Guild Associates, Inc. v. Bio-Energy (Washington), LLC

309 F.R.D. 436, 2015 WL 5383743
CourtDistrict Court, S.D. Ohio
DecidedSeptember 15, 2015
DocketCASE NO.: 2:13-CV-1041, CASE NO. 2:14-CV-1676
StatusPublished
Cited by16 cases

This text of 309 F.R.D. 436 (Guild Associates, Inc. v. Bio-Energy (Washington), LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Guild Associates, Inc. v. Bio-Energy (Washington), LLC, 309 F.R.D. 436, 2015 WL 5383743 (S.D. Ohio 2015).

Opinion

OPINION AND ORDER

ALGENON L. MARBLEY, United States District Judge

I. INTRODUCTION

Before the Court is Plaintiff Navigators Specialty Insurance Company’s (“Plaintiff’ or “Navigators”) Motion to Consolidate (Doe. 32) seeking to consolidate Guild Associates, Inc. v. Bio-Energy (Washington) LL, Case No. 2:13-cv-1041, with Navigators Specialty Insurance Company v. Guild Associates, Inc., et al, Case No. 2:14-cv-1676, pursuant to Rule 42(a) of the Federal Rules of Civil Procedure. In response, Defendant Guild Associates, Incorporated (“Guild”) filed a Memorandum in Partial Opposition of Navigators’ Motion to Consolidate, (Doc. 33). Defendant Guild agrees to consolidation for purposes of discovery, but opposes consolidation for trial. For the reasons set forth below, Plaintiffs Motion to Consolidate is GRANTED in part and DENIED in part.

II. BACKGROUND

This case arises from the failure of a Nitrogen Removal Unit (“NRU”), a machine used to purify landfill gas into pipeline quality gas. The NRU was ordered from Guild and installed by Meridiem Chemicals and Refinery Services LLC (“Meridiem”) in a Bio-Energy, LLC (Washington) (“BEW”) purification plant at the Cedar Hills Landfill in Maple Valley, Washington. (Complaint, Doc. 1 at 3). On October 1, 2010, the NRU failed, causing the destruction of portions of absorbent media.1 (Id. at 3-4). The failure caused dust to overwhelm the filter system, and repairs required the system be shut down. Guild participated in the repairs and provided replacement absorbent media to BEW at no cost. (Id.). BEW claims, however, the damage was more extensive than originally thought. (Doc. 1, Exhibit B, at 9).

On or about March 29, 2011, an automated monitor registering levels outside normal conditions set off alarms and required the plant to be shut down. (Id.). BEW alleges the shutdown occurred as a result of damages not detected in the initial repair on October 5, 2010. (Id.). BEW also alleges that Guild refused to sell BEW replacement parts to repair the new found damage unless modifications were made to the plant system, at the expense of BEW. (Id. at 9-10). BEW entered into a “Repair Agreement” dated December 7, 2011. (Doc. 1 at 5). Following modifications and repairs made pursuant to the Repair Agreement, DEW’S methane recovery at the Cedar Hills plant dropped from 87% to 81.6%, which BEW alleges caused an estimated $865,000 per year in lost revenue. (Id. at 5).

On October, 7, 2013, Guild Associates filed an action in Franklin County Common Pleas Court, Case (the “State Action”). (Id. at 2). In the State Action, Guild alleged that BEW owed monies to Guild pursuant to the Repair Agreement. (Id.). In response, BEW removed the case to this Court as Guild Associates, Inc. v. Bio-Energy (Washington) LL, Case No. 2:13-cv-1041, currently pending in front of The Honorable Michael H. Watson (the “Underlying Case”). (Id. at 3). In its Answer, BEW asserted counterclaims of breach of contract, fraud in the inducement, and breach of the Meridiem Purchase Order (the “Purchase Order”). The Purchase Order, which Meridiem assigned to BEW, allegedly obligated Guild to indemnify the NRU purchaser, and allegedly stated that “Meridiem assigned its rights to BEW for property damage arising, in any manner, from the furnishing of goods or services thereunder or caused by defects in the goods purchased thereunder...only to the extent caused by the negligence/gross negligence, intentional acts, omissions, or strict liability of the seller.” (Id. at 6).

[439]*439On October 21, 2013, BEW filed a Complaint for Declaratory Judgment and Specific Performance against Guild in the Superior Court of King County in the State of Washington (the “Washington State Case”). (Doc. 1 at 3). In the Washington State Case, BEW requested a declaratory judgment that Guild had a contractual obligation to provide BEW with replacement components, and an order compelling Guild to perform its obligations under the Purchase Order. (Id.).

On September 19, 2014, Navigators, who insured Guild through a Commercial General Liability insurance policy (“CGL Policy”), filed a Complaint for Declaratory Judgment in the present case, Navigators Specialty Insurance Company v. Guild Associates, Inc., et al., Case No. 2:14-cv-1676 (the “Present Case”), against Guild and BEW. (Doc. 1). Navigators asks this Court to enter judgment declaring that Navigators does not owe indemnity to either Guild or BEW, as it pertains to BEWs and Navigators’ claims in the Present Case and/or the Washington State Case. (Id. at 18).

In their Complaint, Navigators asserts that several clauses within the CGL Policy bar or limit Guild’s insurance coverage. (Id. at 13-17). For example, Navigators contends that BEWs claims against Guild for breach of contract are not covered under the policy because they do not state a claim for property damages as a result of an “occurrence” or “accident” as those terms are defined in the CGL Policy. (Doc. 1 at 13-14). Navigators further argues that liability is excluded because the CGL Policy does not cover Guild’s work or work product, and excludes warranties or representations of “fitness, quality, durability, performance, or use” of the insured’s product or work. (Id. at 15). In addition, Navigators asserts that the “Impaired Property” exclusion precludes Navigators from owing for “damage to impaired property or property not physically injured” arising from defect or deficiency in Guild’s work or failure to perform a contract. (Id.). Finally, Navigators contends that the punitive damages sought by BEW are not covered under the CGL Policy. (Id. at 16).

On October 10, 2014, BEW filed its Answer with Jury Demand to Navigators’ Complaint for Declaratory Judgment. (Doe. 16). In addition to its affirmative defenses, BEWs Answer included a prayer for dismissal with prejudice, as well as costs.

On November 10, 2014, Guild filed its Answer and Counterclaim, alleging that Navigators has a duty under the CGL Policy to indemnify Guild for expenses incurred in the investigation and defense against BEW, exemplary damages, and any possible monetary judgment entered against Guild which may flow from the Underlying Case and/or Washington Case. (Doe. 22).

On February 26, 2015, Navigators filed this Motion to Consolidate under Rule of 42(a) of the Federal Rules of Civil Procedure. (Doc. 32). Subsequently, Guild responded to Navigators’ motion to consolidate, agreeing to consolidate for purposes of discovery, but opposing consolidation for purposes of trial. (Doe. 33 at 2). Guild argues that consolidation for trial may prejudice the parties and may create evidentiary problems under Rule 411 of the Federal Rules of Evidence. Navigators filed its Reply to Guild’s Response to Navigators Motion to Consolidate, (Doc. 34), reasserting its arguments for consolidation and denying any prejudice to the parties. BEW has not opposed Navigators’ Motion to Consolidate. This matter is ripe for review.

III.

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Bluebook (online)
309 F.R.D. 436, 2015 WL 5383743, Counsel Stack Legal Research, https://law.counselstack.com/opinion/guild-associates-inc-v-bio-energy-washington-llc-ohsd-2015.