Steelcase Inc. v. M.B. Haynes Corporation

Filing 19

ORDER denying 5 Motion to Dismiss; denying 8 Motion for Summary Judgment ; denying 10 Motion for Summary Judgment ; adopting Memorandum and Recommendations re 15 Memorandum and Recommendations; IT IS FURTHER ORDERED th at counsel shall conduct the initial attorneys conference and file certificate thereof in accordance with the Local Rules of Practice and Procedure of the United States District Court for the Western District of North Carolina. Signed by District Judge Martin Reidinger on 8/6/10. (siw)

S t e e l c a s e Inc. v. M.B. Haynes Corporation

D o c . 19

IN THE DISTRICT COURT OF THE UNITED STATES F O R THE WESTERN DISTRICT OF NORTH CAROLINA ASHEVILLE DIVISION C IV IL CASE NO. 1:09cv443

S TE E L C AS E , INC., P l a i n t if f , vs . M .B . HAYNES CORPORATION, D e fen d a n t.

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ORDER

TH IS MATTER is before the Court on the Defendant's Motion to Dismiss [ D o c . 5]; the Defendant's Motion for Summary Judgment (Indemnity Claim) [D o c . 8]; and the Defendant's Motion for Summary Judgment (Contribution C la im ) [Doc. 10]. P u rs u a n t to 28 U.S.C. § 636(b) and the Standing Orders of Designation o f this Court, United States Magistrate Judge Dennis L. Howell was d e s ig n a te d to consider the motion to dismiss [Doc. 5] and to submit r e c o m m e n d a tio n s for its disposition. The motions for summary judgment were n o t referred to the Magistrate. In March 2010, the Magistrate Judge entered a Memorandum and

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R e c o m m e n d a tio n in which he recommended denying the motion to dismiss. [D o c . 15]. The Defendant timely filed objections. Because no referral was m ade, the Magistrate Judge did not issue a Memorandum and

R e c o m m e n d a tio n concerning the motions for summary judgment. The Court, h o we ve r, considers those motions infra.

P R O C E D U R AL & FACTUAL BACKGROUND T h e Plaintiff initiated this action for indemnification and, alternatively, c o n trib u tio n , on December 10, 2009, based on diversity jurisdiction. [Doc. 1]. In 2003, Steelcase, Inc. (Steelcase) operated a furniture manufacturing plant in Fletcher, North Carolina. [Id., at 1]. In October 2003, Steelcase had a c o n tra c t with the Defendant for construction work in the plant and the D e fe n d a n t. [Id., at 2]. Employees of the Defendant moved a metal fire door d u rin g construction and the next day, the door fell on Maxine Shelton, an e m p lo ye e of the janitorial service retained by Steelcase. [Id.]. Shelton and h e r husband (Sheltons) sued both Steelcase and M.B. Haynes (Haynes) in s ta te court. [Id.]. The state court granted summary judgment to Haynes prior to trial but th e jury returned a verdict against Steelcase in the amount of $1,250,000.00 in favor of the Sheltons. [Id.]. The North Carolina Court of Appeals affirmed 2

th e verdict and judgment against Steelcase but reversed the grant of s u m m a ry judgment in favor of Haynes. [Id., at 3]; Shelton v. Steelcase, Inc., e t. al, 677 S.E.2d 485 (2009). The case against Haynes was remanded for tria l. Id. Both Steelcase and Haynes moved for discretionary review by the N o rth Carolina Supreme Court and both petitions were denied in August 2009. [D o c . 1, at 3.]; Shelton v. Steelcase, Inc., et. al., 363 N.C. 583, 682 S.E.2d 3 8 9 (2009). Steelcase paid the full amount of the judgment owed to Shelton a n d filed a Satisfaction of Judgment in state court on October 1, 2009. [Doc. 1 , at 3; Doc. 17-1]. After this present action was filed the Sheltons filed a v o l u n t a r y dismissal with prejudice of their claims against Haynes, thus this c la im was never tried on remand. [Doc. 17-1, Doc. 17-2]. In the Complaint in this Court, Steelcase seeks indemnification from H a yn e s as the primary, active tortfeasor for the full amount of the judgment p a id to Shelton. [Doc. 1, at 3]. In the alternative, it seeks contribution from H a yn e s as a joint tortfeasor. [Id., at 4]. O n February 8, 2010, Haynes moved to dismiss pursuant to Federal R u le of Civil Procedure 12(b)(6), claiming this action is premature until the n e g lig e n c e , if any, of Haynes is determined by the state court. [Doc. 6, at 2]. O n the same day that Haynes moved to dismiss, it filed two separate motions fo r summary judgment, one addressed to indemnity and one addressed to 3

c o n trib u tio n . [Doc. 8; Doc. 10]. Steelcase responded to the motion to dismiss by presenting proof that th e state court action was completely concluded. Steelcase filed both the S a tis fa c tio n of Judgment showing that Steelcase had paid the full amount of th e judgment to the Sheltons and a copy of the Sheltons' Notice of Voluntary D is m is s a l with Prejudice as to Steelcase and Haynes. [Doc. 17-1; Doc. 17-2]. H a yn e s does not dispute that the state court action has been concluded. S in c e the Defendant had moved to dismiss solely based on the state c o u rt action not being concluded, and because the state court action has th e re a fte r been concluded, the Magistrate Judge recommended the denial of th e motion to dismiss. Haynes timely filed objections.

S TAN D AR D OF REVIEW A district court reviews specific objections to a Memorandum and R e c o m m e n d a tio n under a de novo standard. 28 U.S.C. §636(b). "Parties filin g objections must specifically identify those findings objected to." Battle v . United States Parole Commission, 834 F.2d 419, 421 (5th Cir.1987), o v e rru le d on other grounds Douglass v. United Ervs. Auto. Ass'n, 79 F.3d 1 4 1 5 (5 th Cir. 1996). If a party makes only general objections, de novo review is not required. Wells v. Shriners Hospital, 109 F.3d 198, 200 (4th Cir. 4

1 9 9 7 )(b o ile rp la te objections will not avoid the consequences of failing to o b je c t altogether). "Section 636(b)(1) does not countenance a form of

g e n e ra liz e d objection to cover all issues addressed by the magistrate judge; it contemplates that a party's objection to a magistrate judge's report be s p e c ific and particularized, as the statute directs the district court to review o n ly those portions of the report or specified proposed findings or re c o m m e n d a tio n s to which objection is made." United States v. Midgette, 478 F .3 d 616, 621 (4 th Cir. 2007), certiorari denied 551 U.S. 1157, 127 S.Ct. 3032, 1 6 8 L.Ed.2d 749 (2007) (emphasis in original). Likewise, merely reiterating th e same arguments made in the pleading submitted to the Magistrate Judge d o e s not warrant de novo review. Id.; Veney v. Astrue, 539 F.Supp.2d 841, 8 4 6 (W.D.Va. 2008). "Allowing a litigant to obtain de novo review of her entire c a s e by merely reformatting an earlier brief as an objection `mak[es] the initial re fe re n c e to the magistrate useless.'" Id. In order "to preserve for appeal an is s u e in a magistrate judge's report, a party must object to the finding or re c o m m e n d a tio n on that issue with sufficient specificity so as reasonably to a le rt the district court of the true ground for the objection." Midgette, 478 F.3d a t 622.

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D I S C U S S IO N Th e Motion to Dismiss for Failure to State a Claim. In order to survive a motion to dismiss pursuant to Rule 12(b)(6), "a c o m p la in t must contain sufficient factual matter, accepted as true, `to state a c la im to relief that is plausible on its face.'" Ashcroft v. Iqbal, U.S. , 129

S .C t. 1937, 1949, 173 L.Ed.2d 868 (2009), quoting Bell Atl. Corp. v. Twombly, 5 5 0 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007). To be "p la u s ib le on its face," a plaintiff must demonstrate more than "a sheer p o s s ib ility that a defendant has acted unlawfully." Id. A plaintiff must

"a rtic u la te facts, when accepted as true, that `show' that the plaintiff has stated a claim entitling [it] to relief, i.e., the `plausibility of entitlement to relief.'" F ra n c is v. Giacomelli, 588 F.3d 186, 193 (4 th Cir. 2009), quoting Twombly, 550 U .S . at 570. Both parties have submitted materials outside the pleadings. The

s a tis fa c tio n of judgment, release and notice of voluntary dismissal with p r e ju d ic e are inherently relied on by Steelcase in its Complaint. It is therefore "p ro p e r for the district court to consider [them] in ruling on the motion to d is m is s ." Darcangelo v. Verizon Communications, Inc., 292 F.3d 181, 195 n. 5 (4 th Cir. 2002), citing New Beckley Mining Corp. v. Int'l Union, UMWA, 18 F .3 d 1161, 1164 (4 th Cir. 1994). "[A] district court ruling on a motion to 6

d is m is s may consider a document the authenticity of which is not contested, a n d upon which the plaintiff's complaint necessarily relies." Stewart v.

P e n s io n Trust of Bethlehem Steel Corp., 12 Fed.Appx. 174, 2001 WL 691028 * *1 (4 th Cir. 2001); Philips v. Pitt County Mem'l Hosp., 572 F.3d 176, 180 (4 th C ir. 2009) (court may consider documents "attached to the motion to dismiss, s o long as they are integral to the complaint and authentic"). "[I]f a plaintiff d o e s not incorporate by reference or attach a document to its complaint, but th e document is referred to in the complaint and is central to the plaintiff's c la im , a defendant may submit an indisputably authentic copy to the court to b e considered on a motion to dismiss." GFF Corp. v. Associated Wholesale G ro c e rs , Inc., 130 F.3d 1381, 1384 (10 th Cir. 1997); CACI Intern., Inc. v. St. P a u l Fire and Marine Ins. Co., 566 F.3d 150, 154 (4 th Cir. 2009) (documents s u b m itte d by defendant in support of motion may be considered if the c o m p la in t explicitly relied on them). In the objections, filed on March 30, 2010, counsel for Haynes states: W h ile it is true that Steelcase, Inc. paid the Judgment against it in th e case pending in [state court], that satisfaction does not resolve th e entire case. The case is still pending as to all claims against M .B . Haynes. ... In other motions before this Court, M.B. Haynes has pled that it h a s obtained a Release from Plaintiffs Maxine Shelton and Jerry S h e lto n . M.B. Haynes understands that this normally would 7

r e s o l v e the action of Plaintiffs against it and end the State Court a c tio n . However, in this case, Steelcase has alleged that the R e le a s e is of no account and was given in bad faith, which if true p ro b a b ly would bring new life to the pending action in [state court]. [D o c . 16, at 1, 2 n.1] (emphasis provided). A s conceded in the objections, Haynes placed before this Court in s u p p o rt of one of its motions for summary judgment, a copy of the release e xe c u te d by the Sheltons to Haynes which is dated January 25, 2010. [Doc. 1 1 -2 ]. The notice of dismissal with prejudice signed by the Sheltons' lawyer is dated April 8, 2010. [Doc. 17-2]. This means that at the time Haynes filed its motion to dismiss on February 8, 2010, defense counsel knew (a) a s e ttle m e n t had been reached between the Sheltons and Haynes; (b) payment o f that settlement had been made; and (c) the Sheltons had signed a full and c o m p le te release of all claims against Haynes. Although technically the action h a d not yet been dismissed at the time defense counsel filed objections on M a rc h 30, 2010, he clearly knew it was only a matter of days before dismissal wo u ld be effected. In addition, the Defendant has not disputed Plaintiff's a s s e rtio n that the state court action has been dismissed. Indeed, in his reply to the Plaintiff's response to the objection, counsel concedes that the state c o u r t action was pending "until Notice of Dismissal was filed in the [state c o u rt] action on April 8, 2010[.]" [Doc. 18, at 1]. It is moreover undisputed

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th a t the judgment against Steelcase was satisfied on October 1, 2009. As s u c h , the sole basis for the Defendant's motion to dismiss - that the state c o u rt action remained pending - is no longer true. As such the Defendant's m o tio n must be denied. In an attempt to avoid this result, Defendant's counsel raises a new a rg u m e n t in his objection to the Memorandum and Recommendation. He a rg u e s that Steelcase has questioned Haynes' good faith in entering into s e ttle m e n t with the Sheltons and asserts that this "probably would bring new life to the pending action" in state court. [Doc. 16, at 2]. This, however, was n o t an argument raised before the Magistrate Judge. Price v. Dixon, 961 F .S u p p . 894 (E.D.N.C. 1997)(claims cannot be raised for the first time in o b je c tio n s to a memorandum and recommendation).1 There is, however, no p e n d in g state court action. To the extent any issue related to good faith has b e e n raised, it has been raised in response to the Defendant's motion for s u m m a ry judgment on the issue of contribution in this case. The Court rejects the Defendant's objection and concludes that the m o tio n to dismiss must be denied. The Court notes that counsel's actions in filin g this motion at a time when he knew that the underlying judgment had

Haynes also makes a vague argument about res judicata in the objections which was not raised before the Magistrate Judge. As a result, the Court will not address it.

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b e e n satisfied and that his client had entered into a settlement and a release h a d been given borders on sanctionable conduct.

T h e Motions for Summary Judgment. U n d e r the Federal Rules of Civil Procedure, summary judgment s h a ll be awarded "if the pleadings, depositions, answers to in te rro g a to rie s , and admissions on file, together with the affidavits, ... show there is no genuine issue as to any material fact and that th e moving party is entitled to a judgment as a matter of law." F e d .R .C iv.P . 56(c). As the Supreme Court has observed, "this s ta n d a rd provides that the mere existence of some alleged factual d is p u te between the parties will not defeat an otherwise properly s u p p o rte d motion for summary judgment; the requirement is that th e re be no genuine issue of material fact." Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 519 (4 th Cir. 2 0 0 3 ) (emphasis in original). N o n e th e le s s , in considering the facts for the purposes of a summary ju d g m e n t motion, the Court will view the pleadings and material presented in th e light most favorable to the nonmoving party. Matsushita Electric Industrial C o . v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (19 8 6 ). In the first motion for summary judgment, Haynes claims that because th e jury in the Shelton trial found Steelcase was actively negligent, Steelcase m a y not seek indemnification from Haynes. [Doc. 9].

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In affirming the jury verdict, the North Carolina Court of Appeals held as fo llo w s : [T ]h is case was tried on a theory of premises liability. The e vid e n c e supported a finding that the door was a hazardous c o n d itio n , that Steelcase knew or should have known of its h a z a r d o u s nature, and that Steelcase nonetheless did not warn M s . Shelton of the hazard. She was then injured by that hazard. ... Thomas Allen, an iron worker for defendant M.B. Haynes, te s tifie d that a day or two before the accident, he and his partner we re working near the door and noticed, because of fresh marks in the dust on the floor, that the door appeared to have slid out fro m the wall. The two men pushed the door back. On the day of th e accident, the door, according to Ms. Shelton, was nearly flush with the wall. Based on this evidence, the jury could have found th a t the door fell because the M.B. Haynes workers pushed it too c lo s e to the wall. ... T h e evidence is sufficient ... to permit a jury to find that Steelcase s h o u ld have been able to foresee that its maintenance of a h a z a rd o u s condition ­ the unsecured 300-pound door leaning a g a in s t a wall ­ and failing to warn Ms. Shelton and others whom it had requested to work in the area of the hazard could result in s o m e injury. S h e lto n v. Steelcase, Inc., 677 S.E.2d at 498-99, 503-04. T h e jury in the state court case against Steelcase thus found that S te e lc a s e was negligent on the theory of premises liability. Premises liability n e g lig e n c e can be either active or passive. That is, Steelcase either "`(1) n e g lig e n tly created the condition causing the injury,' (active negligence) or (2) n e g lig e n tly failed to correct the condition after actual or constructive notice of

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its existence' (passive negligence)." Nourse v. Food Lion, Inc., 127 N.C.App. 2 3 5 , 238 (1997), affirmed 347 N.C. 666, 496 S.E.2d 379 (1998), quoting R o u m illa t v. Simplistic Enters., Inc., 331 N.C. 57, 64, 414 S.E.2d 339 (1992), o v e rru le d in part on other grounds by Nelson v. Freeland, 349 N.C. 615, 507 S .E .2 d 882 (1998). The Defendant presented no evidence or public records in support of its motion. It presented only a conclusory statement that the jury fo u n d active negligence. Conclusory allegations are insufficient. Summary ju d g m e n t is decided based on forecasts of evidence. Thompson v. Potomac E le c . Power Co., 312 F.3d 645, 649 (4 th Cir. 2002). In the second motion for summary judgment, Haynes claims that a re le a s e executed by Shelton to Haynes in exchange for $55,000.00 precludes a n y liability for contribution to Steelcase, citing N.C.G.S. §1B-4(2). [Doc. 11; D o c . 11-2]. That statute provides that when a release "is given in good faith to one of two or more persons liable in tort for the same injury ... [i]t d is c h a rg e s the tort-feasor to whom it is given from all liability for contribution to any other tort-feasor." Steelcase has raised the issue of "good faith" in re s p o n s e to the motion, claiming that Haynes entered into the release solely to defeat contribution. Again, the motion is premature and unsupported. Brooks v. Wal-Mart S to re s , Inc., 139 N.C.App. 637, 644, 535 S.E.2d 55 (2000), review dismissed 12

3 5 3 N.C. 370 (2001) (noting the statute does not define good faith and g e n e ra lly a hearing is required). Although the "totality of the circumstances" is generally considered, those circumstances have not been present to the C o u rt. Id., at 645. Counsel are advised to conduct the initial attorneys' conference and to file their certificate thereof. ORDER IT IS, THEREFORE, ORDERED that the Memorandum and

R e c o m m e n d a tio n of the Magistrate Judge is adopted and the Defendant's M o tio n to Dismiss [Doc. 5]; the Defendant's Motion for Summary Judgment ( In d e m n ity Claim) [Doc. 8]; and the Defendant's Motion for Summary J u d g m e n t (Contribution Claim) [Doc. 10] are hereby DENIED. IT IS FURTHER ORDERED that counsel shall conduct the initial a tto rn e ys ' conference and file certificate thereof in accordance with the Local R u le s of Practice and Procedure of the United States District Court for the W e s te rn District of North Carolina.
Signed: August 6, 2010

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