WALSH CONSTRUCTION COMPANY v. ADVANCED EXPLOSIVES DEMOLITION, INC. et al

Filing 62

ORDER on Defendant AED's Motion to Dismiss or, Alternatively, for More Definite Statement - 20 Motion to Dismiss, or in the Alternative, for More Definite Statement is DENIED. See Order for details. Signed by Magistrate Judge Debra McVicker Lynch on 5/22/2018. (LBT)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
NEW ALBANY DIVISION
WALSH CONSTRUCTION COMPANY,

)
)
Plaintiff,
)
)
v.
)
)
ADVANCED EXPLOSIVES DEMOLITION, )
INC., JERRY KEITH, and
)
PREMIER ENGINEERING, INC.,
)
)
Defendants.
)

No. 4:17-cv-00160-DML-SEB

Order on Defendant AED’s Motion to Dismiss
or, Alternatively, for More Definite Statement
Defendant Advanced Explosives Demolition, Inc. (“AED”) moved to dismiss
the plaintiff’s complaint on the grounds that the claims are barred by the economic
loss rule or the statute of limitations. In its reply brief, to which the court allowed
plaintiff Walsh Construction Company to file a surreply, AED raised another
ground for dismissal—lack of constitutional standing. In the alternative to these
dismissal arguments, AED asks the court to order Walsh to provide a more definite
statement of its claims.
AED’s motion is denied because (1) plaintiff Walsh Construction has
standing; (2) the economic loss rule and statute of limitations arguments are not
resolvable in this case on a motion to dismiss; and (3) Rule 12(e) “more definite
statement” relief is inappropriate and unnecessary.

The Complaint
Walsh Construction’s complaint alleges that under a contract with the
Indiana Department of Transportation, it built a new bridge between Milton,
Kentucky and Madison, Indiana (the “New Milton-Madison Bridge” or “New
Bridge”). The New Bridge was built adjacent to the existing or “old” Milton-Madison
Bridge. At some point, Walsh Construction entered into a contract with a company
named Omega Demolition to “perform, among other services, explosive demolition
services in connection with” Walsh’s New Bridge construction project. Omega, in
turn, contracted with AED to perform explosive demolition services for the removal
of the Old Milton-Madison Bridge. See Complaint, Dkt. 1, ¶¶ 7-8. During AED’s
explosive demolition work on the Old Bridge on certain days in July, August, and
September 2013, “flying shrapnel struck the new adjacent Milton-Madison Bridge
causing indentation/gouges of the Bridge’s structural members and paint chipping.”
Id., ¶ 10.
Walsh asserts it suffered damages from AED’s conduct because Walsh had to
repair the resulting physical damage to the New Bridge. Walsh seeks relief under a
negligence theory (AED “negligently managed, operated, used, controlled,
conducted, and carried out its” explosive demolition and negligently failed to control
the premises so as not to damage the New Bridge, complaint, ¶ 16), a negligence per
se theory based on AED’s alleged failure to comply with the Explosive Materials
Code, a set of guidelines adopted as part of Indiana’s Fire Prevention Code (id., ¶¶

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20, 24), and a “strict liability” theory based on AED’s engaging in an ultrahazardous activity. (Id., ¶ 12).
AED’s Motion to Dismiss
AED’s motion to dismiss raises three arguments: (1) that Walsh lacks
standing; (2) that the economic loss rule bars relief; and (3) that Walsh’s claims are
barred by the statute of limitations. The court addresses first the statute of
limitations and standing arguments because Walsh’s response to AED’s statute of
limitations contention caused AED to assert in its reply brief that Walsh lacks
standing. The court will then address the economic loss rule argument.
I.

AED is not entitled to dismissal based on the statute of limitations.
Dismissing a complaint based on a statute of limitations affirmative defense

is unusual because a complaint need not plead around an affirmative defense, but it
is appropriate to do so when the complaint alleges facts “sufficient to establish the
complaint’s tardiness.” Cancer Foundation, Inc. v. Cerberus Capital Mgmt., L.P.,
559 F.3d 671, 674 (7th Cir. 2009). The complaint alleges that the damages caused by
AED’s demolition work occurred in July, August, and September 2013. There is no
suggestion that any cause of action against AED accrued any later than the time of
this work. Walsh Construction filed its complaint on August 28, 2017, around four
years after the work complained of.
In its opening brief, AED argued that Walsh Construction’s claims are
governed either by Indiana’s two-year statute of limitations for injuries to personal
property, Ind. Code § 34-11-2-3, or Kentucky’s one-year statute of limitations

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governing claims in contract and tort arising out of alleged acts or omissions in
rendering professional services, Ky Stat. § 413.245.1 If AED is right that one of
these statutes applies as a matter of law, then the court could agree that the
complaint alleges facts sufficient to establish its tardiness. But Walsh Construction
asserts that its claims are governed by Indiana’s six-year statute of limitations at
Ind. Code § 34-11-2-7(3), governing actions “for injuries to property other than
personal property. . . .” It argues that its claims seek recovery for injuries to the
New Bridge, and the New Bridge is considered to be real property, not personal
property, and thus fall within the six-year limitations statute.
In reply, AED asserts that the claim for damages to the New Bridge cannot
be considered a claim for injuries to real property because, supposedly, “Indiana
rejects Plaintiff’s characterization of repair damages as real property damage.”
Dkt. 29 at p. 2. The only authority cited by AED to support this assertion is an
economic loss rule case, Indianapolis-Marion County Public Library v. Charlier
Clark & Linard, P.C., 929 N.E.2d 722, 732 (Ind. 2010). Public Library’s discussion
about whether certain losses were “property” losses concerned whether the Library
had suffered injury to “other property” in the context of the economic loss rule. The
case has nothing to do with a statute of limitations. Public Library never mentions
the injury to real property statute of limitations in Ind. Code § 34-11-2-7(3), or any

The parties do not address conflicts of law issues. The court makes no ruling
here that Indiana law or Kentucky law applies.
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other statute of limitations. It thus provides no insight into whether this six-year
statute of limitations should apply.
It is not obvious to the court that Walsh is wrong that its claims to recover for
repairs to the New Bridge is an action for injury to real property within the
meaning of Ind. Code § 34-11-2-7-(3). AED does not counter Walsh’s assertions that
the New Bridge is “property other than personal property” or that Walsh is seeking
to recover for an injury to the New Bridge. It may be that later in this case, a more
developed factual record will point to the application as a matter of law of a
particular limitations period, but AED has not yet demonstrated that the six-year
statute of limitations relied on by Walsh cannot apply. The court therefore DENIES
AED’s request that the court dismiss Walsh’s claims against it on statute of
limitations grounds.
II.

Walsh Construction has standing.
In response to Walsh’s contention that the New Bridge is real property and

thus its causes of action are governed by the six-year statute of limitations
applicable to actions “for injuries to property other than personal property,” AED
contends that Walsh Construction lacks standing because “Walsh has provided no
factual support that it owned an interest in the allegedly damaged property” and
therefore could not have suffered an injury in fact. AED has cited no authority for
the proposition that Walsh has standing only if it alleges, and then proves, that it
was an “owner” of an “interest” (presumably, AED means a property interest) in the
New Bridge.

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Standing is an aspect of the “case or controversy” requirement under Article
III of the United States Constitution and it asks, in general terms, whether the
plaintiff has a “vested interest in the case.” Cabral v. City of Evansville, 759 F.3d
639, 641 (7th Cir. 2014). A plaintiff has standing if it establishes:
(1) that it suffered an “injury in fact”;
(2) a causal connection between the injury in fact and the alleged improper
conduct by the defendant; and
(3) that the injury would likely be redressed by a favorable result in the case.
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).
Walsh Construction’s complaint meets these elements. Its complaint is
grounded in the theory that in its capacity as the contractor of the New Bridge, it
was required to (and did) spend money to make repairs to the New Bridge (the
“injury in fact”) to fix damage caused by AED’s alleged deficient conduct. The injury
could be redressed by a damages judgment if Walsh is successful in proving its
claims. The court therefore rejects the standing argument raised by AED.
III.

AED has not shown that the economic loss rule
definitively bars relief.
AED contends that the Indiana Supreme Court’s shaping of the economic loss

rule in Indianapolis-Marion County Public Library, 929 N.E.2d 722 (Ind. 2010),
bars Walsh Construction’s tort claims. The problem with AED’s argument is that
the complaint itself does not allege facts sufficient for the court to decide the issue
on a motion to dismiss. Public Library was decided on summary judgment, a very
different posture.
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The economic loss rule, as explained in Public Library, is that contract law,
and not tort law, governs a plaintiff’s action seeking purely pecuniary loss against a
supplier of products or services based on claims that it supplied substandard
products or services. 929 N.E.2d at 726-27. Pure pecuniary loss does not include
claims for personal injuries or claims for damages to “other property”; that is,
property not considered part of the contracted-for “property.” Id. at 727.
Determining whether a plaintiff is seeking recovery for damages to “other property”
or whether his alleged damages arise instead from a “single property” transaction
can be a difficult task that depends on the nature of the relationships between the
parties and any governing contracts. See id. at 730-32 (addressing the “other
property” aspect of the rule). Further, even if a plaintiff’s claims are not for
personal injuries or for damages to “other property,” other exceptions to the
economic loss rule may apply to a particular fact pattern. The Indiana Supreme
Court stated:
[W]e emphasize . . . that the economic loss rule has limits, that while
it operates as a general rule to preclude recovery in tort for economic
loss, it does so only for purely economic loss—pecuniary loss
unaccompanied by any property damage or personal injury (other than
damage to the product or service provided by the defendant)—and even
when there is purely economic loss, there are exceptions to the general
rule.
Id. at 730 (emphasis in original).
Walsh Construction contends that the New Bridge was “other property” from
the “Old Bridge” for which AED provided blasting services and therefore the
economic loss rule does not bar its tort claims. While AED asserts that the New

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Bridge and Old Bridge must be viewed as an integrated, single “property,” the court
cannot make that determination on the basis of the complaint. No contracts are
attached to the complaint, and there is insufficient information about the nature of
the relationships among the parties, the contents of relevant contracts, and the
construction activities for the New Bridge and the demolition of the Old Bridge for
the court to decide whether the economic loss rule applies or whether an exception
should be recognized. More factual development is necessary. Cf. Community Bank
of Trenton v. Schnuck Markets, Inc., 887 F.3d 803, 821 (7th Cir. 2018) (in deciding on
motion to dismiss that economic loss rule barred claims, court emphasized that “we
know enough about the [relevant] agreements in our record for them to inform our
analysis”).
Walsh contends further that because AED allegedly breached duties in
conducting its blasting demolition activities independent of contract requirements—
the duties of care supplied by the Explosive Materials Code and incorporated into
Indiana’s Fire Prevention Code—the economic loss rule does not apply. In response,
AED argues that for such an exception to apply, Walsh must first show that there is
a private right of action to enforce the Explosive Materials Code incorporated into
the Fire Prevention Code. AED has cited no authority for the proposition that a
private right of action is necessary to except a loss from the reach of the economic
loss rule. AED merely states, “Plaintiff’s negligence per se claim does not create an
independent duty, so economic loss doctrine remains as a bar to the Plaintiff’s
claim. The court has no subject matter jurisdiction over the negligence per se claim

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because there is no private right of action.” Dkt. 29 at p. 7. The court does not
follow this logic. A negligence per se claim is not a claim that a plaintiff has a
private right of action under a particular statute. It is a claim that a statute
establishes a standard of conduct that a defendant owes to a particular category of
plaintiffs, and that if the defendant breached that standard of conduct, the
defendant is liable to the plaintiff as a matter of common law negligence. See, e.g.,
Cook v. Whitsell-Sherman, 796 N.E.2d 271, 275-76 (Ind. 2003) (describing the basic
contours of a negligence per se claim).
The court does not purport to rule that Walsh’s negligence per se theory can
survive as an exception to the economic loss rule. It decides only that AED has not
established that the negligence per se theory is not available as a matter of law.
Further, under some states’ laws, there is an exception to the economic loss
rule for “property damage resulting from sudden or dangerous conditions.”
Community Bank, 887 F.3d at 813 (addressing exceptions under Illinois law). While
the court does not purport to address the contours of this exception or whether it
could apply to this case, the court notes that one of Walsh’s theories is that AED is
“strictly liable” because it was engaged in “ultra-hazardous activity.” Complaint, ¶
12.
In short, the court cannot decide as a matter of law and based solely on the
complaint’s allegations that Indiana’s economic loss rule bars relief. It is possible
that targeted discovery will flesh out the facts relevant to this theory.

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IV.

The court denies AED’s request for Rule 12(e) relief.
In the alternative to its request that the court dismiss Walsh’s complaint,

AED asks it to order Walsh to make more specific statements in its complaint about
the facts that support its legal theories. Rule 12(e) allows the court to grant a
motion for more definite statement when the “pleading . . . is so vague or ambiguous
that the [moving] party cannot reasonably prepare a response” to the pleading. It is
not a vehicle to transform the rules of procedure into a code-pleading regime.
Chapman v. Yellow Cab Cooperative, 875 F.3d 846, 849 (7th Cir. 2017). Walsh’s
complaint is not vague or ambiguous; it gives fair notice to AED about the nature of
the conduct complained of and when it occurred, sufficient to permit AED to prepare
an answer. Airborne Beepers & Video, Inc. v. AT&T Mobility LLC, 499 F.3d 663,
667 (7th Cir. 2007) (Rule 8 requires only that complaint gives the defendant fair
notice of what the claim is and the grounds on which it rests).
Conclusion
For the foregoing reasons, AED’s motion to dismiss or, in the alternative, for
more definite statement (Dkt. 20) is DENIED.
So ORDERED.
____________________________________
Debra McVicker Lynch
United States Magistrate Judge
Southern District of Indiana

Dated: May 22, 2018

Distribution:
All ECF-registered counsel of record by email through the court’s ECF system

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