Zurich American Insurance v. Lord Electric Co.

828 F. Supp. 2d 462, 2011 U.S. Dist. LEXIS 144793, 2011 WL 6252762
CourtDistrict Court, D. Puerto Rico
DecidedDecember 15, 2011
DocketCivil No. 09-1111 (SEC)
StatusPublished
Cited by10 cases

This text of 828 F. Supp. 2d 462 (Zurich American Insurance v. Lord Electric Co.) is published on Counsel Stack Legal Research, covering District Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zurich American Insurance v. Lord Electric Co., 828 F. Supp. 2d 462, 2011 U.S. Dist. LEXIS 144793, 2011 WL 6252762 (prd 2011).

Opinion

OPINION AND ORDER

SALVADOR E. CASELLAS, Senior District Judge.

Before the Court are third party defendant Chardon/Hato Rey Partnership S.E.’s (“Chardon”) motion to dismiss (Docket #230), third-party plaintiffs Electro Mechanical Corporation d/b/a/ (“Federal Pacific”), Alarm & Control System Co. d/b/a/ (“Acotrol”), together with Rimco Inc.’s (“Rimco”) oppositions thereto (Dockets # 233, 239 & 244), and Chardon’s replies (Dockets #242, 247 & 249). Also before this Court is third-party defendant Securitas Security Services of Puerto Rico, Inc.’s (“Securitas”) unopposed motion to dismiss (Docket #232). After reviewing the filings, and the applicable law, Chardon motion is GRANTED, while Securitas’ is DENIED.

Factual and Procedural Background

A brief introduction to the underlying facts of this case suffices to set the stage for the analysis. The facts, as alleged by the plaintiffs in their complaint, are as follows:

On February 6, 2009, Zurich American Insurance Company (“Zurich”), UBS Financial Services Inc. (“UBS”), and Fire-mans’ Fund Insurance Company (“Fire-mans”) (collectively, “Plaintiffs”) filed this diversity suit against a multitude of defendants. Docket # 1. According to the complaint, on February 12, 2008, a substantial amount of diesel overflowed from the day tanks of the American International Plaza’s (the “Building”) backup generators. [464]*464Id. at ¶43. What ultimately became a diesel spill (the “Spill”), in turn, propagated into and throughout parts of the building, causing damages to tenants UBS and O’Neill & Borges’ (“O’Neill”) property, as well as disrupting their business operations. Id.1 Plaintiffs sued, among other defendants, Federal Pacific, Acotrol, and Rimco, alleging that their negligence caused or aggravated the spill, and consequently, their damages.

With respect to Rimco, a Puerto Rican corporation distributing diesel-powered generators, the complaint essentially states that Rimco failed to ensure that the emergency generators operated properly and safely. Id. at ¶¶ 8, 47 & 58.2 Regarding Acotrol, a Puerto Rico-based corporation that deals with alarm systems for use with backup generators, Plaintiffs essentially contend that Acotrol failed to install, inspect, or otherwise maintain the alarm systems that malfunctioned. Id. at ¶¶ 18-19 & 78.3

Finally, as to Federal Pacific, a corporation based in Virginia that manufactures and designs commercial building transformers, Plaintiffs allege that Federal Pacific’s negligence lies in its failure to properly manufacture and design the transformer (the “Transformer”) that allegedly malfunctioned in the Building. Id. According to the complaint, the Transformer’s failure, which Plaintiffs attribute to its incompatibility with humidity, triggered a domino effect that climaxed with the Spill. Id.

Against this factual backdrop, the third-party plaintiffs filed separate third-party complaints against Chardon, a special partnership that owns the Building. Docket # 67, ¶ 8.

Rimco’s third-party complaint came first. In a nutshell, it alleged that Char-don was the sole party responsible for the damages caused to Plaintiffs because, among other things, Chardon failed to connect or maintain the day tank’s drainage system. Docket # 37, ¶¶ 20 & 24-26. This, according to Rimco, caused the diesel to “seep down inside the office building.” Id. at ¶20. Tracking Rimco’s allegations against Chardon, Acotrol and Federal Pacific subsequently followed suit. Docket # 134, ¶¶ 12-13; Docket # 136, ¶¶ 18-20. Notably, Acotrol included two meager allegations against another nonparty: Securitas.

Chardon timely moved to dismiss the third-party complaints. Dockets # 67, 152 & 153. The core of Chardon’s defense was that, pursuant to Fed. R. Civ. 14(a)(1), these third-party complaints improperly impleaded it. See e.g., Docket # 152, p. 4. Chardon’s proffer rested on two contractual clauses in effect at the time of the Spill, which were included in tenants UBS and O’Neill’s lease contracts with Chardon (the “Lease Contracts”). In pertinent part, the Lease Contracts provided (1) a waiver of subrogation rights, by virtue of which, UBS and O’Neill waived any right of recovery against Chardon for any damage [465]*465that may occur to the leased premises or the Building; and (2) a “Casualty Damage” that made Chardon immune for damages suffered by its tenants. See Docket # 67 at ¶¶ 9-13.4 Hence, Chardon alleged that, because there was no derivative liability against it, the third-party complaints ran afoul of Rule 14. See Docket # 230, p. 3.

Adopting Chardon’s Rule 14 defense, Securitas moved to dismiss Acotrol’s third-party complaint. Docket # 154. Pointing to the scarcity of allegations against it, Securitas countered that Acotrol’s third-party complaint contained no averments to conclude that Securitas was contractually bound to service the Building. Id. at ¶¶ 6-7.

Although Acotrol never opposed Securitas’ motion to dismiss, the third-party plaintiffs did protest Chardon’s request for dismissal. See Dockets # 78, 161, 162.5 Rimco reiterated its claims against Char-don were imbricated with the original complaint; according to Rimco, such interrelation satisfies Rule 14. Docket # 78, p. 12-13. In opposition, Acotrol took a different route this time around: it argued, albeit with no specificity and without much in the way of a legal argument, that Chardon violated certain clauses of a purported contract between these two. Dockets # 161, p. 6. Federal Pacific, meanwhile, explained that it had never alleged that Chardon should be directly responsible to Plaintiffs. Docket # 162, p. 8. Instead, Federal Pacific contended, Chardon was responsible to it for whatever amount it may be held liable to Plaintiffs. Id.

After several procedural nuances, Rimco filed an amended third-party complaint against Chardon. Docket # 226.6 For its part, Federal Pacific’s amended complaint incorporated Rimco’s newfound allegations against Chardon. Docket # 228. Acotrol also filed its amended third-party complaint against Chardon and Securitas. Docket #227. This time, however, Acotrol shed more light on its allegations against Securitas, arguing that Chardon had contracted with Securitas for the latter to perform the former’s duties of overseeing the operation of the Building and its equipment. Id. at ¶ 14.

On November 4, 2011, Chardon filed the instant consolidated motion to dismiss the amended third-party complaints, rehashing its previous arguments.7 In opposition, [466]*466Federal Pacific avers that because the Lease Contracts cannot affect its rights, Chardon is not immune from Federal Pacific’s claims. Docket # 233, p. 4. Acotrol also opposed Chardon’s motion, realleging old arguments. Docket # 239, p. 10.8 Securitas, who again moves to dismiss Acotrol’s amended third-party complaint, contends that Acotrol merely tries to “[d]ress up its allegations ... but fails to correct the substance of the defect of the third-party complaint under [Rule 14].” Docket #232, p. 1. Securitas’ motion to dismiss stands unopposed.

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828 F. Supp. 2d 462, 2011 U.S. Dist. LEXIS 144793, 2011 WL 6252762, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zurich-american-insurance-v-lord-electric-co-prd-2011.