RICHMOND STEEL v. Legal and General Assur. Soc.

• Decision Date: 26 February 1993
• Docket Number: Civ. No. 90-2334 HL.
• Citation: 821 F. Supp. 793
• Parties: RICHMOND STEEL, INC., Plaintiff, v. LEGAL AND GENERAL ASSURANCE SOCIETY, LTD., et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

821 F. Supp. 793

RICHMOND STEEL, INC., Plaintiff, v. LEGAL AND GENERAL ASSURANCE SOCIETY, LTD., et al., Defendants.

Civ. No. 90-2334 HL.

United States District Court, D. Puerto Rico.

February 26, 1993.

COPYRIGHT MATERIAL OMITTED

Charles A. Cordero, Cordero, Miranda & Pinto, San Juan, PR, for Richmond Steel, Inc.

Luis M. Angelet-Frau, Vazquez, Vizcarrondo & Angelet, San Juan, PR, for Legal & Gen. Assur. Soc., Ltd.

Romano A. Zampierollo-Rheinfel, Rio Piedras, PR, Jorge Marrero-Narvaez, Autoridad Acueductos & Alcantarillados, Santurce, PR, for Puerto Rico Water and Sewer Authority.

Jose M. Biaggi-Junquera, Biaggi & Landron, Mayaguez, PR, for Constructora Lluch, S.E. and Ins. Co. of North America.

Richard A. Lee, Richard Lee Law Office, San Juan, PR, for defendants Lebron Associates, Felipe Lebron P.E., Rene Purcell, Hector Zavala, Pedro A. Marrero, Eduardo Rodriguez and Felipe Lebron.

Jeanette M. Lopez, Urb. Ramirez, for Seaboard Sur. Co.

Amancio Arias-Guardiola, Hato Rey, PR, for cross-defendant Royal Ins. Co. Puerto Rico.

Charles DeMier-LeBlanc, De Corral & De Mier, Hato Rey, PR, for cross-defendant Nat. Union Fire Ins. Co.

Enrique Peral-Soler, Munoz, Boneta, Gonzalez, Arbona, Benitez & Peral, Hato Rey, PR, for cross-defendant Valentin Eng. Valentin Beato.

Jose E. Otero-Matos, Irizarri & Otero, San Juan, PR, for CNA Cas. of PR.

Cristobal Colon, San Juan, PR, for Carlos Ortiz.

Jaime E. Sifre-Rodriguez, San Juan, PR, for Jose C. Agrelot.

OPINION AND ORDER

LAFFITTE, District Judge.

Before the Court is a motion for summary judgment (Docket No. 149) by Plaintiff Richmond Steel, Inc. ("RSI") to dismiss the counterclaim of Defendant Legal and General Assurance Society, Ltd. ("LGAS"). RSI, a construction firm based in Texas, brought this claim for declaratory relief and monetary damages based on diversity jurisdiction¹. This case arises out of the construction of a project known as the "Mayaguez Composting Facility." In 1987 Puerto Rico Aqueduct and Sewer Authority ("PRASA") contracted the engineering and architecture firm of Lebrón Associates ("Lebrón") to design the facility. PRASA also contracted Constructora Lluch, S.E., ("Lluch") in May 1988 to build the facility. In October 1988, Lluch subcontracted RSI to manufacture and install the steel components of the facility. In October 1989, before RSI completed its work, a portion of the steel structure collapsed.

RSI seeks the following declarations: that Lebrón and Valentin Beato, an engineer who participated in the preparation of the project's designs, were negligent in their design work; that this negligence caused the collapse; that PRASA is liable for RSI's damages because the former negligently approved these designs; that Lluch contributed to the collapse by its negligence in building the structure's center columns, preparing the soil, and laying the foundation; that the respective insurers of Lebrón and Lluch are also liable to RSI; and that RSI is not liable to LGAS. A flurry of cross-claims, counterclaims, and third-party claims has followed. Included in this flurry is LGAS' counterclaim against RSI. On January 26, 1989, three months after Lluch and RSI entered into their contract, LGAS issued to Lluch a builder's risk policy covering the construction project. The policy also named PRASA as an insured. After the collapse of the structure, LGAS paid Lluch $891,972.00 under the policy. In its counterclaim LGAS, as subrogee to Lluch, seeks to recover from RSI the amount paid to Lluch. LGAS alleges that the collapse of the structure was caused by RSI's negligence.

RSI has moved for summary judgment to dismiss LGAS' counterclaim. RSI makes two arguments. First, that it was an insured under the LGAS policy, and therefore LGAS cannot bring a subrogation action against its own insured. The second argument is based on Article 13.5 of the contract between Lluch and RSI. This article provides for a waiver of claims between the parties to the construction. RSI claims that this article waives LGAS' right to bring a claim against it. LGAS argues that (1) RSI's failure to plead these defenses in its answer to LGAS' counterclaim precludes it from raising them now; (2) because Lluch contracted with Richmond Steel Erectors, rather than Richmond Steel, Inc., RSI is not protected by the contract; (3) the waiver of subrogation clause in the contract is not binding on LGAS; and (4) because RSI is not named as an insured in Lluch's builder's risk policy, RSI cannot be an insured. The Court agrees with LGAS that RSI is not an insured under the policy. However, the Court disagrees with all of LGAS' remaining arguments. Accordingly, it grants RSI's motion for summary judgment.

DISCUSSION

A. Failure to plead defenses in the answer

At the outset, the Court notes that summary judgment is appropriate if "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). LGAS claims that RSI's failure to plead defenses in the answer preclude it from raising them in a motion for summary judgment. A review of the chronology of the pleadings is necessary before proceeding to a determination on this claim. On October 10, 1990, RSI filed its complaint. Among its prayers for relief was a request that the Court declare that LGAS' claim against RSI for the $891,972 was unfounded. On December 21, 1990, LGAS filed its counterclaim, together with its answer, alleging that the collapse of the structure was caused by RSI's negligence. RSI answered the counterclaim on January 9, 1991. It plead the following affirmative defenses:

1. The Counter Complaint fails to state a claim upon which relief can be granted.

2. The claim described in the Counter Complaint is time-barred.

3. The collapse described in the counter claim was the fault and negligence of persons and/or entities beyond the control of RSI.

4. RSI raises by reference as affirmative defenses the substantive allegations described in the complaint. (Docket No. 7).

On August 30, 1991, RSI tendered an amended complaint. In the amended complaint, which was not accepted until March 23, 1992, RSI prayed that the Court declare that it was not liable to LGAS because of the waiver of subrogation clause in the contract between Lluch and LGAS. On February 24, 1992, after the filing of the amended complaint but before its being entered on the docket, RSI filed the motion for summary judgment that is currently before the Court. LGAS filed an opposition to the motion on March 19, 1992. In its opposition, LGAS did not raise the claim that RSI's failure to plead affirmative defenses in the answer precluded it from raising them in a motion for summary judgment. In a proposed pretrial order filed on March 23, 1992 by all the parties, including LGAS, RSI stated that the waiver of subrogation clause protected it from LGAS' claim. By a motion filed September 2, 1992, LGAS raised the issue of whether RSI has failed to plead the affirmative defenses. The trial in this case is set for June 21, 1993.²

Under Fed.R.Civ.P. 8(c), certain affirmative defenses must be set forth in the pleadings. Depositors Trust Co. v. Slobusky, 692 F.2d 205, 208 (1st Cir.1982). Failure to raise an affirmative defense in the pleadings generally results in the forced waiver of that defense and its exclusion from the case. Federal Deposit Ins. Corp. v. Ramirez-Rivera, 869 F.2d 624, 626 (1st Cir.1989); Jakobsen v. Massachusetts Port Authority, 520 F.2d 810, 813 (1st Cir.1975); 5 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1278, at 477 (2d ed. 1990). In the case before the Court, RSI raised the waiver of subrogation rights defense in its amended complaint. RSI did not plead this defense in its answer to LGAS' counterclaim, but it did raise the defense in a pleading. Accordingly, the Court will allow RSI to raise this defense in its motion for summary judgment.

Assuming arguendo that RSI's raising of the defense in its amended complaint — instead of in its answer — is not a proper pleading, the Court would still allow RSI to raise this defense. Courts should avoid hypertechnicality in pleading requirements and focus instead on the purpose of pleading rules. Hassan v. U.S. Postal Service, 842 F.2d 260, 263 (11th Cir.1988); Allied Chemical Corp. v. MacKay, 695 F.2d 854, 855-56 (5th Cir.1983); Polles v. Federal Deposit Ins. Corp., 749 F.Supp. 136, 138-39 (N.D.Miss.1990). The purpose of Rule 8(c) is to give the opposing party notice of the issue and opportunity to argue his position. Blonder-Tongue Lab., Inc. v. Univ. of Illinois Found., 402 U.S. 313, 350, 91 S.Ct. 1434, 1453, 28 L.Ed.2d 788 (1971); Hassan, 842 F.2d at 263. An unplead affirmative defense may be allowed if the opposing party is not prejudiced in his ability to respond. Charpentier v. Godsil, 937 F.2d 859, 863-64 (3rd Cir.1991); Mitchell v. Jefferson County Bd. of Educ., 936 F.2d 539, 544 (11th Cir.1991); 5 Charles A. Wright & Arthur R. Miller, supra, § 1278, at 502.

In the case before the Court RSI first raised the waiver of subrogation defense in its amended complaint which was tendered on August 30, 1991 and docketed March 23, 1992. It later raised the issue in its motion for summary judgment of February 24, 1992 and in the proposed pretrial order of March 23, 1992. Counsel for LGAS signed this proposed pretrial order. In LGAS' initial opposition to the motion for summary judgment, it did not claim that it was prejudiced in its ability to adequately respond to RSI's motion. This opposition was filed on March 19, 1992, more than a year before the trial date. LGAS did not raise the issue of a failure to plead a defense until a motion filed on September 2, 1992, more than six months after RSI filed its motion for summary judgment. As stated above, the trial in this case is set for June 21, 1993, more than a year after RSI filed its motion. At the earliest, LGAS was notified of RSI's waiver of subrogation...