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

575 B.R. 345
CourtUnited States Bankruptcy Court, E.D. North Carolina
DecidedSeptember 29, 2017
DocketCASE NO. 09-10340-8-SWH; ADVERSARY PROCEEDING NO. 10-00023-AP
StatusPublished

This text of 575 B.R. 345 (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), 575 B.R. 345 (N.C. 2017).

Opinion

ORDER ON REMAND REGARDING STOCK BUILDING SUPPLY MOTION FOR SUMMARY JUDGMENT ON INDEMNITY CLAIM AND ALLOWING MOTION TO EXCLUDE EXPERT REPORT

Stephani W. Humrickhouse, United States Bankruptcy Judge

The matter before the court is the district court’s remand after appeal of this court’s order allowing summary judgment for third-party defendants Stock Building Supply, LLC and PLF of Sanford, Inc. (formerly dba Lee Window & Door Co.) (herein collectively “Stock Supply”) against third-party plaintiff Weaver Cooke Construction, LLC (“Weaver Cooke”). The court also will rule on Stock Supply’s pending motion to exclude the reports and testimony of plaintiffs expert George Barbour insofar as the reports and testimony relate to windows and doors in the SkySail Luxury Condominiums (“SkySail” or “the Project”). For the reasons outlined below, the court will allow Stock Supply’s motion to exclude the testimony of Mr. Barbour and will again, on remand, allow summary judgment for Stock Supply on the indemnity claim.

DISCUSSION

New Bern Riverfront Development, LLC (“New Bern”) is the owner and developer of SkySail Luxury Condominiums in New Bern, North Carolina. Weaver Cooke served as the SkySail Project’s general contractor, and Stock Supply as the subcontractor who supplied and installed the windows and doors. New Bern filed a state court action against Weaver Cooke and others in March 2009, and filed a petition for relief under Chapter 11 of the Bankruptcy Code in November 2009. The state court action was removed to the United States District Court for the Eastern District of North Carolina, and subsequently transferred to this court.

With leave of court, Weaver Cooke filed its second third-party complaint on June 14, 2012, 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 Supply. On December 20, 2013, Stock Supply filed a motion for summary judgment regarding all three causes of action alleged against it by Weaver Cooke.1 On that same date, Stock Supply also filed a motion to exclude the report and testimony of George Barbour, insofar as the report and testimony pertains to Stock Supply. (D.E. 722, the “Motion to Exclude”) Mr. Barbour is New Bern’s expert witness, and his report and testimony are relied upon by Weaver Cooke in support of its case. The court granted summary judgment in favor of Stock Supply on the negligence and breach of express warranty claims in an order entered June 10, 2014.

[349]*349On August 22, 2014, the court entered an order granting summary judgment in favor of Stock Supply on the indemnity claim, which was Weaver Cooke’s only remaining claim against Stock Supply. (D.E. 898, the “Indemnity Order”) In subsequent orders, the court entered summary judgment for other third-party defendants (collectively, the “Related Orders”) on essentially the same bases as those cited in the Indemnity Order. For purposes of appeal, the Indemnity Order and the Related Orders were certified as final by both this court and the district court. In an order entered on August 12, 2016, the district court affirmed the Indemnity Order in part, reversed in part, and remanded for further proceedings. (D.E. 1326, the “Order on Appeal”) The district court decided the appeals of the Related Orders on a similar basis.2 On September 23, 2016, Stock Supply filed a motion for reconsideration and clarification, which the district court denied.

On May 16, 2017, this court held a status conference to consider the parameters of the matter on remand. The parties collectively agreed that in a subsequent hearing counsel for Stock Supply and Weaver Cooke would take the lead in presenting the primary arguments pertaining to the indemnity issue, after which the court would enter an order resolving the matter on remand as between Weaver Cooke and Stock Supply. After that, the parties to the Related Orders would have an opportunity to submit briefs addressing the extent to which that order does, or does not, resolve the matter on remand as to them. Weaver Cooke and Stock Supply presented their arguments in a hearing held on July 19, 2017, together with arguments on the closely related matter of Stock Supply’s motion to exclude the testimony and expert report of Mr. Barbour. Post-hearing, both Stock Supply and Weaver Cooke provided the court with supplemental citations of authority, and the matter is ripe for disposition.

The primary issue addressed in the Indemnity Order, and discussed by the district court in the Order on Appeal, was whether contractual indemnification language in ¶ 16.2 of Article 16 of Weaver Cooke’s subcontract (as assigned to and performed by Stock Supply) ran afoul of North Carolina General Statute § 22B-1. In pertinent part, the subcontract provides as follows:

[350]*35016.2 To the fullest extent permitted by law, Subcontractor shall indemnify and hold harmless Contractor, its agents and employees from and against claims, damages, losses and expenses, including but not limited to attorneys’ fees, arising out of or resulting from Subcontractor’s performance of Subcontractor’s Work, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than Subcontractor’s Work itself) including loss of use resulting therefrom, if caused in whole or in part by the negligent acts or omissions of Subcontractor, a sub-subcontractor, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, regardless of whether or not such claim, damage, loss or expense is caused in part by a party indemnified hereunder. Such obligation shall not be construed to negate, abridge, or reduce other rights or obligations of indemnity, which would otherwise exist as to a party or person described in this Article.

Stock Supply Mem. Ex. A (Weaver Cooke Subcontract) at 9 ¶ 16.2 (emphasis added) (D.E. 72Í). The North Carolina statute 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 excavation 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 promi-sor, its agents or employees.

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

In the Indemnity Order, this court held that the “regardless of’ clause violated the statute, which invalidates contractual indemnity provisions that purport to require a subcontractor to indemnify a general contractor for its own negligence. Indemnity Order at 9, citing St. Paul Fire & Marine Ins. Co. v.

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Cite This Page — Counsel Stack

Bluebook (online)
575 B.R. 345, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-bern-riverfront-development-llc-v-weaver-cooke-construction-llc-in-nceb-2017.