Setta et al v. Walmart Stores, Inc.
Filing
39
MEMORANDUM and ORDER granting in part and denying in part 31 Motion to Dismiss Count I of Third Party Complaint. See Memorandum and Order for details. Signed by Magistrate Judge Thomas M. Blewitt on 03/06/12 (tmbsec, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
J.S., a Minor, by and through his parent
and natural guardian, DAWN GILLIS,
and DAWN GILLIS, individually,
Plaintiffs
v.
WAL-MART STORES, INC.,
Defendant/
Third-Party Plaintiff,
v.
UNARCO INDUSTRIES, LLC, f/k/a,
UNARCO INDUSTRIES, INC.,
Third-Party Defendant.
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CIVIL ACTION NO. 3:CV-11-0792
Magistrate Judge Blewitt
MEMORANDUM AND ORDER
I. Background.
On April 25, 2011, Plaintiffs J.S., a Minor, by and through his parent and natural guardian,
Dawn Gillis, and Dawn Gillis, individually, filed a Complaint against original Defendant, Wal-Mart
Stores, Inc. (Doc. 1). On April 28, 2011, Plaintiffs filed an Amended Complaint again solely
against original Defendant, Wal-Mart Stores, Inc. (Doc. 5). Both the original Complaint and the
Amended Complaint were filed in federal court based on diversity jurisdiction, under 28 U.S.C.
§1332, since Plaintiffs are Pennsylvania residents and Defendant Wal-Mart is a Delaware
corporation with its principal place of business in Arkansas.1 On May 24, 2011, Defendant Wal-
We note that Pennsylvania law applies to Plaintiffs’ claims as against Defendant WalMart. See Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938); Schlegel v. Wilson-Cook Medical, Inc.,
1
Mart filed its Answer to Plaintiffs‘ Amended Complaint with Affirmative Defenses. (Doc. 10).
On November 2, 2011, the Court issued an Order granting Defendant Wal-Mart’s unopposed
Motion for Leave to File a Third-Party Complaint against Unarco Industries, LLC, f/k/a Unarco
Industries, Inc. (“Unarco”). (Docs. 22 and 25). Defendant/Third-Party Plaintiff Wal-Mart (“WalMart”) filed its Third-Party Complaint against Third-Party Defendant Unarco on November 2, 2011.
(Doc. 26). On December 12, 2011, Third-Party Defendant Unarco filed a Motion to Dismiss
Defendant/Third-Party Plaintiff Wal-Mart’s Third-Party Complaint, pursuant to Fed.R.Civ.P. 12(b)(6),
with Exhibits, A-C . (Doc. 31). Third-Party Defendant Unarco’s Motion to Dismiss has been briefed
by the respective parties. (Docs. 32, 35 and 36). Defendant/Third-Party Plaintiff Wal-Mart also
submitted Exhibits (A-C) with its opposition brief, including copies of unreported cases, Ex. D.
(Doc. 35). Plaintiffs did not file a brief with respect to Third-Party Defendant Unarco’s Motion to
Dismiss Defendant/Third-Party Plaintiff Wal-Mart’s Third-Party Complaint. However, Plaintiffs did
not concur with Third-Party Defendant Unarco’s Motion to Dismiss. (Doc. 31, p. 12).
Third-Party Defendant Unarco’s Motion to Dismiss Defendant/Third-Party Plaintiff WalMart’s Third-Party Complaint is ripe for disposition.2
2007 WL 465528, * 3, n. 3 (M.D. Pa.).
The original Plaintiff and the original Defendant consented to proceed before the
undersigned United States Magistrate Judge, and the District Court entered an Order on July 27,
2011, reassigning this case to the undersigned for all matters pursuant to 28 U.S.C. § 636(c).
(Doc. 15).
2
2
II. Allegations of Complaints.
In their Amended Complaint, Plaintiffs allege that on July 1, 2008, they were business
invitees at the Wal-Mart Store located at 2150 Wilkes-Barre Township Marketplace, Wilkes-Barre,
Luzerne County, Pennsylvania, and that Plaintiff Gillis strapped and locked her portable car seat,
in which the infant Plaintiff J.S. was sitting, onto the top of a Wal-Mart shopping cart. Plaintiffs
allege that the shopping cart then suddenly collapsed which caused the infant Plaintiff J.S. to fall
into the cart and suffer serious and permanent injuries. (Doc. 5, pp. 2-3). Plaintiffs allege that
Defendant Wal-Mart, individually and through its employees, “failed to have adequate warnings
on its shopping carts to not place a child’s car-seat in the position the Plaintiff ‘s mother and other
mothers shopping with their infant children did and do on a regular basis.” (Id., p. 3, ¶ 9).
Both Plaintiffs assert two Counts in their Amended Complaint against Defendant Wal-Mart.
In Count I, Plaintiffs allege that Defendant Wal-Mart was negligent as follows:
a.
In then and there failing to warn mothers that placing an infant’s
car seat in the shopping cart in a certain manner can be hazardous to the infant;
b.
In then and there allowing shopping carts to exist in the Defendant’s
parking lot when the Defendant knew or should have known said shopping carts
presented a hazardous and dangerous condition to infants being placed in
said shopping carts;
c.
In then and there failing to inspect shopping carts that may have
been in a defective condition;
d.
In then and there failing to implement a system of routine
maintenance on all shopping carts that may have been in a defective condition
so as to protect business invitees from a hazardous condition;
e.
In then and there having shopping carts available to business
invitees, with infants, when the Defendant knew or should have known that
the shopping carts had no labels or warnings against activities like those
3
performed by Ms. Gills and other mothers routinely shopping at WAL-MART; and
f.
In then and there allowing defective shopping carts to be
available to mothers shopping with infants, when the Defendant knew or should
have known that the shopping cart in question was defective.
In Count II, Plaintiffs allege that the injuries sustained by minor Plaintiff J.S. due to the
negligent acts of Defendant Wal-Mart have caused Plaintiff Gillis to incur medical bills from several
facilities, and that Plaintiff Gillis has been informed that minor Plaintiff J.S. will continue to undergo
medical treatment for the injuries and that additional medical bills will be incurred. Thus, Plaintiffs
raised a claim for the past and future medical bills which minor Plaintiff J.S. has and will incur as
a result of his alleged injuries. (Id., pp. 6-7).
As stated, Defendant/Third-Party Plaintiff Wal-Mart filed its Third-Party Complaint against
Third-Party Defendant Unarco on November 2, 2011. (Doc. 26). Wal-Mart contends that Unarco
was the supplier of the shopping cart at issue and, that it had a Wal-Mart Realty Supplier
Agreement, dated January 22, 2008, with Unarco which contained indemnification provisions.
(Doc. 26, Ex. C). Wal-Mart avers that the Realty Supplier Agreement contained the following
Indemnification provision:
16)
INDEMNIFICATION:
Supplier [Unarco] agrees to and shall defend, indemnify and hold
harmless Purchaser [Wal-Mart] and all related or affiliated companies,
and all affiliates, officers, directors, shareholders, associates, employees,
servants and agents of Purchaser, from and against all Damages, whether
such matters are groundless, fraudulent or false, which arise out of or relate
to this Agreement for the negligent act or omission, willful misconduct,
other fault of any nature of Supplier, its employees, agents, servants
or subcontractors.
(Doc. 26, p. 3, ¶ 9 and Ex. C, pp. 9-10).
4
Wal-Mart avers that the Realty Supplier Agreement defined the term “Damages” as follows:
(d)
“Damages” shall mean shall mean [sic] lawsuits, claims, actions,
suits, injuries, damages, losses, fines, penalties, sanctions, deficiencies,
judgments, awards, costs, expenses (including reasonable fees,
disbursements, and costs of attorneys, accountants, experts and investigators),
settlement payments, liabilities, liens, remediation expenses, loss of
goodwill, lost profits, corrective action costs, and other obligations,
including, without limitation, property damages and bodily injury or
personal injuries, illnesses and deaths (whether or not such injury is
physically manifest, or emotional in nature without any attendant
physical manifestation of such injury), and in each case regardless of
whether such matters are groundless, fraudulent or false.
(Doc. 26, p. 3, ¶ 10 and Ex. C, pp. 2-3).
Thus, in Count I of its Third-Party Complaint, Wal-Mart asserts a claim for contractual
contribution and indemnification against Unarco. Wal-Mart concludes its averments in Count I by
claiming that if Plaintiff minor J.S. sustained the injuries which Plaintiffs allege and Plaintiffs
sustained the damages they allege, “then said injuries and damages were caused by the actions,
omissions, negligence, and carelessness and other liability-producing conduct of Unarco and were
caused in no manner whatsoever by Wal-Mart.” (Id., p. 4, ¶ 11). Wal-Mart also avers that “Unarco
alone is liable to Plaintiff[s] and/or jointly and severally liable to Wal-Mart and/or liable over to WalMart by way of contractual contribution and/or indemnification.” (Id.).
In Count II of its Third-Party Complaint, Wal-Mart asserts a claim for common law
contractual contribution and indemnification against Unarco. Wal-Mart avers that if Plaintiff minor
J.S. sustained the injuries which Plaintiffs allege and Plaintiffs sustained the damages they allege,
“then said injuries and damages were caused by the actions, omissions, negligence, and
carelessness and other liability-producing conduct of Unarco and were caused in no manner
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whatsoever by Wal-Mart.” (Id., p. 4, ¶ 11). Wal-Mart also avers that “Unarco alone is liable to
Plaintiff[s] and/or jointly and severally liable to Wal-Mart and/of liable over to Wal-Mart by way of
common law contribution and/or indemnification.” (Id., ¶ 13, p. 5).
III. Motion to Dismiss Standard.
In Reisinger v. Luzerne County,712 F.Supp. 2d 332, 343-344 (M.D. Pa. 2010), the Court
stated:
The Third Circuit Court of Appeals recently set out the appropriate standard
applicable to a motion to dismiss in light of the United States Supreme Court's
decisions Bell Atlantic Corp. v. Twombly, 550 U.S. 433 (2007), and Ashcroft v.
Iqbal, --- U.S. ----, 129 S.Ct. 1937 (2009). “[T]o survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as true to ‘state a
claim that relief is plausible on its face.’ “ Iqbal, 129 S.Ct. at 1949 (citing
Twombly, 550 U.S. at 570). The Court emphasized that “only a complaint that
states a plausible claim for relief survives a motion to dismiss.” Id. at 1950.
Moreover, it continued, “[d]etermining whether a complaint states a plausible
claim for relief will ... be a context-specific task that requires the reviewing
court to draw on its judicial experience and common sense.” Id. (citation
omitted). McTernan v. City of York, 577 F.3d 521, 530 (3d Cir.2009). The
Circuit Court discussed the effects of Twombly and Iqbal in detail and provided
a road map for district courts presented with a motion to dismiss for failure to
state a claim in a case filed just a week before McTernan, Fowler v. UPMC
Shadyside, 578 F.3d 203 (3d Cir.2009).
[D]istrict courts should conduct a two-part analysis. First, the factual and legal
elements of a claim should be separated. The District Court must accept all of
the complaint's well-pleaded facts as true, but may disregard any legal
conclusions. [ Iqbal, 129 S.Ct. at 1949.] Second, a District Court must then
determine whether the facts alleged in the complaint are sufficient to show that
the plaintiff has a “plausible claim for relief.” Id. at 1950. In other words, a
complaint must do more than allege a plaintiff's entitlement to relief. A
complaint has to “show” such an entitlement with its facts. See Philips [v. Co.
of Allegheny], 515 F.3d [224,] 234-35 [ (3d Cir.2008) ]. As the Supreme Court
instructed in Iqbal, “[w]here the well-pleaded facts do not permit the court to
infer more than the mere possibility of misconduct, the complaint has allegedbut it has not ‘show[n]’-‘that the pleader is entitled to relief.’ “ Iqbal, 129 S.Ct.
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at 1949. This “plausibility” determination will be “a context-specific task that
requires the reviewing court to draw on its judicial experience and common
sense.” Id.
Fowler, 578 F.3d at 210-11.
The Circuit Court's guidance makes clear that legal conclusions are not entitled
to the same deference as well-pled facts. In other words, “the court is ‘not
bound to accept as true a legal conclusion couched as a factual allegation.’ “
Guirguis v. Movers Specialty Services, Inc., No. 09-1104, 2009 WL 3041992,
at *2 (3d Cir. Sept. 24, 2009) ( quoting Twombly, 550 U.S. at 555) (not
precedential).
Where the parties submit exhibits with their filings, a court must determine
what documents may be considered with a motion to dismiss. In reviewing a
motion to dismiss filed pursuant to Rule 12(b)(6)of the Federal Rules of Civil
Procedure, the Third Circuit Court of Appeals had held that “a court can
consider certain narrowly defined types of material without converting the
motion to dismiss” to one for summary judgment. In re Rockefeller Center
Properties, Inc. Securities Litigation, 184 F.3d 280, 287 (3d Cir. 1999).
Specifically, a court can consider “a document integral to or explicitly relied
upon in the complaint ... [and] an indisputably authentic document that a
defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims
are based on the document.” ( Id. (internal citations and quotation omitted).)
The Circuit Court explained the rationale for these exceptions: “the primary
problem raised by looking to documents outside the complaint-lack of notice
to the plaintiff-is dissipated where plaintiff has actual notice and has relied
upon these documents in framing the complaint.” FN11 Id. (internal citations
and quotations omitted).) Matters of public record, including government
agency records and judicial records, may be considered. Jean Alexander
Cosmetics, Inc. v. L'Oreal USA, Inc., 458 F.3d 244, 257 n. 5 (3d Cir.2006)
(citation omitted); Pension Benefit Guarantee Corp. v. White Consol. Indus., 998
F.2d 1192, 1196 (3d Cir.1993).
See also Williams v. Hull, 2009 WL 1586832, *2-*3 (W.D. Pa. 2009).
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IV. Discussion.
In its Third-Party Complaint against Unarco, Wal-Mart is attempting to pursue its
indemnification and defense rights under the Reality Supplier Agreement.3 In its Motion to Dismiss
Wal-Mart’s Third-Party Complaint based on contractual and common law contribution and
indemnification, Unarco argues that Plaintiffs allege Wal-Mart had specific knowledge that mothers
regularly placed car seats in shopping carts at its store and that Wal-Mart failed to provide an
adequate warning about the dangers of this conduct. Unarco states that Plaintiffs’ amended
pleading does not claim that the alleged injuries of minor Plaintiff J.S. were caused by any negligent
act or omission, willful misconduct, or other fault by Unarco. Unarco points out that the Reality
Supplier Agreement was drafted by Wal-Mart and that under the Agreement all disputes are
governed by the laws of Arkansas.4 Unarco also argues that under Section 16 of the Reality
Supplier Agreement, its obligations to defend, indemnify and hold harmless Wal-Mart are strictly
limited to “damages... which arise out of or relate to this Agreement for the negligent act or
omission, willful misconduct, other fault of any nature of [Unarco].” (Doc. 31, p. 2 and Ex. B, pp.
8-9). Unarco contends that under the Reality Supplier Agreement, it has no obligation to defend
and/or indemnify Wal-Mart for any claims that arise out of or relate to Wal-Mart’s conduct. (Id.).
Thus, Unarco moves to dismiss Wal-Mart’s Third-Party Complaint against it in its entirety for failure
to state a claim, and it moves to dismiss each of the two Counts raised therein separately.
Both Unarco and Wal-Mart have attached copies of the Reality Supplier Agreement to
their respective briefs. (Doc. 31, Ex. B and Doc. 35, Ex. C).
3
4
See Doc. 35, Ex. C, p. 10.
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Alternatively, Unarco moves to strike, under Rule 14, Wal-Mart’s allegations in both of its Counts
that Unarco is liable in any way to Plaintiffs, and Unarco moves, under Rule 12(e), to require WalMart to file a more specific pleading against it with respect to Count II, common law contribution
or indemnity.
Wal-Mart argues that “Plaintiffs’ claims that the minor [J.S.] was injured as a result of a
defective shopping cart, which was supplied to Wal-Mart by Unarco, fall under those claims for
which Unarco is required to defend and indemnify Wal-Mart.” (Doc. 35, p. 4).
1. Unarco’s Rule 14 Motion to Strike Wal-Mart’s allegations that Unarco is liable to Plaintiffs
As stated, Unarco moves to strike, under Rule 14, Wal-Mart’s allegations in both Counts
of its Third-Party Complaint that Unarco is liable in any way to Plaintiffs. Unarco points out that
Wal-Mart’s allegations that Unarco is “alone liable to Plaintiff[s]” and that Unarco “is jointly and
severally liable to Plaintiffs,” which are contained in both Counts I and II, are improper as a matter
of law under Rule 14. (See Doc. 26, pp. 4-6). Unarco cites to Rocuba v. Mackrell, 2011 WL
5869787 (M.D. Pa. 11-22-11), for the proposition that a third party cannot be impleaded on the
basis that he might be liable to the Plaintiff.
In Rocuba v. Mackrell, 2011 WL 5869787, *1, the Court stated:
Pursuant to Federal Rule of Civil Procedure 14(a)(1), a defending party may join a
non-party “who is or may be liable to it for all or part of the claim against it.” “The
crucial characteristic of a Rule 14 claim is that defendant is attempting to transfer
to the third-party defendant the liability asserted against him by the original
plaintiff.” 6 Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice
and Procedure § 1446, at 377 (2d ed.1990). Third-party liability must depend on
the outcome of the main claim and derive from defendant's liability to the plaintiff
in the main action so that, if the third-party plaintiff is found liable, the third-party
defendant will be liable to the third-party plaintiff “under a theory of
indemnification, contribution, or some other theory of derivative liability recognized
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by the relevant substantive law.” Toberman v. Copas, 800 F.Supp. 1239, 1242
(M.D.Pa.1992); 6 Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal
Practice & Procedure, § 1446, at 246 (2d ed.1990). A third-party complaint is
improper where the defendant/third-party plaintiff seeks to join a third-party
defendant who is or may be liable only to the original plaintiff. Toberman, 800
F.Supp. at 1242–43.
(Emphasis added).
In Flickinger v. Toys R Us, Inc., 2010 WL 4384252, *1 (M.D. Pa. 10-29-10), the Court
stated that “[a] Defendant may only use Rule 14 to implead a third-party Defendant where the
third-party Defendant is, or may be, liable to the Defendant derivatively or secondarily, and not
to join a person who is or may be liable solely to the Plaintiff.” (citing FDIC v. Bathgate, 27 F.3d
850, 873 (3d Cir. 1994)).
The Court agrees with the Rocuba Court and Unarco’s reliance upon in it, as well as the
Flickinger Court, and, it finds that a third party cannot be impleaded under Rule 14(a) on the basis
that its actions allegedly caused the Plaintiff‘s injuries. The Court also agrees completely with
Unarco that the case upon which Wal-Mart relies, Jonas v. Schaff, 1991 U.S. Dist. LEXIS 10554
(E.D. Pa. 7-30-91), is misplaced. (Doc. 36, pp. 6-7). Thus, the Court concurs with Unarco that
the allegations of Wal-Mart in its Third-Party Complaint, Counts I and II, that Unarco is “alone
liable to Plaintiff[s]” and that Unarco “is jointly and severally liable to Plaintiffs” are improper as
a matter of law under Rule 14. See Rocuba, supra; Flickinger, supra. Therefore, to the extent that
Wal-Mart avers that it was the actions of Unarco, as opposed to its actions, which caused minor
Plaintiff’s alleged injuries, such averments are not proper grounds for a third-party claim under
Rule 14(a). See Rocuba, supra; Flickinger, supra.
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As such, the Court shall grant Unarco’s alternative Motion to strike Wal-Mart’s allegations
in its Third-Party Complaint that Unarco is “alone liable to Plaintiff[s]” and that Unarco “is jointly
and severally liable to Plaintiffs” which are contained in both Counts I and II since they are
improper as a matter of law under Rule 14. (Doc. 26, p. 4-6).
2.
Claims for Contractual Indemnification and Contribution under the Realty Agreement
in Wal-Mart’s Third-Party Complaint (Count I)
The parties dispute whether Wal-Mart’s Third-Party Complaint asserts viable claims for
contractual indemnification and contribution against Unarco under the Realty Agreement. The
parties do not dispute that under the Realty Agreement Arkansas substantive law applies to the
interpretation of the terms of the Agreement. Thus, the Court must look to Arkansas law on the
interpretation of indemnification contracts.
In Patton v. TPI Petroleum, Inc., 356 F.Supp. 2d 921, 927 (E.D. Ark. 2005), the Court stated:
Indemnification agreements are contracts to be construed in accordance with
general rules of contract construction. Chevron U.S.A., Inc. v. Murphy Exploration &
Prod. Co., 356 Ark. 324, 329, 151 S.W.3d 306, 310 (2004) (citations omitted). The
court's duty is to construe the writing in accordance with the plain meaning of the
language employed. Weaver-Bailey Contractors, Inc. v. Fiske-Carter Construction
Company, 9 Ark.App. 192, 195, 657 S.W.2d 209, 210 (1983). In doing so, the court
must construe indemnity agreements strictly against the party seeking
indemnification. East-Harding, Inc. v. Horace A. Piazza & Assocs., 80 Ark.App. 143,
149, 91 S.W.3d 547, 551 (2002). “[I]n contracts of indemnity the losses to be
indemnified must be clearly stated and the intent of the indemnitor's obligation to
indemnify against them must be expressed in clear and unequivocal terms and to
such an extent that no other meaning can be ascribed.” Chevron, 356 Ark. at 330,
151 S.W.3d at 310 (citations omitted). If the agreement is unambiguous, then the
court need not resort to rules of construction. Ray & Sons Masonry Contractors v.
United States Fid. & Guar. Co., 353 Ark. 201, 211, 114 S.W.3d 189, 195 (2003)
(citing Nabholz Constr. Corp. v. Graham, 319 Ark. 396, 401, 892 S.W.2d 456, 459
(1995)). The Court must initially determine the existence of ambiguity; if the Court
finds that the writing contains an ambiguous term, it will admit parol evidence. First
Nat. Bank of Crossett v. Griffin, 310 Ark. 164, 169, 832 S.W.2d 816, 819 (1992)
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(citing C & A Constr. Co., Inc. v. Benning Constr. Co., 256 Ark. 621, 509 S.W.2d 302
(1974)). The meaning of the ambiguous term then becomes a question of fact for the
factfinder. Id.
The Court finds that the terms of the indemnification provision in the Realty Agreement,
quoted above, are not ambiguous.
Wal-Mart cites to Wal-Mart Stores, Inc,. v. RLI Ins. Co., 292 F.3d 583, 588 (8th Cir. 2002),
in which the Court found that under the clear language of the indemnity provision, the vendor
promised to indemnify Wal-Mart for any liability or loss resulting from Wal-Mart’s sale of the
vendor’s goods. In Wal-Mart Stores, Inc,. v. RLI Ins. Co., the Eighth Circuit stated:
The language of the [indemnity] provisions is clear. Cheyenne [vendor] has
promised to indemnify Wal-Mart for any liability or loss resulting from Wal-Mart's
sale of its lamps. A judgment against Wal-Mart to pay the Boykin settlement is a
liability to Wal-Mart resulting from its sale of Cheyenne's goods. RLI argues that the
indemnity clause is ineffective to cover Wal-Mart's own negligence because such
an obligation is not clearly and unequivocally expressed as required by Arkansas
law.
We are not persuaded. The indemnity provisions are very broad and state that
Cheyenne will indemnify Wal-Mart for claims resulting “in whole or in part” from
any actual or alleged defect in the lamps. The Boykin settlement met this criterion;
plaintiffs alleged that design flaws in the lamp resulted in its explosion. Any possible
negligence by Wal-Mart does not protect Cheyenne from its contractual promise
to indemnify Wal-Mart. Therefore, if Wal-Mart is liable to RLI to reimburse it for
the Boykin settlement, Wal-Mart would have the right to sue Cheyenne and be
indemnified for that amount.
Id.
Wal-Mart argues that in the indemnity provision of the Realty Supplier Agreement at issue
herein, Unarco is required to “defend, indemnify and hold harmless” Wal-Mart “from and against
all damages, ... which arise out of or relate to this Agreement for the negligent act or omission,
willful misconduct, other fault of any nature of Unarco.” (Doc. 35, p. 9). Wal-Mart states that
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Plaintiffs’ claims against it arise out of an alleged defective shopping cart, which Unarco provided
to Wal-Mart pursuant to the Realty Supplier Agreement. Wal-Mart also argues that Unarco ignores
the fact Plaintiffs allege that J.S.’s injuries were caused by a defective shopping cart and that the
cart did not have adequate labels or warnings. Wal-Mart correctly points out that these claims of
Plaintiffs involve the shopping cart itself and not the conduct of Wal-Mart. Wal-Mart also states
that it alleges in its Third-Party Complaint that the shopping cart which Plaintiffs used and aver was
defective was supplied to Wal-Mart by Unarco under the Realty Supplier Agreement. (Id., p. 10).
Wal-Mart concludes as follows:
Any conceivable wrongdoing by Wal-Mart for placing the alleged defective
cart with no or inadequate warnings into commerce for its customers’ use
necessarily implicates Unarco’s wrongdoing for supplying the alleged
defective cart to Wal-Mart for consumer use. Therefore, because Plaintiff’s
claims arise out of the distribution of allegedly defective carts by Unarco to
Wal-Mart under the Realty Agreement, Unarco’s fault is implicated,
thereby triggering its contractual duty to defend and indemnify Wal-Mart
in this action.
(Id.).
The Court agrees with Wal-Mart that Plaintiffs’ Amended Complaint sufficiently alleges that
the shopping carts used by Wal-Mart were defective. (Doc. 5, p. 6, ¶18(f)). As mentioned,
Plaintiffs allege in their Amended Complaint that Wal-Mart was negligent in “allowing defective
shopping carts to be available to mothers shopping with infants, when [Wal-Mart] knew or should
have known that the shopping cart in question was defective.” (Id.).
Thus, the Court will deny Unarco’s Motion to Dismiss Count I of Wal-Mart’s Third-Party
Complaint since it finds that Wal-Mart asserts a cognizable claim under Arkansas law for
contractual indemnification and contribution against Unarco pursuant to the Realty Supplier
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Agreement.
3.
Claims for Common Law Indemnification and Contribution in Wal-Mart’s Third-Party
Complaint (Count II)
Unarco argues that Wal-Mart’s claim for Common Law Indemnification and Contribution
in its Third-Party Complaint (Count II) should be dismissed for failure to state a claim. Unarco
states that “Wal-Mart has failed to plead any fact(s) to support its bare allegations that Unarco is
liable by way of common law contribution and/or indemnity.” (Doc. 31, p. 7). Unarco further
states that:
Wal-Mart’s Third Party Complaint makes no mention of any action,
omission, negligent act, carelessness or liability-producing conduct by
Unarco. Instead, Wal-Mart merely alleges that “if plaintiff sustained
injuries and damages alleged in [their] Complaint . . . then said injuries
and damages were caused by the actions, omissions, negligence,
carelessness and other liability-producing conduct of Unarco and were
caused in no manner whatsoever by Wal-Mart.” See Exhibit “C” at page
4. This assertion is simply a conclusion and formulaic recitation of the
elements of Wal-Mart’s cause of action. Because Wal-Mart does not
allege any facts, the Third Party Complaint does not demonstrate a
plausible right to relief.
Alternatively, Unarco argues that it is entitled to a more definite pleading from Wal-Mart
with respect to Count II of its Third-Party Complaint under Rule 12(e).
Federal Rule of Civil Procedure 8(a) requires that a complaint contain a short and plain
statement setting forth (1) the grounds upon which the court’s jurisdiction rests; (2) the claim
showing that the pleader is entitled to relief; and (3) a demand for judgment for the relief sought
by the pleader. See Saltzman v. Independence Blue Cross, 2009 WL 1606887, *4 (E.D. Pa.)(“The
Court in Iqbal explained that, although a court must accept as true all of the factual allegations
contained in a complaint, that requirement does not apply to legal conclusions; therefore,
14
pleadings must include factual allegations to support the legal claims asserted.”); Amco Ins. Co. v.
Varish Const., Inc., 2010 WL 3239395, *2 (M.D. Pa. 7-15-10)(“more is required than labels,
conclusions and a formulaic recitation of the elements of a cause of action.”)(citation omitted).
In order to comply with Rule 8, a Complaint must contain at least a modicum of factual
specificity, identifying the particular conduct of the defendant that is alleged to have harmed the
plaintiff, so that the court can determine that the compliant is not frivolous and a defendant has
adequate notice to frame an answer. Frazier v. Southeastern Pennsylvania Transp. Auth., 785 F.2d
65, 68 (3d Cir. 1986); Klein v. U.S. Bank, N.A., 2010 WL 703255, *4.
Under even the most liberal construction, the Court agrees with Unarco that Count II of
Wal-Mart’s Third-Party Complaint is in clear violation of Rule 8. It does not give Unarco fair
notice of what Wal-Mart’s claim against it is and the grounds upon which it rests. Thus, the Court
finds that Count II of Wal-Mart’s Third-Party Complaint is not in conformity with Rule 8 of the
Federal Rules of Civil Procedure.
It certainly does not set forth in brief, concise, and
understandable terms the conduct of Unarco about which Wal-Mart is complaining.
In Amco Ins. Co., the Court stated:
Under Pennsylvania law, the right of contribution is governed by the Uniform
Contribution Among Tort-feasors Act, 42 Pa.C.S.A. § 8321-8327. Contribution
applies when the parties are joint tortfeasors. Kirschbaum v. WRGSB Assocs.,
243 F.3d 145, 156 (3d Cir.2001). “Under the Act, joint tortfeasors are entitled
to contribution if they have paid more than their pro rata share of a common
liability.” Rabatin v. Columbus Lines, Inc., 790 F.2d 22, 24 (3d Cir.1986). The
Act defines joint tortfeasors as “two or more persons jointly or severally liable
in tort for the same injury to persons or property, whether or not judgment has
been recovered against all or some of them.” 42 Pa.C.S.A. § 8322. “Under
Pennsylvania law, two actors are joint tortfeasors if their conduct ‘causes a
single harm which cannot be apportioned ... even though [the actors] may have
acted independently.’ ” Rabatin, supra, 790 F.2d at 25 (quoting Capone v.
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Donovan, 332 Pa.Super. 185, 480 A.2d 1249, 1251 (Pa.Super.Ct.1984)).
Contribution “is an equitable right based on a common liability to the plaintiff.'
” Walton v. Avco Corp., 530 Pa. 568, 610 A.2d 454, 461 (Pa.1992) (quoting
John W. Brown, Jr. Equipment Rental Corp. v. Dickey, 397 Pa. 454, 155 A.2d
836, 838 (Pa.1959)). Contribution “is not a recovery for the tort, but rather it
is the enforcement of an equitable duty to share liability for the wrong done by
both [tortfeasors].” Swartz v. Sunderland, 403 Pa. 222, 169 A.2d 289, 290
(Pa.1961).
“Indemnification is ‘a fault shifting mechanism.’ ” Sovereign Bank v. BJ's
Wholesale Club, Inc., 533 F.3d 162, 174 (3d Cir.2008) (quoting Sirianni v.
Nugent Bros., Inc., 509 Pa. 564, 506 A.2d 868, 871 (Pa.1986)). Indemnity “
‘shifts the entire loss from one tortfeasor who has been compelled to pay it to
the shoulders of another who should bear it instead.’ ” Walton, supra, 610 A.2d
at 460(quoting W. Prosser, Law of Torts at 310 (4th ed.1979)).
Indemnity may be based either on a contractual provision or on the common
law right of indemnification. The common law “right of indemnification arises
when there is a ‘difference between the primary and the secondary liability of
two persons each of whom is made responsible by the law to an injured party.’
” Kirschbaum, supra, 243 F.3d at 156 (quoting Builders Supply Co. v. McCabe,
366 Pa. 322, 77 A.2d 368, 370 (Pa.1951)). “It is a right which enures to a
person who, without active fault on his own part, has been compelled, by
reason of some legal obligation, to pay damages occasioned by the initial
negligence of another, and for which he himself is only secondarily liable.”
Builders Supply Co. v. McCabe, 366 Pa. 322, 77 A.2d 368, 370 (Pa.1951))
“[S]econdary as distinguished from primary liability rests upon a fault that is
imputed or constructive only, being based on some legal relation between the
parties, or arising from some positive rule of common or statutory law or
because of a failure to discover or correct a defect or remedy a dangerous
condition caused by the act of the one primarily responsible.” Id. “In the case
of concurrent or joint tortfeasors, having no legal relation to one another, each
of them owing the same duty to the injured party, and involved in an accident
in which the injury occurs, there is complete unanimity among the authorities
everywhere that no right of indemnity exists on behalf of either against the
other; in such a case, there is only a common liability and not a primary and
secondary one, even though one may have been very much more negligent
that the other.” Id.
“Thus, unlike comparative negligence or contribution, the common law right
of indemnity is not a fault sharing mechanism between one who was
predominantly responsible for an accident and one whose negligence was
relatively minor.” Sirianni v. Nugent Bros., Inc., 509 Pa. 564, 506 A.2d 868,
871 (Pa.1986). “Rather, it is a fault shifting mechanism, operable only when a
defendant who has been held liable to a plaintiff solely by operation of law,
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seeks to recover his loss from a defendant who was actually responsible for the
accident which occasioned the loss.” Id. Common law indemnity is not
available to a party that had any part in causing the injury. MIIX Ins. Co. v.
Epstein, 937 A.2d 469, 472 (Pa.Super.Ct.2007).
2010 WL 3239395, *2-*3.
As stated, the Court agrees with Unarco that Count II of Wal-Mart’s Third-Party Complaint
based on common law contribution and indemnification fails to sufficiently state a cognizable
claim. Thus, the Court will grant Unarco’s Motion to Dismiss with respect to Count II of Wal-Mart’s
Third-Party Complaint based on common law contribution and indemnification. However, rather
than dismiss with prejudice Wal-Mart’s Count II, the Court will grant Wal-Mart leave to amend its
Count II as Wal-Mart requests. The Third Circuit has held that a Plaintiff’s Complaint which fails
to state a cognizable claim is entitled to amend his pleading unless it would be futile or inequitable
to Defendant. See Grayson v. Mayview State Hospital, 293 F.3d 103, 111 (3d Cir. 2002). See
Alston v. Parker, 363 F.3d 229, 235-236 (3d Cir. 2004).
Based on the foregoing, the Court does
not find that allowing Wal-Mart to amend Count II of its Third-Party Complaint is futile or that it
would unduly prejudice Unarco. Thus, the Court will permit Wal-Mart leave to amend Count II
of its Third-Party Complaint against Unarco.5
It is noted that in the alternative, Unarco requests the Court to direct Wal-Mart to file a
more specific pleading with respect to Count II under Rule 12(e). (Doc. 31, pp. 8-9). Thus, the
Court is essentially granting Unarco’s alternative request, under Rule 12(e), that Wal-Mart be
directed to file a more specific pleading with respect to Count II.
5
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Thus, the Court shall grant in part and deny in part Unarco’s Motion to Dismiss Wal-Mart’s
Third-Party Complaint.
An appropriate Order will be issued.
s/ Thomas M. Blewitt
THOMAS M. BLEWITT
United States Magistrate Judge
Dated: March 6, 2012
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IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
J.S., a Minor, by and through his parent
and natural guardian, DAWN GILLIS,
and DAWN GILLIS, individually,
Plaintiffs
v.
WAL-MART STORES, INC.,
Defendant/
Third-Party Plaintiff,
v.
UNARCO INDUSTRIES, LLC, f/k/a,
UNARCO INDUSTRIES, INC.,
Third-Party Defendant.
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
CIVIL ACTION NO. 3:CV-11-0792
Magistrate Judge Blewitt
ORDER
AND NOW, this 6th day of March, 2012, IT IS HEREBY ORDERED THAT:
1. Third-Party Defendant Unarco’s Motion to Dismiss Defendant/Third-Party Plaintiff WalMart’s Third-Party Complaint (Doc. 31) is GRANTED IN PART AND DENIED IN PART.
2. Third-Party Defendant Unarco’s alternative Motion to Strike Wal-Mart’s allegations in
its Third-Party Complaint that Unarco is “alone liable to Plaintiff[s]” and that Unarco “is jointly and
severally liable to Plaintiffs,” which are contained in both Counts I and II of Wal-Mart’s pleading,
is GRANTED and these allegations are stricken since they are improper as a matter of law under
Fed.R.Civ.P. 14(a).
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3. Third-Party Defendant Unarco’s Motion to Dismiss Count I of Wal-Mart’s Third-Party
Complaint, namely, a claim under Arkansas law for contractual indemnification and contribution
against Unarco pursuant to the Realty Supplier Agreement, is DENIED.
4. Third-Party Defendant Unarco’s Motion to Dismiss Count II of Wal-Mart’s Third-Party
Complaint, namely, a common law claim under Pennsylvania law for indemnification and
contribution against Unarco, is GRANTED and Count II is dismissed without prejudice.
5. Wal-Mart is granted leave to amend Count II of its Third-Party Complaint against Unarco
within ten (10) days of the date of this Order. Wal-Mart is directed to file one complete amended
Third-Party Complaint and it is directed not to include allegations in its amended Third-Party
Complaint, with respect to both Count I and the amended Count II, that Unarco is “alone liable
to Plaintiff[s]” and that Unarco “is jointly and severally liable to Plaintiffs.”
6. Third-Party Defendant Unarco is directed to file an Answer to Wal-Mart’s amended
Third-Party Complaint within ten (10) days of the date that Wal-Mart files its amended pleading.
7. The Court will schedule a Case Management Conference once the pleadings are closed.
s/ Thomas M. Blewitt
THOMAS M. BLEWITT
United States Magistrate Judge
Dated: March 6, 2012
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