Bor-Son Building Corporation v. Acuity A Mutual Insurance Company, No. 27-CV-08-1920.
| Decision Date | 30 June 2008 |
| Docket Number | No. 27-CV-08-1920. |
| Parties | Bor-Son Building Corporation, Plaintiff, v. Acuity A Mutual Insurance Company, Defendant. |
| Court | Minnesota District Court |
Gary Larson, Judge of District Court.
The above-entitled matter came before the Honorable Gary Larson, Judge of Hennepin County District Court, on June 30, 2008, on a motion for partial summary judgment.
John Anderson, Esq., appeared for and on behalf of Plaintiff, Bor-Son Building Corporation and Mark Brown, Esq., appeared for and on behalf of Defendant, Acuity A Mutual Insurance Company.
Based upon the files and proceedings herein, the Court makes the following:
In 2005, Bor-Son Building Corporation ("Bor-Son") served as the general contractor for a construction project at River Park Loft Condominiums ("RPL") in St. Paul, Minnesota. Premium Poured Floors ("PPF") entered into a subcontract with Bor-Son to furnish all labor, material, skill and equipment necessary or required and to perform all the work necessary for: all acoustical concrete topping sound board/mat work, complete, and in accordance with the Plans, Specifications, Bidding and Contract Documents, Division 0 Conditions of Contract, Division 1 General Requirements, and specifically Section(s) 03350.
(Def.'s Ex. 5.)
As part of the contract, Bor-Son required PPF to obtain insurance for the project and list Bor-Son as an additional insured. A certificate of insurance between PPF and Acuity, issued December 15, 2005, names "Bor-Son Construction, Inc, and the owners . . . listed as additional insureds with respect to general liability and excess liability on a primary and non-contributory basis." (Id. at subd. 8.) Subdivision 7 of the contract provides that PPF will obtain, maintain and pay for such insurance as may be required by the General Contract, the rider attached hereto, or by law, and to furnish the Contractor satisfactory evidence that it has complied with this paragraph; and to obtain and furnish to the Contractor an undertaking by the insurance company issuing each such policy that such policy will not be cancelled except after fifteen (15) days notice to the Contractor of its intention to do so. The Subcontractor agrees to assume entire responsibility and liability, to the fullest extent permitted by law, for all damages or injury to all persons, whether employees or otherwise, and to all property, arising out of it, resulting from or in any manner connected with, the execution of the work provided for in this Subcontract or occurring or resulting from the use by the Subcontractor, his agents or employees, of materials, equipment, instrumentalities or other property, whether the same be owned by the Contractor, the Subcontractor or third parties, and the Subcontractor, to the fullest extent permitted by law, agrees to indemnify and save harmless the Contractor, his agents and employees from all such claims including, without limiting the generality for the foregoing claims, for which the Contractor may be or may be claimed to be, liable and legal fees and disbursements paid or incurred to enforce the provisions of this paragraph and the Subcontractor further agrees to obtain, maintain and pay for such general liability insurance coverage and endorsements as will insure the provisions of this paragraph.
(Id.)
RPL brought suit against Bor-Son claiming, among other things, that Bor-Son failed to meet the sound attenuation requirements for the renovation project. The parties disagree as to the cause of the sound attenuation problems and whether any cause is covered under Acuity's policy. There is no dispute between Acuity and Bor-Son that the sound attenuation design was a factor in the resulting sound problems. However, Acuity alleges that the underlying complaint presents only damages which constitute a failure to meet the project specifications and are excluded from coverage. Bor-Son, on the other hand, alleges that although design may be a factor, the underlying complaint also includes a negligence claim in connection with the mats installed by PPF, triggering coverage under Acuity's insurance policy.
Acuity's insurance policy provides that (Def's Memo in Opp. to Plf's Mot. for Partial Summ. J. at 7.) The two additional insured endorsements provide additional insured status to Bor-Son for liability for property damage "caused, in whole or in part, by" PPF's ongoing or completed operations. (Def's Ex. 5.)
The underlying action in this case is a suit by River Park Lofts Condos, LLC. against Bor-Son Building Corporation for breach of contract, breach of warranty, negligence, breach of fiduciary duty, breach of duty of good faith and fair dealing, and a declaratory judgment that Bor-Son is not entitled to further payments for work done on River Park Lofts Condos. One of the main allegations in the suit is that Bor-Son failed to meet the sound attenuation requirements for the renovation of the building into condominium units. Bor-Son Construction filed a motion for partial summary judgment claiming that PPF's insurance policy, through Acuity Insurance, which names Bor-Son as an additional insured, has a duty to defend Bor-Son in the underlying action.
Rule 56.03 of the Minnesota Rules of Civil Procedure establishes the standard for summary judgment:
Judgment shall be rendered forthwith 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.
Minn. R. Civ. P. 56.03. In a summary judgment motion, the facts are viewed in a light most favorable to the non-moving party. Offerdahl v. Univ. of Minn. Hosp. & Clinics, 426 N.W.2d 425, 427 (Minn. 1988). The moving party bears the burden of showing that the material facts in the case are undisputed. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Mems v. City of St. Paul, Dep't of Fire & Safety Serv., 224 F.3d 735, 738 (8th Cir. 2000).
Material facts are those tending to establish the existence of any element essential to a party's case, and on which the party will bear the burden of proof at trial, inasmuch as the complete failure of proof concerning any essential element of the non-moving party's case renders all other fact issues immaterial. See Celotex, 477 U.S. at 322-23; Carlisle v. City of Minneapolis, 437 N.W.2d 712, 715 (Minn. Ct. App. 1989). If the evidence is merely colorable, or is not sufficiently probative, summary judgment may be granted. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986). The moving party cannot rely upon mere general statements of fact, hearsay, speculation or conjecture. Id.
The non-moving party must present specific facts showing there is a genuine issue for trial. DLH, Inc. v. Russ, 566 N.W.2d 60, 70 (Minn. 1997). "The mere existence of a scintilla of evidence in support of the [non-movant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-movant]." Anderson, 477 U.S. at 252. To defeat a motion for summary judgment, the nonmoving party must submit "significant probative evidence . . . [it] must do more than simply show that there is some metaphysical doubt as to material facts." Carlisle v. City of Minneapolis, 437 N.W.2d 712, 715 (Minn. Ct. App. 1989).
The duty to defend is broader than the duty to indemnify in three ways: (1) the duty to defend extends to every claim that "arguably" falls within the scope of coverage; (2) the duty to defend one claim creates a duty to defend all claims; and (3) the duty to defend exists regardless of the merits of the underlying claims. Meadowbrook, Inc. v. Tower Ins. Co., 559 N.W.2d 411, 415-19 (Minn. 1997). An insurer who seeks to avoid that duty has the burden of showing that all parts of the cause of action fall clearly outside the scope of coverage. Jostens, Inc. v. Mission Ins. Co., 387 N.W.2d 161, 165-66 (Minn. 1986).
The insurer's obligation to defend is generally determined by comparing the complaint with the terms of the policy language. SCSC Corp. v. Allied Mut. Ins. Co., 536 N.W.2d 305, 316 (Minn. 1995); Garvis v. Emp. Mut. Ins. Ins. Co., 497 N.W.2d 254, 256 (Minn. 1993). Any ambiguity regarding coverage is resolved in favor of the insured. St. Paul Fire & Marine Ins. Co. v. Nat'l Computer Sys. Inc., 490 N.W.2d 626, 631 (Minn. Ct. App. 1992), rev. denied, (Minn. Nov. 17, 1992).
The plain language of the insurance policy and the language of RPL's complaint are congruent. Acuity's policy states that it is legally obligated to pay damages due to property damage. The RPL complaint alleges property damage due to negligence. Among other allegations, RPL asserts that there were "gaps [left] in between sheets of Quiet Qurl that permitted `icicling' of concrete and destroying sound integrity." (RPL Complaint ¶ 12. )
The Acuity policy defines property damage as "physical injury to tangible property." (Policy at ¶ 17.) Both the concrete and the Quiet Qurl mats are tangible property. The physical alteration of concrete is sufficient to constitute property damage. See Cargill, Inc. v. Liberty Mut. Ins. Co., 488 F.Supp. 49 (D. Minn. 1979); Federated Mut. Ins. Co. v. Concrete Units, Inc., 363 N.W.2d 751 (Minn. 1985). The concrete icicling constitutes...
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