Kmart Corporation v. The Kroger Co. et al

Filing 361

MEMORANDUM OPINION re 360 Order on Motion for Summary Judgment. Signed by Glen H. Davidson on 1/23/2014. (dlh)

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF MISSISSIPPI

ABERDEEN DIVISION

KMART CORPORATION

v.

PLAINTIFF

CIVIL ACTION NO.1 :11-CV-00103-GHD-DAS

THE KROGER CO. and E & A SOUTHEAST
LIMITED PARTNERSHIP

DEFENDANTS

MEMORANDUM OPINION GRANTING DEFENDANT E & A SOUTHEAST LIMITED
PARTNERSHIP'S MOTION FOR SUMMARY JUDGMENT
Presently before the Court is Defendant E & A Southeast Limited Partnership's motion for
summary judgment [267]. Upon due consideration, the Court finds the motion should be granted.

A. Factual and Procedural Background
The Corinth, Mississippi Kroger store and Kmart store are neighboring tenants in the
Fulton Crossing Shopping Center. In May of 201 0, heavy rain pelted the Corinth area, causing
nearby Elam Creek to flood. The Corinth Kmart store sustained extensive flood damage and was
closed for repairs from the time of the May 2010 flood until February 2011, when the store
reopened for business. The Corinth Kmart store then incurred further additional costs to prevent
subsequent damage from another anticipated flood event.
Kmart Corporation ("Kmart") brings this action against Defendants The Kroger Co. and E
& A Southeast Limited Partnership ("E & A") to recover for the flood damage sustained by the

Corinth Kmart store allegedly caused by actions and omissions of Defendants. 1 Kmart alleges,

I Although Kmart also initially brought this action against the Federal Emergency Management Agency
("FEMA"), the City of Corinth, Fulton Improvements, LLC, and Kansas City Southern Railway Company, those
parties have been dismissed from the case. The Court dismissed FEMA and the City of Corinth on immunity
grounds. See Ct.'s Order [50] & Mem. Op. [51] Granting FEMA's Mot. Dismiss; Ct.'s Order [209] & Mem. Op.

1

inter alia, that the neighboring building occupied by the Corinth Kroger store was initially
constructed halfway in the floodplain and halfway in the floodway, and that in 2005, thirteen years
after the Kroger store building was constructed, the Federal Emergency Management Agency
("FEMA") issued a Letter of Map Revision ("LOMR") that removed the Kroger store from the
regulatory flood way after finding it was inadvertently included in the flood way.
On July 25, 2013, Kmart filed a motion for leave to file a proposed amended report of its
retained expert, John R. Krewson, to recalculate the estimated water level to correct prior
inaccuracies in Krewson's initial report, and in so doing, to change Kmart's theory of the case.
On September 27,2013, the Court entered an Order [243] stating that it would consider a limited
amendment of only mathematical errors to the Krewson report. Kmart filed another motion for
leave [271] to file a newly proposed amended Krewson report and attached the same for the
Court's consideration. After careful consideration of the newly proposed amended report, the
Court denied Kmart's request to amend the Krewson report.

Accordingly, when this

memorandum opinion references the Krewson report, the opinion refers to Krewson's initial
report, unless otherwise indicated.
On October 8, 2013, E & A filed the present motion for summary judgment [267]. Kmart
has filed a response, and E & A has filed a reply. The matter is now ripe for review. As the
present motion concerns Kmart's claims against E & A, the Court will focus its attention on those
claims.

[210] Granting City of Corinth's Mot. Dismiss. In addition, the Court granted summary judgment to Fulton
Improvements, LLC and Kansas City Southern Railway Company. See Ct.'s Order [354] & Mem. Op. [355]
Granting Fulton's MSJ; Ct.'s Order [358] & Mem. Op. [359] Granting KCSR's MSJ.

2

B. Summary Judgment Standard
Summary judgment "should be rendered if the pleadings, the discovery and disclosure
materials on file, and any affidavits show that there is no genuine dispute as to any material fact
and that the movant is entitled to judgment as a matter oflaw." Celotex Corp. v. Catrett, 477 U.S.
317,322, 106 S. Ct. 2548,91 L. Ed. 2d 265 (1986). See FED. R. CIV. P. 56(a); Weaver v. CCA

Indus., Inc., 529 F.3d 335, 339 (5th Cir. 2008). The rule "mandates the entry of summary
judgment, after adequate time for discovery and upon motion, against a party who fails to make a
sufficient showing to establish the existence of an element essential to that party's case, and on
which that party will bear the burden ofproof at trial." Celotex Corp., 477 U.S. at 322, 106 S. Ct.
2548.
The party moving for summary judgment bears the initial responsibility of informing the
court ofthe basis for its motion and identifying those portions ofthe record it believes demonstrate
the absence ofa genuine dispute of material fact. Id. at 323, 106 S. Ct. 2548. Under Rule 56(a),
the burden then shifts to the nonmovant to "go beyond the pleadings and by ... affidavits, or by the
depositions, answers to interrogatories, and admissions on file, designate specific facts showing
that there is a genuine issue for trial." Id. at 324, 106 S. Ct. 2548 (internal quotation marks
omitted). Accord Littlefield v. Forney Indep. Sch. Dist., 268 F.3d 275,282 (5th Cir. 2001); Willis
v. Roche Biomedical Labs., Inc., 61 F.3d 313,315 (5th Cir. 1995).

Where, as here, the parties dispute the facts, the Court must view the facts and draw
reasonable inferences in the light most favorable to the nonmovant. Scott v. Harris, 550 U.S. 372,
378, 127 S. Ct. 1769, 167 L. Ed. 2d 686 (2007) (internal citations omitted). "However, a
nonmovant may not overcome the summary judgment standard with conclusional allegations,

3

unsupported assertions, or presentation of only a scintilla of evidence." McClure v. Boles, 490 F.
App'x 666, 667 (5th Cir. 2012) (per curiam) (citing Hathaway v. Bazany, 507 F.3d 312, 319 (5th
Cir. 2007».
C. Analysis and Discussion

In its motion for summary judgment [267], E & A argues that Kmart's claims against it
should be dismissed on the following grounds: (1) "[a]ny allegation stemming from the issuance of
the LOMR falls squarely within the ambit ofthe NFIA"; (2) "[t]he statute oflimitations has run on
all claims against [E & A]"; (3) the Kroger store is not located within a floodway; (4) Kmart cannot
show that the presence of the Kroger store caused any damage to Kmart during the subject flood;
and (5) the proximate cause ofthe subject flood was an Act ofGod and was thus unforeseeable. E
& A Mem. Br. Supp. MSJ [268] at 4-16.

At the outset, the Court addresses E & A's argument that Kmart's claims are barred by the
applicable statute of limitations. The parties agree that Kmart's claims against E & A are subject
to the three-year statute of limitation under Mississippi Code § 15-1-49. That statute provides in
pertinent part that the action "shall be commenced within three (3) years next after the cause of
such action accrued, and not after." MISS. CODE ANN. § 15-1-49(1).
Kmart contends that the injury occurred on May 2,2010, when the Kmart store flooded,
and thus, that the applicable limitations period began to run on that date. Kmart relies on
Owens-Illinois, Inc. v. Edwards, 573 So. 2d 704, 706 (Miss. 1990) to support the proposition that

Kmart suffered no injury and had no enforceable claim until the store sustained flood damage in
May of201 0, and thus, that the three-year limitation period began to run on the date ofthe subject
flood. The Court finds this argument is not well taken.

4

The Mississippi Supreme Court has stated: "Owens-Illinois stands for the legal theory that
'[a] cause of action accrues only when it comes into existence as an enforceable claim; that is,
when the right to sue becomes vested,' and the theory that an injury has to happen before a tort is
considered to complete." Oaks v. Sellers, 953 So. 2d 1077, 1081 (1[ 13) (Miss. 2007) (quoting
Owens-Illinois, 573 So. 2d at 706-07).

However, the Mississippi Supreme Court has

distinguished the Owens-Illinois holding as applying to personal injury cases involving latent
injury or disease issues. See id. (discussing same).
As E & A points out, it is undisputed that E & A was the landlord of the building occupied
by Kroger and Kmart from September 11, 1998 through December 14, 2007 only. Kmart's
allegations against E & A are clearly based on E & A's ownership of the property and reference
alleged actions or omissions by E & A during that time period. Kmart alleges that the Kroger
store was improperly located in a floodway "at the time the building was constructed and during E
& A's ownership of the property," Kmart's Compl. [1] 1[ 29; that E & A "improperly aided and
supported" the issuance ofthe LOMR "in 2005," id. 1[ 31, or alternatively, that E & A was aware of
the LOMR and "allowed its building to remain in the floodway, id. 1[ 32 (emphasis added); and that
the Kroger store's location proximately caused Kmart's flood-related damages during the subject
flood in May of201 0, id. 1[1[ 33-35.
Even if an alleged act or omission occurred as late as December 14, 2007, the limitations
period would have run in December of 2010. The flood occurred in May of 2010. This action
was initiated on May 2,2011. Therefore, Kmart's claims against E & A are time-barred under
Mississippi law and must be dismissed. However, even assuming, arguendo, that the claims
against E & A are not barred by the statute of limitations, the claims fail on the merits, as welL

5

A plaintiff asserting a negligence claim must ultimately prove the essential elements of
duty, breach of duty, proximate causation, and damages. Cascio v. Alfa Mut. Ins. Co., No. 2012­
CA-0130O--COA, 2013 WL 6383041 (Miss. Ct. App. Dec. 6, 2013) (citing Ladner v. Holland, 90
So. 3d 655, 659
550,

55l(~

(~

13) (Miss. Ct. App. 2012) (in tum citing Price v. Park Mgmt. Inc., 831 So.2d

5) (Miss. 2002»). Kmart alleges that E & A was negligent and that E & A's alleged

negligence proximately caused Kmart to suffer flood damages. As stated, first, Kmart alleges that
the Kroger store was improperly located in a floodway that existed at the time the store was
constructed and during E & A's ownership of the property. Kmart's Compi. [1]

~

30. Second,

Kmart alleges that E & A improperly aided and supported the issuance of the LOMR by FEMA
allowing the Kroger store to remain in the floodway, id.

~ 31;

alternatively, Kmart alleges that E &

A was aware of the LOMR and knowingly and improperly allowed its building to remain in the
floodway, id.

~

32. Third, Kmart alleges that Kroger's presence in the floodway caused a

displacement of water and rise in the water level resulting in flood damage to the Kmart store and
causing Kmart to incur expenses to prevent further water from entering the store. Id.

~~

33-35.

Upon due consideration, the Court finds that because FEMA has detennined that the
Kroger store and building as a whole are not in the regulatory floodway, any allegations to the
contrary are untenable against E & A. As the Court has stated in prior memorandum opinions and
Orders, in 2005, FEMA issued a LOMR removing the Kroger store from the floodway due to
"Inadvertent Inclusion in Floodway." See LOMR from FEMA [259-1] at 1. Also, as the Court
has stated, Kmart's allegations challenging the issuance of the LOMR and whether the Kroger
store was actually in a floodway fall squarely within the ambit of the NFIA and would only be
tenable against FEMA, which has the primary responsibility for issuing LOMRs as part of the

6

National Flood Insurance Program. See, e.g., Great Rivers Habitat Alliance v. FEMA, 615 F.3d
985,987-89 (8th Cir. 2010); Coal. for a Sustainable Delta v. FEMA, 812 F. Supp. 2d 1089, 1102
(E.D. Cal. 2011). The Court has already dismissed FEMA from the case sub judice on immunity
grounds. Thus, it is the opinion of the Court that Krnart cannot prove that the Kroger store was
improperly located in a floodway that existed at the time the store was constructed and during E &
A's ownership of the property, as FEMA has determined that neither the Kroger store nor the
building as a whole were at any time located in the floodway. Krnart's allegations that E & A
improperly aided and supported the issuance of the LOMR by FEMA allowing the Kroger store to
remain in the floodway or that E & A was aware of the LOMR and knowingly and improperly
allowed its building to remain in the floodway are untenable for the same reason. Further, Krnart
has not presented evidence that E & A improperly sought a LOMR. Thus, any such allegation is
merely conclusory and cannot survive summary judgment.
In its response to E & A's motion for summary judgment, Krnart maintains that E & A can
be liable for negligence if it knew that the building was in a flood-prone area yet took inadequate
measures to protect Krnart against the risk of flooding. Krnart's Mem. Br. Supp. Resp. Opp'n to
E & A's MSJ [310] at 4. Krnart contends that E & A had notice that the building was located in a
flood-prone area, given two prior flooding events that occurred during E & A's ownership of the
building. As support for this contention, Krnart cites a 2010 Elam Draining District News
newsletter article, which it contends includes language from a reprint of a December I, 2001

Northeast Mississippi Daily Journal article concerning a flooding event that year; Krnart
maintains that these articles indicate that the 2010 flood giving rise to this suit was not an
unprecedented flooding event for Corinth, Mississippi. However, "[n]ewspaper articles ... are

7

not proper summary judgment evidence to prove the truth of the facts that they report because they
are inadmissible hearsay." James v. Texas Collin County, 535 F.3d 365, 374 (5th Cir. 2008)
(citing Roberts v. City o!Shreveport, La., 397 F.3d 287,295 (5th Cir. 2005)). Also, the reprinted
newspaper article published in the newsletter is hearsay within hearsay. Kmart further cites to
several communications that allegedly demonstrate that E & A had notice that the building was in
a flood-prone area. However, even ifthe Court found that Kmart had presented evidence that E &
A had notice that the building was in a flood-prone area, this would not be enough to sustain the
claim past summary judgment. Kmart has failed to present evidence that the presence of the
Kroger store caused or contributed to the flooding damages sustained by the Kmart store.
Kmart alleges that Kroger's presence in the floodway caused a displacement ofwater and a
rise in the water level resulting in flood damage to the Kmart store and causing Kmart to incur
expenses to prevent further water from entering the store. Kmart's Compl. [1] W 33-35. As the
Court has stated above, Kmart cannot prove that Kroger was located in a floodway at the time of
the flood, given FEMA's determination to the contrary. E & A contends that Kmart similarly
cannot prove that the presence of the Kroger store caused a displacement of water or rise in the
water level resulting in Kmart's flood damage, because Kmart has offered no reliable expert proof
that the presence ofthe Kroger store in the building caused any damage to Kmart during the flood,
given the flawed data in the report ofKmart's retained engineering expert, John R. Krewson. E &
A refers to Krewson's admission during his deposition that he had made a mistake in flow data
when modeling the effect of the Kroger store on the Kmart store; Kmart's subsequent statement
that if it were not allowed to amend Krewson's report to reflect the correct flow data, Kmart
"[would] be forced to prosecute its case with Mr. Krewson's flawed Initial Report," see Kmart's

8

Mem. Br. Supp. Mot. Appeal Mag. Decision [228] at 9 (emphasis added); and the Court's
subsequent denial of Kmart's request to amend Krewson's report. E & A maintains that without
an accurate Krewson report, Kmart has no basis for its allegations against E & A.
Kmart agrees in its response that its proof on the effect of the Kroger store's presence on
Kmart's flooding is through Krewson's report, but Kmart contends that it has explained through
Krewson's testimony why the Kroger store contributed to Kmart's flooding. Kmart maintains
that the Court entered an Order allowing Krewson to amend his report to correct the errors present
in his initial report. This statement is incorrect. On September 27, 2013, the Court entered an
Order [243] stating that it would consider a limited amendment of only mathematical errors to the
Krewson report and requesting that Kmart submit the same for the Court's consideration.
Although at the time of the parties' briefing on this motion for summary judgment the Court had
not yet ruled on Kmart's request to allow the newly proposed amended report reflecting
mathematical calculations, on December 18, 2013, the Court entered an Order [346] and
memorandum opinion [347] denying Kmart's request. Thus, when Kmart states its proof on this
issue is based on the Krewson report, it is relying in part on the flow data contained in the initial
Krewson report, which both Kmart and E & A agree is flawed. Kmart additionally maintains that
at the time of the construction of the building nothing was done to determine whether there would
be a significant rise of the water as a result of that construction. In support of this contention,
Kmart cites the deposition testimony of David Huwe, the Director of Community Development
and Planning for the City of Corinth, that he was not aware whether the developer of the building
or anyone else obtained a no-rise certification or variance in developing that project. See Huwe
Dep. [309-12] at 46-48, 50. Kmart does not present any other evidence in support of its theory

9

that the Kroger store's presence affected Kmart's flood damages. The Court finds that Kmart's
evidence on causation-specifically, Krewson's opinions in the flawed report and Huwe's
deposition testimony expressing uncertainty about whether the building developer obtained a
no-rise certification or variance on the property-is insufficient to raise a fact issue for trial on
causation on Kmart's claims against E & A. Accordingly, the Court finds that E & A is entitled to
summary judgment.2

D. Conclusion
In sum, Defendant E & A Southeast Limited Partnership's motion for summary judgment
[267] is GRANTED in its entirety; all claims against Defendant E & A Southeast Limited
Partnership are DISMISSED; and Defendant E & A Southeast Limited Partnership is
DISMISSED as a party to the case.
An order in accordance with this opinion shall issue this day.

THIS,

~

day of January, 2014.

SENIOR JUDGE

2 Because the Court finds that Kmart's claims against E & A fail to survive summary judgment, the Court
need not reach E & A's argument that the flood was an Act of God which allowed no preparation for flood protection.

10