Harodite Indus. Inc. v. Warren Electric Corp..

Citation24 A.3d 514
Decision Date06 July 2011
Docket NumberNo. 2009–222–M.P.,2009–222–M.P.
PartiesHARODITE INDUSTRIES, INC.v.WARREN ELECTRIC CORPORATION et al.
CourtUnited States State Supreme Court of Rhode Island

OPINION TEXT STARTS HERE

Thomas W. Lyons III, Esq., Providence, for Plaintiff.Christine K. Bush, Esq., Providence, for Defendant.Present: SUTTELL, C.J., GOLDBERG, FLAHERTY, ROBINSON, and INDEGLIA, JJ.

OPINION

Justice ROBINSON for the Court.

This case came before the Supreme Court as a result of our having granted a petition for writ of certiorari filed by Harodite Industries, Inc., whereby it sought review of an order of the Superior Court denying the petitioner's motion to amend its complaint. Specifically, the petitioner has asked this Court to determine whether or not the hearing justice's denial of that motion was an abuse of discretion. Further, in accordance with the order of this Court granting the petition, the parties have also addressed the issue (which was previously addressed by the Superior Court) of whether a Rhode Island or a Massachusetts statute of limitations should apply to the claims asserted by the petitioner in its proposed amended complaint.

For the reasons set forth in this opinion, we affirm the ruling of the Superior Court with respect to the motion to amend, and we are in agreement with its determination concerning the choice of law issue.

IFacts and Travel

The first issue before us is the correctness vel non of the hearing justice's denial of plaintiff's 1 motion to amend its original complaint. The plaintiff's basic contention is that the denial of that motion was an abuse of discretion because, when it filed the motion, plaintiff had only very recently acquired (from defendant pursuant to the discovery process) the information upon which its proposed amended complaint would in large measure be predicated.

The second issue before us (the choice of law issue) also must be understood in light of the specific factual and procedural context within which it arose.

Accordingly, we shall summarize, as briefly as is practicable, the travel of the case and the relevant discovery exchanges of the parties to the extent necessary to provide context for the issues before us.

AThe Original Complaint

On April 29, 2005, plaintiff, Harodite Industries, Inc., filed a complaint in the Superior Court for Providence County, with respect to an incident that occurred at Harodite's facility in Taunton, Massachusetts in May of 2002. The complaint named numerous defendants, including defendant Warren Electric Corporation. (The other defendants are no longer parties to the underlying litigation.)

In its complaint, Harodite alleged that [o]n or about August 13, 2001, Warren Electric sold an oil pre-heater to Harodite * * *.” 2 Harodite also alleged that another company had “sold a gasket to Warren Electric, which gasket Warren Electric installed in the oil pre-heater it sold to Harodite.” Harodite's complaint then described the incident giving rise to the civil action as follows:

[O]n May 3–4, 2002, the gasket failed under normal operating conditions causing over 3300 gallons of no. 6 heating oil to spray out of Harodite's heating system into its boiler room. The oil then ran into Harodite's basement and maintenance shop and from the maintenance shop into the adjacent Three Mile River. This caused significant property and environmental damage and forced Harodite to incur substantial cleanup costs, property depreciation and lost profits.”Harodite sought to recover “for damages to its property, for the costs of environmental cleanup[,] and for lost profits, all directly and proximately resulting from the failure of the gasket in the oil pre-heater, in an amount exceeding five hundred thousand dollars ($500,000.00).” Harodite did not seek to recover for any damages arising from personal injury.

Harodite's original complaint contained the following counts with respect to Warren Electric: (1) breach of the implied warranty of merchantability; (2) breach of the implied warranty of fitness for a particular purpose; (3) breach of contract; (4) negligence; (5) defect in manufacture; (6) defect in design; and (7) declaratory judgment.3 Significantly, with respect to counts four, five, and six, the thrust of the allegations in Harodite's original complaint was that “the gasket used in the assembly of the pre-heater was too large for the space in which it was placed.” (Emphasis added.) 4

BThe Discovery Process
1. The Initial Discovery
a. Harodite's Interrogatory Numbers 25 and 26

In July of 2005, plaintiff and defendant propounded interrogatories and requests for production of documents upon each other. On August 22, 2005, defendant Warren Electric filed its first set of answers to plaintiff's interrogatories. Of significance to the instant appeal are the following interrogatories propounded by Harodite and Warren Electric's responses:

INTERROGATORY NO. 25:

State what you contend caused the failure of the Warren Electric oil pre-heater at Harodite on May 3–4, 2002.

RESPONSE TO INTERROGATORY NO. 25:

At this time, Warren has not made any contentions concerning the cause of this spill, as investigation is incomplete. Among other things, no information or site visit has been allowed to determine the workings of the entire system, the control system, maintenance or the relief valve.

INTERROGATORY NO. 26:

Set forth the facts that support the contention you stated in response to the previous interrogatory including the names and last known addresses of the persons having knowledge of those facts.

RESPONSE TO INTERROGATORY NO. 26:

Inapplicable at this time.”

b. Warren Electric's Interrogatory Numbers 12 and 13

Between October of 2005 and May of 2006, Warren Electric and Harodite engaged in several rounds of discovery (and discovery-related disputes) with respect to Harodite's answers to Warren Electric's interrogatories and its answer to interrogatory No. 12 in particular; that interrogatory had asked Harodite to explain the maintenance and service procedures that were in place in 2001 and 2002 with respect to the pre-heater, gasket, pressure relief valves, system controls, electrical connections, and boiler. Harodite stated in its first response (dated January 6, 2006) that [t]here was no maintenance performed on the pre-heater.” Harodite essentially adhered to that position in its first more responsive answer (dated March 8, 2006). However, in its second more responsive answer (dated May 3, 2006), Harodite stated in pertinent part as follows:

“SECOND MORE RESPONSIVE ANSWER:

The maintenance consisted of switching the strainers every other week to filter the oil. The gauges would be monitored on a daily basis. These two tasks were performed as a matter of course, they were not reduced to writing. Every year the controls would be checked by Warren Professional Controls. The safety valves were tested by Transcat after the incident. Moreover, every year the boiler would be inspected by a Commonwealth of Massachusetts boiler inspector. If any parts failed, they would be immediately replaced. Harodite's employees monitor gauges and make visual inspections in a constant basis and do maintenance as required. There is no other written or recorded inspection or maintenance schedule.”

Also of significance to the instant appeal is Harodite's answer (dated January 6, 2006) to Warren Electric's interrogatory No. 13. Warren Electric's interrogatory and Harodite's answer read as follows:

INTERROGATORY NO. 13:

Identify any problems or issues experienced with the Pre–Heater, the Casing or the Gasket prior to May 2002.

ANSWER: The pre-heater was purchased on August 31, 2001. The pre-heater was installed on September 20, 2001. The pre-heater failed sometime between May 3, 2002 at 3:00 p.m. and May 4, 2002. There were no problems or issues prior to that time. (Emphasis added.)

Harodite never supplemented or amended its answer to this particular interrogatory.

2. A New Theory

Quite significantly, as the discovery process continued, on November 17, 2007, Harodite provided supplemental answers to interrogatories that had been propounded by Acadia Elastomers Corp.—a defendant named in Harodite's original complaint, but not a party to these appellate proceedings. (Harodite's certificate of service that accompanied those supplemental answers indicates that a copy thereof was sent to counsel for Warren Electric.) Among those supplemental answers was Harodite's supplemental answer to Acadia Elastomers' interrogatory No. 15 (“State whether you have consulted, engaged or otherwise obtained the assistance of any expert, with respect to any of the issues in this case * * *.”). In response to that interrogatory, Harodite identified Dr. Ali M. Sadegh and described the subject matter about which Dr. Sadegh would testify as follows:

“The subject matter on which Dr. Sadegh will testify will concern, inter alia, the fact that a gasket can be damaged by the bolts if it is not centered properly when installed. This can happen if a pre-heater is assembled with the flange in the vertical position as the gasket may slip down before the bolts are tightened. Also, a flange that has a raised surface on one side that might also contribute to the gasket being displaced from the center. If the bolts are tightened too much in the assembly process the gasket may get crushed. Moreover, if the bolts are not tightened evenly the flange may expand and contract unevenly as it heats and cools during the circulation process. There may be a leakage or greater pressure at the less tight points. This opinion is based upon a review of the case pleadings and materials and an inspection of the accident site and the subject pre-heater.” (Emphasis added.) 5

3. Discovery Concerning RALCO Electric, Inc.

On September 24, 2008, Harodite produced certain documents in response to a Warren Electric Request for Production of Documents that had been propounded on July 19, 2005. Of particular significance to the instant appeal, the documents produced by...

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