Carhartt, Inc. v. Innovative Textiles, Inc.
Filing
33
OPINION and ORDER Granting Gnetry Mills, Inc.'s 18 Motion to Dismiss the Third-Party Complaint. Signed by District Judge Judith E. Levy. (SBur)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
Carhartt, Inc.,
Plaintiff,
Case No. 17-cv-13604
Judith E. Levy
United States District Judge
v.
Innovative Textiles, Inc.,
Mag. Judge R. Steven
Defendant/Third- Whalen
Party Plaintiff,
v.
Gentry Mills, Inc.,
Third-Party
Defendant.
________________________________/
OPINION AND ORDER GRANTING GENTRY MILLS, INC.’S
MOTION TO DISMISS THE THIRD-PARTY COMPLAINT [18]
I.
Background
After Carhartt, Inc. found out that its fire resistant garments
containing Innovative Textiles, Inc.’s (“ITI”) fire resistant fabric were not
actually fire resistant, Carhartt sued ITI. Carhartt brings claims for
breach of contract, negligence, and other theories against ITI, alleging
that ITI’s decision to change the fibers it incorporated into its fire
resistant fabric from an industry standard fiber to a new, untested
competitor caused the defect in Carhartt’s products. ITI then filed a
third-party complaint against Gentry Mills, Inc. (“GMI”), a subcontractor
involved in ITI’s fabric production business.
ITI alleges that GMI is responsible for the defects in the products
that it sold to Carhartt because “[a]ll of the fabric Carhartt contends was
defective was dyed, treated, finished, and tested by GMI before it was
ultimately supplied to Carhartt.” (Dkt. 8 at 3.) ITI brings five counts
against GMI: breach of contract (Count I), breach of express warranty
(Count II), breach of implied warranty (Count III), common law
indemnity (Count IV), and implied contractual indemnity (Count V).
GMI now moves to dismiss the third-party complaint. This matter
was fully briefed by the parties, and, pursuant to Local Rule 7.1 the Court
determines that no hearing is necessary.
II.
Standard of Review
When deciding a motion to dismiss under Fed. R. Civ. P. 12(b)(6),
the Court must “construe the complaint in the light most favorable to the
plaintiff and accept all allegations as true.” Keys v. Humana, Inc., 684
2
F.3d 605, 608 (6th Cir. 2012).
“To survive a motion to dismiss, 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). A plausible claim need not contain “detailed factual
allegations,” but it must contain more than “labels and conclusions” or “a
formulaic recitation of the elements of a cause of action.” Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007).
III. Choice of Law
ITI argues that North Carolina law should apply to the allegations
in its third-party complaint, and, although GMI did not affirmatively
raise this issue, it appears not to contest it.
When a Michigan federal court exercises jurisdiction based on the
diversity of the parties, the “conflict of laws rules to be applied by the
federal court in [Michigan] must conform to those prevailing in
[Michigan’s] state courts.” See Klaxon Co. v. Stentor Elec. Mfg. Co., 313
U.S. 487, 496 (1941). In actions based in contract, Michigan courts apply
§§ 187 and 188 of the Second Restatement of Conflict of Laws. Chrysler
Corp. v. Skyline Indus. Servs., Inc., 448 Mich. 113, 124 (1995). Where the
parties have not agreed upon the applicable law, § 188 dictates that
3
courts apply “the local law of the state which, with respect to that issue,
has the most significant relationship to the transaction and the parties.”
Restatement (Second) of Conflict of Laws § 188(1) (1971); see also
Chrysler Corp., 448 Mich. at 128. The state with the most significant
relationship to the transaction and parties is determined by looking to
“(a) the place of contracting, (b) the place of negotiation of the contract,
(c) the place of performance, (d) the location of the subject matter of the
contract, and (e) the domicil, residence, nationality, place of incorporation
and place of business of the parties.” Restatement § 188(2).
Though this action is in a Michigan federal court, North Carolina
has the most significant relationship to the transaction and the parties.1
Both parties are North Carolina corporations, and they each maintain
their principal place of business there. (Dkt. 8 at 1-2.) Though the thirdparty complaint does not contain detailed factual allegations about the
interactions between the parties, it is reasonable to assume that because
they are both headquartered in North Carolina, “the place of contracting,
place of negotiation of the contract, place of performance, and location of
The third-party complaint does not allege the parties’ agreement contained a choice
of law clause.
1
4
the subject matter of the contract” are all North Carolina. See
Restatement § 188(2)(a)-(d) (internal formatting altered).
In addition, none of the § 188 factors indicate that Michigan has an
interest in applying its law to this case. This action is in Michigan court
by operation of a choice of forum clause in the agreement between
Carhartt and ITI. (Dkt. 1-2 at 15.) That clause has no bearing on the
relationship between ITI and GMI, and there is nothing else about the
parties’ relationship that indicates they would reasonably expect to
litigate pursuant to Michigan law.
For these reasons, North Carolina law applies to the allegations in
the third-party complaint.
IV.
Analysis
a. Breach of Contract
The first count of ITI’s complaint is for breach of contract. It alleges
that “GMI breached its contractual obligations to ITI to provide goods
and services in accordance with ITI’s purchase orders and industry
standards.” (Dkt. 8 at 3.)
Under North Carolina law, a party alleging breach of contract must
demonstrate “(1) the existence of a valid contract and (2) breach of the
5
terms of the contract.” Martinez v. Univ. of N. Carolina, 223 N.C. App.
428, 432 (2012) (quoting Long v. Long, 160 N.C. App. 664, 668 (2003)).
ITI fails to allege sufficient facts to sustain its breach of contract
claim. First and foremost, ITI does not allege the existence of a contract.
The third-party complaint’s only mention of a contract between ITI and
GMI is the language quoted above, alleging that “GMI breached its
contractual obligations to ITI.” (Dkt. 8 at 3.) There is no explanation, for
example, of when the contract was formed, who the parties are, or
whether it was oral or written. Absent such information, the third-party
complaint contains only “labels or conclusions,” Twombly, 550 U.S. at
555, insufficient to state “a claim to relief that is plausible on its face.”
Iqbal, 556 U.S. at 678.2
Second, even if this mention of a contract between the parties were
a sufficient allegation of the existence of a contract, the third-party
ITI argues that its breach of contract allegations are sufficient to state a claim
because they satisfy the pleading standard articulated by the North Carolina
Supreme Court. (Dkt. 29 at 16.) However, because “federal courts sitting in diversity
‘apply state substantive law and federal procedural law,’” ITI’s third-party complaint
is evaluated against the federal pleading standard set forth in Fed. R. Civ. P. 8 and
the Supreme Court cases interpreting that rule. Saab Auto AB v. General Motors Co.,
770 F.3d 436, 440 (6th Cir. 2014) (quoting Shady Grove Orthopedic Assocs., P.A. v.
Allstate Ins. Co., 559 U.S. 393, 417 (2010)).
2
6
complaint says nothing about the obligations of the parties under the
contract, or how GMI breached those obligations. ITI argues the thirdparty complaint “included allegations that [ITI] contracted with [GMI] to
‘dye[], treat[], finish[] and test[]’ the fabric it subsequently provided to
Carhartt.” (Dkt. 29 at 15.) However, there are no allegations of a contract
for those services in the complaint. ITI cites ¶7 of the complaint as a
description of the parties' contractual obligations, but that paragraph
only describes the services GMI provided ITI. It does not mention a
contract, nor does it state what the contract required.
Third, if the Court were to assume that the contract obligated GMI
to “dye[], treat[], finish[] and test[]” ITI’s fabric, the complaint still does
not explain how GMI breached the contract. ITI alleges that GMI
serviced “[a]ll of the fabric Carhartt contends was defective” and that it
“was relying on GMI’s skill and judgment to select and furnish goods and
services suitable for ITI’s fabric.” (Dkt. 8 at 3.) But these allegations are
not sufficiently specific to “give the defendant fair notice of what the
claim is.” See Twombly, 550 U.S. at 555. The third-party complaint does
not apprise GMI of what it did to cause the fabric to be defective, or even
7
if the defect was caused by GMI’s services. Instead, the complaint only
informs GMI that it treated the defective fabric.
Because the third-party complaint fails to allege the existence of a
contract, the terms of the contract, and the manner in which it was
breached, the third-party complaint contains only “a formulaic recitation
of the elements of a cause of action” for breach of contract. See Twombly,
550 U.S. at 555. Accordingly, Count I of the third-party complaint is
dismissed.
b. Breach of Warranty
ITI’s second set of claims is for breach of warranty. It alleges that
if ITI is found liable to Carhartt, GMI breached both express and implied
warranties. GMI allegedly breached an express warranty that the “fabric
[GMI] dyed, treated, finished, and tested met industry standards,
including flammability specifications.” (Dkt. 8 at 4.) It allegedly breached
an implied warranty of “merchantability and fitness for a particular
purpose
by
provid[ing]
goods
and
services
that
were
merchantable nor fit for their particular purpose.” (Dkt. 8 at 5.)
8
neither
i. Breach of Express Warranty
GMI argues that ITI’s breach of express warranty count should be
dismissed because the third-party complaint contains insufficient factual
allegations to state a claim, and, even if it did, GMI only provided services
to ITI, not goods. ITI responds by arguing that ITI provided goods and
pleaded sufficient facts to state a claim for breach of express warranty.
Under North Carolina law, a breach of express warranty claim
requires the plaintiff to demonstrate “(1) an express warranty as to a fact
or promise relating to the goods, (2) which was relied upon by the plaintiff
in making his decision to purchase, (3) and that this express warranty
was breached by the defendant.” Hall v. T.L. Kemp Jewelry, Inc., 71 N.C.
App. 101, 104 (1984). “It is not necessary to the creation of an express
warranty that the seller use formal words such as ‘warrant’ or ‘guarantee’
or that he have a specific intention to make a warranty.” Id.
The third-party complaint does not contain more than “a formulaic
recitation of the elements of a cause of action” for breach of express
warranty. Twombly, 550 U.S. at 555. In the third-party complaint, ITI
alleges that “GMI knew ITI was relying on GMI’s skill and judgment to
select and furnish goods and services suitable for ITI’s fabric,” that “GMI
9
expressly warranted that the fabric it dyed, treated, finished, and tested
met industry standards, including flammability specifications,” and that
if “Carhartt’s principal allegations are found to be valid, then GMI
breached its express warranties.” (Dkt. 8 at 3, 5.) These allegations recite
the elements of breach of express warranty, but, as with ITI’s contract
claim, fail to apprise GMI how, exactly, it created or breached the
warranty. Specifically, the complaint contains no allegation regarding
what statement or contract clause created the warranty, nor does it
contain an allegation concerning what defect in GMI’s product caused
ITI’s liability. It is not enough for ITI to state that GMI handled the
allegedly defective products; it must state what aspect of that handling
breached the warranty.
In addition, an express warranty claim only attaches where there
has been a sale of goods, and the third-party complaint contains no facts
indicating that GMI sold ITI goods.3 See Hall, 71 N.C. App. at 104. Under
ITI’s primary argument that GMI sold it goods is that nothing in two invoices it
attaches to its motion “reflects that Gentry Mills only provided services.” (Dkt. 29 at
22.) These invoices were not attached as exhibits to the complaint. (See Dkt. 8.) To
avoid treating the motion as “one for summary judgment under Rule 56,” Fed. R. Civ.
P. 12(d), the Court will not “consider evidence outside the complaint.” Kostrzewa v.
City of Troy, 247 F.3d 633, 643 (6th Cir. 2001).
3
10
North Carolina law, when an agreement between two parties contains
both goods and services courts look to whether “their predominant factor,
their thrust, their purpose, reasonably stated, is the rendition of service,
with goods incidentally involved . . . or is a transaction of sale, with labor
incidentally involved.” Hensley v. Ray's Motor Co. of Forest City, 158 N.C.
App. 261, 265 (2003). This is sometimes called the “predominant factor
test.” Id.
Here, taking the allegations in the complaint as true, the
“predominant factor” of the agreement between ITI and GMI is services.
The only allegations in the complaint about the work GMI did for ITI is
that GMI “dyed, treated, finished and tested” ITI’s fabrics. (Dkt. 8 at 3.)
These are all services, not goods. Moreover, the complaint makes no
mention of the chemical sales that ITI contends is the “predominant
factor” of the parties’ agreement. The only reference to goods in the
complaint is that “GMI knew ITI was relying on GMI’s skill and judgment
to select and furnish goods and services suitable for ITI’s fabric.”
However, this statement provides no information about what goods GMI
actually sold to ITI, and, accordingly, is not more than the mere “labels
11
and conclusions” rejected by the Supreme Court as insufficient to satisfy
Fed. R. Civ. P. 8. See Twombly, 550 U.S. at 555.
Because the third-party complaint contains no allegations that GMI
sold ITI goods and no explanation as to how GMI breached an alleged
express warranty, ITI fails to state a claim for breach of express
warranty. Accordingly, Count II of the third-party complaint is
dismissed.
ii. Breach of Implied Warranty
ITI also argues that GMI breached an implied warranty of
merchantability and fitness for a particular purpose if ITI is liable to
Carhartt.
A plaintiff must prove four elements to make a claim for breach of
implied warranty: “(1) that the goods bought and sold were subject to an
implied warranty of merchantability; (2) that the goods did not comply
with the warranty in that the goods were defective at the time of sale; (3)
that [its] injury was due to the defective nature of the goods; and (4) that
damages were suffered as a result.” DeWitt v. Eveready Battery Co., 355
N.C. 672, 683 (2002) (quoting Morrison v. Sears, Roebuck & Co., 319 N.C.
298, 301 (1987)) (internal quotation marks removed). “The burden is
12
upon the purchaser to establish a breach by the seller of the warranty
of merchantability . . . by showing that a defect existed at the time of the
sale.” Id. (quoting Cockerham v. Ward, 44 N.C. App. 615, 625 (1980)). As
with breach of express warranty claims, breach of implied warranty
claims only attach when there is a sale of goods. Id. (noting that warranty
claims arise out of the Uniform Commercial Code, which only applies to
the sale of goods).
ITI’s breach of implied warranty claim fails for two reasons. First,
ITI has not carried its burden of “showing that a defect existed at the
time of sale.” See DeWitt, 355 N.C. at 672. The third-party complaint
contains no allegation about what defect was present in GMI’s products,
and contains no factual allegations that explain how the defect was
present at the time of sale. Absent such allegations, no claim for breach
of implied warranty exists.
Second, ITI’s breach of implied warranty claim fails because the
complaint does not allege GMI sold ITI goods. As explained above, the
complaint does not specify with any particularity what goods ITI
purchased from GMI, and instead alleges a relationship based on the
13
provision of services. Accordingly, ITI failed to state a claim for breach of
implied warranty.
For these reasons, Count III of the third-party complaint is
dismissed.
c. Indemnification
ITI’s last set of claims is for indemnification. According to the
complaint, if ITI is liable to Carhartt, “that liability will have arisen
solely as a result of GMI’s failure to provide goods and services
conforming to its contractual obligations and industry standards,” thus
entitling ITI to indemnification from GMI. (Dkt. 8 at 5.) ITI also suggests
that the contractual relationship between itself and GMI implied a right
of indemnification.
GMI counterargues that no such right to indemnification was
implied in any contract between the parties.
Under North Carolina law, a “contract of indemnity need not be
express; indemnity may be recovered if the evidence establishes an
implied contract. In addition, a right to indemnity exists whenever one
party is exposed to liability by the action of another who, in law or equity,
should make good the loss of the other.” McDonald v. Scarboro, 91 N.C.
14
App. 13, 22 (1988). Put another way, there are three theories by which a
party may establish a right to indemnity: “(1) an express contract; (2) a
contract implied-in-fact; or (3) equitable concepts arising from the tort
theory of indemnity, often referred to as a contract implied-in-law.”
Kaleel Builders, Inc. v. Ashby, 161 N.C. App. 34, 38 (2003).
Here, there is no allegation that an express contract between ITI
and GMI contains an indemnification clause, so only the latter two
theories are relevant.
i. Indemnification by Contract Implied-in-Fact
North Carolina law recognizes an implied right of indemnity in a
contract between two parties. That “implication is derived from the
relationship between the parties, circumstances of the parties' conduct,
and that the creation of the indemnitor/indemnitee relationship is
derivative of the contracting parties' intended agreement.” Kaleel
Builders, 161 N.C. App. at 38. Importantly, “the essence of such a claim
is the intent of the parties to create an indemnitor/indemnitee
relationship.” Ne. Solite Corp. v. Unicon Concrete, LLC, 102 F. Supp. 2d
637, 640 (M.D.N.C. 1999) (quoting Terry’s Floor Fashions v. Georgia-
15
Pacific Corp., No. 97-CV-683, 1998 WL 1107771 at *8 (E.D.N.C. July 23,
1998)).
In the context of subcontractor relationships, “a right of indemnity
under a contract implied-in-fact is inappropriate where . . . both parties
are well equipped to negotiate and bargain for [indemnity] provisions.”
Schenkel & Shultz, Inc. v. Hermon F. Fox & Assocs., P.C., 180 N.C. App.
257, 267 (2006), aff'd, 362 N.C. 269 (2008); see also Kaleel Builders, 161
N.C. App. at 40 (explaining that indemnity implied-in-fact arises when
the parties relationship is “master-servant” or an “agency-type
relationship” rather than an “independent contractor” relationship).
Courts evaluating the contractual relationships between contractor and
subcontractor “should not lose sight of the fact that the plaintiff could
have ‘freely negotiated . . . protection for itself’ but chose otherwise.
Accordingly, [a] [p]laintiff must allege ‘special circumstances from which
such an agreement might be implied’ to establish a right to indemnity.”
Ne. Solite Corp., 102 F. Supp. 2d at 640-41 (quoting Terry’s Floor
Fashions, 1998 WL 1107771 at *8) (some internal formatting removed).
GMI and ITI do not have the type of relationship that allows or
requires the court to read an implied right of indemnity into a contract.
16
Despite the lack of clarity regarding the exact nature of the parties’
contractual relationship, there is little doubt that GMI is ITI’s
subcontractor. The parties do not have a master-servant or an agency
relationship. Instead, GMI is a commercial entity that provided services
as a subcontractor and “both parties are well equipped to negotiate and
bargain for” indemnity provisions in any contracts between them. See
Schenkel, 180 N.C. App. at 267. “[T]here is nothing in the allegations that
suggests establishing an indemnitor/indemnitee relationship was at the
essence or intent of the agreement” between the parties, see Kaleel
Builders, 161 N.C. App. at 40-41, and there are no allegations of other
“special circumstances from which [an indemnity] agreement might be
implied.” See Ne. Solite Corp., 102 F. Supp. 2d at 641. Indeed, the barebones allegations in the third-party complaint allege nothing unique or
special about the parties’ subcontractor relationship. See Kaleel Builders,
161 N.C. App. at 40-41 (“For this Court to read a right of indemnity
implied-in-fact into such bald allegations would be to do so in every
general and subcontractor agreement, thus infringing upon this state's
long standing and coveted principle of freedom of contract.”).
17
Accordingly, ITI has failed to plead a claim for implied-in-fact
indemnity, and Count V of the third-party complaint is dismissed.
ii. Indemnification Implied in Law
Indemnity implied-in-law is “more an equitable remedy than an
action in and of itself,” Kaleel Builders, 161 N.C. App. at 41, and is a
“legal fiction used to avoid unfairness.” Carl v. State, 192 N.C. App. 544,
558 (2008) (quoting Ne. Solite Corp., 102 F. Supp. 2d at 641). “For
indemnification implied-in-law . . . North Carolina law requires there be
an underlying injury sounding in tort.” Kaleel Builders, 161 N.C. App. at
41; see also CBP Res., Inc. v. SGS Control Servs., Inc., 394 F. Supp. 2d
733, 741 (M.D.N.C. 2005) (“Defendant is correct that both implied-in-law
indemnity and contribution require an underlying tort injury.”).
When “indemnity implied-in-law arises from an underlying tort, []
a passive tort-feasor pays the judgment owed by an active tort-feasor to
the injured third-party.” Kaleel Builders, 161 N.C. App. at 39. Often
described as “primary and secondary liability,” an active tortfeasor is
required to pay a judgment on behalf of a passive tortfeasor when:
(1) they are jointly and severally liable to the plaintiff; and (2)
either (a) one has been passively negligent but is exposed to
liability through the active negligence of the other or (b) one
18
alone has done the act which produced the injury but the other
is derivatively liable for the negligence of the former.”
CBP Res., Inc. v. SGS Control Servs., Inc., 394 F. Supp. 2d 733, 746
(M.D.N.C. 2005) (quoting Edwards v. Hamill, 262 N.C. 528, 531 (1964)).
Implied-in-law indemnity is not available “when both defendants breach
substantially equal duties owed to the plaintiff.” Id.
ITI’s argument as to why it is entitled to implied-in-law indemnity
from GMI appears to center on the idea that Carhartt’s primary
complaint is not one for active negligence. GMI argues in reply that
Carhartt’s complaint contains no allegations for which GMI could be
derivatively liable.
Carhartt alleges three theories of tort damages against ITI:
negligence (Count III), fraud and misrepresentation (Counts IV-VI), and
false advertising under the Lanham Act (Count VII).4 For each of these
ITI argues that these tort claims should be dismissed because they are precluded by
the contract claims in Carhartt’s complaint. The Court will not address that
argument here, as it is more appropriately brought in a motion to dismiss Carhartt’s
complaint.
4
However, if ITI were to succeed on that theory, its indemnity implied-in-law claim
would fail. ITI suggests that indemnification implied-in-law actions can arise out of
contractual liability as well as tort liability, and there is some support for that
position in case law. See, e.g. Cox v. Shaw, 263 N.C. 361, 367 (1965) (noting that a
“contract implied in law is a quasi contract, which may result either from a tortious
19
claims, the primary underlying factual allegation is that ITI changed the
type of fiber it used to make its fire resistant fabric from a well-regarded
industry standard fiber to an untested new competitor without first
determining if the new fiber met the necessary fire resistance standards.
Carhartt’s alleged tort damages arise from ITI’s failure to test the new
fiber and to disclose the change to Carhartt while continuing to produce
fabric for Carhartt’s line of fire resistant garments.
wrong, as in our case, or from one that is contractual”); Carl, 192 N.C. App. at 558
(citing Cox); Ne. Solite Corp., 102 F. Supp. 2d at 641 (same). However, ITI does not
identify any cases in which a court actually found indemnity implied-in-law based on
contractual liability, and the Court is not aware of any such cases.
Assuming North Carolina courts recognize claims for indemnity implied-in-law
arising solely out of contract claims, ITI could not recover from GMI on these grounds.
Carhartt alleges that ITI breached the contract between it and Carhartt by selling
Carhartt fabric that did not meet the specifications for fire resistance in the contract.
ITI’s fabric allegedly failed to meet those specifications because ITI changed the fibers
it used to make the fabric from a type widely accepted within the insudstry to a
different, less well-known type. According to the complaint, after it discovered the
fiber change, Carhartt tested the pre-change fabric against the post-change fabric
and found the pre-change fabric to be in compliance. (Dkt. 1 at 12.) The third-party
complaint at issue here only alleges that GMI “dyed, treated, finished, and tested”
the fabric before delivery. (Dkt. 8 at 3.) It does not contain any allegations about
GMI’s role in the fiber switch that would expose ITI to contract liability, the time
periods GMI participated in ITI’s fabric production (e.g. pre-switch, post-switch, or
both), or whether GMI tested the fabric for flame resistant qualities. Absent any
allegations to these effects, there is nothing in the complaint to indicate that GMI
caused ITI to breach its contract with Carhartt, and, thus, ITI is not entitled to
indemnification implied-in-law for any contractual liability it may incur.
20
Taking all of the allegations in the third-party complaint as true, it
still contains no allegations “to state a claim [for indemnity implied-inlaw] that is plausible on its face.” See Iqbal, 556 U.S. at 678. As discussed
above, the complaint contains almost no information about the
relationship between ITI and GMI. It alleges only that “[a]ll of the fabric
that Carhartt contends was defective was dyed, treated, finished, and
tested by GMI before it was ultimately supplied to Carhartt” and that
“GMI knew that ITI was relying on GMI’s skill and judgment to select
and furnish goods and services suitable for ITI’s fabric.” (Dkt. 8 at 3.)
These broad statements give no indication that GMI owed any duty to
Carhartt such that it is “jointly and severally liable to the plaintiff” along
with ITI. See CBP Res. Inc., 394 F. Supp. 2d at 733.
These statements also do not explain how GMI was involved in the
allegedly tortious conduct, even if it did owe a duty to Carhartt. There is
no information in the complaint about how GMI’s conduct caused ITI’s
fabric to fail to meet Carhartt’s fire resistance specifications. For
example, the third-party complaint lacks allegations that GMI tested the
new fibers for fire resistance and falsely informed ITI that the fibers
passed the tests, or that GMI’s fabric dyeing processes degraded the fire
21
resistant nature of the fabric. Accordingly, the complaint does not allege
either “(a) [ITI] has been passively negligent but is exposed to liability
through the active negligence of [GMI] or (b) [GMI] alone has done the
act which produced the injury but [ITI] is derivatively liable for the
negligence of the former.” See CBP Res. Inc., 394 F. Supp. 2d at 733.
Because ITI has not plead facts indicating that GMI exposed it to
tort liability through GMI’s active negligence, ITI has not “state[d] a
claim [for indemnity implied-in-law] that is plausible on its face.” See
Iqbal, 556 U.S. at 678. Accordingly, Count IV of the third-party complaint
is dismissed.
V.
Conclusion
For the reasons set forth above, GMI’s motion to dismiss the thirdparty complaint (Dkt. 18) is GRANTED, and ITI’s third-party complaint
is DISMISSED.
IT IS SO ORDERED.
Dated: June 11, 2018
Ann Arbor, Michigan
s/Judith E. Levy
JUDITH E. LEVY
United States District Judge
22
CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served
upon counsel of record and any unrepresented parties via the Court’s
ECF System to their respective email or First Class U.S. mail addresses
disclosed on the Notice of Electronic Filing on June 11, 2018.
s/Shawna Burns
SHAWNA BURNS
Case Manager
23
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