FIREMAN'S FUND INSURANCE COMPANY v. 360 STEEL ERECTOR'S, INC.

Filing 90

OPINION. Signed by Judge William J. Martini on 2/26/18. (gh, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

FIREMAN’S FUND INSURANCE
COMPANY, a/s/o S.L. MANAGEMENT
GROUP LLC and 6 AIRPORT ROAD, LLC,

Civ. No. 2:16-02782

Plaintiff,
OPINION
v.
360 STEEL ERECTORS, INC.,
MONMOUTH EQUIPMENT SALES CO.
INC., BLUESCOPE BUILDINGS NORTH
AMERICA, INC., and VARCO PRUDEN
BUILDINGS, a division of BlueScope
Buildings North America, Inc.,
Defendants.

WILLIAM J. MARTINI, U.S.D.J.:
Plaintiff Fireman’s Fund Insurance Company brings this action against 360 Steel
Erectors, Inc. (“360 Steel”), Monmouth Equipment Sales Company, Inc. (“Monmouth”),
BlueScope Buildings North America, Inc. (“BlueScope”) and an unincorporated division
of BlueScope, Varco Pruden Buildings (“VP”), alleging negligence and breach of contract
claims, in connection with Defendants’ purported faulty construction of an airport hangar.
This matter comes before the Court on Defendant BlueScope’s motions to dismiss
Defendants 360 Steel and Monmouth’s (collectively “Co-Defendants”) crossclaims for
contribution and indemnification, and on Co-Defendants’ motions to amend their
pleadings. There was no oral argument. Fed. R. Civ. P. 78(b). For the reasons set forth
below, BlueScope’s motions to dismiss are GRANTED in part and DENIED in part.
Co-Defendants’ motions to amend are also GRANTED in part and DENIED in part.

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I.

BACKGROUND

Plaintiff is an insurance company incorporated in Illinois and is the subrogee of S.L.
Management Group, LLC (“SL”) and 6 Airport Road, LLC (“the insureds”). Second Am.
Compl. (“2AC”) ¶ 1, ECF No. 59. 360 Steel and Monmouth are construction businesses
incorporated in New Jersey. Id. ¶¶ 2–3. BlueScope is a Missouri corporation that produces
unassembled, pre-engineered building components. Id. ¶ 4. VP is an unincorporated
subdivision of BlueScope that furnished building components to SL. See BlueScope’s
Mem. of Law in Supp. of Mot. to Dismiss 360 Steel’s Crossclaim (“BlueScope’s 360
Mem.”) 1 n.1, ECF No. 69-1.
This matter arises out of the collapse of an airport hangar in Morristown, New
Jersey. In December 2013, Plaintiff’s insureds contracted with Monmouth to construct an
airport hangar at 6 Airport Road. 2AC ¶ 9. Monmouth, in turn, subcontracted with 360
Steel to perform the steel erection of the hangar. Id. ¶ 10. The insureds purchased preengineered metal components from BlueScope for the construction of the hangar. See Op.
2, ECF No. 86. On January 16, 2015, the hangar’s steel framework collapsed during
construction, causing substantial damage, including severe injuries to one worker. See id.;
2AC ¶ 12. Plaintiff paid its insureds $1,379,511.95 in claims, representing the insureds’
damages caused by the collapse. 2AC ¶ 15.
Plaintiff filed suit against 360 Steel and Monmouth, alleging negligence against
both in their participation of the hangar’s faulty construction. Id. ¶¶ 17–23. Plaintiff also
alleged a breach of contract claim against BlueScope for failing to pay its share of costs
incurred by the parties in preserving evidence of the collapse. Id. ¶¶ 24–30. In its answer,
Monmouth filed crossclaims against 360 Steel and BlueScope for contribution and
common law indemnification. See Monmouth’s Cross-Claims 9–10, ECF No. 60. 360
Steel filed similar crossclaims against Monmouth and BlueScope, with an additional claim
for contractual indemnification. See 360 Steel’s Cross-Claims ¶¶ 16–23, ECF No. 63.
BlueScope now moves to dismiss all of Co-Defendants’ crossclaims, arguing that
their common law indemnification claims fail because their pleadings do not allege a
special legal relationship between BlueScope and either 360 Steel or Monmouth. See
BlueScope’s 360 Mem. 10–12; BlueScope’s Mem. of Law in Supp. of Mot. to Dismiss
Monmouth’s Crossclaims (“BlueScope’s Mon. Mem.”) 6–9, ECF No. 70-1. BlueScope
argues that 360 Steel’s contractual indemnification claim fails because it does not allege
the existence of a contract between it and BlueScope. See BlueScope’s 360 Mem. at 7–10.
BlueScope further argues that Co-Defendants’ crossclaims for contribution fail because
they do not allege facts sufficient to establish how BlueScope is jointly liable with CoDefendants for Plaintiff’s damages. See BlueScope’s 360 Mem. at 12–15; BlueScope’s
Mon. Mem. at 9–11.
Both Co-Defendants respond by submitting that discovery undertaken by the parties
in a related state-court personal injury case, in which a 360 Steel employee filed suit for
injuries suffered from the hangar’s collapse, establishes BlueScope’s liability. See
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Monmouth’s Mem. of Law in Opp’n to BlueScope’s Mot. to Dismiss (“Mon. Opp’n”) 2–
6, ECF No. 74-1; Br. in Supp. of 360 Steel’s Opp’n to BlueScope’s Mot. to Dismiss (“360
Opp’n”) 7–13, ECF No. 77-2.1 Specifically, deposition testimony from the personal injury
case suggests that the hangar components produced by BlueScope potentially contained
design defects. See Mon. Opp’n at 1–2, 6; 360 Opp’n at 6–7. Both Co-Defendants submit
that their crossclaims plead sufficient facts to survive BlueScope’s motion to dismiss;
however, both also seek to amend their pleadings with more facts revealed during
discovery in the personal injury case. See Mon. Opp’n at 6–8; 360 Opp’n at 14–17.
Monmouth attached to its moving papers a proposed amended answer and crossclaim,
specifically alleging design defects in BlueScope’s components. See Am. Answer to
Second Am. Compl. & Cross-Claims (“Mon.’s Proposed Am.”) 11–12, ¶¶ 13–16, ECF No.
74-6. 360 Steel seeks leave from the Court to file an amended pleading, but did not include
a proposed amendment with its filing. See 360 Opp’n at 17.
In its reply briefs, BlueScope opposes Co-Defendants’ motions to amend, arguing
that any such amendments would be futile. See BlueScope’s Reply in Supp. of Mot. to
Dismiss 360 Steel’s Crossclaim (“BlueScope’s 360 Reply”) 19–22, ECF No. 80;
BlueScope’s Reply in Supp. of Mot. to Dismiss Monmouth’s Crossclaim (“BlueScope’s
Mon. Reply”) 12–13, ECF No. 81. BlueScope also argues that the Court should not
consider certain factual allegations advanced by Co-Defendants for the first time in their
opposition briefs because they are extraneous to their pleadings. See BlueScope’s 360
Reply at 1–2; BlueScope’s Mon. Reply at 1–4.
II.

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint,
in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted.
The moving party bears the burden of showing that no claim has been stated. Hedges v.
United States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding a motion to dismiss under
Rule 12(b)(6), a court must take all allegations in the complaint as true and view them in
the light most favorable to the plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975);
Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir.
1998).
Although a complaint need not contain detailed factual allegations, “a plaintiff’s
obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels
and conclusions, and a formulaic recitation of the elements of a cause of action will not
do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, the factual allegations
must be sufficient to raise a plaintiff’s right to relief above a speculative level, such that it
is “plausible on its face.” See id. at 570; see also Umland v. PLANCO Fin. Serv., Inc., 542
F.3d 59, 64 (3d Cir. 2008). A claim has “facial plausibility when the plaintiff pleads factual
Unfortunately, 360 Steel’s brief does not include page numbers. The Court, therefore, refers to the ECF pagination
found at the top of the electronically filed document when citing to 360 Steel’s opposition.
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content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly,
550 U.S. at 556). While “[t]he plausibility standard is not akin to a ‘probability
requirement’ . . . it asks for more than a sheer possibility.” Id.
Federal Rule of Civil Procedure 15(a)(2) provides, “[A] party may amend its
pleading only with the opposing party’s written consent or the court’s leave. The court
should freely give leave when justice so requires.” Local Civil Rule 7.1(f) for the District
of New Jersey provides, “Upon filing a motion for leave to file an amended complaint or
answer . . ., the moving party shall attach to the motion a copy of the proposed pleading or
amendments and retain the original until the Court has ruled. If leave to file is granted, the
moving party shall file the original forthwith.” The Third Circuit applies a “liberal
amendment philosophy.” See Adams v. Gould, Inc., 739 F.2d 858, 864 (3d Cir. 1984).
District courts considers the following factors: (1) undue delay on the part of the party
seeking to amend; (2) bad faith or dilatory motive behind the amendment; (3) repeated
failure to cure deficiencies through multiple prior amendments; (4) undue prejudice on the
opposing party; and (5) futility of the amendment. See Great W. Mining & Mineral Co. v.
Fox Rothschild LLP, 615 F.3d 159, 174 (3d Cir. 2010) (quoting Forman v. Davis, 371 U.S.
178, 182 (1962)).
III.

DISCUSSION

The Court first addresses Co-Defendants’ motions to amend their pleadings because
of the Third Circuit’s liberal amendment policy and in the interest of judicial efficiency.
Thereafter, the Court addresses the merits of BlueScope’s motions for dismissal.
A. Co-Defendants’ Motions for Leave to Amend Their Pleadings
Monmouth properly followed Local Rule 7.1(f) by attaching a proposed amendment
to its motion for leave to amend. In its proposed amendment, Monmouth adds four new
paragraphs that explicitly allege that “the design and manufacture of the prefabricated
building by BlueScope was defective in that it did not contain components which could be
assembled as designed.” See Mon.’s Proposed Am. 11, ¶ 13. They also allege that the
“erection plans did not provide for a temporary bracing plan necessary to prevent collapse,”
that the steel bolts used in the design “were not sufficient to withstand the weight/load of
the prefabricated building,” and that the prefabricated building was “otherwise defective.”
See id. 11–12, ¶¶ 14–16. If true, these allegations establish a potential cause of action
against BlueScope. The Court, therefore, GRANTS Monmouth’s motion for leave to
amend and it shall file its amended crossclaim upon the issuance of the Court’s
accompanying order.
360 Steel did not attach a proposed amended crossclaim with its motion for leave to
amend and it, therefore, fails to follow Local Rule 7.1. Without a proposed amended
crossclaim, the Court cannot assess whether 360 Steel’s amendments would state a cause
of action. The Court, therefore, DENIES 360 Steel’s motion for leave to amend but
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underscores that 360 Steel is free to file a renewed motion that properly follows the Local
Rule upon the issuance of the Court’s accompanying order.
B. BlueScope’s Motions to Dismiss
In light of the above, the Court assesses BlueScope’s motions to dismiss CoDefendants’ crossclaims against Monmouth’s proposed amendments. The Court finds that
Monmouth’s amended crossclaim sufficiently pleads a cause of action for contribution;
however, it does not establish a claim for common law indemnification. Additionally, even
assuming that 360 Steel files a proper motion to amend, the Court finds that any further
amendments by Co-Defendants would be futile in establishing claims for common law or
contractual indemnification.
i. Contribution
Under New Jersey’s Joint Tortfeasors Contribution Law, a right of contribution
exists between joint tortfeasors where one such tortfeasor pays a money judgment for
damages in excess of her pro rata share of that judgment. See N.J.S.A. 2A:53A-3. Joint
tortfeasors are “two or more persons jointly or severally liable in tort for the same injury
to person or property, whether or not judgment has been recovered against all or some of
them.” N.J.S.A. 2A:53A-1. New Jersey’s Comparative Negligence Act provides a
tortfeasor defendant with a contribution claim when she is compelled to pay more than her
percentage share of the damages owed. See Jones v. Morey’s Pier, Inc.,165 A.3d 769,
784–85 (N.J. 2017) (quoting N.J.S.A. 2A:15-5.3(e)).
“It is well settled that ‘the true test [for joint tortfeasor contribution] is join liability
and not joint, common or concurrent negligence.’” Cherry Hill Manor Assocs. v. Faugno,
861 A.2d 123, 127–28 (N.J. 2004) (emphasis original) (quoting Farren v. N.J. Tpk. Auth.,
106 A.2d 752, 755 (N.J. Super. Ct. App. Div. 1954)). “The test’s core proposition may be
stated succinctly: It is common liability at the time of the accrual of plaintiff’s cause of
action which is the Sine qua non of defendant’s contribution right.” Id. (internal quotation
and citation omitted).
As stated above, Monmouth’s amended crossclaim alleges design defects in
BlueScope’s prefabricated steel components, which Plaintiff’s insureds bought from
BlueScope for the construction of the hangar. If true, Monmouth’s allegations establish
that BlueScope is jointly liable for the hangar’s collapse. Monmouth, therefore, has
sufficiently pleaded its crossclaim for contribution against BlueScope. Accordingly,
BlueScope’s motion to dismiss that crossclaim is DENIED.
360 Steel’s current crossclaim does not sufficiently plead a contribution claim. It
merely states that BlueScope designed and manufactured the hangar but it makes no
mention of any design defects. See 360 Steel’s Answer to Pl.’s Second Am. Compl. 11, ¶
7, ECF No. 63. The Court, therefore, finds that 360 Steel’s crossclaim in its current form
does not sufficiently plead a claim for contribution. Accordingly, BlueScope’s motion to
dismiss that crossclaim is GRANTED and it is DISMISSED WITHOUT PREJUDICE.
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ii. Indemnification
“Indemnification is available under New Jersey law in two situations: when a
contract explicitly provides for indemnification or when a special legal relationship
between the parties creates an implied right to indemnification.” Allied Corp. v. Frola, 730
F. Supp. 626, 639 (D.N.J. 1990), abrogated on other grounds by Apgar v. Lederle Labs.,
588 A.2d 380 (N.J. 1991). “In either case a party is entitled to indemnification only if he
or she is without fault and his or her liability is purely constructive, secondary or vicarious.”
Id. (citations omitted). “It is the existence of a special legal relationship sufficient to
impose certain duties and a subsequent breach of those duties that permits an implied
indemnification.” Ruvolo v. U.S. Steel Corp., 336 A.2d 508, 511 (N.J. Super. Ct. Law Div.
1975). “Examples of special legal relationships that can give rise to liability include lessorlessee, principal-agent and bailor-bailee.” Ferriola v. Stanley Fastening Sys., L.P., No. 04cv-4043, 2007 WL 2261564, at *2 (D.N.J. Aug. 1, 2007) (citing Ramos v. Browning Ferris
Indus. of S. Jersey, 510 A.2d 1152, 1158 (N.J. 1986)).
Here, neither Co-Defendant has sufficiently alleged a crossclaim for
indemnification, nor could they if given the chance to amend their pleadings. First, there
is no contract between BlueScope and either Monmouth or 360 Steel. BlueScope
contracted with Plaintiff’s insureds via a purchase order to provide the steel components
for the hangar, but the Co-Defendants are not parties to or third-party beneficiaries of that
contract. See Mem. of Law in Supp. of BlueScope’s Mot. to Dismiss Count III of Pl.’s
Second Am. Compl. 4, ECF No. 67-1; see also id., Ex. 1, ECF No. 67-2 (the purchase
order). The Court, therefore, GRANTS BlueScope’s motion to dismiss 360 Steel’s
crossclaim for contractual indemnification and it is DISMISSED WITH PREJUDICE.
Second, neither Co-Defendant has alleged a special legal relationship with
BlueScope that would give rise to a claim of implied indemnification. Plaintiff’s insureds
contracted with Monmouth to construct the hangar and Monmouth subsequently subcontracted with 360 Steel. BlueScope contracted with the insureds via a purchase order to
provide the prefabricated components of the hangar. Nothing about these transactions
supports the type of special legal relationship between BlueScope and Co-Defendants
required to establish a claim of implied indemnification. See Ferriola, 2007 WL 2261564,
at *2 (finding that claim for indemnification failed where no contract or special legal
relationship existed between a purchaser of a product and the manufacturer or seller of that
product). The Court, therefore, GRANTS BlueScope’s motion to dismiss Co-Defendants’
crossclaims for implied or common law indemnification and those crossclaims are
DISMISSED WITH PREJUDICE.
IV.

CONCLUSION

For the reasons stated above, BlueScope’s motions to dismiss Co-Defendants’
crossclaims are GRANTED in part and DENIED in part. BlueScope’s motions are
granted with respect to Co-Defendants’ crossclaims for indemnification and those
crossclaims are DISMISSED WITH PREJUDICE. BlueScope’s motion is granted with
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respect to 360 Steel’s crossclaim for contribution and that crossclaim is DISMISSED
WITHOUT PREJUDICE. BlueScope’s motion is denied with respect to Monmouth’s
crossclaim for contribution. Additionally, Monmouth’s motion for leave to amend its
pleadings is GRANTED. 360 Steel’s motion for leave to amend its pleadings is DENIED
WITHOUT PREJUDICE. An appropriate order follows.

/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.

Date: February 26th, 2016

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