Westfield v. IPC, Inc.

• Decision Date: 08 September 2011
• Docket Number: Case No. 4:11CV00155 JCH.
• Parties: WESTFIELD, LLC and West County Center LLC, Plaintiffs, v. IPC, INC., et al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

816 F.Supp.2d 745

WESTFIELD, LLC and West County Center LLC, Plaintiffs,

v.IPC, INC., et al., Defendants.

Case No. 4:11CV00155 JCH.

United States District Court,E.D. Missouri,Eastern Division.

Sept. 8, 2011.

Kevin M. Cushing, Gerard T. Carmody, Carmody MacDonald P.C., St. Louis, MO, for Plaintiffs.

Anne M. Lindner, Frank Susman, Kenneth B. Newman, Spencer and Fane, LLP, John T. Walsh, Clayton E. Gillette, Lathrop and Gage, LLP, St. Louis, MO, for Defendants.

MEMORANDUM AND ORDER

JEAN C. HAMILTON, District Judge.

This matter is before the Court on Defendant Consulting Engineers Group, Inc.'s Motion to Dismiss (ECF No. 21) and Defendant IPC, Inc.'s Motion to Dismiss (ECF No. 29). These matters are fully briefed and ready for disposition.

BACKGROUND

Plaintiff Westfield, LLC (“Westfield”) was the property manager and contractor for the shopping center construction for the mall and parking garage structures for West County Center mall in Des Peres, Missouri (the “Project”). (Petition (“Pet.”), ECF No. 6, ¶¶ 1, 11, 12). Plaintiff West County Center, LLC (“WCC”) was the owner of the Project. (Pet., ¶ 2). Part of the Project included building multiple parking structures. (Pet., ¶ 13). On June 24, 2000, Westfield entered into a design-build Standard Construction Subcontract with Raider Precast Concrete, Inc. (“Raider”) to design and build three precast parking structures for the Project (the “Subcontract”). (Pet., ¶¶ 14, 15).¹ Raider entered into a sub-subcontract with Consulting Engineers Group, Inc. (“CEG”), an engineering and design firm, under which CEG was to provide design drawings for the parking structures Raider contracted to design, fabricate and erect pursuant to the Subcontract. (Pet., ¶ 17). CEG designed the parking structures and the parking structures were constructed from 2000–2002 based upon the design drawings prepared by CEG for Raider. (Pet., ¶ 20).

In November 2006, WCC noticed concrete cracking, movement and water intrusion in the parking structures. (Pet., ¶ 22). In May 2007, Plaintiffs learned that the parking structures had multiple defects resulting from the poor workmanship and design flaws of Raider and CEG. (Pet., ¶ 23). CEG designed a fix for the problems and throughout 2008 and 2009 extensive structural remediation was required to address the design failures in the parking structures. (Pet., ¶¶ 25–26). Plaintiffs allege that the design and construction of the parking structures failed to meet industry standards and they incurred significant costs to repair the defects, in addition to outside engineering consulting fees. (Pet., ¶¶ 27–35).

In December 2010, Plaintiffs filed this Petition in the Circuit Court of St. Louis County, State of Missouri. Plaintiffs alleged causes of action for Breach of Contract against IPC (Count I), Negligence against IPC (Count II), and Professional Negligence against CEG (Count III). On January 21, 2011, CEG removed the case to this Court based upon diversity jurisdiction, 28 U.S.C. § 1332(a). (ECF No. 1). On March 7, 2011, CEG filed a motion to dismiss, and, on March 31, 2011, IPC filed a motion to dismiss.

STANDARD FOR MOTION TO DISMISS

In ruling on a motion to dismiss, the Court must view the allegations in the complaint liberally in the light most favorable to Plaintiff. Eckert v. Titan Tire Corp., 514 F.3d 801, 806 (8th Cir.2008) (citing Luney v. SGS Auto. Servs., 432 F.3d 866, 867 (8th Cir.2005)). Additionally, the Court “must accept the allegations contained in the complaint as true and draw all reasonable inferences in favor of the nonmoving party.” Coons v. Mineta, 410 F.3d 1036, 1039 (8th Cir.2005) (citation omitted). To survive a motion to dismiss, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (abrogating the “no set of facts” standard for Fed.R.Civ.P. 12(b)(6) found in Conley v. Gibson, 355 U.S. 41, 45–46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a 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, 127 S.Ct. 1955; Huang v. Gateway Hotel Holdings, 520 F.Supp.2d 1137, 1140 (E.D.Mo.2007).

DISCUSSION

I. Consulting Engineers Group, Inc.'s

Motion to Dismiss ²

A. Statute of Limitations

CEG claims that Plaintiffs' cause of action for negligence against CEG is barred by the five (5) year statute of limitations for actions where damages are capable of ascertainment but the precise amount of damage is not known. See Mo.Rev.Stat. § 516.100.³ CEG asserts that the parking structures were completed in 2002, and the petition does not allege that the defects were hidden. (Memorandum, p. 3). Rather, CEG claims that Plaintiffs only allege “significant changes” four (4) years after CEG completed work on the Project. ( Id.). Therefore, CEG claims that the fact of damages was capable of ascertainment before November 2006 and this lawsuit is barred by the statute of limitations. ( Id.).

The Court finds that Plaintiffs' negligence claims is not barred by the statute of limitations. Plaintiffs allege that the defects were “latent” and only became “visible” in November 2006. (Pet., ¶¶ 21–22). Therefore, at this stage of litigation, the Court finds that Plaintiffs' Petition does not allege that the fact of damages was capable of ascertainment prior to the expiration of the statute of limitations period. State ex rel. Marianist Province of the United States v. Ross, 258 S.W.3d 809, 811 (Mo.2008) (“The capable of ascertainment standard is an objective one; therefore, when relevant facts are uncontested, the statute of limitations issue can be decided by the court as a matter of law.”). The Court denies CEG's motion to dismiss on this basis.

B. Acceptance Doctrine

CEG next argues that Plaintiffs' claims are barred by the acceptance doctrine, “which relieves contractors of liability to those not parties to the contract after the owner accepts the contractor's work.” Fisher v. State Highway Comm'n, 948 S.W.2d 607, 611 (Mo.1997) (citing Gast v. Shell Oil Co., 819 S.W.2d 367, 370 (Mo. banc 1991)); Rogers v. Frank C. Mitchell Co., 908 S.W.2d 387, 388 (Mo.Ct.App.1995); Gruhalla v. George Moeller Construction Co., 391 S.W.2d 585, 597 (Mo.Ct.App.1965). “In the absence of formal acceptance, constructive or practical acceptance will suffice.” Roskowske v. Iron Mountain Forge Corp., 897 S.W.2d 67, 71 (Mo.Ct.App.1995) (citing Gruhalla v. George Moeller Construction Co., 391 S.W.2d 585, 597 (Mo.App.1965)). The burden is on the plaintiff to show there is no acceptance and contractor is still in control of the premises, particularly the area in which injury occurred. Id. (citing Gruhalla, supra, at 598).⁴

Plaintiffs claim that exceptions to the acceptance doctrine are applicable. Exceptions to this rule of non-liability of the contractor after acceptance by the owner include “a) departure from specifications that could not be discovered by reasonable investigation; b) the dangerous character of the structure or condition, unknown to the owner; c) hidden defects in the project which were not discoverable by the proprietor; and d) specifications that are ‘so imperfect or improper that the ... contractor should realize that the work done thereunder will make the structure or condition unsafe ...’ ” Shady Valley Park & Pool v. Fred Weber, Inc., 913 S.W.2d 28, 34, n. 1 (Mo.Ct.App.1995) (quoting Restatement (Second) of Torts, Sec. 384, comment f (1965)); see also Constance v. B.B.C. Dev. Co., 25 S.W.3d 571, 589 (Mo.Ct.App.2000) (“(1) the defect is imminently dangerous to others; (2) the defect is so hidden that a reasonably careful inspection would not reveal it; and (3) the contractor knows of the defect, but the owner does not.”); Chubb Group of Ins. Cos. v. C.F. Murphy & Associates, Inc., 656 S.W.2d 766, 776 (Mo.Ct.App.1983) (exception to the acceptance doctrine where liability must be premised instead on whether the injury to plaintiffs was foreseeable).

Plaintiffs assert that CEG's negligence claim fits within the exception to the acceptance doctrine because the injury to Plaintiffs was foreseeable. As noted by the court in Chubb Group of Ins. Cos., “architects and contractors owe a duty to exercise the care required of their professions to persons with whom they are not in privity when the injury to those third parties is foreseeable.” 656 S.W.2d at 775. CEG claims that this holding is limited to those instances where the danger is hidden from discovery by the plaintiff and known to the defendant. Id. at 775, 777; Reply, p. 4. CEG claims that the alleged design defect “would have been apparent at the time the design was delivered in 2002.” (Reply, p. 5). But, as previously discussed, Plaintiffs allege that the design defect was latent and not discovered until November 2006. Accordingly, the Court finds that Plaintiffs' allegations fall within an exception to the acceptance doctrine because Plaintiffs allege that the defects to the parking structures were or should have been foreseeable by CEG as a likely result of negligent performance of their duty to design. The Court denies CEG's motion to dismiss on this basis.

C. Economic Loss Doctrine

CEG argues that Plaintiffs' negligence claim is barred by the economic loss doctrine.⁵ “The economic loss doctrine bars ‘recovery of purely pecuniary losses in tort where the injury results from a breach of a contractual duty.’ ” Dubinsky v. Mermart, LLC, 595 F.3d 812, 819 (8th Cir.2010) (quoting Zoltek Corp. v. Structural Polymer Group, Ltd., 2008 WL 4921611, at *3, 2008 U.S. Dist. LEXIS 92714, at *3 (E.D.Mo.2008), aff'd on other grounds, 592 F.3d 893 (8th Cir.2010)).

Plaintiffs assert that the economic loss doctrine is not...