Diplomat Properties Ltd. Partnership v. Tecnoglass, LLC

114 So. 3d 357, 2013 WL 2218514, 2013 Fla. App. LEXIS 8130
District Court of Appeal of Florida·Decided May 22, 2013·No. No. 4D12-2086·Published·Cited by 10 cases

Opinion

TAYLOR, J.

Appellant, Diplomat Properties, L.P. (“Diplomat”), appeals an order which dismissed all of its claims against the defendants, Tecnoglass USA, Inc., and Tecno-[359] glass Colombia S.A., Inc. (collectively “Tecnoglass”). In this appeal, Diplomat challenges only the dismissal of its common law indemnity claim. We reverse.

Diplomat is the owner of the Westin Diplomat Resort and Spa (the “hotel”) in Hollywood, Florida. During the construction of the hotel, Diplomat contracted with Shower Concepts, Inc. (“Shower Concepts”) to furnish and install glass shower doors in the guest rooms. Shower Concepts, in turn, entered into a contract with Tecnoglass, who fabricated the glass doors. After the hotel opened for business in 2002, at least thirty-nine of the installed glass doors spontaneously fractured into small pieces. According to Diplomat’s complaint, nickel sulfide inclusions in the glass doors caused them to break spontaneously.

In 2006, Diplomat brought an arbitration proceeding against Shower Concepts to recover damages for breach of contract. Specifically, Diplomat sought to recover the costs associated with replacing all the defective glass shower doors in the hotel. Shower Concepts failed to defend and did not appear at the arbitration hearing. In 2007, the arbitrator rendered an award in favor of Diplomat and against Shower Concepts. In 2008, the circuit court confirmed the arbitrator’s award and entered a final judgment awarding Diplomat over $2.5 million against Shower Concepts. In exchange for Diplomat’s agreement not to execute on the judgment, Shower Concepts assigned to Diplomat any claims it had against third parties arising from the defects in the glass doors.

In 2011, Diplomat, standing in the shoes of Shower Concepts, filed a multi-count complaint against Tecnoglass, Tecnoglass LLC,1 and another defendant. Relevant to this appeal, Count VI of the complaint asserted a claim against Tecnoglass for common law indemnification.

Tecnoglass moved to dismiss all of Diplomat’s claims. The motion to dismiss sought dismissal of the common law indemnity claim on two grounds: 1) Diplomat did not allege facts supporting the existence of a special relationship between Shower Concepts and Tecnoglass; and 2) the arbitrator’s award held Shower Concepts liable for breach of contract and included “no finding that such liability is vicarious, constructive, or derivative to the Defendants.”

Following a hearing on the motion to dismiss, the trial court dismissed all of Diplomat’s claims against Tecnoglass with prejudice. This appeal ensued.

We apply a de novo standard of review to a final order of dismissal for failure to state a cause of action. Kreizinger v. Schlesinger, 925 So.2d 481, 432 (Fla. 4th DCA 2006). A court may not go beyond the four corners of the complaint and must accept the facts alleged therein as true. Id. at 432-38.

The seminal Florida case on common law indemnity is Houdaille Industries, Inc. v. Edwards, 374 So.2d 490 (Fla.1979). The issue presented in Houdaille was whether a manufacturer of a defective product that contributes to an on-the-job injury of a worker may seek common law indemnity from the employer of the injured worker. In addressing this issue, the Florida Supreme Court set forth the general principles of common law indemnity.

Common law indemnity is a claim that “shifts the entire loss from one who, although without active negligence or fault, has been obligated to pay, because of some vicarious, constructive, derivative, or [360] technical liability, to another who should bear the costs because it was the latter’s wrongdoing for which the former is held liable.” Id. at 493. “Indemnity rests upon the fault of another which has been imputed to or constructively fastened upon the one seeking indemnity, and there can be no indemnity between joint tortfeasors.” Id.

The Florida Supreme Court noted that although the courts “have consistently premised the allowance of indemnity upon a special relationship between the primary defendant and the third-party defendant,” confusion had arisen over the use of the labels that courts employed to designate the types of conduct that would permit the party seeking common law indemnity to recover. Id. The Houdaille court stated that “[rjegardless of what specific terms are employed whether the courts say active-passive or primary-secondary what they are really speaking of is fault or no fault.” Id.

The Florida Supreme Court explained that in determining whether a party is entitled to indemnity, the courts will not weigh the relative fault of the parties. Id. Rather, the courts must look to the party seeking indemnity to determine whether he is without fault. Id. If both parties are at fault, no matter how slight the fault of the party seeking indemnity, recovery for common law indemnity is precluded. Id. at 494.

Applying these principles, the Florida Supreme Court held that “absent a special relationship between the manufacturer and the employer which would make the manufacturer only vicariously, constructively, derivatively, or technically liable for the wrongful acts of the employer, there is no right of indemnification on the part of the manufacturer against the employer.” Id. at 492. The court noted that the manufacturer’s claim that the worker’s death resulted solely from the negligence of the employer would have stated a complete defense to the original action, and did not establish that the manufacturer was vicariously, constructively, derivatively, or technically liable for the employer’s negligence. Id. at 494. However, the court noted that a “different situation may exist where the manufacturer’s liability arises because of a defective component supplied by another and incorporated into the product which is subsequently sold to one injured by the defect.” Id. at 493 n. 3. “In that case, a manufacturer who is held liable for a breach of an implied warranty of fitness could be without fault insofar as its relationship with the supplier of the component part is concerned and may be permitted to seek indemnification from the supplier.” Id.

Following the Houdaille decision, “[fjor a party to prevail on a claim of common law indemnity, the party must satisfy a two-prong test.” Dade Cnty. Sch. Bd. v. Radio Station WQBA, 731 So.2d 638, 642 (Fla.1999). “First, the party seeking indemnification must be without fault, and its liability must be vicarious and solely for the wrong of another. Second, indemnification can only come from a party who was at fault.” Id. (citation omitted). “Additionally, Florida courts have required a special relationship between the parties in order for common law indemnification to exist.” Id.

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Diplomat Properties Ltd. Partnership v. Tecnoglass, LLC, 114 So. 3d 357, 2013 WL 2218514, 2013 Fla. App. LEXIS 8130 (Fla. Ct. App. 2013).

114 So. 3d 357 (Diplomat Properties Ltd. Partnership v. Tecnoglass, LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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