Air Products and Chemicals v. Eaton Metal Prods., Civil Action No. 02-CV-1277.

• Decision Date: 27 May 2003
• Docket Number: Civil Action No. 02-CV-1277.
• Parties: AIR PRODUCTS AND CHEMICALS, INC., Plaintiff, v. EATON METAL PRODUCTS CO., et. al., Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

272 F.Supp.2d 482

AIR PRODUCTS AND CHEMICALS, INC., Plaintiff, v. EATON METAL PRODUCTS CO., et. al., Defendants.

Civil Action No. 02-CV-1277.

United States District Court, E.D. Pennsylvania.

May 27, 2003.

Scott S. Barker, Holland & Hart LLP, Denver, CO, Stephen R. Bishop, Post & Schell, PC, Philadelphia, PA, Mark E. Dreyer, Conner & Winters, Melodie Freeman-Burney, Conner & Winters, Tulsa, OK, Daniel R. Frost, Holland & Hart, LLP, Denver, CO, Debra S. Goodman, Margolis Edelstein, Philadelphia, PA, Timothy W. Gordon, Holland & Hart LLP, Denver, CO, Larry B. Lipe, Conner & Winters, Tulsa, OK, Christopher J. Pakuris, Margolis Edelstein, Philadelphia, PA, Mark H. Scoblionko, Scoblionko Scoblionko Muir, Allentown, PA, John C. Sullivan, Post and Schell, Philadelphia, PA, Timothy T. Trump, Tulsa, OK, R. Dennis Withers, Robins, Kaplan, Miller & Ciresi LLP, Atlanta, GA, Matthew J. Zamites, Margolis Edelstein, Philadelphia, PA, for Defendant.

Marianne Bechtle, Frank R. Emmerich, Jr., Andrew Hanan, Howard Klein, Lauren A. Schochor, Conrad, O'Brien, Gellman & Rohn, PC, Philadelphia, PA, for Plaintiff.

OPINION AND ORDER

Van ANTWERPEN, District Judge.

INTRODUCTION

Plaintiff Air Products and Chemicals, Inc. ("Air Products") commenced an action in the Pennsylvania Court of Common Pleas of Philadelphia County on February 8, 2002 based upon alleged manufacturing defects in pressure vessels sold to Air Products by Eaton Metal Products Co. ("Eaton") at various times from 1994 through 2001. In addition to Eaton, Air Products named as defendants Lumbermens Mutual Casualty Insurance Co. d/b/a Kemper National Insurance Co. ("Lumbermens") and the Hartford Steam Boiler Inspection and Insurance Company ("HSB") based upon Air Products' asserted status as a third-party beneficiary of inspection contracts between them and Eaton. All parties agreed to discontinue that action, and Plaintiff filed its complaint in this court on March 13, 2002. Counts 15, 16 and 17 of Plaintiff's complaint allege, respectively, negligence, negligent misrepresentation and negligent provision of services on the part of Lumbermens and HSB. Defendant Lumbermens now moves for summary judgment on these counts on the basis that Pennsylvania's economic loss doctrine bars recovery in tort for purely economic losses.

The dispute between the parties in this case has already resulted in numerous motions for dismissal and/or partial judgment, some of which have considered the plaintiff's tort claims. Previously, on June 11, 2002, we granted Defendant Eaton's motion under Fed.R.Civ.P. 12(b)(6) to dismiss Air Products' negligence and strict liability tort causes of action against it, finding that these claims were barred by the economic loss doctrine. Memorandum and Order of June 11, 2002. We declined to dismiss these tort claims as against Lumbermens and HSB because the record at that point was insufficient to determine the applicability of Pennsylvania law to them. Id. On March 31, 2003, we granted Plaintiff Air Products leave to amend its complaint to include a claim against all three defendants of intentional fraud in the inducement of its contract to purchase pressure vessels from Eaton. Air Prods. & Chems., Inc. v. Eaton Metal Prods. Co., Civ.A.No. 02-1277, 272 F.Supp.2d 482, 2003 U.S. Dist. LEXIS 5716 (E.D.Pa., March 31, 2003).

On April 2, 2003, we granted Lumbermens' motion to reconsider our previous denial of its motion for partial summary judgment on Counts 13 and 14 of Plaintiff's complaint, which alleged breach of contract and breach of warranty of workmanlike inspection. We vacated our prior ordered and granted judgment to Lumbermens on the basis that these claims were barred by the statute of limitations because the equitable discovery rule did not apply. Air Prods. & Chems., Inc. v. Eaton Metal Prods. Co., 2003 U.S. Dist. LEXIS 6576 (E.D.Pa., Apr. 2, 2003). Following our April 2, 2003 order, only claims sounding in tort remained against Lumbermens. Lumbermens now moves for partial summary judgment as against the plaintiff's negligence-based tort claims (Counts 15, 16 and 17). Lumbermens' motion does not address the intentional fraud claim raised in Count 18 of Plaintiff's Second Amended Complaint.

Presently before us is the Motion of Defendant, Lumbermens Mutual Casualty Insurance Company d/b/a Kemper National Insurance Companies, for Partial Summary Judgment on Certain Tort Claims, filed April 11, 2003, and brief in support thereof; Plaintiff Air Products and Chemicals, Inc.'s Brief in Opposition to Motion of Defendant, Lumbermens Mutual Casualty Insurance Company d/b/a Kemper National Insurance Companies, filed May 5, 2003; Reply Brief in Support of Motion of Defendant, Lumbermens Mutual Casualty Insurance Company d/b/a Kemper National Insurance Companies, for Partial Summary Judgment on Certain Tort Claims, filed May 16, 2003; Plaintiff Air Products and Chemicals, Inc.'s Sur-Reply Brief in Opposition to Motion of Defendant, Lumbermens Mutual Casualty Insurance Company d/b/a Kemper National Insurance Companies, for Partial Summary Judgment on Certain Tort Claims, filed May 22, 2003;¹ and Defendant Lumbermens Mutual Casualty Company's amended Reply Brief in Support of its Motion for Partial Summary Judgment on Certain Tort Claims, filed May 22, 2003.² For the following reasons, we grant Lumbermens' motion in part and deny it in part.

I. STATEMENT OF JURISDICTION

We have original subject matter jurisdiction over claims between citizens of different states in which the monetary amount in dispute is greater than $75,000 under 28 U.S.C. § 1332. Plaintiff Air Products and Chemicals, Inc. is incorporated in the state of Delaware and has its principal place of business in Pennsylvania. Defendant Eaton Metal Products Co. is incorporated in Colorado and has its principal place of business in that state. Defendant Hartford Steam Boiler Inspection and Insurance Company is incorporated and has its principal place of business in Connecticut. Defendant Lumbermens Mutual Casualty Insurance Company d/b/a Kemper National Insurance Companies is incorporated and has its principal place of business in the state of Illinois. Plaintiff seeks $4.5 million in damages from each Defendant in each count of its Amended Complaint. As there is complete diversity between the parties and the amount in controversy exceeds $75,000, this court has jurisdiction to hear Plaintiff's complaint.

II. STANDARD OF REVIEW

The court shall render summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). An issue is "genuine" only if there is a sufficient evidentiary basis on which a reasonable jury could find for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A factual dispute is "material" only if it might affect the outcome of the suit under governing law. Id. at 248, 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202. All inferences must be drawn, and all doubts resolved, in favor of the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Gans v. Mundy, 762 F.2d 338, 341 (3d Cir.1985), cert. denied, 474 U.S. 1010, 106 S.Ct. 537, 88 L.Ed.2d 467 (1985).

On a motion for summary judgment, the moving party bears the initial burden of identifying those portions of the record that it believes demonstrate the absence of dispute as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). To defeat summary judgment, the non-moving party must respond with facts of record that contradict the facts identified by the movant and may not rest on mere denials. Id. at 321 n. 3, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (quoting Fed. R.Civ.P. 56(e)); see First Nat'l Bank of Pa. v. Lincoln Nat'l Life Ins. Co., 824 F.2d 277, 282 (3d Cir.1987). The non-moving party must demonstrate the existence of evidence that would support a jury finding in its favor. See Anderson, 477 U.S. at 248-49, 106 S.Ct. 2505.

When federal courts sit in diversity cases, they must apply the substantive law of the states where they sit. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). When they are required to interpret or apply state law, they must consider and accept the decisions of the state's highest court as the ultimate authority regarding state law. Ciccarelli v. Carey Canadian Mines, Ltd., 757 F.2d 548, 553 (3d Cir.1985). When, however, the highest court of the state has not authoritatively considered the issue, "our disposition of such cases must be governed by a prediction of how the state's highest court would decide were it confronted with the problem." McKenna v. Ortho Pharmaceutical Corp., 622 F.2d 657, 661 (3d Cir.1980). In making such a prediction, we must give "`proper regard' to the relevant rulings of other courts of the state." Robertson v. Allied Signal, Inc., 914 F.2d 360, 378 (3d Cir.1990); Gares v. Willingboro Twp., 90 F.3d 720, 725 (3d Cir.1996) ("In the absence of guidance from the state's highest court, we are to consider decisions of the state's intermediate appellate courts for assistance in predicting how the state's highest court would rule."); also U.S. Underwriters Ins. Co. v. Liberty Mut. Ins. Co., 80 F.3d 90, 93 (3d Cir.1996) ("The rulings of intermediate appellate courts must be accorded significant weight and should not be disregarded absent persuasive indication that the highest court would rule otherwise.").

III. FACTS

We have summarized the facts of this case in many of our previous memoranda.³ See Air Prods. & Chems., Inc. v. Eaton Metal Prods. Co., Civ.A.No. 02-1277, 256 F.Supp.2d 329 (E.D.Pa. 2003); Air Prods. & Chems., Inc. v. Eaton Metal Prods. Co., 2003 U.S....