Charter Oak Fire Ins. Co. v. SSR, Inc.
| Decision Date | 13 March 2014 |
| Docket Number | CIVIL ACTION NO. 11-118-HRW |
| Parties | THE CHARTER OAK FIRE INSURANCE COMPANY a/s/o Reyton Cedar Knoll, LLC and REYTON CEDAR KNOLL, LLC PLAINTIFFS v. SSR, INC. and SINGLESOURCE ROOFING CORPORATION DEFENDANTS |
| Court | U.S. District Court — Eastern District of Kentucky |
Now pending before the Court are two motions for summary judgment. Defendants have filed a Motion for Summary Judgment (R. 41) and Plaintiffs have filed a Motion for Partial Summary Judgment (R. 48). These motions have been referred to the undersigned for preparation of a Report and Recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). Both motions are ripe for review. For the reasons that follow, it will be recommended that Defendants' Motion for Summary Judgment and Plaintiffs' Motion for Partial Summary Judgment be denied.
This action involves an Ashland, Kentucky, mall owned by Plaintiff Reyton Cedar Knoll, LLC ("Reyton Cedar Knoll"). (R. 16, at 2). In September 2005, Reyton Cedar Knoll purchased the mall from its previous owner, Cedar Knoll Galleria Limited Partnership. (R. 42-2, at 1). Prior to selling the mall, Cedar Knoll Galleria Limited Partnership contracted with Defendant SingleSource Roofing Corporation ("SingleSource") to install a new roofing system on the Sears store. (Id.). InSeptember 2004, SingleSource installed a rubber based roofing system, known as an EPDM roof, on the Sears retail store. (R. 16, at ¶ 10; R. 41, at 6). In conjunction with this installation, SingleSource issued two warranties to Cedar Knoll Galleria Limited Partnership: a 10-year Membrane System Warranty and a 20-year Membrane Materials Warranty. (R. 41, at 6).1 Both Warranties were transferred to Reyton Cedar Knoll when it purchased the mall in 2005. (R. 41-3).
After installation, SingleSource returned to the mall on several occasions to inspect and repair the roof. (R. 42-1, at 5-11; R. 48-4, at 2). The subject of the parties' present dispute, as alleged in Plaintiffs' Amended Complaint, concerns three particular inspections and repairs of the Sears roof performed by SingleSource. According to Plaintiffs, in April 2007, September 2007, and December 2008, SingleSource inspected and repaired the roof. (R. 16, at ¶ 12; R. 42, at 4-5). Each inspection and repair was made after Reyton Cedar Knoll notified SingleSource that the roof was leaking. (R. 42-1, at 6). SingleSource invoiced Reyton Cedar Knoll for its "non-warranty"2 inspection and repair services for each of these three service calls. This invoicing occurred after SingleSource inspected each leak and concluded the leak was not caused by "Defective Workmanship" or "Defective Materials" in its September 2004 installation of the roofing system.3
Plaintiffs allege that on May 30, 2010, there was a significant failure of the Sears roof, resulting in substantial property damage. (R. 16, at ¶ 13).
Plaintiff Reyton Cedar Knoll, LLC filed this diversity suit on November 7, 2011. (R. 1). The original Complaint asserted negligence and breach of express warranty claims. (Id.). On April 4, 2012, Plaintiffs filed an Amended Complaint, adding Charter Oak Fire Insurance Company, subrogee of Reyton Cedar Knoll, as a Plaintiff. (R. 16). It is Plaintiffs' position in the Amended Complaint that the May 30, 2010, roof failure was the result of Defendants' negligence in performing the three "non-warranty" inspections and repairs. (Id. at ¶ 14). Plaintiffs are no longer asserting a breach of warranty claim against Defendants.
Defendants initially filed a Motion for Summary Judgment on April 14, 2012, asserting that Plaintiffs' claims were barred by provisions in the Membrane System Warranty. (R. 19). Ultimately, the Court determined that ruling on Defendants' Motion without the benefit of discovery would be premature and denied the Motion without prejudice until discovery was completed. (R. 29). Defendants have now renewed their request for summary judgment, offering that consideration of their motion is now procedurally appropriate because substantial discovery has occurred. (R. 41). Additionally, Plaintiffs have filed a Motion for Partial Summary Judgment. (R. 48). Both motions have been fully briefed and a telephonic oral argument was held on February 18, 2014. Accordingly, both motions are ripe for review.
Under the federal rules, summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The purpose of summary judgment "is not to resolve factual issues, but to determine if there are genuine issues of fact to be tried." Wilson v. Karnes, No. 2:06-cv-392, 2009 WL 467566, at *2(S.D. Ohio Feb. 24, 2009) (citing Lashlee v. Sumner, 570 F.2d 107, 111 (6th Cir. 1978)). In reviewing motions for summary judgment, the Court must view all facts and draw all reasonable inferences in a light most favorable to the nonmoving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88; Dominguez v. Correctional Medical Servs., 555 F.3d 543, 549 (6th Cir. 2009). The nonmoving party, however, must provide more than a "mere scintilla of evidence"; there must be sufficient evidence on which the jury could reasonably find for the nonmoving party. Dominguez, 555 F.3d at 549. Also, the trial court is not required to "search the entire record to establish that it is bereft of a genuine issue of material fact." Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479-80 (6th Cir. 1989).
Defendants' Motion for Summary Judgment seeks to preclude Plaintiffs' claim based on certain limitations in the 10-year Membrane System Warranty. Accordingly, the issue before the Court on Defendants' Motion for Summary Judgment is whether the 10-year Membrane System Warranty issued by SingleSource to Reyton Cedar Knoll applies to Plaintiffs' claim. Defendants argue that it does. Defendants also argue that because this Warranty applies, Plaintiffs' claim is precluded by the Warranty's exculpatory and statute of limitations clauses. (R. 41, at 1). Defendants further argue that if the Court concludes these clauses do not apply to dictate a dismissal of Plaintiffs' claim, Plaintiffs' claim nevertheless should be dismissed or transferred based upon the Warranty's venue provision. (Id. at 2).
As an initial matter, it is important to note that Defendants' latter two arguments depend upon a finding in their favor on the first argument. In other words, if the Membrane System Warrantydoes not cover "non-warranty" work-specifically the three occasions alleged by Plaintiffs in their Amended Complaint-then application of the Membrane System Warranty's exculpatory and statute of limitations clauses does not come into play, nor does the venue clause.4 As explained below, because the Warranty language does not unambiguously provide that these "non-warranty" repairs are covered by, or fall within, or are subject to, the Membrane System Warranty, a summary judgment for Defendants premised upon application of the exculpatory or limitation of action clauses of the Warranty is not appropriate.
The Court initially must determine the scope of the Membrane System Warranty and whether the subject three occasions of inspection and repair by SingleSource fall within that scope. "The construction as well as the meaning and legal effect of a written instrument, however compiled, is a matter of law for the court." Morganfield Nat'l Bank v. Damien Elder & Sons, 836 S.W.2d 893, 895 (Ky. 1992). Where a written agreement is unambiguous, the court will interpret its terms "by assigning language its ordinary meaning without resort to extrinsic evidence. Frear v. P.T.A. Indus. Inc., 103 S.W.3d 99, 106 (Ky. 2003). On the other hand, "[a] contract is ambiguous if a reasonable person would find it susceptible to different or inconsistent interpretations." Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d 381 (Ky. Ct. App. 2002).
(R. 62-1). Thus, when SingleSource installed its membrane roofing system, it contractually warrantied those roofing materials and its workmanship in installing those materials, obligating itself to repair leaks caused by defects in that workmanship or in those materials it supplied and furnished for a period of 10 years following its installation of that roofing system. This would be consistent with the general understanding of what a warranty is. See Oxford English Dictionary, online ed. at http://dictionary.oed.com (last visited Mar. 7, 2014) (A warranty is "[a]n undertaking, express or implied, given by one of the parties to a contract to the other, that he will be answerable for the truth of some statement incidental to the contract; esp. an assurance, express or implied, given by the seller of goods, that he will be answerable for their possession of some quality attributed to them.).
Plaintiffs' Amended Complaint asserts only one count of negligence against Defendants. (R. 16). The negligence claim stems from SingleSource's performance of repairs in April and September 2007 and December...
To continue reading
Request your trial