Dan Ryan Builders, Inc. v. Crystal Ridge Dev., Inc., s. 16-0401, 16-0402.
| Decision Date | 14 September 2017 |
| Docket Number | Nos. 16-0401, 16-0402.,s. 16-0401, 16-0402. |
| Citation | 803 S.E.2d 519 |
| Court | West Virginia Supreme Court |
| Parties | DAN RYAN BUILDERS, INC., Third-Party Plaintiff Below, Petitioner v. CRYSTAL RIDGE DEVELOPMENT, INC., Lang Brothers, Inc., And Robert S. Lang, Third-Party Defendants Below, Respondents and Dan Ryan Builders, Inc., Third-Party Plaintiff Below, Petitioner, v. Horner Brothers Engineers, Third-Party Defendant Below, Respondent. |
Avrum Levicoff, Esq., Julie A. Brennan, Esq., The Levicoff Law Firm, P.C., Pittsburgh, Pennsylvania, Counsel for the Petitioner
Tiffany R. Durst, Esq., Nathaniel D. Griffith, Esq., Pullin, Fowler, Flanagan, Brown & Poe, PLLC, Morgantown, West Virginia,
Counsel for Respondents Crystal Ridge Development, Inc.; Lang Brothers, Inc.; and Robert S. Lang
Frank E. Simmerman, Jr., Esq., Chad L. Taylor, Esq., Frank E. Simmerman, III, Esq., Simmerman Law Office, PLLC, Clarksburg, West Virginia, Counsel for Respondent Horner Brothers Engineers
In these consolidated appeals from the Circuit Court of Harrison County, we examine the res judicata effect of a federal court judgment on a state court third-party complaint. The circuit court found that the federal court case involved the same parties as those in the third-party complaint; the third-party complaint was based on the same evidence as the action litigated in federal court; and the final federal court judgment resolved the merits of the parties' disputes. The circuit court therefore dismissed the third-party complaint on res judicata grounds.
As we discuss below, we affirm the circuit court's ruling.
This case arises out of the construction of a residential community called "Crystal Ridge" on an empty 70-acre tract in Harrison County, West Virginia. The family of Robert S. Lang owned the tract, and in 2005, Mr. Lang transferred ownership to a family company, Crystal Ridge Development, Inc. Mr. Lang anticipated that excavation, grading and construction of the housing lots and the infrastructure—the roads, drainage culverts, utilities and such—would be done by the family construction business, Lang Brothers, Inc. We refer to Mr. Lang, Lang Brothers, and Crystal Ridge Development singularly as "the Lang Defendants."
The Lang Defendants retained Horner Brothers Engineers to design the infrastructure for the housing subdivision. Because the land had steep slopes, Horner Brothers also designed the contour of the landscape. The parties planned to create 143 single-family house lots.
On June 30, 2005, the Lang Defendants entered into a "Lot Purchase Agreement" with Dan Ryan Builders, Inc. ("Dan Ryan").1 The Agreement allowed Dan Ryan to buy individual lots, as many as 143, in the Crystal Ridge subdivision. The Lot Purchase Agreement specified that the Lang Defendants would grade and contour the lots for construction and would build the infrastructure, while Dan Ryan would construct and sell the houses it built on the lots. Grading and construction on Phase I of the subdivision, comprising Lots 1-50, began in fall of 2005.
The main road built through Crystal Ridge was Emerald Drive. To one side of Emerald Drive was a steep upward slope; to the other was a steep downward slope. To create usable lots on the downward slope (including Lots 1 through 7), on April 4, 2006, Dan Ryan and the Lang Defendants entered into a second agreement, titled "Contract With Independent Contractor." Under the agreement, for a fee, the Lang Defendants removed dirt and rock from one part of Crystal Ridge, and then contoured and constructed that material into a massive "fill slope" downhill from Emerald Drive. The Lang Defendants say they moved materials according to engineering plans drawn by Horner Brothers.2
Dan Ryan and the Lang Defendants entered into a third contract, the "Trade Contract," on June 2, 2006, whereby the Lang Defendants agreed to perform excavation, dampproofing, and backfilling for the foundations of houses to be constructed.
In August 2006, Dan Ryan purchased its first 12 contiguous finished lots in Crystal Ridge pursuant to the Lot Purchase Agreement.
Almost immediately, Dan Ryan began selling the 12 lots and then constructing single-family homes thereon for the purchasers. Dan Ryan purchased another five contiguous lots in January 2007. In May 2007, Dan Ryan and the Lang Defendants signed a fourth contract, the "First Amendment to Lot Purchase Agreement" that, among other things, changed the lot price in return for Dan Ryan's purchase of the final batch of 33 lots.
By March 2007, it appears that the fill slope behind Lots 1 through 7 began to move. In December 2007, the fill slope behind Lot 7 moved significantly, dropping three feet, opening large fissures in the ground, and compromising the integrity of the single-family house built on Lot 7. Dan Ryan repurchased the lot from the homeowner and demolished the house. Thereafter, Dan Ryan began to reconstruct the entire fill slope.
The homeowners further alleged in their complaint that Dan Ryan had "caused or substantially contributed to a portion of the Crystal Ridge Development to subside, fall away or slip damaging the Plaintiffs' lots and land and the Development as a whole and forcing the demolition of at least one newly built home in the Development to date." The homeowners' complaint contends that Dan Ryan "failed to maintain sufficient support for the soil" and "improperly altered the flow of water" in Crystal Ridge, causing subsidence or the "loss of lateral and subjacent support" necessary to support houses on the tract.
Based on these allegations, the homeowners asserted various legal theories for relief including negligence, breach of warranty, fraudulent misrepresentation, and vicarious liability. The homeowners contended that Dan Ryan failed to "exercise reasonable care in planning, construction, excavation, [and] site development" of Crystal Ridge, and that Dan Ryan failed to "supervise" or "make a proper and reasonable inspection" of work done by others.
In their initial complaint, and likewise in three subsequent amendments to that complaint, the plaintiff-homeowners never asserted any claims against the Lang Defendants or Horner Brothers.
Furthermore, at this point in the state court case, Dan Ryan also did not assert any claims against the Lang Defendants or Horner Brothers, specifically by way of a third-party complaint alleging they were liable for part or all of the homeowner's claims. Instead, Dan Ryan filed a civil case in federal court against the Lang Defendants.
Ten months after the homeowners filed the state court case, on December 8, 2009, Dan Ryan filed a new lawsuit against the three Lang Defendants in the United States District Court for the Northern District of West Virginia.4 The complaint was based on the federal court's diversity jurisdiction.5 The federal court complaint also centered upon the Crystal Ridge subdivision and generally alleged that the Lang Defendants were responsible for the same actions at issue in the state court case, including:
the development of various designs and plans for construction of Subdivision infrastructure ... including, but not limited to: clearing and establishing grades on lots ... mass site grading; on-lot fill compaction; ... design and construction of storm water and sewer management systems; roadway curb and gutter installation; roadway paving installation; certain landscaping installation; certain street element installation; and certain utility installation.
Count I of Dan Ryan's complaint asserted a cause of action for negligence. It asserted that the Lang Defendants failed to act with reasonable care in the "placement of fill and compaction of fill material under Subdivision lots," the "installation of roadways and gutters," the "installation of storm water and sewer systems," and the "installation of utilities." The complaint alleged the Lang Defendants were negligent because they "deviat[ed] from original, approved construction designs and plans when performing excavation work[.]" As evidence of the Lang Defendants' duties—duties that were breached in negligence—Dan Ryan cited to the obligations established in the Lot Purchase Agreement; the Trade Contract; and the First Amendment to the Lot Purchase Agreement.6
Count II of Dan Ryan's complaint alleged breach of contract (including for "negligently performing the construction activities"). Dan Ryan asserted the Lang Defendants breached the same contracts, and the same obligations, set forth in the negligence count, Count I.7
Finally, the initial complaint that Dan Ryan filed in federal court included a count seeking "Defense and Indemnification." Dan Ryan asserted in Count IV that homeowners had named it as a defendant in the aforementioned civil action in state court. Dan Ryan contended that the plaintiff-homeowners in the state court action were alleging damages "that arise from and are a direct and proximate result of [the Lang] Defendants' negligence as alleged in Count I" of Dan Ryan's complaint. Dan Ryan's initial complaint demanded the Lang Defendants...
To continue reading
Request your trial
-
Estate of Jones v. City of Martinsburg (In re Estate of Jones), 18-0927
...and requires that all claims arising out of a single wrong be presented in one action.'" Dan Ryan Builders, Inc. v. Crystal Ridge Dev., Inc., 239 W. Va. 549, 561, 803 S.E.2d 519, 531 (2017) (quoting Sensormatic Sec. Corp. v. Sensormatic Elecs. Corp., 452 F. Supp. 2d 621, 626 (D. Md. 2006)).......
-
Bison Interests, LLC v. Antero Res. Corp.
...abandon a claim it could have resolved and thereafter evade the effects of res judicata. In Dan Ryan Builders, Inc. v. Crystal Ridge Dev., Inc. , 239 W. Va. 549, 561, 803 S.E.2d 519, 531 (2017), this Court found that res judicata barred a "new, state court action based upon [an] abandoned f......
-
Chalifoux v. W.Va. Dep't of Health & Human Res.
...of relief" in different actions, res judicata may constitute a bar. Dan Ryan, 239 W.Va. at 562, 803 S.E.2d at 532. Like the plaintiff in Dan Ryan, Chalifoux "plainly could and should have pursued all [his] factually intertwined claims" in the injunctive action. Id. Chalifoux's requested ame......
-
Staubs v. CSX Transp., Inc.
...thus avoiding relitigation of issues that were or could have been raised in the original action." Dan Ryan Builders, Inc. v. Crystal Ridge Dev., Inc., 803 S.E.2d 519, 529 (W. Va. 2017); see Conley v. Spillers, 301 S.E.2d 216, 220 (W. Va. 1983) ("[T]he central inquiry on a plea of res judica......