Davis Elecs. Co. v. Springer Capital, LLC
| Decision Date | 20 September 2021 |
| Docket Number | Civil Action 3:20-CV-00038-CRS-CHL |
| Parties | DAVIS ELECTRONICS CO, INC., et. al PLAINTIFFS v. SPRINGER CAPITAL, LLC, et. al DEFENDANTS |
| Court | U.S. District Court — Western District of Kentucky |
This matter is before the Court on the motion of Defendant Springer Capital, LLC for summary judgment pursuant to Federal Rule Civil Procedure (“FRCP”) 56. DN 53. Plaintiffs Davis Electronics, LLC, et. al (“Davis”) filed a response, and Defendant replied. DN 60; DN 64. This matter is now ripe for adjudication. For the reasons stated below, Springer's motion will be denied.
In 1985, Gar Davis (“Davis”) acquired the property (“the Davis property”) located at 2211 Brownsboro Road in Louisville, Kentucky and constructed a building on the property (“the Davis building”) shortly thereafter. Davis Dep., DN 60-1 at PageID# 818. Since that time, Davis has owned and occupied the property, operating an electronics business (“Davis Electronics, LLC”) out of the Davis building. Id.
An apartment complex (“The Views”) has existed on Biljana Drive uphill from the Davis property since before the Davis building was constructed. Id. at PageID# 819. In November of 2019, Davis filed a complaint in Jefferson Circuit Court, maintaining that water drainage from The Views was causing damage to the Davis property and to the Davis building. St. Ct. Compl., DN 1-3 at PageID# 24-25. In the complaint, Davis insists that drainage was not an issue prior to renovations conducted at The Views between 2016 and 2019 Id. Davis claims that because of these renovations, water drainage that was previously directed away from the Davis property is now directed toward it, causing runoff water from The Views to enter the Davis property. Id. at PageID# 25.
Davis named Springer Capital, LLC (“Springer”) and S.C. Echo Associates, LLC (“SC Echo Associates”) as Defendants. Id. at PageID# 22. After the original complaint was filed in state court, Springer and S.C. Echo Associates timely removed the case to federal court pursuant to 28 USC § 1332. Notice of Removal, DN 1. Davis later filed an amended complaint, adding Thomas Greenwood (“Greenwood”) and Brookside Properties (“Brookside”) as Defendants and adding Gar and Teresa Davis as Plaintiffs. First Am. Compl., DN 47 at PageID# 527. “Defendants” will be used to refer collectively to Springer, SC Echo Associates, Greenwood, and Brookside. “Plaintiffs” or “Davis” will be used to refer to Davis Electronics, Gar Davis, and Teresa Davis. Springer now moves for summary judgment pursuant to FRCP 56. DN 53.
To understand the nature of Plaintiffs' claim and the basis for Springer's motion for summary judgment, it is important to appreciate the rather complicated relationship of the defendant parties. Based on all evidence and documents presently in the record, the following facts seem to be uncontested:
Springer is a limited liability company (“LLC”) owned by Greenwood and Thomas Farnoly (“Farnoly”) in equal membership shares.[1] Farnoly and Greenwood also own another LLC, “SC Echo Managers, ” in equal membership shares.[2] Springer does not have an ownership interest in The Views.[3] When Springer identifies a property of interest, the property is acquired by a third LLC, created to hold title to the property.[4] The third LLC that owns The Views is “SC Echo Associates.”[5] S.C. Echo Associates is comprised of a number of members, including Farnoly and Greenwood.[6] The managing member of S.C. Echo Associates is S.C. Echo Managers.[7]
The Views was acquired by S.C. Associates in 2015.[8] S.C. Echo Associates contracted with Brookside to manage The Views property.[9] The contract between the two parties defined S.C. Echo Associates as the “owner” of The Views and Brookside as an “independent contractor” and an “agent” of S.C. Echo Associates.[10] There is not and has never been contractual relationship between Springer and Brookside.[11] As part of the agreement between Brookside and S.C. Echo Associates, Brookside was tasked with managing renovations of The Views property.[12] The renovation work managed by Brookside is the work that Plaintiffs claim caused runoff water from The Views to be diverted toward the Davis property and resulted in injury to the property.[13]
The underlying issue being contested in Springer's motion for summary judgment is whether Springer can be held liable for the renovation work and, hence, for the damages claimed by Plaintiffs. See Pls.' Resp. Mem., DN 60 at PageID# 792-95. Springer filed the motion on the basis that Plaintiffs have failed to provide any evidence that would “create a genuine dispute of material fact for the jury” as to whether Springer can be held liable for the damage to the Davis property. See Springer Mot. Summ. J. Mem., DN 53-1 at PageID# 711. Springer first asserts that, “as the sole owner of the Views property, ” S.C. Echo Associates “is the only party that could potentially be liable to Plaintiffs.” Springer Mot. Summ. J. Mem., DN 53-1 at PageID# 709. Second, Springer contends that Plaintiffs have not shown or even alleged that “Springer was the landowner of the Views property, an agent, or has vicarious liability.” Springer Mot. Summ. J. Mem., DN 53-1 at PageID# 708, 710-11.
Although the legal theory by which Plaintiffs seek recovery against Defendants is not entirely clear from either the original or amended complaint, Plaintiffs state in their response to Springer's motion that the claim against Springer is based on negligent trespass under Kentucky common law. Pls.' Resp. Mem., DN 60 at PageID# 796. As Plaintiffs acknowledge, the first of the three elements that must be established to maintain this claim is that the defendant breached a duty of care. Id. (citing Rockwell Intern. Corp. v. Wilhite, 143 S.W.3d 604, 620 (Ky. App. 2003)).
Plaintiffs maintain that Springer owed Plaintiffs a duty of care. Although Plaintiffs cite to Grayson Fraternal Order of Eagles v. Claywell, 736 S.W.2d 328 (Ky. 1987) to support the contention that Springer's duty of care arose from the foreseeability of the injury, the crux of Plaintiffs' argument really lies in whether Springer directed or controlled the construction work that Plaintiffs allege caused the injury. Plaintiffs point to two sources as proof that Springer's involvement in the construction work was so significant that it amounted to “directing” the work. First, Plaintiffs rely in part on certain statements made by Farnoly during his deposition. Pls.' Resp. Mem., DN 60 at PageID# 794. Second, Plaintiffs rely on specific emails sent by Greenwood in late 2019. Pls.' Resp. Mem., DN 60 at PageID# 795; Farnoly Dep. Ex. C, DN 60-3 at PageID# 864; Farnoly Dep. Ex. D, DN 60-4 at PageID# 873. The content of each of these sources will be discussed below.
In his deposition, Farnoly indicated that he was on the “acquisition side and the operations of the property” acquired by Springer. Farnoly Dep., DN 60-2 at PageID# 845. When asked to expand on what he meant by “acquisitions, ” Farnoly explained that he “look[s] at acquiring properties.” Id. at PageID# 846. When asked to expand on “operations of the property, ” Farnoly's response was, “[l]easing, overseeing property management-managers on the site, our property management teams, Brookside Properties.” Farnoly Dep., DN 60-2 at PageID# 846.
Farnoly later submitted an affidavit in which he attempted to clarify this latter response. Farnoly Aff., DN 64-1 at PageID# 987. In the affidavit, Farnoly stated that, in his deposition, he represented himself as an individual, not on behalf of an entity, and that he misspoke when he implied that Springer carried out “operations” of properties. Id. Farnoly explained that S.C. Echo Associates carried out such operations and, as a member of S.C. Echo Associates and as a 50% owner in S.C. Echo Managers, he was involved in “leasing, overseeing property management, overseeing managers on site such as Brookside, and general oversight of operations.” Id. Farnoly clearly stated in this affidavit that these responsibilities were not part of his role as an owner or member of Springer. Id.
Emails sent from Greenwood's Springer email account have been offered by Plaintiffs into evidence as Exhibits C and D to the Farnoly Deposition. DN 60-3 and 60-4.
The first exhibit provided by Plaintiffs (Exhibit C) is a series of emails that includes multiple email exchanges between Greenwood and Maria Simpson of Brookside from October of 2019, as well as a forwarded email message from Eric Ward of “Mr. Roof, ” a construction contractor. Farnoly Dep. Ex. C, DN 60-3 at PageID# 865-70. In these emails, Simpson and Greenwood discuss construction bids for work to be performed at The Views, including a bid from Mr. Roof and another bid from contractor identified by the parties as “Diamond.” Id. at PageID# 865-70. To Simpson, Greenwood makes such statements as “let's go with Diamond for the trenching work, ” and “[w]e also need to get the curb by the front left of the building brought up to standard height.” Id. at PageID# 865. In another exchange, Simpson states to Greenwood, Id. at PageID# 868. Greenwood later replies, “Thanks, let's go with Mr. Roof.” Id. at PageID# 867. Notably, Greenwood signs this last email as “Thomas Greenwood, Springer Capital, LLC.” Id.
The second exhibit (Exhibit D) includes an email message from Greenwood to ...
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