invokes the
“sudden and dangerous” exception. The negligence claim survives judgment on the
pleadings if two conditions are adequately alleged: (1) a sudden or dangerous
occurrence (2) resulted in property damage. Mars, Inc. v. Heritage Builders of
Effingham, Inc., 327 Ill.App.3d 346, 352 (4th Dist. 2002).
1.
Suddenness and Dangerousness
In determining whether a negligence claim involves a sudden occurrence, a
court must consider “the suddenness of the occurrence of an event —the point when
the injury occurs (a fire, overturning of a truck, collapse of a ceiling)—where such
occurrence causes personal injury or damage to property external to the defective
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product which exposes a party to an unreasonable risk of injury to himself or his
property, rather than the suddenness or length of time within which the defect or
cause of the occurrence develops (ignition of polyurethane padding, locking wheel
brakes, water leakage) and manifests itself in the sudden and calamitous
occurrence.” United Air Lines, Inc. v. CEI Indus. of Ill., Inc., 148 Ill.App.3d 332, 339
(1st Dist. 1986) (emphasis in original).
Yeadon argues that the rupture of the dome constitutes a sudden occurrence,
and the tear in the dome fabric constitutes property damage. It alleges that Roberts
negligently created a defective flame control module when it installed the module on
April 4, 2014, and negligently removed a pressure sensor two weeks later, and that
those two defective mechanisms caused the dome to rupture. Roberts says the entire
sequence of events took two weeks, which is not sudden. But Roberts
misapprehends the relevant time period. Two weeks passed between Roberts’s
installation of the HVAC unit and its removal of the pressure sensor, but the
occurrence here is the rupture, not the events leading up to the rupture. The
complaint is at best unclear as to how long the dome took to rupture—it could have
happened in a matter of seconds or hours. To establish that the rupture was not a
sudden event such that the Moorman doctrine precludes liability, further factual
development is necessary.
Both Mestek and Roberts argue that the exception does not apply because
Yeadon’s complaint does not describe the event as sufficiently dangerous or
calamitous. Indeed, the Illinois Supreme Court stated that, in establishing the
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exception, it “had in mind fires, explosions, or other calamitous occurrences due to
the failure of a product and the resulting risk of harm to persons or property.”
Loman v. Freeman, 229 Ill.2d 104, 110 (2008). In Moorman, the court held that a
crack in a steel tank, which had not been discovered until the tank was emptied,
was not of the sudden and dangerous character that would give rise to a tort law
claim for economic damages. 91 Ill.2d at 85. But a tank full of water that ruptured
due to a defect, sending its components and contents in all directions, did give rise
to such a claim. See Bi-Petro Refining Co., Inc. v. Hartness Painting, Inc., 120
Ill.App.3d 556, 560 (4th Dist. 1983). Likewise, the collapse of a ceiling caused by
water leaking through a defective roof constitutes a sudden and dangerous
occurrence such that a plaintiff may recover in a tort action for the resulting
property damage. See United Air Lines, Inc., 148 Ill.App.3d at 340–41.
Again, Yeadon does not provide enough detail in its complaint to plead itself
out of court. The complaint alleged that a large dome—at least big enough to house
a tennis court—tore and collapsed due to Roberts’s actions. And Yeadon undertook
repairs “to prevent further damage,” which likely refers to further damage to the
dome itself, as well as anyone or anything at risk of injury from its collapse. It is
reasonable to infer that the tearing and collapse of a large dome constitutes the type
of sudden and dangerous event that can give rise to a tort claim, so long as it results
in property damage.
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2.
Property Damage
For the exception to the Moorman doctrine to apply, the sudden and
dangerous event must result in personal injury or property damage. In re Chicago
Flood Litig., 176 Ill.2d at 199–200. The property damage cannot relate to the
defective product itself—there must be damage to “other property.” Trans States
Airlines v. Pratt & Whitney Canada, Inc., 177 Ill.2d 21, 41–42 (1997). But a product
and one of its component parts can constitute two separate products such that a
plaintiff may recover in tort when a defect in one causes damage to the other. Id. at
51. “[T]o determine whether a defective product caused damage to ‘other property’
the court must focus on the injured party’s bargained-for expectation.” Id. at 46. If a
party bargained separately for individual components, then those components
constitute separate products. Id. at 47. If a defective component constituting a
separate and distinct product causes damage to another component or to the whole,
then the plaintiff lost more than it bargained for, and it can recover under tort
theory. Id. at 49–50.
Mestek and Roberts state without elaboration that there was no damage to
other property, implying that the dome and the flame control module constitute one
product. Yeadon identifies the dome itself as the other property that was damaged
as a result of the defective flame control module. The relationship between the
HVAC system, the flame control module, the pressure sensor, and the dome cannot
be determined from the pleadings. Construing the complaint in favor of Yeadon, and
considering the lack of support for Roberts’s and Mestek’s contention, the flame
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control module and the dome will be considered as separate products under the
Moorman doctrine at this stage of the proceedings. Because a defect in one caused
damage to the other as a result of a plausibly alleged sudden and dangerous event,
Yeadon can proceed with its tort theory. Therefore, Roberts’s motion is denied, and
Yeadon’s negligence claim survives the pleadings stage.
Mestek’s arguments based on the Moorman doctrine also fail, even though
Mestek’s motion is not directly related to Roberts’s motion, and the relationship
between Yeadon and Mestek is different than that between Yeadon and Roberts.
Roberts’s third-party complaint incorporates the relevant facts alleged in Yeadon’s
complaint, and Roberts adopts Mestek’s Moorman-related arguments. Those
arguments are insufficient to justify dismissal of Yeadon’s claim against Roberts,
and without more, they fail to justify dismissal of Roberts’s claim against Mestek.
B.
Mestek’s Other Arguments
In addition to its arguments related to the Moorman doctrine, Mestek makes
two separate arguments in favor of dismissal of Roberts’s third-party complaint.
First, it argues that Roberts fails to establish that a right of contribution may exist
between Roberts and Mestek. Under the Joint Tortfeasor Contribution Act, if two
parties are found liable in tort to the same person for the same injury, and one of
those parties pays more than its pro rata share of the common liability, that
tortfeasor is entitled to contribution from the other tortfeasor. 740 ILCS 100/2(a)–
(b). To seek contribution from Mestek, Roberts must establish that Mestek could be
liable in tort to Yeadon for the damage alleged by Yeadon against Roberts. See
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Heinrich v. Peabody Int’l Corp., 99 Ill.2d 344, 349 (1984) (“A claimant seeking
[contribution] need show only a common injury which his acts and those of the
contributor combined to bring about and which makes them subject to liability in
tort . . . .”). Accordingly, to state a cause for negligence that would give rise to a
right of contribution, Roberts must show that Mestek owed Yeadon a duty and
breached that duty, proximately causing injury to Yeadon. See Lewis v. CITGO
Petroleum Corp., 561 F.3d 698, 702 (7th Cir. 2009).
Mestek argues that the third-party complaint does not allege the necessary
elements of a negligence claim to establish that Mestek might be liable to Yeadon.
Roberts’s complaint alleges that Mestek owed a duty to Yeadon to provide complete
and accurate technical support to Yeadon and its subcontractors, that Mestek
breached that duty by failing to provide complete and accurate information to the
Roberts technician who contacted Mestek on April 18, and that that breach
proximately caused the damage to Yeadon’s dome. Mestek says that Roberts fails to
specify the type of technical support Mestek was under a duty to provide to Yeadon,
the inaccurate information conveyed that constituted breach of that duty, and how
Mestek’s breach caused Yeadon’s injury. Roberts did not file a response to Mestek’s
motion.
Ordinarily, if a party fails to respond to an argument, any responsive
argument is waived. However, only the narrowest possible reading of Roberts’s
complaint would give weight to Mestek’s arguments. The third-party complaint
alleges the necessary elements of a common-law negligence claim, and contains
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enough factual detail to provide Mestek with notice of that claim and of a possible
right of contribution. Thus, Mestek’s argument does not warrant dismissal of
Roberts’s third-party complaint.
Mestek’s second argument in favor of dismissal relates to the exhibit to
Roberts’s third-party complaint, Yeadon’s interrogatory responses, which seem to
contradict some of Roberts’s allegations. Specifically, Mestek argues that, according
to the responses, Mestek did not serve as Yeadon’s technical support vendor for the
dome’s inflation unit or work on the unit on April 18, 2014, and that Yeadon’s
employees provided technical support for the dome. According to the third-party
complaint, Roberts’s technician disconnected the pressure sensor on the instructions
of “Yeadon’s Technical Support,” and the attached interrogatory responses might
point to Yeadon, not Mestek, as the source of technical support. If Mestek did not
provide the technical support at issue, it is not liable.
Again, Roberts’s failure to respond to Mestek weighs against it, but Mestek’s
argument is too thin, even without a response, to justify dismissal of the third-party
complaint. Roberts’s interrogatories are confusingly worded, so Yeadon’s responses
do not make clear who exactly Roberts’s technician spoke to on April 18, 2014.
However, they do make clear that, while Yeadon did not have a separate technical
support service contract with any other company on that day, defendant Temprite
(a division of Mestek) offered technical support for the dome inflation units that it
manufactures. It is reasonable to infer that when the Roberts technician reached
out to Yeadon’s technical support provider, he contacted a Mestek employee—an
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inference consistent with Roberts’s allegation in its complaint. Thus, Mestek’s
argument fails.
Mestek’s motion to dismiss is denied and Roberts’s third-party complaint
survives.
IV.
Conclusion
Defendant Roberts’s motion for judgment on the pleadings, [57], is denied.
The motion to dismiss, [45], filed by third-party defendants Mestek, Inc. and
Temprite, Inc., is also denied.
ENTER:
___________________________
Manish S. Shah
United States District Judge
Date: 7/21/2016
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