Core-Mark Midcontinent Inc. v. Sonitrol Corp.

2016 COA 22, 370 P.3d 353, 2016 Colo. App. LEXIS 133, 2016 WL 611566
CourtColorado Court of Appeals
DecidedFebruary 11, 2016
DocketCourt of Appeals No. 14CA1575
StatusPublished
Cited by193 cases

This text of 2016 COA 22 (Core-Mark Midcontinent Inc. v. Sonitrol Corp.) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Core-Mark Midcontinent Inc. v. Sonitrol Corp., 2016 COA 22, 370 P.3d 353, 2016 Colo. App. LEXIS 133, 2016 WL 611566 (Colo. Ct. App. 2016).

Opinions

Opinion by

JUDGE J. JONES

T1 Plaintiffs, Core-Mark International, Inc, and its wholly owned, subsidiary, Core-Mark Midcontinent, Inc. (collectively, Core-Mark); and Core-Mark's casualty insurers, United States Fire Insurance Company and Commonwealth Insurance Company (collectively, the Insurers), appeal the judgment entered after a jury trial to determine damages on their breach of contract claims against defendaht, Sonitrol Corporation. Sonitrol cross-appeals the judgment and conditionally eross-appeals the district court's denial of its motion to strike a portion of Core-Mark's damages claim. We affirm the Judgment and dismiss Sonitrol's conditional cross-appeal.

I. Background

T2 Core-Mark distributes merchandise to convenience stores. Core-Mark contracted with Sonitrol to install and momtor & secur1ty system at a warehouse Core-Mark used to store inventory.1

T3 In 2002, three men burglarized Core-Mark's warehouse. Sonitrol employees failed to detect or respond to the break-in while the burglars looted the building for several hours. Sonitrol employees ignored several alarms activated by the burglars' noise. One of the burglars started a fire in the warehouse that destroyed the building and its contents.

1 4 Core-Mark and the Insurers sued Son-itrol, asserting both tort and contract claims to recover for losses resulting from the burglary.. The district court dismissed Core-Mark's tort claims and granted Sonitrol's motion for -summary judgment on the contract claims based on a limitation of liability clause in Core-Mark's contract with Sonitrol,

T5 On appeal, a division of this court affirmed the dismissal of the tort claims, but reversed the grant of summary judgment on the contract claims, holding that Core-Mark's claims for willful and wanton breach of contract were not subject to the contractual limitation of liability, U.S. Fire Ins. Co. v. Sonitrol Mgmt. Corp., 192 P.3d 543 (Colo. App. 2008) (Sonitrol D). The division remanded the case for a trial on the breach of contract claims.

T6 On remand, a. jury found that Sonitrol had willfully and wantonly breached. its contract with Core-Mark and breached the con-Atractual duty of good faith and fair dealing. The jury awarded $7,848,782 to Core-Mark and $10,965,777 to the Insurers.

T7 On appeal, a division of this court affirmed the jury's verdict as to Sonitrol's liability, but reversed the damages award. Core-Mark Midcontinent, Inc. v. Sonitrol Corp., 2012 COA 120, 300 P.3d 968 (Somitrol II). The division held that the district court erred by excluding the testimony of Soni-trol's expert witnesses regarding the foreseeability of the extent of Core-Mark's logses. The division remanded the case for a new trial on damages, at which Sonitrol's experts [356]*356would be permitted to testify. Id. at 435, 39-40.

T8 On remand, a jury awarded Core-Mark $2,750,000.

II, Core-Mark's Appeal

T9 Core-Mark makes three primary contentions on appeal: (1) the district court erred in allowing Sonitrol to present evidence that the arson was not foreseeable; (2) the district court erred in refusing to give the jury Core-Mark's tendered instruction explaining the phrase "natural and probable consequence" used in a damages instruction; and (8) the district court abused its disceretion by exeluding evidence of how Sonitrol breached the contract. We address and re-jeet these contentions in turn, *

A. Foreseeability of Arson

1. Procedural Background

110 In Somitrol II, the division held that to be liable for the lqgses claimed by a plaintiff, "[the defendant must have had reason to foresee both the type and the general magnitude of damages." Somitrol II, T81, The division reversed and remanded "for a new trial on damages," id. at 11; see id. at Tl 40, 50, because the district court had erroneously precluded three experts from testifying for Sonitrol that Core-Mark's storage of excessive amounts of flammable liquids in the warehouse, and other related actions and cireumstances, contributed significantly to the loss resulting from the fire. Id. at 1° 80-40, On remand, Core-Mark filed a motion in limine asking the court to exclude "all evidence attempting to controvert the Court of Appeals' ruling that the type of damages resulting from the fires was foreseeable to Sonitrol," Core-Mark characterized the "type" of damages at issue as "an arson fire started by an undetected burglar," and argued that the Sonitrol II division's statement "Iwle assume that Sonitrol could have foreseen that if it failed to detect a break-in at the warehouse, a burglar could start a fire," see Somitrol II, ©3832, was the "law of the case" as to whether the fire was foreseeable. In short, Core-Mark argued that the division's assumption that the fire was foreseeable was a holdmg' that the fire was foreseeable.

Sonitrol's opposition to Core-Mark's motion in limine argued, 'as now relevant, that the division's assumption was not a holding, the law of the case doctrine does not apply to an issue (like the foreseeability of the fire) that the appellate court did not decide, and the Sonitrol II mandate did not limit the trial on remand to the question of the extent of fire-related damages, but to "damages generally." In so arguing, Soni-trol also characterized "arson" as a "type" of damages

( 12 The district court demed Core~-Mark's motion, for two reasons. First, the court ruled that the division's assumption that the fire was foreseeable was not the law of the case because it was not necessary to the division's holdings. Second, the court ruled that evidence regarding the foreseeability of the fire was not precluded by the scope of the division's remand.

113 At trial, one of Core—Mark’s experts testified that the arson was foreseeable. He did not say that arson was a "probable" result of the breach, notmg that burglars committing arson in connection with a burglary was "statistically quite rare." Rather, he opined that the fire was foreseeable in the same sense that a commercial airline pilot becoming incapacitated is foreseeable because though "statistically rare," it does happen. Another of Core-Mark's experts testified, in response to a question whether Core, Mark's damages were "a natural and probable consequence of the breach of contract," that "Sonitrol's breach of contract flowed through the natural flow, probable breach of what they did." Core-Mark has not pointed to any other evidence it introduced at trial as to the foreseeability of its claimed damages,

T14 A long-time Sonitrol employee testified that the purpose of Sonitrol's burglar alarm system was to detect break-ins, not fires, and that the nature of what was stored in the warehouse was not relevant to services Sonitrol was to provide under the burglar alarm contract. He also testified that, in the thirty-six years he had worked for Sonitrol, the only burglary of a Sonitrol-monitored. facility that involved a fire, of which he was [357]*357aware, was the burglary of Core-Mark's warehouse. Two experts testified on behalf of Sonitrol that Core-Mark stored more than thirty times the amount of flammable or combustible materials allowed by fire and building codes, and that Core-Mark's violations of those codes was a significant contributing factor to the extent of the fire loss.

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Cite This Page — Counsel Stack

Bluebook (online)
2016 COA 22, 370 P.3d 353, 2016 Colo. App. LEXIS 133, 2016 WL 611566, Counsel Stack Legal Research, https://law.counselstack.com/opinion/core-mark-midcontinent-inc-v-sonitrol-corp-coloctapp-2016.