New Bern Riverfront Development, LLC v. Weaver Cooke Construction, LLC (In re New Bern Riverfront Development, LLC)

515 B.R. 230, 2014 Bankr. LEXIS 3564
CourtUnited States Bankruptcy Court, E.D. North Carolina
DecidedAugust 22, 2014
DocketCASE NO. 09-10340-8-SWH; ADVERSARY PROCEEDING NO. 10-00023-AP
StatusPublished

This text of 515 B.R. 230 (New Bern Riverfront Development, LLC v. Weaver Cooke Construction, LLC (In re New Bern Riverfront Development, LLC)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
New Bern Riverfront Development, LLC v. Weaver Cooke Construction, LLC (In re New Bern Riverfront Development, LLC), 515 B.R. 230, 2014 Bankr. LEXIS 3564 (N.C. 2014).

Opinion

ORDER ALLOWING MOTION FOR SUMMARY JUDGMENT ON INDEMNITY CLAIM

Stephani W. Humrickhouse, United States Bankruptcy Judge

Pending before the court is the final component of the motion for summary judgment filed by third-party defendants Stock Building Supply, LLC and PLF of Sanford, Inc. (formerly dba Lee Window & Door Co.) (herein collectively “Stock Supply”) against Weaver Cooke Construction, LLC (“Weaver Cooke”), in its capacity as third-party plaintiff. The court already entered an order granting summary judgment with respect to two of Weaver Cooke’s three claims against Stock Supply (for negligence and breach of express warranty) on grounds that the claims were barred by the applicable statutes of limitation, and this order addresses the remaining claim, in which Weaver Cooke asserts that Stock Supply must indemnify it for its losses. For the reasons outlined below, the court will enter summary judgment in favor of Stock Supply on this claim as well.

BACKGROUND

New Bern Riverfront Development, LLC (“New Bern”) is the owner and developer of the SkySail Luxury Condominiums (“SkySail Project”) located in New Bern, North Carolina. On March 30, 2009, New Bern initiated an action in Wake County Superior Court against nine individual defendants related to their roles in the construction of the SkySail Condos (the “State Not Action”). The named defendants in the State Action included New Bern’s general contractor, Weaver Cooke; Travelers Casualty and Surety Company of America (“Travelers”); National Erectors Rebar, Inc. f/k/a National Reinforcing Systems, Inc. (“NER”) and certain subcontractors of the general contractor.

On November 30, 2009, New Bern filed a petition for relief under chapter 11 of the Bankruptcy Code. The State Action was removed to the United States District Court for the Eastern District of North Carolina on December 16, 2009, and subsequently transferred to this court on Febru[235]*235ary 3, 2010. After voluntarily dismissing its causes of action as to the subcontractors named as defendants in the State Action, New Bern filed its first amended complaint on May 6, 2010, asserting claims against the original parties of Weaver Cooke, Travelers, and NER, and the additional parties of J. Davis Architects, PLLC, and Fluhrer Reed, PA.

On May 27, 2010, Weaver Cooke filed an answer to New Bern’s first amended complaint and a third-party complaint against Wachovia Bank, N.A. and Wells Fargo & Company ftd/b/a Wachovia Corporation. Absent as third-party defendants in Weaver Cooke’s original third-party complaint were any of the subcontractors hired by Weaver Cooke during the construction of the SkySail Project. On June 14, 2012, Weaver Cooke filed its second, third-party complaint asserting claims of negligence, contractual indemnity and breach of express warranty against many of the subcontractors hired during the construction of the SkySail Project, including Stock Building Supply, LLC and PLF of Sanford, Inc. Stock Supply filed an answer to Weaver Cooke’s second, third-party complaint on August 17, 2012, asserting numerous defenses, including the statute of limitations.

On December 20, 2013, Stock Supply filed a motion for summary judgment regarding all three causes of action alleged against it by Weaver Cooke. As grounds for the motion, Stock Supply argued that (1) the applicable statute of limitations bars Weaver Cooke’s claims of negligence and breach of express warranty; (2) the economic loss rule bars Weaver Cooke’s negligence claim; and (3) N.C. Gen.Stat. § 22B-1 bars Weaver Cooke’s contractual indemnity claim. The court dealt first with the statute of limitations issue, and granted summary judgment in favor of Stock Supply with respect to the negligence and breach of express warranty claims in an order entered June 10, 2014. Weaver Cooke’s claim for indemnification is its only remaining claim against Stock Supply.1

DISCUSSION

“[Sjummary judgment is proper ‘if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ ” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986) (quoting Fed.R.Civ.P. 56(c)). In making this determination, conflicts are resolved by viewing all facts and inferences to be drawn from the facts in the light most favorable to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962) (per curiam). Summary judgment is not a [236]*236“disfavored procedural shortcut,” but an important mechanism for filtering out “claims and defenses [that] have no factual basis.” Celotex, 477 U.S. at 327, 106 S.Ct. at 2555.

With respect to the non-core matter now before the court, there is no dispute as to the relevant facts, contractual language, or applicable law. The court has jurisdiction to enter this order allowing summary judgment, in light of the right of de novo review by the district court. Ward v. United States Dept. of Educ., Case No. 5:13-CV-695-D (E.D.N.C. June 18, 2014), citing Exec. Benefits Ins. Agency v. Arkison, — U.S. -, 134 S.Ct. 2165, 189 L.Ed.2d 83 (2014).

The court’s analysis is governed by North Carolina state law, and in particular N.C. Gen.Stat. § 22B-1, which provides:

Any promise or agreement in, or in connection with, a contract or agreement relative to the design, planning, construction, alteration, repair or maintenance of a building, structure, highway, road, appurtenance or appliance, including moving, demolition and excavating connected therewith, purporting to indemnify and hold harmless the promis-ee, the promisee’s independent contractors, agents, employees, or indemnitees against liability for damages arising out of bodily injury to persons or damage to property proximately caused by or resulting from the negligence, in whole or in part, of the promisee, its independent contractors, agents, employees, or in-demnitees, is against public policy and is void and unenforceable. Nothing contained in this section shall prevent or prohibit a contract, ■ promise or agreement whereby a promisor shall indemnify or hold harmless any promisee or the promisee’s independent contractors, agents, employees or indemnitees against liability for damages resulting from the sole negligence of the promisor, its agents or employees.

N.C. Gen.Stat. § 22B-1 (emphasis added).

The contractual indemnification language at issue is set out in Article 16 of Weaver Cooke’s subcontract (“the Subcontract”) with Lee Window & Door Co. (as assigned to and performed by Stock Supply), as follows:

Article 16
Indemnification
16.1 Subcontractor shall be responsible to Contractor for the acts and omissions of Subcontractor’s employees, sub-subcontractors and their agents and employees, and other persons performing portions of Subcontractor’s Work under a contract with Subcontractor.

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United States v. Diebold, Inc.
369 U.S. 654 (Supreme Court, 1962)
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Carl v. State
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Vecellio & Grogan, Inc. v. Piedmont Drilling & Blasting, Inc.
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McDonald v. Scarboro
370 S.E.2d 680 (Court of Appeals of North Carolina, 1988)
City of Wilmington v. North Carolina Natural Gas Corp.
450 S.E.2d 573 (Court of Appeals of North Carolina, 1994)
Schenkel & Shultz, Inc. v. Hermon F. Fox & Associates
658 S.E.2d 918 (Supreme Court of North Carolina, 2008)
Jackson v. Associated Scaffolders & Equipment Co.
568 S.E.2d 666 (Court of Appeals of North Carolina, 2002)
St. Paul Fire & Marine Insurance v. Hanover Insurance
187 F. Supp. 2d 584 (E.D. North Carolina, 2000)
Executive Benefits Insurance Agency v. Arkison
134 S. Ct. 2165 (Supreme Court, 2014)

Cite This Page — Counsel Stack

Bluebook (online)
515 B.R. 230, 2014 Bankr. LEXIS 3564, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-bern-riverfront-development-llc-v-weaver-cooke-construction-llc-in-nceb-2014.