PNC Bank v. U.S. Army Corps of Eng'rs

Decision Date04 February 2015
Docket NumberCAUSE NO. 2:13-CV-374-JVB-JEM
CourtU.S. District Court — Northern District of Indiana


This matter is before the Court on a Motion [DE 24], filed by Defendant Walsh Construction Company on March 18, 2014, and a Motion to Dismiss [DE 33], filed by Defendant Walsh Construction Company on May 7, 2014.

On May 9, 2014, Judge Joseph S. Van Bokkelen entered an Order [DE 35] referring this matter to the undersigned Magistrate Judge for a report and recommendation on the instant motionpursuant to 28 U.S.C. § 636(b)(1)(B). This Report constitutes the undersigned Magistrate Judge's combined proposed findings and recommendations pursuant to 28 U.S.C. § 636(b)(1)(C). For the following reasons, the Court recommends that the District Court grant in part and deny in part the motions to dismiss.


Plaintiff PNC Bank, National Association f/k/a National City Bank, Successor Trustee of Trust # 972 dated March 1, 1960 ("the Trust") filed its Complaint on October 16, 2013, for damages arising out of the July 30, 2010, destruction of a rain water drain pipe. It alleges that Defendants United States Army Corps of Engineers ("the Corps"), Little Calumet River Basin Development Commission ("the Commission"), and Walsh Construction Company ("Walsh") were engaged in upgrading a levee on the Trust's property when the drain pipe was destroyed.

On March 18, 2014, Walsh filed its first Motion [DE 24], requesting dismissal of the Trust's claim against it. The Trust filed a response on April 24, 2014, and Walsh filed a reply on May 1, 2014. Also on March 18, 2014, the Commission filed its answer, including a cross-claim against Walsh. On May 7, 2014, Walsh filed its second Motion to Dismiss [DE 33] requesting dismissal of the cross-claim. No response has been filed and the time to do so has passed. The Corps has not appeared or filed any responsive pleadings.


A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the complaint and not the merits of the suit. See Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In ruling on such a motion, the Court accepts as true all of the well-pleaded facts alleged by the plaintiff and all reasonable inferences that can be drawn therefrom. SeeBell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007); see also Tamayo v. Blagojevich, 526 F.3d 1074, 1082 (7th Cir. 2008).

To survive a 12(b)(6) motion to dismiss for failure to state a claim, the complaint must first comply with Rule 8(a) by providing "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), such that the defendant is given "fair notice of what the . . . claim is and the grounds upon which it rests." Twombly, 550 U.S. at 555 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)); see also Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009). Second, the "complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 570); see also Tamayo, 526 F.3d at 1082. The Supreme Court explained that the "plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (quotation marks and brackets omitted); see also Iqbal, 556 U.S. at 678-79; Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009). The Seventh Circuit Court of Appeals has explained that "[t]he complaint 'must actually suggest that the plaintiff has a right to relief, by providing allegations that raise a right to relief above the speculative level.'" Indep. Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 935 (7th Cir. 2012) (quoting Windy City Metal Fabricators & Supply, Inc. v. CIT Tech. Fin. Serv., Inc., 536 F.3d 663, 668 (7th Cir. 2008)). In order "[t]o meet this plausibility standard, the complaint must supply enough fact to raise a reasonable expectation that discovery will reveal evidence supporting the plaintiff's allegations." Indep. Trust Corp., 665 F.3d at 934-935 (quoting Twombly, 550 U.S. at 556) (quotation marks omitted).


In the instant Motions, Walsh moves for the dismissal of the claims and cross-claim pending against it. The Court will first consider Walsh's motion for dismissal of the cross-claim, then will consider its arguments regarding dismissal of counts in the Complaint.

I. Motion to Dismiss Cross-Claim

Walsh moves to dismiss the Commission's cross-claim on the grounds that Indiana does not recognize the non-contractual common law indemnification claim. The Commission did not file a response.

On March 18, 2014, the Commission filed its cross-claim against Walsh for indemnification of the Commission for any judgment rendered against the Commission. The Commission alleges that it was the local sponsor of the levee project, but "had nothing to do with the engineering, construction, or supervision of the project," and that the Corps "was the project engineer and supervisor of the project" who hired Walsh to do the work. Cross-Claim ¶3-6 [DE 26] p. 21.

Under Indiana law, "[g]enerally, the right of indemnification arises only by contract, express or implied, or by statutory obligation." Rotec, Div. of Orbitron, Inc. v. Murray Equip., Inc., 626 N.E.2d 533, 535 (Ind. App. 1993); see also Mills v. Hausmann-McNally, S.C., No. 1:13-CV-00044-SEB-DKL, 2014 WL 129276, at *5 (S.D. Ind. Jan. 14, 2014). Implied indemnity is only available in Indiana when "liability to another is solely derivative or constructive and only against one whose wrongful act has caused such liability to be imposed." Mullen v. Cogdell, 643 N.E.2d 390, 400 (Ind. App. 1994) (citing Indianapolis Power & Light Co. v. Brad Snodgrass, Inc., 578 N.E.2d 669, 671 (Ind. 1991)). "Generally, implied indemnity is created by a relationshipbetween the parties, i.e. employer-employee, principal-agent." Sears, Roebuck and Co. v. Boyd, 562 N.E.2d 458, 461 (Ind. App. 1990); see also Mills, 2014 WL 129276, at *5 ("[R]elationships where a 'derivative or constructive' implied right to indemnity may apply include those of an employer to an employee and a manufacturer of a defective good to the retailer of that good.").

In this case, the Commission has not identified any statute or contract that would give rise to indemnification liability, and it does not allege that a derivative or constructive relationship existed between itself and Walsh. Walsh argues that the Commission cannot make that allegation, since Walsh was hired as an independent contractor by the Corps and had no direct relationship with the Commission. The Commission has failed to argue otherwise. The Court concludes that the Commission fails to state a claim for indemnification by Walsh, and recommends that the Commission's cross-claim against Walsh be dismissed.

B. Motion to Dismiss Complaint

Walsh moves for dismissal of the case as a whole for lack of subject matter jurisdiction and also argues that several individual counts should be dismissed as to their claims against Walsh. The Court will consider each of its arguments in turn.

1. Subject Matter Jurisdiction

Walsh first argues that the Complaint should be dismissed for lack of subject matter jurisdiction since the Trust does not allege that it has been injured or in any way harmed as a result of the destruction of the drainpipe. The Trust argues that the Complaint clearly alleges harm: that its drain pipe was intentionally or negligently destroyed by Defendants, leaving its property without adequate drainage and subject to flooding.

In order to have standing to sue, "the plaintiff must have suffered an 'injury in fact' - an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) (quotations omitted). Walsh argues that because the Trust has not suffered any discernable injury as a result of the work that Walsh did on the easement, and does not plead actual damages, it has failed to state a claim as to Walsh. The Trust argues that it has expressly alleged concrete injury: the intentional destruction of the rain water drain pipe, disrupting its ability to drain its property and diminishing its value. Although Walsh is correct that the Trust did not allege that its property has been damaged by flooding, Walsh ignores that the Trust has clearly claimed that its rain water drain pipe was destroyed - an actual, concrete injury. At this stage of the proceedings, the Trust needs only "a short and plain statement of the claim." Fed. R. Civ. P. 8(a); see also Lujan, 504 U.S. at 561 ("At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice."). It has been provided. Accordingly, the Court does not recommend that the Complaint be dismissed for lack of subject matter jurisdiction.

2. Count III: Tortious Interference with Contract

Walsh argues that the Trust's claim for tortious interference with contract should be dismissed because the two year statute of limitations has expired and the Trust has failed to properly plead the claim. The Trust argues that its claim has been adequately pled and is timely.

Under Indiana Law, to succeed on a claim for tortious...

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