Those Certain Interested Underwriters at Lloyd's, London v. The Farley Group
Filing
87
DECISION AND ORDER granting in part and denying in part # 56 Defendant's Motion for Summary Judgment as set forth in Part IV of this Decision and Order such that SURVIVING Defendant's motion are Plaintiff's claims for negligent misre presentation and/or advice. Counsel are directed to appear on 10/28/15 at 11:00 a.m. in chambers for a pretrial conference, at which counsel are directed to appear with settlement authority, and in the event that the case does not settle, trial will be scheduled at that time. Plaintiff is further directed to forward a written settlement demand to defendants no later than 10/9/15, and the parties are directed to engage in meaningful settlement negotiations prior to the conference. Signed by Chief Judge Glenn T. Suddaby on 9/23/15. (lmw)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
_____________________________________________
THOSE CERTAIN INTERESTED UNDERWRITERS,
AT LLOYD’S, LONDON, subscribing to Policy No.
Z101663/003, as subrogee of M&C Ventures, LLC,
and Adirondack Sports Complex, LLC,
Plaintiff,
v.
Lead Case: 1:12-CV-0707
(GTS/FRT)
THE FARLEY GROUP,
Defendant.
_____________________________________________
THE FARLEY GROUP,
Third-Party Plaintiff,
v.
TADJER-COHEN-EDELSON ASSOCIATES, INC.,
Third-Party Defendant.
_____________________________________________
M&C VENTURES LLC; and ADIRONDACK
SPORTS COMPLEX, LLC,
Plaintiffs,
v.
Member Case: 1:13-CV-385
(GTS/FRT)
THE FARLEY GROUP,
Defendant.
_____________________________________________
THE FARLEY GROUP,
Third-Party Plaintiff,
v.
TADJER-COHEN-EDELSON ASSOCIATES, INC.,
Third-Party Defendant.
_____________________________________________
APPEARANCES:
OF COUNSEL:
FURMAN KORNFELD & BRENNAN, LLP
Counsel for Plaintiff Those Certain
Interested Underwriters at Lloyd’s, London
61 Broadway, 26th Floor
New York, New York 10006
ANDREW R. JONES, ESQ.
BAXTER, SMITH & SHAPIRO, P.C.
Counsel for Defendant
99 North Broadway
Hicksville, New York 11801
ARTHUR J. SMITH, ESQ.
STEVEN M. BUNDSCHUH, ESQ.
FITZGERALD MORRIS BAKER FIRTH, P.C.
Counsel for Plaintiffs Adirondack
Sports Complex and M&C Ventures, LLC
16 Pearl Street
P.O. Box 2017
Glens Falls, New York 12801
JOHN D. ASPLAND, JR., ESQ.
JOSHUA D. LINDY, ESQ.
GLENN T. SUDDABY, Chief United States District Judge
TABLE OF CONTENTS
Page
I.
RELEVANT BACKGROUND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A.
The Underwriters’ Complaint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
B.
The Complaint Filed by M&C and ADSC.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
C.
Procedural History. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
D.
Statement of Undisputed Material Facts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1. Plaintiffs’ Claims and Relevant Background.. . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. Mr. Miller’s Decision to Purchase a Farley Dome. . . . . . . . . . . . . . . . . . . . . . 5
3. Farley Contract and Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4. Design of the ADSC Dome. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5. TCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6. Farley’s Design of the ADSC Dome. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7. Erection of the ADSC Dome. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8. Operation and Maintenance of the ADSC Dome.. . . . . . . . . . . . . . . . . . . . . . 20
9. Air Pressure Fluctuation of the Dome to Remove Snow. . . . . . . . . . . . . . . . . 24
10. Temperatures Inside the ADSC Dome.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11. Events Preceding the Dome’s Partial Collapse. . . . . . . . . . . . . . . . . . . . . . . . 27
12. Events Post-Collapse of the ADSC Dome.. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
13. Damage Caused by the Dome’s Collapse. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
E.
Parties’ Briefing on Defendant’s Motion for Summary Judgment. . . . . . . . . . . . 38
1.
Defendant’s Memorandum of Law-in-Chief. . . . . . . . . . . . . . . . . . . . . . . 38
2.
Underwriters’ Opposition to Defendant’s Motion for Summary
Judgment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.
ADSC’s Opposition to Defendant’s Motion for Summary Judgment. . . . 43
4.
Defendant’s Reply to Plaintiffs’ Respective Oppositions to the Motion for
Summary Judgment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.
Underwriters’ Sur-Reply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.
ADSC’s Sur-Reply.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.
Defendant’s Sur-Sur-Reply to Plaintiffs’ Sur-Replies.. . . . . . . . . . . . . . . 51
II.
APPLICABLE LEGAL STANDARDS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
III.
ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
A.
Whether the Economic Loss Rule Bars Plaintiffs’ Tort Claims. . . . . . . . . . . . . . 54
1.
“Abrupt Cataclysmic Occurrence”.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2.
“Other Property”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
3.
Negligent Misrepresentation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.
Independent Duty of Care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
5.
Failure to Warn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
i
B.
C.
D.
E.
F.
G.
IV.
Whether the Limitation-of-Liability Provision Precludes Consequential
Economic Damages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
1.
Whether the Subject Contract Is Unconscionable. . . . . . . . . . . . . . . . . . . 69
2.
Whether Public Policy Prohibits Enforcement of the Limitation-ofLiability Provision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Whether Underwriters’ Claims for Breach of Implied and Express
Warranties and Breach of Contract Are Barred by the Statute of Limitations.. . . 74
1.
Whether the Parties’ Contract Is One for the Sale of Goods. . . . . . . . . . . 74
2.
Accrual and Application of Statute of Limitations to Underwriters’
Breach-of-Warranty Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Whether Underwriters’ Claim for Defective and/or Negligent Design of the Dome
Is Barred by the Statute of Limitations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Whether a Genuine Dispute of Material Fact Exists Regarding Underwriters’
Claim for Defective and/or Negligent Design of the Dome. . . . . . . . . . . . . . . . . 86
Whether a Genuine Dispute of Material Fact Exists Regarding Underwriters’
Claim for Failure to Warn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Defendant’s Challenge to the Admissibility of Thomas Grafe’s Expert
Opinions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
ii
DECISION and ORDER
Currently before the Court, in these consolidated property damage actions filed by M&C
Ventures, LLC (“M&C”), Adirondack Sports Complex, LLC (“ADSC”) (collectively “ADSC”),
and Those Certain Interested Underwriters at Lloyd’s, London, subscribing to Policy No.
Z101663/003, as subrogee of M&C and ADSC (hereinafter “Underwriters”), against The Farley
Group (“Farley” or “Defendant”), is Defendant’s motion for summary judgment pursuant to Fed.
R. Civ. P. 56. (Dkt. No. 56.) For the reasons set forth below, Defendant’s motion is granted in
part and denied in part.
I.
RELEVANT BACKGROUND
A.
The Underwriters’ Complaint
The Underwriters filed their Complaint on April 30, 2012, in their capacity as subrogee of
M&C. (Dkt. No. 1.) Generally, the Complaint alleges as follows. M&C is the owner of the
Adirondack Sports Complex, located in Queensbury, New York, which is a multi-sport and event
facility operated by ADSC. (Id. ¶ 1, 7.) The Underwriters provided insurance coverage to M&C
against property damage to its buildings in connection with M&C’s operation of the sports
complex. (Id. ¶ 2.) The sports complex is enclosed by a dome that was manufactured by
Defendant in August of 2005, installed by Defendant sometime in November of 2005, and has
continued to be serviced and maintained by Defendant. (Id. at ¶ 8.)
During the winter of 2006, the dome began having technical and mechanical problems
with its longitudinal cables (cables that run over the top of the dome lengthwise and provide
support for its “end caps”). (Id. at ¶ 9.) Specifically, snow began to slide down to the outer most
cable on each side, causing a back up of snow on the dome, which resulted in sagging in the
1
dome’s southeastern areas and required the dome’s air pressure to be kept at a higher level to
maintain its structure. (Id.) ADSC notified Defendant of the accumulation of ice and snow in
these areas in an attempt to develop a better method for causing accumulated snow to slide over
the cable and off the side of the dome. (Id. at ¶ 11.) Defendant advised ADSC to implement a
“pressure control” method of decreasing the air pressure of the dome as a means of dislodging
snow accumulation from the dome’s roof. (Id. at ¶ 13.) This method initially worked with some
success. (Id. at ¶ 16.) However, due to significant snowfall and exceptionally cold temperatures
during the winter of 2010-2011, the dome did not experience a normal shedding of snow. (Id. at
¶ 17.)
In February 2011, approximately eight inches of snow fell in the area of Queensbury. (Id.
at ¶ 19.) To remove the excess snow, Defendant advised ADSC to take a length of rope and run
it along the dome to dislodge the accumulated snow. (Id. at ¶ 20.) On February 5, 2011, the
dome’s roof began to invert under the weight of the accumulated snow and ice. (Id. at ¶ 21.)
ADSC successfully used a recirculation unit to round out the dome to expel snow and ice from
the dome’s roof. (Id. at ¶ 22.) The next day, on February 6, 2011, ADSC contacted Defendant
and advised that some of the snow had been dislodged from the dome. (Id. at ¶ 24.) However,
that same night, ADSC attempted to increase the pressure of the Dome, with no success. (Id. at ¶
25.) ADSC spoke with Defendant’s representatives, who advised that reducing the pressure in
the dome may cause the snow/ice to dislodge. (Id.) ADSC followed this advice and lowered the
pressure, which caused large portions of snow/ice to shift to one area. (Id. at ¶ 26-28.) Moments
later, a large portion of the dome collapsed to the ground. (Id. at ¶ 29.) This incident required
the dome to be completely deflated so that it could be repaired. (Id. at ¶ 30.) As a result,
Underwriters paid $933,642.80 to M&C under its insurance policy for the damage sustained to
the dome.
2
Based on these factual allegations, the Underwriters’ Complaint asserts five claims
against Defendant: (1) a claim that Defendant is strictly liable for the defective design of the
dome; (2) a claim that Defendant negligently designed the dome; (3) a claim that Defendant
failed to warn M&C and ADSC about the dangers from the foreseeable uses of its product; (4) a
claim that Defendant breached its duty of reasonable care by advising ADSC to remove
accumulated snow and ice by employing failed techniques and otherwise providing inadequate
and/or improper instructions on how to effectively handle the situation and failing to timely
respond to M&C’s requests for assistance; and (5) a claim that Defendant breached its implied
and express warranties to M&C. (Id. ¶¶ 34-60.)
B.
The Complaint Filed by M&C and ADSC
M&C and ADSC filed their Complaint on April 4, 2013. (12-CV-0707, Dkt. No. 1.) On
April 17, 2013, an Order was entered by United States Magistrate Judge Randolph F. Treece,
which consolidated this matter with the action commenced by Underwriters. (Dkt. No. 7.)
Pursuant to this Order, this matter was designated as the Lead Case (12-CV-0707) and the action
commenced by Underwriters (13-CV-0385) was designated as the Member Case. (Id. at 2.)
Generally, the Complaint filed in the Lead Case asserts identical claims and factual
allegations as those asserted in the Member Case. (Dkt. No. 1, ¶¶ 2-29.) Accordingly, for
purposes of brevity, the Court will not restate these claims and allegations. However, in addition
to the claims already discussed, the Complaint in the Lead Case also asserts a sixth claim for
breach of contract. (Id. ¶ 59.) Specifically, this claim alleges that, pursuant to the contract
between the parties, Defendant warranted that “the air structure package supplied as per items 16 will perform satisfactorily at this location for the intended use.” (Id.) M&C and ADSC claim
that the product provided by Defendant “did not conform to the contract and did not perform
satisfactorily at the location for the intended use.” (Id.)
3
Familiarity with these claims, and the factual allegations supporting them, is assumed in
this Decision and Order, which is intended primarily for the review of the parties.
C.
Procedural History
A stipulation of dismissal of the third-party claims against Third-Party Defendant, TadjerCohen-Edelson Associates, Inc. (“TCE”), in both the Lead and Member Cases, was signed by
both Farley and TCE and filed on August 12, 2014. (Dkt. No. 84.)
D.
Statement of Undisputed Material Facts
The following material facts have been asserted and supported by Defendant in its
Statement of Material Facts, and not denied in a matching numbered paragraph with a supporting
record citation by either Underwriters or M&C and ADSC in their responses thereto, and thus
admitted pursuant to Local Rule 7.1 of the Local Rules of Practice for this Court. (Compare Dkt.
No. 57 [Def.’s Rule 7.1 Statement] with Dkt. No. 67 [Underwriters’ Rule 7.1 Response]; Dkt.
No. 69, Attach. 7 [Pls.’ Rule 7.1 Response].)
1.
1.
Plaintiffs’ Claims and Relevant Background
Plaintiffs allege that an air structure designed and manufactured by Farley, which
was installed by Farley, M&C, and ADSC in Queensbury, New York, in November 2005
partially collapsed due to the weight of ice and snow on February 6, 2011.
2.
Plaintiffs allege that Farley defectively and/or negligently designed the dome, that
Farley failed to warn and/or provide adequate instructions for the use of its product, that Farley
gave negligent advice regarding the operation of the dome, and that Farley breached the contract
of sale and/or implied and express warranties for the subject air structure.
4
3.
Underwriters are seeking monetary damages in the amount paid to its insured
pursuant to a policy of insurance. M&C and ADSC are seeking monetary damages for business
interruption and default fees and interest on business loans.
4.
Doug Miller is a principal of both M&C and ADSC. M&C is the single purpose
entity formed to own real property located at 326 Sherman Ave, Queensbury, New York,
including the air-supported structure (a/k/a dome) erected thereon. ADSC manages and operates
a multi-sport and event dome for indoor and outdoor field sports and community events located
at 326 Sherman Ave, Queensbury, New York.
5.
Mr. Miller is college educated with degrees in physical education, sports medicine
and mechanical engineering. He also has a post-graduate degree in sports medicine. Mr. Miller
has an employment background in education and coaching as well as general construction,
mechanical construction and design.
6.
In or around 1999, Farley began designing and manufacturing air-supported
structures. Farley has designed and manufactured domes installed throughout North America
and in Russia, off the coast of Siberia, and China.
7.
Farley has designed and manufactured approximately three hundred domes since
1999. Most of these domes are located in areas with similar climates to that of Queensbury, New
York.
8.
Currently, Farley’s main competitors are Yeadon, Arizon and ASATI.
2.
9.
Mr. Miller’s Decision to Purchase a Farley Dome
Mr. Miller became interested in owning and operating an air-supported sports
facility in the early 2000s while coaching youth athletics at dome sports facilities in other
locales. He visited approximately three (3) domes prior to 2003.
5
10.
Farley became involved with ADSC when Doug Miller contacted John Simpell, a
representative from Farley, expressing interest in erecting a multi-purpose sports dome in
Queensbury, New York.
11.
Mr. Simpell was involved in sales for Farley when Mr. Miller first became
interested in purchasing a dome. Mr. Simpell was involved in the sale of the ADSC dome.
12.
Between 2002 and 2005, Mr. Miller visited approximately thirty (30) domes.
These domes were located primarily on the east coast of the United States and in Canada. Mr.
Miller visited domes manufactured by Farley, Yeadon, ASATI and Birdaire between 2000 and
2005.
13.
During this time period, Mr. Miller visited domes installed in Ontario, Canada,
Connecticut, New Hampshire and New York, including those located in cold weather climates
such as Buffalo, Niagara Falls, and Albany with representatives of Farley, Yeadon and ASATI.
(Compare Dkt. No. 57, ¶ 13 [Def.’s Rule 7.1 Statement, citing record evidence that establishes
above-stated fact, which does not state that the climates of these geographic areas are “similar” to
that of Queensbury, NY, as ADSC contends] with Dkt. No. 69, Attach. 7, ¶ 13 [Pls.’ Rule 7.1
Response, failing to cite record evidence that controverts above-stated fact].)
14.
During his many visits to domes, Mr. Miller spoke with the owners, operators and
managers regarding the operation, maintenance and design of their domes.
15.
During his visits to other domes, Mr. Miller was never advised by dome owners,
operators or managers that they had issues with the ability of Farley domes to shed snow.
However, these discussions mostly involved the accumulation of snow on the ground level and
the prevention of snow from accumulating against a dome’s grade beam rather than the
prevention of snow from accumulating on top of a dome.
6
16.
Mr. Miller had dozens of communications with Yeadon before deciding which
dome to purchase. In addition, he visited approximately twelve (12) of their domes.
17.
Domes manufactured by Yeadon had the same or a substantially similar exterior
cross-cable system to domes manufactured by Farley.
18.
Mr. Miller had more than fifty (50) conversations with representatives from
Farley before deciding to purchase a Farley dome. Mr. Miller visited at least fourteen (14)
Farley domes before purchasing a Farley dome, including Farley’s manufacturing facility in
Guelph, Ontario, which was housed in a Farley dome.
19.
When Mr. Miller was deciding to purchase a dome, his main concerns were the
up-front costs as well as operating costs such as the dome’s energy consumption and thermal
efficiency.
20.
The up-front costs of an air-supported structure are three (3) to five (5) times less
than those of a conventional metal building lacking column support.
21.
Both Yeadon and Farley provided documents containing the estimated energy
consumption and operating costs for their domes because that information was a key part of Mr.
Miller’s decision making.
22.
Ultimately, Mr. Miller decided to purchase a Farley dome as opposed to a dome
manufactured by Yeadon, ASATI and Birdaire. Yeadon and Farley domes were similarly priced
and designed; however, he preferred the type of insulation used by Farley in its domes based
on the insulation’s thermal efficiency.
23.
During his pre-purchase research, Mr. Miller came to learn that the ASATI dome
design resulted in additional challenges with snow.
7
24.
Mr. Miller was informed by both representatives of Yeadon and Farley that their
domes were designed to shed snow–not to hold the weight of snow. He understood that, due to
the cabling pattern and Tedlar fabric, the domes designed by Yeadon and Farley had better snow
shedding capabilities than did ASATI domes. Mr. Miller was made aware that snow entrapment
could occur as a result of the exterior cables. Snow entrapment was reduced by the cabling
design used by Yeadon and Farley.
25.
Mr. Miller was able to choose which fabric the dome would be constructed from;
and he chose the Tedlar fabric based on discussions with Farley and the Tedlar’s longer life span
and increased snow shedding ability.
26.
Mr. Miller performed extensive research into domes before purchasing the dome
manufactured by Farley.
27.
Mr. Miller also relied upon Farley’s track record and design capabilities as well
as information ascertained while visiting other domes and speaking with dome owners, operators
and managers about the maintenance issues and operation of their domes.
28.
Mr. Miller also spoke with other dome owners, operators and managers about the
dimensions of their domes and how those dimensions affected snow build-up on their domes.
These discussions ultimately resulted in Mr. Miller reducing the width of the dome he intended
to have constructed by Farley.
29.
Mr. Miller was aware that the dimensions of the dome also had an impact on the
number of exterior support cables necessary to structurally support the dome. (Compare Dkt. No.
58, Attach. 11, at 612:14-22 [cited in ¶ 29 of Def.’s Rule 7.1 Statement, which establishes abovestated fact] with Dkt. No. 69, Attach. 7, ¶ 29 [Pls.’ Rule 7.1 Response, failing to cite record
evidence that controverts above-stated fact].)
8
3.
30.
Farley Contract and Warranties
After discussions and negotiations, ADSC and Farley entered into a contract for
the purchase of a Farley dome. At his deposition, Mr. Miller identified the contract between
ADSC and Farley as well as his signature on the contract.
31.
Mr. Miller received a pre-printed Farley warranty before the execution of the
contract.
32.
Mr. Miller may have received the pre-printed warranty bearing exhibit tab “3B,”
but had the pre-printed warranty bearing exhibit tab “19” with his records.
33.
Both the warranty bearing exhibit tab “3B” and the warranty bearing exhibit tab
“19” contained a limitation of liability provision stating that “[Farley] shall not be liable in
contract or tort (including negligence) for loss of profits or revenues, loss of use of equipment or
facilities, cost of capital, or for any nature resulting from or in any manner relating to the air
supported structure covered hereby, its design, use, any inability to use the same or any delay in
delivery of same.”
34.
Mr. Miller understood that Farley’s warranty was made a part of the contract at
the time of the contract's execution.
4.
35.
Design of the ADSC Dome
ADSC retained Tom Nace to provide site development engineering services.
ADSC retained Rucinski Hall, an architecture firm, to design the support building and the
electrical system that supplies power to the dome, and to file necessary documents, calculations
and drawings with the local building department.
36.
Jason Schmidt is the Vice President of Design and Technical Solutions at Farley.
9
37.
Mr. Schmidt was the Farley employee involved with designing the dome.
38.
The dome was designed in accordance with the ASI-77, which is the industry
standard for designing air-supported structures in the U.S. (Compare Dkt. No. 57, ¶ 38 [Def.’s
Rule 7.1 Statement, supporting above-stated factual assertion with accurate record citation] with
Dkt. No. 69, Attach. 7, ¶ 38 [Pls.’ Rule 7.1 Response, failing to support denial with citation to
specific paragraph(s) of Grafe’s affidavit, which in any event appears based on lack of personal
knowledge, speculation and/or argument regarding the design of the dome in 2005].)
39.
The ASI-77 is the standard required by the 2002 New York State Building Code
with respect to designing air-supported structures.
40.
While the largest dome Farley had built, the ADSC dome was similar to other
domes designed and manufactured by Farley in that it had an outer membrane and inner
membrane as well as longitudinal and barrel cables on the exterior of the dome.
41.
Mr. Schmidt prepared a set of construction drawings and load calculations, which
did not include snow load calculations, but which were approved by ADSC and sent to
Tadjer-Cohen-Edelson Associates, Inc. (“TCE”) for review and certification.
42.
TCE reviewed and stamped the design drawings and calculations.
43.
TCE would review the drawings and calculations in an effort (whether successful
or not) to ensure that they were compliant with the local code.
44.
Load calculations affect the location, diameter and amount of barrel and
longitudinal cables required to support the dome. The cables are necessary to reduce the stress in
the fabric caused by loading due to wind and air pressure. The cables help provide the required
curvature to aid in fabric stress reduction. Longitudinal and barrel cables are required to ensure
10
that the dome fabric has an adequate safety factor and does not tear apart. The longitudinal
and barrel cables also hold the dome in place and prevent it from lifting up.
5.
45.
TCE
Ali Tahbaz is a Professional Engineer licensed in New York, Maryland, Virginia
and the District of Columbia and a principal of TCE.
46.
TCE has provided structural engineering services in connection with air-supported
structures since 1995. It has provided structural engineering services for Yeadon and Farley.
47.
TCE has provided structural engineering services on approximately 150 air-
supported structures manufactured by Yeadon and erected in the U.S. TCE has provided
structural engineering services on approximately thirty (30) to thirty-five (35) air-supported
structures manufactured by Farley.
48.
Between 1995 and 2005, TCE had provided structural engineering services on at
least 100 air-supported structures. Of those 100 or more domes, approximately thirty (30) to
thirty-five (35) were to be erected in New York.
49.
In 2005, Rick Edelson, Vice President of TCE, was a Professional Engineer
licensed in New York.
50.
Mr. Tahbaz would personally review the calculations and drawings for domes
erected in New York between 1998 and 2005 under the supervision of Mr. Edelson.
51.
Mr. Tahbaz was Farley’s principal contact. He was advised in 2005 that Farley
was planning to design a dome for erection in Queensbury, New York.
52.
Design drawings and calculations were provided by Farley in connection with the
air-supported structure to be erected in Queensbury, New York. Mr. Tahbaz reviewed all the
calculations for accuracy and to make sure that the dome as designed was structurally sound.
11
53.
In addition, Mr. Tahbaz reviewed this information to determine whether
compliance with the 2002 New York State Building Code was met.
54.
Mr. Tahbaz reviewed the calculations and drawings and did not take exception to
those calculations or drawings. (Compare Dkt. No. 57, ¶ 54 [Def.’s Rule 7.1 Statement, citing
record evidence that establishes above-stated fact] with Dkt. No. 69, Attach. 7, ¶ 54 [Pls.’ Rule
7.1 Response, failing to cite record evidence that controverts above-stated fact].)
55.
Mr. Tahbaz also reviewed Farley’s Operating and Maintenance Instructions in
conjunction with the calculations, drawings and ASI-77.
56.
TCE had never been asked to review snow load calculations on any of the 150 air-
supported structures that it provided structural engineering services on for either Farley or
Yeadon.
57.
Snow load calculations were never requested by TCE. The domes designed by
Yeadon and Farley were designed in accordance with ASI-77.
6.
58.
Farley’s Design of the ADSC Dome
When designing the dome, Farley considered wind loads and outdoor
temperatures. (Compare Dkt. No. 58, Attach. 18, at 38:6-39:4; 40:10-19 [cited in ¶ 58 of Def.’s
Rule 7.1 Statement, which establishes above-stated fact] with Dkt. No. 69, Attach. 7, ¶ 58 [Pls.’
Rule 7.1 Response, failing to cite record evidence establishing that Mr. Schmidt was not aware of
climatic data in 2005 when the dome was designed].)
59.
Snowfall and heat loss rates were considered in determining the size and output of
the heating system.
12
60.
The ASI-77 does not provide formulas for determining snow loads. (Compare
Dkt. No. 58, Attach. 18, at 235:9-20 [cited in ¶ 60 of Def.’s Rule 7.1 Statement, which
establishes above-stated fact] with Dkt. No. 69, Attach. 7, ¶ 60 [Pls.’ Rule 7.1 Response, which
cites ASI loading combinations but not formulas for determining snow loads].)
61.
While two of Farley’s competitors (ASATI and Arizon) often design for snow
loads, it is not standard industry practice to design for snow loads; rather, industry practice is to
use heat as a tool in aiding the dome in shedding snow. (Compare Dkt. No. 58, Attach. 18, at
90:21-91:3 [cited in ¶ 61 of Def.’s Rule 7.1 Statement, which establishes above-stated fact] with
Dkt. No. 69, Attach. 3 [cited in ¶ 61 Pls.’ Rule 7.1 Response, which establishes only that ASATI
and Arizon design domes to withstand certain snow loads].)
62.
Heat inside the dome is a factor that aids the dome in shedding snow.
63.
While air-supported structures may temporarily hold six to twelve inches of fresh
snow (before the snow is shed), they are not designed to support the weight of snow but are
designed to shed snow. There is a design distinction between conventional buildings and airsupported structures.
64.
Farley domes, including the ADSC dome, are designed with various attributes to
aid them in shedding snow. The curvature of the dome and its flexibility in wind aids in the
dome’s ability to shed snow. In addition, heating the dome and increasing air pressure also aid in
preventing snow accumulation and shedding snow that has accumulated. The slipperiness of the
Tedlar fabric also aids the dome in shedding snow. Lastly, while neither the dome’s design
drawings nor its operating manual mention manual removal, and Farley may not have mentioned
manual removal until approximately five years after the dome’s construction, the dome is
designed in such a way that snow may be removed from it manually by pulling a rope over the
top of it.
13
65.
Tedlar fabric is considered the slipperiest in the industry.
66.
Because the ADSC dome was designed in accordance with ASI-77, the dome did
not need to be designed to support the ground snow loads of any specific geographic area. It was
designed so that snow could be removed through the application of internal heat or manually.
(Compare Dkt. No. 58, Attach. 21, at 119:12-24 [cited in ¶ 66 of Def.’s Rule 7.1 Statement,
which establishes above-stated fact] with Dkt. No. 69, Attach. 7, ¶ 66 [Pls.’ Rule 7.1 Response,
which fails to cite record evidence establishing that ASI-77 requires a design to account for snow
loads of specific geographic locations where a dome is to be erected].)
67.
By at least November 15, 2010, Mr. Miller was made aware that manual removal
of snow could be required if snow was allowed to accumulate on the dome. (Compare Dkt. No.
58, Attach. 30, at p. 1 [cited in ¶ 67 of Def.’s Rule 7.1 Statement, which establishes above-stated
fact] with Dkt. No. 69, Attach. 7, ¶ 67 [Pls.’ Rule 7.1 Response, failing to cite record evidence
that controverts above-stated fact].)
68.
Because snow load is borne by inflation pressure, the amount of snow that
accumulates on the top of the structure cannot be more than the internal air pressure of the
structure.
69.
The turf was not something that came with the dome; rather, it was something
ADSC purchased separately. (See Dkt. No. 57, ¶ 69 [Def.’s Rule 7.1 Statement, citing record
evidence that establishes above-stated fact].)
70.
Farley provided supervisory personnel for the erection of the dome. ADSC
provided the labor for the erection of the dome.
14
71.
The mechanical equipment was installed outside of the dome and air was forced
into the dome through the ducts.
72.
The mechanical equipment provided by Farley included a main inflation unit,
which is the primary air and heat source for the dome, as well as the re-circulation unit, which
re-circulates the indoor air and provides heat for the dome. Farley also provided and
installed a low-inflation unit, which is an emergency unit, and a summer fan, which is used in the
warmer months to bring in outside air.
73.
The dome also had furnaces, which transported forced air through ground level
ducts and heated the interior of the dome.
74.
The furnaces were sized so that they provided 3.5 billion BTUs for heat. Farley
chose that output because it provided a 500,000 BTU buffer in excess of the desired normal
operating temperature. This would produce at least 65°F at ground level in the dome if the
outside temperature was 0°F.
75.
The ADSC dome designed by Farley included insulation. The insulation increases
the thermal resistance of the air structure membrane to reduce heating costs. Heat is reflected
into the dome. However, there is still heat loss. The lower the R value, the quicker the heat
will pass through the insulation.
76.
Due to stratification, heat in a dome will rise to the top resulting in higher
temperatures at the top of the dome. Heat stratification aids a dome in melting snow.
77.
The insulation was intended to slow down, but not stop, heat from escaping to
melt snow.
15
78.
Insulation is used as a cost saving measure because it reduces the size of the
furnace required to heat the dome and saves energy costs. Adding insulation was an option,
which ADSC chose for that purpose.
79.
Most customers request the insulation in order to save energy costs. Insulation
has never been an issue in preventing Farley domes from shedding snow.
80.
Mr. Miller had frequent discussions with Jason Schmidt, Farley’s dome designer,
regarding the design and location of mechanical systems in the dome and the positioning of
longitudinal cables and their connection to the support building. ADSC’s architect was also
involved in those discussions. Mr. Miller was aware that Mr. Schmidt was not an engineer and
understood that design drawings and calculations would be sent to a licensed professional
engineer for review and approval.
81.
Mr. Miller was also involved in the design of the duct work providing forced air
into the dome for heat and air pressure.
82.
During the design phase, Mr. Miller requested certain changes to the grade beam
design and duct work specifications. There were also some requested changes with respect to the
building connection.
83.
ADSC’s architect filed the stamped engineering drawings and calculations for the
dome with the local municipality.
84.
Mr. Miller initially wanted a dome that was larger than any manufacturer had
made at that time. Ultimately, it was decided between Farley and ADSC that the dome’s size
would be reduced.
16
85.
After submission of the certified drawings and calculations, the local municipality
requested snow load calculations, which Mr. Schmidt prepared based on formulas used by
Yeadon and information provided in the ASI-77 and ASCE 7-98.
86.
Before the project in question, Farley had rarely, if ever, provided a client with
snow load calculations on an Excel spreadsheet for a project. (See Dkt. No. 58, Attach. 18, at
60:8-20 [cited in ¶ 86 of Def.’s Rule 7.1 Statement, which establishes above-stated fact].)
87.
The ground snow load refers to the amount of snow that can accumulate at a
location if a building was not there.
88.
When Farley prepared the snow load calculations for the local municipality, the
preparation was solely for the purpose of determining the snow load that the air-supported
structure could handle given its design. It was not prepared as part of the design process.
89.
The snow load calculations were not reviewed by a licensed engineer, and the
building department neither requested any changes to the design of the dome to meet a specified
snow load criteria nor requested calculations certified by a licensed professional engineer.
(Compare Dkt. No. 58, Attach. 19, at 253:254:5, 286:13-287:7, 289:7-14 [cited in ¶ 89 of Def.’s
Rule 7.1 Statement, which establishes above-stated fact] with Dkt. No. 69, Attach. 7, at ¶ 89
[Pls.’ Rule 7.1 Response, failing to cite record evidence that controverts above-stated fact].)
90.
Mr. Schmidt corresponded with the local municipality after submitting the
requested snow load calculations. He advised the local building department and Mr. Miller that
the snow load calculations did not account for the effect that internal heat would have on the
dome. He advised the local building department and Mr. Miller that Farley recommends to all its
customers to keep their heat on during heavy snow storms or if there is a risk of a potential heavy
snowfall during non-operating hours.
17
91.
Mr. Schmidt also prepared the patterning drawings for the dome membrane. The
patterning drawings would be provided to the factory floor for welding of the dome fabric.
92.
The length of the barrel and longitudinal cables would be determined by Mr.
Schmidt while patterning the dome.
93.
Adam Spencer currently holds the title of Production and Service Manager at
94.
Mr. Spencer was involved in the fabrication of the dome. Fabrication of the dome
Farley.
consists of cutting and welding the fabric together per the pattern drawings created by Jason
Schmidt.
7.
Erection of the ADSC Dome
95.
The dome’s erection began on or about November 25, 2014.
96.
Mr. Spencer was the site supervisor for the erection of the dome. Farley had a
four-person crew that included Sam Hayhoe.
97.
Temporary labor was provided by ADSC for the actual erection of the dome.
There were approximately forty (40) laborers involved in the erection of the dome.
98.
The erection of the dome was completed in approximately three weeks. After the
dome was up, Farley installed insulation and lights.
99.
Daily work orders were prepared by Farley and reviewed and executed by Mr.
100.
While Mr. Spencer is not absolutely certain of the fact, he believes that, after
Miller.
erection of the dome was substantially complete, he performed a walk-through with Mr. Miller
for turnover. Further, Mr. Spencer believes that any deficiencies were noted to be completed or
18
corrected under warranty at a later date. Mr. Spencer believes that he discussed general operation
procedures including the general procedures outlined in the owner’s manual related to heat and
pressure. Finally, he believes that he also discussed operation of the dome with respect to snow.
(See Dkt. No. 57, ¶ 100 [Def.’s Rule 7.1 Statement, citing record evidence that establishes abovestated fact].)
101.
Mr. Miller executed the acknowledgment of receipt of goods at the time of
turnover, which was December 9, 2005.
102.
Mr. Miller did not refuse to accept the dome after it was installed or inform Farley
that he and/or ADSC believed that the dome as designed, manufactured or installed was in
breach of the contract. However, there were items that had to be completed, repaired or replaced
after the initial erection.
103.
Craig Vandenberg is the Vice President of Mechanical Design.
104.
Mr. Vandenberg was involved in the installation of mechanical equipment in
the dome.
105.
The dome has two heating units, each with 1.75 million BTU heat output.
The units are located outside the dome and feed heated forced air into the dome through ducts in
the ground. The heated air rises from vents in the ground inside the dome.
106.
Mr. Vandenberg wired the mechanical equipment. He performed the start-up of
the air inflation equipment and trained Mr. Miller on how to use it.
107.
Mr. Vandenberg visited the dome several times thereafter for warranty work and
customer relations purposes. He would discuss the mechanical equipment and its operation
during those visits and perform inspections. He would also answer any questions that Mr. Miller
had.
19
108.
Mr. Vandenberg completed the wiring of the heating control system on or about
March 27, 2006. At that time, he trained Mr. Miller on how to use it.
109.
Mr. Vandenberg testified that, every time he visited the dome, the heat was off.
110.
Other than Mr. Miller, only Andrea Eaves was a full-time ADSC employee at the
time that the dome was erected.
8.
111.
Operation and Maintenance of the ADSC Dome
The day-to-day operation and maintenance of the dome and its mechanical
support systems is wholly Mr. Miller’s responsibility and has been since the time of its erection.
112.
Farley was never retained to perform routine maintenance, service or inspections
of the dome. After the dome was erected, Farley visited the dome one to two times per year
when called to perform warranty work.
113.
ADSC did not enter into a service agreement with Farley. (Compare Dkt. No. 58,
Attach. 8, at 244:11-12 [cited in ¶ 113 of Def.’s Rule 7.1 Statement, which establishes abovestated fact] with Dkt. No. 69, Attach. 7, at ¶ 113 [Pls.’ Rule 7.1 Response, failing to cite record
evidence that controverts above-stated fact].)
114.
ADSC was first provided with the Operation and Maintenance Instructions in
2004 when Mr. Miller was determining whose dome to purchase.
115.
Through visiting other domes with Farley representatives over the course of three
years, Mr. Miller learned about the operation and maintenance of the dome through Farley
representatives and other dome owners, operators and managers. Mr. Miller had several
discussions and site visits to other domes where the substance of the information contained in the
Operation and Maintenance Instructions was discussed.
20
116.
Mr. Miller did not request formal training and did not ask Farley representatives
any specific questions regarding the contents of the Operation and Maintenance Instructions.
117.
Mr. Miller read the section in the Operation and Maintenance Instructions under
the heading “Snow Accumulation.” He never contacted Farley with any questions regarding the
substance of that paragraph. He also read the section titled “Emergency Procedures.” He
understood the directions in the operator’s manual. (Compare Dkt. No. 58, Attach. 7, at 177:9180:6 [cited in ¶ 117 of Def.’s Rule 7.1 Statement, which establishes above-stated fact] with Dkt.
No. 69, Attach. 7, at ¶ 117 [Pls.’ Rule 7.1 Response, failing to cite record evidence that
controverts above-stated fact].)
118.
Mr. Miller understood that the application of heat through the heating system in
the dome was a necessary component in melting snow that accumulated on the dome.
119.
Mr. Vandenberg had instructed Mr. Miller that the heat must be turned to 75°F
prior to, during, and after snow events and kept on continuously until the snow melts off the airsupported structure. (Compare Dkt. No. 58, Attach. 20, at 71:17-25, 77:11-78:4, 241:9-243:2
[cited in ¶ 119 of Def.’s Rule 7.1 Statement, which establishes above-stated fact] with Dkt. No.
69, Attach. 7, at ¶ 119 [Pls.’ Rule 7.1 Response, failing to cite record evidence that controverts
above-stated fact].)
120.
On several occasions other Farley personnel either verbally or in writing
instructed Mr. Miller to apply heat to combat the accumulation of snow on the air-supported
structure.
121.
Prior to the erection of the dome, Mr. Miller was made aware that the use of heat
would aid the dome in shedding snow by providing a melt layer to facilitate the sliding of snow
21
off the dome. Mr. Miller had also reviewed correspondence between Farley and the local
municipality before the erection of the dome where Farley’s dome designer indicated that the
application of interior heating should be used to aid in shedding snow.
122.
Before the dome’s erection, Mr. Miller was never made aware by Farley that the
air structure was not designed to support 70 PSF of ground snow loads but, rather, was advised
by Farley that the dome was designed to shed snow with the use of internal heat and air pressure.
123.
Mr. Miller observed that the ADSC dome did, in fact, shed snow. The use of the
Tedlar fabric aided the dome in shedding snow; the curvature of the dome aided the dome in
shedding snow; the use of air pressure aided the dome in shedding snow; and using heat in the
dome and transferring the heat through the fabric aided the dome in shedding snow.
124.
Before the subject collapse, the dome had effectively shed snow during past
winters. ADSC sent out a press release that stated specifically that, up until the date of the
collapse, the dome had effectively shed snow during winter months since its erection.
125.
ADSC experienced that snow normally shed off the dome without any human
intervention.
126.
When snow was forecasted, ADSC did not always keep the heat on. It depended
on the amount of snow forecasted, the type of snow expected, and the likelihood of a snow storm
occurring.
127.
Mr. Miller believed that the volume of snow, in terms of its effect on the dome,
was only one of many variables ADSC needed to consider when deciding whether to use internal
heat prior to, during, and after snow events. Mr. Miller made a judgment call based on his
knowledge as the operator of the dome.
22
128.
Even if wet and heavy snow accumulated on the dome, ADSC would not leave the
heat on for the entire night if the forecast was for sunny weather following a storm because the
sun would typically melt the snow, which would then slide off the dome.
129.
In February 2009, there was a period of one or more weeks where snow
accumulated behind the cables on the dome. During that time period, ADSC did not keep the
thermostat set to the highest temperature and the heat on constantly, including overnight, until
the snow melted off.
130.
Although snow had accumulated on the dome for one or more weeks during that
time period, Mr. Miller turned the heat off at night. Mr. Miller had turned off the heat despite
being told by Mr. Vandenberg that the heat must be turned to 75°F before, during, and after
snow events and kept on continuously until the snow melts off.
131.
Mr. Miller believed that snow and ice would build up along the two lower exterior
longitudinal cables that structurally supported the dome. He first noticed snow building up along
the longitudinal cables in February of 2006.
132.
Mr. Miller never made a warranty claim to Farley related to the longitudinal
cables. (Compare Dkt. No. 58, Attach. 11, at 663:21-23, 664:17-19 [cited in ¶ 132 of Def.’s
Rule 7.1 Statement, which establishes above-stated fact] with Dkt. No. 69, Attach. 7, at ¶ 132
[Pls.’ Rule 7.1 Response, failing to cite record evidence that controverts above-stated fact].)
133.
Other than the month before the date of the collapse, the dome had always shed
snow within a day or two of a snowstorm if the outside temperature was in the mid 20°F range
and the sun was out regardless of whether internal heat was applied. The snow being held up
along the longitudinal cables was a short-term occurrence if the outside temperature was in the
mid 20°F range and the sun was out, regardless of whether internal heat was applied.
23
134.
Mr. Miller would use air pressure to aid the dome in shedding snow. The use of
air pressure would help the dome keep its curvature. Typically, if there was a six inch snow
storm of dry snow, the air pressure would be set at around 1.1 or 1.2 inches per water column. If
there was a six inch snow storm of wet heavy snow, then ADSC may have the air pressure at 1.5
inches per water column. On the date of the collapse, the dome was operating at approximately
2.1 inches per water column.
135.
In general, ADSC would set the thermostat during week days in winter months at
59°F or 60°F degrees. The heat would turn on at 3:00 pm. The heat would automatically shut
off at 10:00 pm on weekdays when the dome was in use. The operation of the heating system
was on a program with an automatic timer. Sometimes the hours of heating would be manually
adjusted depending on what activities were occurring in the dome. On a normal winter week day
night, the heat would be turned off after activities had ceased in the dome and turned back on
around 3:00 pm the next afternoon. On weekends the heat could be turned on as early as 5:00 am
and shut down as late as 11:00 pm.
9.
136.
Air Pressure Fluctuation of the Dome to Remove Snow
Since at least 2006 or 2007, ADSC had been using air pressure fluctuation as a
method of fracturing snow on the dome on certain occasions.
137.
While performing a pressure fluctuation, Mr. Miller would lower the pressure
1/10 of an inch to 3/10 of an inch at a time and then raise it back up. He would do a series of
three to five fluctuations in a set.
138.
Mr. Miller did not call Farley for advice or supervision when employing the
pressure fluctuation method the first time because Farley had previously suggested the method.
24
139.
Farley representatives were never present when Mr. Miller performed a pressure
fluctuation to fracture snow or ice.
140.
Because Farley had instructed Mr. Miller on how to use the pressure fluctuation
method, Mr. Miller did not contact Farley before or during ADSC’s performance of the
pressure fluctuation method to fracture snow and ice. (Compare Dkt. No. 58, Attach. 12, at
59:14-20 [cited in ¶ 140 of Def.’s Rule 7.1 Statement, which establishes that Mr. Miller did not
contact Farley when using the pressure fluctuation method] with Dkt. No. 69, Attach. 7, at ¶ 140
[Pls.’ Rule 7.1 Response, citing record evidence that Mr. Miller did not contact Farley before
using pressure fluctuation method because Farley had previously advised him regarding its use].)
141.
ADSC used the pressure fluctuation method of fracturing snow and ice on at least
twelve (12) occasions in the years before the collapse. On approximately six (6) of those
occasions he had air pressure at or close to its maximum of 2.1 inches per water column before
beginning the process.
142.
The pressure fluctuation method was a fairly effective method for fracturing snow
and ADSC never experienced any negative consequences before the date of the collapse.
143.
Mr. Miller would generally do a pressure fluctuation during the day when the
dome was empty and the sun was providing heat to aid in the melting of snow.
144.
Mr. Miller spoke with the owner and operator of the Central Connecticut State
University dome regarding procedures he used to handle snow accumulations. The operator of
the Central Connecticut State University dome indicated that he used the pressure fluctuation
method to fracture snow and ice on occasion.
25
145.
Mr. Miller was aware that the Connecticut Sportsplex operator used the pressure
fluctuation method to fracture snow and ice on occasion.
146.
Mr. Miller had spoken with the operator of the Calgary dome, who also indicated
that he used the pressure fluctuation method a/k/a “burping” the dome on occasion.
147.
Mr. Miller attended an annual U.S. Indoor Conference and had discussed the
pressure fluctuation method with other dome operators, including dome operators that owned
domes erected by manufacturers other than Farley.
148.
Mr. Miller spoke with enough people about the pressure fluctuation method of
fracturing snow and ice that he believed that the pressure fluctuation method was acceptable.
149.
Mr. Miller also read articles from the Canadian Research Institute that advised
using the pressure fluctuation method as a method for fracturing snow and ice on domes.
10.
150.
Temperatures Inside the ADSC Dome
There are various methods of manual removal of snow and ice from domes used
in the industry including the following: Climbing the dome to shovel snow, a controlled deflation
of the dome to shovel snow, using a rope across the dome, and fluctuating pressure by opening
and closing emergency exit doors.
151.
Sam Hayhoe made service trips to the ADSC dome during the winter months.
During one of his visits, Mr. Hayhoe observed that the interior of the dome was kept at an
abnormally cold temperature.
152.
After Mr. Miller complained about snow accumulation on the dome, Mr. Hayhoe
advised Mr. Miller to turn the heat to the maximum setting and leave it on until the snow shed
from the dome. He also suggested dragging a rope over the top of the dome to fracture the snow.
26
153.
Mr. Spencer performed warranty work at the dome after it was initially installed.
He observed that the dome was kept at an extremely cold temperature.
154.
Mr. Spencer believes that there was snow on the ground at that time.
155.
Mr. Spencer performed work at the dome on another occasion to remove an ice
build-up at the dome around the cables.
156.
Mr. Spencer observed at that time that the dome was maintained at a very cold
temperature despite ice and snow build-up on the dome. Assuming that the heat was turned off
at night, Mr. Spencer advised Mr. Miller that in order for snow and ice to shed from the dome,
ADSC needed to keep the heat on, even overnight.
157.
Mr. Aljoe had received complaints from Farley employees working at ADSC’s
dome that the dome was cold inside when they worked. (Compare Dkt. No. 58, Attach. 17, at
35:18-36:10 [cited in ¶ 157 of Def.’s Rule 7.1 Statement, which establishes above-stated fact]
with Dkt. No. 69, Attach. 7, at ¶ 157 [Pls.’ Rule 7.1 Response, failing to cite record evidence that
controverts above-stated fact].)
158.
As a general method for removing snow, Farley recommends leaving the heat on
at the highest level and setting the internal pressure higher for snow removal when snow
accumulates on the dome. If this method is unsuccessful, Farley recommends the customer
should contact Farley to send a service technician to the site to remove snow.
11.
159.
Events Preceding the Dome’s Partial Collapse
In the four (4) to five (5) week period before the date of the collapse, there
were a series of approximately six (6) to eight (8) snow storms of varying amounts of snowfall.
There was a cycle of freezing and thawing that occurred.
27
160.
During the month before the collapse, when snow had accumulated on the
dome, Mr. Miller did not always keep the heat on. When Mr. Miller did have the heat on, he did
not always set it to the highest temperature.
161.
During the course of the four (4) to five (5) week period before the collapse,
ADSC utilized the pressure fluctuation method to fracture snow and ice between three (3) and
six (6) times.
162.
In the week before the collapse, there was more snow on the dome then there had
ever been before.
163.
Before contacting Farley, Mr. Miller used the pressure fluctuation method to
try to fracture snow and ice build-up on his dome. When that method proved only marginally
effective, he contacted Farley for advice and suggestions. (Compare Dkt. No. 58, Attach. 8, at
296:23-297:9 [cited in ¶ 163 of Def.’s Rule 7.1 Statement, which establishes above-stated fact]
with Dkt. No. 69, Attach. 7, at ¶ 163 [Pls.’ Rule 7.1 Response, failing to cite record evidence that
controverts above-stated fact].)
164.
Mr. Miller first contacted Farley on or about February 1, 2011. He was not
concerned about the stability of the dome at that time, but was concerned that a forecasted
snowstorm on February 4, 2011, or February 5, 2011, could produce more snow loads on the
dome than the air pressure could handle. Ultimately, Farley recommended that Mr. Miller
perform a controlled deflation of the dome to manually remove snow and ice. (Compare Dkt.
No. 58, Attach. 12, at 92:3-22, 81:16-82:10 [cited in ¶ 164 of Def.’s Rule 7.1 Statement, which
establishes above-stated fact] with Dkt. No. 69, Attach. 7, at ¶ 164 [Pls.’ Rule 7.1 Response,
failing to cite record evidence that controverts above-stated fact].)
28
165.
During the week preceding the collapse, Mr. Miller did not always maintain heat
in the dome to aid the dome in shedding snow. When the heat was on, he did not always have it
set to the maximum temperature.
166.
In November 2010, Mr. Miller was sent an e-mail message from Farley in
response to an information request by his insurance carrier pertaining to policy renewal. The email message stated that the dome was designed in conformance with the Air Structure Designs
and Standards Manual, Section A-5.1, which included manual removal of snow when snow
remains on the dome more than three days and is more than six inches deep. Mr. Miller testified
that he believed this was the first time he had received information regarding the ASI or manual
removal of build up snow. (Compare Dkt. No. 57, ¶ 166 [Def.’s Rule 7.1 Statement, citing
record evidence that establishes above-stated fact] with Dkt. No. 69, Attach. 7, at ¶ 166 [Pls.’
Rule 7.1 Response, failing to cite record evidence that controverts above-stated fact].)
167.
In the week preceding the collapse, Mr. Miller did not make arrangements for
someone to climb the dome to manually remove snow or for a controlled deflation to manually
remove snow. (Compare Dkt. No. 57, ¶ 167 [Def.’s Rule 7.1 Statement, citing record evidence
that establishes above-stated fact] with Dkt. No. 67, ¶ 167 [Pl.’s Rule 7.1 Response, failing to
cite record evidence that controverts above-stated fact].)
168.
On or about Friday, February 4, 2011, after speaking with Mr. Miller, Farley
recommended that a technician be sent to aid Mr. Miller in his efforts to shed and/or manually
remove snow from the dome.
29
169.
As a result of the snow and rain mix, the dome began to sag or “dish.” It became
progressively worse as the day continued. The dome began to dish along the whole length of the
dome. The ADSC dome had never experienced dishing along the whole length of the dome at
any prior time.
170.
On February 5, 2011, the water began to move toward the middle of the dome and
cause the dome to flatten out.
171.
Mr. Miller contacted Farley by e-mail message in the late evening of February 4,
2011. He indicated that the dome was sagging 10 to 12 feet the entire length of the dome and
that air pressure was set to its maximum. Farley sent a return email at 3:15 am on February 5,
2011, approximately forty (40) hours preceding the partial collapse, suggesting that Mr. Miller
close the facility.
172.
Despite his concerns and the recommendation by Farley to close the facility, Mr.
Miller held a youth sports tournament in the dome the mornings and afternoons of February 5,
2011, and February 6, 2011 (the date of the collapse). However, lacrosse practice was cancelled
the night of the collapse either by him or the lacrosse team due to the Super Bowl.
173.
The night of February 5, 2011, there was a lot of water causing dishing on the top
of the dome. ADSC increased the air pressure, using a method taught to Mr. Miller by Farley,
which aided in causing slush, snow and ice to shed from the dome. According to Mr. Miller, the
dome rounded out. (Compare Dkt. No. 58, Attach. 7, at 151:6-152:8 [cited in ¶ 173 of Def.’s
Rule 7.1 Statement, which establishes above-stated fact] with Dkt. No. 69, Attach. 7, at ¶ 173
[Pls.’ Rule 7.1 Response, failing to cite record evidence that controverts above-stated fact].)
30
174.
Mr. Hayhoe became aware that there was large snow accumulation on the ADSC
dome. Mr. Hayhoe was in Connecticut shoveling snow off of the roof of the Connecticut
Sportsplex when he was told by Mr. Simpell that the ADSC had a large snow accumulation on
the dome. Mr. Hayhoe was notified that he could be required to go to the ADSC dome after
Connecticut if Mr. Miller requested.
175.
While he was traveling back to Guelph, Ontario, from Connecticut, Mr. Hayhoe
was again told that he may have to turn around and go to Queensbury if Mr. Miller requests
assistance. After he returned home, the evening of February 5, 2011, he was told by Jason Aljoe
to go down to Queensbury to look at the situation.
176.
Mr. Miller did not request that Farley send a technician until February 4, 2011.
(See Dkt. No. 58, Attach. 9, at 324:16-326:12 [cited in ¶ 176 of Def.’s Rule 7.1 Statement, which
establishes above-stated fact].)
177.
Before February 5, 2011, Mr. Miller never contacted Farley requesting that it send
representatives to perform snow removal at the ADSC dome. In addition, ADSC did not retain
an outside contractor to perform snow removal or a controlled deflation of the dome.
178.
Mr. Miller learned that Mr. Hayhoe would arrive at the dome on Sunday, February
6, 2011.
179.
It did not snow on the day before the collapse or the day of the collapse. However,
in the afternoon of the day of the collapse, dishing reoccurred. The youth tournament was in
session while this was occurring. However, Mr. Miller did not end the tournament early.
31
180.
Mr. Hayhoe left the following morning, on February 6, 2011, to go to Queensbury,
New York. It is a seven-hour trip from Guelph, Ontario, to Albany, New York, without taking
rest stops or delays in border crossing into account. Mr. Hayhoe arrived in Albany at 6:00 pm.
Because it was dark, he decided to stay in a hotel in Albany. He would not be able to determine
the amount of snow and ice on the dome and does not climb domes in the dark for safety reasons.
181.
Mr. Hayhoe advised Mr. Miller that he would not be able to make it to the dome
that night and they began making arrangements for his arrival the next morning. Subsequently,
Mr. Hayhoe spoke with Mr. Aljoe and advised him that he would not make it to the dome
because it was dark and not safe to climb the dome. (Compare Dkt. No. 58, Attach. 15, at 74:475:4, 135:18-136:16; Dkt. No. 58, Attach. 17, at 77:8-15 [cited in ¶ 173 of Def.’s Rule 7.1
Statement, which establishes above-stated fact] with Dkt. No. 67, ¶ 173 [Pl.’s Rule 7.1 Response,
failing to cite record evidence that controverts above-stated fact].)
182.
The partial collapse occurred between 8:00 pm and 9:00 pm on Sunday, February
6, 2011.
183.
Mr. Miller did not use the pressure fluctuation method on February 5, 2011, due
to the amount of dishing. However, on February 6, 2011, he believed that the slush on the dome
was softer and could be fractured more easily. In addition, the forecast for the evening of
February 6, 2011, was for freezing temperatures. So Mr. Miller decided that performing a
pressure fluctuation was the best option.
184.
Mr. Miller dropped the air pressure in the dome from 2.1 inches per water column
to 2.0 inches per water column. The dome stabilized after twenty minutes. He then set it down
from 2.0 inches per water column to 1.9 inches per water column. Shortly thereafter, a partial
collapse of the dome occurred at the southeast quadrant due to the shifting of ice and snow.
32
12.
185.
Events Post-Collapse of the ADSC Dome
The next time Mr. Hayhoe spoke with Mr. Miller, he was informed about the
partial collapse. Mr. Hayhoe recommended that Mr. Miller perform a controlled deflation of the
dome after the partial collapse. (Compare Dkt. No. 58, Attach. 15, at 75:11-19 [Def.’s Rule 7.1
Statement, citing record evidence that establishes above-stated fact] with Dkt. No. 69, Attach. 7,
¶ 185 [Pls.’ Rule 7.1 Response, failing to cite record evidence that controverts above-stated
fact].)
186.
After the partial collapse, Mr. Aljoe recommended that Mr. Miller lower the dome
to the ground. Mr. Miller did not deflate the dome after the partial collapse despite Mr. Aljoe’s
recommendation. (Compare Dkt. No. 58, Attach. 17, at 80:4-81:11 [cited in ¶ 186 of Def.’s Rule
7.1 Statement, which establishes above-stated fact] with Dkt. No. 69, Attach. 7, ¶ 186 [Pls.’ Rule
7.1 Response, failing to cite record evidence that controverts above-stated fact].)
187.
Mr. Hayhoe did not arrive until February 7, 2011, the day after the collapse. Mr.
Miller was not particularly upset with Mr. Hayhoe’s failure to arrive because Mr. Miller did not
believe anything else could have been done to change the course of events. In other words, after
all the communications that occurred in the week preceding the collapse, there was nothing that
Sam Hayhoe could have done to change the course of events.
188.
Mr. Miller did not have any criticism of how Farley handled the collapse, per se.
In hindsight, Mr. Miller may have preferred that Farley responded better during the time leading
up to the collapse of the dome. However, Mr. Miller did not believe that there would have been
a different outcome if Farley was on-site the week preceding the collapse. His only criticism was
that he believed the two outermost cables held back snow and ice.
33
189.
When Sam Hayhoe arrived at the dome on February 7, 2011, Mr. Hayhoe
recommended completely deflating the dome. However, Mr. Miller raised concerns about this
course of action because he believed doing so would damage the batting cages, which, in turn,
could potentially damage the dome’s fabric. So, they began to remove the snow from the
collapsed portion of the dome without the dome being deflated.
190.
Ultimately, the dome was later deflated the following week. Mr. Miller was
concerned about damage to the batting cages and punctures to the dome by the batting cages.
191.
There was approximately 770 cubic yards of snow and ice on the dome. The
weight of ice and snow on the dome was approximately 350 tons.
192.
A measurement was taken after the partial collapse of the dome. There was an
area of snow on the dome with an approximate depth of four (4) feet measuring 130 feet long by
51 feet wide.
193.
Mr. Hayhoe observed an abnormally large amount of snow on the dome the next
morning when he arrived in Queensbury. He had seen more snow on a dome that was deflated,
but never more snow on a dome that was partially up.
194.
After the collapse, Theresa Miller, a principal of ADSC, advised Mr. Hayhoe that
heating costs were too high to constantly keep the heat on in the dome as a snow removal
method. (Compare Dkt. No. 58, Attach. 15, at 92:2-17 [cited in ¶ 194 of Def.’s Rule 7.1
Statement, which establishes above-stated fact] with Dkt. No. 69, Attach. 7, ¶ 194 [Pls.’ Rule 7.1
Response, failing to cite record evidence that controverts above-stated fact].)
34
13.
195.
Damage Caused by the Dome’s Collapse
ADSC hired Farley to aid in removing snow from the partially collapsed dome.
In addition, Farley was retained by ADSC to perform temporary repairs to the fabric panels due
to punctures caused by the collapse. ADSC also entered into discussions with Farley regarding
the replacement of fabric sections of the dome and repair/replacement of lights and ballasts.
197.
Ultimately, Farley was retained to replace three panels of fabric on the dome as
well as lights and ballasts that were damaged due to the collapse.
198.
A portion of the dome was reopened to the public approximately one week after
the collapse. The whole dome was reopened to the public in March of 2011.
199.
ADSC retained a public adjuster, Andrew Fusco of WorldClaim, to aid in its
dealings with the insurance companies and in adjusting the loss.
200.
ADSC filed insurance claims with Lloyd’s London and Peerless Ins. Co./Inland
Marine, its insurance carriers, for damage to the dome, which included the turf field, as well as
for damage to business personal property and business interruption loss.
201.
As a result of the collapse, lights were damaged causing glass to become
embedded in the turf field. The turf field was replaced because Lloyd’s London would not
continue to insure the dome unless it was replaced.
202.
Portions of the dome’s old turf are now being used by another dome operator.
203.
Lloyd’s provided only coverage for the dome and the turf, including the ballasts
and lights inside the dome. Farley’s invoices for snow removal and temporary repairs to the
dome, as well as the fabric panel replacement and repair/replacement of lights and ballasts, were
paid through insurance payments from Lloyd’s London. Similarly, the turf replacement was paid
through insurance payments from Lloyd’s London.
35
204.
Peerless Ins. Co./Inland Marine insured the business personal property and
business interruption loss. In addition to the damage to the dome, there was some damage to a
golf cart, fencing used for baseball and softball, batting cages, garbage barrels and soccer goals.
Equipment damages were fully reimbursed through an insurance policy issued by Peerless Ins.
Co./Inland Marine.
205.
Peerless also paid at least $40,403.00 toward ADSC’s business interruption claim.
The business interruption claim is still being pursued by ADSC as against Peerless. In fact,
ADSC’s pursuit of its insurance claim for business interruption against Peerless is a condition to
a Forbearance Agreement it entered into with one of its mortgage holders.
206.
ADSC’s claim in the Member Case against Farley is solely for economic
damages in the form of unreimbursed business interruption losses, refunds to customers, and
interest and default fees on business loans. (Compare Dkt. No. 58, Attach. 10, at 560:24-561:15
[cited in ¶ 206 of Def.’s Rule 7.1 Statement, which establishes above-stated fact] with Dkt. No.
69, Attach. 7, ¶ 206 [Pls.’ Rule 7.1 Response, failing to cite record evidence that controverts
above-stated fact].)
207.
ADSC had a $25,000 deductible on the Lloyd’s policy. ADSC did not have a
deductible applied on the Peerless/Inland Marine policy.
208.
In a conference call between Mr. Miller, Farley’s President and CEO, John
Simpell, and ADSC’s public adjuster, Andrew Fusco, Farley was instructed to increase Farley’s
invoices for repairs and replacements to the dome by 20% (10% for overhead and 10% for
profit). As a result, Farley re-submitted marked-up invoices to ADSC. Ultimately, ADSC
advised Farley that all its invoices must be marked-up.
36
209.
In addition, Mr. Miller had similar conversations with the turf provider. The turf
provider also marked-up its invoices by 20% (10% for overhead and 10% for profit) as requested
by ADSC and its agent, Andrew Fusco.
210.
ADSC kept in excess of $118,000.00 from monies paid by Lloyd’s London on the
invoices submitted by Farley for repairs and replacements to the dome. These monies were
meant to cover ADSC’s deductible and public adjuster fees and were issued as a credit note
against the contract price for the repair and replacement of the dome as a consulting fee.
211.
Since the collapse, ADSC has continued using the pressure fluctuation method
to fracture snow and ice that has accumulated on the dome. In March 2013, ADSC experienced
a snow event. Farley sent correspondence recommending that ADSC perform a controlled
deflation. Instead, Mr. Miller utilized the pressure fluctuation method to fracture snow and ice.
Once all of the snow had shed off the dome at that time, Mr. Miller may have turned the heat
down inside the dome. He also did not keep the thermostat set at the highest temperature.
212.
The air-supported structure manufactured by Farley is a temporary structure that
can be moved. ADSC considers the air-supported structure temporary for accounting and tax
purposes. (Compare Dkt. No. 58, Attach. 7, at 59:9-60:5 [cited in ¶ 212 of Def.’s Rule 7.1
Statement, which establishes above-stated fact] with Dkt. No. 69, Attach. 7, ¶ 212 [Pls.’ Rule 7.1
Response, failing to cite record evidence that controverts above-stated fact].)
213.
In March 2013, Mr. Miller contemplated moving the dome to a location out of
state or on Long Island and requested that Farley provide an estimate for the cost of bringing
down the dome, transporting it and re-erecting it at another location. Mr. Miller also obtained
estimates from his concrete contractor for installation of a grade beam, ducts and concrete at a
new location.
37
214.
A large portion of Farley domes are used seasonally and taken down during the
warmer months.
215.
Other than those asserted in the current consolidated action, there have only been
two other legal claims filed against Farley for collapses of their domes. One claim was related to
the failure of a cable anchor plate, which connects the dome to the grade beam, resulting in a
dome’s fabric being ripped. The other claim involved a failure in a dome in Iowa as a result of
wind.
E.
Parties’ Briefing on Defendant’s Motion for Summary Judgment
1.
Defendant’s Memorandum of Law-in-Chief
Generally, in its memorandum of law, Defendant argues that it is entitled to judgment as a
matter of law for five reasons. (Dkt. No. 38, Part 6 [Def.’s Mem. of Law].) First, Defendant
argues that Plaintiffs’ causes of action based in negligence and strict products liability for alleged
defects in the design of the dome fail as a matter of law for the following reasons: (a) the dome
was designed in accordance with the 2002 New York State Building Code, ASI-77, and federal
regulations; (b) application of the risk-utility test establishes that the dome’s utility outweighed
any potential risk of harm; (c) the economic loss rule precludes Plaintiffs from recovering in tort
for alleged defects in the design of the dome; and (d) Plaintiffs cannot establish that the partial
collapse was proximately caused by a defect in the design of the dome. (Dkt. No. 58, ¶¶ 20-94
[Bundschuh Decl.]; Dkt. No. 59, at 1-11 [Def.’s Mem. of Law].)
Moreover, Defendant argues that Plaintiffs’ negligence and strict products liability causes
of action are barred by New York’s three-year statute of limitations for property damage. (Dkt.
No. 58, ¶¶ 95-99 [Bundschuh Decl.]; Dkt. No. 59, at 11-12 [Def.’s Mem. of Law].) Specifically,
38
Defendant contends that the applicable statute of limitations accrued in 2007, when Mr. Miller
first observed damage to the dome due to snow loads that caused cable pockets on the dome to
rip. (Dkt. No. 58, ¶¶ 97-98 [Bundschuh Decl.].) Therefore, because the Lead and Member Cases
were not commenced until 2013 and 2012, respectively, Defendant argues that the actions are
now barred. (Id. ¶¶ 98-99.)
Second, Defendant argues that Plaintiffs cannot establish that defective warnings or
instructions were the proximate cause of the dome’s partial collapse, because ADSC’s misuse of
the dome was the sole proximate cause of the collapse, and Mr. Miller was aware of the dangers
associated with allowing snow to accumulate on top of the dome. (Dkt. No. 58, ¶¶ 100-117
[Bundschuh Decl.]; Dkt. No. 59, at 6-10 [Def.’s Mem. of Law].) In any event, Defendant argues
the economic loss rule precludes any recovery on this basis. (Id.)
Third, Defendant argues that Plaintiffs’ causes of action based upon breach of contract
and breach of express and implied warranties should be dismissed for the following reasons: (a)
because the causes of action accrued no later than December 9, 2005, when the dome, or “good,”
was tendered to ADSC, the claims are barred by the four-year statute of limitations set forth in
U.C.C. § 2-725; and (b) Plaintiffs are precluded from recovery due to ADSC’s continued use of
the dome after discovery of the alleged defect and gross misuse of the dome by allowing
substantial snow loads to accumulate despite warnings and instructions by Farley. (Dkt. No. 58,
¶¶ 118-42 [Bundschuh Decl.]; Dkt. No. 59, at 13-19 [Def.’s Mem. of Law].)
Fourth, Defendant argues that Plaintiffs are precluded from recovering damages for
consequential economic damages. (Dkt. No. 58, ¶¶ 143-54 [Bundschuh Decl.]; Dkt. No. 59, at
19-21 [Def.’s Mem. of Law].) According to Defendant, the contract between Farley and ADSC
39
provided a warranty containing a limitation-of-liability provision that precludes Plaintiffs from
recovering such damages both in contract and tort. (Dkt. No. 58, ¶ 143 [Bundschuh Decl.].)
Fifth, and finally, Defendant argues that Plaintiffs’ cause of action for negligent advice
and/or misrepresentation must be dismissed for the following reasons: (a) Mr. Miller’s deposition
testimony establishes that he did not actually rely on the alleged negligent advice or that any
alleged reliance would have been reasonable under the circumstances; and (b) ADSC and Farley
did not have a special, or privity-like, relationship sufficient enough to impose a duty on Farley
to impart correct information to Plaintiffs. (Dkt. No. 58, ¶¶ 155-76 [Bundschuh Decl.]; Dkt. No.
59, at 22-25 [Def.’s Mem. of Law].)
2.
Underwriters’ Opposition to Defendant’s Motion for Summary
Judgment
Generally, in opposition to Defendant’s motion, Underwriters assert seven arguments.
(Dkt. No. 66, at 3-24 [Underwriters’ Opp’n Mem. of Law].) First, Underwriters argue that the
dome was defectively designed for the following reasons: (a) the dome was not in compliance
with local snow load requirements because it was designed for a ground snow load of 45 pounds
per square foot (“PSF”) and structures within the Town of Queensbury are supposed to be rated
at 70 PSF; (b) the dome was not in compliance with ASI-77 because the dome’s height-to-width
ratio was below the minimum level set by ASI, thereby limiting its ability to shed snow; (c) the
Defendant’s purported compliance with applicable codes and regulations does not constitute
prima facie evidence that the dome was not defectively designed; (d) application of the seven (7)
factors contained in the risk-utility test weigh in Underwriters’ favor; and (e) in any event,
Underwriters have met their burden in establishing a triable issue of fact with respect to the
dome’s defective design. (Id., at 3-7.)
40
Second, Underwriters argue that the economic loss rule is inapplicable to the present case
and is not otherwise a bar to recovery for the following reasons: (a) the manner in which the
injury occurred was “an abrupt, cataclysmic occurrence,” which “mitigates strongly in favor of a
finding of tort liability”; (b) a dome that is defectively designed is inherently dangerous; and (c)
the damages being sought are not only to the “product itself,” but also to “other property,” such
as damage to turf, golf carts, batting cages, and soccer goals that precludes application of the
economic loss rule. (Id. at 7-10.)
Third, Underwriters argue that the dome’s collapse was proximately caused by a defect in
the design of the dome, and not by the actions of ADSC, for the following reasons: (a) ADSC
complied with Defendant’s instructions regarding the operation of the dome at all times and, to
the extent that ADSC deviated from these instructions and purportedly caused the collapse, those
actions were specifically undertaken at Defendant’s direction; (b) ADSC’s alleged failure to
properly heat the dome is irrelevant to the claims that the dome’s design failed to withstand the
snow load that it was expressly represented as being able to withstand; (c) in any event, a triable
issue of fact exists regarding whether failure to heat the dome proximately caused the collapse
because this is based on a fact-specific inquiry; (d) the dome was not designed for manual
removal of snow accumulations on top of the dome, nor was it safe to do so without a Farley
technician, and cannot, therefore, serve as a basis for summary judgment; and (e) a triable issue
of fact exists regarding whether the dome’s collapse was caused by a reduction in the dome’s
pressure and, even if the collapse was due to this reduction, ADSC reduced the pressure on the
day of the collapse at the specific direction of Defendant’s service technician and the dome was
never brought below the minimum pressure set forth in the dome’s operating manual. (Id. at 1116.)
41
Fourth, Underwriters argue that the statute of limitations does not bar recovery for
defective design of the dome. (Id. at 16-17.) Specifically, Underwriters argues that the statute of
limitations did not begin to accrue until the date of the dome’s partial collapse, in February 2011,
because they were not able to allege all the elements of their causes of action until the injury and
damages occurred. (Id. at 17.) Furthermore, Underwriters have asserted several claims for
design defects beyond those related to the design and installation of the longitudinal cables,
which Defendant uses as a basis for its proposed accrual date in 2007. (Id.)
Fifth, Underwriters argue that genuine issues of material fact exist regarding their claims
for failure to warn and negligent instruction for the following reasons: (a) Defendant failed to
warn ADSC of what the dome’s actual minimum snow load capability was, which Defendant
should have been aware of had it performed proper snow load calculations and had them
reviewed by an engineer; (b) had Defendant warned ADSC of the dome’s actual snow load
capability, the collapse may have been avoided because ADSC likely would have sought
Defendant’s assistance to manually remove the snow and/or perform a controlled deflation; (c)
Defendant failed to provide ADSC with adequate warnings regarding the alleged need to
manually remove snow accumulations from the dome’s roof; and (d) Defendant failed to provide
ADSC with adequate warnings and/or instructions for the safe operation of the dome when Mr.
Miller contacted Defendant for guidance and assistance after he had exhausted all methods for
combating snow accumulation contained in the operator’s manual. (Dkt. No. 66, at 17-20 [Pl.’s
Opp’n Mem. of Law].)
Sixth, Underwriters argue that Defendant is not entitled to summary judgment on their
claims for breach of implied and express warranty for the following reasons: (a) because the
42
contract executed by ADSC and Defendant was a construction contract for a permanent structure,
not a movable good, it is not governed by the four-year statute of limitations under U.C.C. § 2105; and (b) ADSC did not grossly misuse the dome. (Id. at 20-23.)
Seventh, and finally, Underwriters argue that a genuine dispute of material fact exists
regarding their claims related to negligent misrepresentation for the following reasons: (a) ADSC
and Defendant had a special relationship and their pattern of close contact with each other
regarding the operation of the dome may also constitute an implied service contract; (b)
Defendant held itself out as having superior knowledge regarding the dome and specifically
instructed ADSC to contact Defendant for assistance when needed; and (c) Defendant
misrepresented the dome’s snow load capabilities and its ability to shed snow during a time when
the parties were in actual privity and those representations were reasonably and justifiably relied
upon by ADSC and the Town of Queensbury. (Id. at 23-25.)
3.
ADSC’s Opposition to Defendant’s Motion for Summary Judgment
Generally, in opposition to Defendant’s motion, ADSC assert six arguments. (Dkt. No.
69, Attach. 9, at 5-27 [ADSC’s Opp’n Mem. of Law].) First, ADSC argues that the dome was
defectively designed for the following reasons: (a) the dome was designed by an unqualified
individual (Jason Scmidt) with no engineering education, training or license, who produced false
engineering calculations regarding the dome’s ability to withstand snow loads; (b)
the dome was not in compliance with ASI-77 because the dome’s height-to-width ratio (which
determines how steep or flat the dome is) was below the minimum level set by ASI, thereby
limiting the dome’s ability to shed snow; and (c) the longitudinal cables placed on top of the
dome were too short, causing the dome’s height-to-width ratio to be even smaller and causing
snow and ice to accumulate behind the cables. (Id. at 5-19.)
43
Second, ADSC argues that the economic loss rule does not preclude recovery of the
damages alleged in this action because Defendant held itself out as an expert in the design and
construction of air supported structures. (Id. at 19-20.) In addition, ADSC argues that Defendant
provided grossly inaccurate engineering calculations that were crucial to the stability of the dome
and then misled a Town of Queenbury building official when questioned about snow load
calculations. (Id. at 20.)
Third, ADSC argues that the improper calculations provided by Mr. Schmidt, the
defective design of the dome’s height-to-width ratio, the neglect by Mr. Hayhoe (a Farley
employee) in failing to arrive at the dome before the dome’s collapse, and the improper design
and placement of the longitudinal cables were the proximate cause of the dome’s collapse. (Id. at
21-22.)
Fourth, ADSC argues that the four-year statute of limitations under U.C.C. § 2-105 is
inapplicable because the dome is a permanent structure with an unmovable foundation, which
was designed by Farley. (Id. at 22.) Furthermore, ADSC argues that the subject contract was not
a sales contract but rather one for services and/or construction because the main objective of the
contract was for Farley to design, construct, and service an air-supported structure to be used as a
sports dome. (Id. at 23.)
Fifth, ADSC argues that the exculpatory clause contained in a warranty attached to the
subject contract does not bar consequential damages as a matter of law. (Id. at 24-26.)
Specifically, ADSC argues that enforceability of the clause depends on the circumstances
surrounding the transaction, and that a genuine dispute of material fact exists regarding the
alleged gross negligence of Mr. Schmidt, Farley’s lead designer, when he intentionally made
44
false representations to the local building department regarding the dome’s ability to withstand
local snow loads. (Id. at 24-25.) In addition, ADSC argues that the clause is unenforceable
because its provisions were obtained through overreaching. (Id. at 25-26.) This is because
Farley allegedly took advantage of Mr. Miller’s reliance on Farley’s expertise and, although
Farley knew that it was not capable of designing and constructing an air supported structure
suitable for this specific geographic location (Queensbury, NY), Farley entered into the contract
anyway. (Id.)
Sixth, and finally, ADSC argues that Defendant is not entitled to summary judgment on
ADSC’s claim for negligent misrepresentation for the following reasons: (a) as the designer and
constructor of the dome, Farley had a special relationship with ADSC requiring it to provide
correct information; (b) Farley made false representations regarding its snow load calculations
that it knew, or should have known, were incorrect and knew that ADSC would rely upon such
information for a serious purpose; (c) Farley held itself out as a purported expert in the field of
dome design and construction to both ADSC and the Town of Queensbury Building & Codes
office and, based upon this representation, ADSC relied on the information regarding snow load
capabilities to its detriment. (Id. at 26-27.)
4.
Defendant’s Reply to Plaintiffs’ Respective Oppositions to the Motion
for Summary Judgment
Generally, in reply to Plaintiffs’ respective opposition papers, Defendant makes the
following arguments. (Dkt. No. 73, Attach. 4 [Def.’s Reply Mem. of Law].) First, Defendant
argues that the Court should disregard the opinions of Plaintiffs’ expert, Thomas Grafe, PE,
because Mr. Grafe’s expert affidavit, submitted in support of Plaintiffs’ opposition papers,
violates this Court’s Pre-Trial Scheduling Order. (Id. at 1-4.) Specifically, Defendant argues that
45
Plaintiffs failed to serve, before the close of discovery, an expert report from Mr. Grafe regarding
the following opinion testimony: (a) the alleged defects with the height-to-width ratio of the
dome, stratification of warm air, the length of longitudinal cables, and issues regarding the
repairs made to longitudinal cables sleeves; (b) the alleged defects in instructions provided by
Farley to ADSC, including the use of manual removal of snow; (c) whether Farley was required
to retain an engineer to design the dome and the alleged negligent advice given by Farley to
ADSC; (d) Farley’s alleged negligence in responding to ADSC’s request for assistance
immediately before the partial collapse; and (e) the purported feasible design alternatives with
respect to the design of the dome. (Id. at 2-3.) In addition, Defendant argues that Mr. Grafe’s
opinions lack probative value because they are based on hearsay, conjecture, and conclusions
unsupported by admissible evidence. (Id. at 3-4.) Moreover, Defendant argues it will suffer
immense prejudice if Mr. Grafe’s affidavit is considered because it contains theories of liability
that were not previously asserted. (Id.)
Second, Defendant argues that, should the Court consider Mr. Grafe’s affidavit, the Court
should, nonetheless, disregard Mr. Grafe’s findings and conclusions because they are too
speculative and conclusory to be of any probative value for the following reasons: (a) Mr. Grafe’s
contention that Defendant provided no indication that manual snow removal may be required is
not supported by the admissible evidence; (b) Mr. Grafe’s contention that the dome may not have
had sufficient heat output to melt snow is speculative because he does not refer to any testimony,
did not conduct his own testing and/or observation, and does not indicate that the heating system
should have been designed differently; (c) Mr. Grafe’s contention that Defendant should have
employed an engineer to prepare the drawings and calculations has no probative value because
46
this information was sent to an outside licensed professional engineer for review and
certification; (d) Mr. Grafe’s contentions that the snow load calculations were improper and that
Mr. Schmidt was misleading in his e-mail to Mr. Hatin and Mr. Miller with respect to those
calculations are conclusory because Mr. Schmidt advised the Building & Codes office that the
dome was designed pursuant to ASI-77 and the Codes Office issued a building permit without
further inquiry; (e) Mr. Grafe fails to cite any support for his contention that ASI-77 requires air
supported structures to have a height-to-width ratio between .30 and .50; (f) Mr. Grafe’s
contention that Mr. Hayhoe could have reached ADSC before nightfall on the night of the partial
collapse is improper; (g) Mr. Grafe’s contention that Defendant took responsibility to protect the
dome from snow accumulation is conclusory and not supported by admissible evidence because
Mr. Miller testified that he was solely responsible for the operation and maintenance for the
dome and ADSC did not enter into any service or maintenance agreements with Defendant; (h)
Mr. Grafe does not offer any evidence in support of his contention that the longitudinal cables
were improperly designed or placed; and (i) Mr. Grafe fails to offer any support for his opinion
regarding feasible alternative designs, such as whether dome manufacturers are using the alleged
feasible design alternatives. (Id. at 4-11.)
Third, Defendant argues that the affidavits submitted by Mr. Hatin and Mr. Miller fail to
raise a genuine dispute of fact. (Id. at 11.) With respect to Mr. Hatin’s affidavit, Defendant
argues there is no dispute that ASI-77 is the relevant standard that governs the structural design
of air-supported structures and is incorporated by reference into the 2002 New York State
Building Code. (Id.) Furthermore, Defendant argues that Mr. Hatin’s contention that Mr.
Schmidt avoided answering his concerns regarding the design of the dome and its ability to
47
support snow loads of 70 PSF lacks probative value. (Id.) Specifically, Defendant argues that
Mr. Hatin admits he decided to issue a building permit without familiarizing himself with the
applicable codes and standards he is charged with enforcing or requesting certified snow load
calculations. (Id.) Similarly, Defendant argues that Mr. Miller’s affidavit lacks probative value
because it is based upon information found during an internet search of Farley’s competitors and
snow load information contained in marketing materials.
Fourth, Defendant argues that the economic loss rule bars Plaintiffs’ recovery in tort
because the dome manufactured by Farley is not a permanent structure; rather, it is a fabric
structure that is portable. (Id. at 11-12.) Furthermore, Defendant argues the dome is not unduly
dangerous but is a good that, if operated properly, is unlikely to produce a catastrophic accident
or enhance the damage to person or property. (Id. at 12.) Moreover, Defendant argues that the
accident occurred due to snow and ice being allowed to accumulate on top of the dome for
approximately five (5) weeks because of ADSC’s neglect and improper operation of the dome.
(Id.) Finally, Defendant argues that damage to business personal property contained within the
dome at the time of the partial collapse was reimbursed by another insurance company. (Id.)
Therefore, Defendant argues that the only damages being sought are for repair and replacement
of the dome itself, repair and replacement of items that were made a part of the dome, and
consequential economic losses (which, according to Defendant, are excluded under the terms of
the contract between ADSC and Defendant). (Id.)
Fifth, Defendant argues that the contract it entered into with ADSC was not a service
and/or construction contract. (Id. at 13.) Specifically, Defendant argues that, as the contract and
testimony establish, the permanent appurtenances, including concrete and grade beams, were
48
installed by ADSC. (Id.) Defendant claims that it provided only supervision for the erection of
the dome and that ADSC provided the labor to effectuate the erection. (Id.) Furthermore, Mr.
Miller testified that Defendant did not have a service contract with ADSC and that ADSC was
responsible for the service and maintenance of the dome. (Id.) Finally, Defendant argues that,
even if the dome became permanent upon erection, the U.C.C. requires only that a good be
movable at the time of contract formation or creation of the good. (Id.) Accordingly, Defendant
argues that the dome supplied by Farley was movable at the time, and that Plaintiffs’ arguments
in opposition are insufficient to raise a genuine dispute of material fact. (Id.)
Sixth, and finally, Defendant argues that Plaintiffs have failed to raise a genuine dispute
of material fact regarding whether Farley’s alleged negligent misrepresentation resulted in the
dome’s partial collapse. (Id. at 13-14.) Specifically, Defendant argues that Plaintiffs have failed
to establish that, had the dome been designed to support ground snow loads of 45 PSF, the dome
would not have collapsed. (Id. at 14.) Furthermore, according to Defendant, Plaintiffs cannot
establish that ADSC justifiably relied on alleged misrepresentations contained in correspondence
from July 2005 (regarding snow load calculations) and that such reliance was the proximate
cause of the loss. (Id.)
5.
Underwriters’ Sur-Reply1
Generally, in response to the propriety of Defendant’s submission of thirty (30) “nontestimonial” exhibits as part of its reply, Underwriters make the following arguments. (Dkt. No.
75 [Underwriters’ Sur-Reply].) First, Underwriters argue that Defendant has submitted the
1
On June 9, 2014, the Court gave leave to both Underwriters and ADSC to file two-page
letter briefs addressing the narrow issue of whether it is appropriate for the Court to consider thirty (30)
“non-testimonial” exhibits submitted as part of Defendant’s reply. (Dkt. No. 72 [Text Order filed June 9,
2014].)
49
affidavit of Mr. Schmidt, which is plainly testimonial in nature. (Id. at 1.) Furthermore,
Underwriters note that the other exhibits, which are “non-testimonial,” are exhibits attached to
the Schmidt Reply Affidavit, not the Defendant’s Reply brief itself. (Id.) Accordingly,
Underwriters argue that the Court should disregard the Schmidt Reply Affidavit and the exhibits
attached thereto. (Id.)
Second, Underwriters argue that there is no legitimate basis for Defendant’s submission
of new evidence on reply. (Id.) Underwriters note that Mr. Schmidt has already submitted an
affidavit in connection with the initial moving papers. (Id.) Therefore, Underwriters argue that
Defendant should have raised the points contained in Mr. Schmidt’s second affidavit in its initial
moving papers. (Id.)
Third, and finally, Underwriters argue that Defendant’s contention that it is necessary to
submit new evidence in response to additional evidence submitted by Underwriters in their
opposing papers, should be rejected because Underwriters did not submit additional evidence.
(Id. at 1-2.) Specifically, Underwriters note that Defendant chose not to depose Mr. Grafe. (Id.
at 2.) Moreover, with respect to Mr. Grafe’s opinions, Underwriters note that Mr. Grafe’s initial
expert report provided adequate notice of his opinions to Defendant and that these opinions were
simply elaborated upon in his expert affidavit. (Id.)
6.
ADSC’s Sur-Reply
Generally, in response to the propriety of Defendant’s submission of thirty (30) “nontestimonial” exhibits as part of its reply, ADSC makes the following arguments. (Dkt. No. 76
[ADSC’s Sur-Reply].) First, similar to Underwriters’ argument, ADSC notes that Defendant has
attached the affidavit of Mr. Schmidt, as well as marketing materials from Farley’s competitors,
50
which, according to ADSC, is in violation of the Court’s Order. (Id. at 1.) Furthermore, ADSC
argues that, should the Court overlook this violation, the exhibits should be excluded nonetheless
because they constitute new evidence, which has been improperly introduced in a reply brief.
(Id.) Second, and finally, ADSC argues that, should Mr. Schmidt’s affidavit be considered,
summary judgment must still be denied because numerous genuine disputes of material fact
exist. (Id. at 2-3.)
7.
Defendant’s Sur-Sur-Reply to Plaintiffs’ Sur-Replies
Generally, in response to ADSC’s and Underwriters’ respective sur-replies, Defendant
makes the following arguments. (Dkt. No. 77 [Def.’s Sur-Reply].) First, Defendant argues that
the sur-replies have gone beyond the scope of the Court’s Order because they challenge the
admissibility and substance of Defendant’s reply papers. (Id. at 1-2.)
Second, and finally, Defendant argues that it has complied with the Court’s Order
because, in its letter application to the Court (Dkt. No. 70 [Def.’s Letter Mot. requesting
enlargement of reply papers]), Defendant expressly requested leave to file reply papers, including
reply affidavits, totaling no more than twenty (20) pages in length. (Id. at 2.) Defendant advised
that Plaintiffs consented to this request with the caveat that Plaintiffs objected to the inclusion of
the thirty (30) pages of non-testimonial exhibits. (Id.) Accordingly, Defendant argues that it is
in compliance with the twenty-page limit because Mr. Schmidt’s affidavit is six (6) pages in
length and the reply memorandum of law is less than fourteen (14) pages in length. (Id.)
Defendant concedes that Mr. Schmidt’s affidavit is testimonial; however, Defendant argues that
the affidavit is a part of the reply papers themselves and should not be considered as part of the
non-testimonial exhibits that accompanied Defendant’s reply papers to which Plaintiffs
specifically objected. (Id.)
51
II.
APPLICABLE LEGAL STANDARDS
Under Fed. R. Civ. P. 56, summary judgment is warranted if “the movant shows that
there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). A dispute of fact is “genuine” if “the [record] evidence is
such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). As a result, “[c]onclusory allegations, conjecture and
speculation . . . are insufficient to create a genuine issue of fact.” Kerzer v. Kingly Mfg., 156 F.3d
396, 400 (2d Cir. 1998) (citation omitted); see also Fed. R. Civ. P. 56(e)(2). As the Supreme
Court has famously explained, “[the non-moving party] must do more than simply show that
there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v.
Zenith Radio Corp., 475 U.S. 574, 585-86 (1986). As for the materiality requirement, a dispute
of fact is “material” if it “might affect the outcome of the suit under the governing law.”
Anderson, 477 U.S. at 248. “Factual disputes that are irrelevant or unnecessary will not be
counted.” Id.
In determining whether a genuine issue of material fact exists, the Court must resolve all
ambiguities and draw all reasonable inferences against the movign party. Anderson, 477 U.S. at
255. In addition, “[the moving party] bears the initial responsibility of informing the district
court of the basis for its motion, and identifying those portions of the . . . [record] which it
believes demonstrate[s] the absence of any genuine issue of material fact.” Celotex v. Catrett,
477 U.S. 317, 323-24 (1986); see also Fed. R. Civ. P. 56(c), (e). However, when the moving
party has met this initial burden of establishing the absence of any genuine issue of material fact,
the nonmoving party must come forward with specific facts showing a genuine dispute of
52
material fact for trial. Fed. R. Civ. P. 56(c), (e). Where the non-movant either does not respond
to the motion or fails to dispute the movant’s statement of material facts, the court may not rely
solely on the moving party’s Rule 56.1 statement; rather, the court must be satisfied that the
citations to evidence in the record support the movant’s assertions. See Giannullo v. City of N.Y.,
322 F.3d 139, 143, n.5 (2d Cir. 2003) (holding that not verifying in the record the assertions in
the motion for summary judgment “would derogate the truth-finding functions of the judicial
process by substituting convenience for facts”).
III.
ANALYSIS
A.
Whether the Economic Loss Rule Bars Plaintiffs’ Tort Claims
After carefully considering the matter, the Court answers this question in the negative
with respect to Plaintiffs’ negligent misrepresentation claims and Underwriters’ claim regarding
replacement of the turf field as “other property.” However, the Court answers this question in the
affirmative with respect to Plaintiffs’ remaining claims regarding the dome itself for the reasons
stated in Defendant’s declaration in support of its motion and Defendant’s memoranda of law.
(Dkt. No. 58, ¶¶ 68-76 [Bundschuh Decl.]; Dkt. No. 59, at 7-10 [Def.’s Mem. of Law]; Dkt. No.
73, Attach. 4 at 11-12 [Def.’s Reply Mem. of Law.].) To those reasons, the Court adds the
following analysis:
Generally, under the economic loss doctrine, while a product
owner may have tort remedies against a product manufacturer for
personal injuries caused by a defect in the product, an owner of a
product who suffers purely monetary harm to the product itself,
due to a defect in the manufacturing or installation of the product,
is limited to only whatever remedy the owner may have in contract.
Wade v. Tiffin Motorhomes, Inc., 686 F. Supp. 2d 174, 187 (N.D.N.Y. 2009) (Suddaby, J.). “The
rule is applicable to economic losses to the product itself as well as consequential damages
53
resulting from the defect.” 126 Newton St., LLC v. Allbrand Commercial Windows & Doors, Inc.,
121 A.D.3d 651, 560 (N.Y. App. Div. 2d Dept. 2014). The purpose of this rule is
to keep contract law from drown[ing] in a sea of tort . . . [and with
this goal in mind] New York courts restrict plaintiffs who have
suffered economic loss, but not personal or property injury, to an
action for the benefits of their bargains. Thus, [i]f the damages
suffered are of a type remediable in contract, a plaintiff may not
recover in tort.
BNP Paribas Mortg. Corp. v. Bank of Am., N.A., 949 F. Supp. 2d 486, 505 (S.D.N.Y. 2013)
(quoting Manhattan Motorcars, Inc. v. Automobili Lamborghini, S.p.A., 244, F.R.D. 204, 220
[S.D.N.Y. 2007]). Generally, a court determining whether the economic loss doctrine applies
“‘should consider the nature of the defect, the manner in which the injury occurred, and the
damages sought.’” Bristol Village, Inc. v. Louisiana-Pac. Corp., 916 F. Supp. 2d 357, 365
(W.D.N.Y. 2013) (quoting Hodgson, Russ, Andrews, Woods & Goodyear, LLP v. Isolatek Int’l
Corp., 300 A.D.2d 1051, 1052 [N.Y. App. Div. 4th Dept. 2002]).
In the present case, ADSC seeks damages due to the interruption in its business (13-CV0385, Dkt. No. 1, ¶¶ 30-31) while Underwriters seeks reimbursement for the costs they paid to
ADSC to repair the dome as well as replacing the turf field and the dome’s roof panels (Dkt. No.
1, ¶ 33). As discussed above in Parts I.E.2. and I.E.3. of this Decision and Order, Plaintiffs argue
that the economic loss doctrine does not apply for three reasons: (1) their losses occurred from
“an abrupt cataclysmic occurrence” involving a product that could produce catastrophic
consequences in the event of an accident; (2) they seek to recover losses to “other property”; and
(3) Defendant owed a professional duty of care to ADSC that was independent from its
contractual duties. (Dkt. No. 66, at 7-10; Dkt. No. 69, Attach. 9, at 19-20.)
54
1.
“Abrupt Cataclysmic Occurrence”
With respect to the first argument, this Court held in Wade that an abrupt cataclysmic
occurrence, in and of itself, is insufficient to operate as an exception to the economic loss rule.
Wade, 686 F. Supp. 2d at 187-88; see also Hartford Fire Ins. Co. v. Atl. Handling Sys., LLC, 09CV-4127, 2011 WL 4463338, at *9 (E.D.N.Y. Sept. 26, 2011) (noting that “Plaintiffs, however,
improperly treat as dispositive the sudden manner of the loss”); Ofsowitz v. Georgie Boy Mfg.,
Inc., 231 A.D.2d 858, 859 (N.Y. App. Div. 4th Dept. 1996) (applying economic loss rule to bar
plaintiff’s tort claims after motor home was destroyed by “abrupt, accident-like event”). Instead,
this Court adopted the analysis from the United States Supreme Court in E. River S.S. Corp. v.
Transamerica Delaval, Inc., 476 U.S. 858 (1986), despite “language in some New York State
Appellate Division cases indicating that the abruptness of an event may be a relevant factor in
determining whether the economic loss doctrine applies.” Wade, 686 F. Supp. 2d at 188.2
Applying that analysis here, this Court, as in Wade, is unpersuaded by Plaintiffs’ argument that
the economic loss rule should not apply due to the abruptness of the dome’s collapse. However,
2
Specifically, this Court found the following language from E. River to be persuasive:
Nor do we find persuasive a distinction that rests on the manner in which
the product is injured. We realized that the damage may be qualitative,
occurring through gradual deterioration or internal breakage. Or it may
be calamitous . . . But either way, since by definition no person or other
property is damaged, the resulting loss is purely economic. Even when
the harm to the product itself occurs through an abrupt, accident-like
event, [if no person or other property is damaged], the resulting loss due
to repair costs, decreased value, and lost profits is essentially the failure
of the purchaser to receive the benefit of its bargain–traditionally the
core concern of contract law.
Wade, 686 F. Supp. 2d at 187 (quoting E. River Steamship Corp., 476 U.S. at 870); see also Trans
Hudson Express, Inc. v. Nova Bus Co., 06-CV-4092, 2007 WL 1101444, at *5 (D.N.J. Apr. 11, 2007)
(noting that, in light of the Supreme Court’s E. River decision, “it is reasonable to assume that the New
Jersey Supreme Court would . . . reject[] the ‘sudden and calamitous’ exception to the economic loss
doctrine”).
55
the Court agrees with Underwriters that a dome, which in this case houses expensive equipment
and hosts public events, is capable of enhancing damages, or producing “catastrophic
consequences,” to person or property in the event of an accident due to a defective design.
Nonetheless, this is but one factor to consider. As a result, the Court will now turn to Plaintiffs’
other arguments on this issue.
2.
“Other Property”
As part of its alleged damages, Underwriters seek recovery for damages to “other
property,” such as replacement of the turf field and the dome’s roof panels.3 This Court
recognized in Wade, that, “[s]ince the Supreme Court decided [Saratoga Fishing Co. v. J.M.
Martinac & Co., 520 U.S. 875 (1997)], decisions by other courts (including courts applying New
York law) have made clear that, when a product causes damage not only to itself, but to ‘other
property,’ tort liability is ‘generally present.’” Wade, 686 F. Supp. 2d at 188 (collecting cases).
In Wade, this Court held that contents inside a recreational vehicle that were damaged
after the vehicle caught fire were separate and apart from the motor home and therefore
constituted other property. Id. at 189; see also Saratoga, 520 U.S. at 875 (holding that fishing
equipment added to a vessel by purchaser that was subsequently destroyed when vessel sank due
to a fire was “other property” rather than part of the product itself); 2-J Corp v. Tice, 126 F.3d
539, 544 (3d Cir. 1997) (holding that a purchaser of a warehouse may recover in tort from the
3
It should be noted that, in Underwriters’ memorandum of law, they argue that additional
miscellaneous items sustained damage due to the dome’s collapse. (Dkt. No. 66, at 10.) According to
Underwriters, these items, which include golf carts, soccer goals, fencing batting cages, garbage barrels,
and lights, should also be classified as “other property.” (Id.) However, it is undisputed that damage to
these items were fully reimbursed through an insurance policy issued by Peerless Ins. Co./Inland Marine.
In addition, Plaintiffs do not mention these items in their respective Complaints as a basis for their
alleged damages. Therefore, the Court will not consider these items for purposes of its analysis.
56
manufacturer of the warehouse for damages caused to the contents of the warehouse after the
warehouse collapsed).
Here, Defendant argues that the turf field and ballasts were appurtenances to the dome
itself and, therefore, should not be considered separate items or “other property.” (Dkt. No. 58, ¶
69 [Bundschuh Decl.].) With respect to the “roof panels,” or ballasts, the Court is unable to
determine, with any specificity, the items which Underwriters seek recovery. As discussed
above, Underwriters allege damages for the costs associated with replacing the dome’s roof
panels. However, it is unclear from the evidence submitted, what the roof panels consist of and
whether they are light ballasts as Defendant contends. Nonetheless, the Court agrees with
Defendant that roof panels, or light ballasts, that are attached to the dome’s ceiling, should be
considered a part of the dome itself rather than “other property.” This is because a roof panel or
light ballast is a component of the dome. See Trump Int’l Hotel & Tower v. Carrier Corp., 524
F. Supp. 2d 302, 309 (S.D.N.Y. 2009) (holding that component parts to product and product
itself are one integrated unit). Moreover, Defendant agreed, as part of the parties’ contract, to
supply and install hanging light fixtures from the dome’s ceiling. (Dkt. No. 55, Attach. 25, at 2-3,
5.) Accordingly, any damages related to the replacement of roof panels or light ballasts are
remediable through the parties’ contract.
However, with respect to damages associated with the replacement of the turf field, there
is no evidence in the parties’ contract that Defendant contracted to supply a turf field to ADSC.
(Dkt. No. 55, Attach. 25.) Indeed, Mr. Miller testified at his deposition that he purchased the turf
field from a company called ProGreen and that it did not come as part of “the package with the
dome.” (Dkt. No. 58, Attach. 7, at 153:19-22.) See 126 Newton St., LLC, 121 A.D.3d at 652
57
(holding that structural elements of a building damaged by water intrusion caused by defective
windows and doors constituted “‘other property’ that was not the subject of the parties’
agreement and, accordingly, support a valid tort cause of action”). Furthermore, the turf field is
completely distinct from the dome itself because it was not affixed to the dome or otherwise
integral to the dome’s functioning. Therefore, the turf field constitutes “other property.”
3.
Negligent Misrepresentation
An exception to the economic loss rule exists where a plaintiff can establish that a special
relationship existed between the parties in the context of a negligent misrepresentation claim.
See Travelers Cas. & Sur. Co. v. Dormitory Auth.–State of New York, 734 F. Supp. 2d 368, 378
(S.D.N.Y. 2010) (noting that “before a party may recover in tort for pecuniary loss sustained as a
result of another’s negligent misrepresentations there must be a showing that there was either
actual privity of contract between the parties or a relationship so close as to approach that of
privity”); Nebraskaland, Inc. v. Sunoco, Inc., 10-CV-1091, 2011 WL 6131313, at *4 (E.D.N.Y.
July 13, 2011) (noting that “courts have relied on the existence of a special relationship that
justified an exception to the economic loss doctrine”); RKB Enter. Inc. v. Ernst & Young, 182
A.D.2d 971, 972 (N.Y. App. Div. 3d Dept. 1992) (holding that “lack of a separate relationship
distinct from and independent of the contract precludes a claim of negligent misrepresentation”).
Under New York law, the elements for a negligent
misrepresentation claim are that (1) the defendant had a duty, as a
result of a special relationship, to give correct information; (2) the
defendant made a false representation that he or she should have
known was incorrect; (3) the information supplied in the
representation was known by the defendant to be desired by the
plaintiff for a serious purpose; (4) the plaintiff intended to rely and
act upon it; and (5) the plaintiff reasonably relied on it to his or her
detriment.
58
Hydro Inv’rs, Inc. v. Trafalgar Power Inc., 227 F.3d 8, 20 (2d Cir. 2000) (citing King v.
Crossland Savs. Bank, 111 F.3d 251, 257-58 [2d Cir. 1997]); Mandarin Trading Ltd. v.
Wildenstein, 16 N.Y.3d 173, 180 (N.Y. 2011).
To determine the existence of a special relationship and duty in the context of a negligent
misrepresentation claim, the Second Circuit has held that New York law requires a fact finder to
consider the following three factors: (1) whether the person making the representation held or
appeared to hold unique or special expertise; (2) whether a special relationship of trust or
confidence existed between the parties; and (3) whether the speaker was aware of the use to
which the information would be put and supplied it for that purpose. Suez Equity Inv’rs, L.P. v.
Toronto-Dominion Bank, 250 F.3d 87, 103 (2d Cir. 2001); LBBW Luxemburg S.A. v. Wells
Fargo Sec. LLC, 10 F. Supp. 3d 504, 525-26 (S.D.N.Y. 2014); Fleet Bank v. Pine Knoll Corp.,
290 A.D.2d 792, 795 (N.Y. App. Div. 3d Dept. 2002). In Kimmell v. Schaefer, 89 N.Y.2d 257,
263 (N.Y. 1996), the New York Court of Appeals explained that, “[i]n the commercial context, a
duty to speak with care exists when the relationship of the parties, arising out of contract or
otherwise, [is] such that in morals and good conscience the one has the right to rely upon the
other for information.” Kimmell, 89 N.Y.2d at 263.
“In general, a simple commercial relationship, such as that between a buyer and seller or
franchisor and franchisee, does not constitute the kind of ‘special relationship’ necessary to
support a negligent misrepresentation claim.” Century Pac., Inc. v. Hilton Hotels Corp., 03-CV8258, 2004 WL 868211, at *8 (S.D.N.Y. Apr. 21, 2004) (citing Dimon, Inc. v. Folium, Inc., 48 F.
Supp. 2d 359, 373 [S.D.N.Y. 1999]). However, “[t]he essential aspects of the requisite special
relationship . . . ‘may not be precisely defined.’” Dimon, 48 F. Supp. 2d at 373 (quoting Polycast
59
Tech. Corp. v. Uniroyal, Inc., 87-CV-3297, 1988 WL 96586 [S.D.N.Y. Aug. 31, 1988]).
Nonetheless, “[a] commercial relationship may become a special relationship . . . where ‘the
parties . . . enjoy a relationship of trust and reliance closer . . . than that of the ordinary buyer and
seller.’” Century Pac., 2004 WL 868211, at *8 (quoting Polycast Tech., 1988 WL 96586, at
*10). “Courts have found a special relationship and duty, for example, where defendants sought
to induce plaintiffs into a business transaction by making certain statements or providing specific
information with the intent that plaintiffs rely on those statements or information.” Id.
Here, Underwriters and ADSC argue that a special relationship existed for the following
reasons: (a) Defendant markets itself as an expert in the field of dome design and construction;
(b) Mr. Schmidt was clearly aware that both Mr. Miller and the Town of Queensbury’s Building
& Codes office sought, and intended to rely upon, factually correct information regarding snow
load capabilities of the dome for a serious purpose; and (c) Defendant and ADSC had a pattern of
close contact with each other regarding the operation of the dome. (Dkt. No. 66, at 24-25
[Underwriters’ Opp’n Mem. of Law]; Dkt. No. 69, Attach. 9, at 26-27 [ADSC’s Opp’n Mem. of
Law.].)
As an initial matter, any alleged misrepresentations made by Mr. Schmidt regarding snow
load calculations in 2005 are now time-barred. New York applies a three-year statute of
limitations for negligence actions, N.Y.C.P.L.R. § 214, and a six-year statute of limitations for
actions based upon a contractual obligation, N.Y.C.P.L.R. § 213(2). Furthermore, “[t]he statute
of limitations for negligent misrepresentation starts on the date of the alleged misrepresentation.”
Gander Mountain Co. v. Islip U-Slip LLC, 923 F. Supp. 2d 351, 368 (N.D.N.Y. 2013)
(D’Agostino, J.); Calcutti v. SBU, Inc., 224 F. Supp. 2d 691, 702 (S.D.N.Y. 2002). Mr.
60
Schmidt’s alleged misrepresentation regarding the snow load calculations occurred in July 2005
(Dkt. No. 58, Attach. 25), the contract was signed by the parties in July 2005 (Dkt. No. 58,
Attach. 22, at 7), and ADSC executed the Acknowledgment of Receipt of Goods in December
2005 (Dkt. No. 58, Attach. 27). Therefore, because Underwriters did not file their Complaint
until 2012, and ADSC did not file its Complaint until 2013, any misrepresentations made by Mr.
Schmidt in 2005 are now time barred under both the three-year and six-year statutory periods.
However, with respect to Plaintiffs’ remaining arguments, Plaintiffs adduce evidence that
Sam Hayhoe, a Farley employee, advised Mr. Miller to perform a pressure fluctuation of the
dome to break up the snow and ice that had accumulated. (Dkt. No. 58, Attach. 9, at 329:16-24
[Miller Dep.].) Underwriters claim that, upon performing the pressure fluctuation method, the
dome suffered a partial collapse. (Dkt. No. 66, at 25 [Underwriters’ Opp’n Mem. of Law].)
However, during his deposition, Mr. Hayhoe denied giving Mr. Miller any advice related to
performing a pressure fluctuation of the dome. (Dkt. No. 58, Attach. 15, at 48:22-49:1, 46:12-19
[Hayhoe Dep.].)
Applying the three factors discussed in Suez Equity, the Court agrees that a genuine
dispute of material fact exists regarding this issue. Suez Equity, 250 F.3d at 103 (stating that
“whether a special relationship exists between two parties is an issue of fact”). Specifically, the
Court agrees that the design and construction of domes is unique and that Defendant possesses
specialized expertise in this area. Second, the Court cannot conclude as a matter of law, based on
the current record, that a special relationship of trust or confidence did not exist between the
parties with respect to operation of the dome. Although the parties did not enter into a service
agreement and Mr. Miller testified he was solely responsible for the day-to-day operations of the
61
dome, it is evident from the undisputed facts that Mr. Miller reached out to Farley occasionally
over the course of several years for advice and suggestions regarding the removal of snow. Cf.
Trump Int’l Hotel & Tower, 524 F. Supp. 2d at 313 (holding that “[a]lthough it is alleged that
Carrier owed an ‘independent duty’ to Trump to properly advise it regarding the use and
operation of the two chillers, no such independent duty existed. The duties Carrier owed to
Trump originated from the Service Agreement and nowhere else.”). The dome is a large and
sophisticated product with which Mr. Miller lacked experience before his purchase. Certainly, it
is reasonable to believe that Mr. Miller would defer to Farley’s advice regarding the dome’s
operation in situations where he was unable to solve a problem himself. Under these
circumstances, a reasonable person could conclude that a special relationship in the form of trust
and confidence existed between the parties. Finally, with respect to the third prong, Farley
certainly knew that Mr. Miller was contacting it for advice regarding the dome’s operation and
removal of snow and that Mr. Miller would likely use the information it provided for that
purpose.
Similarly, the Court is unable to determine as a matter of law, based on the current record,
whether Mr. Miller actually relied on the information provided to him by Farley immediately
preceding the dome’s collapse. It is clear from the undisputed facts that Mr. Miller contacted
Farley seeking advice for removing the significant accumulation of snow on top of the dome.
According to Mr. Miller, either Mr. Hayhoe or Jason Aljoe responded by suggesting Mr. Miller
use the pressure fluctuation method to remove the snow. (Dkt. No. 58, Attach. 12, at 105:17-125
[Miller EUO].) It is undisputed that Mr. Miller lowered the pressure, causing the snow to shift,
which, in turn, caused the dome to partially collapse due to the added weight of the snow in one
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location. (Part I.D. of this Decision and Order at ¶ 184 [Statement of Facts].) Whether Mr.
Miller did so based on the guidance and information allegedly given to him by Farley
representatives is a dispute of material fact that cannot be determined as a matter of law.
Accordingly, Defendant’s motion for summary judgment with respect to Plaintiffs’ claims for
negligent misrepresentation and/or advice is denied.
4.
Independent Duty of Care
The New York Court of Appeals has stated that “[i]t is a well-established principle that a
simple breach of contract is not to be considered a tort unless a legal duty independent of the
contract itself has been violated. This legal duty must spring from circumstances extraneous to,
and not constituting elements of, the contract, although it may be connected with and dependent
upon the contract.” Clark-Fitzpatrick, Inc. v. Long Island R. Co., 70 N.Y.2d 382, 389 (N.Y.
1987); Avazpour Networking Servs., Inc. v. Falconstor Software, Inc., 937 F. Supp. 2d 355, 361
(E.D.N.Y. 2013). New York courts have found that a contractor owes a common law tort duty to
perform a contract non-negligently. See, e.g., Hydro Inv’rs, 227 F.3d at 17-18 (finding that
engineers owed professional duty to complete work with reasonable care); cf. Anunziatta v. Orkin
Exterminating Co., 180 F. Supp. 2d 353, 359 (N.D.N.Y. 2001) (finding that exterminator had
independent duty of reasonable care in treating home for termites, which was separate from its
contractual duties); Sommer v. Fed. Signal Corp., 79 N.Y.2d 540, 552-53 (N.Y. 1992) (finding
that fire alarm manufacturer owed independent duty to plaintiffs where fire alarm failed to
transmit signal to fire department and caused a delayed response to building fire); Syracuse
Cablesystems, Inc. v. Niagara Mohawk Power Co., 173 A.D.2d 138, 142 (N.Y. App. Div. 4th
Dept. 1991) (finding that Niagara Mohawk had a duty to protect plaintiffs where negligent
operation of power transformer led to explosion and PCB contamination).
63
“However, this duty only applies to the ‘limited class of cases in which a strong public
interest in the careful performance of particular contractual obligations may give rise to a tort
duty of due care.’” Hartford Fire Ins. Co., 2011 WL 4463338, at *5 (quoting Pfizer, Inc. v.
Stryker Corp., 02-CV-8613, 2003 WL 21660339, at *2 [S.D.N.Y. July 15, 2003] [citing Sommer,
79 N.Y.2d at 540]); see also Vigilant Ins. Co. v. ADT Sec. Servs., Inc., 10-CV-3066, 2011 WL
855874, at *3 (S.D.N.Y. Mar. 9, 2011) (holding that alarm company did not owe a duty of care
apart from contract because, unlike the fire company in Sommer, ADT was not “franchised and
regulated” by New York City).
In Hydro Inv’rs, a case relied upon by ADSC, the Second Circuit ruled that the economic
loss rule would not bar a malpractice case brought by owners of a hydroelectric power plant
against an engineering firm and an individual employed by the firm. The Circuit noted that the
damages involved were distinct from those anticipated by the underlying contractual agreement
and that the parties’ relationship was not exclusively “economic in nature.” Hydro Inv’rs, 227
F.3d at 17. Noting conflicting rulings surrounding the economic loss doctrine, the Circuit ruled
that “the better course is to recognize that the rule allows such recovery in the limited class of
cases involving liability for the violation of a professional duty. To hold otherwise would in
effect bar recovery in many types of malpractice actions.” Id.
Similarly, in Anunziatta and Sommer, the failure to exercise due care under specialized
service contracts gave rise to tort claims akin to professional malpractice, where negligent
performance would foreseeably lead to substantial damages. See Anunizatta, 180 F. Supp. 2d at
358 (“[Termite extermination company] held itself out to be a reliable professional, capable of
performing the job in a careful, professional manner. Thus, [it] was obliged to use reasonable
64
care, as it was clear plaintiffs were relying on [it] to complete the treatment of their home with
due care.”); Sommer, 79 N.Y.2d at 552-53 (“[F]ailure to perform the [fire alarm relay] service
carefully and competently can have catastrophic consequences.”). In La Barre v. Mitchell, 256
A.D.2d 850 (N.Y. App. Div. 3d Dept. 1998), and Village of Groton v. Tokheim Corp., 202
A.D.2d 728 (N.Y. App. Div. 3d Dept. 1994), two cases relied upon by Underwriters, the New
York Appellate Division held that tort claims could proceed because of the danger attendant to
the use of the products and that plaintiffs were also seeking damage to other property. La Barre,
256 A.D.2d at 655; Tokheim Corp., 202 A.D.2d at 729.
Although there are similarities between these cases and the present case, significant
differences exist, including that plaintiffs in those cases alleged damages to “other property.” See
Anunizatta, 180 F. Supp. 2d at 358 (holding that, where termite infestation was capable of
destroying plaintiffs’ home, “the injury would not be one merely to the product itself, as is the
case when a good is purchased but does not perform as expected, but harm would result to the
home of the plaintiffs as well”); Sommer, 79 N.Y.2d at 553 (finding that, as a result of the
defective fire alarm system, there was extensive property damage due to fire that spread out of
control); La Barre, 256 A.D.2d at 655 (finding that defective fire alarm caused delay in fire
department’s response, which in turn allowed fire to cause extensive damage to commercial
building and its contents); Village of Groton, 202 A.D.2d at 729 (holding that “[t]he injury was
not solely injury to the fuel dispensing system itself, but consisted of physical injury to plaintiff’s
property caused by the contamination of surrounding oils and ground water.”). Here, with the
exception of Underwriters’ claim regarding replacement of the turf field, Plaintiffs largely seek
purely economic damages as a result of the dome’s failure to meet ADSC’s expectations, rather
65
than damages related to personal injury or property damage beyond the dome itself. In such
instances, recovery in tort is inappropriate. See Manhattanville Coll. v. James John Romeo
Consulting Eng’r, P.C., 28 A.D.3d 613, 616 (N.Y. App. Div. 2d Dept. 2006) (“When a plaintiff
seeks to recover damages for purely economic loss resulting from the failure or malfunction of a
product, such as the cost of replacing or retrofitting the product, or for damage to the product
itself, the plaintiff may not seek recovery in tort against the manufacturer or distributor of the
product, but is limited to a recovery sounding in breach of contract or breach of warranty.”);
Suffolk Laundry Servs. v. Redux Corp., 238 A.D.2d 577, 578 (N.Y. App. Div. 2d Dept. 1997)
(holding that, “where a product fails to perform as promised due to negligence in either the
manufacturing or installation process, a plaintiff is precluded from recovering tort damages for
its economic loss”); Carmania Corp., N.V. v. Hambrecht Terrell Int’l, 705 F. Supp. 936, 939
(S.D.N.Y. 1989) (holding that an architectural firm owed an independent duty of care but then
barring plaintiff’s malpractice claim because the damages alleged as a result of defendant’s
malpractice were identical to the alleged contract damages).
Furthermore, it is evident that Defendant’s duty in the present case arose from what was
negotiated in the contract. Specifically, with respect to the alleged defective design of the dome,
the parties had numerous conversations regarding the dome’s design, specifications, and snow
load calculations. Moreover, the contract summarizes the materials and some of the
specifications used in designing the dome, including the language that “the air structure package
supplied as per items 1-6 will perform at this location for the intended use.” (Dkt. No. 55,
Attach. 25, at 1-4) (emphasis added). Accordingly, any alleged deficiencies in the design of the
dome, and/or materials that were used, arise from the contract and do not create a legal duty
66
independent of the contract itself. See Clark-Fitzpatrick, 70 N.Y.2d at 90 (holding that, where
plaintiff alleged that defendant failed to exercise “due care” in the design of a railroad project,
plaintiff’s negligence allegations were “merely a restatement, albeit in slightly different language,
of the ‘implied’ contractual obligations asserted in the cause of action for breach of contract.
Moreover, the damages plaintiff allegedly sustained as a consequence of defendant’s violation of
a ‘duty of due care’ in designing the project were clearly within contemplation of the written
agreement.”). Therefore, with the exception of Plaintiffs’ negligent misrepresentation claims and
Underwriters’ tort claims regarding the turf field, an independent duty of care did not exist,
which would support Plaintiffs’ remaining tort claims as an exception to the economic loss rule.
5.
Failure to Warn
Plaintiffs allege that Defendant breached its duty to warn ADSC about the dangers arising
from the foreseeable uses of the dome, including how to operate the dome when accumulations
of snow and ice are present. (Dkt. No. 1, ¶¶ 44-49; 13-CV-0385, Dkt. No. 1, ¶¶ 42-47.)
Furthermore, Plaintiffs allege that Defendant had been notified of inclement weather conditions
impacting the use of the dome beginning in 2006 and, therefore, had a duty to provide adequate
instructions and warnings regarding the safe use of the dome. (Id.)
Courts outside of this Circuit have applied the economic loss rule to post-sale failure-towarn claims. Specifically, in Sea-Land Serv., Inc. v. Gen. Elec. Co., 134 F.3d 149 (3d Cir.
1998), the Third Circuit stated that,
[w]here, however, damage from a defect is only to the product
itself and is only economic, there is no tort recovery. The policy of
economic loss is better adjusted by contract rules than by tort
principles. This conclusion is as true for strict liability and
negligence cases as it is for failure to warn cases. Thus, a
manufacturer may be culpable of a failure to warn, but if the
damage is solely to the product itself and is solely economic, there
is no tort recovery.
67
Sea-Land Serv., 134 F.3d at 156; accord, Turbomeca, S.A. v. Era Helicopters, LLC, 536 F.3d
351, 354-57 (5th Cir. 2008) (interpreting the economic loss rule from E. River as a “broad bar to
tort claims for damages solely to the product itself”); Ace Am. Ins. Co. v. Grand Banks Yachts,
Ltd., 587 F. Supp. 2d 697, 702-03 (D. Md. 2008) (holding that “E. River’s broad rule should
encompass a negligent failure to warn cause of action” and extends to consumer transactions);
see also Nicor Supply Ships Assocs. v. Gen. Motors Co., 876 F.2d 501, 504-05 (5th Cir. 1989)
(rejecting tort claim for failure-to-warn of a defect known at the time of manufacture); cf.
Rochester-Genesee Reg’l Trans. Auth. v. Cummins Inc., 09-CV-6370, 2010 WL 2998768, at *9
(W.D.N.Y. July 28, 2010) (holding that the duty to warn “creates an exception to the economic
loss doctrine” under limited circumstances).
Accordingly, because Plaintiffs have alleged purely economic damages as a result of the
dome’s collapse, Plaintiffs’ separate tort claims regarding Defendant’s failure-to-warn are barred
by the economic loss rule. Underwriters may proceed, however, with their failure-to-warn claim
regarding damages associated with replacement of the turf field. See Mays Towing Co. v.
Universal Mach. Co., 755 F. Supp. 830, 834 (S.D. Ill. 1990) (holding that “Plaintiff, however,
may proceed on its failure-to-warn claim for those damages to property other than the [product
itself]”).
B.
Whether the Limitation-of-Liability Provision Precludes Consequential
Economic Damages
After carefully considering the matter, the Court answers this question in the affirmative
for the reasons stated in Defendant’s declaration in support of its motion and Defendant’s
memorandum of law. (Dkt. No. 58, ¶¶ 143-154 [Bundschuh Decl.]; Dkt. No. 59, at 19-21 [Def.’s
68
Mem. of Law].) To those reasons, the Court adds the following analysis.4
Section 2-719 of the N.Y.U.C.C. permits contracts for the sale of goods to contain
limitations on the availability of consequential damages. Section (3) provides as follows:
Consequential damages may be limited or excluded unless the
limitation or exclusion is unconscionable. Limitation of
consequential damages for injury to the person in the case of
consumer goods is prima facie unconscionable but limitation of
damages where the loss is commercial is not.
Furthermore, the “parties are left free to shape their remedies to their particular requirements and
reasonable agreements limiting or modifying remedies are to be given effect.” N.Y.U.C.C. § 2719, cmt. 1; see also McNally Wellman Co. v. New York State Elec. & Gas Corp., 63 F.3d 1188,
1195 (2d Cir. 1995) (“It is axiomatic that parties to a contract must remain free to allocate risks
and shield themselves from liability.”). “Therefore, unless the provision is unconscionable, a
limitation or exclusion of consequential damages must be upheld by the Court.” Am. Tel. & Tel.
Co. v. New York City Human Res. Admin., 833 F. Supp. 962, 988 (S.D.N.Y. 1993) (citing
N.Y.U.C.C. § 2-719[3]).
1.
Whether the Subject Contract Is Unconscionable
“Whether a contract’s terms are unconscionable is a matter of law to be determined in
light of ‘the background of the contract’s commercial setting, purpose, and effect.’” Xuchang
Rihetai Human Hair Goods Co., Ltd. v. Hanyu Int’l USA Inc., 00-CV-5585, 2001 WL 883646, at
*4 (S.D.N.Y. Aug. 7, 2001) (quoting Wilson Trading Corp. v. David Ferguson, Ltd., 23 N.Y.2d
398, 403-04 [N.Y. 1968]). Furthermore, as stated by the court in Am. Tel. & Tel. Co.,
4
As discussed below in Part III.C.1. of this Decision and Order, the Court has determined
that the parties’ contract is predominantly one for the sale of goods. As a result, the N.Y.U.C.C. governs
the parties’ contract, which, in turn, will govern the Court’s analysis regarding the enforceability of the
limitation-of-liability provision.
69
“[A] determination of unconscionability generally requires a
showing that the contract was both procedurally and substantively
unconscionable when made–i.e., some showing of an absence of
meaningful choice on the part of one of the parties together with
contract terms which are unreasonably favorable to the other
party.”
With respect to the procedural element of unconscionability, the
Court must engage in “an examination of the contract formation
process and the alleged lack of meaningful choice.” Thus, “the
focus is on such matters as the size and commercial setting of the
transaction, whether deceptive or high-pressure tactics were
employed, the use of fine print in the contract, the experience and
education of the party claiming unconscionability, and whether
there was disparity in bargaining power.” With respect to
substantive unconscionability, “this question entails an analysis of
the substance of the bargain to determine whether the terms were
unreasonably favorable to the party against whom
unconscionability is urged.” In Cayuga Harvester, Inc., the court
noted “[i]n cases involving transactions of a commercial nature,
courts have rarely found unconscionability, and it has been held
that when businessmen contract in a commercial setting, a
presumption of conscionability arises.”
Am. Tel. & Tel. Co., 833 F. Supp. at 988 (quoting Gillman v. Chase Manhattan Bank, 73 N.Y.2d
1, 10-11 [N.Y. 1988]; Cayuga Harvester, Inc. v. Allis-Chalmers Corp., 95 A.D.2d 5, 20 [N.Y.
App. Div. 4th Dept. 1983]).
Here, the limitation-of-liability provision states, in relevant part, that
[Farley] shall not be liable in contract or tort (including negligence)
for loss of profits or revenues, loss of use of equipment or
facilities, cost of capital, or for any nature resulting from or in any
manner relating to the air supported structure covered hereby, its
design, use, any inability to use the same or any delay in delivery of
same.
(Dkt. No. 58, Attach. 22, at 15; Dkt. No. 58, Attach. 23; Dkt. No. 58, Attach. 24.) ADSC argues
that Mr. Miller trusted and relied upon Defendant’s expertise in designing and building a
70
structure suitable for a business in which Mr. Miller had never been involved before. (Dkt. No.
69, Attach. 9, at 24-25 [ADSC’s Opp’n Mem. of Law].) ADSC notes that Mr. Miller was a
former high school teacher and Niagara Mohawk employee who was making his first venture
into the sports hosting business, while Defendant markets itself as an expert in the field of design
and construction of domes. (Id. at 25-26.)
The Court is unpersuaded that these facts constitute sufficient grounds on which to find
the limitation-of-liability provision unconscionable. First, Mr. Miller testified at his deposition
that he received the warranty containing the limitation-of-liability provision before signing the
contract. (Dkt. No. 58, Attach. 7, at 172:2-5 [Miller Dep.].) Furthermore, Mr. Miller understood
that the warranty was part of the agreement with Defendant when he executed the contract. (Id.
at 172:6-9.) If Mr. Miller or ADSC had any concerns regarding the provision, they certainly
could have objected to it or negotiated that it not be included in the contract.
Second, the provision was sufficiently conspicuous, using bold, underlined, and capital
letters to alert the reader of its presence. See N.Y.U.C.C. § 1-201(10). Third, although this was
Mr. Miller’s first experience in this area of business, Mr. Miller is sufficiently educated to read
and understand the meaning of the provision. See, supra, Part I.D. at ¶ 5 of this Decision and
Order (stating that Mr. Miller is college educated with degrees in physical education, sports
medicine and mechanical engineering and that he also has a post-graduate degree in sports
medicine).
Fourth, ADSC has not presented any evidence that Defendant exerted pressure on Mr.
Miller to sign the contract or agree to terms with which he felt uncomfortable. Indeed, as
Defendant points out, Farley was one of three manufacturers with which Mr. Miller was
71
negotiating before entering into the contract. Mr. Miller and ADSC could have easily decided to
contract with another manufacturer if they were not happy with the contract terms or the way
they were being treated.
Fifth, and finally, the exclusion of “consequential damages was not unreasonably
favorable to [Defendant] in that it did not disturb the ‘substantial value of the bargain.’” McNally
Wellman Co., 63 F.3d at 1198 (citing N.Y.U.C.C. § 2-719 cmt. 1).
Accordingly, ADSC has not presented sufficient evidence demonstrating that the
limitation of liability provision is unconscionable.
2.
Whether Public Policy Prohibits Enforcement of the Limitation-ofLiability Provision
Next, ADSC argues that the limitation-of-liability provision should be deemed
unenforceable on the basis that it violates public policy considerations. Specifically, ADSC cites
a line of cases holding that an exculpatory clause “will not be enforced where it purports to
exempt liability for willful or grossly negligent acts or where a special relationship exists
between the parties so that an overriding public interest renders the exculpatory clause
unenforceable.” Commercial Union Ins. Co. v. Blue Water Yacht Club Ass’n, 239 F. Supp. 2d
316, 321 (E.D.N.Y. 2003) (citing Lago v. Krollage, 78 N.Y.2d 95 [N.Y. 1991]); Falcone v.
MarineMax, Inc., 659 F. Supp. 2d 394, 399-400 (E.D.N.Y. 2009). Based upon this precedent,
ADSC argues that, at a minimum, there is a question of fact regarding the gross negligence of
Defendant’s lead designer, Mr. Schmidt, when he intentionally made false representations to
ADSC and the local building department with respect to the dome’s ability to withstand local
snow accumulations. (Dkt. No. 69, Attach. 9, at 24-25 [ADSC’s Opp’n Mem. of Law].)
72
Initially, it should be noted that exculpatory clauses, as discussed in the cases cited by
ADSC, are different from limitation-of-liability clauses. See Valhal Corp. v. Sullivan Assocs,
Inc., 44 F.3d 195, 202-03 (3d Cir. 1995) (noting that, under Pennsylvania law, the same stringent
standards developed for exculpatory, hold harmless and indemnity clauses do not apply to
limitation-of-liability provisions). Generally speaking, “[e]xculpatory clauses seek to shield a
company from any liability. Limitations of liability, on the other hand, seek to do precisely what
the term suggests: limit, rather than exempt[,] a company from liability.” Michael Pillow,
Clashing Policies or Confusing Precedents: The “Gross Negligence” Exception to
Consequential Damages Disclaimers, 4 Wm. & Mary Bus. L. Rev. 493, 503-04 (2013).
Furthermore, the Second Circuit has expressly held that N.Y.U.C.C. § 2-719 displaces the
common law. McNally Wellman Co., 63 F.3d at 1196. In McNally, the Circuit noted that “New
York courts have held specifically that the UCC displaces the common law when the particular
section at issue produces a result that would be contrary to that obtained under ordinary contract
law.” Id. (citing Horn Waterproofing Corp. v. Bushwick Iron & Steel Co., 66 N.Y.2d 321 [N.Y.
1985]; Ap Propane v. Sperbeck, 157 A.D.2d 27 [N.Y. App. Div. 3d Dept. 1990]); see also PC
COM, Inc. v. Proteon, Inc., 946 F. Supp. 1125, 1139 (S.D.N.Y. 1996) (holding that, “in
situations where the U.C.C. would produce a different result from traditional common law, the
U.C.C. displaces the common law”). Additionally, “[s]ection 2-719(3) of the UCC, which
governs exclusions of consequential damages, directs the enforcement of such clauses unless
they are unconscionable, and the provision contains no other explicit exceptions.” McNally
Wellington Co., 63 F.3d at 1196 (emphasis added).
73
Therefore, the Court finds that the limitation-of-liability provision is not unconscionable,
that the provision is enforceable and that, as a result, ADSC is precluded from seeking recovery
for consequential economic damages. However, this determination has no effect on ADSC’s
negligent misrepresentation and/or advice claim. This is because the limitation-of-liability
provision is limited to the design and erection of the dome. Moreover, Plaintiffs’ negligent
misrepresentation claims stem from a special relationship between the parties, which existed over
the course of several years from the time of the dome’s erection to its partial collapse. This
relationship was extraneous and separate from the contract. Therefore, having found that
ADSC’s claims and damages (with the exception of its’ negligent misrepresentation claim) are
precluded by the economic loss rule and the limitation-of-liability provision, the Court will now
focus solely on Underwriters’ claims for damages related to replacement of the turf field.
C.
Whether Underwriters’ Claims for Breach of Implied and Express
Warranties and Breach of Contract Are Barred by the Statute of Limitations
After carefully considering the matter, the Court answers this question in the affirmative
for the reasons stated in Defendant’s declaration in support of its motion and Defendant’s
memorandum of law. (Dkt. No. 58, ¶¶ 118-42 [Bundschuh Decl.]; Dkt. No. 59, at 13-18 [Def.’s
Mem. of Law].) To those reasons, the Court adds the following analysis.
1.
Whether the Parties’ Contract Is One for the Sale of Goods
As an initial matter, the Court must determine whether the contract in the present case
was one for the sale of goods, thereby bringing it under the governance of the N.Y.U.C.C., or
whether it is subject to the longer statute of limitations period set forth in N.Y.C.P.L.R. § 213.
Claims arising from the sale of goods “are governed by the four-year statute of limitations set
74
forth in § 2-725 of the N.Y.U.C.C.” Jackson v. Eddy’s LI RV Ctr., Inc., 845 F. Supp. 2d 523, 531
(E.D.N.Y. 2012). “While claims for breach of contract under New York law are generally
covered by a six year statute of limitations, that limitations period does not apply where . . . the
contract at issue is for the sale of goods and is therefore governed by the U.C.C.” Jackson, 845 F.
Supp. 2d at 531 (citing N.Y.C.P.L.R. § 213). In other words, the U.C.C. “applies to transactions
involving goods, but its provisions . . . are not applicable to either ‘service’ or ‘construction’
contracts.” Hunter’s Run Stables, Inc. v. Triple H Constr. Co., Inc., 938 F. Supp. 166, 168
(W.D.N.Y. 1996) (quoting Schenectady Steel Co., Inc. v. Bruno Trimpoli Gen. Constr. Co., Inc.,
43 A.D.2d 234 [N.Y. App. Div. 3d Dept. 1974]).
“In determining whether the violation of a contract providing both for the sale of goods
and for the furnishing of services is controlled by the four-year statute of limitations of U.C.C. §
2-725 or the six-year statute of limitations in N.Y.C.P.L.R. § 213(2), the test is whether the
contract is ‘predominantly’ one for the sale of goods or for the providing of services.” Alesayi
Beverage Corp. v. Canada Dry Corp., 947 F. Supp. 658, 666-67 (S.D.N.Y. 1996) (citing Levin v.
Hoffman Fuel Co., 94 A.D.2d 640 [N.Y. App. Div. 1st Dept. 1983]). “If the provision of services
or rendering of other performance predominates and is not merely incidental or collateral to the
sale of goods, then the U.C.C. does not apply.” Alesayi, 947 F. Supp. at 667 (citing Compania
Sud-Americana de Vapores v. IBJ Schroder Bank & Trust, 785 F. Supp. 411, 431 n.19 [S.D.N.Y.
1992]); see also Long Island Lighting Co. v. IMO Indus. Inc., 6 F.3d 876, 888 (2d Cir. 1993).
“This inquiry depends heavily on the facts and terms peculiar to that contract.” Alesayi, 947 F.
Supp. at 667 (citing McNally Wellman Co. v. New York State Elec. & Gas Co., 6 F.3d 1188, 1194
[2d Cir. 1995]). However, “[t]here may be agreements in which it is difficult to determine from
75
the face of the agreement whether the sale of goods or the promise to provide service is
predominant, and as to which surrounding circumstances may be decisive in resolving that
question.” Levin, 94 A.D.2d at 641.
Section 2-105(1) and (2) of the U.C.C. define “good” as follows:
(1) “Goods” means all things (including specially manufactured
goods) which are movable at the time of identification to the
contract for sale other than the money in which the price is to be
paid, investment securities (Article 8) and things in action.
“Goods” also includes the unborn young of animals and growing
crops and other identified things attached to realty as described in
the section on goods to be severed from realty (Section 2-107).
(2) Goods must be both existing and identified before any interest
in them can pass. Goods which are not both existing and identified
are “future” goods. A purported present sale of future goods or of
any interest therein operates as a contract to sell.
Furthermore, U.C.C. § 2-106(1) provides the following:
In this Article unless the context otherwise requires “contract” and
“agreement” are limited to those relating to the present or future
sale of goods. “Contract for sale” includes both a present sale of
goods and a contract to sell goods at a future time. A “sale”
consists in the passing of title from the seller to the buyer for a
price (Section 2-401). A “present sale” means a sale which is
accomplished by the making of the contract.
In the present case, Defendant argues, in part, that the dome is a “good” because, at the
time of the dome’s manufacture, it was movable and remains movable today. (Dkt. No. 58, ¶¶
119-21 [Bundschuh Decl.].) As discussed above in Part I.E.2. and I.E.3. of this Decision and
Order, Plaintiffs contend that the dome is a permanent structure with an unmovable concrete
foundation and the contract between ADSC and Defendant was one for construction and/or
services. (Dkt. No. 66, at 20-23 [Underwriters’ Opp’n Mem. of Law]; Dkt. No. 69, Attach. 9, at
22-23 [ADSC’s Opp’n Mem. of Law].)
76
As an initial matter, Defendant asserts in its Statement of Material Facts that “[t]he airsupported structure manufactured by Farley is a temporary structure that can be moved. ADSC
considers the air-supported structure temporary for accounting and tax purposes.” (Dkt. No. 57, ¶
212.) The Court deems this fact admitted, in part, because (1) Underwriters admitted this fact
(Dkt. No. 67, ¶ 212) and (2) ADSC failed to cite record evidence that controverted this fact (Dkt.
No. 69, Attach. 7, ¶ 212). Instead, ADSC attached an exhibit of a handwritten tax worksheet in
support of its contention that the dome “is a permanent structure and is being tax depreciated
over 40 years.” (Dkt. No. 69, Attach. 7, ¶ 212.) However, this worksheet was not accompanied
by an affidavit and is not admissible record evidence.5 Furthermore, no reference to the IRS
Code or a statute was provided to support the contents of the document, nor does the document
say anything about the dome being a permanent structure.
Conversely, Defendant provided citations to Mr. Miller’s deposition transcript where he
implicitly acknowledged that the dome is a temporary structure and movable. (Dkt. No. 57, ¶
212.) Mr. Miller also testified that the dome is considered a temporary structure and not a
permanent building for accounting and tax purposes. (Dkt. No. 58, Attach. 7, at 59:9-60:5
[Miller Dep.].) Finally, Mr. Miller also testified during his deposition that, at one point, he
considered moving the “whole facility, the whole business to a different location.” (Dkt. No. 58,
Attach. 10, at 490:17-492:6 [Miller Dep.].) Accordingly, the Court finds that the dome was
movable at the time of its identification to the contract and is therefore a “good” as defined by
U.C.C. § 2-105(1).
5
“The record for purposes of the Statement of Material Facts includes the pleadings,
depositions, answers to interrogatories, admissions and affidavits.” N.D.N.Y.L.R. 7.1(a)(3).
77
Next, the Court must determine whether the contract was primarily one for services or
goods. The contract reveals that Defendant agreed to provide ADSC with “one Air Structure
approximately 432' long x 225' wide x 68' high, plan as per finished drawings which will be
signed and confirmed by Purchaser . . . .” (Dkt. No. 55, Attach. 25, at 1.) The contract states that
ADSC agrees to pay for the dome, including, among other things, the following main component
parts: (1) the dome’s main outer and inner “fabric membrane”; (2) “doors and other access
components”; (3) “lighting”; (3) “mechanical equipment”; and (4) “air structure retention,”
including a “retention channel” and “restraining cables.” (Dkt. No. 55, Attach. 25, at 1-4.)
Significantly, according to the terms of the contract, Defendant agreed to be responsible
for the following: (1) delivery of all components to project site; (2) supervisory personnel to
direct installation; (3) attachment of membranes to profile hardware; (4) installation of doors,
airlocks and catenaries as required; (5) startup and operational check of furnace, inflator, and
emergency backup systems; (6) installation and assembly of lighting poles, including light
fixtures if included in contract; (7) inflation and stabilization of air structure; (8) air structure will
be prepared to facilitate installing insulation between inner and outer membranes; and (9)
operational instruction and review of Operating & Maintenance Instruction Manuel requirements
with Purchaser and/or Purchaser’s designates. (Dkt. No. 55, Attach. 25, at 5-6.)
ADSC agreed to perform the following relevant responsibilities: (1) obtaining and paying
for all permits; (2) excavation, site grading and landscaping; (3) furnishing and placement of
concrete grade beam, equipment pads, and all concrete work required to meet plans and
specifications; (4) installation of cable attachment anchors in grade beam; and (5) supply of
temporary labor required by the Supplier and equipment as requested by the Supplier to effect
78
installation of air structure and equipment including unloading at the site. (Dkt. No. 55, Attach.
25, at 5.) Furthermore, Paragraph “F” of the contract states that “Purchaser is responsible for all
site preparations, site access, on-site crane, unloading at site, placement of structure and
components.” (Dkt. No. 55, Attach. 25, at 6.)
It has been held that “[c]ontracts for goods which involve–incident to the sale of
goods–services such as installation, maintenance, testing, instruction or supervision are still
subject to the UCC.” KSW Mech. Servs. v. Johnson Controls, Inc., 992 F. Supp. 2d 135, 141
(E.D.N.Y. 2014) (citing Richard A. Rosenblatt & Co., Inc. v. Davidge Data Sys. Corp., 295
A.D.2d 168 [N.Y. App. Div. 1st Dept. 2002]). Furthermore, “‘contracts for the sale of
sophisticated equipment frequently provide for some initial supervision, testing and instruction
by the manufacturer,’ and these contracts are nevertheless governed by the UCC because they
primarily concern the sale of goods.” KSW Mech. Servs., 992 F. Supp. 2d at 141 (quoting
Richard A. Rosenblatt & Co., Inc., 295 A.D.2d at 168); accord, J.I. Hass Co., Inc. v. Frank A.
Kristal Assocs., Inc., 127 A.D.2d 541, 542 (N.Y. App. Div. 1st Dept. 1987). As other courts have
observed, labor is “an input into the manufacture of every good.” Micro Data Base Sys., Inc. v.
Dharma Sys., Inc., 148 F.3d 649, 655 (7th Cir. 1998). Moreover, “[m]anufacture always involves
some services, such as engineering, design, fabrication and inspection.” Propulsion Tech., Inc. v.
Attwood Corp., 369 F.3d 896, 901 (5th Cir. 2004). “The fact that a manufactured item is custom
designed for the buyer’s needs and is not readily marketable to others is not
dispositive–manufactured goods are still ‘goods.’” Propulsion Tech., 369 F.3d at 901.
Based upon the foregoing, the Court is persuaded that the parties’ contract was
predominantly one for goods rather than services and/or construction. First, as discussed above,
the dome was movable at the time of its identification to the contract. Second, the contract called
79
for Defendant to provide “one Air Structure” according to the specifications agreed upon by the
parties. Any services rendered by Defendant in connection with the erection of the dome,
training of staff in its use and operation, connection to the grade beam, and connection of
mechanical systems were ancillary to the purpose of the contract. Furthermore, it is undisputed
that the parties never entered into a service agreement, nor was Defendant ever retained to
perform routine maintenance, service or inspections of the dome. Rather, the day-to-day
operation and maintenance of the dome and its mechanical support systems is wholly Mr.
Miller’s responsibility and has been since the time of its erection.
Underwriters attempt to distinguish between the components that were furnished by
Defendant and the dome itself, arguing that, “while the components making up the product may
constitute goods, the fully assembled, finished product is not a good as a matter of law.” (Dkt.
No. 66, at 22-23.) Underwriters cite Hunter’s Run Stables, arguing that, in that case, the court
determined the main objective of the contract was the construction of a horse barn, not the sale of
the goods necessary to construct it. Hunter’s Run Stables, 938 F. Supp. at 168. Similarly,
Underwriters cite Rush v. Jack Anthony, Inc., 2011 NY Slip Op 31230(U) (N.Y. Sup. Ct. Nassau
Cnty. Apr. 25, 2011), where the court held that “[a] completed swimming pool is not ‘goods’
within the meaning of the UCC. While the component parts making up a pool kit may constitute
goods, it is the fully assembled product of which plaintiffs complain.” Rush, 2011 NY Slip Op
31230(U), at *5; see also Schenectady Steel Co., v. Bruno Trimpoli Gen. Constr. Co., Inc., 43
A.D.2d 234, 237 (N.Y. App. Div. 3d Dept. 1974) (holding that “Respondent was not contracting
simply for the steel beams but in essence for their erection and installation with the transfer of the
title to the steel a mere incident of the overall transaction”). However, the finished products in
80
those cases involved permanent structures in the form of a horse barn and an in-ground
swimming pool. Cf. Corbin v. Coleco Indus., Inc., 748 F.2d 411, 414 (7th Cir. 1984) (holding that
above-ground swimming pools are goods within the meaning of Article 2 of the U.C.C. under
Indiana law). Indeed, in Hunter’s Run Stables, the construction company made no attempt to
argue that the disputed contract was a contract for goods. Hunter’s Run Stables, 938 F. Supp. at
168.
The Court is persuaded that this matter is more akin to cases from other state courts
applying identical provisions of the U.C.C., involving seemingly permanent structures. For
example, in Robertson Co., Inc. v. Kenner, 311 N.W.2d 194 (N.D. 1981), the Supreme Court of
North Dakota was tasked with deciding whether a contract was one for goods or services that
involved the sale and erection of two galvanized steel grain storage facilities on a farm.
Robertson, 311 N.W.2d at 199. The court held that the U.C.C. governed the contract, stating that
Although the storage facilities are not ‘goods’ to be taken from the
shelf, they are, in the words of the UCC, a movable thing specially
manufactured. The fact that the storage facilities were in existence
only as disassembled materials at the time of the execution of the
contract, did not change their status as goods. These buildings,
even upon full assembly, are capable of being detached from their
foundations and are thus “movable.”
Id. at 200; see also Kline Iron & Steel Co., Inc. v. Gray Commc’n Consultants, Inc., 715 F. Supp.
135 n.2 (D.S.C. 1989) (applying U.C.C. § 2-105[1], determining that erection of a TV tower was
sale of “goods,” and noting that “[t]he various products were to be manufactured or ordered in
advance by the plaintiff and shipped to the tower site where they would be erected by
subcontractors hired by the plaintiff. Thus, they would clearly be movable at the time of
identification of the contract”); Pittsburgh-Des Moines Steel Co. v. Brookhaven Manor Water
81
Co., 532 F.2d 572, 580 (7th Cir. 1976) (applying Illinois law and holding that a one-million
gallon water tank, that was designed and manufactured by defendant, was a “good”); Gulf Coast
Fabricators, Inc. v. Mosley, 439 So.2d 36, 38 (Ala. 1983) (holding that pre-fabricated building
was a “good” under Article 2 of the U.C.C.); Entron, Inc. v. Gen. Cablevision of Palaka, 435
F.2d 995, 1000 (5th Cir. 1970) (holding that contract for construction of cable television system
was a contract for sale of goods); Gruet v. Care Free Hous. Div. of Kenn-Sch. Enter., 305 A.D.2d
1060 (N.Y. App. Div. 4th Dept. 2003) (holding that “sale and delivery of a modular home is
essentially a contract for the sale of goods governed by UCC article 2”).
2.
Accrual and Application of Statute of Limitations to Underwriters’
Breach-of-Warranty Claims
Accordingly, because the subject contract is predominantly one for the sale of goods, the
U.C.C.’s four-year statute of limitations applies to Underwriters’ claims for breach of implied
and express warranties.6 Under N.Y.U.C.C. § 2-725(1) and (2), claims for breach of contract and
warranty accrue at the time of delivery. Richard A. Rosenblatt & Co., Inc., 295 A.D.2d at 168;
Gianakakos v. Commodore Home Sys., 285 A.D.2d 907, 908 (N.Y. App. Div. 3d Dept. 2001);
Franklin Nursing Home v. Power Cooling, Inc., 227 A.D.2d 374 (N.Y. App. Div. 2d Dept.
1996). Therefore, the date of injury is irrelevant. See Potomac Ins. Co. v. Rockwell Int’l Corp.,
94 A.D.2d 763, 763 (N.Y. App. Div. 2d Dept. 1983); Weinstein v. Gen. Motors Corp., 51 A.D.2d
335, 336-37 (N.Y. App. Div. 1st Dept. 1976). Moreover, N.Y.U.C.C. § 2-725(2) specifically
6
The Court notes that, had ADSC been allowed to proceed with its breach of contract
claim, the claim would have also been subject to the four-year statute of limitations period. N.Y.U.C.C.
§ 2-725(1) (“An action for breach of any contract for sale [of goods] must be commenced within four
years after the cause of action has accrued.”); accord, QK Healthcare, Inc. v. InSource, Inc., 108 A.D.3d
56, 65 (N.Y. App. Div. 2d Dept. 2013); Laing Logging, Inc. v. Int’l Paper Co., 228 A.D.2d 843, 845
(N.Y. App. Div. 3d Dept. 1996); Jackson, 845 F. Supp. 2d at 531.
82
states that knowledge, or lack thereof, of a defect has no effect on the running of the statute. See
Vanata v. Delta Int’l Mach. Corp., 269 A.D.2d 175, 176 (N.Y. App. Div. 1st Dept. 2000). Nor do
any attempts to repair a defective product toll the statute. See Zielinski v. Alfa-Laval, Inc., 86CV-0296, 1989 WL 29482, at *3-4 (W.D.N.Y. Mar. 27, 1989).
When a warranty explicitly extends to the future performance of the goods, a cause of
action for breach of that warranty does not accrue until the breach occurs or should have been
discovered. See Weiss v. Herman, 193 A.D.2d 383, 383 (N.Y. App. Div. 1st Dept. 1993); accord,
Wyandanch Volunteer Fire Co., Inc. v. Radon Constr. Corp., 19 A.D.3d 590, 591 (N.Y. App.
Div. 2d Dept. 2005). This exception applies only to express warranties, not ones that are
implied. Rosen v. Spanierman, 894 F.2d 28, 31-32 (2d Cir. 1990); accord, Momentive
Performance Materials USA, Inc. v. AstroCosmos Metallurgical, Inc., 659 F. Supp. 2d 332, 34748 (N.D.N.Y. 2009) (Scullin, J.); Orlando v. Novurania of AM., Inc., 162 F. Supp. 2d 220, 224
(S.D.N.Y. 2001). However, a warranty expressly limited to repair or replacement is not a
warranty that extends to the future performance of goods. Schwatka v. Super Millwork, Inc., 106
A.D.3d 897, 899 (N.Y. App. Div. 2d Dept. 2013); accord, St. Patrick’s Home for Aged & Infirm
v. Laticrete Intern., Inc., 264 A.D.2d at 657. Finally, while the “tender” of goods is generally
deemed to occur upon delivery, N.Y.U.C.C. § 2-503(1), the parties may alter the definition of
“tender” by agreement, and thereby alter when a breach accrues. City of New York v. Pullman,
Inc., 662 F.2d 910, 919 (2d Cir. 1981); St. Anne-Nackawic Pulp Co., Ltd. v. Research-Cottrell,
Inc., 788 F. Supp. 729, 734 (S.D.N.Y. 1992).
83
In the present case, the date of “tender” of goods occurred no later than December 9,
2005. This is the date that ADSC executed the Acknowledgment of Receipt of Goods provided
by Defendant. (Dkt. No. 58, Attach. 27.) Pursuant to the parties’ contract, ADSC could not use
the dome until the Acknowledgment of Receipt of Goods was executed. (Dkt. No. 58, Attach.
22, at 6 ¶ K.) Furthermore, the warranty provided by Defendant was for repair and replacement
of the dome and its component parts, not a warranty explicitly guaranteeing the performance of
the dome for any length of time. (Dkt. No. 58, Attach. 22, at 15; Dkt. No. 58, Attach. 23; Dkt.
No. 58, Attach. 24.) Therefore, there was no warranty extending to the future performance of the
dome, which could have tolled the applicable statute of limitations.
Therefore, because Underwriters did not file their Complaint until 2012 and ADSC did
not file its Complaint until 2013, Underwriters’ claims for breach of implied and express
warranties are time barred by the applicable four-year statute of limitations.
D.
Whether Underwriters’ Claim for Defective and/or Negligent Design of the
Dome Is Barred by the Statute of Limitations
After carefully considering the matter, the Court answers this question in the negative for
the reasons stated in Underwriters’ memorandum of law. (Dkt. No. 66, at 16-17 [Underwriters’
Opp’n Mem. of Law].) To those reasons, the Court adds the following analysis.
“The statute of limitations in New York for negligence claims is three years.” Triangle
Underwriters, Inc. v. Honeywell, Inc., 604 F.2d 737, 744 (2d Cir. 1979) (citing N.Y.C.P.L.R. §
214); see also Victorson v. Bock Laundry Mach. Co., 37 N.Y.2d 395, 399 (N.Y. 1975) (holding
that three-year statute of limitations applies to actions for strict products liability). Furthermore,
it is the date of injury, rather than the wrongful act of defendant or discovery of injury by
84
plaintiff, that is the relevant date for marking accrual of negligence or a products liability action.
Evans v. Visual Tech. Inc., 953 F. Supp. 453, 456 (N.D.N.Y. 1997); accord, St. Patrick’s Home
for Aged & Infirm v. Laticrete Int’l, Inc., 264 A.D.2d 652, 654 (N.Y. App. Div. 1st Dept. 1999).
In other words, “[a]n action accrues when a plaintiff can allege all of the legal elements that
would allow her to seek redress for her injuries.” Evans, 953 F. Supp. at 456 (citing Kronos, Inc.
v. AVX Corp., 81 N.Y.2d 90, 94 [N.Y. 1993]). As in all negligence claims, a plaintiff asserting a
claim based on a design defect must all also allege injury and damages. See Rogers v. Westfalia
Assoc. Tech., Inc., 485 F. Supp. 2d 121, 126-27 (N.D.N.Y. 2007) (Sharpe, C.J.).
Here, Defendant contends that the statute of limitations accrued in 2007, when Mr. Miller
first observed damage to the dome due to snow loads that caused cable pockets to rip. (Dkt. No.
58, ¶¶ 97-98 [Bundschuh Decl.].) However, the Court believes that the damages sustained as a
result of ripped cable pockets and the dome’s collapse are distinct from each other. Specifically,
as discussed above, Plaintiffs have asserted claims regarding the dome’s inability to withstand
the snow load indicated in Defendant’s snow load calculations and an improper height-to-width
ratio in the dome’s design. These claims are much broader than a design defect claim related to
the longitudinal cables and the pockets that ripped. Moreover, because the Court has held that
Underwriters’ claim for damage to the turf field is the only claim that may proceed under a
defective and/or negligent design theory of liability, Underwriters could not have alleged the
requisite injury and damages to the turf field until the dome’s collapse in 2011. Therefore,
Underwriters’ claim for defective and/or negligent design of the dome is not time-barred.
85
E.
Whether a Genuine Dispute of Material Fact Exists Regarding Underwriters’
Claim for Defective and/or Negligent Design of the Dome7
After carefully considering the matter, the Court answers this question in the negative for
the reasons stated below.
A plaintiff seeking to impose liability for a design defect must demonstrate the following:
(1) the product, as designed, posed a substantial likelihood of harm; (2) it was feasible to design
the product in a safer manner; and (3) the defective design was a substantial factor in causing
plaintiff’s injury. Maxwell v. Howmedica Osteonics Corp., 713 F. Supp. 2d 84, 90 (N.D.N.Y.
2010) (Suddaby, J.); Simon v. Smith & Nephew, Inc., 990 F. Supp. 2d 395, 403 (S.D.N.Y. 2013).
“Taken together, the first two prongs form a standard known as the ‘risk-utility test.’” Maxwell,
713 F. Supp. 2d at 91 (citing Cuntan v. Hitachi Koki USA, Ltd., 06-CV-3898, 2009 WL 3334364,
at *5 [E.D.N.Y. Oct. 15, 2009]). “This standard is used to determine whether a product, as
designed, is ‘unreasonably dangerous.’” Id. “There must be something wrong with the product,
and if nothing is wrong there will be no liability.” Galletta v. Valmet, Inc., 04-CV-0313, 2007
WL 963288, at *4 (N.D.N.Y. Mar. 30, 2007) (Mordue, J.).
It is not enough, however, to demonstrate that a product is dangerous. Cuntan, 2009 WL
3334364, at *5. A plaintiff must engage in
7
In New York, “‘[i]n a design defect case, there is almost no difference between a prima
facie case in negligence and one in strict liability.’” Rogers v. Westfalia Assoc. Tech., Inc., 485 F. Supp.
2d 121, 126 (N.D.N.Y. 2007) (Sharpe, J.) (quoting Bah v. Nordson Corp., 00-CV-9060, 2005 WL
1813023, at *12 [S.D.N.Y. Aug. 1, 2005]); Pinello v. Andreas Stihl Ag & Co. KG, 08-CV-0452, 2011
WL 1302223, at *16 (N.D.N.Y. Mar. 31, 2011) (Kahn, J.) (noting that “New York courts generally
consider strict products liability and negligence claims to be ‘functionally synonymous’”). Thus, the
Court will address Plaintiffs’ negligence and strict liability design defect claims together.
86
an inquiry into such factors as [the following]: (1) the utility of the
product to the public as a whole and to the individual user; (2) the
nature of the product–that is, the likelihood that it will cause
injury; (3) the availability of a safer design; (4) the potential for
designing and manufacturing the product so that it is safer but
remains functional and reasonably priced; (5) the ability of the
plaintiff to have avoided injury by careful use of the product; (6)
the degree of awareness of the potential danger of the product
which reasonably can be attributed to the plaintiff; and (7) the
manufacturer’s ability to spread any cost related to improving the
safety of the design.
Id. (quoting Clarke v. LR Sys., 219 F. Supp. 2d 323, 330 [E.D.N.Y. 2002]). “A plaintiff is not
required to introduce proof on all of these factors, as relevance of each factor will vary from case
to case, and the factors interact with one another.” Guarascio v. Drake Assoc. Inc., 582 F. Supp.
2d 459, 463 (S.D.N.Y. 2008). “At a minimum, however, the plaintiff, in order to make out a
prima facie case (and to raise a genuine issue of fact when confronted with a motion for summary
judgment), must present some admissible evidence that there exists a technologically feasible and
commercially practicable alternative design . . . .” Guarascio, 582 F. Supp. 2d at 463; Cuntan,
2009 WL 3334364, at *5 (“[A] plaintiff must establish not only that a different design would
have led to improved safety, but also that adopting such a design would be ‘economically and
technically feasible.’”).
Generally, under New York law, a plaintiff seeking to establish a design defect is required
to provide expert testimony as to the feasibility and efficacy of alternative designs. Cuntan, 2009
WL 3334364, at *6 (collecting cases). In particular, unless a reasonable alternative design is
both obvious to and understandable by a layperson, an expert is needed. Guarascio, 582 F. Supp.
2d at 463. As a result, “New York courts uniformly rule that competent, non-conclusory expert
testimony is needed in cases involving complex design issues.” Guarascio, 582 F. Supp. 2d at
87
463 (collecting cases). Experts can prove the feasibility and efficacy of alternative designs either
by (1) showing, “through testing and construction of a prototype, that such an alternative design
is within the realm of practical engineering feasibility,” or (2) identifying “makers of similar
equipment who have already put into use the alternative design.” Rypkema v. Time Mfg. Co. 263
F. Supp. 2d 687, 692 (S.D.N.Y. 2003). “Despite this standard, there is no specific evidence a
plaintiff must submit, although ‘unsupported, conclusory evidence on the technological and
economic feasibility of a safer design is insufficient.’” Mathis-Kay v. McNeilus Truck & Mfg.,
Inc., 06-CV-0815, 2011 WL 4498386, at *7 (W.D.N.Y. Sept. 27, 2011) (quoting Ferracane v.
United States, 02-CV-1037, 2007 WL 316570, at *5 [E.D.N.Y. Jan. 30, 2007]).
In the present case, Plaintiffs’ expert, Thomas Grafe, P.E., opined that the dome suffered
from several design defects. For instance, Mr. Grafe opined that the dome’s height-to-width ratio
was not in compliance with ASI-77. Mr. Grafe states that ASI-77 requires a height-to-width ratio
between .3 and .5. (Dkt. No. 65, Attach. 2, ¶ 18 [Grafe Aff.].) According to Mr. Grafe, “[t]he
high end, .5, is typically used in a high snow location to provide a steeper slope for snow to slide
off. In this case, the subject structure is located in a low wind and high snow location, yet was
designed at the flattest possible profile with a height to width ratio of .30.” (Id.) Mr. Grafe
further states that the longitudinal cables that were used were too short by several feet. (Id. at ¶
19.) As a result, “[t]his likely created an even flatter profile than the .30 height to width ratio for
which it was designed. Less than .30 is out of the proper design range.” Mr. Grafe appears to
have confirmed this himself by visiting the site in 2013, approximately two years after the
dome’s collapse. While there, Mr. Grafe states, “I measured the height at the center to be 66 feet
4 inches. This produces a height to width ratio of less than the minimum .30.” (Id.)
88
In light of Mr. Schmidt’s testimony that this was the largest structure he had designed at
the time, Mr. Grafe states that “[it] is quite obvious that a larger structure has a larger area at the
top that is nearly flat and can accumulate snow. Yet, the structure was designed with the flattest
possible height to width ratio, in a high snow area. This fact alone establishes that the Dome was
defectively designed.” (Id. at ¶ 20.) Mr. Grafe also takes issue with the placement of the
longitudinal cables, which caused documented occurrences of snow build on the ADSC dome
and prevented the dome to shed snow. (Id. at ¶¶ 21-22.)
Finally, Mr. Grafe also takes issue with the design of the dome’s heating system. Mr.
Grafe states that the ASI manual requires the difference in temperature from the floor to the
crown of the structure should be an increase of 0.5EF for every foot of height. (Id. at ¶ 9.) Mr.
Grafe opines that, in this case, the temperature at the crown of the ADSC dome should be 34EF
higher than the temperature at the floor. (Id.) However, according to Mr. Miller, a thermometer
hoisted to the top of the inside of the dome never showed a differential temperature from the
floor to the crown of more than 12EF. (Id.) Based upon this testimony, Mr. Grafe opines that
“[t]his indicates either an incorrect assumption of the amount of stratification used in the design
or improper design of the heating system.” (Id.)
Based upon the opinions expressed in Mr. Grafe’s affidavit, Mr. Grafe offers the
following opinion with respect to alternative designs:
Moreover, there are several feasible design alternatives that could
have been employed by the Farley Group to avoid the Dome’s
collapse. For example, the Farley Group could (and should have)
designed a Dome with a steeper height to width ratio. Similarly,
the Farley Group could (and should have) designed a smaller
structure so as to avoid snow accumulation on the Dome’s
excessively and unnecessarily flattened roof. Additionally, the
89
Farley Group could (and should have) designed the Dome with
longitudinal cables of a proper length, and could have placed those
cables in such a manner that would avoid ice and snow being
lodged behind them (such as being placed in the interior of the
Dome’s fabric).
(Id. at ¶ 32.)
In expressing this opinion, Mr. Grafe has failed to demonstrate the feasibility and efficacy
of these alternative designs through his own testing or identifying other dome manufacturers that
utilize these designs. For instance, with respect to Mr. Grafe’s opinion regarding the dome’s
heating system, Mr. Grafe relied upon uncited deposition testimony from Mr. Miller, did not
conduct his own tests or observations to verify Mr. Miller’s claims, and did not indicate, with any
specificity, that the heating system should have been designed with a higher BTU output or that
the alleged lower temperatures were due to a specific defect.
Similarly, Mr. Grafe does not offer any support regarding the feasibility of placing the
longitudinal cables in the interior of the dome or that other dome manufacturers have done so in
their designs. Nor does Mr. Grafe offer any support for his opinion that Farley could have
designed the dome with a steeper height-to-width ratio without significantly compromising the
rest of the design. Specifically, Mr. Grafe does not offer an opinion as to what the proper heightto-width ratio should have been for a dome in the Queensbury area. Moreover, Mr. Grafe does
not opine as to the costs associated with a steeper design, such as up-front and operating costs.8
8
The Restatement provides an illustration that highlights the flaws of Mr. Grafe’s opinion
regarding the size of the dome. Restatement (Third) of Torts: Prod. Liab. § 2 cmt. f, illus. 9 (1998).
Illustration number nine to comment “f,” describes a purchaser of a compact car who suffered serious
injuries after getting into an accident. The purchaser brings a products liability claim on the basis that
the car is defective in that it does not offer the same level of crashworthiness as does a full-size
automobile. Plaintiff, however, cannot identify a specific feature of the car that could have been
designed differently so as to be safer without increasing its size and substantially reducing its desirable
90
Granted, Underwriters argue in their memorandum of law that, “[a]s a matter of common sense,
building a smaller structure would have had the likely result of decreasing the price of the Dome”
and that “[i]t does not appear that designing and constructing a Dome with a steeper height-towidth ratio would have the effect of significantly increasing the Dome’s price”; however, such
arguments are conclusory and not based on reliable evidence. (Dkt. No. 66, at 6-7
[Underwriters’ Opp’n Mem. of Law].) Once again, this is a large and sophisticated product.
Therefore, it would be impermissible to assume, “as a matter of common sense,” that changing
the dome’s design to make it smaller would automatically be less expensive.
Finally, although Mr. Miller submitted an affidavit containing the results of Internet
research he conducted, which purportedly demonstrate that other dome manufacturers utilize
designs that can withstand specific snow loads, such evidence lacks probative value. (Dkt. No.
69, Attach. 3 [Miller Aff.].) Specifically, the attachments to Mr. Miller’s affidavit are marketing
materials from Defendant’s various competitors. Although the documents state that the
respective designs can withstand various snow loads, no calculations or other information is
provided regarding the designs. Nor do any of these materials state that the designs can
withstand a ground snow load of 70 PSF, which is the requirement for a structure erected in
Queensbury, New York. Nonetheless, under the circumstances, advertising materials from
Farley’s competitors, which state that their designs can withstand specific snow loads, without
characteristics of lower cost and lower fuel economy. Therefore, “[Plaintiff] has not established a defect
within the meaning Subsection (b).” Similarly, here, Mr. Grafe suggests the dome should have been
designed smaller and/or with a steeper height-to-width ratio but does not offer an opinion regarding the
costs involved with these design modifications or the costs associated with operating costs such as how
much more expensive it would be to heat and inflate a dome with a steeper design. Nor does he take into
account that Mr. Miller specifically wanted a large dome.
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any additional information (including, but not limited to, cost), is insufficient to raise a genuine
dispute of material fact with respect to whether Defendant could have used an alternative design
that was both technologically feasible and commercially practicable. Accordingly, because
Underwriters have failed to offer sufficient evidence regarding a feasible alternative design, the
claim must be dismissed. See In re Fosamax Prods. Liab. Litig., 924 F. Supp. 2d 477, 485
(S.D.N.Y. 2013) (stating that, “[t]o recover under a theory of strict products liability for sale of a
defectively designed product, ‘it is well established that a plaintiff must plead and prove that
there was a feasible design alternative that would have made the product safer.’”) (citations
omitted).
F.
Whether a Genuine Dispute of Material Fact Exists Regarding Underwriters’
Claim for Failure to Warn
After carefully considering the matter, the Court answers this question in the negative for
the reasons stated in Defendant’s declaration in support of its motion and Defendant’s
memorandum of law. (Dkt. No. 58, ¶¶ 101-15 [Bundschuh Decl.]; Dkt. No. 59, at 6-7 [Def.’s
Mem. of Law].) To those reasons, the Court adds the following analysis.
The elements of a failure-to-warn claim are the same as those of a strict liability claim
and a negligence claim. Fane v. Zimmer, 927 F.2d 124, 130 (2d Cir. 1991); Marshall v.
Sheldahl, Inc., 150 F. Supp. 2d 400 n.5 (N.D.N.Y. 2001); Engler v. MTD Prods., Inc., 13-CV0575, 2015 WL 900126, at *17 (N.D.N.Y. Mar. 2, 2015) (Hummel, M.J.). To prove a prima
facie case for a failure-to-warn claim under New York law, a plaintiff must demonstrate that (1)
the manufacturer had a duty to warn, (2) the danger resulted from a foreseeable use about which
the manufacturer knew or should have know, and (3) the manufacturer’s failure to warn of the
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danger was the proximate cause of the plaintiff’s injury. Gunn v. Hytrol Conveyor Co., Inc., 10CV-0043, 2013 WL 2249241, at *11 (E.D.N.Y. May 22, 2013) (citing Colon ex rel. Molina v.
BIC USA, Inc., 199 F. Supp. 2d 53, 84 [S.D.N.Y. 2001]). Further, a plaintiff does not have the
burden, at the summary judgment stage, to show that an adequate warning would have prevented
his injury. Liriano v. Hobart Corp., 170 F.3d 264, 271 (2d Cir. 1999). Indeed, “[t]he adequacy
of the instruction or warning is generally a question of fact to be determined at trial and is not
ordinarily susceptible to the drastic remedy of summary judgment.” Urena v. Biro Mfg. Co., 114
F.3d 359, 366 (2d Cir. 1997) (quoting Beyrle v. Finneron, 199 A.D.2d 1022, 1023 [N.Y. App.
Div. 4th Dept. 1993]).
However, this District has recognized two situations wherein failure-to-warn claims can
be decided as a matter of law: “(1) where the injured party was fully aware of the hazard through
general knowledge, observation or common sense; and (2) where the danger at issue falls within
the limited class of hazards [that] need not be warned of as a matter of law because they are
patently dangerous or pose open and obvious risks.” Rogers, 485 F. Supp. 2d at 129 (citations
omitted). Furthermore, a plaintiff’s failure to read a warning is not dispositive. Anderson v.
Hedstrom Corp., 76 F. Supp. 2d 422, 445 (S.D.N.Y. 1999). A plaintiff may argue that “the
warnings, in addition to being substantively inadequate, were insufficiently conspicuous or
prominent and, thus, be able to overcome his or her failure to read them.” Humphrey v. Diamant
Boart, Inc., 556 F. Supp. 2d 167, 181 (E.D.N.Y. 2008).
Here, it is undisputed that Mr. Miller knew of the danger associated with allowing snow
to accumulate on top of the dome. Mr. Miller read the dome’s Operation and Maintenance
Instructions, including the section titled “Snow Accumulation” and “Emergency Procedures,”
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and discussed snow accumulation with other dome owners while conducting his own research
prior to purchasing a dome. Although apparently no warnings were explicitly provided to Mr.
Miller regarding the possibility that manual snow removal may be required at the time of his
purchase, Mr. Miller was subsequently informed of this possibility in November 2010, which
was before the dome’s collapse. Accordingly, any failure to warn about the possibility for
manual snow removal at the outset cannot be considered a proximate cause of the accident.
Finally, Underwriters’ argument that Defendant failed to warn ADSC about the dome’s
actual minimum snow load capacity is also unpersuasive. Once again, it is undisputed that Mr.
Miller was aware of the dangers associated with snow accumulation on top of the dome.
Therefore, it was incumbent upon him to ensure that snow did not gradually accumulate.
Underwriters’ argument that Mr. Miller would have requested assistance sooner had he known
that the dome could not withstand a 45 PSF snow load is entirely speculative and insufficient to
raise a genuine dispute of material fact. In fact, Mr. Miller testified that he observed snow
accumulating on the dome two to three weeks before the collapse. (Dkt. No. 58, Attach. 8, at
293:13-17.) Mr. Miller also observed the dome dishing approximately one week before the
collapse when, in Mr. Miller’s opinion, “it became a significant issue” based upon his past
experience with other snow buildups on the dome. (Id. at 294:22-295:14.) It was at that point
that Mr. Miller contacted Farley. (Id. at 295:15-17.) Nothing from this testimony suggests that
Mr. Miller would have contacted Defendant any sooner, because Mr. Miller contacted Farley as
soon as he developed significant concerns regarding the snow accumulation. Therefore, any
alleged failure to advise or warn ADSC regarding the dome’s actual minimum snow load
capacity cannot be considered the proximate cause of the accident.
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G.
Defendant’s Challenge to the Admissibility of Thomas Grafe’s Expert
Opinions
In light of the above holdings, the Court need not, and will not, consider the merits of
Defendant’s arguments in its’ reply papers regarding Mr. Grafe’s proposed opinions. More
specifically, because the Court did not rely upon Mr. Grafe’s opinions in reaching its decision
regarding Plaintiffs’ negligent misrepresentation and/or advice claims, those arguments are moot.
Furthermore, the Court did not consider the thirty pages of “non-testimonial” exhibits attached to
Defendant’s reply.
IV.
CONCLUSION
For the reasons stated above, Defendant’s motion for summary judgment is denied with
respect to Plaintiffs’ claims for negligent misrepresentation and/or advice. However,
Defendant’s motion for summary judgment is granted with respect to Plaintiffs’ remaining
claims.
ACCORDINGLY, it is
ORDERED that Defendant’s motion for summary judgment (Dkt. No. 56) is
GRANTED in part and DENIED in part as set forth in Part IV of this Decision and Order such
that SURVIVING Defendant’s motion are Plaintiffs’ claims for negligent misrepresentation
and/or advice; it is further
ORDERED that counsel are directed to appear on OCTOBER 28, 2015 at 11:00 a.m. in
chambers for a pretrial conference, at which counsel are directed to appear with settlement
authority, and in the event that the case does not settle, trial will be scheduled at that time.
Plaintiff is further directed to forward a written settlement demand to defendants no later than
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OCTOBER 9, 2015 , and the parties are directed to engage in meaningful settlement
negotiations prior to the conference. In the event that counsel feel settlement is unlikely, counsel
may request to participate via telephone conference for the limited purpose of scheduling a trial
date by electronically filing a letter request at least one week prior to the scheduled conference.
Dated:
September 23, 2015
Syracuse, New York
___________________________________
Hon. Glenn T. Suddaby
Chief, U.S. District Judge
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