Urban Outfitters, Inc. v. United Construction Co.

District Court, D. Nevada·Decided November 16, 2021·No. 3:21-cv-00109·Unknown

Opinion

3 UNITED STATES DISTRICT COURT

4 DISTRICT OF NEVADA

5 * * *

6 URBAN OUTFITTERS, INC., Case No. 3:21-cv-00109-MMD-CLB

7 Plaintiff, AMENDED ORDER v. 8 DERMODY OPERATING COMPANY, 9 LLC, et al.,

10 Defendants.

11 12 I. SUMMARY 13 This is a breach of contract action involving the construction of a fulfillment and 14 distribution center. Plaintiff Urban Outfitters, Inc., brings claims against Defendants 15 Dermody Operating Company, LLC, the developer of the project, and United Construction 16 Co., the general contractor. (ECF No. 1.) Several motions are before the Court, including: 17 Dermody and United’s motions to dismiss (ECF Nos. 10 (“United’s Motion”), 12 18 (“Dermody’s Motion”)), Plaintiff’s motion for leave to amend the complaint (ECF No. 34), 19 Plaintiff’s motion to file supplemental briefing in support of its motion for leave to amend 20 (ECF No. 49 (“Plaintiff’s First Motion”)), and Plaintiff’s motion to file supplemental briefing 21 in opposition to Defendants’ motions to dismiss (ECF No. 58 (“Plaintiff’s Second 22 Motion”)).1 Plaintiff’s motions for leave to file supplemental briefing include notice of two 23 newly decided Nevada Supreme Court cases, which they argue impact the outcome of 24 the other pending motions. See Somersett Owners Ass’n v. Somersett Dev. Co., Ltd., 25 492 P.3d 534 (Nev. 2021); Dekker/Perich/Sabatini Ltd. v. Eighth Judicial Dist. Ct. in and 26 for Cnty. of Clark, 495 P.3d 519 (Nev. 2021). 27 28 1Defendants responded to both Plaintiff’s motions (ECF Nos. 50, 52, 59, 60), and 2 outcome of Plaintiff’s motion for leave to amend and will therefore deny the First Motion. 3 However, the Court further finds that Dekker is new authority which does affect the 4 outcome of Defendants’ Motions and Plaintiff’s motion for leave to amend, and will 5 therefore grant Plaintiff’s Second Motion. Because the parties included their arguments 6 about Dekker’s applicability to this case, the Court finds further briefing is unnecessary. 7 Having considered the new authority cited in Plaintiff’s Second Motion, the Court will deny 8 in part and grant in part Defendants’ motions to dismiss, and will grant Plaintiff leave to 9 file an amended complaint.2 10 II. BACKGROUND 11 Plaintiff contracted with Defendants on May 11, 2011, for the construction of a 12 warehouse distribution and fulfilment center (the “Center”) in Reno, Nevada. (ECF No. 1 13 at 2-3.) Plaintiff agreed to pay Defendants $25,540,253.00 for the Center, which would 14 encompass approximately 462,720 square feet, as well as associated driveways, parking 15 areas, on-site utilities, and landscaped areas. (Id. at 3.) The construction was 16 substantially completed on January 31, 2012, and Plaintiff took occupancy on February 17 2, 2012.3 (ECF Nos. 13-2, 13-3.) 18 Plaintiff alleges that sometime around September 2019, it became aware that the 19 Center had sustained significant damage, initially believed to be the result of excessive 20 rainfall and the resulting rise of water level in nearby Silver Lake. (ECF No. 1 at 9.) The 21 damage included disruption and cracking of the asphalt and concrete around the truck 22 23 2The language in this sentence was amended to correct a clerical error. As 24 explained below, the Court will grant Defendants’ motions to dismiss in part because Plaintiff’s negligence claim is barred by the economic loss doctrine. Accordingly. the 25 motions to dismiss are denied only in part.

26 3United requests the Court take judicial notice of certain documents, including the Certificate of Substantial Completion issued by the City of Reno. (ECF Nos. 13, 13-2, 13- 27 3.) Dermody joined the request (ECF No. 17), and Plaintiff did not oppose or otherwise respond to the request. Plaintiff did attach to the Complaint a damage evaluation letter 28 prepared for Zurich Insurance Company dated January 29. 2020, which indicates receipt of the Certificate of Occupancy on the same date. (ECF No. 1-1 at 69.) 2 docking bay structure. (Id.) 3 Plaintiff hired Sean Wagner of NewStudio Architecture, LLC, to examine the 4 damage and investigate its cause. (Id. at 6.) Wagner conducted a site visit on September 5 9-12, 2019, and prepared a report dated October 4, 2019. (ECF No. 1-1 at 44-46 6 (“Wagner Report”).) Wagner concluded that the damage was not in fact caused by a one- 7 time weather event, but rather was attributable to conditions that were either improperly 8 assessed or not taken into consideration in the original design and construction of the 9 Center. (ECF No. 1 at 9-10.) 10 After a claim of loss was filed, Zurich Insurance retained an outside consulting 11 firm—Madsen, Kneppers & Associates, Inc. (“MKA”)—to evaluate the roof. (ECF No. 1 at 12 8.) MKA performed two site visits in December 2019 and January 2020, and issued a 13 report dated January 29, 2020 (“MKA Report”). (ECF No. 1-1 at 67.) MKA concluded that 14 the damage to the roof was “not the result of adverse weather conditions or elevated wind 15 speeds, but rather original design and construction.” (Id. at 69.) The MKA Report also 16 notes that “there have been ongoing issues with the roof since original construction,” and 17 details invoices for repairs ranging from November 2018 to March 2019. (Id. at 73-74.) 18 However, Defendants assert that the Center’s roof sustained damage as early as 19 2011, before any time mentioned in the Complaint. (ECF No. 10 at 16.) Sometime in 20 November 2011, before the substantial completion of construction, Defendants claim the 21 Center’s roof was damaged by high wind and moisture, which caused the roof fasteners 22 to pull out of the roofing deck. (Id.) 23 Plaintiff filed suit on March 3, 2021, nine years after the substantial completion of 24 construction. (ECF No. 1.) Defendants now claim that Nevada’s statutes of repose and 25 limitations bar Plaintiff from pursuing its breach of contract claims. (ECF Nos. 10, 12.) 26 Plaintiff opposes Defendants’ Motions, and seeks to file an amended complaint that adds 27 claims and parties to this action. (ECF Nos. 20, 22, 34.) 28 /// 2 Supreme Court issued two decisions that address Nevada’s statute of repose. Plaintiff 3 subsequently filed a motion for leave to file supplemental briefing after each decision was 4 issued. (ECF Nos. 49, 58.) Defendants opposed both of Plaintiff’s motions and included 5 in their briefing arguments not only against granting supplemental briefing, but directly 6 addressing the applicability of the Somersett and Dekker decisions to this action. (ECF 7 Nos. 50, 52, 59.) The Nevada Supreme Court summarily denied a petition for rehearing 8 in Dekker on October 28, 2021.4 9 III. LEAVE TO FILE SUPPLEMENTAL BRIEFING 10 Plaintiff filed two motions for leave to file supplemental briefing. In the First Motion, 11 Plaintiff argued that the Nevada Supreme Court recently indicated in Somersett Owners 12 Ass’n v. Somersett Dev. Co., Ltd., 492 P.3d 534 (Nev. 2021), that a qualifying fraud claim 13 may justify equitable tolling of the statute of repose, and therefore requested leave to file 14 supplemental briefing in support of its motion for leave to amend the complaint. (ECF No. 15 49.) In the Second Motion, Plaintiff argued that the Nevada Supreme Court in 16 Dekker/Perich/Sabatini Ltd. v. Eighth Judicial Dist. Ct. in and for Cnty. of Clark, 495 P.3d 17 519 (Nev. 2021), conclusively found that the 2019 amendments to NRS § 11.202 revives 18 claims which otherwise would have expired under the 2015 version of the statute, and 19 therefore requested leave to file supplemental briefing in support of its opposition to 20 Defendants’ motions to dismiss. (ECF No. 58.) “A party may not file supplemental 21 pleadings, briefs, authorities, or evidence without leave of court granted for good cause.” 22 LR 7-2(g).

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Urban Outfitters, Inc. v. United Construction Co., (D. Nev. 2021).

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