Mears Grp., Inc. v. Kiawah Island Util., Inc.
Decision Date | 08 March 2019 |
Docket Number | No. 2:17-cv-02418-DCN,2:17-cv-02418-DCN |
Citation | 372 F.Supp.3d 363 |
Court | U.S. District Court — District of South Carolina |
Parties | MEARS GROUP, INC., Plaintiff, v. KIAWAH ISLAND UTILITY, INC., Defendant. |
David L. Louie, Pro Hac Vice, Vorys Sater Seymour and Pease LLP, Richard A. Schwartz, Pro Hac Vice, Munsch Hardt Kopf and Harr PC, Houston, TX, G. Mark Phillips, Patrick Coleman Wooten, Nelson Mullins Riley and Scarborough, Charleston, SC, for Plaintiff.
C. Allen Gibson, Jr., James E. Weatherholtz, Kathryn Susan Mansfield, Womble Bond Dickinson US LLP, Charleston, SC, for Defendant.
The following matter is before the court on plaintiff Mears Group, Inc.'s ("Mears") partial motion for summary judgment, ECF No. 18, and defendant Kiawah Island Utility, Inc.'s ("KIU") cross-motion for summary judgment, ECF No. 25. For the reasons set forth below, the court grants in part and denies in part Mears's partial motion for summary judgment and denies KIU's cross-motion for summary judgment.
This case arises out of the construction of a pipeline running from Kiawah Island to Johns Island ("the Project"). KIU, the owner of the Project, entered into a contract ("the Contract") with Mears to construct the pipeline. The Project consisted of using horizontal directional drilling to bore an underground hole and then pulling pipe through the hole. During this process, the pipe got stuck in the borehole, and Mears's work was lost. As a result, Mears had to drill a second borehole and install a new section of pipeline.
Mears presented a claim for the lost work to KIU to be submitted to KIU's builder's risk insurance carrier. Mears contends that the Contract required KIU to obtain builder's risk insurance and name Mears as a loss payee. KIU disputes whether the Contract required KIU to provide builder's risk insurance for the Project, but regardless, KIU submitted Mears's claim under a property insurance policy held by KIU's parent, SouthWest Water Company. That policy is supplied by Westport Insurance Corporation ("Westport"). KIU also demanded that Mears submit a claim to its own builder's risk insurance carrier, which KIU claims that Mears still has not done. KIU explains that Westport denied the claim, saying that (1) the Contract required Mears, not KIU, to obtain builder's risk insurance, and (2) the cause of the lost work was a result of Mears's faulty workmanship, which is excluded from coverage. Westport determined that KIU's policy was "excess to" any of Mears's insurance policies, meaning KIU's policy would not pay until Mears's insurance policies limits are exhausted. ECF No. 18 at 9. Mears alleges that as a result of KIU's failure to procure builder's risk insurance, Mears was not provided the builder's risk insurance coverage it bargained for and has now suffered over $ 7 million of damages, the amount of money it cost Mears to re-drill the second borehole and obtain additional pipe.
The dispute in this case centers around the Contract itself. The parties used a standard Engineers Joint Contract Documents Committee ("EJCDC") form to draft the Contract. The Contract consists of, among other documents, (1) General Conditions, (2) Supplementary Conditions, and (3) Special Conditions. The General Conditions contain form contract language, while the Supplementary Conditions amend or supplement the General Conditions. The Special Conditions provide additional conditions to the Contract, but whether they supersede the General Conditions or merely add to them is at issue here.
The first set of clauses relevant here are in the General Conditions. Article 5.06, with emphasis added by Mears, states:
ECF No. 18-1 at 73. The second relevant provision in the General Conditions, with emphasis added by Mears, is as follows:
Id. at 74. Mears also cited to Section 5.04 of the General Conditions at the hearing on the motions, which provides:
Id. at 72 ( ). Mears explained that "the Work itself" falls under the coverage of builder's risk insurance. Hearing Tr. 7:11–17. The final General Conditions clause relevant here is relied upon by KIU and is as follows:
The Supplementary Conditions contain additional insurance coverage requirements for Mears. Specifically, they require that Mears provide and maintain commercial general liability insurance, business automobile liability insurance, worker's compensation insurance, and umbrella excess liability insurance, as well as requiring Mears to provide certificates of insurance and the required endorsements to KIU. Id. at 125–26.
The only Special Condition discussed by the parties requires Mears to obtain certain insurance. It states as follows:
To continue reading
Request your trial- Wilson v. Berryhill
- Bradshaw v. Berryhill
-
TruAuto MC, LLC v. Textron Specialized Vehicles, Inc.
... ... “approved dealer”); see also Mears Grp., Inc ... v. Kiawah Island Util., Inc., 372 ... ...