SELECTIVE INSURANCE COMPANY OF AMERICA v. CHRISTEYNS LAUNDRY TECHNOLOGY, LLC

CourtDistrict Court, D. New Jersey
DecidedOctober 22, 2020
Docket1:19-cv-11723
StatusUnknown

This text of SELECTIVE INSURANCE COMPANY OF AMERICA v. CHRISTEYNS LAUNDRY TECHNOLOGY, LLC (SELECTIVE INSURANCE COMPANY OF AMERICA v. CHRISTEYNS LAUNDRY TECHNOLOGY, LLC) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
SELECTIVE INSURANCE COMPANY OF AMERICA v. CHRISTEYNS LAUNDRY TECHNOLOGY, LLC, (D.N.J. 2020).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CAMDEN VICINAGE

SELECTIVE INSURANCE COMPANY OF AMERICA,

Plaintiff, Civil No. 19-11723 (RMB/AMD)

v. OPINION

CHRISTEYNS LAUNDRY TECHNOLOGY, LLC, et al.,

Defendants.

RENÉE MARIE BUMB, United States District Judge This matter comes before the Court on the Motion for Summary Judgment brought by Third-Party Defendant Lavatec Laundry Technology, Inc. (“Lavatec”) [Docket No. 61], the Motion to Seal brought by Lavatec [Docket No. 63], and the Motion for Summary Judgment brought by Defendant/Third-Party Plaintiff Christeyns Laundry Technology, LLC (“Christeyns”) [Docket No. 81]. For the reasons expressed below, the Court will grant Lavatec’s Motions and deny Christeyns’ Motion. I. FACTUAL BACKGROUND This case stems from the malfunction of a commercial laundry machine. Intervenor Plaintiff Clean Green Textile Services, LLC, t/a Single Source Laundry Solution (“Clean Green”) provides commercial laundry cleaning services, primarily to hotels in southern New Jersey. Clean Green is insured by Selective. In approximately August 2016, Clean Green purchased a Lavatec Tunnel Washer LT 35-10 BT (“the Tunnel Washer”) from Lavatec. The Tunnel Washer has various chambers, some of which

are separated by ethylene propylene diene monomer rubber seals (“EPDM seals”). Christeyns “sells detergents and installs chemical dispensing systems for use by industrial laundry facilities like Clean Green.” [Docket No. 81-1, ¶ 6.] In approximately April 2016, Clean Green and Christeyns executed “a Supply Agreement whereby Clean Green agreed . . . to purchase various detergents and chemicals exclusively from Christeyns.” [Id., ¶ 13.] Christeyns also provided the systems by which the detergents and chemicals would be dispensed into the Tunnel Washer (“the Dispensing System”). The Dispensing System, including the control card, was a product of Third-Party Defendant Softrol

Systems, Inc. Clean Green contends that it bargained for all new equipment from Christeyns. In fact, Christeyns provided used equipment, including the Dispensing System and control card. The Supply Agreement also had several clauses relating to what damages the parties would be permitted to seek from one another in the event of a lawsuit. This included the “Limitation of Liability” clause, which read in full: WITHOUT IN ANY WAY LIMITING THE PROVISIONS OF THIS AGREEMENT, NEITHER PARTY SHALL HAVE LIABILITY TO THE OTHER FOR ANY ANTICIPATORY OR LOST PROFIT, SPECIAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY, INCIDENTAL, OR INDIRECT DAMAGES OF ANY KIND (COLLECTIVELY “NON-DIRECT DAMAGES”) RESULTING FROM THE PERFORMANCE OR NON- PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT EVEN IF THOSE NON-DIRECT DAMAGES ARE: ATTRIBUTED TO BREACH OF THIS AGREEMENT, TORT, NEGLIGENCE, OR OTHER CAUSE; EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF NON-DIRECT DAMAGES; OR EVEN IF, UNDER APPLICABLE LAW, NON-DIRECT DAMAGES ARE CONSIDERED DIRECT DAMAGES.

[Docket No. 81-9, ¶ 8.1.] The Supply Agreement also included a Massachusetts choice of law provision and a merger clause. [Id. ¶¶ 8.5, 8.7.] Clean Green started using the Dispensing System in September 2016. According to Clean Green, the Dispensing System malfunctioned in December 2016, resulting in an excessive amount of bleach being pumped into the Tunnel Washer. Shortly thereafter, in January 2017, linens began to exhibit small black dots after being washed in the Tunnel Washer. According to Clean Green, the black dots were the result of the excessive amounts of bleach interacting with the EPDM seals and causing them to deteriorate. The black dots, unsurprisingly, rendered the linens unusable by Clean Green’s clients. Clean Green reported the initial malfunction to Christeyns in December 2016. It reported the black dots in January 2017. Clean Green contends that Christeyns did not adequately investigate the issue until October 2017, at which point Clean Green alleges Christeyns advised “that the cause of the black dots damaging the linen was likely a degradation of the seals in the Lavatec Tunnel caused by the bleach being pumped into the Lavatec Tunnel as a result of the defect in the Christeyns dispensing system and the failure of the Softrol control card.”

[Docket No. 84-1, ¶ 18.] Christeyns denies this characterization. [Docket No. 92, ¶ 18.] Even so, Clean Green contends that Christeyns failed in several ways to address the issue with the Dispensing System, including by allegedly intentionally removing and destroying the control card, which would have had valuable information about the precise failings of the unit. Due to Christeyns’ alleged actions and inactions, Clean Green claims to have sustained approximately $2.5 million in damages. Conversely, Lavatec and Clean Green more promptly addressed their shared concerns by way of a settlement agreement dated September 1, 2017 (the “Settlement Agreement”). [Docket No. 62-

1, Exhibit E.] The Settlement Agreement noted that Clean Green had “demanded damages from Lavatec in connection with the performance of the Lavatec Tunnel Washer 35-10 BT that [Clean Green] purchased from Lavatec (‘Demand’).” [Id.] It also included the following release clause: Except for obligations created by or arising out of this Agreement, [Clean Green] and Lavatec fully and forever release and discharge each other and each and every one of their partners, members, directors, shareholders, employees, officers, affiliates, marketing partners, related parent and subsidiary entities, insurance carriers, publishers, representatives, agents, and attorneys of any and all debts, liabilities, judgments, verdicts, penalties, demands, liens, obligations, promises, acts, contracts, costs, accountings, expenses, attorneys’ fees, damages, actions and causes of action of every kind, nature, character and description existing before and/or as of the Effective Date of this Agreement, whether known or unknown, foreseeable or unforeseeable, suspected or unsuspected, that directly or indirectly related to, arise out of, or stem from the provision of services to [Clean Green] by Lavatec, the comments to YourLinenService.com, or the Demand.

[Id.] Finally, Selective, Clean Green’s insurer, paid $950,504.02 to Clean Green to settle its claims. [Docket No. 81-13.] II. PROCEDURAL HISTORY Selective initially filed this suit against Christeyns in the Superior Court of New Jersey, Law Division, Camden County on March 28, 2019. [Docket No. 1-1.] Selective, as the subrogee of Clean Green, pled four counts against Christeyns: products liability, negligence, breach of warranty, and “ultrahazardous activity.” [Docket No. 1-1.] Selective sought $950,504.02 in damages, plus interest, costs, and fees. On April 29, 2019, Christeyns removed the case to this Court. [Docket No. 1.] Clean Green then filed a Motion to Intervene on September 9, 2019, which the Honorable Ann Marie Donio granted on September 26, 2019. [Docket Nos. 16, 20.] The Intervenor Complaint asserted the same four claims against Christeyns — products liability, negligence, breach of warranty, and “ultrahazardous activity” — in addition to claims for breach of contract, breach of covenant of good faith and fair dealing, and fraud. [Docket No. 21.] Christeyns answered the Intervenor

Complaint on November 12, 2019, at which time it also filed a Third-Party Complaint against Lavatec and Softrol. [Docket No. 25.] Christeyns’ Third-Party Complaint pled two counts against both Lavatec and Softrol: contribution and common law indemnity. [Id.] On January 13, 2020, Softrol filed its answer to Christeyns’ Third-Party Complaint and asserted crossclaims of contribution and indemnification against Christeyns and Lavatec. [Docket No. 50.] On March 4, 2020, Lavatec also filed its answer to Christeyns’ Third-Party Complaint. [Docket No.

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SELECTIVE INSURANCE COMPANY OF AMERICA v. CHRISTEYNS LAUNDRY TECHNOLOGY, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/selective-insurance-company-of-america-v-christeyns-laundry-technology-njd-2020.