325 F.3d 54 (1st Cir. 2003), 01-1512, Restoration Preservation Masonry, Inc. v. Grove Europe Ltd.

Docket Nº:01-1512, 01-1513, 01-1514, 01-1515.
Citation:325 F.3d 54
Party Name:RESTORATION PRESERVATION MASONRY, INC., in its own capacity and as subrogee of Dunlop Equipment Co., Inc.; DUNLOP EQUIPMENT CO., INC., Plaintiffs, Appellees, v. GROVE EUROPE LTD.; GROVE WORLDWIDE CO., INC.; BRONTO SKYLIFT; BET, PLC & PTP, LTD; FEDERAL SIGNAL CORP.; FEDERAL SIGNAL CORP. (FINLAND) OY AB, Defendants, Appellants.
Case Date:April 01, 2003
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

Page 54

325 F.3d 54 (1st Cir. 2003)

RESTORATION PRESERVATION MASONRY, INC., in its own capacity and as subrogee of Dunlop Equipment Co., Inc.; DUNLOP EQUIPMENT CO., INC., Plaintiffs, Appellees,



Nos. 01-1512, 01-1513, 01-1514, 01-1515.

United States Court of Appeals, First Circuit

April 1, 2003

Heard Feb. 3, 2003.


Page 55

John A. Sakakeeny, with whom were Stephen W. Sutton & Sakakeeny, LLP, on brief for Appellee Restoration Preservation Masonry, Inc.

Page 56

Edward L. Kirby, Jr., Lauren A. Boice, and Edward L. Kirby, Jr. & Assoc., were on brief for appellee Dunlop Equipment Co., Inc.

Barry Weiner, with whom were Christopher P. Litterio, and Ruberto, Israel & Weiner, P.C., on brief for appellants Federal Signal Corp. and Federal Signal Corp. (Finland) Oy Ab.

David A. Hilton, with whom was Morrison, Mahoney & Miller, on brief for appellants Bronto Skylift, Grove Europe, Ltd. and Grove Worldwide Co., Inc.

James P. Donohue, with whom was Sloan & Walsh, on brief for appellants BET, PLC and PTP, Ltd.

Before Lynch, Circuit Judge, Stahl, Senior Circuit Judge, and Howard, Circuit Judge.

LYNCH, Circuit Judge.

In 1993, there was a tragic construction accident caused by a collapsing mast climber — mechanized scaffolding equipment with a mobile work platform that can hydraulically ascend a mast — leaving one man dead and another with a life of pain and paralysis. The families were paid approximately $8 million; the money came from Restoration Preservation Machinery, Inc. ("RPM") and Dunlop Equipment Co., Inc. ("Dunlop"). These two companies, the plaintiffs-appellees here, then sought in two 1996 state court actions to recover the money on theories of indemnification or contribution from five other companies, defendants-appellants here, in the complicated chain of sale of the defective mast climber: Grove Europe, Ltd., Grove Worldwide Co., Inc., Bronto Skylift ("Bronto"), BET, PLC, and PTP, Ltd. Two additional defendants were added in 2000: Federal Signal Corp. ("Federal USA") and its subsidiary Federal Signal Corp. (Finland) Oy Ab ("Federal Finland"). Asserting in 2000 that these claims had to be arbitrated, the defendants removed the case to federal court and sought to compel arbitration pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 9 U.S.C. § 205 (2000). The district court remanded and then denied the motion to compel arbitration as moot. We affirm.


On September 2, 1993, Charles MacGlashing and another brick mason, James Proctor, both employees of RPM, were working on a renovation project at the Longwood Towers complex in Brookline, Massachusetts. MacGlashing and Proctor were removing stone from the parapet of one of the towers when the mast climber they were using collapsed. Both men fell eight stories to the ground. Proctor died; MacGlashing survived, but suffered serious injuries including broken bones, internal and neurological damage, a ruptured aorta and bladder, a perforated colon, and lung damage. MacGlashing was hospitalized for six months after the accident, and left partially paralyzed and in constant pain.

MacGlashing and his wife filed suit against Dunlop in federal court. Dunlop filed a third-party complaint against RPM, seeking indemnification pursuant to their lease agreement. The court granted summary judgment to the MacGlashings and Dunlop on Dunlop's third-party indemnification claim. As a result of a combined settlement with Dunlop and a verdict against RPM, the MacGlashings collected approximately $5.7 million dollars from Dunlop and RPM. RPM appealed the summary judgment ruling, but it was affirmed. MacGlashing v. Dunlop Equip. Co., 89 F.3d 932, 941 (1st Cir. 1996).

MacGlashing's ex-wife also filed suit against Dunlop, on behalf of MacGlashing's Page 57

minor children, in state court. Proctor's family filed suit against Dunlop in state court as well. In both of the state court actions, Dunlop also entered third-party indemnification complaints against RPM. In each, summary judgment was entered in Dunlop's favor on the indemnity claims against RPM. In the MacGlashing state action, MacGlashing's children and Dunlop received a judgment of $145,000 against RPM. In the Proctor state action, Dunlop and Proctor's heirs received a judgment of $2 million against RPM. In total, RPM paid over $7 million dollars. Dunlop paid approximately $1 million. Dunlop and RPM now seek indemnification or contribution from other companies in the chain of sale of the defective mast climber. This chain dates back to 1993, when Bronto sold a number of new aerial lifts to a joint venture comprised of BET and PTP. As part of the purchase price, Bronto took in trade sixty used mast climbers from BET and PTP. At the same time, Grove Europe also sold aerial lifts to BET and PTP, receiving in trade sixty-two used mast climbers. (The mast climbers were manufactured by still another company, Access Engineering.) Grove Europe and Bronto then sold the used mast climbers to Dunlop. That sale took place on August 2, 1993. The bill of sale, which was signed by Bronto, Grove Europe and Dunlop, contains an arbitration clause: The construction, validity and performance of any contract shall be governed by the laws of England (including English conflict of laws) and all disputes which arise out of or in connection with any contract shall be settled by arbitration in England in accordance with provisions of the Arbitration Acts for the time being in force. Dunlop took delivery of the mast climbers from BET and PTP depots. It then leased four mast climbers to RPM on July 7, 1993. The accident took place two months later. Following the judgments in suits brought by the families of MacGlashing and Proctor, Dunlop and Restoration sought recovery from Bronto, Grove Europe, Grove Worldwide, BET, and PTP. Grove Worldwide is a U.S. company; its relation to Grove Europe, a British company, is not specified in the record. In August 1996, Dunlop filed suit in Suffolk Superior Court against Bronto, Grove Europe, BET, and PTP. The following month, RPM filed a similar suit in Middlesex Superior Court against Grove Europe, Grove Worldwide, and Bronto, for indemnification and contribution, and later amended the complaint to include negligence, negligent failure to warn, and breach of warranties. Grove Europe and Bronto responded by filing motions to dismiss for lack of personal jurisdiction. Grove Worldwide answered the complaint in June 1997 and asserted as one of its affirmative defenses that the parties were bound to submit the matter to arbitration. But it did not move to compel arbitration. RPM subsequently amended its claim to add BET and PTP as defendants. BET and PTP filed motions to dismiss for lack of personal jurisdiction. None of the motions to dismiss were granted. These two state court suits were ultimately consolidated in July 2000.

The parties engaged in discovery from 1997 through 2000. Five people were deposed, including two depositions in London. RPM and Dunlop exchanged requests for production of documents and interrogatories with defendants other than Grove Worldwide. Experts were retained to conduct failure analyses on the scaffolding equipment. Thirteen status conferences were held in the Middlesex Court litigation. During the course of discovery, plaintiffs learned that on August 4, 1995 Page 58

Federal Finland had purchased the assets and liabilities of Bronto. Federal USA, the sole shareholder of Federal Finland, joined the asset purchase contract as a guarantor. Under the contract, Federal Finland purchased all assets of Bronto, including Bronto's proprietary information, records, trade rights, and causes of actions. Federal Finland also assumed many of Bronto's liabilities. Product liability on items sold prior to the effective date of the transfer was excluded, except for claims "arising under contract or warranty."1 The asset purchase contract limited assignment of assumed contracts only where consent was required and where the assignment itself constituted a breach of the pre-existing contract.

In December 1999, RPM amended its complaint to add Federal USA, and in March 2000 further amended it to add Federal Finland, as necessary defendants. On June 12, 2000, Dunlop filed an amended complaint adding Federal USA and Federal Finland as defendants. Federal USA responded to RPM's amended complaint by filing a motion to dismiss in March 2000, asserting that Federal Finland was the party that had purchased Bronto's assets. Federal USA then sought to withdraw its motion to dismiss in April 2000 so that it could file for summary judgment. In May 2000, both Federals filed a notice of removal in state court based on diversity jurisdiction. However, they never filed the notice of removal in U.S. district court and shortly thereafter abandoned this effort to remove the case. Meanwhile, neither of the Federals conducted any discovery.

A trial date of September 18, 2000 had been scheduled. In June 2000, Federal USA moved to reset the tracking order to allow for a motion for summary judgment. At an August 2, 2000 status conference, all defendants filed a notice of removal to federal court, citing their intention to exercise their arbitration rights. On August 14, 2000, the plaintiffs filed a motion to remand the case to state court. Two weeks later, before the district court acted, the defendants filed a motion to compel arbitration and to stay the district court proceedings.

On February 22, 2001, the district court allowed the motion to remand to Middlesex Superior Court, citing this court's decision in Menorah Insurance Co. v. INX Reinsurance Corp., 72 F.3d 218 (1st Cir. 1995),...

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