Flooring Systems, Inc. v. Beaulieu Group, LLC

Filing 61

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that the motion of third-party defendant Clayco, Inc., to dismiss the third-party complaint for failure to state a claim [Doc. # 50 ] is granted.. Signed by District Judge Carol E. Jackson on 5/19/16. (KKS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
FLOORING SYSTEMS, INC.,
Plaintiff,
vs.
BEAULIEU GROUP, LLC,
Defendant/Third-Party
Plaintiff,
vs.
CLAYCO, INC.,
Third-Party Defendant.

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Case No. 4:15-CV-1792 (CEJ)

MEMORANDUM AND ORDER
This matter is before the Court on the motion of third-party defendant
Clayco, Inc., to dismiss for failure to state a claim, pursuant to Fed.R.Civ.P.
12(b)(6). Defendant and third-party plaintiff Beaulieu Group, LLC (defendant), has
filed a response in opposition and the issues are fully briefed.
I.

Allegations in the Complaint

In 2014, plaintiff Flooring Systems, Inc., purchased 160,000 square feet of
carpet tiles from defendant Beaulieu Group, LLC, which plaintiff installed in an office
building in Pennsylvania. After installation, the carpet tiles began to curl and
demonstrate dimensional instability. Plaintiff filed this action in state court, bringing
claims for breach of contract, breach of express warranty, and breach of implied
warranties of fitness for a particular purpose and merchantability under the Uniform
Commercial Code. Defendant removed the action to this court, asserting diversity

of citizenship jurisdiction. On February 29, 2016, defendant filed a third-party
complaint for indemnification and contribution against Clayco, Inc., the general
contractor on the project.1 [Doc. #22]. Defendant alleges that it informed plaintiff
and Clayco that it would not warrant the installation unless they took steps to
properly prepare the subflooring. According to defendant, the parties installed the
carpet without heeding its advice. Defendant alleges that any curling and
dimensional instability of the carpet tiles is due to the failure of plaintiff and Clayco
to comply with its installation instructions.
II.

Legal Standard

The purpose of a motion to dismiss under Rule 12(b)(6) is to test the legal
sufficiency of the complaint. Fed.R.Civ.P. 12(b)(6). The factual allegations of a
complaint are assumed true and construed in favor of the plaintiff, “even if it strikes
a savvy judge that actual proof of those facts is improbable.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 556 (2007) (citing Swierkiewicz v. Sorema N.A., 534 U.S.
506, 508 n.1 (2002)); Neitzke v. Williams, 490 U.S. 319, 327 (1989) (“Rule
12(b)(6) does not countenance . . . dismissals based on a judge’s disbelief of a
complaint’s factual allegations.”); Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)
(stating that a well-pleaded complaint may proceed even if it appears “that a
recovery is very remote and unlikely”). The issue is not whether the plaintiff will
ultimately prevail, but whether the plaintiff is entitled to present evidence in
support of his claim. Scheuer, 416 U.S. at 236. A viable complaint must include
“enough facts to state a claim to relief that is plausible on its face.” Twombly, 550
U.S. at 570; see id. at 563 (stating that the “no set of facts” language in Conley v.
1

Defendant also named Next Architecture as a third-party defendant. The Court granted
Next Architecture’s motion to dismiss for lack of personal jurisdiction. [Doc. #58].

2

Gibson, 355 U.S. 41, 45–46 (1957), “has earned its retirement”); see also Ashcroft
v. Iqbal, 556 U.S. 662, 678–84 (2009) (holding that the pleading standard set forth
in Twombly applies to all civil actions). “Factual allegations must be enough to raise
a right to relief above the speculative level.” Twombly, 550 U.S. at 555.
III.

Discussion

The parties agree that, under Missouri’s choice-of-law rules, defendant’s
third-party claim is governed by the laws of Pennsylvania. See East Maine Baptist
Church v. Union Planters Bank, N.A., 244 F.R.D. 538, 547 (E.D. Mo. 2007)
(Missouri courts apply the “most significant relations” test). Three factors

— the

place of injury, the conduct causing the injury, and the center of the parties’
relationship — favor Pennsylvania. The fourth factor — the residence or place of
business of the parties — is neutral.2 See id. (setting out four-factor test). The
Court will examine defendant’s indemnification and contribution claims under the
substantive law of Pennsylvania.
A.

Indemnification

Under Pennsylvania law, indemnity is available only (1) “where there is an
express contract to indemnify,” or (2) where the party seeking indemnity is
vicariously or secondarily liable for the indemnitor’s acts. Allegheny Gen. Hosp. v.
Philip Morris, Inc., 228 F.3d 429, 448 (3d Cir. 2000) (citing Richardson v. John F.
Kennedy Mem’l Hosp., 838 F. Supp. 979, 989 (E.D. Pa. 1993)). “The right of
indemnity . . . arises solely by explicit contractual agreement, or some other legal
obligation between the parties which has been implicated because of a failure by
the indemnitor to discover and correct a defect.” Foulke v. Dugan, 212 F.R.D. 265,

2

Defendant’s place of business is Georgia and Clayco’s place of business is Missouri.

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270 (E.D. Pa. 2002). Where, as here, there is no express contract to indemnify, the
party seeking indemnification must rely on common law indemnification. Bank v.
City of Philadelphia, 991 F. Supp. 2d 523, 530 (E.D. Pa. 2014). Common law
indemnification is appropriate when a defendant’s liability “arises not out of its own
conduct, but out of a relationship that legally compels the defendant to pay for the
act or omission of a third party.” Morris v. Lenihan, 192 F.R.D. 484, 489 (E.D. Pa.
2000). The following types of relationships support a claim for indemnification: an
employer may secure indemnification from a negligent employee; a retailer has a
right of indemnity against a negligent wholesaler or manufacturer; a property
owner can recover from a contractor who failed to perform specified duties and
thereby caused an injury to another; or a municipality with a duty to ensure that
property owners maintain sidewalks can be indemnified by a property owner who
failed to maintain a sidewalk that caused an injury to a passerby. Id. (citing
Builders Supply Co. v. McCabe, 366 Pa. 322, 326, 77 A.2d 368, 370 (1951)).
A

party

whose

own

conduct

subjects

it

to

liability

cannot

obtain

indemnification from another because:
the common law right of indemnity is not a fault sharing mechanism
between one who was predominantly responsible for an accident and
one whose negligence was relatively minor. Rather, it is a fault shifting
mechanism, operable only when a defendant who has been held liable
to a plaintiff solely by operation of law, seeks to recover his loss from
a defendant who was actually responsible for the accident which
occasioned the loss.
Sirianni v. Nugent Bros., 506 A.2d 868, 871 (Pa. 1986) (emphasis added). If the
party seeking indemnity had “any part in causing the injury,” indemnity is not
available. Twin City Fire Ins. Co. v. Pierce Leahy Co., No. CIV.A. 92-6370, 1993 WL
131333, at *2 (E.D. Pa. Apr. 23, 1993) (emphasis in original). If the party seeking

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indemnification is actively negligent or is guilty of an independent act of negligence
that also is the cause of the underlying injuries, indemnity is not available as a
matter of law. Foulke, 212 F.R.D. at 270.
In this case, there are no facts alleged that would establish the requisite
contractual or special relationship between defendant and Clayco, such that
defendant is legally compelled to pay for Clayco’s acts or omissions. Furthermore,
plaintiff’s claims of breach of contract, breach of warranty, and breach of implied
warranties all require proof of wrong-doing by defendant. Thus, if plaintiff prevails
on its claims, defendant is ineligible for indemnification. If, on the other hand, as
defendant alleges, plaintiff’s damages arise solely from the negligence of plaintiff
and Clayco, defendant cannot be liable to plaintiff and there will be no need for
indemnification.3 Defendant’s third-party claim for indemnification will be dismissed.
B.

Contribution

In Pennsylvania, issues of contribution are governed by statute. Moran for &
on Behalf of Estate of Moran v. G. & W.H. Corson, Inc., 402 Pa. Super. 101, 12223, 586 A.2d 416, 427 (Pa. Super. Ct. 1991) (citing 42 Pa. C.S. §§ 8321–8327).
Contribution “is not a recovery for the tort, but rather it is the enforcement of an
equitable duty to share liability for the wrong done by both.” Agere Sys., Inc. v.
Advanced Envtl. Tech. Corp., 552 F. Supp. 2d 515, 520 (E.D. Pa. 2008) (quoting
Swartz v. Sunderland, 403 Pa. 222, 169 A.2d 289, 290 (Pa. 1961)). Contribution is
a fault-sharing mechanism between two parties responsible for a harm. Kemper

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Indemnification is not available where there is concurrent or joint liability. “[I]n such a
case, there is only a common liability and not a primary and secondary one, even though
one may have been very much more negligent than the other.” Walton v. Avco Corp., 610
A.2d 454, 460 (1992) (quoting Builders Supply Co, 77 A.2d at 371.

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National P & C Companies v. Smith, 419 Pa. Super. 295, 615 A.2d 372, 375 (Pa.
Super. Ct. 1992).
Under Pennsylvania law, a right to contribution arises only among joint
tortfeasors. Id. at 309, 615 A.2d at 380. Joint tortfeasors are defined as “two or
more persons jointly or severally liable in tort for the same injury to persons or
property, whether or not judgment has been recovered against all or some of
them.” Foulke, 212 F.R.D. at 270 (quoting 42 Pa. C.S. § 8322). A joint tort is
defined as “where two or more persons owe to another the same duty and by their
common neglect such other is injured.” Lasprogata v. Qualls, 263 Pa. Super. 174,
180, 397 A.2d 803, 806 (1979) (quoting Black’s Law Dict. 973 (4th ed. 1968)). In
order to be joint tortfeasors, “the parties must either act together in committing the
wrong, or their acts, if independent of each other, must unite in causing a single
injury.” Id. at 179 n. 4. Two persons are not acting jointly for the purposes of
committing a joint tort if the acts of the original wrongdoer and the joint tortfeasor
“are severable as to time, neither having the opportunity to guard against the
other’s acts, and each breaching a different duty owed to the injured plaintiff.” Id.
Pennsylvania law does not recognize a right to contribution for liability in
breach of contract cases. Eastern Elec. Corp. of N.J. v. Rumsey Elec. Co., No.
CIV.A. 08-5478, 2010 WL 1444584, at *2 (E.D. Pa. Apr. 8, 2010). The parties
dispute whether plaintiff’s claim for breach of implied warranty is properly
considered a tort. Assuming for present purposes that the alleged breach can be
considered a tort, the parties are nonetheless not joint tortfeasors. Defendant
allegedly breached the duty to sell carpet tiles free of manufacturing defects, while
third-party defendant Clayco allegedly breached its duty as general contractor to

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ensure appropriate installation procedures. The alleged breaches occurred at
different times, breached different duties owed to plaintiff, involve different facts,
and give rise to different causes of action, and thus cannot support a claim for
contribution.
For the reasons stated above,
IT IS HEREBY ORDERED that the motion of third-party defendant Clayco,
Inc., to dismiss the third-party complaint for failure to state a claim [Doc. #50] is
granted.

CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 19th day of May, 2016.

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