In re Reinforced Earth, Co.

• Decision Date: 03 May 1996
• Docket Number: Civil No. 93-1874 (DRD).
• Citation: 925 F. Supp. 913
• Parties: In re REINFORCED EARTH, CO., and others — La Colina and Oasis Gardens Litigation.
• Court: U.S. District Court — District of Puerto Rico

925 F. Supp. 913

In re REINFORCED EARTH, CO., and others — La Colina and Oasis Gardens Litigation.

Civil No. 93-1874 (DRD).

United States District Court, D. Puerto Rico.

May 3, 1996.

Harvey B. Nachman, Nachman, Santiago, Bray, Guillemard & Carrion, Santurce, PR, for Carmelo Lartigue-Henriquez, Myrna Castro-De Lartigue, Conjugal Partnership Lartigue-Castro, Myrta M. Avila, Carlos Rodriguez-Santiago, Elis Ana Gonzalez, Rodriguez-Gonzal, Roger V. Wall, Dulce G. Santiago-Vela, Wall-Santiago, Edgardo N. Bermudez, Miriam Gonzalez-De-Bermudez, Bermudez-Gonzale, Eloy Gomez, Jr., Aida Gomez, Conjugal Partnership Gomez-Gomez, Hector M. Osorio-Yera, Lydia Lartigue-De-Osorio, Conjugal Partnership Osorio-Lartigue, Carmen G. Caldero-Santiago, Oscar Martin-Martin, Conjugal Partnership Martin-Caldero, Gloria Rodriguez-Sanchez, Alfredo J. Bayouth, Lucia Vega-Chavez, Bayouth-Vega.

Eric Perez-Ochoa, Martinez, Odell & Calabria, San Juan, PR, for Fredrick Newman, Carmen Newman, Conjugal Partnership Newman-Newman, Carlos Gonzalez-Aquino, Maria Ines Castro-Ferrer, Conjugal Partnership Gonzalez-Castro, Raul Rios-Mollineda, Mercedes De-Choudens-Vicente, Conjugal Partnership Rios-De-Choudens, Arturo Gigante, Cecil Marques, Conjugal Partnership Gigante-Marques, Sunil Lula, Anita Lula, Conjugal Partnership Lula-Lula.

Francisco Cobian-Guzman, Cobian & Valls, San Juan, PR, Jennifer W. Fletcher, Harry Griffin Jr., Griffin, Cochrane & Marshall, Atlanta, GA, Armando Lasa-Ferrer, Maria B. Maldonado-Malfregeot, Lasa Monroig & Veve, San Juan, PR, for Reinforced Earth Co.

Francisco Cobian-Guzman, Cobian & Valls, San Juan, PR, Armando Lasa-Ferrer, Lasa Monroig & Veve, San Juan, PR, for Transportation Ins.

Amancio Arias-Guardiola, San Juan, PR, for Leonel Fernandez.

Rafael Fuster-Martinez, Ponce, PR, Enrique Peral-Soler, Munoz, Boneta, Gonzalez, Arbona, Benitez & Peral, Hato Rey, PR, for Jose Blanco-Garrido.

OPINION AND ORDER

DOMINGUEZ, District Judge.

Pending before the court is defendant's, Transportation Insurance Company's¹ ("Transportation"), motion for summary judgment, filed on November 18, 1994, (docket 85). On December 20, 1994, co-defendant, Reinforced Earth Company² ("RECO") filed a response and opposition to Transportation's motion, (docket 93), to which Transportation replied on February 17, 1995, (docket 109). On April 16, 1996, Transportation filed a motion summarizing the arguments presented in their motion for summary judgment, (docket 172).

I — Background

The facts are stated in the light "most hospitable to the summary judgment loser, consistent with the record support." See Roche v. John Hancock Mutual Life Ins. Co., 81 F.3d 249 (1st Cir.1996). Plaintiffs³ have brought this action against RECO, and Lexington Insurance Company⁴ ("Lexington"), for the claimed damages suffered by the residents of Oasis Gardens Urbanization and Extension La Colina in Guaynabo,⁵ as a result of the alleged defects in the design, manufacture, installation, and/or implementation of an earth retention wall⁶ ("REW"), built by RECO in the La Colina Development⁷, "The Project", in Guaynabo, Puerto Rico.

II — Analysis

A. THE SUMMARY JUDGMENT STANDARD

Both Plaintiffs and Defendants in their motions refer to documents (i.e., insurance contracts, letters, etc.) outside the pleadings. Because the court shall consider these supplementary materials, the summary judgment standard is both apposite and opportune. See Garita Hotel Ltd. v. Ponce Federal Bank, 958 F.2d 15, 19 (1st Cir.1992).⁸

A district court may grant summary judgment when the record documents that possess evidentiary force "show that 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). See Eileen M. McCarthy v. Northwest Airlines, Inc., 56 F.3d 313 (1st Cir.1995), (citing Coyne v. Taber Partners I, 53 F.3d 454 (1st Cir. 1995)). The intricacies and general standards of Rule 56, have been documented by the First Circuit Court in a "cascade of cases"⁹. "Once a properly documented motion has engaged the gears of Rule 56, the party to whom the motion is directed can shut down the machinery only by showing that a trial worthy issue exists." Eileen Mc Carthy, 56 F.3d at 315, (citing National Amusements, 43 F.3d at 735). In applying these criteria, we acknowledge that "genuineness and materiality are not infinitely elastic euphemisms that may be stretched to fit whatever pererrations catch a litigant's fancy." See Roche v. John Hancock Mutual Life Ins. Co., Id. at 253, (citing Blackie v. Maine, 75 F.3d 716, 721 (1st Cir.1996)). At this crux, we need say no more than that summary judgment will proceed if the record, even when taken in the aspect most favorable to the nonmoving party, fails to yield a trial worthy issue as to some material fact.¹⁰ Coyne, 53 F.3d at 457.

A material fact is one that might affect the outcome of the suit under the governing law. "The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Medina-Muñoz, 896 F.2d at 8 (emphasis in original), quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). See also Woods v. Friction Materials, Inc., 30 F.3d 255, 259 (1st Cir.1994). A dispute about a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id.

Hence, in applying these criteria, the Court is to consider that "not every genuine factual conflict necessitates a trial. It is only when a disputed fact has the potential to change the outcome of the suit under the governing law, if found favorably to the nonmovant, that the materiality hurdle is cleared." See Wilfredo Martinez v. Rafael Colon, 54 F.3d 980 (1st Cir.1995), (citing United States v. One Parcel of Real Property, 960 F.2d at 204).

Consistent with the summary judgment standard, "we canvass the material facts in a light that flatters, but does not impermissibly distort", the nonmoving party's claims, and indulge all inferences in favor of that party¹¹. Because in the instant case there are no genuine issues of material fact, what remains to be decided are questions of law.¹²

III — DISCUSSION

Plaintiffs assert several causes of action which arise from the property damage caused by the collapse. First, they allege that the REW was defective, inadequately designed and/or installed and that RECO failed to warn that it was not fit for its intended use. See Master Complaint ¶ 27. Second, Plaintiffs claim that RECO was negligent in failing to ascertain that the soil testing reports were inadequate and that the construction of the REW was not in accordance with engineering standards; failing to analyze earth and soil conditions and side slope earth retention criteria; failing to supervise the installation of the wall; and failing to warn plaintiffs of the "dangers to be encountered." Master Complaint at ¶ 34. Third, plaintiffs claim to have suffered emotional distress and depression "due to the collapse of the defective earth retention wall and the possibility of collapse in the future," Master Complaint at ¶ 42. Finally, plaintiffs claim that RECO breached its express and implied warranties of fitness for a particular purpose, and its implied warranty of merchantability. Master Complaint ¶¶ 48-57.

At this juncture, the court need not concern itself with whether RECO's product actually caused the property damage. Instead, the court must only decide whether there would be coverage under Transportation's policy should plaintiffs allegations prosper. On this quest we now traverse.

Transport has moved for summary judgment alleging that plaintiffs' substantive claims of relief stem directly from RECO's alleged acts or omissions in the design or manufacture of its product (the REW). More specifically Transport alleges that: the REW was defective; the REW was inadequately designed and/or installed; RECO failed to supervise the installation/erection of the wall; and RECO failed to warn the plaintiffs of the potential dangers to be encountered because the REW was not suitable for its intended use. In addition, plaintiffs further allege that RECO was failed to analyze earth and soil conditions at the site, and failed to analyze the side slope earth retention criteria. (See docket 93 at 25-26, citing Master Complaint ¶ 34).

Transportation further states that all of plaintiffs' claim against the insured¹³, defendant RECO, for "Products and Completed Operations", and rendering of "Professional Services", are included under the Lexington policy, but are specifically, clearly, and unambiguously excluded under Transportation's policy. (See docket 85 and 109) Moreover, Transport purports that both insurance policies are "mirror images of each other," in every aspect, except for certain exclusions specified below. The court agrees.

Pursuant to plaintiff's allegations, it remains uncontested that the issue of coverage under Transportation's insurance policy must be decided, regardless of the policy's validity. (See Opp. docket 93, at 3, and Reply docket 109, at 2). In deciding Transportation's motion to dismiss, the court shall then review plaintiffs' contentions against RECO, to determine whether there is coverage under Transportation's policy.

1. The Transportation Policy:

Transportation issued a Comprehensive General Liability Policy Number XXXXXXXXX¹⁴ to provide RECO coverage from the period between February 28, 1992 to February 28, 1993 (See docket 85 exhibit I). Because the "products-completed Operations Aggregate Limit" is listed as "Excluded" on the Declarations page of the Transportation policy, there can be no coverage for products and completed operations claims. Transport states that this exclusion is reiterated in Form CG 2104¹⁵, and on indorsement Number 9, the ...