Opinion
CV-03-856-ST.
October 7, 2004
OPINION AND ORDER
INTRODUCTION
The roof of a house owned by James and Carole Webb (the "Webbs") in Baker City, Oregon, began to leak. Plaintiff, Country Mutual Insurance Company ("Country"), insured the Webbs' house. After the leak was discovered, Country made a payment to the Webbs pursuant to their policy. Country now seeks subrogation in the amount of $84,761.91 from defendant Gyllenberg Construction, Inc. ("Gyllenberg"), who built the Webbs' house. Gyllenberg in turn filed third-party claims against third-party defendants ASC Profiles, Inc., fka BHP Steel Building Products USDA, Inc. ("BHP"), who manufactured the roof materials used on the Webbs' house, and Union Lumber Co., Inc., dba Bronson Lumber Co. ("Bronson"), who sold the roof materials to Gyllenberg.
I. Country's Claims
Country's First Amended Complaint (docket #17) alleges two claims against Gyllenberg. First, Country alleges that Gyllenberg was negligent in failing to "have installed and/or have chosen properly designed metal roof panel" for the Webb's home (First Claim). First Amended Complaint, ¶ 4.2. Second, Country alleges that Gyllenberg breached its contract by failing to "install and/or choose the proper roofing panels for the construction" (Second Claim). Id at ¶¶ 4.4, 4.5.
II. Gyllenberg's Affirmative Defenses and Third Party Claims
In addition to its affirmative defenses against Country, Gyllenberg alleges that if it is found liable to Country for defects and/or failures in the performance of the roof, then third-party defendants BHP and Bronson are liable to Gyllenberg on a variety of theories. With respect to BHP, Gyllenberg alleges claims for indemnity (First Claim), contribution (Second Claim), negligent failure to design and manufacture a roof product that would protect buildings from the climate in and around Baker City, Oregon (Third Claim), breach of express warranty that the roof product was suitable for the intended use (Fourth Claim), and breach of the implied warranty of merchantability (Fifth Claim). With respect to Bronson, Gyllenberg alleges claims for indemnity (Sixth Claim), contribution (Seventh Claim), negligent failure to distribute a roof product that would protect the structure from the elements in the Baker City, Oregon area (Eighth Claim), breach of the implied warranty of merchantability (Ninth Claim), and breach of the implied warranty of fitness for a particular purpose (Tenth Claim).
III. Prior Summary Judgment Opinion
This court issued an Opinion and Order on July 2, 2004 (docket #83), which denied Gyllenberg's Motion for Summary Judgment against Country's Second Claim for breach of contract, leaving Gyllenberg as a defendant in this action as to both of Country's claims.
The Opinion and Order also granted Bronson's Motion for Summary Judgment against Gyllenberg's third-party claims for indemnity and contribution. This court construed Country's First Claim as a claim for negligent design and selection, not for a product defect. Therefore, it was unnecessary to reach the issue of whether the claim was barred by ORS 30.905, the statute of limitations governing product liability actions. It also concluded that "if the only basis for Country's claim is Gyllenberg's negligent design and selection, there is no circumstance under which Bronson owed any liability to Country." Id at 23. The situation was comparable to Evans v. Howard Green Co., 231 NW2d 907 (Iowa 1975), which held a construction contractor could not be held liable in indemnity to an architectural firm in a case involving only negligent design.
This court further concluded that Bronson could not be liable in indemnity or contribution for Country's Second Claim for breach of contract for the following reasons:
Country's breach of contract claim [(Second Claim)] can be passed through by Gyllenberg to Bronson in the form of an indemnity or contribution claim only if Bronson could have been liable to Country. However, Bronson was not a party to the Contract or otherwise in privity of contract with Country. . . . Accordingly, because Country has no viable breach of contract claim against Bronson, Country's breach of contract claim against Gyllenberg cannot be passed through to Bronson using a third-party indemnity or contribution claim.
Opinion Order, pp. 18-19.
Even though Bronson originally sought summary judgment against all of Gyllenberg's third-party claims, the parties indicated at oral argument that Gyllenberg had agreed to dismiss all those other claims. During a telephone conference on August 18, 2004, Gyllenberg clarified that it agreed to dismiss its remaining claims against Bronson for negligence (Eighth Claim) and breach of implied warranty of merchantability (Ninth Claim), but was still seeking to recover on its claim for breach of an implied warranty of fitness for a particular purpose (Tenth Claim). As a result, Bronson made an oral motion for summary judgment against Gyllenberg's Tenth Claim. This court granted Bronson's oral motion for summary judgment in an Opinion and Order signed on August 20, 2004 (docket #87). As a result, Bronson was dismissed from the case.
IV. BHP's Motion
BHP filed its Third-Party Motion to Dismiss all Claims, or in the Alternative, a Motion for Entry of Summary Judgment (docket #85), which seeks dismissal, or alternatively, summary judgment, against all of Gyllenberg's third-party claims against BHP. Because BHP has submitted and relies on materials which are outside the pleadings, this court will treat the motion as one for summary judgment. FRCP 12(b)(6). For the reasons discussed below, BHP's motion is granted.
LEGAL STANDARDS
FRCP 56(c) authorizes summary judgment if "no genuine issue" exists regarding any material fact and "the moving party is entitled to judgment as a matter of law." The moving party must show an absence of an issue of material fact. Celotex Corp. v. Catrett, 477 US 317, 323 (1986). Once the moving party does so, the nonmoving party must "go beyond the pleadings" and designate specific facts showing a "genuine issue for trial." Id at 324, citing FRCP 56(e). The court must "not weigh the evidence or determine the truth of the matter, but only determines whether there is a genuine issue for trial." Balint v. Carson City, 180 F3d 1047, 1054 (9th Cir 1999) (citation omitted). A "` scintilla of evidence,' or evidence that is `merely colorable' or `not significantly probative,'" does not present a genuine issue of material fact. United Steelworkers of Am. v. Phelps Dodge Corp., 865 F2d 1539, 1542 (9th Cir), cert denied, 493 US 809 (1989) (emphasis in original) (citation omitted).
The substantive law governing a claim or defense determines whether a fact is material. T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F2d 626, 631 (9th Cir 1987). The court must view the inferences drawn from the facts "in the light most favorable to the nonmoving party." Id (citation omitted). Thus, reasonable doubts about the existence of a factual issue should be resolved against the moving party. Id at 631.
DISCUSSION
BHP first argues that Gyllenberg previously agreed to dismiss its third-party negligence and warranty claims (Gyllenberg's Third, Fourth, and Fifth Claims) in an e-mail between counsel dated May 7, 2004. BHP's Exhibit A. Second, BHP maintains that it cannot be liable for indemnity or contribution (Gyllenberg's First and Second Claims) for the same reasons Bronson was not liable. Specifically, BHP argues that if Bronson could not be liable in indemnity or contribution as the supplier of the products Gyllenberg used, then BHP cannot be liable since it is even further out on the distributive chain as the manufacturer of the products.
I. Timeliness of BHP's Motion and Failure to Follow Local Rules on Fact Statements
As a threshold issue, Gyllenberg first argues that BHP's motion should be denied because it was filed after May 14, 2004, the deadline for filing dispositive motions. However, based on Gyllenberg's May 7, 2004 e-mail, BHP had an agreement with Gyllenberg that the third-party negligence and warranty claims would be dismissed. BHP's Exhibit A. Therefore, BHP's failure to file a dispositive motion with respect to these claims is understandable and excusable.
With respect to the contribution and indemnity claims, BHP explains that it failed to file a summary judgment motion before the dispositive motions deadline because: "It would not have been productive for the court or the parties to bring two nearly identical motions." BHP Reply Memorandum (docket #92), p. 2. This explanation is not adequate. Courts deal with identical summary judgment motions by different parties on a regular basis. Indeed, BHP could have simply filed a summary judgment motion adopting all of Bronson's arguments.
Despite BHP's failure to comply with the dispositive motion deadline, this court is unwilling to deny BHP's motion as untimely because, as discussed below, all the claims against BHP should be dismissed. If BHP's motion were denied now due to untimeliness, BHP would simply make the same motion in limine prior to trial or during trial. This court's ruling would be the same, but would occur after the parties incurred more attorneys fees preparing for trial.
For similar reasons, BHP's summary judgment motion will not be rejected for failing to include a Concise Statement of Material Facts as required by LR 56. After deciding Bronson's motion, this court is well aware of the relevant facts in this case. Additional fact statements are unnecessary to decide BHP's motion.
II. Sanctions or Attorneys Fees Pursuant to FRCP 16(f)
If BHP's motion is considered, Gyllenberg requests that BHP be sanctioned or required to pay attorneys fees pursuant to FRCP 16(f). That request is denied. Although BHP's noncompliance was not substantially justified, an award of expenses would be unjust because the substance of BHP's motion would have arisen later anyway, requiring Gyllenberg to respond.
FRCP 16(f) provides:
Sanctions. If a party or party's attorney fails to obey a scheduling or pretrial order, or if no appearance is made on behalf of a party at a scheduling or pretrial conference, or if a party or party's attorney is substantially unprepared to participate in the conference, or if a party or party's attorney fails to participate in good faith, the judge, upon motion or the judge's own initiative, may make such orders with regard thereto as are just, and among others any of the orders provided in Rule 37(b)(2)(B), (C), (D). In lieu of or in addition to any other sanction, the judge shall require the party or the attorney representing the party or both to pay the reasonable expenses incurred because of any noncompliance with this rule, including attorney's fees, unless the judge finds that the noncompliance was substantially justified or that other circumstances make an award of expenses unjust.
III. Dismissal of Gyllenberg's Third-Party Claims A. Negligence and Warranty Claims (Gyllenberg's Third, Fourth, and Fifth Claims)
According to the May 7, 2004 e-mail from Gyllenberg's attorney to BHP's attorney, Gyllenberg agreed to dismiss all the claims against BHP except those for indemnity and contribution. BHP's Exhibit A. Gyllenberg's Response to BHP's Motion (docket #89) does not mention this agreement, but neither does it argue that BHP is liable to Gyllenberg for these claims. Therefore, the parties' agreement will be enforced and Gyllenberg's third-party negligence and warranty claims against BHP are dismissed.
B. Indemnity and Contribution Claims (Gyllenberg's First and Second Claims)
BHP can only be liable for indemnity or contribution to Gyllenberg if BHP could not have been liable to Country. Safeco Ins. Co. of Am. v. Russell, 170 Or App 636, 639, 13 P3d 519, 520 (Or App 2000) (setting forth the elements of an indemnity claim); Jensen v. Alley, 128 Or App 673, 677, 877 P2d 108, 111 (Or App 1994) (setting forth the elements of a contribution claim). Gyllenberg cannot pass its liability for Country's First Claim for negligent design and selection through to BHP if BHP could not be liable to Country for this same claim. Here "Country is essentially alleging that Gyllenberg acted as an architect by negligently designing a cold roof system and negligently selecting materials that were inadequate for use on a roof in Baker City." Opinion and Order, p. 20. Country does not allege that the roofing materials manufactured by BHP were defective, such as having some inherent structural weakness, or that BHP made any warranties to the Webbs that its product was fit for a particular purpose. Id. Because the only basis for Country's claim is Gyllenberg's negligent design and selection, there is no circumstance under which BHP owed any liability to Country. If Gyllenberg separately believes that BHP's product was defective, or that BHP warrantied to Gyllenberg that its product was fit for use on the Webbs' home, the appropriate claim is one for negligence or breach of warranty (both of which Gyllenberg has agreed to dismiss), not contribution or indemnity.
As with Bronson, Gyllenberg cannot pass through its liability for Country's Second Claim for breach of contract because BHP was not in privity of contract with Country. Id at 19.
ORDER
For the reasons stated above, BHP's Third-Party Motion to Dismiss all Claims, or in the Alternative, a Motion for Entry of Summary Judgment (docket #85) is GRANTED.